Episode 159 | Business of Software 2013

Startups For the Rest of Us

Episode 159 | Business of Software 2013

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Show Notes

• Business of Software Conference
• Steve Pavlina: Get More Done in Less Time
• Steve Pavlina: Productivity
• Steve Pavlina’s Ultimate guide to productivity

Transcript

[00:00] Mike: This is Startups for the Rest of Us: Episode 159.

[00:03] Music

[00:10] Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.

[00:18] Rob: And I’m Rob.

[00:19] Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week Rob?

[00:23] Rob: The word is I’m one week past the public launch of Drip and it feels like a lot has happened during that time. Basically last Wednesday we launched the last 1,300-1,400 people on the email list and then it went live with the world. It feels like a good milestone. However, the day that I sent out the emails or about the day before, we started having some performance issues. I think we talked briefly about them on the last podcast and so I couldn’t relish in the victory of the launch because I was basically having to go in and like disable reports for people who had higher volume accounts which are our best customers frankly. It’s the people with the most traffic we’re seeing the most emails. So that is bittersweet.

[01:02] But within two days we went to a new server, got a new AWS instance with an outrageous amount of RAM, moved the database over the middle of the night on Friday night. And at that moment, everything came back up and it was super fast. That was when it was literally 1 AM Saturday morning, that’s when I finally had like the victory rush of we’re done, we’re launched and stable. And then I popped off this quote today to Derek and he thought this was fantastic when my app is unstable, I’m unstable and I’d like to put that in a t-shirt at some point.

[01:37] Mike: Very nice. Well it’s nice to be able to have those performance problems and then you already have the customer signed up and be able to turn around and invest in a matter of infrastructure for that but it kind of sucks that you have to go through all the stress and effort of moving everything over just because you end up with those performance issues.

[01:54] Rob: Yeah. I agree. I mean it’s this balance right? Because the server we moves to is going to amortize out over the course of a year, it’s going to be between $400 and $500 a month for the database server. That’s what we need to sustain growth, what I expect the growth to be over the next year and I wouldn’t have wanted that six months ago. That would’ve saved us all the headache but we would’ve just been dropping tons of cash along the way. This is now the second server we’ve upgraded to. I think this is the beauty of these kind of pay as you go models. You can scale up pretty easily. You just have to have that 20 minutes of shut down time where as long as your database is small enough because it’s only 2 or 3 gigs still, you only need 20 minutes to do it.  And if you can get to it quick and you have an agile team, this is the startup way. Right?

[02:39] If I was at a big enterprise, I would’ve just dropped the coin six months ago and gotten a 68 gig instance for the database but it’s just not something I want you to – you want to spend when you have zero customers using it but it’s totally worth it when you have a couple hundred people actively pounding on this thing.

[02:54] Mike: Well, I’m testing out a new task prioritization strategy. So I’ve had so many things coming in like – I think I’m like most people where I tend to use my email box as – I tend to use Gmail as kind of a task list. I try to keep it under 20 or 30 things but lately it started to grow and become a little bit more unwieldy and getting into that inbox zero has just not been feasible lately. So what I started doing was I picked up a couple of eBooks. They were written by Steve Pavlina. We’ll link to his blog on the show notes.

[03:28] One of the books that I picked up was some advice on productivity and one of the things that I took out of that book was he actually sets up a system so that he has A tasks, B tasks and C tasks. And anything that’s an A task is stuff that will generate some sort of return or still be usable in five years. And anything that’s a B task will have like a life expectancy of two years. And then anything that’s a C task the benefits are going to be no more than 90 days in the future. So anything that’s like paying bills or doing invoicing or sending out receipts and things like that. Those are all C tasks. They need to be done but they’re not necessarily important and they are not going to benefit you 90 days down the road really. I mean obviously you’ve got to pay your bills and stuff versus things like working on your core products or building marketing material and things like that, those could be B or even A level tasks.

[04:19] And he actually suggest that you spend at least 50% of your time on A level tasks and no more than I think around 20% of your time on your C tasks and then everything else kind of gets shuffled in with the B tasks. So at a bare minimum, you’re spending at least four hours a day on you’re A level task. At most you’re spending you’re a 1 ½ on your C level task and then any left over time gets allocated to your B task. And it seems that I kind of supported out my task list according to that strategy and I’m kind of working through it right now and it seems like it might actually work out because I could take a look at anything that’s a C level task. My very first thought is can I send this to somebody else to do?

