Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about harnessing the power of your marketing data. Syncing information between marketing tools is a difficult task and its easy to make mistakes. The guys talk through some ways to make it easier.
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Transcript
Mike: In this episode of Startups For the Rest of Us, Rob and I are going to be talking about harvesting the power of your marketing data. This is Startups For the Rest of Us, episode 351. 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 experiences to help you avoid the same mistakes we have made. What’s going on this week, Rob?
Rob: Do you ever notice that when you intro the show, you say, “Rob and I are going to be talking about XYZ” and that I say, “Mike and I talk about XYZ”?
Mike: No.
Rob: You haven’t noticed that? Alright. I wonder if anyone else has.
Mike: Why do you think that is?
Rob: I think because you’re actually talking about the conversation we’re about to have because you know that 20 seconds later, we’re going to be talking about this, whereas I’m kind of like putting it up as an intro, as if it was independently recorded – almost like it’s done after the fact. “In this episode, Mike and I talk about blah blah blah.” It’s almost like it’s something that happened in the past.
Mike: Like you’re a time traveler, and you’re doing it in the future.
Rob: Exactly. Anyways.
Mike: Anyways.
Rob: Now that we’ve lost all our listeners, you know what’s up for me? This week – last week, once this episode goes live, Clay Collins stepped down as the Leadpages CEO, and he decided that it was a good time to bring in someone to scale the company. He made specific comments of – which I really respected – like this was his impetus. He initiated it. This wasn’t just him offering flowery language, as some founders get kicked out by their board. They say things like this, but I know the backstory of that guy.
I know the inner workings of what happened, and he said, “Look, I’m really good at growing a company from zero to $10-15 million, and we’re a lot more than that now. We need more process, and we need someone who can really scale this thing up to $50-100 million, so the COO John Tedesco, who I’ve worked with now for a year, in essence, since we’ve been at Leadpages – he is taking over as CEO.”
Clay is really taken some time off. He’s gonna spend more time with his family. The dude is super smart, and he reads a lot of stuff. He’s into investing. I mean, he has enough hobbies to keep him busy, and he won’t be down for long. He’s like one of us, where it’s like you’re just constantly – you have that next thing going. Frankly, I applaud his decision to do this, and I think he’ll have some nice – I hope he’ll have some nice restful time as he steps away from it.
Mike: Honestly, I think that’s really smart and insightful on his part to know really where he fits into the startup process and understanding where he provides the most value and realizing that there’s probably going to be a time, where either he’s not good at it or he doesn’t enjoy it. So it’s better to move things around and put a succession plan in place, so that he can go do the things that he really wants to do or is really good at, versus continuing down that road because you feel pressured to or you feel like you are supposed to do that versus “this is the right thing to do.” I agree with you. I think that that’s totally the best-case scenario – is he makes that decision as opposed to somebody else making it for him.
Rob: Right. And making it for him, like kind of overstaying your welcome, and then people are like, “Um…” They’re bored like, “Um…” Your C-Level Suite is like, “Dude, what’s going on here?” Yeah, I agree. It is genuinely – obviously there’s always uncertainty when this type of thing happens. From my perspective, when I first heard – which is a while ago – I was like, “Alright.” Clay and I worked close together, and I know him. He’s a known quantity. I know how we interact together, so I was a little concerned because they did a national search for replacement. They didn’t just say, “Well, the COO is gonna take over.”
My concern was like, “Who’s that gonna be? Is it gonna be someone that I don’t know that runs a company completely different than Clay did? It’s gonna be this big shakeup that I’m not going to enjoy working with all that stuff,” and then the more I learned and the more I heard they were thinking about going with John, I had an inner sense of relief because he’s a known quantity. I’ve worked with John, so there’s obviously gonna be some changes. I’m sure, John’s gonna run it a different company than Clay did, just because they’re very different people, but I’m really genuinely curious and interested to see what’s coming here in the next couple of months.
Mike: I wouldn’t think it’s unusual for a company to run a national search like that and then end up hiring somebody internally anyway. I would imagine that even if somebody applies internally – if they were planning on doing a search for a CEO anyway, they’re gonna do that just so that they get a lay of the land and see if there’s other things that they’re missing because the last thing you wanna do is promote somebody from within, only to find out that they’re really not a good fit for that particular thing and you feel almost obligated to give them the position, versus if you actually do a full-blown search. You’ll feel a lot better about making the decision – assuming you go internally anyway.
Rob: Totally. It’s almost like a fiduciary duty or could be considered. It’s like we’ve got to protect all the shareholders. Let’s do the right thing, rather than do something that may look like an inside job or an insider – almost like a nepotism thing, although it’s not family, but that kind of stuff.
How about you, man? You are knee-deep in a launch right now.
Mike: Yeah. I sent out my first launch email yesterday and trying to record a video today that I still have not gotten to, and I’m hoping to get to that soon. But I got a few replies for my email that I sent out yesterday, from people who are interested in signing up. I’ve got some other people, who I’ve talked to over the past week or two that they basically just said, “Hey! This is not a good time right now, but in a couple of weeks, let me know” or they’ve got a vacation coming up or they’re gonna be out of the country or what have you.
I’ve got some things that are coming up, but the real impetus is really push hard on the email list this week. I’ve got a series of, I think, four or five emails that have got to go out, and I’ve still gotta write most of them so that’s gonna be the big priority for me over the next several days – is getting those emails written and scheduled, and then making sure that all the signup code is in place, so that people can get in, and they know what to do and have some videos that will walk them through how to do different things. All that stuff. It’s not hard. It’s just time-consuming to be honest.
Rob: Yeah. I know how that goes. How would you describe your mood? Are you excited? Are you stressed out? Are you just wanting to get it over with?
Mike: Real stressed out, to be honest. It’s just because I know all the different things that need to get done. There’s like the short list and then there’s the long list. The short list is the time-consuming stuff that has to be done in a relatively limited time frame, and then there’s the long list of all the things that I would really like to do or should be done or need to get done, but I can push them off theoretically until after the launch date, but I’d rather not, if I could get them in. I just can’t. I don’t have the resources or time or anything to be able to do that. Plus my wife’s out of town this week, which I hadn’t anticipated until after I decided on the launch date, and then I realized, “Oh, she’s out of town from Wednesday morning until Sunday night.”
Rob: Piece of cake.
Mike: Sure.
Rob: These kids are watching themselves, right?
Mike: Right. They’re cooking me dinner and making breakfast, yeah.
Rob: That’s perfect.
Mike: Right.
Rob: Totally not happening.
Mike: Yeah, totally not burning the house down.
Rob: Yeah, that’s pretty much what you’re trying to do. Oh man, I didn’t hear that part.
Mike: Yeah. What’s even worse is on the schedule, it was messed up. I thought she would be back Saturday night, because that’s what the calendar says. She looked at it and realized that on her calendar, it shows that she’s out till Sunday, but her hotel only goes until Saturday. It was like, “Oh, that sucks!” because I really thought – it was two days ago, when I found out that she was not gonna be back until Sunday.
Rob: I’m sorry. That’s not cool. Yeah, [inaudible 0:07:31] when you get this.
Mike: It’s nobody’s fault.
Rob: No. I don’t mean, not cool on Ally’s part. I just mean it’s not cool when that kind of stuff happens, and this is entrepreneurship. This is launching a startup, while you have a real life and you have a family, and this kind of stuff happens. It’s a drag, and it stresses you out, but it would almost be too easy without these wrenches getting thrown into the works.
Mike: Business would be awesome if you didn’t have to worry about customers or money.
Rob: Customers, people, money. Yeah.
Mike: Support issues. Yeah.
Rob: Yeah. Cool, so what are we talking about today? Is it one of the most fascinating topics that we’ve ever talked about on this podcast?
Mike: Absolutely. It’s all about harnessing the power of the marketing data that you have available to you and making sure that the data that you have in each tool is accurate, which doesn’t sound very sexy, but at the same time, it’s very useful. If you don’t have things wired up properly, you can very easily miss things from one tool to the next. Or let’s say that things aren’t getting synced properly between your app and either your marketing software, like your marketing automation software or your email list software. Your billing code, for example, because somebody can sign up for an account, but they may use a different email address – is their generic catchall for all the credit card statements and stuff that they sign up for because they want all of the billing emails to go there. But they don’t want to use that email address to actually sign up for your service, so now you’re going to end up with mismatches between things.
What we’re going to be doing today is talking about how to synchronize some of that information between your prospects, leads, and the contacts and the fact that – of course, generally doing that sucks, but it has to be done. One of the things that I’ve noticed is that inside Drip, for example – I think that Drip does a really good job of this. But they differentiate between tags, events, and custom fields. Since I look to that as the source of authority for those types of things, why don’t you explain a little bit about the differences between them? Because I think you guys are doing a fantastic job of explaining it on your website.
Rob: Thank you. I appreciate that. The reason we do a good job, I think, is that we have been asked that question, especially in the early days, so many times – “What is the difference between these things?” To me, this is the heart of marketing data. In almost any marketing system you go into, you’re gonna see tags and custom fields, for sure, and then we innovated in the marketing automation space, in the email marketing space. We brought in events, so we pulled that over from analytics like Kissmetrics and Mixpanel.
Here’s the simple answer. Tags are basically just a string, like a single word or phrase that you can attach to a person, so you typically use it to segment or bucket groups of subscribers. I might import 10 subscribers, and you just say, “I’m gonna tag them with ‘microconf 2017 attendees’.” That tag is just a piece of text, and it attaches to the record. Then you can later search who has these tags. I only want to send to people with these tags and not these other tags. Tags, I think, are pretty well-known, and they’re common now in marketing automation platforms and in a lot of others likes sales platforms and stuff.
Custom fields are really just name-value pairs. That’s how you think of it. If you use MailChimp, they call them “merge tags.” We call them “custom fields,” but it’s basically like if you want a first name, then the name is “first name” and the value is “Rob.” Or you could have last name or telephone number or address, so there’s just a name-value pair. It’s kind of like having two tags that are linked, but really it’s just name-value.
Events are the thing that – there’s no other marketing automation platform that has events, like Drip does. Again, we borrowed it. We migrated it over from analytics. Events are similar to tags, in that they have a name. There’s a text thing, but they also record a timestamp of when the event happened. You can look at how often it happens, so someone could – you can’t have a tag applied seven times. A tag is applied, or it’s not. It’s applied, or it’s removed, whereas an event – you can say they made a purchase seven times. That actually makes sense in the context.
Events also have a payload, meaning they have a collection, almost like a JSON Blob or a collection of name-value pairs. You think about an event like “Made a purchase,” what type of values do you want attached to that? You probably want a price, may want an item title, a skew – something like that. If the event is “Visited a page on your website,” what’s a metadata you might want to know about that? What was the page? Maybe you already know when it happened? Maybe you know how many times they visited this page. You could attach that all to that single event. They’re kind of like, in my opinion, a better version of tags, although tags still have some use.
I realize that was a long explanation, but I wanna describe it like if you’re a sophisticated marketer, it could have been shorter, but I wanted to make it approachable to lay people – basically a lay person. We have a good KB article on getdrip.com, and we will link that up in the show notes.
Mike: Yeah, I think the big differentiator there is just – with the tags versus events. The tags really give you a single indicator that says, “This person fits this particular profile,” and you can’t apply that tag more than once to somebody versus the event, where it can be – like you said, somebody could make more than one purchase. That’s an event. But the tags in Drip will just by default prevent you from adding a tag to somebody more than once, because it doesn’t make sense in that particular context.
The other thing that struck me was the payload side of it, because an event can have a payload associated with it. It’s really a description of that event and all the different parameters or properties of that event, and that may be important for something down the road.
Rob: Yeah, and the way I think about it is custom fields are – they’re like a description of the person, who the person is, because it’s like first name, last name, and properties about them – maybe have their plan and the price they’re paying you – stuff like that. Tags tend to be the buckets or groupings of people, and then events are things that people do. That’s the plain English version of it.
The reason we’re talking about this and defining these things is that tags, events, and custom fields are really the heart of your marketing data. This is how you have information and the learnings about the people that are on your list, coming to your site, etc. I think we’re gonna dive in now to – there are definitely other things, other data points, but these are probably a big part of what you’re gonna wanna try to be syncing between your marketing tools.
Mike: One thing to kind of point out in terms of those things, like Bluetick has tags and custom fields. One thing that I use custom fields for is tying contacts inside of Bluetick to other applications. You’re not always using, for example, a numeric ID or an email address, depending on which tool you’re using. Some of them will use one or the other, or they’ll even have a hash of some other data value or of the email address, and it’s difficult to match the data from one tool to another unless you have that information included.
I actually use the custom field in Bluetick sometimes to attach it to some other products. For example, a pipedrive deal – I’ll add a pipedrive deal ID in as a custom field. That’s the name of it, and then there’s a value associated with it that says, “Here is ID 123,” for example, that you can use inside of Zapier or other tools to tie the data back and forth, or to be able to map events from one tool to another.
But along those lines, let’s talk about some of the different ways that you can map information from one tool to another. The first one is a manual or custom sync. When you’re doing this, really what you’re trying to do is just export data from one tool into another, and you may either be doing that through the API itself or you may be downloading a spreadsheet or creating a CSV file and uploading it. These things are brittle. That’s the biggest problem with this is that the tools themselves – they require a lot of code or engineering work to take those things and translate them and move the data from one tool to another. It’s really hard to keep up with the changes. That’s really the biggest drawback to this.
That said, it can be the easiest way to get up and running or to get an initial prototype of “Hey, how does this data sync or data transfer work?” but longer term, as you expand what you’re doing, it’s probably not a great strategy to rely on that too much because it is probably not automated. Yeah, you could create a scheduled job or a cron job someplace that runs it on a periodic basis, but that doesn’t necessarily mean that it’s going to be the best way because it is so brittle. It can fall down, and when it does, you may not even know that something went wrong or that it’s not doing what it’s supposed to until much later. Then it’s almost too late.
Rob: Yeah, unless you’re kind of at scale and you’re really gonna monitor it. I’ve written some manual – they’re like cron jobs and stuff that would sync up between systems, and it just seems like every three to six months, something would go pretty badly wrong, and I would have to investigate. I have to stop what I was doing.
It’s like if you have developers – have a team of developers and you’re maintaining a whole system, and this is just one piece of it – that’s cool. But if it’s literally you hacking together a PHP script and putting it in a directory and having it run on a cron, meaning on a schedule-basis, that’s not set-it-and-forget-it. You’re gonna need to send yourself emails when it fails. It may die. A bunch of stuff can happen with it, and so this is not an ideal thing, if you’re just running it on your own and you want a set-and-forget solution.
Mike: I think your point about having something break every three to six months is spot on, from what I’ve seen. I used to export the data from Gumroad into a spreadsheet, and then I would take that and then I had a small script that I wrote that would take that data and then upload it into Infusionsoft. Like you said, every three months, something would change, and then something would break. Then I’d have to spend time on it. It just really was not worth the time and effort. Because they didn’t really support a lot of other ways to get data in and out, it just made things harder and more difficult. It’s hard to deal with a time-consuming time sync.
Rob: The problem is as developers, it’s super easy to build this thing for the first time, and so it’s very appealing to do so. It’s kind of like, “I can just hack up a script here in an hour. There’s an API here. There’s an API here. I pull it out and put it in.” You can. That’s right. It’s not that part though. It’s the maintenance of it that’s the pain.
Mike: The next mechanism that you can look at is using a tool that’s built specifically for syncing data. The tool that come to mind right off are Zapier and If This Then That. I think that mostly what I found is that for individual events, this tends to be something that you turn towards. Zapier obviously has a huge base of applications that they work with. I think they’re up over 800 at this point. Finding an integration between one tool that you’re using and another tool is generally pretty straightforward, but the problem with doing those is that, depending on how complex your sales funnel is or your marketing funnel and what data you need to move from one to another – it’s very easy to miss or realize after the fact that you should have been forwarding this particular data over and you weren’t. Then you have to go set it up, and there’s this line in the sand drawn, so to speak, which is not – before that point, you almost have no data. You can go back and upload it afterwards using a Zapier integration and a spreadsheet or something like that, but it still means that you have to do extra work in order to get it.
I do find it really useful, to be perfectly honest. I have a lot of stuff tied in through Zapier, and it’s supported in Bluetick. So I don’t want to make it sound as if that’s not a viable route, but it can be easy to miss things – is really the point – if you don’t have your marketing funnel mapped out.
Rob: Yeah, I think Zapier’s pretty handy for marketing stuff actually. I know we use it with our own internal stuff and in our own internal marketing communications and getting data in and out. I know we recommend it to customers a lot. It kind of takes the place in the short term of a first-class integration, because we build a lot of integrations. I think we have 40-plus that are direct with Drip and something else, but Zapier gives us another – I don’t even know – hundred maybe, and that’s helpful. Then we can get reports on which are the most common Zaps, and then we can say, “Well, we should build first-class integration with that – with those folks.”
From a business owner’s perspective and you’re running your own startup, I think it’s definitely cool to have that Zapier integration. Then I think as a marketer, it can be a really valuable tool. You’re right. There is that thing of if you miss stuff, and then it’s a fiasco. They do have rate limiting, so if you hit Zapier’s endpoint – if an app hits it more than (I forget what the limit – it’s fairly low) – but if they hit it more than X amount per hour, then those things will just bounce, and so that app has to know to retry, which obviously we do with Drip, but I know there are a lot of other apps that are not doing that. There are pluses and minuses, but overall I give Zapier two thumbs up.
Then you mentioned If This Then That, which I’ve always viewed – I think it’s more of a consumer version of Zapier. If This Then That came first, and I remember some people being like, “Isn’t this just a clone of If This Then That?” It was like, “No. It’s like a B2B version.” They integrated with the apps that we, as entrepreneurs and business owners, wanted [inaudible 0:20:25]. If This Then That’s integrated with Yahoo! Pipes and all this kind of stuff on the internet that isn’t necessarily applicable to businesses. But I haven’t actually used If This Then That. I’ve only used Zapier.
Mike: Yeah. I signed up for If This Then That account a while back, because I was trying to link things between Dropbox folders, and it wasn’t – neither Zapier or If This Then That were able to look into a subfolder and monitor a subfolder that hadn’t yet been created. You can point it to a folder, but if you wanted to monitor it for files in directly that folder, it was fine. But if you wanted to monitor for a folder getting created and then files being added to that folder inside – neither one of them can do it. That’s not their fault. It’s basically Dropbox not being able to offer that.
I found the UI of If This Then That extremely confusing. I signed up for my account. I tried to use it. I probably spent several hours on it, and I’m like, “You know what? I’m done.” I literally deleted my account entirely. I couldn’t deal with it. Because I couldn’t figure out how to do anything. It didn’t seem like it gave you access to a lot of the underlying pieces of how it works. Your description of “it’s aimed at the consumer market,” that makes sense to me now, because I was just like, “How do you even offer a product like this?”
Rob: I think If This Then That has done a lot of integrations with home automations stuff. I think Zapier really has not. That says where they’ve differentiated.
There are other alternatives, of course, to these two, and we’ll link up a core, a thread when someone asks, “What are the alternatives.” There’s a big list there, if you’re interested in looking at more, but for my money, Zapier’s definitely the leader in terms of B2B and marketing data that we’re talking about.
Mike: The next mechanism you can try and use is a product called Segment. You can get this at segment.com. It used to be called Segment.io, but the big draw here is that it allows you to essentially replay some of the events that have happened in some of your different marketing automation tools or your different sales tools, and then pipe them to different places. It’s really good for doing that at scale, and because it gives you the capabilities of really just using one snippet of JavaScript, and you can turn on and off different tools in the application that you’re sending data to. And because it gives you that backlog of things, as soon as you connect it to your account or put it on your website, you then get a full history of all the previous things that have happened and can send them into a new tool.
Let’s say that you decide to move from one tool to another. Tool 2 is gonna be the go-to later on. You can always just turn that new one on and pipe all the previous data into it. I always thought that that was like a really fascinating way of doing things. They used to have a different pricing model as well. They would look at the tools that you were sending data into or pulling data from, and they would charge you more based on what those tools were. Like Salesforce, for example, tends to be an expensive tool, so it ended up being in a higher price tier even if you weren’t using it very much.
Rob: I didn’t realize you could replay old events with Segment.
Mike: I’ve not done it myself. I have seen – there was documentation. Like the last time I looked at it, in terms of how to do that stuff, that was my understanding was you could basically replay things to – basically pipe all your previous data into a second tool.
Let’s say, somebody wanted to switch from AWeber or something like that to Drip. They could take a lot of their old data and pipe it from – they used to go into AWeber – let’s say it’s 30 days or 60 days or whatever – and they say, “Okay. Take this 30 or 60 days’ worth of history and send it into Drip instead and replay it, so that that now in Drip will get all of that information.” I don’t know how far it goes back, but that was the sales pitch for it.
Rob: That’s interesting because I was going to say, “That would be hefty if they were keeping all your data forever.” That’s always the thing I thought they didn’t do, just because of the volume that they would have to absorb.
Mike: Yeah. My suspicion is that they don’t do that forever, but I would imagine that they probably have at least a semi-limited history. Even if it’s a couple of weeks, that couple of weeks could be important to you. If you wanted to just try out a new tool, it gives you a much easier way of doing that because when you sign into a new tool, especially if it’s any level of complexity, you’ve got nothing there, so you don’t really have a good idea of what it can do for you. But if you can prepopulate it with actual, live data from your own systems for the past couple of weeks – you sign up, pipe it all in, and boom! It’s there. You can actually use it and see what it would really do for you.
Rob: Yes. Segment.com is a solid tool. They integrate with a ton of things, and as you said, it’s not for the one-off moving tags and custom fields here and there. It’s an event-based system. It allows you – the original thing was that they allowed you to put the Segment JavaScript on your website, and then you could pipe it anywhere. You could pipe in into Kissmetrics or Mixpanel or (I think) Google Analytics. You can pipe it into Drip, which we integrate with them.
You could pull stuff into and out of HitTail, like they integrated with us back in the day. They actually wrote that integration, but now when you do it, I think you have to write your own – is my recollection. It’s a good tool, and it’s for masses of data. I think that it can be super helpful for getting data into and out of systems, and being able to report on them and not necessarily in Segment, but they integrate with a bunch of analytics and reporting tools.
That’s something – some people will come in. they’ll use Drip, and they’ll say, “I want all this fancy pivot table capabilities and blah blah blah. I want all this stuff.” It’s like, “We’re a marketing automation platform. We’re not a business intelligence platform. We’re not gonna build that into Drip,” but here, we integrate with Segment. We send a ton of data to them, so just hook up your Segment account, then pipe that into one of these BI tools and you’re set. You can do whatever you want. It allows us not to have to build the world into Drip and to be able to put boundaries on things.
Mike: I think using it as a data hub is extremely helpful. The downside of it is, of course, there’s a lot of complexity there, too, so you could easily spend hours, days, or even weeks just evaluating it and seeing if it’s gonna fit into your business and just spending the time learning how to use it. I found that when I first signed up for it a long time ago was that it was a huge time sync to really get up and running with it and understand how the different things worked and how it pipes data from one place to another and how you would do some of that data piping. That said, it is really powerful. You can do a lot with it.
Moving on to the next section. I think one of the key pieces of advice in a situation, where you’re trying to get all the data from one place to another is to settle on a single source of authority. That’s a phrase that I’ve used for years, talking about systems management software and trying to manage large numbers of machines, whether it’s a couple of 100 or 25-100 thousand machines all at once.
It’s very difficult to do that, if you don’t have a single source of authority for that information. Because if data gets out of sync, you need to know what is the master source where this information comes from. Who’s the gatekeeper of this?
Let’s say you got Tool 1 and Tool 2, and Tool 2 doesn’t have a piece of information, is it not supposed to have that information or does it not have it yet? You have no idea by looking at that tool or the other one, unless you’ve already decided which of those two is going to be the master data source.
Rob: Yeah. This is actually an interesting thing happening, with ESPs and marketing automation platforms – is we build Drip – I keep bringing back to Drip because this stuff’s really something we have dealt with a lot – is all this data syncing. This source of authority – I think Brian Dunn calls Drip his source of truth, in terms of the data. Or you could call it the customer database. Some people might call it a CRM, because really it is customer relationship management, but that has now been, in terms been bastardized into sales software.
What you’ll find out is if you do a lot of email marketing, then quickly your email provider (assuming it stores data like clicks and purchases and has your tags and has your events) – it can quickly and easily become your source of authority or your source of truth. That’s something we have been doubling down on as we notice more people doing that.
First it was solopreneurs who said, “Drip is where I keep all the data, and I want to get all the data in there.” Then we started seeing two and three-person companies. Now we have five and ten-person companies. Really interesting to see. We’ve [inaudible 0:28:36] down and started building more stuff to allow people to do that, and so I think if you are gonna do a lot of online marketing, that’s something to think about. It’ll probably be a CRM or a marketing automation platform that’s gonna be this customer database for you.
Mike: I think that actually brings up an interesting point that I run to – is that what is the idea or how do you identify who a person is in your source of authority? Is it gonna be an email address? Is it gonna be some sort of a generated unique identifier or something like that? Because it’s difficult when you get into a situation, where somebody signs up like they put in their credit card. All the billing information goes to that one email address, and then they sign up and they have a user account that is a different email address.
In marketing, the automation software – a lot of them, the email address is kind of that source of authority or that unique identifier for that person, and in the case of billing information, especially if it’s a one-user account, now you have two email addresses. It really is the same person, and it’s hard to differentiate between them sometimes. That’s why some people will go towards using a CRM for that, but again, there’s pluses and minuses in both aspects, whether you’re using a marketing automation tool like Drip or if you’re using a CRM. Both of them are gonna have pros and cons for that type of schema.
The last thing to talk about is how do you keep some of these data paths straight? I think there’s pretty basic guidelines about how to track the information flow from one tool to another, but the basic – you can start it out with is just a pen and paper. That’s easy to get started with, when you’re just trying to build out and map what your sales and marketing funnels look like, because you can just really quickly draw something out. But as it gets more complicated, you’re probably gonna have to graduate more towards a tool or a document or a spreadsheet that is going to allow you to put a lot more information in there.
Something that I found useful is to implement some sort of a workflow in either a desktop or a cloud-based workflow tool. There’s a bunch of them that I’ve tried. I’ve tried things like Gliffy. I’ve tried Draw.io. I’ve tried Moqups. I’ve tried doing things in Drip’s workflow tool as well, and that works great so long as you are operating within the confines of Drip. Once you start to go out of that and do things that are not involved directly with Drip, it sort of falls apart a little bit. That’s not a knock on Drip specifically.
Rob: Sure. Just the reality of it – yeah.
Mike: Yes. It’s just the reality of it. That’s not what it was for. The one I’ve actually settled on is a product called Lucidchart. Fairly inexpensive. It’s like $8 or $9 a month for one of their more advanced accounts, but you can get it for $5 a month on the lower end.
Rob: I’ve heard of it. I haven’t used it, but I’ve heard some people speak highly of it.
Mike: Yeah, it’s really good for being able to map out what a workflow looks like, in terms of how people enter your marketing funnel and how they go into another one. Then you can also have a bunch of different things wired together, so you can zoom in on one specific piece of it. Then you can just encompass it and say, “Okay, this is how people get onto our mailing lists,” and that’s like the whole workflow. Then once they’re there, you have a different diagram and document that describes how they move through the sales funnel itself or the onboarding funnel. Each one of those could be a completely different document. You just link back and forth between them.
Rob: I think that wraps us up for the day. 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 Out of Control by MoOt. It’s used under creative commons. Subscribe to us in iTunes by searching for Startups and visit our website for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 350 | Launching Books, Compensation for a Side Project, Starting with A Lot of Runway, and More Listener Questions
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike answer a number of listener questions including launching books, compensation for a side project, and starting a product with a lot of runway.
Items mentioned in this episode:
Transcript
Rob: In this episode of Startups For The Rest Of Us, Mike and I talk about launching books, compensation for a side project, starting a SaaS app with a lot of runway and more listener questions. This is Startups For The Rest Of Us episode 350. 350 episodes, Mike.
Mike: Wow. It didn’t even occur to me that this was 350.
Rob: It’s crazy. That’s almost seven years because we tend to release one a week.
Mike: I think it’s more than seven years. Because we started in 2010, didn’t we?
Rob: Yes, you’re right. It was late March of 2010.
Mike: So this is eight years?
Rob: No, because it’s 2017. It’s July 2017.
Mike: Oh yeah, you’re right.
Rob: I was trying to divide 350 by 52 and it’s only like 6.7, but you’re right. I don’t know how the numbering worked out. It’s weird.
Mike: I think it’s because there was a time for six months or so where we were going every other week for a while. That’s why it doesn’t quite work out.
Rob: Really? That wasn’t at the start, was it in the middle?
Mike: Yeah. It was probably a year into it or six months into it, something like that.
Rob: Okay, we dropped down because we had hundreds of listeners and it was like why are we doing this every week? Was that why we did it?
Mike: No. I think it was because we were trying to figure out whether or not it would impact growth and we had other things going on. We were just trying to figure out, “Okay, does it really matter?” And then, we went back and looked at the stats and said, “Hey, publishing once a week actually makes a huge difference.”
Rob: That’s right and we also, I remember early on, we had a tough time coming up with content every week. Remember we got like 20 something episodes in and we’re like, “Alright, that’s all we have to say. We’re done.”
Mike: We had no idea what we were going to talk about next. Of course, we were also a lot more careful about what we were doing, now we just shoot from the hips. It’s like yeah, whatever.
Rob: 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: And I’m Mike.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, sir?
Mike: I’m hoping that I can get through this entire podcast episode without touching the mute button and then touching my face or mouth in any way, shape, or form because our cat started chewing on stuff including cables and chewed through a couple of cables so I’m like, “I don’t want it chewing through my headphones.” So I sprayed them and you run into at least three situations over the past few weeks, used my headphones, where I touched it and then I wipe my mouth or something like that. And let me tell you that anti-cat chewing on stuff tastes god awful. It’s the worst thing in the world and it doesn’t come off your hands.
Rob: Oh, I bet. There was something called Bitter Orange or Bitter Apple that my mom used to use because we had several dogs for that kind of stuff and I got it on my mouth once, it was horrendous. And yeah, your soap doesn’t take it off. That’s the point. It’s really, really hard to get off. You’ve been working on a video series here. What are you? Seven or eight days into this?
Mike: The ninth one got published this morning so the 10th will go out tomorrow. I’m doing an ask me anything for that one. By the time this airs, that’ll be over.
Rob: Cool. It’s the 21 days before your SaaS launch. If people head to singlefounder.com, they can sign up to hear more about it. I’ve watched every one of the videos although many of them at 1.7 or 1.8 speed, I’ll admit, but it’s been cool to follow along. I’m glad you’re doing this.
Mike: Cool. I’m publishing a new blogpost today probably that’s basically just going to open it up. Previously, I just had it available for the people on my mailing list but I’ve got enough comments and feedback and stuff that I think it might be beneficial to put it out there so that even if you’re not on the mailing list, if you just want to head over to the site and click on the videos and stuff, you can watch or barrel through them if you want to catch up. Yeah, I’ll be doing that today.
Rob: One thing you do that I had a question about is in every episode, you hold a bottle of whiskey and you talk a little bit about it for 30 seconds then you take a sip of it and then you go into what you did that day but I was trying to do loose math. I’m not that great at math, Mike, but if you’re doing 21 days and you hold up a different whiskey bottle, do you actually have 21 bottles of whiskey?
Mike: Do you want the honest answer to that question?
Rob: The honest answer, Mike.
Mike: There’s technicalities here. I probably have closer to 30 or 35, but in all fairness, somebody came over and dropped off a 12 pack of nips of Fireball at one point. If you include that, it’s a little higher than it should be.
Rob: I don’t count Fireball as whiskey, I’m sorry.
Mike: I don’t either. I was really torn about whether I’m even going to show Fireball. I think I might put several whiskeys together and be like this one’s terrible, and then drink it.
Rob: I thought it was funny. One of the best parts is you did Crown one day and then the next day you did the maple flavored or something and then you were like, “Ugh! This is god awful.” Like the look on your face was hilarious. I think you offended some people with that comment.
Mike: I don’t care. I’m sorry but it is a very fake maple taste. There are Maple whiskeys out there that you can get that actually have maple syrup in them but they tend to be classified more as a liquor than as whiskey just because of the content which there is technicalities there, I get it, but there’s another one called Sortilege, I’m not sure exactly how to pronounce it but that’s a liquor and it’s got whiskey and real maple syrup in it. It’s actually quite good. But the Maple Crown Royal is just awful.
I actually had somebody’s comment to me like thanks for turning me away from that because they were going to try it. In terms of full bottles of whiskey, I have 18 or 19 full sized bottles.
Rob: You’re going to have to run out last couple of days?
Mike: Yeah. Sometime between now and next week, I’ll probably go out and pick up a couple of extra bottles just so I’m not repeating some things.
Rob: That’s interesting because I drink a lot of whiskey but at any given time, I have maybe two or three bottle in the house and then as I finish, I’ll buy something else but I don’t have a big place where I could store that much, I don’t think.
Mike: Got it. I was born in Japan and my mother brought over all these Japanese hand carved furniture from Japan and she gave me the bar that they had so I have that fully stocked with all these different whiskeys. I used to just collect them but I got to the point, probably six months ago, I’m like, why am I collecting these? Why am I not just drinking these? I’ve been digging into them a little bit.