[04:59] Rob: Yeah, that’s a nice way to do it. I’m actually intrigued by this because what I have is a queue in Trello that pretty much are my tasks and I just have a single queue and I keep it in order and I try to go down that queue as best as I can. And then of course stuff gets assigned to me in FogBugz for support and stuff gets emailed to me in Gmail. So I really do have three queens that I’m trying to merge and manage and I try to get everything into Trello prioritized and that handle it but I don’t like killing 20% of my time just trying to manage the queue. So sometimes of course you just go into email and delete a bunch of stuff and reply quickly without adding it into Trello.

[05:39] So I like the idea of having an A and a B and maybe a C because then those tasks that I’m always prioritizing at the bottom that never get done, a lot of my probably B and C tasks are on there, you actually give yourself permission to go work on them. Right? These are less important tasks but they do need to get done at some point. What I’m wondering is what tool are you using to manage this? Are you putting everything in a spreadsheet or is there a better way because you still have an email inbox with 20 things in it. How do you know what’s an A, B and C?

[06:10] Mike: Well I haven’t really gone through my list of emails yet but I’ve basically been keeping track of a list of what I classify as my A, B and C tasks and some of the emails in my mailbox map back to these. So for example I have pay bills on here. I have send work to one of my contractors, that’s a B level task because it’s more important that I keep him busy because the things that he’s working on are going to contribute to the business in the future and they will have that impact down the road.

[06:38] And then there’s things like soliciting more users for Audit Shark, validating and testing some of the Audit Shark code and working on that core engine I’ve classified as A level tasks. A lot of the emails are in my mailbox mapped back to those high level things. It’s not like I’m going through my email box right now and just saying this is an A level email, this is a B level email or something like that. I’m keeping track of things separately on an index card because I tend to use a lot of index cards just to keep track of things that I have to do that I need to do today for example. And what I did was I just mapped out a bunch of things that I have on my list of things to do and I just put A, B or C next to each of them.

[07:13] Rob: Got it. So for you, it seems like a shorter term thing because that’s not going to work for tasks or like some weeks or months to have them on index cards right? Because then you’re going to write it all the time?

[07:23] Mike: I mean in a lot of times what I’ll do is I’ll throw a bunch of tasks on an index card and my goal is to get through that entire index card and then I just throw it away and that’s the whole point of having an index card because you want to get through. It tends to be a short enough list because you can only fit so much stuff on an index card that it helps you knock those things out. And if you absolutely need to, you can take things from one index card and copy them onto another and put them on the top of the list or something that but I try to avoid doing that if I can.

[07:50] Rob: I did that for a while. I didn’t like it. I felt like a lot of wasted time. It was hard to reprioritize. Like I said, when Trello started and I started using it, I’ve been sold and I’ve been using it since. I have maintained inbox zero. I got to inbox zero right before going to Europe and then I was gone for a month I came back to hundreds and hundreds of emails and I’m down. I think I’m at inbox 5 as of the start of this recording. I’m pretty close to there and I do either – I am able to get most of the things into Trello. What’s nice is that Trello now has an email address unique for your board. So in Gmail I can just hit forward and I list it as the contact name is Trello and so I type in Trello and hit send and it goes into at the top of my Trello board.

[08:32] So then when I go into Trello to look at stuff, I’m able to reprioritize things and then basically I have to go back into Gmail and find it. I mean that’s where the kludge part comes in. I’m using these two systems to manage that single thing but for me so far it’s working. I do think there’s a better way. The better way I think would be to make a cross between Gmail and Trello. Right? Make a plug-in where you can reorder things in your Gmail inbox and add notes and add things just like Trello but do it to Gmail emails right there. You can add metadata and reorder so that they’re not just sort of by date. That’s what I think the best option would be.

[09:09] Mike: Switch over to using something like FogBugz or some other sort of “bug tracking” tool or customer support tool where like you send and receive all your emails out of there and that allows you to add in all those notes. But that’s a total hack as well.