Rob: Now that we’ve lost all of our listeners, I think there’s three people left listening, they’re like, “When are these guys going to start talking about startups for the love of God.” For the last week on my end, I’ve been doing some hiring, more interviewing. We’ve been interviewing constantly pretty much since the acquisition but we hire slowly. We’re extremely picky about skill set and about personality and culture fit and a lot of elements so we hire a lot slower than most SaaS teams or most startup teams do.
We have just stumbled on two or three really good candidates in the past few weeks. It’s nice to grow the team slowly and a lot of people get on board and productive. I don’t know if I said it on the podcast but we’ve had several weeks of the highest feature velocity in terms of shipping new features. The last month or two is probably the highest in Drip’s history.
That’s just gut feel, I don’t have absolutely numbers on it but it’s like we’ve shipped a ton of a new stuff and that’s partially because we’re, in my opinion, actually growing the team slowly and I want people get up to speed so that when you’re constantly adding people, you’re detracting from that people who should be being productive because they have to train everybody and get them up to speed and everything. Looking ahead, I guess I’m just optimistic and enjoying. This is when it’s fun, it’s when you’re getting a lot done.
Mike: I’m surprised that Drip being acquired by Leadpages and Leadpages is a funded company. I’m just surprised that culture is there of hire slowly to make sure that you’re getting the right people as opposed to I think most people when they picture a Silicon Valley startup, it’s like, “Oh, just hire whoever you can possibly get your hands on to get them in there because you need bodies to generate code to put it out the door.”
I do think that it’s a much better approach but there’s a tradeoff there in which you’re going to have to move slower and release less features over a certain time frame because you just don’t have the people. At the same time it’s like, you’re releasing good features and they’re quality so you don’t have to go back and incur a lot of technical debt because those people are coming up to speed at the right pace, so to speak.
Rob: To their credit, Leadpages has let us make that decision and has basically said, “As long as Drip keeps growing and you’re scaling and you’re doing all the right things, like you have been in the past,” Drip’s four and a half years old based on when we broke around on code and it’s probably about three years old from when we launched, and they say, “as long as you keep doing what you’re doing, you can grow as fast or as slow as you want.” They let us drive that, us being Derek and I.
Again, it’s to their credit. They haven’t forced any type of hiring culture on us. Leadpages itself grew rather quickly. I think they hired 100 people in 2016. They hired a lot of people that year. They did do exactly what you’re talking about, the high growth funded startup approach but they haven’t forced that on us.
Something else too is we haven’t had to hire that many because I’m only talking about product and engineering, I’m not talking about support, sales, marketing, finance, HR or any of that because there was already that infrastructure. We have a team of I think 12 full time support people working on Drip right now and I really hired one, it was Andy who’s been with us essentially since the start and since pre-acquisition but I didn’t have to hire those 11 people. It is a bit of apples and oranges because Leadpages had to grow an entire organization and I only have to grow the product engineering org.
Mike: Yeah. That’s true. I have seen cases where a new company will come in and they’ll acquire a smaller company and then a lot of the administrative marketing or sales team ends up leaving just because the bigger company already has those things in place and the smaller company basically gets gutted and they move everybody or let them go because they don’t need those roles filled anymore, it’s overhead. They’ve already got those things in place.
You are definitely in a different position but like I said, it’s nice to be in a position where you can just make the right decisions because they’re the right decision as opposed to being told like hey, you have to do this because there’s money to spend or something like that.
Rob: I agree. The other thing that has been nice with this funding, basically “being funded,” is that we are hiring fewer people but since we are so picky, they tend to be really good and thus, they tend to be really expensive. They tend to make a lot of money where they’re at and they’re worth that and it was something that couldn’t have afforded when we were bootstrapped. I’m pretty much across the board all the salaries that we make and that we’re hiring the people at. They’re worth it, it’s market rate. I just couldn’t afford to do that when we were bootstrapped in Fresno. How about you, what’s going on before we dive into some questions?
Mike: Not much else, really. I’m adding a couple of more customers to Bluetick on the way to my launch. I talk a lot more about that probably in my video series. I’ll leave it there just in case anybody’s interested. I think the plan is to try and add as many customers before the launch as I possibly can. I’ve done a couple of private demos for people here and there. It’s just interesting showing certain screens or how to do certain things and it’s like the light bulb moment, they’re just like, “I want it. That’s enough, I don’t need to see the rest of it.” It’s actually difficult to shut up at that point because it’s like they’ve already said, “Here, take my money.” And you’re like, “Oh no, but you see this, see that, over here.”
Rob: That’s really cool, man. Really good to hear. Alright, we’re going to answer some listener questions today, they continue to come in. We’ve got a couple of voicemails but first, I’m going to kick off with an email from Dan Miller, and he says, “You inspired me to write a book.” He says, “I’m Dan Miller from Canberra, Australia. I’ve been listening to Startups For The Rest Of Us for about two years and my wife, Christy, and I also listen to Rob and Sherry’s podcast, ZenFounder. About a year ago, I decided to take the first steps to move out of full time software consulting. My long term idea is to start a SaaS but when I heard you guys talking about the stairstep approach, I realized that going straight from consulting to SaaS was probably too far of a leap so I decided to turn a bunch of development notes I had taken into a book and this is about on the MEAN stack.”
Mean is MongoDB, Express.js, AngularJS and Node.js, just a technology stack you can use to build apps. He’s built a lot of apps, kept a lot of notes and so he launched a book, it’s called Lean MEAN Web App Machine. Says it’s going to be available soon in print from Amazon and a PDF from Gumroad. His website is miller.productions, that’s not miller.productions.com. I think productions is actually the TLD. So it’s miller.productions and he says, “Thanks again for all your work and creations over the years, you guys really have inspired me. Keep it up. I look forward to following your progress and learning more from you.”
Mike: I do think one thing we probably haven’t emphasized enough about your stair step approach, Rob, is the fact that it’s not even just the experience level involved in building a SaaS but it’s also the resources that you need and the length of time that it takes to get something workable and viable out the door.
I spent six months after I got the initial version done just trying to get it to a point where people would look at it and say yes. Even though I gave you a pre-order and paid for it, I’m still not necessarily comfortable moving forward because the product just really wasn’t there yet and it took a long time to get there. I underestimated how long it would take to get through that process and I think that it’s very easy to do that.
Rob: Right, and lose motivation and you questioning whether you’re going to find customers eventually and you don’t have the runway. There are so many things that stair stepping takes care of and it’s not just actual skill set and money but it’s confidence. It’s just confidence that you’re going to make it happen because you have before on a smaller scale.
Mike: Yeah. I think in my situation it was more just the runway and the timeline and everything that went with it, not so much the confidence. With the pre-orders and stuff I had the confidence, it’s just the product wasn’t there yet. It’s like, “Oh, this sucks.” But getting through that second wave, I’ll say, or that second iteration on the product was extremely helpful. It was a lot longer than I expected it to be.
Rob: He also said he gave us a shout out in the acknowledgment section of his book so that’s cool. He did give a discount code, if you’re interested in buying this. First 50 listeners that purchase the PDF copy can enter offer code startups at the checkout. Thanks for writing, Dan. I appreciate it.
Mike: Thanks, Dan. I think our listeners will really appreciate that.
Rob: Next, we’re going to a voicemail question from Cory Moss.
Cory: Hey, Mike and Rob. This is Cory Moss. I have a side project I’ve been working on for a couple of years and I’ve grown it to about $800 a month. For a big code upgrade coming up, a developer friend of mine is joining my team of just me. He’s expressed ongoing interest so he might be around for a few weeks or he might be around for the life of the product. Given that there are no shares to split, how would you guys offer him compensation? Like I said, it’s a side project, it’s not a company. There are no salaries, there are no titles. I’m not working on it full time and I probably won’t be for a long time and it’s a side project so there’s a little risk. These are really the things that one user has to figure out equity. How would you recommend that I compensate myself for the time that I put in versus how do I make sure he feels compensated even if he only ends up helping me out for a couple of weeks? Thanks for everything you do. I appreciate it.
Mike: Cory, it’s an interesting situation just because of the fact that it’s a small product and I think what strikes me, there’s a few different pieces that I plucked out of this. The first one was that you’ve been running this for a while, a couple of years now and it’s at $800 a month so it sounds to me like the growth is not there yet. It doesn’t mean that it won’t come but it doesn’t sound like it’s on a hockey stick trajectory where you can count on revenue from this upgrade being large enough to sustain both of you full time.
The other thing you need to consider is is this person really interested in coming on as a business partner? Is the product itself capable of supporting either salaries or dividends for both of you and can you afford to just pay him outright? Those are all kind of considerations that you need to think about. But I think that because of the situation you’re in, I would probably lean towards at the very least talking to him and just establishing an initial compensation to see how things work out.
I think that that does a couple of different things for you because if you just jump right into a partnership or relationship of any kind like that, then you can very easily have issues down the road where you find out that you don’t work very well together. Bringing him in on a consulting basis or I don’t want to call it partnership basis but to assist with the certain pieces of it, then it gets you through that and it gets you some familiarity with how you each work and whether or not you’re going to work well together. I would just pay for that outright with the understanding that yes, we can talk about that other stuff down the road but right now, let’s just see how this works out first.
You could also, depending on what the actual profit margin is, you could potentially pay for that out of profits down the road especially if you don’t have the money to pay him upfront right now. If you could work something out, say, “This is how much it’s making, $800, I’ll give you $400 or $600 every month for the next x months until your time is paid off.” That’s another way to approach it. Essentially, you are using, I’ll say worker financing, to get the work done and still be able to pay for it. Because otherwise, you got to front the money and that might be difficult based on what situation you’re in.
But I would try a short term approach where you just do some consulting work together a little bit, feel things out, see if it works out. If it doesn’t, that’s the end of it and you’re good. If it does, then you can discuss where to go next and whether or not the business has an opportunity to succeed both of you putting time and effort into it. And then you can figure out what does that look like. In terms of valuation of what your time is worth and how much you’ve put into it, I would probably look to see how much is it currently worth today and you can guess about how much time and effort you’ve put into it but it may very well put the product completely out of reach of somebody buying into it.
The other mechanism obviously is you could say, “Okay, we’ll buy it in a lower amount and then we both work x number of hours or you put in x number of hours in addition to what I’m putting in, to make up the difference. At that point they’re putting sweat equity into it and at some point, they’re vested at 50% or 25%, whatever the split between you two is. Those are the kinds of things that come to mind but Rob, what are your thoughts on this?
Rob: This is a tough one. Sometimes, handshake deals, honestly, can be a way to go if it’s someone like a long term friend and you really do trust the person. What I mean by that is, Chris said there’s no stock to split. He probably owns it personally, it’s not an entity on its own and it probably goes straight to his schedule C income on his tax returns so there’s nothing to give out. But I question if starting a LLC or even going so far as to formalize a partnership, I don’t know if that’s worth the effort given how little revenue it makes and how slow it’s growing.
I guess that’s where I would use my judgment. For example, if suddenly I had a side project and it was doing similar amounts of money and someone wanted to explore this opportunity, I do think that there would be a certain number of weeks or months where it would make sense to do the trial like you said and then if things work out and things do start growing, then you formalize it. That is something we did with DotNetInvoice. It was never really its own business entity but in the US, you can do something called just a partnership agreement. I think you can file that with the state, I don’t even remember but you basically sign a partnership agreement and there’s not stock but you can do an equity split.
You can just say I own 90%, you own 10% or whatever. And again, you have to ask yourself then, what if he only sticks around six months, is it worth the 5% or the 10% or whatever number you’re giving him. Because you can do restricted stuff and I don’t know how this is getting far beyond my understanding of technically, if it took you to court, is there a way to restrict partnership ownership, I don’t know. I’ve heard of restricted shares and stuff like that.
With DotNetInvoice, with Jeremy, the guy who I partnered on it with, he came along later as very much similar to this and it was doing $2,000 a month or something, we just signed an agreement and we view this legally binding between us but frankly, I don’t know how it would have gone over in court. We just didn’t expect that to happen and we were good friends and we’d worked together for a decade doing consulting.
It was a handshake deal that we put in writing and both signed and then he basically got more and more equity over the course of a year as he contributed more. He, in essence, did vest when that was the idea of it. I’m not saying you should or shouldn’t do that, to be frank. It was just how we handled it because we had that relationship and it worked out. I owned DotNetInvoice for several years and then since then, when I divested myself of everything as Drip got bigger, I actually gave the product to him, my ownership half. We just dissolved the partnership and now he owns it.
There’s a lot there and this is a complicated topic. I’m glad you called in and I hope that’s helpful, Cory. As we said last episode, people who send voicemails, you tend to go straight to the top of the cue. Cory just called in in the past couple of weeks.
Our next question is from Juka and he says, “You pointed out that it might be a bad idea to expand your product into a new feature area because you probably won’t be best of breed in both.”
I think he’s referring to me talking about how we’ve kept Drip focused on email marketing, marketing automation and we haven’t attached all these other apps to it. We haven’t built a shopping cart or landing pages or affiliate management like some of our competitors have done. Continuing with this email, he says, “Since that’s what he’s planning to do. I’d like to get into more detail on this. For example, using two separate best of breed products will most likely be more expensive than one product that does both things. Wouldn’t people appreciate the lower total price and the tighter integration as well? Personally, I’m starting out with time tracking and planning to add invoicing and accounting and later on maybe even stuff like payroll, CRM, etc. I don’t have much of a vision for my product besides that it’s meant to help people deal with stuff related to running a business. But I also want to make it very good. I think I’m headed towards having best of breed time tracking and I think I can implement the other stuff well too. What’s your take on this?”
Mike: I think when you’re looking at this specific situation, the thing to keep in mind is whether or not the features that you’re adding, could they stand as a completely separate products on their own or is it something that really needs to be integrated into the product that you currently have?
There are certainly products that go out there in the marketplace and over time as people make more requests, they expand their footprint and they get more functionality and then they cost more and they tend to move up and away from the customer base that they originally started with. There’s nothing fundamentally wrong with that but you do have to recognize that as you add more features and become much less of a point solution and become more of a, I don’t really want to call it a platform, but a one stop shop for accomplishing all things within a particular silo, then you start to eliminate yourself from contention for consideration via certain segment of the population because they’re not interested in all those other things. They need one or two pieces of it but not the whole thing.
You could make it modular and say buy this or buy that and do ala carte sort of thing but then things get really, really messy so I probably wouldn’t recommend that. I don’t think that having two best of breed products and making them work really well together is a bad strategy. It does pose some marketing challenges though because how do you present that in such a way that it is obvious to people that you can either buy this or but that or you can get this suite of products that lumps them together. That’s probably a better approach.
That way, you silo it all underneath a corporate umbrella where everybody is coming to you for solving problems in this particular niche and if you need the CRM, you get this. If you need the invoice and accounting, you get this piece over here and by the way, you can lump them together and instead of paying $50 for each of them, you can pay $75.
That’s similar to the strategy that Intercom has gone with a lot of their products. They have four different products right now and you can buy them individually or you can buy them in a bundle and it costs you less money to buy them all as a bundle. But otherwise, you get them individually. For you as a consumer, the benefit of that is in theory, the company behind it is all working on the same code base or on the same teams and they have much better access to the code behind it and the teams and can do a much tighter integration that works better than if you were to tie things together using Zapier or custom webhooks or anything like that.
I don’t know if it’s the worst thing in the world to go in that direction but there are people out there who are just looking for a point solution. You have to be cognisant of that facts because that may be all that they want.
Rob: I think if you are in a vertical market, meaning you have time tracking for hair stylists, or for electricians, or for designers, whatever, like a really niched down market, I actually think you could add these other things and be okay, you still will not have multiple best of breeds because you cannot out compete teams who are totally focused on just that space or just that one app.
You can build a good product. It’s keeping up with all the feature requests and the changing environment. You got to think about people who have teams of 10 or 20 engineers and if they’re just focused on time tracking, they are going to out feature you and they’re very likely going to out innovate you and if you have time tracking, you were saying the CRM and whatever else, you’re going to get smoked. You will not have best of breed products in all of those spaces.
Again, unless you’re in that vertical where you really have niched down and then you may have it within that space again, the hairstylers’ space and the designer’s space is a tough one because there’s a lot of people doing it for that. That’s why I’m not saying like designers, developers, or freelancers because there are so many time tracking apps there. So if you’ve picked a vertical, then maybe I would perhaps consider building out an entire business suite. But if you have a horse on a product that you’re going to service everyone, I would say that there is zero chance of that happening.
With that said, if you have zero customers right now and you aren’t already dealing with support and adding features and all that stuff, then you need to launch before you start building anything or building anything further. If you believe you have a best of breed time tracking app, then take it to market and see what happens. I don’t believe that adding on another piece is going to help but you will know once you have 500 customers or 1,000 customers. You’ll know exactly what people are asking for and you’ll know what can potentially retain more customers or broaden your market. That’s my take on it. I hope that’s helpful.
Our last question for the day comes from Tom and he says, “I’ve been wanting to do a SaaS startup for the last few years but I run a consulting firm. Not in the same situation as a lot of other people, I have been a software engineer for over 10 years and my custom software consulting business does several million dollars a year. I have been able to put myself in a good spot financially.” He says he has runway of six to seven years. He says, “If you did have the cash to go full time with a runway of six or seven years, would you recommend going after a larger SaaS business even though you do not want to raise funding? Is a super long runway and a lot of determination enough or are you still going to need to raise several million dollars in VC to tackle something that’s either saturated or creating a somewhat new market?”
Mike: I think that springs an interesting question about the potential for having too much runway. The reason I say too much runway is that if you try to build something and you don’t have enough runway, obviously, you’re going to fail because you run out of runway, you can’t get the product out the door in the time that you have.
But if you have too much, you run into the opposite problem where your motivations to finish things or to get it out in the market as soon as you possibly can so that you can learn things is going to be impacted and you run the risk of waiting too long to launch and packing so many things in there that really doesn’t matter to the customers.
I think that that’s something that you need to keep in mind when you’re looking at this. I would probably cut that down and put it into chunks and say cap it on certain things. Let’s say 18 months or something like that for a particular idea that you’re going to pursue. If it doesn’t start to get any sort of traction, then you kill it and move on to another one. I think that’s a good approach because you do have the runway to be able to make those types of decisions and chop it up but being able get the traction within a certain amount of time is going to be critically important for this.
I do think you got plenty of runway to try a SaaS, even if it’s your first time out because you have enough runway to fail several times along the way or find several ideas that you start and make same false steps and it doesn’t ultimately impact negatively. There’s no negative repercussions for going down this road and failing or having it not work out. Or even just break even. That’s not exactly the situation you’re looking for.
But again, you have to keep in mind that that’s going to be a hard thing to deal with and you will have to think about it because you can easily get to a point where you’re like, “Oh, screw it. I don’t want to deal with this customer support issue. I’m just going to shut the whole thing down because I don’t like what these people are saying.”
Rob: Yeah. You’re in a great spot admittedly, right? Not doing it on the side is just a better way to go. Because it’s not as stressful as trying to hack nights and weekends. I’d been there and I wouldn’t do that again if I had the means. When I’m think of having six or seven years of runway, I’m just going to throw out a number, I’m imagining you have $600,000 in the bank, maybe it’s $400,000 but it’s probably a substantial sum of money.
The question to ask yourself is how much of that are you willing to spend and feel okay about? Because if it really does take you two or three years to get there, you might chew through hundreds or thousands of dollars, will you be okay with that? Some people are okay, it’s risk capital or whatever and they’re willing to put it in and other people, it would drive them nuts to be drawing their savings down like that.
The other question I would throw out is do you plan to do this solo because it’s going to take a lot longer or do you plan to hire a couple of people to help you? Because when I look back at how we grew Drip which is basically, I was in a smaller position as Tom, I didn’t have enough money in the back but HitTail was throwing off enough cash that we basically funded Drip using HitTail. By the time we broke even, I was out somewhere between $150,000 and $200,000. Not just because of my expenses but because I hired people to help us.
If you want to move faster and you think about hiring people, you may not have six or seven years of runway. I’m just going to take this $200,000, set that aside and then the rest of it I’m not going to touch at all. That’s my personal money that I’m not willing to get into and then use that $200,000 kind of as your own little angel round. And put that in the bank, the company bank account in essence, that you start and draw off that as you hire, as you pay for hosting expenses. There’s just going to be other expenses, it’s not just your living expenses, unfortunately. Especially if you’re trying to go into a bigger or more crowded space. That’s my initial thoughts on the money part.
Then there’s the question of if you have never launched a SaaS app and you want to launch into a place where it’s crowded and there’s VC funding and there is all kinds of chaos, basically red water, they call it. Personally, I would not have had the skills to do it until I had done several of my software products, until I had done HitTail. That set me up to do Drip. It gave me the skills and the confidence and the experience and all the things that I talk about with stair stepping.
I guess you have to judge for yourself, I would try not to be overly optimistic that just having six years and determination are going to mean that you can compete in a big space. I don’t think you need the VC money either though, like Tom said in his email, but I do think you need a skillset and some experience and the confidence that you can do it, otherwise you may get six or nine months in, get discouraged and bail because you’re wasting money or you may get two years in and since you’re just learning so much at once because all of the moving parts of SaaS, not just the tech, right? It’s the marketing, the sales and the customer’s success, and the support. All that stuff, trying to learn all that at once, it’s going to be a big learning curve.
Those are my thoughts. I think that you got to do some soul searching and know yourself on this one.
Mike: One thing that came to mind as you were talking about all that was that if you have this much of a runway, you could also consider just buying an app that somebody else doesn’t want to work on anymore, that is already making $10,000 or $20,000 a month and then using your runway to grow that. That takes a lot of the risk out of finding the market and finding customers and it allows you to put yourself in a position where you’ve got money in the bank that you can use to help scale the business. And as long as you can find something that would have the type of trajectory you would like it to have, it just needs some funding and money behind it, you’ve got that to bring to bear. That might be an option as well.
Rob: Yeah. I was totally going to say that. I’m glad you brought that up. That’s actually what I would do. That’s what I did multiple times. You can gain experience that way and it can be lucrative and you do have to put some money out upfront. As soon as I hit the point with consulting where I had a bit more money than I had time, that’s when I started saying how can I spend less time but still get to the same end?
I think some of the best decisions I’ve made in my entrepreneurial career were acquiring DotNetInvoice, acquiring HitTail, acquiring a couple of the other products I did because I learned so much and it gave me the means to basically change my life and then to fund future red water market stuff like Drip. I think that’s a real avenue I would explore myself.
Mike: Tom, I hope that was helpful and thanks for the question.
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Episode 349 | Things to Consider When Building Your Launch Plan
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about things to consider when building your launch plan, both from a preparation and execution stand point.
Items mentioned in this episode:
Transcript
Mike: In this episode of Startups for the Rest of Us, Rob and I are going to be talking about elements to consider when building a launch plan. This is Startups For The Rest Of Us episode 349.
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 Mike.
Rob: And I’m Rob.
Mike: We’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s going on this week, Rob?
Rob: Not much, I’m just getting back into the swing of things. As I talked about last week, I was working remote from Chicago at a cello camp for my oldest. Back in Minneapolis this weekend after spending a day and hanging out over the weekend in the Wisconsin Dells, which I’ve never heard of, but when we drove through it, I saw a bunch of resorts there and so I wound up taking my son to a big water slide and stuff on the way back, kind of as a high five for slogging through a week’s worth of cello camp. It feels good, it’s always good.
I like traveling but I like that feeling of getting home, getting settled, having my stuff where it is, my external monitor. There’s just a certain piece that comes about returning back home. The cool part is I tend to be more productive because it’s kind of like my home is a new place because I haven’t been there for a while.
Mike: I hate travelling and trying to get any work done on the road, I just can’t do it. It’s more because of the access to the external monitors and having everything set up the way that I like it and need it to be. I hear what you’re saying about coming back to your home base and getting re familiarized with where you’re at and having to re energize a little bit but I just can’t work on the road, that’s just me.
Rob: What’s interesting is I’m very productive on the road, not in long stretches, I can’t just sit and work for eight hours, but I find that if I sit down for an hour here and an hour there, I get two or three hours worth of work done because it’s hyper focus and I’m just hammering through stuff. Although I don’t have my setup, I feel like I don’t get distracted, no one interrupts me. I feel like there’s a good balance. Last week in Chicago in the dorms, I was hammering on stuff.
I really felt like I got a lot of productive thinking done. That’s the kind of stuff that’s harder to do in the office because you’re just in the day to day slog of things. I do feel like having a good mix for me is probably the optimal approach.
Mike: You just said dorms, was it like in a college campus?
Rob: Yeah, it was on a college campus.
Mike: You’re partying the entire time and living up your college years.
Rob: Partying with a bunch of 10 year olds. I had my 10 year old there. It was fun. I do enjoy that, the college vibe. Obviously, it’s a middle summer, there were no college kids around. I enjoy the feel of campuses, I really enjoyed my college years and so to wake up and be in the dorms and then go to the dining hall. We brought scooters and just the scoot around campus was pretty relaxing and it was a fun time to spend with one kid.
We have two kids. When you’re with them all the time, it’s they like they fight amongst each other and you get frustrated with them but when you pair it down and you do an extended period of time with just one child, it’s like, “Whoa, I’m so jealous of people who were smart enough to stop after one.”
Mike: It’s funny. I had talked to a guy who had, I think he had five or six kids. We were asking him over lunch one day like, “What is the difference between having one kid, two kids, three kids, etcetera?” He’s like, “If you have one kid, it’s really not a big deal. It’s obviously like a shock because you’re going from zero to one, it changes a lot of things but it’s not really any different. Having two kids is like having three because sometimes you have one or the other and then when they’re together, they fight. It’s like having three.”
He’s like, “Three is no big deal, four, you have to buy a bigger car, five is not a big deal and then six you have to buy a bigger house.” It was interesting to hear him map out what the progression was, I’m like, “Nope, stopping at two.”
Rob: Anyways, we’ve gone off on a tangent here. What’s been going on with you before we dive into today’s topic?
Mike: I’m working on my Bluetick launch plan. I’ve realized that my notes were all over the place at the moment, just in various notebooks or different apps and things like that. I got to consolidate them into one specific launch plan and focus on the things that I really need to do and that I’m going to do versus the things that I would like to do because I can’t do everything on that launch plan within the three weeks that I have.
But one of thing I am going to do that’s kind of an offshoot of this is putting together a short video series called 21 Days Behind the Scenes of a SaaS Launch with a subtitle of with whisky to drown the sorrows, because I know that there’s things that I’m going to want to do that I’m just not going to be able to. I’m going to basically record a three to five minute video at the end of each day and document the daily successes and failures leading up to the launch. I’m just going to talk about the highs and lows and put them out there and see if resonates with people and if people enjoy it.
Rob: That sounds super cool. Actually, it reminds me a little bit of what Derek and I did with the Drip startups stories podcast where we just had nine months of audio and I edit it down to a couple hours but this is like more focused and intense and just about the launch. I like this idea.
Are you considering turning it into audio as well because that’d be cool, whether you drip it out as a podcast and an RSS feed people could subscribe to or you just slapped it all into one big audio file and let people download it. I think that could be interesting because I don’t know that I, personally, will watch this much video but I absolutely would listen to the audio.
Mike: I hadn’t actually thought about putting it together in a bunch of mp3s or a single mp3 and aggregating all of the audio together but that’s a really good idea, I’ll probably do that at some point. Obviously, I won’t do it on a daily or whatever. I’ll just have somebody go back through the whole thing afterwards.
Rob: Something that might be interesting if it really was one audio file, would be just to push it out on this feed so listeners could just get it as an app. We just make it other half episode or just an unnumbered episode, people could hear it. We could also do that with the Drip Series that Derek and I recorded, it’s like 90 minutes worth of audio but throwing it into RSS feed, people don’t have to listen to it if they don’t want to, it could be interesting. I can’t believe I never thought of that before now.
Mike: That would be cool. I listened to that as well and I thought it was really interesting to hear. The difference, I think, between what you did versus what I’m doing, I’m doing it more because when I heard yours, I was like, “That’s an awesome idea. I should do that.” I just never did it because I don’t really have anybody else to talk to about some of the behind the scenes stuff and I’m not going to record people on my mastermind group or anything like that.
I was like, “Well, I’ll just hold off.” But then the idea came to me to do a video series of behind the scenes and literally just like the 21 days leading up to it. All of this is like three to five minutes each day and encompassing like, “Hey, how did things go today? What’s up on deck next? How did things go?” I think that would be really interesting for people to hear.
Rob: If people want to follow to that, where do they go?
Mike: At the moment, I don’t have a landing page or anything like that setup for it but I’m going to be putting one up.
Rob: Boo! Boo!
Mike: I just thought of it yesterday, come on, give me a break.
Rob: Are you going to put it at singlefounder.com or do you have a domain or anything we can give people because you realize this is going to go live next week and you’ll already have started this.
Mike: I’m probably going to do it from singlefounder.com at the moment. People can go there, there’ll be a blog post on it and then they can go signup directly from there specifically for that. I’m going to send something out to my mailing list and say, “Hey, if you want to listen to this, you can listen to it but it’ll be separate.”
Rob: Let’s both plan, once you have that landing page or blog post up, you and I obviously will tweet it out. Anyone listening to this, if this sounds cool, seriously, go there and subscribe and tweet it out, let’s try to give Mike some love on this and build a little bit of Twitter buzz around this because I think this is a pretty cool little adventure you’re going on.
Mike: That leads us into today’s episode which, as I said before, these are things to consider when building your launch plan. It’s interesting, I went back through some of our older episodes and in episode 121, we had seven catastrophically common launch mistakes. Do you want to go through one real quick first?
Rob: Yeah, for sure. The seven mistakes we had, obviously you can go back and listen to it in its entirety, but mistake number one was not putting up a landing page before you start coding, number two is not tracking key metrics from the start, number three is saying people are finding you through “word of mouth” which really means I don’t know how people are finding us, mistake number four is running an open beta, mistake number five is launching with a single launch email when you should have between two and six, probably, mistake number six was having a free plan unless you really know what you’re doing and mistake number seven was not growing fast enough because you need to grow fast enough to keep yourself interested or you will abandon it.
Mike: Today’s list is a little bit different than that. These are more longer term things that you need to think about way in advance when you get to the point of building a software product and launching it. What we’re going to go over today is more about the short term things where you have a limited time window of whether it’s a month or two months, it’s an arbitrarily selected time period but in my case, I’ve got three weeks. The idea is to walk through the things that you should be considering when you’re putting together that launch plan.
The first one is to have a written plan. I think that this one sounds obvious but the idea here is to have a written checklist for you to work through so that you don’t have to stop at any point and think, “What should I do next?” Everything is all written out and you’ve already decided on that stuff. You don’t have to make any more decisions at that point. Your past self has already made those decisions.
Presumably, you trust your past self to make those decisions. At that point, you’re just iterating through all of the different things you’ve already decided that need to be done. By virtue of that, it’s going to make you more productive because you don’t have to stop and think about those things.
Rob: I used to not do written plans and I would try to keep it in my head. I would have scrolls here and a notebook and stuff there, just flailing around. When I was doing smaller launches with smaller products, it didn’t really matter because I only had a couple tactics. Once I started leveling up, especially into, I think it was HitTail where I made a big turning point, that’s when I started the Google Doc, it’s the marketing game plan, I think it’s what I called, HitTail marketing game plan. I basically just copied that over to start Drip and it becomes a long list of bullets.
I think now, I look back at Drip which I haven’t used for years but it was 12, 13 pages of pretty detailed, structured thoughts, it wasn’t just random stuff. But it was so helpful as we were going and we could just execute in line. That was the overarching marketing approach of like these are things we should try. But actually, for the launch itself, there is one subsection, I was like, “Do this on this day, do this on that day. Just in line, get these people on board to help promote, email a list here with these five email sequence.”
I really did think it through which sounds like it could be boring or whatever to think all that through but it’s like the timing is so critical and if you forget something until the day before that you should’ve done a week before, you can’t go back and redo it. I really think more folks should have written plans when they’re coming into a launch like this.
Mike: What you just said about the timing of different things is just super important because you can’t go back in time and do something that you forgot about. As long as you’re writing these things down, then at least they’re in front of you and you can think about, “Well, this is supposed to happen a week before but is there anything that leads up to that?” You do some backward planning at that point to determine if there are previous things that you should be doing or that you need to do in order to get to that point.
A lot of times, they’re just like these little things, you need to set up this webpage or you need to design this landing page over here. There are lots of little things that could easily slip through the cracks and you don’t want them to. The reason for that is because they lead to the next one which is being selective about what you do.
The first one on that list is decide what not do during that time because you don’t want to decide to do something or try to do something that is just not going to get done. If you do that, then what happens is it pushes your time back and it introduces these artificial delays.
If you’re already working towards let’s say 21 days or 30 days, if something delays your launch sequence or the plans that you have by let’s say 3 days or 4 days, then you have to decide what to cut out because it’s going to be hard to push back your launch date if you have a lot of other things that are already in place, that are going live on a specific day whether you’ve arranged with podcasters to put out specific episode on specific days or PR releases, things like that. You need to be careful about what those timelines look like.