[09:22] Rob: It is. But I can see that working. I wanted to call out a website called beamcalculations.co.uk. This is a long time listener and a guy who read my book and implemented a lot of the stuff that we talked about. His name is Kevin Taylor and he’s at beamcalcs on Twitter. He said Rob Walling, the site I have beamcalculations.co.uk after reading your book, it’s been live since September 25^th and it’s had 16 sales. Great. Thanks to you. So just wanted to kind of call him out as a nice success story, someone who was able to launch and he’s certainly not going to retire off this effort but it’s that stair step approach. It’s getting something out there, getting people to use it, getting your feet wet and getting some experience marketing and actually getting a few dollars in your back account. And once you get that feeling, it’s addictive. Like launching is addictive. And so getting this site out, that will lead to his next idea and his next one and they tend to get bigger over time so congratulations to Kevin on launching.

[10:20] Music

[10:23] Mike: Since you were out during the middle of Business Of Software, I figured we’d go over some of the takeaways form Business Of Software this year.

[10:30] Rob: So you’ve broken it up into you have the hallway track and then you have a few speakers that you took away quite a few things from it sounds like. So why don’t you lead us through that?

[10:39] Mike: The first one was the hallway track and this is just randomly talking to people in the hall and various conversations whether you’re sitting down at lunch or you sit down in the amphitheater and talk to somebody next to you, I was talking I believe it was Brett Palumbo who was telling me that one o the things that he’s found is that when he’s trying and to contact people, the best way that he’s found is to use LinkedIn.

[11:04] Within LinkedIn, you can send direct messages to people. I apologize if I misquoted the numbers and stuff but I believe it was something in an excess of 70% or 80% in terms of the open rate and response rate was something along the lines of 50% for people who are receiving those emails which I think is a far cry from what you would typically get if you’re just cold emailing people or sending out marketing newsletter and things like that.

[11:27] Rob: Well the interesting thing here is you have the social graph so you’re probably tied to this person either directly or at a second level or a third level connection so it’s not a super cold email. There might be a little bit of warmth there and I’d be interested to hear more detail about this maybe I’ll drop Brett an email. But I’m curious to hear how you do this and don’t come off as spammy or solicity or just out of the blue salesy type thing. I know that there’s a balance here and I’m sure you can get there. I’m just curious what the lessons learned are there.

[11:55] Mike: Yeah. I mean we talked a little bit about that and it was more about when you’re first reaching out to somebody you don’t necessarily say hey I’ve got this product to sell you or that I think you might be interested in. It seemed like the best way to reach out to people was to ask them questions like hey I noticed that you’re listed over here or you’re involved in this organization. I’d love to have a conversation about and talk to you a little bit about it or something along those lines.

[12:16] Rob: Very cool.

[12:17] Mike: So the next one was from Rita Gunther and it was very interesting because Rita’s talk seemed very reminiscent of Clayton Christiansen’s. One of the things that Clayton talks a lot about is disruptive technologies and how companies that are large tend to be attacked from underneath by the smaller companies because they’re not really paying attention to them or it’s a very disruptive technology and they don’t feel like it’s going to be relevant in their space. He kind of relates that back to the story of IBM  how they were initially selling these giant mainframe computers and then switched over to mini computers while all their competitors went out of business because they spun up this new division in this completely different part of the country.

[12:58] And a lot of the things that she talked about was how to identify some of the markets that are right for new competitors and she said basically find companies that have hostages, not customers because those are the people who are locked in and the only reason they haven’t gone to find another provider is because they can’t.

[13:15] Rob: Yeah, I’ve talked to a few people who are interested in Drip, some guys  I know and they’ve talked about some larger enterprise marketing software that they’re using. They’re saying that they’re basically not able to sign up without a one year contract that they are essentially hostages for a year. That even if they just want to try it out, I mean you get a two week trial or a three week trial. But after that, you either pay for a year or you can’t use the software.

[13:38] I know sales force is like that and I think the larger enterprise like hub spots that is all annual and I understand that it’s better for their business for their retention and everything but it really does make your customers at some point start to turn against you. You see these companies early on where they have big fans and I think sales force signups have both been in that situation. Intuit was like that when they already had their tax offer. That was really good and everybody loved it. And then at a certain point it feels like they’re just trying to milk money out of you and they have you locked into their ecosystem.

[14:08] So I like the way of thinking about that. If you spot a company or an industry, everybody’s a hostage. I think credit card processing, payment gateways and all that stuff definitely was like that and Stripe came in and said everybody’s a hostage, how can we improve that? I like this approach.

[14:24] Mike: The credit card companies is the one that she specifically called out because nobody really likes dealing with those companies but they kind of have to because they really just don’t have any other choice. And as you said, until Stripe came along and then all these other payment providers came out and started offering other types of solutions so you don’t necessarily need to have a payment gateway anymore.

[14:43] Something else that she talked about was in identifying some of these markets is if the bosses at these companies have a tendency to say one of three things, either 1) I don’t want any surprises. 2) Don’t bring me bad news or 3) Don’t bring me a problem unless you have a solution. Because a lot of times, those are the types of companies especially for number 3 if the boss says I don’t want to hear about problems unless you have a solution for it. Well, if you have a company that can come in underneath them and basically get the from down low like from below their price point or something along those lines, if you don’t have a solution for that, then what will happen is there’s that sort of culture in that company, nobody’s going to bring it to the boss’s attention that it’s going to be a problem for them because they don’t have a solution. So if the boss has kind of made that mandate, nobody’s going to approach him until its way too late and you basically already done the damage to them.

[15:34] Rob: So how would you know that about a company? You’ve had to get some type of anecdotal evidence or you’d have to have some type of business relationship with them at your day job and realize how screwed up they were and then kind of go on the side and build a product to compete with them.

[15:46] Mike: Well I think you can do it a couple different ways. I mean 1) you could certainly probably glean some of that information out of just the way that they do business and I think some of that would trickle down into their customer service but definitely talking to former employees would probably be just kind of a no brainer to me. I mean if you can find some ex-employees of the company and kind of ask them questions about that especially if your already looking at going after a particular market and you happen to run into one of them and you start asking them questions like that and say hey, how did you analyze your competitors and what source of things did they do internally and how it was operated.

[16:24] I almost feel like the larger companies that you suffer some back lash like you were saying before about sales force and some of these other companies where they’re really locking in their customers I sort of suspected it in some ways their internals of the organization are probably run very similarly where it’s just very heavy handed from the top. And you’re expected to follow orders not necessarily be nimble. It’s like they want you to do what you’re told to do and not necessarily think out of the box because they’re trying to drive revenue in a way that they know how versus look for alternatives and other solutions.

[16:57] Rob: I think there’s that part where you can over optimize your funnel or you can over optimize your retention and you try to push the churn down for typically its reason of going public or trying to please share holders or investors often find that founders don’t want to do this kind of stuff. But you hit a point where in my opinion you can just push it too far and that’s when you start pissing off customers and there starts being this movement away from you and that’s where competitors can sneak into a market, identifying companies who have hit that point are good markets for us to enter.

[17:31] Mike: The next person I took a bunch of notes from was Dan Siroker from Optimizely. And he essentially had five different lessons that he wanted people to take away from his talk. And the first one was defining quantifiable success because if you’re not familiar with Optimizely, it’s essentially an AB testing tool for your website and the first lesson was defining quantifiable success. If you’re running any sort of test, you want to understand what are the success measures? How are you going to know whether or not a particular test was successful? And some of that with AB testing just comes in terms of knowing whether a test is statistically significant or not.

[18:05] The second lesson was that less is more. And if you reduce the number of choices the people have, then you can get a lot more return on the choices that you’ve made to implement. So there are several examples that he put out there where for example the checkout process, what people would do is they would rip out all the site navigation. Some people take this for granted that oh, that seems like a no brainer but then there’s other people who look at that and say oh, I wouldn’t have known that would’ve given me a 17% increase in my conversion rate for example. He made sure to call out some things like that.

[18:37] The third lesson he brought was that words matter and he showed several different examples where he was putting different types of text on buttons and asking the audience to kind of weight their opinion on what they thought would do better. There were a lot of people in the audience I mean I would probably say it was 60% or 70% who were wrong on most of these. That was something else that was very interesting as well because words really do matter and he was able to statistically show that there were certain types of words that would show up on buttons that would have a huge increase in the number of click throughs.

[19:10] And in addition to that depending on the audience for example if somebody was a new visitor for the website one set of text might convert better versus somebody who is coming in from a mailing list or had purchased before a different set of text would have a much better conversion rate.

[19:25] Rob: You know, this stuff can get complicated and I think that if you are sitting her listening to this and you’re kind of licking your chop because you have a successful business and you’re looking to squeeze another few percentage points out of it then this kind of – its advanced testing and analytics is what it is. This type of stuff is awesome. If you’re just getting started and you have 1,000 or 2,000 uniques to your website or you’re still building your product, then don’t worry about this yet. I mean AB testing is far off for you at this point and certainly these high, high end ultra optimizations as I would say.