The third one is to leverage your strengths. Rob, I think you did an entire talk about this at MicroConf one year, but most of this boils down to who you know, who knows you, and your relationships with different influencers. You need to know what your strengths are in terms of not just the product development but talking to people about your product. If you’re the founder of the product, you have a good idea of exactly what it does and how it can be used and who it’s going to be a good fit for.
It would be very difficult to bring somebody in the last minute to help you with those types of things unless there is no additional information that they’re going to need in order to be able to implement their piece of the project or their piece of the launch. If it’s completely standalone, they could do that, that’s great. But you’re going to have to be the person who’s the point person on a lot of that stuff. You need to be able to use your strengths to accomplish some of those goals.
If there are things where you fall short, you may need to bring in that extra help and just be aware of the places where you’re probably going to spend a lot of extra time as opposed to somebody who you just hired to do a very specific thing and hand it off to them and say, “I need you to this and this is everything that needs to be done with it.” And let them go so that it saves you time in the long run.
Rob: This is where cultivating a network, or an audience, or some pretty epic skills really come in handy and these are the things that you only build out over time. Who you know, who knows you, those are the things that you’re not going to solve that in the next 21 days, you need to attend conferences, or been blogging and met other bloggers, or had a podcast and have an audience.
That’s something that takes so long to build but this is where you start calling in favors, and this is where you start talking to your audience about it, and this is where you start really making a few withdrawals from that trust bank account or the relationship bank account that you’ve built up over the years by offering advice, helping people, and giving stuff away for free. This is one of those times where you’re going to start calling back some of those favors and some of the value you’ve given into the world.
Mike: Essentially, that’s capitalizing on that social capital that you’ve cultivated, as you said.
Rob: Exactly.
Mike: The fourth one on this list is relentless execution. Rob, you’ve mentioned this phrase a bunch of different times either on this podcast, or on ZenFounder, or in some of your MicroConf talks. I really like this phrase of relentless execution but you have to make the most of the time that you do have to put into the work that you’re doing. If you’re launching something else aside, you probably only have a couple of hours a day or even a limited time period per week to be working on this launch and you need to maximize the productivity for the time that you are working.
If you focus on that productivity, if you’re making sure that, “Hey, I need to be productive during this two hour stretch that I have.” Don’t let anything interrupt you and make sure that you don’t get distracted by things that are essentially meaningless. The font, for example, on a webpage is off, it’s not really that big a deal, there are probably much bigger things that you need to worry about. Just blog it as an item to come back to and then move on, it’s not on your launch list, go ahead and do something else.
Not everything is going to need to be perfect and it is worth taking those things, just setting them aside and walking away even if it bugs you. I would have a hard time with that. I do have a hard time with those types of things because I look at something and I’m a little OCD and I’m like. “Hey, this just sucks. I can’t deal with that.” But you have to be able to put those aside. If you write them on a list that says, “Hey, I am going to come back to this.” It makes that process of walking away from those things a little bit easier.
Rob: Yeah. During this three-week period, specifically this is where you have to really bring your A game and you need to remove the distractions. This is where I would probably go on a complete social media fast aside from what’s needed to promote your launch, I wouldn’t be reading the news, I wouldn’t be checking Twitter during the day, I would be getting that epic playlist together or perhaps this single song that I would loop for three weeks straight and have that general dose of caffeine every morning, every afternoon. This is where you need to bring everything you have because you have to execute on this and it can have such a huge impact on how the app gets started and the motivation.
If you have a good launch, you’re so motivated to continue. If your launch tanks, it’s tough, it’s tough to pick yourself back up after month and months of preparation for this point. This is where you need to relentlessly execute, as we’re saying.
Mike: The next one is to be a little bit mindful of how you’re presenting your products to people. This is more of a features versus benefits type of idea which we talked about in the past on this podcast. But you need to demonstrate how it benefits users versus how good the product is and what it does. You want to focus on what the users are going to get out of it and how well it’s going to help them do their job and make their lives easier versus these are all the different things that you can do with the product. They can do this, they can do that, etcetera, all those things don’t matter, what really matters is what they’re going to get out of it.
Again, this is something we talked quite a bit about so I don’t want to beat a dead horse, but it is important to think about that when you are putting together this list that says, “Oh we need to create this webpage or that webpage.” If it doesn’t fall into this bracket and allows you to present it in such a way that it’s going to resonate with people, then I would just skip it and move on because those are the things that are brand awareness that aren’t really going to help you, specifically during a launch.
Rob: The next thing to think about is to balance your long term and your short term goals because if you think about it, you can have a big initial splash that leads to waves of signups which tends to be good. Now, realize that that may clear out your pipeline for a while so your second and third months could potentially fall off, I guess, from there. Also, make sure that you have things like your tracking pixels and your analytics in place and you’re going to want to test and verify these.
If you want retargeting pixel from Facebook or from Perfect Audience, if you want certainly Google Analytics, whether you use Kissmetrics or Mixpanel, you want this stuff in place before you start driving traffic because you really want to know how they’re finding you, who’s signing up, who’s getting the most value and who’s sticking around.
Mike: Along with that, you really want to make sure that there is a stopping point where if somebody is not quite ready to buy, at least you have mechanisms for capturing their email address so that you can follow up with them later. If they’re not totally on board right now when you’re doing your product launch, at least have mechanisms to get their email address so that you can put them into an email series, either that’s a short term email course or a longer term follow ups, something along those lines.
If nothing else, you want to be able to at least get their email address. Tracking pixels do help to be able to bring people back but it’s not quite as good as getting an email addresses so that you can send them direct emails later on.
The last one for preparation is to accept critical feedback but be mindful of the trolls. Not everybody is going to be supportive or is even worth listening to. There are going to be some people who are not supportive or dismissive of what it is that you’re working on and you can just walk away from those. You can either listen to them or read them or whatever, have the conversation with them and nod your head and say yes, okay, I’ll think about it and then walk away and just let it go because some people are going to have things to say that are absolutely not worth listening to.
There’s going to be others that you are going to look at and say yes, this is important stuff but is it important right now? You don’t feel the need to act on every single piece of critical feedback. I heard a podcast episode from, I think it was Craig Hewitt and Dave Rodenbaugh a couple of weeks ago on Rouge Startups where they were talking about Craig was going through his launch and Dave have commented that as a strategy for support, you can’t listen to everything that somebody says and implement all of it. It’s really only going to get you about 30% of the way.
That’s so true. What it will do is it will eat away your time when you’re doing the launch and even shortly afterwards. You can’t just listen to everybody and do everything that they want, you have to be selective about it and filter out the things that are going to be important to large numbers of people and take the things that are not and set them aside and then come back to them later and decide whether or not you’re going to do anything with them or you’re just going to let them sit there.
Rob: It’s always tough to balance this when you only have a few data points and somebody complains about your pricing, it’s always something you doubted early on. Once you have hundreds or thousands of data points, you just learn what kind of noise and what the concensus is.
It is definitely hard early on to take feedback and figure out which is most valuable and which you should listen to. It’s just something you got to be mindful of. It’s kind of a learned skill but it also goes away with time. As the older the product gets, the more mature it gets. You just learn where it is. This is a hard one especially for folks who are just getting started.
Mike: That walks us through a lot of the preparation for a product launch. We’re going to talk a little bit now about specifically some of the execution. The first thing that you want to do is you want to look at how to prime the pumps, there’s a bunch of different ways that you can prime the pumps for your launch. The first one is an email list. What you want to do is you want to plan out when you’re going to send the emails, who you’re going to send them to and what you’re going to say in each of those emails.
I think it’s really helpful to print out a copy of the calendar and write on it and say, “I’m going to send out an email to this list on this date and it’s going to say X, Y, or Z.” You don’t have to write out the entire email at that point, you’re really just trying to build an outline of it and work backwards from the times that you want to send those emails.
In episode 121, mistake number 5 was launching with a single launch email, I have at least 2, possibly up to 4. That advice absolutely applies here. You want to plan out the number of emails that you’re going to send, when you’re going to send them, and what the headline is. That’s the place I would probably spend the most time, is on that headline to make sure it gets opened because if those emails are not getting opened, then the contents of the email are almost immaterial at that point.
But planning out when those emails are going to send and then setting everything up so that they are sent at that time automatically in the background whether they’re using Drip or anything else that’s out there. You want to make sure that those emails are going out when they’re supposed to go out because you can’t send them retroactively after the date has already passed.
Rob: Yup. Email launch, that’s the big deal. We’ve talked a lot about that in the past and that’s the thing you’re going to want to focus on a lot. Another thing to think about is when you start your podcast tour. If you haven’t heard of this, this is something I stumbled upon after revamping HitTail and I went on this big tour of all these appropriate podcast. I measured the impact each of them gave me as I went along and I went all these in a MicroConf talk.
The fun part about podcast tours is you’re able to reach a lot of folks through audio which means they tend to be a little more engaged than when reading a blog post. It’s such a small amount of time because you show up for 30 minutes to have a conversation and then a couple weeks later, you show up on someone’s podcast and you reach 5,000, 10,000 people. The thing you’re thinking about here is when should you do this, who to reach out to and how long it’s going to take for that episode to go live. Because if you record a bunch now, some podcaster booked out a few months. Other podcasters record and go live a few days later.
This is where you got to start thinking about there’s a whole bunch to learn about this. We don’t have time to go into how you plan all this but it’s something to consider if you’re up for getting on some podcast, I think that this is something that didn’t really exist. 10 years ago there were a few podcast here and there but there wasn’t nearly the audience for this kind of stuff as there is today.
Mike: The next one is to look where you can promote your launch to things like Product Hunt, or BetaList, or Hacker News. You have to be a little bit sensitive about some of the different communities that are out there because some of them are very accepting of people coming in and say, “Hey, I’ve got a product launch going on.” Some of them are not. It also depends a lot on how you go into those or how involved you have been in those communities in the past. A lot of this has to do with social capital at that point but some of them, it doesn’t matter really matter.
With Product Hunt, you don’t necessarily have to have a large following or a voice in the community, it’s a lot easier to just post with something like Hacker News or Reddit. You have to be a lot more sensitive about that. They are not very receptive to external people who are not members of the community and never really contributed, just coming in and trying to market themselves. Be a little bit sensitive to that but other ones that come up, you could go in and you could try to pitch TechCrunch, or Master Ball, or various tech blogs.
If you know influencers then you can reach out to them, and ask to either do a guest post, or appear on their blog, or if they have a video series or something like that, there are ways to get in front of their audience as well. That’s really the point here, you’re trying to leverage other people’s audiences in order to help bring about awareness of your product.
Anything where you’re getting onto an email list or mentions on blogs. Even if you’re not directly on a podcast, for example, at least if you can get a mention, that’s going to be helpful, you’re going to get some traffic from those assuming that it’s the right target market for that.
Rob: This is also stuff that you have to prep in advance. If you have relationships with these folks, whether it’s the Big Tech Blogs or whether it’s someone who composed the product for you. It’s so much better to not just hit these things cold and then have some type of plan that you’ve worked out in advance. There’s a bunch of blog posts and resources online. If you Google how to do a product launch or how to pitch TechCrunch for your startup launch, you can read through these and get a gist of what works.
These are crap shoots. If you’re relying on either of these for you launch, it’s a really bad sign because you can do it and either get 0 signups or you can get 1,000 signups. Even if you get 1,000 signups, a lot of people are just checking out what’s going on, they’re not actually looking for the apps.
It’s that method that TechCrunch launched, getting linked to from TechCrunch is not going to make your startup, it’s going to send some traffic to you from a bunch of people who like to try out a lot of different apps and your churn is going to likely be very, very high.
That’s not a reason not to do them, this will give you an incremental bump and they’re worth doing if they work but these are the exciting, fun things that when you do them it’s accelerating. I think they’re worth doing and they can definitely make you some money but these should not be the pillar of your launch approach, the email list. Emailing the launch list really is that pillar.
Another interesting approach, and it’s one that I’ve only seen done a few times, but it’s to launch at an in person event like at a conference. I spoke at LES Conf five years ago maybe. Brennan Dunn launched Planscope at that conference and I think Intercom spoke there. I don’t think they launched at LES conf but it was very close to the time that they launched. I just thought it’s an interesting idea if you can time it for that and you can get either a little stage time.
I don’t know if Brennan’s sponsored or if Steven Alan just gave him stage time but he had five minutes where he just stood up and he said, “Hey, I’m launching. Here is my background. I have this app, check it out.” It was for freelancers, obviously. There were bunch of freelancers there.
It’s an interesting idea and I think I’ve seen some folks launch at MicroConf as well. They either tried to attendee talk where they’re able to talk to through their process or mention their app in some say. Obviously, this is not giving you an audience of 10,000 people but since it’s in person, people can come up and talk to you and I actually think there’s a lot of value if you can swing this.
Mike: The big downside to something like that, I think there’s two. One is there’s only so much of you to go around and the audience is going to be much smaller than you would get. The big benefit of that is you get that in person, in depth conversation with somebody that you wouldn’t get if they just hit your webpage or they read an article someplace else and then came to your site. They don’t get to ask questions and you don’t get to ask questions, either. That’s the big thing that I’ve noticed in doing a lot of in person demos.
Right now, for example, with Bluetick, you still can’t sign up for it unless you talk directly to me. I’ve done that very intentionally so that when I’m talking to somebody, if I ask somebody a question, I get to hear them pause, I get to hear not just the words that they say but how they say them. That stuff is very, very important when you’re trying to figure out what is important to them and what’s not. If you get a question that says, “Hey, can I do this?” You can ask them, “Is that important to you?” “No, I was just asking.”
It’s very good to be able to differentiate between those two types of questions and you can do that in an in person situation. It’s just much harder to do that if you get that type of question through an email.
The last one is to put together some explainer videos. I think that this is important just because sometimes it’s really difficult to rely on your sales copy. You may have a group of people who you have treated as beta customers, you’ve talked to them, you’ve on boarded them and you’ve heard what they have to say but sometimes, presenting that in such a way that an anonymous person who comes to your website and sees it for the first time is not necessarily going to understand it as well as if you had that in person conversation with them.
An explainer video can be a really good way to enhance the sales copy that you have and inform people about what the product is going to do for them and how it’s going to work and answer some of the questions and overcome some of the objections that they have, in a way that your text and copy is not going to be able to. I think that relying on those explainer videos as sort of a crutch can really help you especially if some of your sales copy is a little bit deficient or it’s not quite where it needs to be.
I find that a lot of the sales copy is really helpful from an SEO perspective. When somebody comes to your website and doesn’t have any preconceived notions about what something is but the video is really, really helpful. You can show your app and it helps give them that little bit of extra trust as well because they see the app, they see exactly what the state it’s in. It gives them an idea of what it is that they’re buying into versus if you send somebody an email without the screenshots even.
A video is better than screenshots because you can show them this how it works and this is what it will do for you versus telling them what it’ll do and maybe giving them a screenshot. It’s just more in depth and more engaging.
Rob: I have a blog post that we will link up in the show notes called How I Created 4 Startup Explainer Videos for $11. It talks you through the process that I used to create some low fidelity and just crappy bootstrapped explainer videos that we had on the homepage of the Drip website for a couple years, actually.
I do think that there’s a lot of value in explainer videos as well especially if you can execute pretty well on them and they don’t feel cheap and they do show the benefits. Like you said, there’s always a balance to video versus text, some people like to skim but if you create 60 second explainer video, it can have a lot of impact, a lot more than just a wall of text.
Mike: Yeah. I have an explainer video for Bluetick that I did when the product is a different name, and at a different URL and unfortunately, that name is used inside the explainer video so I have to redo the entire video.
Rob: That’s a bummer.
Mike: I did really well with the video and it worked well to explain what it did. It’s just the old name is plastered all over it.
Rob: I think that wraps us up for the day. If you have a question for us, call our voicemail number at 888-801-9690 or email us at questions@startupsfortherestofus.com.
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Episode 348 | Finding Product/Market Fit, Organizing Notes for Maximum Effect, Growing from $100k to $1M, and More Listener Questions
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike answer a number of listener questions. The topics include finding product/market fit, organizing notes for maximum effect, and growing from $100k to $1M.
Items mentioned in this episode:
Transcript
Rob: In this episode of Startups for the Rest of Us, Mike and I talk about finding product market fit, organizing notes for maximum effect, growing from $100,000 of ARR to $1 million and more listener questions. This is Startups for the Rest of Us episode 348.
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’s the word this week, Mike?
Mike: As I said on the last episode, I kind of finished up almost the tech stuff that I’ve been working on and started switching over to working on the website marketing stuff and currently targeting a public launch date of August 1st. I’m kind of greasing the wheels of the marketing pipeline at the moment and doing everything that can possibly be done in the amount of time that I have.
Rob: Very nice. It’s about three and a half weeks from now.
Mike: Yeah, above three and a half weeks from when this episode goes live.
Rob: From whenever we record.
Mike: Yeah, whatever. Something along those lines.
Rob: It’s a few weeks. You must feel pretty good about it then. You must be pretty close to getting things out the door.
Mike: I do. There’s still a few things that need to be taken care of between now and then so I’ve realized that as I’m putting together the website itself to do some price turning, that there are certain things that need to be in place that are not there yet just so that I can charge different amounts based on different things. Maybe they’ll be there. Maybe they won’t when it goes live but if I need to toggle stuff on the backend, or do certain things, or just give people stuff that they normally shouldn’t have access to for the time being, then that’s probably not a big deal. I’m just finding those little edge cases here and there and reworking some things as necessary to make that happen.
One thing that I’ve realized over the past couple of weeks is that I added a customer, I think a week or two ago, and they had this massive mailbox that went back for years and years and had like almost 750,000 emails in their mailbox. The system generally held up pretty well. I’m pretty pleased with how that stuff is going right now.
Rob: That’s exciting. It’s nice to have some confidence going into a launch like this. You didn’t just up and build a product and have no one use it, not know if they get value, not know all the bugs that you have because you inevitably will until people use it. No app survives first contact with the real customer without having bugs.
You’ve taken this slow launch approach of trickling people in, getting your 20, 25 early customers in. That is obviously a more conservative way of doing it than the Silicon Valley pay $500,000 for some massive launch party. I realized that’s a strong argument. A lot of people don’t do that.
But even if you have a lot of funding, you want to move really fast that you staff up, and you build quickly, and then you just do this big splash launch. You’re like, “Alright, product hunt, man. Product hunt’s going to do it.” But then, if you product hunt and you haven’t already had 20, 30, 40 people touch this app, you just don’t know what’s going to happen.
As engineers, we know all the pitfalls and ways things can go wrong. While this is a slower, more calculated and more conservative way of doing it, this is obviously the approach that we espouse on the show. It’s that more careful, calculated, repeatable way to do it. It’s how I’ve launched a bunch of apps and how you’re launching Bluetick here.
Mike: I think the interesting thing is I’m looking at the app now and I see places where clearly things will start to break or slow down just because of performance and depending on what it is, sometimes, I just look at it and say, “I’m going to let this go.” Versus other times where like, and this mainly has to do with data sorting, paging, and making sure that you’re not returning too many things on the browser.
Those are few places where I’ve looked at and just said, “It can handle it. It’s not great. It’s not awesome user experience, but it works, so for the time being, I can just push it off and I’ll fix it later especially if customers start to run into it or it becomes a big deal. But it works, it’s not going to fall over. I’m not going to stop everything and put it on hold for another month or two to fix those things. I may as well just push it out there.”
Rob: You’re always going to have some part of your app that feels that way. There’s always a page or two that you’re embarrassed about, that you’re concerned it’s going to break, that’s too slow for large accounts. That will never stop.
Mike: I have a single-page application.
Rob: Oh Mike. Listeners can’t see me putting my head into my palm. For me, I’m actually working from Chicago this week. I’m with my son. We’re at his cello camp. We used to go to Oregon for this but now that we live in Minneapolis, it makes sense to come to Chicago. To be honest, it brings back memories, I was at the Oregon cello camp last year. I was signing life changing Drip acquisition documents on my iPhone with my finger from inside the halls of a music building on a small college campus that no one’s ever heard of in Central Oregon. It was just this.
I remember feeling overwhelmed and I couldn’t think straight. We’ve been talking about this for a year and doing negotiations for six months and then I keep thinking to myself shouldn’t I be calm, cool, and collected like at my home office with my laptop but no, I was running in and out. I dropped the kid off at cello, a lesson or a group thing, and then I ran outside and then I read on my phone, oh my gosh, this piece fell through. I’d get a thing to sign to override this and to sign over. It was exhilarating. It was also super stressful. But being here reminds me of that because it is the one year anniversary of the Drip acquisition just a couple of days ago.
Mike: Today, now you can sit there without the dirty looks from the other parents.
Rob: I know. That’s right. It’s Suzuki method of teaching cello and strings and so the parents were supposed to heavily participate and I actually had to talk to a couple of the teachers and I said, “Look, I have something going on right now. I’m in the process. My company’s being acquired. I need you to cut me some slack for a couple of days here.” That was fun.
Let’s kick off today’s episode with a voicemail question. Note to the listeners. If you want to get your question to the top of the stack, send a voicemail because we don’t get very many of them and it’s always cool to hear people’s actual voice. It’s just a better experience for everyone. It feels like The Collin Show. With that said, someone sent us a voicemail with a question for you, Mike, about Bluetick.
Andrew: Hi Mike and Rob, this is Andrew calling from Australia. Mike, I’ve got a question for you in relation to Bluetick. You talk a lot about product market fit. Have you found with Bluetick that you’ve had a general type of customer or have you found already that Bluetick has started to be suited for either a particular industry vertical, a particular customer type in terms of size of the company, or to some other characteristic in terms of the groupings of your customers? Love the show and hope to hear you guys answer this question on air. Thanks. Bye.
Mike: From the customers that I’m working with right now, they fall into a certain set of categories. I’m not saying that these categories of people, the customer profile that I currently have for the people that I’m working with right now is the long term ultimate customer base, I guess, of Bluetick. It’s just what I found so far and what seems to be successful.
They fall into a couple of different buckets. The first one is startup founders who are trying to validate an idea and most of them are trying to do cold outreach and get in front of customers or try and reach out to people that they think would be a good fit for their software. They plug people into Bluetick and it does essentially cold outbound outreach for those people and try to get those conversations started. That’s one group.
A second group is podcasters, to be honest. People who are running podcasts and are trying to get sponsorships for their podcast are using Bluetick to do that outreach to people they think would be a good fit and then start those conversations and then enter into the individual emails back and forth to try and get them to buy into a sponsorship for those podcasts.
A third category is small businesses who have an inbound lead funnel. Most of these are services based businesses where somebody will fill out a form on their website and the customer is approaching them and then they need to fill that request and probably ask for more information or try and get them to the next step. But what they’re finding is that a lot of people will fill out a form on their website or request information and then go dark or go silent.
What Bluetick does at that point is that because it’s a warm contact, it will help bring them back to the table. Very similar to Rob, you guys in Drip have this feature where you can send out a broadcast email and then several days later you can reschedule that same email to go out with a different headline if the person doesn’t open it. Bluetick, because of the way that it works, after the first attempt, if it doesn’t receive a response from the person, it will try again and again and again.
Those additional steps in the email sequence tend to aggregate together and give you a much higher response rate than if you just sent out one email, waited and if they didn’t respond, then you kind of walked away from the conversation. That’s the profile that I’m currently finding success with and people are comparing other products to Bluetick. There’s a lot of different cold outbound tools out there or tools that will remind you, “Hey, you sent an email to this person and they didn’t respond.” But Bluetick aggregates those things together, not just their features, but also the fact that it’s got a mini CRM built into it and helps you give a bigger picture of the whole thing.
That’s where I’m at right now. I don’t know if that completely answers the question but there’s a few different buckets that they fall into and I haven’t found one specifically that is better or substantially worse than the other.
Rob: Yeah, that’s cool. I go back and forth on this. As an entrepreneur, early on in your entrepreneurial journey, it’s like I stuck to apps that really had a tight vertical niche and I feel like that is a good way to keep things simple, you know where to find them. I like that approach. However, there are tools that in order to grow to a reasonable size, they’re in such a competitive space that I guess it could be argued that you could say that Bluetick is advanced follow up in sales for podcasters. You could start out that way and then expand. Land and expand is what it’s called and then go horizontal.
I think it’s too early to decide that right now. Podcasters may be too small of a niche, although it is growing.
Mike: It’s interesting that you say that that’s a small niche. I agree with you that it is but they talk to each other a lot. I get a lot of referral in that. I think that’s partly why I’m getting traction there. It’s because they talk to each other and they’re saying, “How do I solve this problem of getting sponsors for my podcast?” And then they say, “Hey, use this tool. It’s really helpful.”
Rob: That’s the thing. I say it’s a small niche but small is in quotes. If you would’ve build this to let’s say it tops out $30,000, $40,000, $50,000 a month, which I think there are enough podcasters to do that for sure. That’s small compared to a multimillion dollar app or some Silicon Valley exit. But that’s a heck of a lifestyle business if you want to keep it that way.
If you own the niche and you’re the name in doing and then you add things in that that really help podcasters find sponsorships, and then you could even branch out into, well, conferences need sponsorships. That’s the whole reason you built Bluetick, originally, was to help with getting sponsorships from MicroConf.
There are other things you could easily translate into so we’re definitely getting, I’m getting ahead of you on this or ahead of ourselves and I don’t think we need to make this decision or the distinction yet but I do think it’s an interesting conversation that you probably have or should have going in the back of your mind of do I need to go vertical because there’s so much competition. Because you have to be different somehow. You don’t just want to be one of many apps that’s doing the same thing.
You either want to go vertical with it and build the best one for that group of people or you want to have a feature or two that really make you stand out where they say, “Well how are you different with the five other apps that do this?” And you can say, “Well, it’s this and that and this is the approach we take. It’s the light way to CRM.” Or whatever it is that you’ve built in that’s different, that you at least have a talking point and aren’t just a commodity.
Thank you for the question. I like that one. I appreciate it. Our next question is from Aaron Cordova. He’s asking about notebook organization. He says, “How do you organize your notes? I’ve recently started note taking with an iPad Pro and a pencil. Do you have a page per day? Do you organize by topics?”
I used to use my notebooks both for longer term notes and thinking and things I was thinking through and I use it for to-dos. I tried so many to-do apps over the years and I finally switched to Trello. I can’t go back now because Trello keeps it on the cloud, have a record that never goes away. I can never lose it. I can access it from all my devices. I really like to-dos being in an app somewhere and Trello is finally the one that broke me with that.
Now, my notes are really just in a black, a Moleskine notebook and I do not do a page a day because I don’t write in my notebook everyday. I still use Evernote for some work things. I use Trello for to-do lists and I use my notebook when I am on an airplane, when I’m deep thinking, when I’m trying to hash through a problem because paper and pen is just I think so much better with that than sitting in front of a computer because there’s no distraction.
If I were to flip through my notebook, I definitely date my pages and I put a topic at the top. If I’m going to be thinking through one problem, or taking action notes from a book that I’m listening to, or trying to think of what else I’ve written on my notebook recently, I tend to put things in there I want to say for a long time. If I know that it’s just super scratch brainstorm-y stuff or it’s, I don’t even know, like a grocery list or something that I know I’m not going to care about in a month, then I don’t put it in my notebook. My notebooks, I keep them pretty much forever. I have notebooks going back ten years and I do flip through them and I have some fascinating insights that when I look back and think, “Man, your view of the world was so different back then.” Or maybe the world was genuinely so different. Just the founder community and the entrepreneurial community and my aspirations for it.
All that to say, I don’t organize by topics because I just flip to the next page, I put a date, and then I flip through. This means that I don’t particularly have a great organizational system. When I remember, “Oh, I remember Derek and I talked about this and I noted that down.” I have to think in my head. I bet that was about six months ago. And then I do, I flip through the notebook and I find the page.
While it’s not the most efficient way to get there, what I really like about it is the serendipity. Typically, when I’m flipping through that notebook, I’m reviewing like six, eight months worth of thoughts that I have forgotten about. Actually, the act of looking through them often will remind me of like, “Oh yeah, there was this feature we were totally going to build.” Or “Oh yeah, we never implemented that one thing.” Or “I never got back to that person.” It’s like all this stuff that isn’t urgent and doesn’t keep coming back on the radar, but it was a really good idea four, five months ago.
For me, my notebook is more of a time capsule. It’s for deep thinking and thought process. That was actually why I don’t like Evernote for it, because Evernote, I know it’s great if you want to search or any of these note taking apps. Great, if you want to search and you know what you’re looking for, but if you just want to kick back with a cold beer in one hand and a notebook on the other and you just want to flip through and read things almost like a dead tree or paperback book, that’s the experience that I relish and that’s what I love about my notebooks.
That was more information you probably ever want to hear about it and maybe a unique use case. I’m curious to hear what your take is on this.
Mike: I’ve tried Evernote and Trello. I still have my Evernote account. I just don’t ever use it and there’s things in there that I don’t go back and find or look at. The problem I found with both Evernote and Trello is that if I’m using it for any sort of to-do list or task management or anything like that, I end up with so many things in there that it just really falls apart. It’s too general purpose.
What I tend to do is it’s broken down based on what it is that I’m doing. Usually, what I’ll do is I’ll either start with index cards for a set of daily tasks that I need to do and get through and I can just mark them off as I’m getting through them. Occasionally, what will happen is that something will stay on an index card for too long and it will end up on the next day’s index card or the next week’s. If things end up there for too long, what I do is I essentially end up promoting it to some other place.
Sometimes, I’ll have a notebook where I will write down short term notes about something I’m working on, whether it’s really complicated or has a lot of things that I need to keep track of and I’ll write them down on paper. But at some point, like you’ve marked off a bunch of stuff and then you end up with 5 to 10 pages worth of stuff but half the pages are all crossed off, it doesn’t really make sense anymore and you can’t move them around.
At that point, I start moving things over into tools. For anything that is a bug or feature related, it tends to end up in FogBugz. Most of my general purpose tasks, or if it’s a marketing task, or related to a specific project, it usually ends up in my teamwork account. If it’s some sort of a thing that needs to go on a shared list that I use for home stuff, I use something called AnyList. I have a paid account that I share with my wife because it’s a family account so we’ll put our grocery list and things like that on it. It works really, really well for that.
Outside of that, I will also use Google Docs for taking long form notes about a particular problem that I’m working on where I don’t want to write it down if it’s not just a really quick thing or if I need to think about a lot of stuff, I’ll put it in Google Docs.
And then for mental brain dumps at the end of each day or at the end of each week, I have a journaling app that I have a subscription to called Penzu. That system works really well for me because each of those tools tend to be focused on a particular type of problem that it’s solving and it has the tools and the features and all the things that go with it that allow me to keep things organized within that context. Once I start crossing the borders between different context, the tools tend to fall apart. You can use FogBugz for marketing tasks but you don’t really necessarily want to be paying for a FogBugz account to give some contractor or somebody who is not going to touch any of your development stuff. Giving them a FogBugz account is kind of pointless so it’s easier to put that stuff in the teamwork.
I have a tendency to feel like this type of problem, it’s going to be different for everybody. That’s why there’s so many different to-do list apps and note taking apps because everybody works differently and you ultimately settle on something that works for you. The other 99 apps that you tried didn’t ultimately work out. I feel like this is a very context sensitive problem in terms of the type of person you are.
Rob: Yup. And the process you use and how you want to handle it. I agree. Thanks for the question, Aaron. I hope that was helpful. Our next couple of questions are from John. He says, “Hi Mike and Rob. I’ve been listening to your podcast for about a year and I get bummed when Stitcher doesn’t have your podcast ready to listen to every Tuesday before I ride to work. I have a couple of questions. First is what are your thoughts on pay what you want pricing? I’ve created a software called Breakneck Install which is a downloadable application that helps developers quickly create an installer for their application.
There are giants in the market and my product can’t compete with them. I don’t feel like I could charge near what they do which is more than $500 per license. I thought of trying to pay what you want model. One of the benefits I see is not having to worry about licensing issues such as maintaining and creating backend infrastructure to deal with licensing. My fear is that I try this and then decide to go a traditional pricing model which may make future customers unhappy. Do you have any thoughts on this?”
Mike: I think for a product like this where you’re trying to build an installer, it almost feels to me like what you’re going to run into is the market is going to be split between these people who are just starting out and they’re trying to build a product but they don’t have any money so you’re not going to get them to donate money to your cause.
It’s not going to be a viable source of income. If it’s something that you want to do because you have the money laying around and you want to put your effort into something like this, then that’s fine but I wouldn’t look at pay what you want pricing for something like that to really be able to make a dent in your bottom line and be able to let you go full time on it. I just don’t think that it’s going to happen.
There are also a lot of open source alternatives out there that would make something like this difficult. You’re absolutely right when it comes to installers, most of them tend to be very expensive and what you’ll find is that the people who don’t have the money will go for the free open source versions. And even if you give them a paid option that is a pay whatever you want, it seems to me like you’re probably not going to get very much money from that. They’re not necessarily going to be willing to pay software maintenance and things like that.
You’re going to spend a lot more time fixing bugs and addressing individual issues than you are trying to build the product where if you were just selling it to smaller businesses that had revenue and the capabilities to pay $500 to $1,000 per license, you’d be able to make a business out of it.