[19:59] Because yeah, if you have traffic let’s say you have a million uniques a month, then it is absolutely worth optimizing every button for like you said, the traffic source like actually changing the text on buttons for traffic source. Amazon.com does this. Google does this. I mean those high volume scaled sites certainly it’s worth it for them. But I advice a listener to not go down the rabbit hole of worrying about stuff prematurely. Basically it’s kind of like premature optimization in that sense.

[20:28] With that said, if you do have a successful business, you have something that’s maybe allowed you to quit your job and you haven’t gone through a round of optimization of tweaking words, of testing different approaches, of reducing choices kind of following the things that Dan talked about in this talk, it can do pretty amazing things for you very quickly. Double digit jumps in conversion rates. Double digit jumps in sales. Even just having someone that you trust come and do a 10 minute screen cast review of your on boarding process and walking through that can give you 20 different ideas to implement and could dramatically increase the number of people that actually use your app.

[21:05] We’ve gone through this already 2 or 3 times with Drip. And one of the big reasons is because we’re emailing that mailing list with several thousand people who I knew were going to come and hit these pages, the pages just some weren’t converting and a lot of people weren’t on boarding early on. There were a lot of questions and so we’ve already gone through their reduced choices as you’re trying to get setup. And I have a lot of different options for getting setup and now it’s basically widdled down to like 2 ½ options. There’s a lot of value to be add here.

[21:33] Mike: The last two pieces of advice that Dan had had is seeking the global maximum because a lot of people have a tendency when they’re doing AB testing to tweak little things as opposed to doing wholesale changes to a page or to a site for example just because it’s so much more difficult to figure out what piece of that redesign for example impacted the conversion rates or was it just one thing? Obviously a lot of things changed. It’s very difficult to pin it down to exactly what it was. But you may very well be missing out on a lot of sales for example if you don’t do this and you end up with a local maximum for your click through rates because you’ve got all these things who are kind of leading you down a path to an overall 8% increase and conversions but if you do the complete site redesign then you may very well find that something completely different could give you 20% lift instead of just an 8%. But it is a huge risk if you start doing those things.

[22:26] Rob: Yeah. You also need a lot of traffic to do that. I’ve only had one site that I’ve ever been able to actually test two very different versions of a page and not just test them against on another but tweak both of them and do essentially multi varied testing over time and actually raise both of their conversion rates and then seeing which one went out. And that’s how you’d find the global maximum. But it is 1) super time intensive and 2) you need a lot of traffic or else it just takes too long. So there’s another thing I’d say save for later unless you do have a lot of traffic coming your way.

[22:59] Mike: The last lesson that we had to share was just start doing AB testing say which as Rob just said you really do need to have a lot of traffic in order to make this worth it. I mean part of Optimizely was really built out of things that were learned from the campaign trail from Obama’s 2008 campaign towards the white house. So there’s a lot of examples from the book that Dan points out. He gave a copy of his AB testing book to everybody in the audience which has a lot of the examples from that campaign and from various other things that they’ve seen and other companies that they’ve worked with. But you’re right. You do need a lot of traffic in order to be able to do some of these things.

[23:39] Someone else I took a lot of information from was Scott from Atlassian. There were several different things that he put out there one of which was internally when they’re developing features, I thought it was really interesting that what they do is they create customer personas with very specific attributes and goals and job titles for those customer personas to help the team understand how the software is going to be used out in the wild. So you’re not just building feature X. You’re building feature X that is going to be used by I don’t know, Sally in accounting who’s job title is CPA for the company or something or maybe she’s a CFO and she’s going to be the one who’s going to be used in this particular feature so she needs to be able to understand it and needs to relate directly to her job. Whereas Dan who’s over in the marketing department is completely not going to care about that feature but it’s going to help Sally which will indirectly help him.

[24:30] Another thing that they do to help keep the team not just interested but on the same page is to explain why those features are useful rather than how great those features are at a technical level because it’s really important to end user that those features work and help them do their jobs. They don’t necessarily care about how technically challenging it was to implement or how much goes under the covers. They want to know what helps them do.

[24:57] Rob: Benefits, not features right?

[24:58] Mike: Yeah. Benefits, not features. Something I found really interesting that Scott said was that he felt like at least 50% of the people there at the conference should go back to the office and fire someone. He said that everyone knows there’s someone they shouldn’t keep but they do because they don’t want to confront the problem. It was interesting that somebody would put that out there in a way that that they did.

[25:18] Rob: Yeah. There’s a book called Fire Someone Today. And I haven’t read it but I’ve had it recommended to me and it’s the same premise is that you should fired someone because you’re not facing up to something. I would think of it as like letting someone go who’s underperforming. But it’s like if you’ve grown to 10 people and you’ve never let anyone go, have you really hired that well or I can see his point that maybe you’re just ignoring the facts that are in front of you seems probably less allocable to me.

[25:42] Mike: There were several reasons that he pointed out why you might want to let someone go and one of them was they were a bad culture fit, bad performance was another one but he also commented that sometimes the company just grows past people. I think this really heavily applies more to Atlassian than a lot of other companies just because at this point Atlassian is I think 700 or 800 employees. And 10 years ago they were just a couple of guys working on a product.

[26:06] And it’s a very different company when you’ve got 10 people versus 100 people or very close to 1,000 people. And somebody who is there in the first year, the second year, they may have been very, very comfortable leading a team that was only 5 or 6 people but then you get into that problem where some people, if you’re just not cut out to be in a company that has grown to the point that it is, then maybe it’s time for you to either move on or to move to a different role inside of the company and that’s something else that he commented.

[26:36] He’s like just because they’re not a good fit for their current role anymore doesn’t mean you can’t look elsewhere inside the company. There may be other things that they can do and they will certainly be appreciative of that fact but nobody really wants to come to their boss and say hey look, I’m really not a good fit for this company anymore. They’re going to go out and look for another job before they start doing it.

[26:53] Rob: There’s a book called What Got You Here Won’t Get You There. And it applies more to growing a company as a founder and the skills that got you here and the marketing approaches and all that. If you’ve 10X then it won’t take you to the next 10x. You have to change your tactics. But I think that applies equally to growing an organization.

[27:12] Mike: Yeah. I said that it’s a very different culture when people are getting hired without the founder’s involvement because the culture in the early days very much revolves around the founders. And then once the founders are no longer doing all of the hiring, that’s at the point where you have to have core values for the company and things like that where you have to have written down what your culture is for the company in order to be able to scale that out to other people.

[27:36] Something Scott had talked about was he said in terms of pricing you get eaten from below, not from above which kind of related to Rita’s talk about how to find markets that are right to be plundered. What he did was he looked around some of the other companies that were selling similar types of software and he realized that their software was actually priced significantly higher than their competitors. So what he did was he essentially looked around and said okay, well how can we combat this? How can we fight this sort of a pricing strategy that could ultimately be your down fall?

[28:09] And what they ended up doing was they created these very small team packages for people and they sold easily six figures worth of software within a couple weeks and all that money I’ve donated to charity so it wasn’t necessarily about the money for them. But it was just interesting how in demand that software was based on the small team sizes. There’s an extra free for like 5 or 10 people. I think its $5 or $10 or something like that.

[28:35] Rob: I think they do Jura this way or they do a bundle of Jura which is their issued tracker with something else. And like you said, it’s like thousands of dollars of tools but they’re basically trying to eat up the market. They’re almost going freeman basically. I guess it’s on premise so it’s like $10 and you just bought a license to it for up to 5 or 10 people. They’re just trying to destroy the lower end market because that’s not what their bread and butter is. And I’ll say it gives them a competitive advantage because it allows them to get people on board with their tool and then as that company grows and then hopefully they’ll be more likely to use Atlassian stuff rather than start with some Saas competitor who just up sprouted and has a couple million funding who’s also trying to take that same market share from them.

[29:19] Mike: Two other points that Scott had made were both about how to price your offerings because they do have a hosted solution and they do have an on premise solution that they give. The point that he made was that when you sell something that is more valuable over time, use a subscription model. And if you sell something, it becomes less valuable over time, get your money upfront.

[29:39] Rob: Do you have examples of something that becomes more valuable versus less valuable? Did he bring up any?

[29:42] Mike: He didn’t specifically but think about this for example, a bug tracking system. If you have a bug tracking system, over time that gets more valuable to the customer because over time, as you add hundreds of bugs or thousands of bugs and cases in there, you don’t necessarily want to lose all that history. So moving to another product at that point, that product that you’re currently on becomes more valuable to you because it has all of that history.