Rob: I have mixed feelings about this. I’ve never done it so I can’t speak from experience. I can only speak from the experience of entrepreneurs who I’ve seen done it and who I’ve talked to. It can work but you need a really large install base. You need a lot of people downloading so you can’t just say I have a few hundred downloads a month and expect that you’re going to be able to do pay as you go and make any kind of money from it.
The problem is that if you do pay as you go and someone pays you $10, how much support do you now owe them? If they start asking for feature requests, if there are bugs that they discovered, if they’re demanding, if stuff goes sideways, it becomes a challenge. I can see a lot of problems with this and my gut is that it’s not going to work unless you are getting, I don’t know what the number is, but it’s thousands and thousands of downloads per month, because a bunch of people are going to pay you nothing, and then a few are going to pay you a small amount.
When podcasters try this, when other small, downloadable WordPress plugins or whatever try it, they don’t tend to get a lot of money. I don’t know that I agree with your fear that if you were to have pay as you go for now, that you can’t undo that later without making future customers unhappy. I think what I would say is I’d rather call it a beta, or an early access, or put some moniker on it and I would say, “It’s pay as you go while it’s an early access.” Even if you already released it and it’s not an early access anymore, that’s what I would do so that if you decide that you don’t want to go pay as you go anymore, that it just doesn’t work out financially, you can always undo that and it’s a pretty easy thing.
I’ve seen apps go from free to paid before. If you grandfather people who already have it, I don’t really know what complaint future potential customers could have other than, “Oh, I should’ve downloaded it last month instead of waiting till now.” There’s a time where I tripled the pricing of DotNetInvoice from $100 to $300, and a couple of people emailed me and said, “Hey, I was in the process of thinking about buying it. Can I still get it for $95, or $98, or whatever it was?” I gave it to them. It was like two or three people.
One I later regretted, he actually turned out to be the worst customer, the first toxic customers that we had but that’s beside the point. I don’t know. It’s easy enough to try. I see your point. I think if you have something that can’t compete in the marketplace like going freemium or pay as you go is often not the right answer. The right answer is make something that can compete in the market place. Have a differentiator or just set a cheaper price.
If this thing really does do a good chunk of what developers need, they can only get it for $500 elsewhere, then what about charging $99 or $199. You don’t necessarily want to be the low price leader but is there a space in the market. You think about Infusionsoft, Eloqua, all these really expensive marketing automations and Drip came in at the beginning, a lighter weight product that was easier to use and less expensive. I do think that there’s an angle that could be added there as well.
Mike: I think the lower price point is definitely an angle that you can go at because there are certainly ways that you could charge a couple of hundred dollars for an installer. I do like your idea about letting people know, “Hey, this is pay as you go for the time being.” And then make it a point that it is something that you can undo later and move to some other one. Just be upfront and clear to people like, “Hey, this is the pricing for now and it’s going to change. We just don’t know what it is yet.”
Rob: Our next question is about growing from $100,000 of ARR to $1 million. This is from Pawel Brzeminski. He says, “Hi Rob and Mike. I’ve been listening to the podcast for years. I really respect what you’ve done and that you’re sharing all this knowledge with the rest of us. I found your podcast immensely helpful in launching my own SaaS app, which is called Snap Projections. How do you think about growing a self fronted SaaS past $100,000 ARR? So that’s about $8,000 or $9,000 a month. What do you specifically pay attention to in terms of marketing, sales, operations, hiring? Any specific tips on growing in a vertical niche versus horizontal? What would you do differently right now?” It says more of a question for Rob but it would be interesting Mike’s take as well. “Anything specific to watch out for?” His background on them is that they have two people on board, more than 120 clients/customers, relatively low churn, and they’re operating in a niche of financial services applicable to Canada only.
Mike: I’ll be honest. I don’t know how qualified I am to actually answer this question so Rob, why don’t you throw some things out there and maybe there’s something I can think of, I’ll just piggyback on it.
Rob: For sure. It’s a really broad question but I appreciate it. It’s almost like what are the things to watch out for because they’ve already had a decent amount of success obviously to get to even that $8,000, $9,000, or $10,000 mark. It’s like what’s the difference to get to seven figures or what has to change between then and now?
What my experience with this is that it’s going to depend on how big the market is that you are in. I’d bring up Drip because that’s the most recent thing I’ve done. We were in a position where we were in such a large space that we didn’t have to change anything in terms of our market. We didn’t have to go from vertical to horizontal or do any of that because there were enough people who wanted it that we needed to do it. We needed to execute on marketing and hiring in essence. Keeping developers going to build features but really, the product, once we had product-market fit, has always been really solid.
I think that’s the first question to ask. If you really are in a niche of financial services in Canada only, it’s like is the market even big enough to get you to a million or are you going to have to either go into another vertical or go more horizontal and serve a lot of vertical niches or just not even be vertical at all. That’s one thing to think about.
I think you can definitely get to seven figures with a very small number of employees or contractors, somewhere between 5 and 10. I think one thing to watch out for is hiring too quickly or trying to hire ahead of revenue because you want to get there faster. It’s a lesson that I learned. It doesn’t necessarily, especially hiring developers, it doesn’t necessarily make that revenue move faster. If you’re already at that $10,000 point, I always would try to look at what is my bottleneck? Why are we not growing faster? Is it because our product needs more features or is it because we’re not marketing or selling enough?
My next hire would be either a developer, or it would be a marketer, or a salesperson, or we’d start doing demos, or whatever. When we were in that $10,000 to $20,000 MRR range, maybe we just hit $25,000, that was when I realized that not having someone who could talk to people on the phone and essentially do customer success/sales, that was a limiting factor for us and that’s when we brought Anna on. That was a game changer for us. That was a bottleneck for us in that $20,000 to $30,000 range.
You may be there but then again, you may be that salesperson and that’s not a limiting factor and it’s more of your market’s too small and your development team is moving too slow or whatever and they need more help. That’s the thing I think that you need to think about at every point is whether you’re at $10,000 or you’re at $50,000, what is your limiting factor? What’s going to double your growth next month or add 50% of your growth to next month because you want growth. The bigger you get, you have to accelerate growth.
When you’re at $10,000, growing at $1,000 a month is actually a victory. At the time you get $20,000, $30,000, you want to start growing at $5,000 a month so you need to think differently about how am I going to 5x growth between those two points. That often means you’re either growing wider, building features faster or dumping more money in the marketing or getting into paid ads, finding a new channel, because that can be a big piece of it. You may just need more people on the top of the funnel. That may be a thing or you may need to close more people that are in the funnel.
That’s why I use all those rules of thumb that we’ve talked about in the past. If you’re already converting 40% to 60% of your trials to paid and you’re asking for credit card up front, then that’s fine. I would push that aside for now and I wouldn’t try to improve my on boarding and I would say, “How can we just get more people to the top of this funnel?” But if your churn is 10% per month, well then, “How are we going to cut churn by making a product better and by retaining more people?”
It’s looking at each of these things and just bouncing from one to the next and you improve one and then you put more people in top of the funnel and you realize, “Oh, now this other thing is broken.” And you just hop from thing to thing. That’s kind of a brain dump of how I thought about it but I hope that gives us some things to chew on.
Mike: I like everything that you just said there. It boils down to recognizing where the bottlenecks are going to be. One thing that comes to mind is you mentioned something about limiting yourself to just Canada for example, because that’s where the company is based right now and those are the people that they’re targeting. But does the customer profile need to change? Are you targeting one type of customer and you need to move to a different type of customer?
Let’s say small financial planning companies versus individual financial planners. Does your customer profile need to change in order to be able to get more revenue per customer in a way that’s going to help the business grow or are you going to max out? Again, that’s just a limiting factor. Not necessarily through geographical border but the customer base that you currently have and that you’re going after.
That all boils down to the same thing. Is there that limiting factor that you’re going to need to overcome? Whether it’s that or whether as you said, the bottlenecks in the marketing funnel, customer acquisition, all that stuff. It’s finding those bottlenecks.
Rob: Thanks for the question Pawel and apologies that it took us so long to answer it. He actually sent that to us last October. Our last question of the day comes from Matt Sencenbaugh. He says, “Hey Rob and Mike, I’m launching a SaaS app on April 1st,” sorry, Matt. It was a couple of months ago, “with two customers who have already signed on. My question boils down to what legal documents do I need at launch? Terms and service, privacy policy, sales agreement, etc? Do you guys have any recommendations for getting the required documents in a cost effective manner? Finally, just doing a sole proprietor affect this legal question at all?”
I will start off by prefacing that neither Mike nor I are lawyers, nor do we play them on TV so our advice is based on experience. It should not be considered legal advice. You should consult with an attorney to get real, legal advice. I have a quick answer to this one. I could say when we launched Drip and when I re-did HitTail and when I’ve done my other apps, terms and service, and privacy policy are the only two things that I really have and I use as a free plug for these guys, they used to advertise on This Week In Startups but it’s Snapterms, snapterm.com. I think it was $600 for privacy policy and terms. Those are not going to be the best. If you were to pay for a lawyer to do it from scratch, it might be $1,000 or $2,000 but they will work with you more to get tighter buttoned up language. But if you’re launching with two customers, it’s just how much time and money do you want to spend on this.
Mike: There’s a ton of privacy policy and terms of service generator tools out there. There’s even some that are licensed under Creative Commons and you can use any one of those. I think our general guidance, not necessarily, as Rob said, legal or financial advice on this particular thing is what we’ve seen people do is find something that seems reasonable for the time being and then once you get to a point where you can afford it and you have something to protect, then you go the route of having something custom built and custom designed for your situation. None of the tools out there that either generate these things for you or even the ones that you find on a website like Snapterms and you download something that is reasonably customized for you, they’re not going to encompass every single scenario.
Every lawyer, even my lawyer has done this before. He will look at legal agreements and he will take things from different legal agreements that he’s seen based on how they’ve been used in the past. If one of his customers got screwed over by a particular piece of legal jargon, he will sometimes take that and put it into his legal agreements to make sure that his customers and clients don’t get the short end of the stick when it comes to interpreting the documents that he’s put together.
Based on how experienced your attorney is, they’re going to have a wider wealth of knowledge, the longer they’ve been in business and the more agreements that they’ve seen and they’re going to be able to use those to craft the one for you. Maybe you get two or three different lawyers from different firms involved, it seems like it would be overkill but it’s always an option. I’m sure that larger businesses tend to have legal teams so that they can get that kind of experience and breadth and put together something that covers them from every possible angle.
Rob: The part about it’s a sole proprietorship has that impact. It just means that you have more exposure and more liability. I don’t know that it’s risk tolerance. Like we always say, you just have to figure out if you’re concerned about there being liability on your shoulders or in these early days, if you feel like you could get sued for something because the way to remove liability or to push it off is to form an LLC or an S Corp and then have really tight terms of service and privacy policy and all that stuff. Air tight, as they say.
That’s the way to ultimately get rid of it all. It costs a lot of money and it’s again, for me and my experiences, not something that I spend a lot of time or money thinking about in the early days of an app because there is less exposure at the time but you have to evaluate it for yourself.
Mike: An interesting hack for this to find out how much exposure you have is to go to an insurance company and ask them for a quote for liability insurance and find out how much that quote is and then use that to decide whether or not you need to go out and get something crafted from an attorney to help cover you. That seems to me like a pretty good way to get an independent gauge of how risky what you’re doing is.
For example, back when I was doing enterprise level consulting, we would be given admin access at the domain level on somebody’s network and some of these companies were like Johnson & Johnson, Pfizer, NASDAQ, those types of companies. Our insurance rates were outrageous. They were like $500 to $1,000 a month for insurance. It was only two or three of us. That was absurd but my wife’s got insurance for her business and it’s only, I forget, like $100 a month or something like that. It’s ridiculously low.
Depending on what you’re doing and how much risk and exposure you have, the insurance company will charge you more. Just getting a price quote from them would be a good way get an independent verification of how much risk there is without you having to sit down and do a ton of work on it. You’re going to have to provide them with paperwork and documentation and they’ll have an auditor review it but you could use that to help out.
Rob: Yup and if you’re going to do that and get a quote, I would recommend a company that I worked with before. They just made the process really easy. It’s foundershield.com. They themselves are a startup. It’s kind of just an insurance broker but they operate, like, I’m guessing they have some funding because they operate like you would want a startup to operate rather than some stodgy old business insurance company.
Mike: Matt, hope that helps. I think that’s probably the place to wrap it up for the day.
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Episode 347 | How to Recover From Coding for Months Without Talking to Customers
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about how to recover from coding for months without talking to customers. Based on some questions a listener sent in, the guys give advice to the classic problem of spending all your time developing and not enough time talking with customers.
Items mentioned in this episode:
Transcript
Mike: In this episode of Startups For the Rest of Us, Rob and I are going to be talking about how to recover from coding for months without talking to customers. This is Startups For the Rest of Us episode 347.
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: We’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s going on this week, Rob?
Rob: Well, I am back from Sweden. I had a great time attending and speaking at Brennan Dunn’s Double Your Freelancing Conference in Europe. He said it was going to be the last DYF conference he throws and then he’s going to only do small retreats after this so it was cool to meet up with him and his crew.
And then I spent a couple of days with Sherry in Stockholm. We had left the kids at home and we had a great time seeing the sights, painting the town red, and I got a good amount of work done. It’s crazy when you’re in a new environment. I was basically taking the days off, “vacation days,” but there was still stuff going on back here, back in the office so a couple of hours a day, 90 minutes or so, I could just hammer out a ton of email and Slack replies.
I had some really good ideas because I had the headspace to think about stuff so I noted them down and I’m starting to put those in the queue right now. It was actually a productive, I wouldn’t even say it goes far as to say as it was a workation, it was more like a light vacation with a bit of work sprinkled in. That’s, to be honest, my ideal thing because I think when I don’t work for like a week, I feel disconnected and I get bored just travelling and being in places without having something to occupy my mind.
Mike: I’d imagine that’s a lot like retirement as well. I’m not one who just likes to take extended vacations just for exactly that reason. I find myself getting bored.
Rob: Yup. I think that’s where having hobbies, like I do investing, which is fun, but I can only do so much of that in a day and think about it for so long before I need to do the next thing. After the conference was done, we would go see one sight and then we’d go to lunch and then Sherry and I would come back in the afternoon which is when this time zone was waking up and Sherry had a few calls and she was still doing quite a bit of consulting and stuff. It was good. It was a nice mix. I really enjoy that stuff.
I also enjoy getting away for retreats. Like we’ve talked about in the past, taking a full two, three days but seven complete days for me without thinking at all about the things I’m most passionate about, which is a lot of what I work on, is always a hard stretch.
Mike: Cool. On my end, I finally got the two step sign up process for Bluetick all squared away. There’s definitely edge cases in there that I just said, “Look, I’ll deal with this later.” Instead of making the whole thing bulletproof, I made it basically just work. I know that there’s going to be cases where something is going to come up and somebody goes to sign up and it’s going to break. I’m just going to have to figure it out at that point because I don’t really have the time to try and capture every single edge case.
Right now, it’s just going to show some generic messages if it goes sideways and certain ways that I just don’t know about because I don’t know all the different ways that Stripe for example, could say, “Hey, this card isn’t going to work.” I got that all squared away and finally got started working on the marketing and sales websites. I got the price and page all set and I’m working on the tour. I got to create a couple of videos to add in there, probably put one on the home page then work on flushing all the rest of the tour and figuring out whether I want to do just one page for the tour or I want to divide it up into several of them based on what different situations people are in.
I’ve got a bunch of different notes that I’ve aggregated from various customer discussions that I’ve had and different things that they’ve either keyed on or asked about during demos and putting those into specific places in the tour and try to essentially walk somebody through the decision making process for it.
Rob: Good for you, man. That’s exciting. I know it took a lot longer than you wanted to but it’s got to feel good to have that behind you and be able to pull the next thing off the list.
Mike: It is. The thing I don’t like about doing the stuff on the tour side of things is that it’s a completely blank slate and I’m not a designer. I’m sitting there, going through and trying to figure out how should the page be laid out and what should I say in certain areas and how should one thing lead into another. For whatever reason, it’s really hard for me to do that. I can conceptualize what I need to say but doing the layout for it, that’s the part I’m having a hard time.
Rob: Yeah, that is hard. I haven’t done that in years. When I used to do it, I wasn’t very good at it. It’s such detailed work. It’s tough. That’s what you got to do when you’re scrapping being bootstrapped and you’re counting the days until you can hire someone else. Get a contractor, even if it’s a contractor, get somebody because they’re so much faster at it and the end product will look better too.
Mike: Plus it’s all in WordPress. There’s only so much that I can do in WordPress. I’m just going to make do with what I’ve got and then after that, just look for a designer at some point down the road, when I actually have the funds for it.
Rob: For me, my other point of update is we’ve had some recent questions on the podcast about books, or resources to learn how to build a SaaS app and someone had pointed out the PHP spark framework, which I think is pretty cool.
There’s another one in the works now. It’s Marcus Wein. He’s in Austria and he’s working on a SaaS guide book for Ruby on Rails. I actually met him at Brennan’s conference. We talked about stuff and then he cooked up this idea and put up a landing page while we were there. I thought that was cool. He’s getting to work on that book and the URL for that is saasrailsbook.com.
If you’re interested in the fundamentals of how to build a SaaS app and are willing to either learn Rails to do it or you already know Rails and you want to just learn how a guy who’s built dozens and dozens of them would architect it and then all the things that he would think about, go ahead to saasrailsbook.com.
What are we chatting about today?
Mike: Today, we’re going to be diving into a problem that a listener had sent in to us. His name is Zac and he has a product called neverlate.io. He started working on it. He spent about three months working on it and has a basic MVP all set up but he fully admits that he made this classic mistake where he spent several months in his basement working on it and has come out of it and now he’s ready to try and find customers but he has no customers to go to or to show it to because he spent all that time working on the product itself rather than doing any customer development.
He’s tried a couple of different things to generate some traffic. He’s tried some AdWords. He’s talked to a few different people but really, he’s at ground zero at this point and he’s wondering, “What do I do here? What do I do to try and move this forward and make it work?”
Rob: The URL again is neverlate.io. It is an appointment reminder service. Right now, it is very horizontal. It doesn’t say appointment reminders for XYZ niche. It’s just a broad appointment calendar plus it can send automated text messages. I guess that’s it. It doesn’t look like it makes phone calls either. Anyways, I’m just looking at the home page. Obviously, I haven’t used the app, just trying to give the listener an idea of the business. It starts at $29 a month for up to 200 appointments a month and it has a $50, an $80, and a $500 tier.
Mike: This reminds me a lot of Patrick McKenzie’s appointment reminder app. Maybe, that’s where the idea came from. But to give a little bit more details on this, I’ve gone back and forth with him just to ask a couple more detailed questions. When he came back, he basically told me the product is functional but he doesn’t have a customer list. He doesn’t have a channel where he can start to do customer development. As you said, the bottom price point is $29 a month.
In terms of his target market, he’s a little bit unclear on where to go with that. He knows certain ones that he’s probably going to skip so he’s inclined to skip massage therapists, for example, because he doesn’t think that they’re going to be willing to pay more than like $10 a month. And then in terms of sign ups, he’s gotten some from AdWords. He spent about $50 or so in AdWords and he is getting people to sign up for trials but it’s not a lot and obviously AdWords can get very expensive.
In terms of lifetime value, he really doesn’t know yet. He’s thinking maybe a year or so of service so around $350 for lifetime value of a customer. His base question is really just what do I do at this point? Should I spend more money on AdWords? Should I do something else? What are my options and what are your recommendations about where to go with this?
Rob: We have an outline here but to kick us off, you’re in a real tough place because you basically have no customers, no list, and you have a me too product. There’s nothing that differentiates this product that I can see from, I won’t say a slew of others but I bet if I search, I can find a half dozen apps that do exactly what this does. Definitely back against the wall at the present.
Mike: I think that’s probably a situation that a handful of listeners have found themselves in over the years, probably more than a small handful, where you’ve built something and you get to a point where like, “Okay, yeah, I’m ready to take this to people and show it to them because I’m no longer embarrassed about what it is or what it looks like.” But you haven’t gotten far enough down the customer development road to figure out who it is you’re going to talk to.
I think in this case, your first priority is to prove, one way or another, whether or not this idea is going to be viable for you to execute on. I’ll put “prove” in air quotes because you’re really never going to be 100% sure that it’s going to work but you can get an idea of it. You can start looking down the road and you start doing that customer development and try and figure out does this look like it has legs or am I just wasting my time and money to try and to get this to work?
Along that lines, I think the first thing to do is really set a time line. For something like this, it seems like a six months time line is probably an appropriate timeline to set for this. Especially if you’re working on the side, if you are working on it full time, probably less since you have a fully functional MVP, take that time line, set it aside, and say, “Okay, I’m going to do X things during this time.” And set goals for that entire time line.
The first goal that I was thinking you would set up for six months, months one and two should really just be focused on trying to get a certain number of customer discussions, whether that’s five per month of five per week. Really, you can set your own pace and schedule at that. But you’re trying to figure out can I reach these people? How do I reach them? Once you start having those discussions with them, you learn more about who they are, what they do, how much time they spend in different areas, especially trying to solve this particular problem, whether it’s something that they’re willing to pay for.
Once you have that information, you ask yourself, how much are they willing to pay? Obviously, you ask them as well. But you want to find out, are they willing to pay for it, how much, and listen to the language that they’re using. Really, these first two months are just spent doing these customer discussions. Yes, if you can get them to a trial or on to a paid account, that’s great, but that’s not your goal here. Your focus should be getting a certain number of customer discussions because that’s going to give you an idea of how easy or difficult it is to continue doing that down the road.
Rob: Right. If you can’t get into these customer discussions, which are really about learning, as you’ve just said, rather than trying to build revenue, if you can’t find anyone who’s willing to talk to you, that’s a very, very bad sign. It’s a sign that you’ve built something that people just don’t care about, don’t need, don’t want, which is going to be something you could very well run into with any product that you launch. At that point, you have to decide am I willing to essentially continue to add things to this that actually make it unique so that I’m the only app that does this in this way, or to pick a niche and niche down.
Like you said, you don’t want to do massage therapist and I don’t blame you. Is there a group? Is it medical or dental because they have HIPPA so they’re really expensive and so they’re the $500 a month and up and you offer only HIPPA compliant so it’s important reminder for medical and dentist office. There’s probably some others in that. This is where you have to do this research. This is not the time to run Facebook ads to a landing page and see who converts and play it that way. This is an app where appointments are brick and mortar type of things. I can’t think of an online audience like designers, or photographers, or developers, or entrepreneurs, there’s certain audiences that are just online a lot.
Appointment reminder, if you can figure out a way to target an online audience, great, but if not, then you have to go through these much more manual steps. I don’t really see an angle here where you’re just going to rent some Facebook ads and convert people to trial and split test your way out of this. For the whole six months, you’re going to be learning that these first two months are going to be critical. They’re going to, like Mike said, tell you whether or not you should continue.
Mike: Along with that, in these first two months, you’re trying to figure out who that target audience is. I think early on, Zac had said he was probably going to skip massage therapists. Maybe there’s some data he already has to indicate that they’re not willing to pay for that. That’s fine. But are there other professions or other verticals that you can target and try to have those discussions with them and see if that’s going to work, see if that’s an initial traction channel that you can start to establish.
If it is, great. You can move on to the next steps in months three, and four, and five, and six that we’re going to lay out. Your focus at this point is trying to figure out who those people are and if you can establish a recurring channel of them to have those discussions with. If you can’t, then maybe it’s time to pivot to a different channel, a different vertical, or can the whole thing.
I probably wouldn’t can it after trying to find one vertical. If you go to massage therapists and they say, “No, we’re just not interested.” Okay, great. Go to dentists and then maybe pivot over to a solo practitioner doctor’s offices, for example, or plastic surgeons, or something along those lines. Each of those could be a one to two month effort but you’re trying to figure out is there a place where you can get customers on a recurring basis, at least in the early days?
If you go through several of those iterations and you still can’t find them, then that’s the point where you need to re evaluate your position and decide whether or not to just cut your losses and move on.
Rob: For months three and four, assuming that months one and two are successful and you figure out a niche or a group that you’re going to target, months three and four, your KPI is the number of paying customers after you’ve had a direct discussion. This is very, very much not scalable but what you’re trying to do is to learn objections. You’re trying to overcome them via discussions. You’re trying to close deals. It’s still learning but you’re trying to start making the rubber meet the road and actually get some revenue.
What you might find is that you get through three and four and you can’t get enough paying customers to make it worth your while and you have to go back and repeat months one and two and find a new group to target.
Mike: The whole point of this particular piece of it, I don’t know if some paying customers is like the sole thing that you should focus on. Getting them into the app and getting them active and using the app, that’s probably a much more important first step. Obviously, you want to keep them as paying customers and get them to convert from any sort of free trial that you put them in into a paying customer. But even if they don’t, you’re still going to learn from that. The focus is really finding a certain number of people that you can put into it.
Again, you can set those numbers yourself. You can base it on how many conversations you’re actually having because obviously, if you only have 5 conversations a week, you’re not going to get 10 customers a week. That’s simply not going to happen. From that, you can back that off and put people into the app and learn those objections. You can overcome them by talking to them. A lot of times, people will have a question that if they’re on your website and they have a question in their mind, it draws doubts for them. They will not sign up because of that.
When you ask them, “Hey, would you like to sign up for an account right now?” They’ll say yes or no. If they say no, you can ask, “Well, why not? What’s stopping you? What is it that’s holding you back here?” Those are the things that you want to write down. Every single question that somebody asks, you want to write that question down. That way, you can go back to that and over time, you’ll get a base of let’s say 20, 30, 50 people you’ve talked to. Start aggregating the number of questions that they ask and which questions they ask. You can identify which of the questions were most prevalent, which ones the most people had and use that in your marketing copy once you get to months five and six, which is where you are trying to land the paying customers or on board people without having those direct discussions.
Rob: That’s month five and six. It’s moving out of the I’m talking to everyone, I’m doing demos for everyone, and I might able to start getting people to overcome their objections and sign up for a trial just purely based on a marketing website.
Take these timelines with a grain of salt here. We heard from Jordan Gal last week and he was giving demos for six months, eight months. It wasn’t just the two months we have here or I guess we have four months. One and two, finding the audience and three to four is overcoming objections, and five and six is moving towards the more automated way. Their journey took longer. They have a more complex product, probably harder to explain, harder to demo. Appointment reminders tend to be fairly, I think it’s pretty easily understood by the prospect so perhaps you’d have an easier time or perhaps you’ll have a tougher time getting to five and six because again, your product isn’t differentiated from others that they could find with a Google search.
That’s the idea here. This third step, this third piece is trying to move towards having more automated things in flow and maybe you don’t remove demos altogether, maybe you figure out you have people self select that if they’re in the lower pricing tiers, then they sign right up and if they’re going to pay you three figures a month, it’s probably worth having a conversation with that person. You have a contact that’s linked. Even if you show your pricing, you still have some type of thing, how many appointments per month and immediately, you get a paying customer and have an idea that it’s worth reaching out to them with a calendar link, trying to set up a conversation.
Mike: With each of these sets of two months, months one and two is really about trying to get a certain number of customer discussions going and then month three and four are putting people into the app through those direct discussions and then five and six is getting those customers onboarded without having those direct sales discussions. That’s really just a logical progression. As Rob pointed out, your timeline may vary quite a lot. It could be closer to a year or it could be closer to two months. It depends on how complicated your app is, how far along it is, how many people you’re able to have those conversations with early on, how quickly you get traction, and it also depends a lot on what your schedule is.
If you’re working on it full time, you’re going to be able to move faster. If you’re working on it on nights and weekends, you’re probably not going to be able to schedule 25 calls during the week. It’s just not going to happen because you have a full time job and you’ve got other responsibilities. During the work week, it’s going to be very difficult for you.
But all of this is really just establishing this logical progression so that you can determine whether or not this idea that you have or the product and the MVP that you put together is going to go anywhere so that you’re not wasting too much time trying to make something work that’s simply not going to for you.
I think that’s another key distinction that we’ve made on this podcast before, which is that even though something could be a great idea and it is reasonably well executed, it may not be the right idea for you. If it’s not something you’re passionate about or you don’t want to do or you’re just not interested in it, you’re not going to do it as well as if it was something that you were extremely interested in and extremely motivated to do. You’re going to push things off and not be as motivated to move people forward in the sales funnel and do the website, coding, and everything else.
It’s going to be harder for you. Maybe it’s just not the right fit. Maybe some other product would be a better fit. Again, these are all things that you need to evaluate as you’re going through this process.
Rob: We call that in the biz, product founder fit. As you said, is the product a good fit for you, for your personality, for what you want to do for the customers you want to work with, for the features you want to build. It’s a bit of an amorphous concept and it’s hard to know upfront but what’s nice is that Zac said, right off the bat, “I don’t think I want to work with massage therapists.” That’s like, alright, good. It’s a good thing to know that. Don’t go after that market because you’re probably going to find out that you’re not, even if you found success, you’re not going to enjoy it. You’re not going to stick with it for the long term.
Mike: I think that’s an interesting side conversation. Even if that would work, do you want to do it? I think in some cases, the answer to that is probably not. There’s certainly groups of people that I would probably not want to work with or probably would not enjoy and everybody has their own either biases or people that they know in certain industries, they’re like, “I just don’t want to deal with any of that stuff.”
Again, it may work out. It’s just like marketing tactics. There may be some things that you’re really comfortable doing and the next person may not be comfortable with that at all.
Rob: Yeah, there was an app I almost acquired. I’m trying to think. It may have been after HitTail, or I still owned it but it had grown to where I thought it was going to grow and I was looking at other avenues before Drip. I looked at acquiring a bunch of different apps. One of them was going to put me marketing to and having a customer base of designers UX and usability folks. I had no reach into that market. Obviously, I have an understanding of what they do but I am not in that target market.
It was Ruben Gamez from Bidsketch who asked me, “You’re doing a market pivot by going from an SEO tool, which is at least marketing technology, into something that goes after a completely different audience, is that something that you want to do for the next three, four, five years?” Frankly, I have no qualms with working with designers and UX people, I think it would have been an interesting adventure but it would’ve been a huge learning experience for me.
I thought, “If I do this, I’m going to have an uphill battle to learn a whole new space and to learn what are all the sites where people hang out? Where are the blogs? I already know this from MarTech. That is one of the reasons that I wound up doing Drip. Because it’s not the same as an SEO keyword tool but it is another marketing SaaS and I already knew so much about the space because of my heavy involvement in evaluation of tools from my own personal use. It was just a different thing.
I think I still would’ve been successful. It probably would’ve taken longer had I done that. I would educate myself about a market, make myself a name in that market, which I really, really don’t have. And so, it’s just something to think about as you go through your ideas.
Mike: I think one of the last questions that Zac came up with was should I spend more money on AdWords or should I just abandon that and go do something else? I think, Rob, you’re probably in agreement with me on this one. But AdWords is probably not the way you want to go, especially if you don’t have a lot of money to throw into this because you’re going to spend money trying to learn. It’s not that spending money to learn is a bad thing but you’re going to probably spend much more money than you would if you had some customer discussions first and you waited until month three or four to start pumping up the sales funnel a little bit.
After you’ve gotten some of the terminology a little bit, you’ve narrowed down the market a little bit, if you’re just throwing money out there to try and figure out where the market is, it’s going to be very expensive to do that.
Rob: Yeah. The tough part is since the audience is brick and mortar, it’s going to be expensive and hard to find them. There are tools where everybody’s online and they’re always signing up for new things. You can do the curiosity play and get them to sign up and you have a low price point and you could test an idea with ads landing pages in more broader scope stuff if you had the money to do it. I don’t see an avenue to do that here. Just by nature of the potential audiences that we can come up with, I think you’re right.
I’m in agreement that AdWords is probably not where you’re going to get a bunch of learning at this point. Maybe you could run AdWords just enough to get that trickle of calls that you want. And again, it’s going to be expensive to get that trickle going. But if you have no other avenues, yeah, maybe AdWords or Facebook ads, or some type of paid acquisition, but if you can pay $10, $20 to find someone to get on the phone with you, who has some inbound interest, that’s interesting but you know you could just as easily do some cold outbound email or cold phone calls and perhaps get the same result with less money but more time.
Mike: That’s really what this is all about. It’s striking that balance between how much money you have available and how much time you have available. If you have more time than money, don’t do paid ads. Have those customer discussions, learn who it is that you need to target. If you have a lot more money than time, spend on AdWords and learn who but it’s going to be dramatically more expensive without having those customer discussions to guide you.
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Episode 346 | Lessons Learned from Requiring Demos for New Customers
Show Notes
In this episode of Startups For The Rest Of Us, Mike interviews Jordan Gal, Cofounder of CartHook, about his lessons learned from doing demos for customers. Jordan gives a background on CartHook as well as the journey from one-on-one demos to the possibilities of scaling the sales process.
Items mentioned in this episode:
Transcript
Mike [00:00]: In this episode of Startups for the Rest of Us, I’m going to be talking to Jordan Gal of CartHook about lessons learnt from requiring demos for new customers. 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.
Jordan [00:24]: And I’m Jordan.
Mike [00:25]: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. How you doing this week Jordan?
Jordan [00:29]: I’m doing well. I just want to be able to say the word ‘episode’ like Rob does, like super fast episode. I’m doing well. You caught me at a busy, hectic, fun kind of week and I’m excited to talk about this. This is the topic of conversation internally for us also.
Mike [00:45]: I just want to give the listeners a brief introduction to you. You are the co-founder of CartHook. You’ve also spoken at Micro Conf; you are the co-host of the Bootstrapped Web. What else am I missing? There’s got to be other things
Jordan [00:57]: It’s mostly dad and sleeping. I’ve got three kids under five years old plus all the business stuff.
Mike [01:03]: So more dad and less sleeping is what you’re saying?
Jordan [01:05]: Yeah and I’ve gone into the bad habit of staying up late working because I do demos all day. I have four demos today and that squeezes out the ability to get work done so I end up doing it at night, which isn’t sustainable but it’s working right now.
Mike [01:18]: I did one this morning, so I know how you’re feeling about that. Before we get into this, I think that we should probably start at the beginning with CartHook and why don’t you give the listeners a brief background on exactly what CartHook is and what it does so that as we get into this discussion about whether or not you should evaluate whether or not you’re going to require demos for new customers or not that people have at least a background to work from.
Jordan [01:43]: Sure. I’ll give the very quick history and what led us to where we are now and how that fits into demos. We started the company with a cart abandonment product for e-commerce stores. What that means is we capture the email address of visitors to the checkout page on the e-commerce store that’s using our product and then once we capture that email address of the customer, if they don’t complete the purchase within 60 minutes, we then consider it abandoned and we start sending them a three part email campaign designed to bring them back to the e-commerce store to finish the purchase. A lot of us have received these types of emails in the past. What we do is enable small medium merchants to do it. That’s where the company started off. We worked on that for about a year, maybe a little more, and then we uncovered an idea for another product that we decided to tackle and the product that we’ve been working on is a check-out product and what it does is it replaces the check-out process of Shopify stores. Shopify is an amazing platform but their checkout process is very rigid and you can’t customize it and so forth. What we do is give a customizable, one page checkout and it also enables something called post-purchase up sales which are very hot in the e-commerce industry right now. That’s what we’re doing and the way we led into demos is because a new product, you don’t know what the on-boarding should look like, you need feedback, you want to talk to as many people as possible. That’s how we got into the demo thing to begin with for the new product.
Mike [03:11]: Got it. Just for the listeners’ background, Shopify is essentially an e-commerce platform where people can sell their stuff and I’ll use that phrase very broadly. But there’s a bunch of different platforms out there where people can basically create an online store and Shopify is one of the platforms that people can use. You’ve really focused specifically on this platform.
Jordan [03:31]: Yes, they’re super hot in this space. They just IPOed; they have an amazing developer eco-system. They have become the default choice for merchants selling physical products online. That’s where we play.
Mike [03:46]: Okay. Let’s dive into a little bit around the idea of these demos. Previously with CartHook, you just had one product before and were you requiring a demo for that or no?
Jordan [03:56]: No. We had a demo page so if someone didn’t want to sign up on their own, they could request a demo and we would get that pretty rarely; either people who really wanted to be hands on and ask questions or larger companies that were used to that process. But 95% of our sign-ups just came through self-serve sign-up, on-boarding, that sort of thing.
Mike [04:18]: Okay.
Jordan [04:18]: That was for the original product. The new product, what really happened, we worked on this product for a while with a lot of early users and then we opened up sign-ups and we got flooded. We had like 100 sign-ups in 10 days and we were not ready for it and totally messed it up and most of them left because the product wasn’t ready and we weren’t ready, the on-boarding wasn’t there so we said, “How do we slow down the rate of sign-ups while also getting a better feel for what our customers want, what we’re doing right, what we’re doing wrong?” We said we are going to do two things; we’re going to raise the price and we were going to require demos. It definitely slowed things down. The interesting thing is the other effects it had like it didn’t change demand very much. That’s how we got into-we used one on one demos specifically as a mechanism to slow things down and to learn more.
Mike [05:14]: That seems a little counter intuitive, where you would want to slow things down. You think of startup like, Oh they want to move as quickly as possible but you’re going in the opposite direction and I think it might be beneficial to explore exactly why that is. You’re talking about things, exploring, you’re going sideways and people leaving. What sort of things-I don’t want to point out specific people or anything like that. But really what types of things go sideways when you have too many people coming in?
Jordan [05:39]: It’s just the nature of our product that we had to learn about. It’s a fact we had to face. This product that we took on is [?] and not simple and we have a team. Then it was four people. Now it’s five. We bit off a lot. What that meant is that the product was going to take a while. You’re always like, “Oh, yeah, you’ll have an MVP up in three months,” and it’s not usually three months and this is a complex product. We just had to face the fact that it was going to take longer to get the product to a place where we could take on a lot of sign-ups successfully. We didn’t want to ruin our reputation. We didn’t want just let people in, the product wouldn’t be ready and they would just leave. It’s hard to get a second chance with people. We just thought strategically, okay, we don’t really have a choice. I’d love to go as fast as possible. I’m the one guy in the marketing side and everyone else is on the tech side. It has caused a lot of frustrations in terms of, “Guys, we need to go faster,” but it’s almost like they had to pull me into the tech side and educate me a little bit about what was happening and once I learned more about it, I understood, “Okay, this is not the time to rush; this is the time to be patient,” which was painful but it was necessary.
Mike [06:55]: It’s really about slowing down the number of people that are coming in more or less because you don’t want to burn the relationships of those people and leave a bad taste in their mouths when they sign up and maybe something doesn’t work or it doesn’t do everything that they want because down the road your hope is eventually you would get them as a customer. But if you don’t have the features in place that they really desperately need right now, they’re just never going to convert because then they’ll look at your product in a negative life basically forever. You only have that one chance.
Jordan [07:21]: Right and it goes against everything that I want or would give advice on. It’s just that the nature of the product is that so many things have to be perfect. It’s not like this core feature that we offer works. The other things, not so much but people still get value out of it. To get value out of a checkout product, so many things have to be perfect because if you mess anything up on a checkout page, people don’t convert and we’re going up against Shopify’s checkout page. Their alternative is to do nothing and Shopify is this $5 billion behemoth and their checkout page is amazing. We have to compete with that. It was just going to take a while to get page-load perfect, Facebook tracking perfect, credit card perfect, PayPal perfect. If you mess any of those things up, the person wasn’t going to get the core value. We had to deal with that fact.
Mike [08:10]: All those things you just mentioned, those are technical aspects of the product itself. What about the sale and marketing side of things? If you build in a product yourself, one of the things that come to mind is that if you are a developer, you look at the techs [?] and you say, “Hey, I just want to work on these stuff because I know how to do that,” and it makes it easier for you to do it. There’s this whole other world to you as a developer that all the marketing and sales stuff, you’ve got no idea. A lot of people will put it off and I’ve certainly succumbed to that as well in the past. The reality is that when you get into that position, there is a lot to do on both sides of it and if you’re just one person, it’s hard to juggle both of those. But you’ve already got a team in place. You’ve got four or five people there and you’re apparently having trouble dealing with stuff on the tech side, not because the team isn’t good. It’s just there’s so much stuff to do that needs to be perfect. On the marketing side, that is also the case in many respects. You’ve got all these things that need to be prefect in terms of your learning page, contact marketing, SCO, there’s all these stuff that goes with it that makes that difficult as well. If you have a really tiny team, if it’s only one or two people, juggling both of those at the same time, it just makes it astronomically difficult.
Jordan [09:21]: It’s been difficult.
Mike [09:22]: Okay.
Jordan [09:24]: Yap, you’re 100% right. Again a lot of these, if I look back objectively, a lot of these is going against what I would think is the right thing. It’s just that we’re just making the best decisions given the information that we have. It’s been a team effort for months of I get a demo, I get a customer, I pass it off, I learn a lot, I take that knowledge, I transfer it over to the tech team, they work with the customer, then they give me feedback. It’s been this knowledge transfer back and forth but the raw material for that process is users but not too many, right? If we had 10 sign-ups a day, it would be a mess. We wouldn’t learn nearly as much. We would just be dealing and putting out fires. But if you passing out one new sign-up a day, all of a sudden it’s more manageable and you learn a lot more. We also learn about who the right customers were for us. We’ve had one customer that just has done really well the whole time. That gives us this north star of like, all right, they are getting amazing value out of the product. They’re making a lot more money. They keep spending more on ads. They keep making more money. Their business is growing, they’re hiring and we are like, “We know we can do it.” That’s the thing that kept us going when we were like, “Jesus, this maybe just too hard.” The demo is the initial part of the process. It’s like, “Okay, talk to someone, figure it out and then put them into the tech side,” and then we learn back and forth from one another.
Mike [10:53]: That learning process actually helps you short circuit a lot of the other problems that you might run into where, with sales and marketing, sometimes you put a learning page out there or even just the homepage of your site, you’re not sure which of the benefits that you should highlight because you haven’t talked to enough people. You start guessing then you’re shooting in the dark and this short circuits that whole problem because you’re talking to those people, you’re making notes, you’re getting more direct contact with these people and you’re getting the marketing lingo in their terms that they would use versus the things that you know because you’ve researched the problem extensively and you have your own terminology for it. By gathering that stuff, you are helping to not have to shoot in the dark and not make guesses and then wait two, four even twelve weeks to see if it made any difference in the number of sign-ups and trials coming in.
Jordan [11:44]: Yeah. It got to the point where we didn’t update our marketing site on purpose. Our marketing site talked about version one of the product where it didn’t even work inside the Shopify store. It only worked as a bridge between your learning page and your Shopify store. If that sounds confusing, you’re not alone. It was impossible to describe accurately. We had our marketing site talk about that version, the first version of the product that only worked with the learning page. We didn’t even change the marketing site till about two months after we had started working directly inside the Shopify store because we knew just stating that was going to drive demand so much higher that we just avoided it. We just said, “No, we’re getting a few demos a day. We don’t need more. Let’s just leave it alone.” I would never recommend that to someone. It sounds ridiculous. Here’s another sin to admit to. We don’t really do any marketing or advertising. It’s literally a build-it-and-they-will-come scenario only in this situation I’m 100% convinced it’s right because the demand for the product is so high. We’re not even doing content. We just don’t talk. We say nothing. Just word of mouth out there and a few Facebook posts and that sort of thing is enough to drive a few demos a day and we just left it like that, up until a week ago.
Mike [13:05]: If you’re getting enough to keep you busy and move things along at the right pace, it’s perfectly okay to do that. When you make a mistake of saying, “If I make the product perfect, everything will work out,” but you don’t also have the accompanying number of sign-ups, I think that’s when people get into trouble.
Jordan [13:24]: Right. If you’re not talking to anyone and you’re guessing that you have the perfect product, that’s dangerous. If you’re talking to 15, 20 people every single week and they’re telling you, “Wow, this is exactly what I’ve been looking for,” then it gives you the confidence to say, “All right, let’s just get this right and then when we make the big reveal, it will work.”
Mike [13:42]: Right. I just want to make that clear to the listener that building the perfect product is not the solution if you don’t also have the accompanying number of people that are coming through your sales funnel. If you have that mentality and your sales funnel is empty and you’re not talking to anybody, then that’s the problem. It’s not about the product being perfect. It won’t matter. You need to talk to people. You need to have that marketing stuff in place. Going back to the marketing side of things a little bit, you said that you really don’t talk about a lot of things on the website, at least some of the advance features and the other stuff around the new product, how do you go about qualifying people in advance of the demo? I think there’s a certain amount of information that you need to gather from people and you don’t want to just give a demo to anybody. That’s a mistake because you’re going to end up with those people who give you an email address and you’ve got nothing to go on and you have no idea whether you’re just completely wasting your time or not. What sorts of things do you guys do?
Jordan [14:35]: At first I was happy to talk to anyone. If you read something about the product and you want to talk about it, let’s talk. As things progressed, you start to see that as, “Okay, this is a complete waste of time so let’s start adding a little bit.” On our site, if you go to carthook.com/checkout, you go to the pricing section and it has a few tiers and each tier has the same call to action. It’s just ‘schedule a demo’. When you click on that, you go over to carthook.com/demo. That’s just a really simple form that asks you for a few pieces of information; name, email, phone number is optional, your website address and then we’re just real straightforward. Our pricing is based on revenue and so this form is based on revenue. It just says, “What is your monthly revenue.” We just ask people how much you make. How seriously should I take this meeting? It’s real straightforward because we have two products; we ask which product are you interested in, the funnel product or the cart abandonment product? Almost everyone says funnel of both. That’s what starts off our process. We haven’t wired up into Slack. When we see something come in and it’s the highest here is over 100K a month, that’s just exciting. When it’s under 10K, we just look at it and say, “Okay, opportunity to talk to someone but not as exciting.” The one lesson I have learnt is that, that is far from perfect. Some of our biggest customers came in and identified themselves as less than 10K because the site was new, technically less that 10K but these people are very experienced with big budgets. It’s a little dangerous but we don’t do a survey or form. What we really wanted to do with this was slow things down but not put up too much friction. It’s just a form, you fill that form out, I get an email. After you fill the form out, the page changes and you can see a calendar link to grab a time on my calendar. If you don’t grab it there, then I’ll go to the email that comes in and I have a save-reply and I say, “Hey, nice to meet you. Here’s my calendar link, grab a time.” That’s how we start the process.
Mike [16:37]: It’s interesting that you use the monthly revenue as the qualifier for that. You’re probably much further along than I am just because you’ve got the two different products that you’re working with but I actually look for a lot more information than you do. I’ve got like a full blown form where when somebody comes to the Blue Tick website, they can enter in their email address for early access and it’s all I had asked them for initially. Once they do that, it takes them to a survey page that says, “Hey, great. Now we’d like some more information from you,” and ask where they heard about it, what do they find most appealing, how do they think it would help them, their top questions. I ask them to describe what their current follow-up process is because one of the things that I want to make sure is do they have one in place right now because if they don’t, I’m going to be doing way too much hand-holding and I’m going to be educating them. If you go to the mass market with a product, then, sure, educating people on how to do that is fine but what I’m really looking for is those people who are well qualified, who are going to essentially be more self-sufficient. Do you find that there are certain types of questions that you’re asked during a demo that help you narrow down whether or not somebody is well qualified for your product that would be very difficult to ask on a form?
Jordan [17:49]: I think it depends on your goal. If you only want to talk to people who are well qualified, I would use a form. In our case, we don’t want to only talk to a very specific segment. We just wanted to slow it down. We just wanted to put a barrier in place as opposed to you put up a higher barrier. You’re saying, “No, I really only want to talk to you if you’re right for me,” which sounds like the right approach when the product is earlier on. For us, it’s a little later on the product but we just wanted to slow it down. You can play with how much you ask how much time commitment you’re asking. Not only are you getting the information from that form but the person who filled out your form spent 10 to 15 minutes on that form. They’re motivated. When you have a conversation with them, it’s in that context, “All right, this is a real opportunity.” For us we didn’t want that. We wanted higher numbers but slow. What I do is I save those questions for the actual demo. After someone schedules something on [?] does its thing. It sends out a reminder on the day before and an hour before. In addition to that what I found works is if I go in and manually send them an email 15 minutes before. I just look at my calendar for the day, I set my iPhone and I set alarms for 15 minutes before each appointment a, so that I don’t forget and b it tells me, “Hey, send that email.” I go to Gmail, just super manual because you can tell that it’s manual. I have a ‘save-reply’ so it takes me 10 seconds to do. It says, “Hey, look forward to speaking with you in about 15 minutes. Here is the link to join the call.” After you do that, you can also join the audio,” because good lord did I have trouble the first week or two of like, “No, no, no click on the freaking phone button or call in the number.” Yeah, you have to be good at anticipating that. One of the tricky things is the way you see it-for me I use ‘join me’ which I like a lot-the way you see the ‘join me’ experience is different from the way your customers. You need to test that out yourself to make sure you know what it looks like on their end so you can actually be like, “You know that field where it says ‘your name’? Type in your name and hit knock the button that says ‘knock’ and I will let you in.” I have that in the email.
Mike [19:56]: This is really about identifying what those friction points all along through that is. That’s an entire sales funnel anyway. Getting people to your website getting them through the process of paying you, signing up, on-boarded, demos and all that stuff, there’s all these little touch points or friction points that, as you said, with your checkout products, if everything is not perfect or at least the five or six things are not perfect, then they’re going to leave, churn out or not going to end up paying you. This is the exact same thing though. There’s all these little things like ‘click on the knock button’. That’s not something that’s obvious but after you do it several times, going through this process with the demo, you see those things and you say, “How can I knock out that barrier? How can I eliminate that so that people don’t run into it or when they do, they know what to do? ”
Jordan [20:43]: I had some funny experiences. We love Zoom. We use Zoom internally for our daily standup calls. Our team is fully distributed in New York, Slovenia, here in Portland. We use Zoom and I love it. People are like, “I use Zoom for Demos.” I said, “Cool, I’m dropping ‘join me’ and use Zoom because I love it.” I had the most awkward week of my life because I couldn’t get-Zoom had this bug where you couldn’t disable video from coming on automatically. I have a demo and I send someone to Zoom link and all of a sudden, their camera were turned on and they weren’t expecting it. These days, not everyone works in office. You’re in your house with your cat on your lap and the video comes on and the initial touch point of the demo with me was you be like, “Oh__ my camera.” Oh, excuse me. That was a paid for experience. I had to go back to ‘join me’. I found that, that email 15 minutes before makes the show-up rate go through the roof. When we start the demo, I started off with one question that’s probably my biggest lesson learnt of the entire demo process was to open up the right question at first. That question I’ll give it verbatim, “Before we jump into the product and features and all that, why don’t you tell me about what you’re trying to accomplish and why you decided to spend half an hour of your time with me today.”
Mike [22:03]: That’s awesome.
Jordan [22:04]: Give that because I found that I would start going into the products. We have two main features. You can build two types of funnel and they’re for two different types of customer. I would just start showing them and I would just not know what they were actually trying to do. When I ask that question, first it just gets the conversation rolling more in a consultative way or like you’re talking about your business with another business owner. I’m not like a sales person that’s giving you a demo of a product I’m trying to sell you. It laid that context down to begin with. And then it told me how to tell the presentation, which main feature should I talk about first? How patient or impatient is this person on the phone? How fast are they talking? It gives you an idea of how to handle the conversation to begin with.
Mike [22:53]: I love the way that you phrase that question. It’s much better than the direction that I go so I will totally steal that.
Jordan [22:58]: It’s almost self- deprecating.
Mike [22:59]: It is, yes.
Jordan [23:00]: Like, “All the product features,” whatever, whatever. What about you? What are you trying to accomplish?
Mike [23:05]: Right. That also gives you an idea of what sorts of things you can go through in the demo and completely leave out because they were irrelevant. You can cut out 10, 15, 20 minutes out of a demo if you don’t have to go over a bunch of things that are just unrelated to what they’re doing. The other question I like to ask when I’m doing a demo is what other things have you tried? What that does is it gives you an idea of the pain points that they’ve had using other products and why those things didn’t work out and you can talk specifically to, “Well, you won’t have that problem because we do this,” or, “This is how we address that. Oh, you said you had that product? This is what we ‘do and this is how you would get around it or avoid that type of situation.
Jordan [23:43]: Yeah, I think that’s great. That sometimes comes up as a result of that initial question but it would be good to address. I think we don’t –I don’t do this much because I know there aren’t alternatives. There’s one alternative. I almost just focus on how will you drive in traffic? Where are you pushing traffic to? What kind of advertising you’re using and that sort of thing. People just tell me. They tell you exactly why like what’s the main feature that caused them to contact you. I’m interested in on click up sales. They just say that and you’re like, “Okay, this person is interested in this feature or someone else will say, “I just want my checkout page to look like the rest of my site and it’s like, “Okay, design focus person.” This just helps you do things right and focus on the right things.
Mike [24:29]: Something that you mentioned earlier was about the fact that if somebody does not sign up for a meeting with you right away after they have gone through and submitted the request for demo, you reach out to them. It’s interesting that you mention that because I automated that piece of it so in my sales funnel when they go through, they enter in the survey, I have it sent out to Google Spreadsheet, where I look it and basically decide whether it’s qualified or unqualified. There’s a drop-down column that I can use, just tag it as qualified or unqualified. If it’s qualified, then what it will do is it will populate it into Blue Tick. It will make some tag adjustments inside Drip and do some other things and it will invite them to a demo using a custom calendar link and it injects using [?] string variables. That gets sent through Blue Tick and if they do not sign up for a calendar link within a certain timeframe, it automatically sends them another one and it will send several follow-ups. It’s interesting to see that most of the people that end up coming to the demo don’t respond necessarily to that first email that gets sent that says, “Hey, you didn’t fill out the survey,” or, “You didn’t sign up for this yet, are you still interested?” It usually takes the second or the third. It’s interesting to notice that those reminders help. You were talking about sending an email 15 minutes in advance of the meeting. Those are the types of things that really help move people forward. You don’t think of them as a business owner initially but those reminders or those touch points help. What other places have you found that that’s true as well?
Jordan [25:56]: What’s been really helpful and I keep manual still and look, a lot of these is you look at the ideal and then you say, “Should we go for that ideal and spend the time to achieve that ideal in terms of process?” For us we are so jammed on the product side that I just tell the guys, “Don’t worry about making this process perfect. We’re not going to do demos this way forever. Just keep it ghetto and yeah, we’re losing some people but it’s better off.” Even you can acknowledge what it should be and what it isn’t, there’s a difference. That difference is acceptable depending on the situation. One of the things that I do manually that’s a touch point in the process that way is the most important touch point. We require demo, we also hide the registration link. You can’t sign up for our product unless you-some people find it somehow.
Mike [26:44]: There’s always people who do that.
Jordan [26:46]: Always, amazing. Those people churn out and like, “I told you, man.” You come in, you start asking questions and like, “We would have talked about this on the demo.” What I do, at the end of the conversation, is we have a talk about pricing. We make sure we’re on the same page so there aren’t any weird surprised because our product isn’t cheap and then I say, “Okay, what I’m going to do when we hang up is I’m going to send you an email with the registration link.” Depending on the way the meeting goes, if the person is super excited, I’m like, “Awesome, sign up, I’ll get you the email right now. I’ll look for it, pin me on intercom once you’re inside the app. Let’s do this.” If it’s less certain, regardless of how uncertain it is. I just say, I’m going to send you the email with the registration link so you have it in your inbox for whenever you’re ready and then when we hang up I go and I have another saved reply that says, “So great to meet you today, really excited to get you started. Here’s the link to register, let me know if there’s any help that we can give you in getting set up.” Again, it’s another manual email touch point after the conversation that’s tailored if we had a really good conversation, if they are a big potential customer, I will change that email up a little bit to address the specific conversation that we had. It’s another touch point after the demo instead of just hoping that they sign up. It’s, “Here’s the link, something personal, super manual,” and I make sure not to reply to the chain of emails we had before that; totally new, subject line is ‘CartHook Sign up link’. That way if they are ever searching for it in their inbox three weeks from now, it’s easier to find.
Mike [28:17]: One of the things that I think is a real advantage of doing that is it allows you to essentially ask for the sale right there on the call and get a solid yes or no and then be able to have a conversation about that. Before we go into that a little bit, I do want to ask you a question because you aid you had a discussion about pricing with them but don’t you list the pricing on your website?
Jordan [28:38]: We do but to assume that everyone looks at it, things about it, internalizes it and brings it into the conversation, I found is a bad assumption. I used to think that but then they kept being like, “All right, so how much is it?” And then I would say, “Okay, so clearly you didn’t look that hard,” and I would get pushback. Yeah, it needs to be part of the conversation. I know, technically, you’re supposed to do it as early as possible. I think in our current stage, if I hired a salesperson to take over for me, I would probably tell them to ask that question earlier on. The way I’ve done it is to focus on the product and get a lot of feedback on it and assume that they looked at the pricing and at the end confirm. I know I’m doing it ideally but I try to make sure it’s injected to the conversation and a lot of that comes from that initial form that they fill out showing how much they make. If I see over 100K a month, I know I’m going to have explain our pricing because our pricing is 300 bucks a months for up to 50K, 500 bucks a month for up to 100K and then over 100K is custom pricing. I know already in the back of my head that’ I’m ready for that conversation.
Mike [29:48]: It’s interesting that- you and I have taken different approaches on this, where you list your pricing there but if you go to Blue Tick’s website, it won’t tell you what the pricing is. You have to ask. That’s one of the questions that when people fill out my survey, that’s one of the, I’ll say, the tops five questions that people are asking; how much does it cost? We get into that conversation and it’s not really a big deal or anything but you do have to have that conversation. I think you’re right about the fact that some people just don’t look at the pricing. They see the product and they sign up for it or they end up in your sales funnel because of something else and you don’t realize that they may never have even hit your website or they just landed on that demo page and that was it. That’s’ their only interaction with it.
Jordan [30:29]: Yeah, it depends on the situation. We wanted to make sure we did give the pricing. That was part of our qualifier. If we didn’t have the pricing, I don’t know what would happen. If we could get more form people or a lot of people who self-select out of the process just don’t request a demo because they think it’s too expensive.
Mike [30:49]: It depends a lot on your own pricing. Your pricing is significantly higher than mine is but mine is also per user. It could obviously swing the other way. If you had 50 or 100 people that you wanted to put on there. There is a generalization that people will make about a product based on the pricing itself and whether they feel like they fit into that or they can afford it. I look at $300 to $500 a month and I’m like, “I’m not paying for that for a shopping cart.”
Jordan [31:16]: That has been a healthy challenge. When someone asks you that on the phone, it forces you into this position of, “I need to justify this properly.” If you’re full of it, it’s going to sound like you’re full of it. You have to believe that your pricing is right. We have only one competitor that does the same thing we do and they are $37 a month. We get the awkward question of, “So I just- I’m not saying anything bad about your software but just help me understand why you’re 10 to 20 times more expensive.”
Mike [31:49]: I’d go with the analogy of have you ever bought something at Walmart and then bough something similar-like a blender at Walmart and then bought a blender at any other distributor ever?
Jordan [31:49]: Right. You need a really good response to that and being forced to do that while on the phone while someone is looking at your screen, it forced a good answer to come out.
Mike [32:10]: How does the on-boarding come into play because there’s obviously an on-boarding discussion that you have to have to have with people. If people are willing to sign up or want to sign up right at that point, obviously you’re sending them the links and stuff. What about on-boarding? Do you talk about on-boarding sessions with them? How do you pitch that to them? Is that an up-sell or is that included as part of the cost?
Jordan [32:31]: At the end of the conversation, along with the sense I say about when we hang up the phone, I’m going to send you the registration link, the next sense that comes out is, “If you look at my screen right now, that little thing on the bottom right hand corner, that’s intercom chat. That’s where you can talk to us. That goes to me and the tech team. If you ever need anything, we’re right there for you. That’s how you’ll get the quickest response.” That puts people at ease a little and then the difficult lesson I had to learn was I need to hand off. I’m doing three or four demos a day and what would happen is those users, I would follow them into the on-boarding. Once they got into the app, they had the relationship with me. They say, “Hey, Jordan I need help on X.” I needed to stop doing that because I want getting any work done besides doing demos and talking to people on intercom. I had to be like, “Sign up and Ben out CTO will be here for you. Our tech team will be able to help you. I’m always here for you if you need anything.” There was a hand off of the baton of once you go into this product, I’m not your man. That had a very interesting effect actually. What it did is it created this social status thing where they were like, “Oh, that’s the founder I like can’t talk to him. He’s like out of reach. We did the demo but he’s too important for me to ask these support questions,” which is not true but you kind of want it to be true in their minds.
Mike [33:54]: You want to be able to redirect the work efforts or the task that they’re giving you because somebody’s got to deal with them.
Jordan [34:01]: Right. You have to make sure not to put down the tech site. I would always say our CTO, Ben. I’m positioning him like, “This is someone serious that you can talk to as a business owner also. Don’t treat this person as some random technical support that works for sales for us and some call center. No, no, no, you’re lucky to work with our team and we’re going to take good care of you,” which goes along with the higher pricing promise.
Mike [34:31]: Inside of Blue Tick there’s a link where people can click on it, literally says ‘support’ on it and then it takes them over to the helpdesk. It’s hosted helpdesk and there’s a place where they can submit something and all the tickets come directly to me but it almost doesn’t matter. I’d rather than go there-
Jordan [34:46]: It’s a process.
Mike [34:47]: Yeah, it’s all about process. I cover that as part of the demo because as you said, people want to feel comfortable that they’re being taken care of. I tell them, “Look, don’t hit me up on Skype, don’t send me directly an email. Send it to support@bluetick.io. You’ll get taken care of.
Jordan [35:02]: I like that. I’m going to take that because people hit me up on Facebook, Slack, Skype, Email, all over the place. I like that.
Mike [35:11]: I think there is a couple of different ways you can position that. One is that, for example Skype, I am almost never on Skype. The only time I’m on Skype is if I’m there to make a call and record podcasts. There might, very well, be a week between calls if somebody tries to hit me up on Skype. If it’s a support request, this could be a few days or it could easily be a few days. I’ve had several situations where that happens and I’m like, “You’ve got to email me like add support here,” and then I’ll get you taken care of.
Jordan [35:38]: That’s a good lesson for that.
Mike [35:39]: It is.
Jordan [35:40]: It’s tricky. Facebook is a full-blown sales channel. My Facebook Messenger is a full-blown sales channel.
Mike [35:47]: The other thing that It allows you to do is to use that as essentially a repository for information for when you bring on new people to help out with support and then they get to see what kinds of things have been asked before, whether or not it make sense to make a helpdesk article out of stuff. There’s a lot of advantages to that but making sure that they know where to go to get help is also an important part of that demo process.
Jordan [36:10]: Yeah, I like that. I’m going to regret that a lot because we have so much in intercom and intercom search is horrific. It’s just terrible. When we hire someone for customer support that we’re talking about doing in the next few weeks, they’ll have everything there but it will be impossible to find. It will be a lot more painful.
Mike [36:29]: That almost sounds like a product on its own, like intercom search but I think you’ll get run out of business at some point.
Jordan [36:36]: Yeah, eventually we’ll get it right.
Mike [36:39]: We’ve talked a lot about some of the different advantages of going with a sales model where you’re forcing people through a demo first. Is there a point where you have in mind right now, where in the future you’re going to switch over or do you know that at some point in the future you’re going to go in the direction of, “Look, let’s kind of stop these one to one demos,” or is there a hybrid approach that you’re thinking of where people who are well qualified, above a certain point, you’ll do demos for them but below that, you want it to be more self-serve? How do you envision that working out for you in the future? What sorts of data points have you pulled in to make those decisions?
Jordan [37:14]: That is the single, hottest topic of conversation internally in our Slack. What do we do to transition out of one on one demos? What we have found is that there is no one way to do it. You can be as creative as you want. We’ve come up with a hundred different ways to do it. There is going from requiring a demo to completely self-serve. That’s like going all the way. Between where we are right now and doing that, there’s this huge range of creative solutions. I’ll tell you some of the things that we’re considering. We thought about A, just experimenting with opening up completely, not requiring a demo. We always require a credit card but not requiring a demo and just letting people in and then doing that and at the same time me taking the time that I’m spending on demos right now and spend it on creating on-boarding videos, documentation, helpdesk stuff, knowledge stuff. That’s one way to do it. We talked about allowing for sign-up but then as soon as you log in, you get a welcome screen with effectively a 10 to 15 minute demo of the product. We’ve talked about doing that and requiring the person watches it before they can go forward. We’ve talked about letting people sign up. Having more on-boarding videos but not letting them launch. Taking the bottleneck and moving it from the signup process to the launch process. Our product requires one line of code added to their Shopify Store. In the process, they give us access to their Shopify Store, we go in and we add one line of code. We looking at them and say, “Maybe that’s actually an opportunity to slow things down, if and when we want.” Maybe we just let people sign up, let them on-board, let them set up but don’t let the launch and have them do launch appointments instead of demo appointments. Someone on our team can do a quick 15 minute call, “Hey, is the checklist, looks like you’re good. Do you have any questions before you go? Let me take a look at your account. You’re good to go, cool.” We’re still only launching [?] three a day instead of just 10 people a day signing up and just asking a million questions and not knowing what to do and launching before they’re ready and so forth. We’ve also considered keeping the demo requirement but doing a one-to-many approach. We’ve talked about daily webinars, which would still be more efficient than doing four individual appointments a day. We’ve talked about a weekly webinar on Wednesdays. This isn’t like a webinar to sell a product. It’s really like a demo webinar, it’s, “Here is the product,” for 20 minutes and then another half hour of Q and A. We’ve also talked about doing that but doing it recorded. We’ve talked about putting it in between so when you sign up, you just put your email address in there you can watch a recording and then you can have a learning page using called [?] pages. You could have the video and then only have the button pop-up to register after X number of minutes. I could do a 10 minute video and the button doesn’t show up to actually register until X number of minutes. It’s like-
Mike [40:17]: That seems really sneaky.
Jordan [40:20]: It’s like okay, take the email upfront but there is no right way. We can do whatever we want and what we always say, internally, is, it’s all reversible. What’s the worse that happens? We just go back to demos. What’s the worst? It’s time to open up and see what happens. If it’s an absolute mess, we go back to doing one on one demos.
Mike [40:39]: It’s interesting the way that you put that in terms of moving where you’re putting that bottleneck or that artificial throttle line to make sure that people are doing the right things. Initially or at least right now, you’ve got that bottleneck right in front of where they can sign up. They can’t sign up unless they go through the demo. You’ve talked a lot about moving that further in so they can sign up but they can’t really use it. There’s other ways that you can think about that as well, in terms of if you allow people to sign up without a credit card, for example, but as soon as they go to do something where it’s going to create value for them, that’s when you require a credit card. That’s another place that you could presumably put a bottleneck.
Jordan [41:18]:-which is exactly what we do with our other product.
Mike [41:22]: But I think all that boils down to what is it that you’re trying to do and why. It has to be whatever makes sense for your product and customers and making sure that you’re not putting negative stress on the business in certain ways, whether it’s on the servers that are running or on your support staff or you as a founder trying to answer those support calls or on the sales demo process. There’s lots of things that go into that. It’s interesting the way that you put that in terms of all the different decisions that you have ahead of you to figure out like where is the next best place to try this?
Jordan [41:57]: Yeah, we’ve probably run ourselves a little crazy for about a week on it. Now it’s just-now every time I get a new demo request, I just say, “Time I should be working on something else.”
Mike [42:09]: We can probably do an entire episode on the pros and cons of having the bottlenecks in different places but I think we’re a little short on time at this point. Any parting words for the listeners?
Jordan [42:20]: The only thing I’d say as a parting is to ignore what other people tell you to do. There’s this unbelievably impactful tweet I saw recently and all it was ‘stop telling me what to do’. If you read all these headlines and blog posts it’s like, “Do this for this action, then you get this result and like-,” all these advice but in reality, you don’t have to take any of it. You just do whatever is right for your situation. There’s no such things as, “I’m doing it wrong just because I’m not doing it the way [?] does it.” It sounds a little stupid for us to slow down, people signing up for 300 bucks a month but that’s what makes sense for us. My parting words would be just do whatever is right for you, not what you think you’re supposed to be doing given your industry or space or whatever.
Mike [43:08]: Excellent advice there. If people want to follow up with you after the podcast, where can they find you?
Jordan [43:13]: I’m on Twitter @Jordangal and Jordan@carthook.com, if you want to email me and hopefully see you at Micro Conf in a few weeks, depending on when this episode gets published. I’m looking forward to Micro Conf.
Mike [43:25]: And you’re also based out of Portland, Oregon, right?
Jordan [43:28]: I am, Portland, Oregon. There’s a good, strong, contingent here of web businesses here, a lot of people that go to Micro Conf. Yes, it’s a strong community, really cool people. Everyone’s supper open to get in-touch with everyone. If you are in the Portland area, definitely get in touch.
Mike [43:43]: Excellent. Well, Jordan, thanks a lot for coming on and if you have a question for us you can call it into our voicemail number at 1-8-8-8-8-0-1-9-6-9-0 or you can e-mail it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from ‘We’re Out of Control’ by MoOt, used under creative comments. Subscribe to us on 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 345 | How to Get Your Emails Delivered to the Gmail Primary Tab
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike review their progress on their 2017 goals thus far, and discuss an article about how to get your emails delivered in the Gmail primary tab.
Items mentioned in this episode:
Transcript
Rob: In this episode of Startups For the Rest of Us, Mike and I review our 2017 goals to see our progress so far through about the first half of the year. We also talk about how to get your emails delivered to the Gmail primary tab. This is Startups For The Rest of Us episode 345.
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’m Mike.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week Sir?
Mike: Well, I’m really close to finishing my two-step signup process. Unfortunately I’ve spent most of the last three to four days doing nothing but refactoring unit tests.
Rob: That is a bummer. Yeah, it’s good to have in the long run, a bummer to do right now.
Mike: Yeah. Although they have saved me in several places where I definitely would have not uncovered the problems that came up because of it. It’s just painful refactoring certain pieces of it, generating new data, and having that all thrown in there, but it’s working
Rob: Yeah. That’s what they’re for man, is to alert you to something, edge case that you missed. That’s how I always think about it. If they fail and you have to refactor, you’re thinking to yourself, “All right, why is this failing? Why am I rewriting this?” Having to rewrite a bunch of your test, that’s due to the big change you made to your data model, is that right?
Mike: That’s part of it. Some of the refactoring was just to make it easier to write the unit test in the long term so that I can add a bunch more data in there and use somewhat generated data. But of course when you’re generating data, you have to massage the stuff that’s being generated in such a way that it actually matches what would be in the system to begin with.
For example, I’m using something called autofixture which just generates data for you based on the types. For a string, it’ll just throw a goo it in there. Unfortunately that doesn’t work for an email address. There’s always places where the data itself, the data generation needs to be fixed so that it generates something that’s a little bit more accurate. And then there’s places where it’s only expecting two characters for the country code and it generates 30 or something like that. That stuff needs to be fixed so that when it goes to throw into the database, it will actually not fail and then afterwards then my unit test will succeed. Stuff like that.
Rob: There it is. It sounds like so much fun.
Mike: Oh yes, very much so.
Rob: That was sarcasm in case you didn’t detect it. For me, I’m actually hopping on a plane in about eight or nine hours and flying to Stockholm, Sweden for Brennan Dunn’s Double Your Freelance Europe Conference. Both Sherry and I are speaking. Since we’re doing that, we’ve taken this opportunity to leave the children at home. We’re going to hang out at the conference for a couple days. I think it’s three or four days actually. And then we’ll wind up staying in Stockholm just for an extra couple days to see the city. We’ve been there once before but it was only for about a day or a day and a half and really interested in digging in. There’s so much cool stuff there.
Mike: Are you coming back?
Rob: I am coming back. Without the kids, you could imagine Sherry and I will be asking ourselves that question every day.
Mike: “Do we really want to come home?”
Rob: Come home? Yeah, definitely.
Mike: We can push this off.
Rob: We’ll call home and be like, “We got snowed in.” “It’s the middle of the summer.” Yeah, looking forward to that and also to getting back. It’s fun to go away but I’m actually in the middle of working on a lot of interesting things. We’re pushing a lot of features right now to production, we’re just really hitting our stride, have a good shipping velocity. When you enjoy what you do, it’s also hard to step away from it for a few days but I think it will be good. I think I’ll come back refreshed. I’m looking forward to get back in the saddle.
The first thing I want to talk through today is something we mentioned last week. It’s that you and I in December of each year, we set out a few goals for ourselves, typically three or four each. In the past, we tend to just revisit them the following December and we say we succeeded or failed or whatever.
It was interesting, we’re about three months into this year and you’ve suggested that we just revisit them. It makes sense to do it again now because we’re almost halfway through the year in another week or so, week or two, we’ll be halfway through the year. I thought we could quickly step through as a precursor to the main topic and just run through these goals again and report on our massive successes or immense failures that we’re currently experiencing.
Mike: Great.
Rob: Yeah I know, fun. Why don’t you kick us off.
Mike: My first one was to log at least 100 days of exercise this year. The past two months or so have been pretty rough just because my shoulders screwed up. I’ve only logged 20 so far this year.
Rob: Oh, wow.
Mike: Yes. I should be up closer to 50. I’m pretty far behind at this point. I knew I’d be behind just because of what was going on. The doctor put me on some medications. It was 1,000 mg of Naproxen for two weeks, which is above what the normal dosage would actually be. I think if you go over the counter, I think they only recommend 600 mg or something like that per day, but she has me on two 500 mg tablets twice a day.
That actually helped quite a bit. It was mostly I think inflammation in my shoulder right now. Now I’m getting to the point where I can move it around a little bit. I’m doing some physical therapy to help just give me some flexibility and range of motion back. It doesn’t hurt as much as it did before but I still have to be a little careful of it, because I just don’t want to have a major regression or anything like that.
Rob: Oh, totally. Yeah, that’s a bummer. Have you thought about bike riding or swimming or something? Something that won’t put impact on it?
Mike: I didn’t even have the range of motion. I literally couldn’t lift my arm up above shoulder level before, so swimming would be difficult. Although we just opened our pool this past week so I might be doing it anyway.
Rob: Yeah, yeah. That’s a bummer, man. I felt the same way a few weeks ago when I got strep throat. I was basically out of commision physically for about a week and a half or two weeks. During that time I also didn’t exercise.
I have a similar goal to you and it’s two days of exercise per week. For the first three months of the year when it was still cold here, I was almost getting it, man. I think we reported about that in March. I was definitely getting one day a week, some weeks I would get two days, and others it just wasn’t happening. It’s hard when it’s five below or five above zero to do that even indoor stuff, just wasn’t shaking out.
Since the sun came out and it started to get warm in March, I’ve been very consistent. In fact, I’ve been probably up at three days a week. Because with the sun like this, I mentioned last week that there’s bike trails from my house. It’s about a 25 to 30 minute ride to work. Every office day, which is three days a week, I’m riding to and from work. It’s almost 50 minutes of riding. I need to look to see how much that is, five miles or something to get there, four to five miles. It’s decent, it’s not a huge ride but someone like me who really just needs to not be completely sedentary, I’m definitely ahead of where I normally am and feeling pretty good about this goal.
At least through September, October, and then we’ll have to see what I can do during the close of the year through December 31st. As it gets cold, I know that that will negatively impact my ability to do it.
Mike: And your motivation.
Rob: Yeah, right, both.
Mike: Yup. Yeah, I’ve definitely got some catching up to do on this. It is something that I still want to keep on track as a goal. It’s not like I want to throw this aside and walk away or anything like that. I still think that getting to 100 is still doable but I’m definitely going to have to double up my efforts a little bit.
Rob: Totally. How about your second goal which is making Bluetick profitable, including your time? Where do you think you are there?
Mike: Well, I’m not as far along as I would like to be but I still think that it’s doable by the end of the year. I’m at over $1,000 a month in revenue which I hit a little while ago, I think last month or the month before. It’s still going up. Slowly onboarding people and looking at ways to get more people on it faster. That has to do with the two-step sign up process.
Once that’s done, I’m probably going to spend at least a week or two just working on the marketing side, getting a lot of the marketing copy, and getting some videos built that illustrate how the product works and what it can do so that I don’t have to explain it individually to each person. I feel like that’s the bottleneck right now. It’s just me having to explain everything. The product itself works pretty well. That’s nice to see. I’m not afraid of it falling over and breaking if I add a bunch of people to it but I would still be concerned about adding 200 people or something like that.
Rob: Sure, but you can go slow. Yeah, it’s nice to say you’re not concerned about falling over and breaking because I remember a time, I don’t know how many months ago it was, where you were concerned about that.
Mike: Yeah. I’m definitely past that at this point. Just because the level of unit tests and just the infrastructure behind it, watching the logs, watching all the stuff that’s going on, and how much synchronization is happening between the mailboxes and stuff, I’m not seeing anything where I’m like, “Oh my god, this thing is going to fall over and die at any given time.”
Rob: Yeah, that’s cool. My second goal was to not start any new projects. It was to run the three MicroConfs, continue the two podcasts, and then working on Drip obviously, and to take a break from the chaos of launching new things. The only exception is I maybe second author on Sherry’s book, ZenFounder Guide to Staying Sane. I forgot what the title is.
So far so good. I haven’t launched anything new, I do have hobbies, I’m tooling around with investing and stuff like that, doing a lot of reading but I’m actually on track to do nothing which was the goal. Sherry is working hard on her book right now. I’m weighing in a little bit here and there which has been fun. It’s been nice to have the time to do that. How about you on your third?
Mike: My third previously was to blog every two weeks or so but I canned that about three months ago.
Rob: Yeah. Didn’t we dismiss this funnel together?
Mike: Yeah, we did.
Rob: I was like, “Why are you planning to do that?”
Mike: Yup.
Rob: It’s like Bluetick’s smart board is what it comes down to. Cool.
My third goal was to do one to three angel investments this year and I did one. I was actually a follow on round and it’s for more of a brick and mortar business in California. The first round, I was not even really an angel investor. I literally invested less than $1,000. But this round I bought a bigger chunk. I feel good about that. They have some growth in there. They’re going to start franchising which is a good model, I think, for them.
I think that’s been about it. One to three angel investments per year I think is probably my pace for now. So far, so good. I have evaluated several other opportunities and nothing has been a fit for what I want to do and has the valuation that’s in a range that make sense for me but that’s been a nice little fun side thing to do.
Mike: Do you have anything in the near horizon that you’re keeping an eye on, that you’re looking at? Or is it just completely, I don’t want to say completely empty, nothing right now that you’re looking at actively to evaluate and pursue, and you’re just looking at stuff as it comes up?
Rob: Yeah. There’s nothing in the pipeline right now. Stuff comes and goes. Someone approached me in MicroConf, we had a conversation, we exchanged the numbers, and talked about stuff. He wasn’t quite far enough along where I think it make sense for me to do it. Another one, there were a couple others where, I think I’ve mentioned this, it’s like when you’re raising at a $10 million or someone who’s at a $30 million evaluation, it’s not even angel investing anymore.
My little check doesn’t even make sense, even if you 10X it. I make a little bit of money but you have to get to $100 million or $300 million in revenue, or at least in valuation I guess, that’s not my game. My game is to invest in real businesses that are going to make money. If there’s an exit, that’s fine but I don’t want that to be the exit strategy.
You look at businesses, a lot of my recent investments, you look at Churn Buster, you look at CartHook, and you look at LeadFuze, these are business that could be as they grow that can be wildly profitable and don’t need this massive valuation or a bazillion users. They’re profitable today if they weren’t growing type thing and just reinvesting back in.
Those are the types of things that I’m looking for, and at reasonable valuations. If I’d invested at any of those at high valuation, it doesn’t make sense, you have so little of the company that you can never get it back even if they do become wildly profitable. If you make only a few thousand bucks a year back and you wrote a check for $25,000 or $50,000, it just takes too long to get paid back. That’s where it is.
I had a fourth one, it was my honourable mention. I was pretty vague about it. I basically said there’s this list of features in Drip that I want to get launched this year. I have them listed in this doc and we’ve launched one of them, we’re working on the second, and I have a third that we haven’t started yet. I actually think we’re on pace to hit all three of these by the end of the year. It’ll make a lot more sense when at the end of the year I can look back and point to these features.
I guess one of them is sharable workflows. We went live so it was not a secret at this point. I just don’t like to project a road map. There’s competitors and there’s all kinds of reasons not to do that.
Sharable workflows, which means you can take a workflow out of your account. You could put it in another one of your accounts with one click or you could share it with people, you could post it on your blog and people could import it into their Drip account. It’s also nice for internal education. It’s like we’re cranking out. We’re going to be cranking on a big library of them where you can just one click import a webinar funnel, this funnel into that funnel. It just makes a lot of sense to do that.
Mike: Cool. There’s something else you guys just launched recently, snippets.
Rob: Yeah. What’d you think about that global snippets? Yeah.
Mike: It caught my eye because I have snippets inside of Bluetick. I’m like, “Oh, I haven’t launched that. You bastard stole it.”
Rob: Oh, funny. Oh man, yeah. We’ve been working on this for a while and had it in the hopper probably four or five months ago but really buckled down on it last couple of months. Snippets are cool, man. People can use them as email signatures or they can use them as a webinar call to action, or even some people who advertise in there have a little ad unit in their newsletter could stick it in there. It’s just a piece of HTML or an image or something that you can change once and it changes it everywhere.
Mike: Got it, yeah. I basically had the same thing, but it was literally called snippets. You could just drop it anywhere. It includes the liquid tags and it can do whatever you want.
Rob: Yeah, yeah. That’s cool. There’s only one, as far as I know there’s only one competitor of ours that has anything similar to snippets. They did it plain text only so you can’t do any HTML, you can’t embed images, you have such little flexibility. We really wanted to do it, I don’t know, the right way I think and this is the way you should build this.
Mike: Am I that competitor? You’re stealing my Dropbox stuff.
Rob: No. You’re not, man.
Mike: Just kidding.
Rob: Is yours text only?
Mike: No.
Rob: Yeah. Okay, haha. No, I don’t get to. You’re in sales automation.
Mike: Yeah, yeah.
Rob: We’re in email marketing.
Mike: Yup.
Rob: Cool. Let’s dig into this article. It’s on chamaileon.io, it’s the blog. It is actually a guest post from Zoran Orack who is an email marketing consultant. He ran a bunch of tests about factors that affect primary tab placement versus promotional tab placement in Gmail.
If you’re not familiar with the Gmail multi-inbox, which I personally do not use because it makes me feel like I have three inboxes I have to check all the time, Gmail auto-sorts your email into the important, promotional, and notifications. Is that right? Is the third one notifications?
Mike: I think it’s social.
Rob: Social, thank you. Social is like Twitter, Facebook, and whatever, Instagram, all these notifications you get. I’m guessing GitHub stuff probably goes in there. Again, since I don’t use them, I’m not actually that familiar.
The curse of a lot of email marketers is if you do things, I won’t say incorrectly, but if you don’t do things smart, you can wind up in the promotions tab and a lot of people completely ignore their promotions tab. It’s where they get a lot of emails from Groupon, or from people trying to market to them. It’s not spam obviously but some people consider it when they look through and they think, “Oh this is one step above spam.” If you want to build a relationship with an audience, especially if it’s a one on one blogging relationship where you’re giving advice as a person, you want your stuff to wind up in the inbox.
There’s an argument here to be made. Let’s say you’re an ecommerce website, you’re keeping in touch, you probably should wind up, it’s probably right that you wind up in the promotions tab. Trying to game the system and use these tips to get into the primary inbox I would actually say is not a good idea if you really are just selling with your email.
Mike: I think a big point about this is really just making sure that you don’t end up in a place where people are much more likely to overlook the emails from you because you’re clearly sending them for a reason and you want them to be read. It’s not like you want these emails to go off into the ether and have nothing happen with them. If they’re not being read, if they end up in that promotions tab, and a lot of people are ignoring them, or they have much lower open rates because they’re on that promotions tab, that doesn’t do your business any good.
Again, these tests are all about at least letting you know how you can stay out of the promotions tab and what sorts of things influence that. I don’t think that any of this stuff is foolproof nor will it ever change. I think that’s one of the key points to keep in mind here is that even if you do all the right things, you could still end up in the promotions tab just because of the nature of the algorithms on the back end. All the stuff that goes into the search ranking factors, you really can’t see those. Some of this stuff is just trial and error and you may end up there anyway.
Rob: Yup. Those are all good points to make. Your open rates will be substantially less if you are on the promotions tab, just the way it works out. Some people never check their promotions tab, other people just clear it out, skim through it.
The author of this email says that Gmail is the most popular client right now. When I do a search, Litmus has the 1.29 billion opens tracked. They said it was in May of 2017, so just a month ago. They say the Apple iPhone has 31%, the Apple iPhone client has 31% of market. Then Gmail is second, and then Apple iPad, and Apple Mail.
I know that maybe the less consumer emails that are sent, let’s take for example all the emails that Drip sent last month, the majority of them are opened in Gmail. Take it for what’s it worth, Gmail is either the most popular or one of the top. Promotion versus inbox is also a big issue. In fact, emails that arrive in the primary inbox actually send a notification if people have those active on their phone and emails that arrive in the promotion tab do not.
Mike: Alright, let’s dive right in.
Rob: Cool. The author talks about how if you search Google for how to get into the inbox, there’s all the same tips. It’s like don’t sell, authenticate your domain with DKIM and SPF, greet recipients by name, have no more than one link in the email, don’t include pictures, don’t use RSS campaigns, don’t use heavy HTML, all this stuff.
What he wanted to do is just run a few tests and see if he could trigger the promotions tab. The first thing he tested, and this comes back to everything I’ve been saying for years Mike, is that heavy HTML email, it’s going to go into the promotions tab and that’s what they do. This guy, he goes into Mail Chimp, he creates a very simple HTML email, and it’s got an image but it’s definitely HTML. There’s no qualms that this is text, a text email and it’s got the share buttons at the bottom, it’s got a bunch of stuff.
All it says is let’s see in which tab this ends up. It’s got a picture of what looks like some dessert. And then cheers, and he puts his name, and it goes right in the promotions tab. This is not a sales email, he doesn’t mention products, he doesn’t have any links in the email aside from the view this in a browser, the Facebook share link at the bottom.
This is it. You’re going to hit. If you use heavy HTML and a lot of design, you are much more likely to wind up in the promotions tab. You can still use HTML, but use HTML that looks like plain text, and that is the default template in Drip. That’s why we did that is we know that it’s A) a more personal experience, and B) it’s more likely to get to where you want it to go.
Mike: He’s got screenshots in the article. If you look at the screenshots, it’s very clearly a newsletter email. CSS styles are definitely embedded into the email, there’s Twitter and Facebook links at the bottom. I’m sure there’s an unsubscribe link if they sent it through MailChimp. It’s all centered, you can very clearly see that it was sent from some sort of newsletter. Just that stuff alone, even the one without the image, it still looks like it was a newsletter of some kind. As you said like that, heavy HTML, it seems to me like just styling your emails as if it was a newsletter, that’s going to throw it into the promotions tab.
Rob: Yup. And then, he was concerned maybe it was just the image so he took the image out, leaves the rest of the heavy HTML, still goes into the promotions tab.
Again, you mentioned this could change over time, this is just one person’s test, this is not definitive by any stretch but this is what we’ve seen too. We send a lot of email every month and this is in line with my experience across tens of thousands of people sending it through our system.
Then he goes with light HTML email. He doesn’t have DKIM and SPF authentication which is where you sign it with your own domain. He just goes with, again, it looks like plain text, it is actually HTML, similar to the Drip default template. I’m sure you can get these templates in Mail Chimp as well. Sure enough, I think it’s the exact same text, and it is the exact same text but it looks more like plain text. It winds up in the inbox.
The only link in there is an unsubscribe link because it was through Mail Chimp. It has the Mail Chimp image at the bottom, the share link there, and that’s it. That’s the simplest way to get in the primary tab.
Then he wanted to run another test and he added more formatting, he added several bullets, he added a hyperlink that just said click here for more info, and he started pitching. He says, “The best product everyone enjoys just got better. Here’s some features that you like, features you beg for.” He’s being silly with it but he definitely is pitching a product. He even includes a price in the email and he had a sale-sy subject line. There it is, he still made it into the primary tab.
Mike: I do wonder how much of an impact it has that he’s sending the same email to himself multiple times. I wonder if there’s anything in the algorithms that look at how much email you have received and have opened from a particular source. I’d be curious to know whether that has any sort of impact.
My feeling is that in looking at emails that I’ve received or that I have sent, the more that something has been opened, the more likely it is to appear in certain places inside your email, or the more likely it’s going to not be classified as spam. Because obviously, there’s learning algorithms behind it. I don’t know how across the board those are or if they are localized to just your account based on what you open or what you tend to open.
Rob: Yeah. I agree with you. What you’ll see is when we get to the end, he’s continued to send the same way and he trips one filter and it goes to promotions, even after he sent all these emails. It helps disprove that thought.
My theory on this, again this is based on seeing a lot of email get sent, is that doing just a few emails isn’t going to give you the positive reputation if someone opens a few of your emails. If you’re sending mass emails, Google knows if you’re sending 10,000 or 20,000 or 30,000, I believe. I think that if you have low engagement with those, that they do start to see that as a signal that your stuff is lower quality or that people aren’t engaging. By engagement I mean opens and clicks.
I don’t know, the author of this article is sending five, six, seven emails which is what he did with minor variations over the course of a few hours. I just don’t think there’s enough data there that Google would really, really engage with it. Obviously there’s a chance that they could say, “Well, if it’s from this sender and you’ve opened their email in the past, then it’s more likely to go to the inbox.” That would be intuitive. But again, he trips a filter here in a couple examples that we’ll get to, and it goes right to promotions. That almost dispels that. It almost makes me think that Google needed more data in order for their machine learning to form an opinion on it.
The next step. He had plain text that was formatted, he included a price, and a link, and it was still in the inbox. So then he decided to add images, he added two images, he left everything pretty much the same, still went into the primary inbox.
Mike: He removed the price though.
Rob: He removed the price. That’s right, he removed the price, he added images, went into the inbox, and this is where he trips it. With the image and the plain text, he added a price, and then it went into promotions. It’s really interesting.
Once you’re going with the plain text look, remember, again, it’s an HTML email, it’s just not heavily formatted, you’re in the safe zone. You can add images, you can add formatting, you can add links, you can add bullets, doesn’t matter. At least again in this example, it didn’t seem to have an impact but he added an image and a price, and that seemed to send him in. That’s pretty interesting.
Mike: Yeah. That’s what I would almost expect from something like that though. You get a newsletter from a retailer or something like that, it’s probably going to have an image or a picture of what it is that they’re trying to pitch you, and a price associated with it. Intuitively, that makes a lot of sense that that would have triggered it.
Rob: Right. Again, this is the promotions tab. The whole point is it’s people trying to sell you stuff. If there’s a price in an image, that lends itself to doing that. I don’t think there is two if statements in Google’s algorithm that says, “If image and price, then promotions.” It’s a big ass machine learning algorithm. That’s how they work. There’s some bayesian filtering going on and I think that’s what it’s picking up.
One of the last test he runs, I guess it’s the last test, is he’s trying to refute the RSS to email thing. People had said if it’s RSS to email then it’s going to go straight to promotions. He does an RSS to what looks like a plain text email. Again, it’s html. Of course, it doesn’t set off the filter. It goes straight to the inbox, which would make sense.
I’m not a fan of RSS to email because I think it’s not a very personal way to engage with your list but I don’t think that Google really cares that much about it. Since a lot of RSS email is bloggers anyways, that’s often not promotional content. You’re not selling stuff. You’re often giving valuable information, writing an article, offering advice. You can debate whether that’s promotional or not but personally if I’m subscribed to someone’s’ list, of Brennan Dunn’s writing or Ruben from Bit Sketcher, Hiten, I want that in my primary. That’s important to me. I’m not subscribed to a bunch of list that I don’t want. If I was, I would unsubscribe from them.
Mike: Yeah. I’d be curious for that specific example, the RSS, if you were to also add in the images and the price of any kind or multiple prices if it would trigger, it seems like it should.
Rob: Ah, it should, yeah. I bet images would be fine.
Mike: Yeah. I think you’re right. I think the images would be fine. I think possibly a price might be fine but I wonder if they take into account like how close it is to a link as well. I don’t know. That was something I noticed about the emails. The price was not necessarily right next to the link.
Rob: Yeah. Or the image. It’s not like it was clustered together like it was a product. It just happened to be in the same email.
Again, we will link this up in the show notes if you do want to see the screenshots and the emails. It’s a fun little romp through and it does confirm a lot of what we’re seeing in the space as well.
Mike: I think that one of the directions that all the stuff leads to is just providing value from the emails that you’re sending to people so that you don’t end up in the promotions tab. You can sell to some extent but you have to be delivering value to people in order to get them to engage with your emails to begin with. If you’re not doing that, then it’s a promotion. Chances are it’s going to get chucked out with all the rest of the advertisements.
Rob: Yeah. Another thing to think about is each of these things is a signal. Although he says you can get into the inbox without SPF, DKIM, the SPF, DKIM is not a bad thing to set up. It is going to be in general a positive signal to someone like Google.
I also think this is where people don’t prune their list enough. I think this is one of my soap boxes is if your open rates are less than 10% on your list, you need to prune that thing, because Google is smart and so are the other inbox providers. They’re starting to catch onto this stuff. If they see you have a mass mailing and very few people are engaging with it, they are going to start to putting you in spam or in promotions.
In my opinion, you should have open rates above 20% but there’s a grey area there between 10% and 20%. That’s where pruning can help with engagement and therefore help get you out of some of these sticky situations that you can wind up in if you’ve kind of not been cleaning your list.
Mike: I think that about wraps us up for the day. If you have a question for us, you can call into our voicemail 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 on iTunes by searching for Startups and visit startupsfortherestofus.com for the full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 344 | 9 Summertime Productivity Tactics
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about 9 summertime productivity tactics. As summer gets into full swing and the weather gets nicer, these tactics will help you stay productive all summer long.
Items mentioned in this episode:
Transcript
Mike: In this episode of Startups For the Rest of Us, Rob and I are going to be talking about nine summertime productivity tactics. This is Startups For the Rest of Us episode 344.
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: We’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s going on this week, Rob?
Rob: Well, you remember how I was sick last week, over the weekend, I don’t know if it became or developed or if it always was but I basically got strep throat again. I have never had it in my life and then I have had it twice in the past eight months. Both of the times, it has been our six year old’s class, we get an email that’s like strep throats going through our class. My six year old is like a carrier. He doesn’t get it but then I wound up with it both times.
I was wrecked over the weekend, sleeping. Basically, in and out of consciousness and Sherry on Sunday morning was like, “Dude, you have to go to urgent care.” Both times I’m like, “Ugh, it’s such a waste of time. I’m not that sick.” She’s like, “You’re a wreck.” Sure enough I go in and did a test. 10 minutes later, they’re like, “You have strep.”
Mike: That sucks.
Rob: But the good news when you have it is that they give you antibiotics and it fixes you up right away. Within six or seven hours of taking the first pill, I felt quite a bit better and then the next day, you’re up at 60%, 70%. The day after, you’re 80%. It’s a much faster recovery if you can use the antibiotics. That was that. It was a bummer. Half speed this week because of it.
Mike: If you’d only gone in like three or four days in advance.
Rob: I know. When I still felt fine, when I just had a head cold.
Mike: It could be worse. At least you’re starting to get over it now.
Rob: I know. I do feel better and I’m really enjoying the summer. I think it is because we live now in a place that has more broader seasons or more noticeable seasons, but I just don’t remember having this kind of euphoric feeling of like, “I want to be outside all the time.” Right now, I’m actually not sitting in my office. I’m sitting out on a deck overlooking the street, the trees, the breeze, and stuff. I just didn’t used to do that as much because year round in California, you can be outside but there’s just so much going on right now.
It’s an interesting thing. I feel like I’m working a little bit less and I want to work a little bit less but during the time that I’m working, I’m hyper productive, hammered out. Honestly, it felt like a day or a day and a half worth of work the other day in four or five hours. I was just that full race car speed and all the stuff poured out of me. I had this to do list that I expected to take literally multiple days and I just hammered everything out. I think it’s part of this vitamin D and being able to easier exercise and all that.
Mike: One of the things that contributes to that or could contribute to that is the fact that like you said, when you lived in California, it’s almost summer time the year round and our brains act as a difference engine where we are able to notice stark changes but if there’s gradual changes, we don’t notice them nearly as much. That’s probably a contributing factor to how you’re seeing things different in Minnesota versus California.
Rob: For sure. How about you, what’s going on?
Mike: I think last week I talked about how it was probably going to take me at least a week or two to get my self-signup process and I’m probably about halfway done after working about a week on it.
Rob: Why does that take so long? It doesn’t seem like it should be that complicated.
Mike: You wouldn’t think. The issue is that a subscription inside the software was originally tied to a user. What it would do is it would create the subscription first and then create the user. It was just because the way things were built early on and because I’m decoupling that where you have to create the user account first like there’s no backend subscription that it’s tied to. All these other things break because of that. I’m going through it.
I’m kind of hacking things together. There are a lot of things that I’m overlooking and making this blanket assumption that just says, “Look, if you don’t have a subscription ID, then you really don’t have an account. You’re just not going to be able to login,” which makes complete sense. It’s just that there’s that decoupling right now that a ton of code had to change to make that work. Just because database constraints and things like that.
Rob: Got it. You’re not just building a time flow. You are refactoring your data model and then building that. Is that correct?
Mike: Yeah.
Rob: That makes sense. We went through a couple of these really early on with Drip and I remember Derek spending like a month and a half twice, at two different times basically trying to decouple things in the data model because we, together, had just made the wrong choice early on. If you’re doing that, that makes sense but I would separate that in your head like, “Alright, this is a necessary refactor,” because that’s going to make everything better long term if you decouple the subscriptions from users. It’s going to give you more flexibility.
We can talk offline. It would be probably boring to talk about it in the podcast but just how we architect it in Drip where you can have a bunch of different users and subscription is the master and then there are accounts which are a separate thing. That’s what’s in the drop down list in the upper right and how they’re all many, many in essence and I guess given us a maximum flexibility to allow agencies to have the flexibility to do what they want and individuals for it not to be too complicated and that stuff.
I’m assuming that’s the direction you’re headed. As long as you have it on the back end, as long as your table structure supports that, you don’t even have to build the code to do it yet but obviously changing the data model later is really time consuming. That’s what you want to do.
Mike: All the stuff and the data model, that’s exactly what I’m dealing with right now. I knew in the longer term that it would be an issue but I kept pushing it off and pushing it off. Now, I have to bite the bullet and just say, “Alright, I got to do something about it.” There are hundreds and hundreds of places where the subscription ID is referenced directly on the user account. It shouldn’t be there. It never should have gone there but I don’t want to go through and make all those changes now because one, it’s time consuming and two, it’s going to be risky, to be honest. I’m pushing some of those things off and refactoring some things and just making that assumption that, “Hey, you have to have a subscription ID in order to log in.”
Rob: And hopefully writing a lot of unit tests.
Mike: I’m definitely adding unit tests to this one.
Rob: Cool. What are we talking about today?
Mike: With the onset of summer, I’m sitting here next to a giant window that looks out into my backyard and I’ve noticed that the day has gotten progressively nicer and nicer. Even in New England, sometimes it just rains right up until early summer. In fact, it was still raining pretty continuously for the last couple of weeks so earlier this week it started to clear up so I’m looking out the window thinking to myself, I’d really like to be outside right now.
I thought it would be nice to go through some summer productivity tactics that people can keep in mind. I realize this is only applicable to probably half of the world because people on the other hemisphere are going into winter at this point but at the same time, these types of tactics you’re going to apply as you’re going into summer whether that’s now or in six months.
Rob: Sounds good. We have nine summertime productivity tactics. Let’s dive in.
Mike: The first one is time box your day. Essentially what this is is putting a hard stop on the end of your day so that you know that at some point, you’ve looked at the clock and you know what that time that’s going to be, that’s the end of your work day. This is I think especially important for people who work from home or out of a home office and have a lot of more flexibility and can find themselves in a situation where they’re working extended hours because they really want to get something done.
The idea here is really just put that hard stop on the end of your day. I think this is a general tip that is a good practice to follow but I think it’s more important in the summer time especially when you’re looking out the window and there’s this draw to go outside just because it’s nice out and you really don’t want to be spending the time in front of your computer.
Rob: I think it’s important to do this and I think if you have flexibility with your schedule, that cuts both ways. It’s as much of a curse as it is a blessing. Probably the best way I found to approach it is to think of the day in three chunks, three four to six hour chunks. There’s your morning, there’s your afternoon, early evening, and then there is your evening or late night.
I don’t like to work three of those in a row. You can work up to two in a row. To be honest, when I was younger, when I was in my 20s, I was a momentum player. I would love to do these long, 15 hour sometimes longer work days and then take the next day off. I don’t so much enjoy that anymore and you have to be doing some pretty specific tasks in order to do that. I used to be able to write code like that for an extended period of time but you can’t be creative for that long. You just don’t have the juices.
Nowadays, I think I can work any two in a row and then I need to take the third off. If I work afternoon, evening, I’ll take the morning off. I don’t do that as much anymore now that we have more of a normal schedule. But you get the idea here. I think that time boxing your work day and getting the maximum productivity out of let’s say the four to eight hours that you’re going to work in a row, which is what I recommend, I know a lot of founders who work for four to six hours a day and get a ton done.
I think if you actually think about what your day looks like, if you’re sitting at your desk for eight or nine hours, if you’re really hammering it, you could probably get all that done if you didn’t have any distractions and minimal interruptions and you just went full force with the music and the caffeine and just went in the zone for a good solid four hours. You can get as much done as you can in a full day of screwing around. Time boxing is something I definitely believe in.
Mike: The second one on this list which probably should have been first was to keep what’s working. Really what that means is don’t throw away all the productivity tactics and hacks that you’ve put together over past the six months to a year because it’s summer time. If you got those to the point where they were working for you, whether that’s getting up early, or taking a break at 11:00AM for an hour, or taking an early lunch, things like that, if you find that those particular things are working for you and have worked for you, don’t just immediately throw them away because it’s summer time.
There are situations where really readjusting your schedule and doing a complete overhaul on it are warranted but I wouldn’t say that going into summer is one of those things. You can play around with things, experiment a little bit, but I wouldn’t make such a drastic change unless there were some major reasons for doing that. Like you’ve got into a car accident and you’re on crutches for a while or something like that. You don’t have that with the summer time coming.
Rob: The third tactic is to take outdoor breaks. Maybe you’re eating lunch outside, maybe go for a walk before or after lunch or an early afternoon when you start to get tired. Early afternoon, it’s a tough spot coming back into work. You can use this time to think about hard problems while enjoying the weather and getting some vitamin D.
To give an example of this, this morning, I was sitting outside. I was drinking coffee. I was thinking about stuff. I did a little bit of email. I responded to everybody’s Slack messages and then I had a hard problem that I wanted to think through so I hopped on my bike and I rode around this lake that’s right near us. It’s called Lake Harriet. Literally, from the time I jumped on the bike until the time I got back into the garage, it was like 20 minutes, maybe 25 minutes but it was a perfect amount of time for me to think through this issue and it was very much like when you have major epiphanies when you’re in the shower, when you’re doing dishes. Bike riding is the same for me.
It could be walking. It could be running. It could be whatever but just being outside for those few moments really kicked my day off in the right fashion. By the time it was 10:00AM, I was highly motivated to come back and just hammer out a bunch of stuff that I had to get done.
Mike: I remember when I used to work at a pedestal software. One of the things that we would do, the guys that I’ve worked with on my part of the engineering team, we basically take a walk around. There is this interloop inside the office campus that we’re at and every day after lunch, we would just take a couple of laps around that and just talk about some of the different things we were working on and it was really nice and motivational to have that time not just to get the outdoor time but also to talk about the things that we were working on. It was almost like a mini meeting but we were getting that a little bit more of a creative spark by being outdoors.
The fourth tactic is to change your working hours. Some companies refer to this as summer hours but I think that there are a lot of different variations that you can put on to this tactic. The first variation is two four day work weeks. You can take Wednesdays off or Fridays off. Most companies will take a half day on Friday but you can also do other things. You could say, “We’re going to do six hour work days instead of eight hour work days.” And then you do that every single day of the week.
Or you can shift your schedule a little bit and get up and start working at 6:00AM and you can be done by 3:00PM or 4:00PM or just start later and end earlier. There are a lot of different ways to play around with the schedule but just shifting your schedule a little bit to give yourself more time during the summer to enjoy the summer, all that’s going to be very helpful and beneficial for your motivation.
Rob: If you’re in control of your schedule, if you’re founder, you have flexibility, now is the time to do it. Now is the time to take that extra day off to shorten your days. You’re not going to regret it. I guess that’s what I’ll say. It always sounds scary to think about changing your work schedule and that you’re not going to get as much done or you’re competitor is going to catch you or whatever, it’s pretty unlikely.
You can always change. Try it for two weeks, maybe a month, somewhere in that range and just commit to doing it even if it feels weird, even if you don’t love it, commit to doing that and then figure out if you actually are enjoying the summer more.
The thing is you need to figure out something to do with that time. The hard thing is if you work for four or six hours and you say, “Alright, I’m not going to work.” You have to now go ride a bike. You have to start playing the guitar. You have to go paddle boarding. You have to fill that time with something. Otherwise, we all naturally will revert back to working. Fill it with a hobby or exercise or something so that work doesn’t constantly pull you back to the laptop every time you see it.
Mike: There are other things to keep in mind when you’re doing that is that that time is really spent rejuvenating your mind and mental energy. It’s not as if you are at a dead stop at that point. It’s like you’re really recharging your batteries. This analogy came to me the other day where if you’re doing a cross country trip and you need to maintain an average of 50 miles an hour, if you stop for four hours, your average speed at that point is zero. But the reality is you are allowing yourself to be able to move faster in the work context when you take those breaks.
If you do those in the middle of the day, you’re going to be able to move faster and make better progress while you’re working versus having your progress decrease over time throughout the course of the day so that by the end of it, you’re only operating at 10% or 20%, when if you took a break in the middle, you’d probably be able to get yourself back up to 70% or 80%. It’s really just a balancing act and being able to rejuvenate yourself as part of that time that you’re taking off.
The fifth summer productivity tactic is to schedule your vacation time. I think this is something that most people will probably have done quite a bit of by now. Like we plan our family vacation probably six months in advance so around January or February time frame but these are the types of things that allow you to get out of the office for an extended period of time. It’s not just the weekend or a couple of days in the middle of the week. Usually, you want to take several days off in a row in addition to the weekend. We try to take at least a week off. If we can do more, we will, but it really depends on what other things are going on.
Now that my wife owns a business and I own my own business, it makes the scheduling a little bit more difficult just because of all the different things that are going on. You really want to be able to take these times and schedule those vacations with everybody so that everybody can just enjoy the time off.
Rob: Our sixth tactic is to learn something new. This goes along with what I said earlier about learning to fill this extra time that you’re going to eek out of your day. Learning something new obviously can be motivational, so consider spending some time this summer learning a new skill that you can put to a good use during the summer. Later on learn to play the guitar and then you could play now on the outdoor patio and the during the winter when everyone is sad and it’s dark and cold, you can sit inside and play. Or again, pick up paddle boarding or get a bike.
About a year ago, when we moved into Minneapolis, we’re near some lakes, Sherry bought two stand up paddle boards and within a couple weeks of us getting here, I’ve actually quite literally picked up the guitar again. I used to play all the time. I was in a couple of bands years ago. I’ve been picking it up lately and just learning new songs. It’s been fun.
I actually got a road bike. I’ve had a comfort bike for a long time but these things are so heavy and I’ve been riding back and forth because there’s bike trails basically from my house to work. It’s about a 25 or 30 minute ride. My big comfort bike was so heavy that it’s taken like 45 minutes because I just couldn’t get the big ol’ steel frame going fast enough.
Sure enough I talked to Anne on the Drip team. She’s big time into cycling. She gave me some recommendations. I got a really nice road bike off Amazon for $550. I say it’s really nice. For me, it’s really nice. It’s an entry level road bike but this thing is awesome. It’s super light and it feels like a kind of a neat little new hobby to be able to ride this bike around.
That’s what I’m saying. Like this morning, I actually don’t like exercise. It’s not something I enjoy. I’m not into it. People say, “My day is a wreck without exercise.” Mine is not so I have to force myself to do it. I used to play sports in college and what I liked about that is it forced me to exercise basically. I loved being around the team and I love the competition. I didn’t actually love the physical exertion. It’s just not something that I naturally need.
Having a bike around or this lake or just some outlet has been this excuse for me to get outside, move around, get the endorphins pumping and staying in some kind of shape. Of course summer is the time to do that right after several months of being indoors during the winter.
Mike: Instead of taking 40 minutes to get to work, it only takes you 38 because you’re old, right?
Rob: Yeah, exactly. Nice one. No, I get there in about 25 on a good day and 30 if I’m taking it easy. It works out nicely. Given that the ride is about 25. My drive to work is like 16, 17 minutes with no traffic but on the drive home, it’s 25 to 30 with traffic so it’s essentially equal but I get the exercise out of it so it’s pretty fun.
Mike: The seventh tactic on our list is to schedule fun time. This could be specifically summer fun time or something that you dedicate time to on a regular basis. One of the things that I enjoyed doing lately is there is a local meet up where they play board games. I’ll go there on Friday nights but during the summer, you have a lot more options so whether that’s riding your bike.
We have a pool as well so our kids love going swimming in the pool pretty much all year long. Right now, it’s kind of cold. It’s probably mid 60’s right now, pretty close to 70 I think in terms of the pool water. But as the summer marches on, it’s just going to get warmer and we have a pool cover. It’s going to be nice to be able to go out there and just hang out by the pool for a little while. We typically have friends over on the weekends, most weekends I’d say, but there are also times where they’ll just come over in the middle of the week because it’s summer vacation so the kids don’t have school. They just come over and do their thing. It’s nice to be able to sit there and just take the time in and enjoy the nice weather outside. That is essentially scheduled fun time at that point.
Rob: I think doing something at least once a week is a good way to think about it and a good way to map it out. In the past couple of weeks, some things that I’ve done is during my work day the other afternoon, on one of the work from home days, I went to this super cool coffee shop. I got some iced coffee. Normally, my afternoons are not as productive as my mornings but this afternoon, it was. It’s that new environment where it inspires creativity or there is something about the chaos of being in a new place and of course getting lightly caffeinated in the afternoon was great.
We have been going to, there are these outdoor concerts at the Lake Harriet band shell here near our house. There’s like five nights a week of different bands. There are cover bands. There was a Beatles cover band. There are drum circles and all kinds of stuff so we’ve been riding over there. It’s about a five, seven minute bike ride so we’ve been taking the kids after school. We’ve been swimming in the lake, that kind of stuff.
It’s like having one or two of those a week to look forward to as a family. We’re also doing Monday night is family movie night and we’re watching movies about historical things of like people doing hard things, overcoming hard things. We watch Hidden Figures, about the African American women in NASA, we watched Apollo 13, that kind of stuff. People struggling. It’s like lessons for the kids but it’s also good films that we want to see.
Getting some stuff, this is also good to do in winter, to be honest. We were doing some of these things especially the indoor things in winter just to have something to look forward to each week but it’s definitely time to up your fun game.
The eighth tactic is to revisit your annual goals. We’re getting close to the midway point of the year and you want to revisit them now so that in September, you don’t have to cram six months of work into three or four months. In fact Mike, you and I should maybe, just at the beginning of next episode, do a little touch base about where we stand with the goals that we set forth last December.
Mike: Sure.
Rob: This is a good time to do it and you’ll either find yourself well ahead of schedule or you will remind yourself that you are not actually exercising twice a week or that you’re way ahead. It’s always good to reflect on these every couple of months and summer is a good time to do it.
Mike: Yeah, I’m definitely a little bit behind on my exercise schedule but part of it is due to my shoulder being out of commission for the past six months.
Rob: Mike, Mike, Mike, oh man.
Mike: I know. I’ll get there. I’m not too far behind but it could be worse. Anyway, back to our list, number nine is to allow for cheat days. Essentially what you’re doing with a cheat day is giving yourself permission to just throw in the towel on any given day for whatever reason you feel like and just walk away and do anything that you want at that point. Really, the idea here is setting up those rules in advance so that you don’t feel guilty about taking that time off.
If you’ve already given yourself permission to take time off whenever you feel like it because something came up that you just want to go do, whether that’s just going to see a movie in the middle of the day or going out running for example, if you have like a nature trail nearby, you want to go run through the woods or if there’s a hiking trail, you can do that as well. Go to a pool. Go to a basketball court, anything along those lines.
The bottom line here is just giving yourself that ability to do those types of things in the middle of the day and just call it quits on the day without feeling guilty about it. That’s a huge piece of this.
Rob: Is the gist of this episode that we’re telling people not to work during the summer?
Mike: I don’t want to say that. I don’t want to go that far. I think that looking around, what I’ve seen historically over the past couple of years is that business for people like you and me, it feels like it ramps down a little bit during the summer time. It doesn’t seem like things are picking up. It’s not like the beginning of the year or after summer time where things are really picking up and the pace is hectic. It feels to me like this schedule seems to be much more dialed back in the middle of July for example.
Same thing happens for a lot of businesses, second or third week of December. The businesses, they don’t do a lot, at least not our types of businesses. The demands are a lot less pressing and you can take it easy. I think that it’s a good time to recharge your batteries and not put the pedal to the metal because you don’t have to. There’s no real driving force to make you do it. Everybody needs a little bit of time off.
Rob: It’s interesting that the advice of only working let’s say six hour days, I actually think that for a lot of people, that would be better year round. That you would actually get more done with more focus time if you time box your day, if you got out and did some exercises instead of sitting in front of your computer for another hour clicking around on social media or doing whatever you’re doing when you’re getting distracted. This is stuff that can apply if used well. It can apply and actually improve your productivity in a counter intuitive way, meaning working shorter days. I believe you can actually get more done because you can be so focused about it.
That about wraps us up for today. If you have a question for us, call our voicemail at 888-801-9690 or you can 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 on iTunes by searching for startups and visit startupsfortherestofus.com for the full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 343 | Growing from $1k to $5k MRR, Projecting SaaS Revenue Growth, Refining Your Sales Process, and More Listener Questions
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about growing from $1k to $5k MRR, projecting SaaS revenue growth, refining your sales process, and more listener questions.
Items mentioned in this episode:
Transcript
Rob: In this episode of Startups for the Rest of Us, Mike and I talk about growing from $1,000 to $5,000 of MRR, projecting SaaS revenue growth, refining your sales process, and more listener questions. This is Startups for the Rest of Us episode 343.
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’s the word this week, sir?
Mike: I’m hoping that in another week or two, I’ll have my completed self sign up process in place. It’s been rather painful to rework those pieces of code just because it’s core to somebody signing up so it has to work properly. I’ve found places where if the signup process previously had failed, at some point along the way, it left a bunch of orphan data and I’m like oh God. And then you start over and then it leaves all these things in the database and I’m just like, “Alright, I got to start refactoring some of that stuff.” The cleanup is kind of a pain in the neck but things are progressing pretty well at this point. I’m hoping to have that cleaned off of my plate in the next week or two.
Rob: That’s nice. One thing that we do, we have a two step sign up process for trial. If they do the first step but don’t enter their credit card, we cookie them. If they come back, we just present them with the credit card. We don’t want to make them do the first step again.
Mike: That’s sort of what I’m looking for right now but I’m looking for ways to create the account and have it as a placeholder without also creating a subscription inside the system. That’s the part that’s hanging me up a little bit. I’m trying to figure out exactly how to do that. The cookie idea is interesting but at the same time, I don’t necessarily want to leave their credentials sitting there in a cookie or someplace either.
Rob: Oh yeah, no. We store it in the database and then cookie them with an account ID or at least a user ID. We wouldn’t store that in a cookie. It’s just an idea. It’s a nice elegant way. Some people will come back and be like, “I can’t believe it. I didn’t have to enter my stuff again to get in.” It’s like a usability thing for people who get stuck in the middle with the credit card and then come back a few hours later and see that it’s already there at the credit card screen.
Mike: Yeah, that’s exactly what I’m looking for. I’m looking at trying to get around because like I said, data structures don’t really support that just yet.
Rob: Got it. That’s a bummer. For me, you probably hear, I’m sick this week. I’ve been working but I just kind of feel hazy and everything is just taking longer to get done. I hate being sick a lot because I feel like I have a bunch of work to do. I got things to do. Who’s got time to be sick these days?
Mike: My son was sick this past week so he was out for one or two days at school.
Rob: That’s crazy. We went to California last weekend for Memorial Day and pretty much my whole family got, it’s just a head cold, we all got it. I don’t know. We had it within the first day we were there so I feel like we caught it before we left. I don’t think you catch it on the plane and then the next day you wake up. I think there’s a longer incubation period for most colds so the timing was kind of bizarre but it seems to be hitting each of us in its own way right now. But the show must go on. Am I right?
Mike: Yes.
Rob: Every week. Every Tuesday morning, we get this podcast out. Apologies in advance if my voice grates on people, I am heavily using the mute button to cough while you’re talking right now.
Mike: What are we talking about this week?
Rob: We have a nice backlog of listener questions once again and so I wanted to run through some of those. Actually, there are a couple that really aren’t questions. They’re just comments and accolades for us. This first one is a voice mail about growing from $1,000 to $5,000 of MRR.
Bryan: [Voice mail] Hey Rob and Mike, Bryan Fleming from Detroit City here. I just wanted to call and say thank you so much for the podcast you guys put out. Being here in Detroit, you just don’t talk to anybody who’s doing the SaaS stuff. It is so goddamn hard.
I’ll tell you what guys. A year ago, I was listening to your podcast, struggling along my SaaS business, doing about $1,000 a month. I listened to an episode where you guys were talking about how to know if your business is viable and sketching out your lifetime customer value on a napkin. I did that and it’s like a lightbulb went off. I moved to a yearly re-bill. I increased my prices and here I am a year later, my business went from $1,000 a month to $5,000 a month. I know you guys have seen ones that have grown better but I’m pretty proud of it.
Again, it’s all from listening to your guys’s episode, that was one in particular. I appreciate everything you guys do like I said. You’re the first one I go to on my podcast, really looking forward to it every week. Keep up the great work guys and when I do have a question, I’m going to call back in and hit you up on it. Take care. Bye.
Mike: That’s good to hear. It’s always nice to hear from listeners who listen to an episode and that are able to act on that advice or the commentary that we give and be able to take things to the next level and really move their businesses forward. I really appreciate hearing that from you, Ryan.
Rob: Yeah, that’s awesome. That’s really why we do it. The fact that anyone ever gets value out of anything you and I say, Mike, it’s just a miracle at this point. Our next question is about how to project revenue growth? It’s from a friend of the show, Craig Hewitt. He’s the founder of Podcast Motor at podcastmotor.com.
He says, “Hey guys, after launching my first SaaS product last week, I’m wondering what realistic ranges for growth scaling are. Heard Mike talking about doubling Bluetick revenue from $1,000 to $2,000 in a month on the last episode, it seems like a great goal but is that kind of expectation realistic? Does the same growth curve slope apply at scale? For instance, did Drip see 100% growth months after you were doing mid five digits a month? Be interested to hear your thoughts.”
Mike: For mine, I looked back over the revenue numbers for Bluetick after I started officially selling it to people. There were a couple of months where I did 100% month over month growth but it was not common. It was like I would get 100% one month and then I would double it and then the month after that, I get like 50% or we just stay even in terms of growth.
There is this exponential curve that you end up getting. Depending on which numbers you’re specifically looking at, whether it is growth from one month to the next versus your total size, those are two entirely different things. What I was looking to do was originally, I was saying, “Okay, I want to go from $1,000 to $2,000.” But even a couple of days later, I looked to that and said, “You know what? That’s actually not very realistic.” Because in my mind it was like, “Oh, I’ll be doubling my customer base.” But the reality is that doubling the customer base is not realistic because it took me x months to get there.
What would more realistic is if I were to say, “Look, I want to double the number of customers that I got last month.” That jump is probably too large. If it takes you four months to get to 20 customers, you’re probably not going to be able to add 20 customers in the next month barring some major marketing strategy that you do or a big launch or something like that. That’s not what I had planned. I realized a couple of days later that that was not going to be a realistic goal.
Paul Graham has some advice about the growth rates for Y Combinator start-ups. They’re looking for 5% to 7% growth per week and he says if you can hit 10% a week, you’re doing exceptionally well. If you can only manage 1%, that’s a sign you haven’t yet figured out what you’re doing.
In the early days, I think it’s a lot easier to get those higher percentage growth numbers just because adding 1 person if you’ve got 10, then that’s a 10% growth rate but once you get to 100, adding one is only 1%. Again, you have to look at both the total size that you’re trying to grow and then back track a little bit and look to see how long it has taken you to get there in order to be able to start projecting forward and establish more realistic goals.
Rob: Yeah, there is kind of early stage growth where you’re just scrapping for every individual customer and it can be a little harder to project at that point. But if you have a nice source of folks that you can bring in almost by hand where you have that 300 person launch list or something and you’re kind of individually choosing people out of that, then you kind of get a feel for how many you can logically bring in in a month.
Once you’re past that, let’s say you’ve launched and you start marketing. You have content marketing. You have Facebook ads. You have SEO. You just have all the channels. You’ll start to see that the numbers just pan out. Depending on the number of unique visitors you get to your site, what percent convert to trial or a customer and you can just look at those numbers and that will allow you to start projecting how in a month, two months, three months and then you’ll be able to see which levers you need to pull in order to increase that. This is where it becomes easier to project but harder to make a dent because adding one, two, three customers doesn’t make a dent when you’re going $5,000 a month MRR.
Now, to really dig in on Craig’s question. He’s asking, “Can you have 100% growth once you’re already doing $50,000 a month?” The answer is not typically. That’s not really a sustainable growth pattern. Don’t think of it in terms of percentages. Think of it in terms of flat dollar amounts.
In the early days, I would shoot for if you can get into four figures of monthly MRR growth, you’re doing okay. Early days is like sub 10,000 or 15,000 of monthly recurring revenue. If you can grow at $1,000 or $2,000 a month during that time, I don’t think of it as a percentage. I just think of it as getting the $1,000 or $2,000.
If you can get to that and make it sustainable so that it’s a flywheel in essence that grows at $1,000 to $2,000 a month, that’s a pretty decent start. If you look out a year, then you think, “Wow, I’m going to have grown $12,000 to $24,000 MRR.” And then what you do is you look at how do I know get to $4,000 or $5,000 MRR and then how do we get to $10,000 MRR growth.
The sooner you can get there, your growth will be huge at first. Let’s say you get to $20,000 MRR and you’re growing at $5,000 a month, man, you have a 25% growth rate. But then next month, you’re going to have a 22% growth rate. And then the month after, if your growth stays flat, you’re going to be at 18%. It’s going to get smaller each month but if you’re still growing at $5,000 MRR, that’s actually a pretty damn good bootstrap business. The percentages start having less of an impact at that point or I should say less meaning because if you continue to grow at $5,000 MRR every month, that’s a good business.
At a certain point, your churn will make it so that your $5,000 MRR growth will get smaller and smaller over time. That’s really a whole separate conversation. That’s when you hit a plateau and there was an episode we recorded probably 100 episodes ago with Reuben Gomes about how to see plateaus coming and how to get over them.
I guess what I’d encourage you to do, Craig, when you’re thinking about this is think about it in terms of absolute dollar amount. People say percentages because A, it sounds impressive or B, they want to not give absolute revenue numbers in public. When I used to talk about Drip’s revenue growth on the podcast, I didn’t want to say we’re growing at $5,000 or $10,000 a month so I use the percentage instead.
But realistically, the absolute dollar amount especially for a bootstrapper in my opinion is what counts because that dollar amount is what allows you to hire people, it’s what allows you to buy Facebook ads, it’s what allows you to run the business whereas percentages really have just such a smaller meaning. You do hear about Y Combinator start-ups or even some bootstrap start-ups that get really good traction.
Growing 20% to 40% a month for a while is totally doable. It’s hard work and you really need to catch a flier. It’s a Cinderella situation but it is possible for the time being but growing 100% month over month for more than just a few months is unheard of. I think you would literally need to be like an Uber or something to be seeing growth like that. I hope that helps, Craig. Thanks for the question.
Our next question is from Chris from vendorregistry.com. He says, “I’ve been thoroughly enjoying your new podcast. I heard you were looking for some questions. Vendor Registry’s SaaS platform and marketplace streamlines the $250 billion dollar local government purchasing market by standardizing and centralizing traditionally paper intensive workflows. Since we have so much green field ahead of us, coming up with new ideas takes only 10% of our time. The other 90% is spent debating which ideas to execute first. Ideally, we stop debating. We let the market decide through AB testing however, implementing AB testing requires money for the tools dab time to build out two versions of everything and enough users to generate actionable data. All of which are in short supply. How do you recommend we get started with AB testing given the resource constraints?”
Mike: I think the resource constraints that you mentioned are probably the place to start because you’ve talked about how there’s a couple of different places where you have these resource constraints. There’s time, there’s money, and then there’s the low numbers of users. I think the low number of users is the thing to really focus on just because it’s really difficult to do AB testing if you don’t have a large number of people that you can put through a particular part of your sales funnel and get the results that you need in a short enough time span.
If you’re running an AB test and it takes you 12 months to get a result, there are two problems to that. The first one is that it takes you 12 months to iterate and do any sort of testing to move you to the next level. The second part of that is that because it’s such a large time span, those results are probably not really statistically relevant anyway.
Even if you go through those calculations and you think to yourself, “Oh, well yeah, this is statistically relevant.” It’s probably not just because of the seasonality of that stuff. It may be statistical over the course of another year but it’s not helpful. That’s the root problem. It’s just not helpful for your business to figure out really what’s going on. I would not really look at AB testing at all.
I would probably look at other areas of your business and try and find places where you can really drive the business forward whether that’s content marketing or advertising. You could try various different advertising channels. You could try face to face meetings.
For this particular industry, it seems to me like it’s very much relationship driven and yes, there are certain lists and stuff that you can get on but having relationships with people who can recommend your services, that’s really what tends to drive business in a larger enterprise environment which is kind of what the Vendor Registry falls under.
Rob: I’m not sure how much I have to add to that other than it doesn’t sound like split testing is the way to go for you. You just need a lot of traffic to do it and it does take a lot of time. It’s easier to split test things like headlines, pricing page. I would not build out two versions of anything.
I think this is much more about talking to customers, potential customers and getting a small sample size but getting real feedback, whether that’s in person at conferences, or trade shows, or Skype calls, or emails, or whatever it takes. That’s going to be a faster and more effective way to try to figure out what to build next.
This is the conundrum of being a good product person. It’s figuring out what to build next. I think there’s a big element that your vision of what it should do is a big part of gut feeling based on your experience in the space. You take a method of landscape. Part of that in my opinion should not be the over riding part is talking to customers and getting ideas and getting a sense of where the market wants you to head.
I don’t think split testing is the way to go. You think about how we decide on what’s the next feature to build in Drip. We don’t build two different features and split test them. We make the decision. It’s based on a bunch of factors that we combine and have honed over the past couple of years. Thanks for the question. I hope that was helpful.
Our next question is from a listener who asked to remain anonymous. He says he’s been following the podcast for a few years, can’t get enough of it. He’s a self funded a B2B SaaS startup for about two years. He says, “I have dozens of potential customer interviews and have been quite involved in helping beta users and testing the product myself. It touches on a sensitive business process that impacts other processes so potential customers are on a certain level of configuration and they are very afraid of bugs. I’ve had a few bad experiences with some beta users who keep asking for improvements and never sign up for the product. To be fair, the app has had some bugs here and there as we were in a hurry to push new features. We may have gone too far in the opposite direction asking customers to sign up first a statement of work contract before doing any implementation. It is really slowing the intake of new customers even if they are enthusiastic after we show them the demo. Now that we can slow down on new features, I’m hesitating on the priority to pursue. I have a number of things we’re looking at. Do you think we should remove any barriers from the sales process for the time being, focus on removing all bugs, and send the message that the app will have to be used mostly as is or do you think we should make Screencasts, write tutorials, etc. to let users start on their own? I’m hesitant to do this because based on their objectives and on their existing processes, they will have to use the app in different ways. For what it’s worth, the cheapest pricing tier is $300 a month and the medium tier is $900 a month.” What do you think, Mike?
Frankly, I don’t think we need to stay within this. He said should I do this or that? I’m not sure that either of those is the right choice. I don’t think we need to stay within the boundaries he’s laid out.
Mike: I think this is an interesting question. The problem here is I think that you’re unsure of how to proceed and it partly depends on where your revenue is and I think at those price points, you’re probably at a point where if you’ve been working on it for a couple of years, my guess is that it’s probably profitable.
I think that given that, you probably want to put yourself in a position where the app is making enough money that you can pour additional money from the business back into it and reinvest those profits to build not just the business but also go back and address some of the quality issues or the bugs and stuff that are in there. That’s just going to take more resources, more engineering time, and to get that stuff, you need money. I would probably focus on anything that is going to be bringing in revenue.
It doesn’t seem to me like that’s doing screencast and tutorials. Those are things that are helpful for users but they’re not necessary to get somebody in the door as a paying customer. You can deal with a lot of issues like that that come up on an ad hoc basis or during on boarding sessions. There are ways to get around that without actually having to do the work.
Basically, do whatever that needs to be done in order to drive those sales through, if people need personal demos or hand holding during a personal walkthrough or something like that. You can use those as well. The price points, my guess is you’re probably talking to people directly for most of your sales especially if you’re going to do any sort of annual contract or anything like that. Those are the places where I would focus and then once you have that money coming in the door, then turn around and start deciding where that money should be allocated to help build the product in the right direction.
For people who are coming in, I think the interesting piece about that was that flip flopping back and forth between, “Oh, there’s some bugs. We should get them taken care of.” Versus going to the other extreme because people aren’t actually signing up for it after you go in and address the issues that they brought up. What I’ve been doing is telling people, “Look, if you sign up, then I will look at that as kind of a higher priority.”
I typically track feature request during a demo and I’ll write down some of these name or tag it on a bug in an open case inside my bug tracker and put the person’s name on it. But if they don’t sign up, automatically, it becomes a lower priority to me because it’s not a paying customer. They didn’t sign up for it. But if I get enough of those onto a particular case, then I can probably justify spending time and effort because then it looks to me like it’s impacting sales.
It doesn’t sound like you are tracking any of that information right now. You’re really just micro focused at the individual person who you’re looking to onboard. I’ll back off from that a little bit and try take more of a macro view to it and say is this a big enough problem that we should deal with it or is this something that we can just log and come back to in the future?
Rob: My sense is it sounds like you have a couple of issues. If you have bugs in the app right now, that’s the first thing you need to take care of. I would put the brakes on everything and fix those because if you get a reputation in this space, and it sounds like it might even be a small space where people know each other and are talking, if you get the reputation of being buggy, that doesn’t go away. It’s like your credit score. Once you jack that score, it is really, really hard, if not impossible to get that back. That would be the first priority of all this stuff that I would basically buckle down.
It’s kind of like having performance problems. It’s like we halt almost all feature development if we find that we’re running into performance problem because you just can’t let that stuff go. It’s only gonna get worse and it’s going to tarnish your reputation. As that’s in process, it sounds like you had folks who ask for improvements and never sign up. By improvements, if you mean bug fixes, then that’s fine. I would do that.
But if they’re asking for more features, something that I would do in the early days of Drip, is if someone asks for a feature, I would say, “Is this the one thing that you need us to implement to be able to use Drip?” If they said, “Yes.” Then I said, “Great. Sign up for a trial and we will have this implemented by the time your trial expires. If we don’t, I will comp your account until this feature is built.” We don’t do that anymore. Tens of thousands of users, you can’t. But in the early days, when we were scrappy, that’s the kind of stuff I was doing to try to get.
If someone had a list of 10,000 or 15,000 people, it’s going to pay us a couple of hundred bucks a month. That was a big deal and it sounds like for you, it’s totally worth doing. It’s interesting. I don’t know about a statement of work contract or any of that stuff. That to me, feel a little cumbersome and a lot of overhead but just having them sign up, put a credit card on file, is a step and you’ll find that some people will balk and they don’t sign up and that’s fine. That’s fine. They were never going to sign up. The ones who do are committed to it and then you implement their features. I just found that that’s a good way to do it.
Given your price point, personally, unless you have a lot of inbound interest, I would personally be hand holding and doing very much one on one sales. The fact that between $300 and $900, I’m assuming you have a higher end tier, your monthly average revenue per user is going to be let’s just say $400 or $500, $600 range. That’s a nice chunk of change. That is definitely worth your time or someone you hire’s time to handle, focus and get them started.
I would not tend to go towards the self on boarding at this point just because of the price point and the value. I think that the value the customers bring to your business is worth the time to spend especially in these early days, to do the learning and to handle everybody into the app. I hope that helps.
Our next question is actually not a question. It’s a compliment for us and the podcast. It’s from Alex Summerfield. He says, “I’ve been listening to your podcasts for about three years. I remember when I first listened to the episodes, just thinking about it, part of your intro really fit for me. I tried a couple of ideas but they never took off. After switching a couple of jobs and getting too busy to work on side projects, I finally got sick of my job and started consulting and working on a startup on the side. I listened to your latest episode and heard that just thinking about it part, and it finally hit me that I’m no longer just thinking about it, I’m actually doing it. I just want to say thank you for the impact you’ve had on my life. All the advices helped and I really enjoy hearing the updates on your businesses.”
Mike: Thanks for the compliment, Alex. I do think that it’s really hard to get started and I think a lot of it has to do with barriers that we encounter as we’re going up in the social environments that we either come out of or immerse in on a daily basis. Breaking away from the things that the people around you are doing is just really challenging, to be honest.
If you don’t interact with the people who are starting their own businesses, or entrepreneurs, or even doing software on their own, it could be very difficult to break the mould and people look at you funny and say what is it that you’re doing because you’re the oddball at that point. You’re weird. It’s nice to hear from someone like you who’s gone out there and actually started working on side products with the intent to move forward and start your own thing.
Rob: A couple more questions. Our next one is from Rob. He says, “I’m part of an early stage bootstraps startups company in the UK with two other co founders. We are between three to six months from launching a product and having any revenue. One of my co founders is pushing for job titles/corporate roles to be assigned like CEO, CTO, etc. Is it important to allocate corporate titles/roles? Is it best to get this sorted early in the life of a company or is it just a distraction?”
Mike, as you think through this, I think corporate titles versus corporate roles is two totally different questions so maybe we can tackle each of those individually.
Mike: I was going to mention that because when you’re doing customer development, it seems to me like CEO and CTO, when you’re talking to a prospective customer, you may think that that sounds impressive but for the most part, especially if you’re early on, you don’t even have a product yet, those titles, I feel like they detract from whatever it is that you’re trying to do because they say, “Oh, you’re the CEO of this company that really has nothing.” And you’re asking people for help. Versus if you are the CEO of a company that has a full blown product and it’s been in the market for three or four years, that has weight behind it.
That early on, I would just say founder or co founder. I wouldn’t even worry about those corporate titles when you’re talking to customers or prospective customers. They’re basically meaningless at that point. In terms of roles though, that’s what people tend to think about when they think of titles like, “Oh, the CEO does this. The CTO does this.” Really, internally, that’s where that matters but externally, it doesn’t.
You want to have a clear expectation of each other and what it is that you’re expected to do inside of the business. And then externally to your clients and customers, I would just say you’re a founder or co founder. I wouldn’t go into what it is your actual title is because it really doesn’t matter. But internally, you do need to be clear on what is your responsibility versus what your co founder’s responsibility is so that each of you know what they’re supposed to working on and when they should be getting guidance and input from the other person into the things that they’re doing.
Rob: I don’t have much to add to that. I think that’s a very good summation of it. There are certain things that are distractions. I found that using the phrase co founder is really helpful especially in the early days when folks know that you’re still being scrappy and doing customer development.
Last question for the day is about sending promotional emails to existing customers. It comes from Bruce. He says, “Thanks for the great show. I have a simple software product I’ve been selling online for several years. My customers all need to provide their email addresses so I can send their payment confirmation and so I can authenticate them when they log in to use my product. I don’t state on my signup page anything about what types of communications the new customer should expect to receive from me when they provide their email. I’m releasing some improvements and new features. Some of these improvements will benefit existing customer with no additional payment. Some new features I intend to sell to existing customers as add ons. Is it okay to email my customers to tell them about the new features? They haven’t given explicit consent to receive email from me. I noticed that whenever I send a SaaS part because I’ve received a lot of emails providers even though I don’t recall opting in to any mailing list. If you guys think it’s ethical, legal, or wise to send emails to my existing customers, would you recommend I add an opt in checkbox or some small print stating the customer is going to expect to receive occasional information/promotional emails and only send only send emails to customers who opt in or have had the chance to read the small print? Thanks in advance for your advice on this. This app is called countingdownto.com.”
I like the way he phrases it. There are legal implications and then there’s ethical. That seems a little strong but your own moral compass is how it feels. What are your thoughts on this, Mike?
Mike: I think we have to provide the standard podcast disclaimer that we’re not lawyers and you can’t rely on us for legal advice, especially given that this business is based in Canada so laws there are different than they are here in the US. Given that, my thoughts on this are that if somebody is signing up for your SaaS product, there are a couple of different types of emails that you could send to them.
When they purchase it and then you send them a receipt, that’s what’s considered to be a transactional email. They purchase something from you, you send them a receipt. That’s completely legit. You are almost expected to send that email and that does not fall under any sort of spam laws that I’m aware of. When you get past that and you start talking about newsletters, and product updates, and things like that, that’s where it gets into the gray area which I think that you’re a little concerned about.
If you’re running a SaaS, it seems to me like you almost have to have people on a newsletter of some kind or a product updates email list of some kind. That said, I would default to adding them to it but I would explicitly give them the ability to opt out at any time. Even if they are an ongoing customer, you might want to segment that list a little bit to give them a profile page that says only email me about product updates and include me in my newsletters. Two different options and then you segment your list based on those two things.
That way, if somebody wants completely out, and they only want the receipts from you, you can still send those email receipts to them. But if they also want to receive your newsletter and the product updates, you’re still going to be sending those to them. Again, just segmenting between those two types of people or if there are other segments that you want to include in that, I would do that but I would opt them in by default and them let them choose otherwise if they want to. That’s probably the way that I would approach it for that.
But again, there are obviously legal implications as well. As to what Rob said about the moral implications of it regarding your moral compass, if you sign up for a SaaS, you expect to get email and told like, “Hey, this is how this product can provide additional value.” I think what you’re probably seeing is when you sign up for new products, people are sending you a lot of onboarding emails. I think that those fall into that grey fuzzy area where a SaaS vendor could easily overwhelm you with a lot of email to the point that you start to consider it spam more than anything else, especially if you decided to not use the product.
There is a difference between those emails that are being sent as onboarding emails where you don’t have the opportunity to opt out because some vendors will send those and you can’t opt out. That’s part of their on boarding process. Depending on whether you allow them to opt out or not, that factors into it.
Rob: Yeah. In the US, CAN-SPAM says if you have a commerce relationship or customer relationship with someone that you can send emails to them related to the business transaction and I think otherwise, there’s always this grey area. It’s like if you read the verbiage exactly, you could interpret it one way or the other. But in general, you do see SaaS apps. If you sign up, they don’t explicitly make you opt in and they send email and people are not being investigated by FTC or FCC or whoever would investigate that. I think the precedent is that this is generally considered a legal thing.
Like Mike said, your moral compass is going to vary. There are people who will say, “Oh, I should explicitly opt in for every single email you’re going to send me.” People get so far into the protection of your email address and your inbox and that no one should ever email you and then on the other end of the spectrum, there are spammers. You gotta ask yourself what’s it worth. There’s some business value to you.
People genuinely do generally really want to hear about feature updates, specifically feature updates to the app. Absolutely! Who doesn’t want to hear that? It’s pretty rare that people unsubscribe. Like Mike said, you should give them the opportunity to do that. Even if you’re sending things that are up sells, my guess is that’s going to be pretty valuable information for people because if it’s an up sell, it’s likely going to have some value that a good chunk of your list is going to at least be interested in and interested in hearing about.
Everything you’ve mentioned in terms of content, it’s not like suddenly you’re taking customers and just starting sending random blog posts with some content. These are really applicable to what they’ve signed up for and what they’re paying you money for. I don’t personally have any kind of issue with you doing that. It sounds like you’re not going to be overly promotional based on how careful you’re thinking about this, which some people don’t do.
Anyways, that’s my take on it as well. It sounds like Mike and I are pretty much in line on this. I think that’s the general consensus of the industry and where it’s at today.
Mike: Yeah. Coincidentally, it’s the first that we’re recording on and I’m getting ready to send out an email to the people who are current subscribers for Bluetick to tell them like, “Here’s the list of all the different updates that have been added over the past four to six weeks that you might be interested in hearing about or maybe you didn’t know about this feature or this was something that was requested by a couple of people.” Just to let them know because there’s a difference between features that a specific person requested and you can let them know when those things go in but you still have to let the rest of the customers know that that new feature has been added. Otherwise, they won’t know anything about it.
I’ve seen a couple of support requests come in and say, “Hey, is it possible for us to be able to do this?” I’m like, “Yup. I actually just added it a week ago and I haven’t gotten around sending out basically the product updates over the past month.” I do think that it’s a good practice to get into. Just be sending those out especially if you’re running a SaaS where it’s regularly changing and the expectations of the customers are that over time, that SaaS app is going to get better.
That matters a lot more I think in the early stages than when you’ve got a late stage SaaS where it’s like you’re not really adding a lot of features. You’re adding scalability and things like that. But if you’re adding features at a very fast pace, it’s probably best to email them on a monthly basis and say, “Hey, here’s all the new things that are going in that you’re getting essentially for free just for being a paying customer.
With that, I think that wraps us up for the day. If you have a question for us, feel free to 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 and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening and we’ll see you next time.
Episode 342 | SaaS Development Shortcuts
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about SaaS development shortcuts. They discuss the gap between what you think needs to be done versus what really needs to be done and give you tips on how to move faster.
Items mentioned in this episode:
Transcript
Mike: In this episode of Startups For the Rest of Us, Rob and I are going to be talking about SaaS Development Shortcuts. This is Startups For the Rest of Us episode 342.
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 you first product or you’re just thinking about it. I’m Mike.
Rob: And I’m Rob.
Mike: We’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s going on this week, Rob?
Rob: It’s been a good week and it’s memorial day weekend coming up so we are flying to California for a couple of days, just like a three or four day trip to see some folks, just looking forward to it. We haven’t been on a trip for I guess since MicroConf which is maybe six weeks ago, it’s not that long ago but looking forward to getting some sun and it’s also nice and warm up where we’re going. Kind of just easing into it. How about you?
Mike: I have to go see a specialist and have some x-rays taken because I might have a torn rotator cuff.
Rob: That is such a bummer, man.
Mike: I know. It’s not bad. If it’s a tear, it’s really small. I think it’s not bad enough where they look at it and say, “Yes, this is obviously a tear. It might just be inflamed and some other stuff.” They’re going to start with some x-rays and see if there’s any fluid buildup or some bone spurs or something like that. If that comes back kind of inconclusive then they’ll move on and do a whole shoulder MRI and see what comes out of that.
Rob: Yeah, that’s a bummer. If they find it then they have to do surgery and then you’re not able to type with that arm for a while.
Mike: Yeah. They also said that because I still have good range of motion, it just hurts when I move in certain positions that physical therapy might be something that they could work with, anti inflammatories or various other things but I’m hoping that I can dodge that surgery bullet. To be honest, that’s not something I want to go through.
Rob: Yeah, totally. It’s always a bummer to get hurt. Nowadays, when I get injured, it’s not like we’re that old but it’s like I remember getting injured running track when I was 21 and you just heal quick, your body is in really good shape and you’re younger. These types of things now, it’s going to take you awhile to get over that. You’ve also had back issues. You just don’t heal as well as you did 20 years ago or whatever.
Mike: Yeah. That actually came to mind like, “I’m not as young as I used to be. I just don’t heal as quickly.” Back then, in your 20s, you can take the bumps and bruises and shake them off and you’ll be back at it the next day. This is just like that dull ache and I’m like, “Oh, this is just going to go on and on.”
Rob: Yeah, totally. Cool, what else? What are we talking about this week?
Mike: Today we’re going to be talking about SaaS Development Shortcuts. I pulled some of this from my MicroConf talk. The basic idea is that there were some parts of my talk where I highlighted where there are gaps between what we think needs to be done versus what really needs to be done. In these places, there are some shortcuts that you can take to avoid doing work now that you can presumably do later. Some of it, you can just avoid indefinitely but there’s other pieces of it that you can push off to the future because it’s going to either take a lot of work or there’s going to be a long time for you to see any results or benefits from doing that work.
There’s workarounds that you can put in place to avoid doing it now. In some cases, you’ll take on some technical data or some other types of work data that you just have to defer really. But by doing so, it allows you to concentrate on the more important things now versus delaying your launch or delaying getting sales or just delaying moving your product further than it would if you took the month or three months or whatever to implement the things that you were looking at.
Rob: Yeah. There’s a lot of these tradeoffs that go into building any type of software, that go into building any type of business. A lot of things that you have to think about and think to yourself, do we have to do this now? Can we push it off? If we push it off, does it create more of a hassle later on? Does it create more debt later on? Not monetary debt, obviously, but technical or business debt. Or is it the same amount? Is it the same amount in three months if I build the knowledge base today, if I build the knowledge base in six months, is it the same amount of work versus when you’re in code, if you take a shortcut, we all know that technical debt will actually get worse over time. There are some of these that get worse if you don’t do them and some are the same or maybe it’s a linear progression. These are the kinds of things you have to think about as you’re trying to figure out what you can delay.
Mike: What we’re going to do is we’re going to walk around some of the different things that we might think that we need but could be delayed with various workarounds and we’ll talk about what some of those workarounds entail and then we’ll talk about some of the things that are really difficult to find workarounds for. And then we’re going to dive into some general guidelines for deciding how to push things off and whether or not you should do them now or schedule them in the near future, kind of how to prioritize them.
To kick things off with the things that we might think that we need, the first one is a sales website. It’s interesting that I ran into this where my traditional thinking all along has been, “You need a sales website in order to sell your products, to tell people what it is, what it does, how it works, how they would use it, what the value is.” What I realized is that if you’re doing direct sales with people, you don’t have to do any of that. You can get away with a lot less than you need to.
For example, I’ve got Bluetick up over 20 customers, around 20 to 25 right now. I still only have I think 3 pages on my website. One of them is a privacy policy, another one is a terms of service and the third one is just the landing page where basically it gives you an overview of what it does and asks you for an email address either to signup, to get an invitation code or to join the mailing list and go through a five part email course. That’s it. I’ve got to this point really without having a website.
Rob: This is an easy one when you’re doing direct sales. With Drip, I wasn’t even doing direct sales but it was onboarding, it’s really what I think about it as. It’s like people wanted to try, always doing emails back and forth and all we had was still that landing page from months and months of onboarding and we did the same thing, got into the high teens, low 20s in terms of customers that way.
Given that you’re still probably trying to find a product market fit at this point, it almost doesn’t makes sense to build a website because you don’t really know what your positioning is, you don’t know what your feature set is, this is still early customer development. I think there are a lot better places your time can be spent than going and trying to hack together some entire website.
Mike: The interesting part about all the stuff that you just said is that because you don’t know what to put on the website, most of it is probably going to be wrong anyway. Going that direct sales route allows you to have the conversations and get people’s feedback and understand truly what it is that they are trying to solve for and what the terminology is that they use and what resonates with them.
Once you’ve done that enough, you get to a certain point where then it makes more sense to build the sales website because you have enough information from those conversations to be able to build something that is going to be effective and pitching towards people that don’t know who you are and you haven’t had a referral or had no conversations or had nothing explained to them, that’s really the position that it puts you in. That really leads into the second one which is marketing automation.
I think people look at marketing automation as a panacea for all types of sales problems but the reality is that it’s very difficult to automate a sales process when you don’t even know what it is that people think yet or what they’re really looking for and that’s what that direct sales approach is going to solve for you.
Rob: Yeah, I agree there too. As much of a proponent as I am of email marketing and marketing automation in general, which is more advanced form of email marketing, it’s just too early at this point. Until you hit the point where you really do feel like you have a good idea of your positioning, you’re going to start to feel like you know what content people need in order to understand your product. There are questions about how you use the product but there’s also questions about the higher level architecture like, “What are best practices for sales nurturing?” That’s what you’re going to get, Mike.
We kept getting what are best practices for email automation or marketing automation? How do I structure my tags? What should I use custom fields for? How is this different than email marketing? It’s a higher level stuff, that’s the kind of stuff that you’re going to either be sending to people via email or you’re going to start pushing some blog post out at some point. That’s at the point where I think you should tip into now I’m going to actually add lead nurturing stuff and build some workflows and start doing behavior tagging because at that point you just have such a better idea of where your business is.
It’s almost a waste of time if you only have 100 website visitors or you only have 20 customers. You really need to get to the point where you’re getting 500 or 1000 uniques a month to where you’re getting at least a handful of new subscribers to go through that stuff.
Mike: The caveat here is that marketing automation is a very broad term and it doesn’t mean that there aren’t certain tactics that you can pull out of the marketing automation playbook that would be beneficial for you. For example, I just saw that Drip sent out an email with a pointer to a mechanism used by Christoph Englehardt who’s a good friend of the show, comes to MicroConf Europe, has taken notes for MicroConf Europe as well. In that article, he went over the idea of using Drip to send an email to people after you’ve captured their email address to pull them back and help with abandoned shopping cart emails. That’s a tactic that you can use to help pull people back to your website.
I actually use it for Bluetick right now where if somebody goes in, they request an invitation code that pops them over to a survey page. If they don’t fill out the survey page, it sends them an email from Drip about 10 minutes later. My hope and intent is that they will fill out the survey because they’re right there. But if they don’t, then they get a follow up email from Drip a little while later. Interestingly enough, I got an email earlier this week from somebody saying, “Hey, how did you do that? Because I’d love to know a little bit more information about it.” We actually have a demo scheduled here pretty soon. It’s tactics like that that can really help. You don’t have to go out and implement everything that’s marketing automation related but there are certain tactics that you can pull from it.
Rob: Another thing that I tend to push off, because it doesn’t get harder to do this in three or six months, it doesn’t build debt, is documentation. At first, when you’re doing hand onboarding, you’re doing direct sales, really the documentation that I had was the emails back and forth with people. I just started gathering those up. First it was an FAQ doc and then I realized some of them needed to really be flashed out. That was the best way to kick off our knowledge base.
First there was nothing. As soon as we get to the point where I knew we’re going to be emailing several thousand people on our launch list, I knew we needed something. What I did is knowing that writing documentation was going to take forever, I went in and I recorded about maybe somewhere between eight and a dozen Screencasts. Three to five minute Screencast where I walk through. This is what a campaign is. This is just basic stuff. This is what this setting does, there wasn’t a ton in the app.
I just slapped up again, that was 8 to 12KB articles. It was in a WordPress, there’s a WordPress theme, I think, that allows you to make a KB and I just put up there and that’s it. We had 8, 9, 10 KB articles at the start. Screencast or not, the ideal way to consume that, it was very fast for me to make them but within the first few months people are saying, “I really want to be able to read through them. I was at the airport, the WiFi was bad and I couldn’t play them.” Overtime, I actually paid someone to turn those Screencast into documents, like actual KB articles.
That’s the progression. You don’t need to write all the documentation upfront. It would be great if you could but you just don’t have the time. That’s the idea, you start with nothing and it really is just manual and you’re going to have more support upfront because of that but then you move into something lighter, for me that was Screencast, for you it may be something different and then ultimately you build that out over time.
Mike: The next item on the list for something you can push off until later is a billing system. It sounds like a billing system is probably not something you want to push off because you want to be able to start getting revenue as quickly as possible. There are hacks around having a billing system in place. Instead of having an automated billing process in place, you could send people manual invoices. There’s tons of different pieces of software out there that allow you to send somebody an invoice and then have them pay you, you could easily do something like that through PayPal, you could send them a PayPal invoice once a month.
Yes, that doesn’t scale but that’s not the point. The point is to allow you to avoid building out that billing system until you get to a point where it is difficult for you to keep up. Another thing that you could do is you could manually enter people’s credit cards in Stripe using the backend. There’s a WordPress plugin called WP Simple Pay which is from Phil Derksen who’s also a MicroConf attendee and friend of ours. That WordPress plugin can be used to capture those credit cards and help you with that stuff without you being involved directly and taking the credit card and entering it in.
If you want to automate some things a little bit, as Rob said, there’s that natural progression. Over time, you can add more and more things into it until you get to a point where it is fully automated and it helps you move things forward. But until you need it, there’s no point spending a lot of time doing it because a billing system can be very, very complicated. At the start, you don’t need all that complexity.
Rob: With Drip, we didn’t actually use any of those approaches, we just had a little Rail script that Derick cranked up. I think it took him less than a day. We wind up building that five days before the first billing was going to run, we were signing people up and I think we got 30-day trial so we got 25 days into the trial and I’m like, “Alright Derek, we got to get something that’s going to bill people on a couple days.” It was super simple at first, it was literally this is an amount and this is how much you’re getting billed.
Again, over the coming month, you have to upgrade and automatic downgrade and prorating and whatever else goes along with it. We built that into it but we started pretty simple. I agree, you don’t need as much logic as you think you do in the early days in billing.
Mike: One of the more common things that you probably need to implement in a SaaS application is permission system. Depending on whether you’re going to do it like a single tenant or multi tenant model on the backend, you may need to implement permissions inside the system to allow certain people access some resources and then prevent others from accessing those same resources.
This can get very, very complicated, especially if you get into the idea of having group accounts and some people with certain roles or permissions. Again, there are lots of white papers and documentations you can read out there about different ways of implementing the permission systems or claim system and it does get complicated. But in the early days, you really don’t need any of that. All you need is the ability for somebody to login and see their data and not see somebody else’s. You don’t need to create all this additional complexity with groups and roles and permissions and stuff like that, you could really get started with one user.
To Rob’s point earlier, there are certain types of debt that you’re taking on. In this case, it’s a technical debt and that can be difficult to get around. But in the early days, if you need to get around that just to help prove out the idea and make sure that things are working and people are getting value out of the app, this is one of the shortcuts that you can take. You have to be forewarned that it is technical debts you’re taking on when you use this approach but it could be what you need to do.
Rob: Yup. When we first launched Drip, it was just one login and then people wanted to invite whatever teammates and so then we had to add the ability to have additional folks. The only thing we had was owner and I think we called it an admin or something was the other role. 6, 12 months down the line, we kept getting requests for like, “I don’t want some people to mess with our settings.” We added a member, there is three tiers, owner, admin, member.
We have been able to maintain that. We are tens of thousands of users and four years into a pretty substantial SaaS app. We do get periodic requests to add more granular stuff and we started talking about that internally, what that would look like. But the good thing is now, we really understand our customer, we really understand our audience and we have had enough request for it asking in different ways. I want people to be able to come in but not export anybody or not be able to view my subscribers or not be able to send anybody. There’s all these different things.
We’re not making it up in a vacuum, it’s not like we just dream up how we think that they might use it, we have real usage patterns and real feature requests. I’m very much in agreement with you on this one. If you need multiple logins, that’s fine but as soon as you get to anything granular at all, I would pump that so far down the line unless that’s a core, core competency of your app which I’m guessing it’s not going to be.
Mike: One thing that I recently did was I repurposed our impersonation mechanism and applied it to people’s accounts to let them have multiple users inside the same account. It works fine. It’s not great, there’s certainly a lot of work that needs to be done there but for the time being it allows people to use the products and have different logins physically associated with the same account. Like I said, it’s a tradeoff but it does work. Early on, your customers are probably going to be pretty understanding about that stuff.
Rob: Another one is password reset and account management type stuff, it’s a lot of time to implement versus the actual number of minutes anyone is going to use it or the number of times someone is going to use it in the first three months of your app. I know that pretty sure we had a reset password button and I think it may have fired off an email to us or something that’s like, “Reset my password.”
Again, this is very, very early on, you’re at 20, 30, 40 customers, you’re going to get one a week and you can just do it manually and people understand. It’s not until you go a little broader and again you’re going to have to really start to scale up that you need to build this out.
Mike: Funny enough that I had mentioned this is my MicroConf talk as well but the password reset in Bluetick did not work at all for nine months. We implemented it probably six months ago but it did not work for the longest time and we would just go in and manually do if somebody came back and said, “Hey, my password reset didn’t work.” There was literally only three people who would ask in those nine months. It’s one of those really low frequency things that is important and needs to be taken care of but you can manually handle it if need be. I did have a manual backend where I could go in and I could reset somebody’s password, they just couldn’t do it themselves.
The next one is a big thing which is reporting. I think in most cases, the challenge with reporting is that unless your app is specifically designed to provide reporting services for somebody, then you can probably get away with very little reporting in the first version. Most of the reason that you would want to pump this down the road is because you don’t necessarily know what people want to be reporting on. As you have conversations with people, you’re going to learn more about it. When you are initially looking at building reports, you’re guessing what people want and it’s just not going to be helpful to you because you’re going to build a bunch of things, people are going to say, “Hey, could you do this instead?”
Now you’ve built a bunch of things that essentially you have to support longer term because you’ve already built them and put them in the app and people are expecting that those things are probably going to stick around but now you’ve got all this legacy code there and it wasn’t really what people were looking for anyway. I think that in most cases it’s best to just put this down the road and not bother with the initially. [00:19:13] had done a recent episode in the Startup chat where they talked about killing features. You can kill features like this but if you only have two reports, it’s really hard to take away one of them.
Rob: Another thing you can push off to get further down the road is the classic marketing strategies, the ones that require long iteration cycles, higher workloads like SEO and content marketing. These are things that take a long time to ramp up to, it’s not something you should push off so long because it’s not like you’re going to launch a blog and then start getting traction with either content marketing or SEO immediately.
Again, when you are under that 50 person mark, it’s just not something that you want to scale to. If you are not doing these other things of building a password reset and building a billing system, you’re not there yet, you don’t actually want to drive this type of cold traffic to your site and stuff. Everyone talks about it, they talk about this, they talk about split testing, these are things that you need to do later on, you need to wait until you’re starting to scale up marketing and you feel like the app and your team is at a place where it can really onboard people, you have documentation and you’re ready to start dealing with really new users to see how they come in and how they get onboarded and how they convert.
Mike: The next one is new feature development. The rule of thumb that I’ve taken lately is that unless I get a certain number of people asking for something or saying that that’s important, or if they’re not a customer yet and they say that, “I need this in order to be able to sign on.” It’s a deal breaker to them, I generally push that off to the side in favor of other things that more people have asked for or are higher priority because it’s not something that is being asked for a lot, therefore, it’s just less important than those other things. I’m not going to spend my time building something that very few people are going to use or it’s not going to be used very often. Instead, I’ll spend my time working on those things that people are going to use a lot, that are getting asked for a lot because those are clearly most important.
The other ones are stuff that they’re nice to have sometimes, it’s just people are asking a question because they want to know the answer to it, not because they’re actually interested in using it. That’s an interesting side note that I’ve discovered is when somebody asked you something, a great way to deflect the question is to ask him if it’s important to them. Sometimes they’ll just say, “No I was just asking, I was just wondering.” If you have that developer mindset where how do I solve problem X that somebody just presented me? You can very easily find yourself going off into the weeds and trying to do something that’s going to take you a while to do when the person was just asking, they just wanted to know because they were curious, not because they needed it.
The last one is being able to provide real time results for people. This delves partially into reporting but also if you need to do any sort of complex calculations or you’re not sure how you’re going to get the data from one place to another and it needs to be done manually for the time being until you go to a point where you automate it.
This could be any sort of situation like if you have to deal with a government website, for example, and you have to feed data into it, those are notoriously terrible when it comes to APIs and being able to send data into them. A lot of times you have to resort to various hacks like using Selenium to automate a browser, to go plugin all the different fields and stuff. Instead of doing that, hire somebody to go in and type in stuff that customers have entered, you’ve made it easy for them to either import the data or put stuff in in a way that makes sense and then you have somebody that go in and type it all in.
Most people would say, “This is a SaaS application and that should be real time.” But it doesn’t need to be, most of the time when you’re looking at those types of things, there’s customer expectations about how long it should take and then there’s also what they really needed return to them. If the time period is a 24 or 48 hour window, it’s probably not that big of a deal. Unless your whole value proposition is that it is automated and very fast, in those types of cases you probably have to do all the leg work and automation upfront. But a lot of times you can get away with just pushing it down the road. Once it gets to a scale where you can’t handle it or it is causing you far too much to not have it automated, that’s when you go down that path.
Rob: Let’s take a look at three things that are difficult to get around, things that you’re going to have to implement upfront and the things that you should be focusing on. The first one are the core parts of your value proposition. Things like features, reports, if they’re absolutely needed, automation, if that’s really what your app does. Without this, you don’t really have much value. This is probably the core piece of finding product market fit and building something people want, you should be focusing on the features that are driving value for your prospects and customers.
Mike: The next one is probably a judgment call but I find that user impersonation is really difficult to get around. You can use screen sharing, so if somebody runs into a problem, you can get on a call with them using a variety of different tools and share their screen and look at what it is that they’re seeing. That type of thing is impossible to do without the other person being present and allowing you to essentially watch them as they login and go do whatever it is.
It’s a lot easier in many cases to have an impersonation mechanism in place so that you can flip a flag on your account or in the database directly and just say, “Hey, log me in as that person.” Then you will be able to see exactly what they would see. If they come back and they have questions about how do I do this or how do I that or why is this showing up in my account this way, it allows you to go into their account, take screenshots and then send them those screenshots or do a Screencast and explain to them what it is that they’re seeing. If you’re seeing data that shouldn’t be there, then it’s a lot easier to do it without the customer present and having you say why is this there? I don’t understand myself, we wrote it. You’re in a much better position if you have that impersonation ability.
Rob: By impersonation you mean like being able to login as one of your customers, is that right?
Mike: Yes.
Rob: I totally agree, this is a huge one. We call it ghosting, you ghost in as them. But it’s incredible to be able to see the app as your customers see exactly what they need. If you don’t have that ability, it’s like you’re digging through raw data that’ll send you a bug and you can’t reproduce it but as soon as you can login as them, that’s a big deal. This is something I would build very, very early on.
The third one that’s difficult to get around is not having any type of sales channel. You need to be able to get to customers somehow. Referrals can be one, this direct sales model, you could be doing outbound cold outreach, you could just have an email list of 50 people and you email them one at a time and you’re bringing them in. You need some type of sales channel to be bringing people in for this to be worth it. Until you get the feedback, you can get a little bit of revenue and you can start building something that you hope a broader audience wants.
Mike: Actually, emailing them individually, that’s what Bluetick does. It allows you to iterate through those people and email them individually as if it was coming directly from you and you can very quickly go through large numbers of people, personalized automation at scale. But I agree. It’s difficult if you don’t have a sales channel at all, you can’t do that with five people.
Rob: That’s Bluetick.io ladies and gentlemen.
Mike: Now we’re going to move on to general guidelines for deciding what to push off. There are a couple of different criteria you can look at. The first one is is there a manual workaround of some kind? It doesn’t need to be something that is quick and easy or automated. If it takes writing sequel and running against the database manually for an individual customer to do those types of things, then it counts as a manual workaround. It doesn’t mean that it’s easy but if it’s easier to do that than it is to spend a week or two writing code, then chances are good that you can start with that and not have to go through that couple of weeks of writing code that may not be used very often.
That leads directly into the second thing which is it’s not something that you or a customer would do very often. If it’s not used very much, then there’s no real point in automating it and writing the code to do those operations.
Rob: Another guideline for thinking about when to push stuff off is if it’s going to take a long time to automate. There are even things that happen fairly frequently that if it’s like two or three months of dev time to implement, you might still be doing manually or having someone on your team do manually a year, two, three years into your business. It’s always a balance. If you can build two killer features in two months or you can build this one background task that only happens once a week or once a day or five times a day, there really is a balance to human automation versus code automation.
Another guideline that leads right into is you’re not really sure what to automate. If you have some stuff that seems like it takes manual time but maybe you don’t know how to automate it or you’re not sure exactly how that would work, then it’s a good reason to push this off. What I found is things do become clearer over time. The more people you get, the more customers you get and the further along your app gets, things just mature and it becomes easier to tell how to automate things and what you should automate.
Mike: The last situation where you should consider pushing something off is if it’s a feature or a task that different customers are going to want different things or are probably going to want different things. This is where reporting falls square into this bucket but there are certainly other things where if there’s a presentation layer over the top of the data that customers might say, “I want to see these columns versus those columns. I want to be able to filter certain things out of the data right on the screen.”
Those are the situations where you can take the stands, here it is out of the box and we will get to those things down the road when they become more important or when enough people ask for them. But because different customers are going to have those different requirements or different needs around it, you can build a lot of customization around presenting data but people are going to want different things and it can take you a long time to build even just those individual pieces.
Rob: I think that about wraps us up for the day. If you have a question for us, you can call our voicemail number at 888-8019-690 or email us at questions@startupsfortherestofus.com.
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