[30:08] Now if you look at something like an eBook, you’re essentially delivering all the value upfront as the person learns from that and consumes it. There’s not really anything else. So getting your money upfront is obviously the natural course for that. I don’t know if we necessarily think about those types of things when we are putting together the offerings, the easiest way to explain that.

[30:30] Rob: Perfect. Those are good examples. So in terms of BOS, you’ve gone every year for the past 3 or 4 years. Do you feel like it’s changed for you or are you still getting the same value out of it that you always have?

[30:41] Mike: It was really high for a little while and then it dropped down a little bit and I think it started to pick back up again.

[30:45] Rob: Got it. So this year was perhaps better than last year.

[30:48] Mike: I would definitely say that this year is better than last year. And I think that part of that was just because the arrangement of the talks and stuff were – they had this back at the seaport hotel so there’s the amphitheater.

[31:00] Rob: It’s also smaller now right?

[31:01] Mike: Yeah, they cut a bunch of people from it. They didn’t sell nearly as many tickets this year as they did last year. I think last year they sold round 450 people. I think this year was around 350. So it’s definitely smaller but it didn’t necessarily feel any smaller this year than it did last year.

[31:17] Rob: That’s interesting. Yeah, because you and I have had some conversations about selling a few more MicroConf tickets like maybe 20 more than last year. Then just growing a little bit and allowing us some flexibility to keep increasing the value of the conference and my gut is that it’s not going to change the feel of it. But the first year I went to BOS it was 200 or 225 people and so for it to be 450, that’s a very different conference.

[31:44] Mike: Yeah, definitely. It just felt different last year to this year. I felt like this year’s conference probably delivered more value than last year’s conference.

[31:52] Rob: That’s good. I haven’t been for the last two years. This year was because I was in Europe. Last year I just opted not to go because the year before, I hadn’t gotten very much out of the conference. I mean it was disappointing. I’ve always been like BOS has always been my number one conference. Three years ago was a little less than two years ago. It wasn’t as good as they wanted it to be so I haven’t gone. Sounds like it has potentially reverted course in terms of the fact that it’s smaller now. I do think that the hallway conversations are probably going to be the bulk of the value and I just need to come to grips with that that I’m basically using it as a reunion to see a bunch of MicroConf Vegas people halfway through the year and that’s okay but I’ll probably focus on that rather on than on the sessions.

[32:34] The sessions and the speakers that they’ve had are for such large companies like hub spot’s going public, Atlassian is has 700 employees. It’s very different than what it was 3 or 4 years ago for someone like me who never plans to go there, go to that level of having a company that large, I’ll go for the hallway track and meet up with people who I know from MicroConf.

[32:55] Mike: That was another interesting thing that I found is there were probably about 30 people there that I knew from MicroConf or like the Micropreneur Academy. So there were a lot of hallway discussions about various things that people were working on or things that we learned or different techniques. And it wasn’t so much focused on the talks and what we were getting out of them as it was like the other things we were doing. So it was very much as you said kind of a mini reunion halfway through the year.

[33:21] Rob: Yeah and that’s a nice way to do it. What’s cool is you get in those conversations and you say what are you up to? How’s Audit Shark doing or what’s working for you with your product? And then someone says I did this crazy campaign on whatever and you’re like I totally need to try that or someone said hey, I had a marketing idea for you and its integrated with so and so, it worked for me. Those are the tips that will make a difference in your business.

[33:42] Mike: I think the last one that I want to bring up is from Greg Bagas and I apologize because I know he listens to this show so if butchered your last name, I’m sorry. He had a very good talk that and something happened I’ve never seen a Business Of Software before but he gave his talk and it was on entrepreneurs and depression. It was related to his struggles with ADHD and being bipolar, he got a standing ovation at the end of it. I’ve never seen anyone at Business Of Software get a standing ovation before. it was a very heartfelt talk and it brought to light I think a lot of issues that most people just don’t talk about in the entrepreneur community because building a business is hard and there’s a lot of struggles that people go through. And for the most part you tend to be alone.

[34:23] If you have employees it’s not like you’re going to talk to your employees about certain things and who else are you going to talk to about them? It was very interesting to hear about his story and have somebody get out there and talk about that particular topic.

[34:37] Rob: Yeah. Bravo to Greg. The video has already been released to the public if you go to businessofsoftware.com it should be somewhere around there. I think sharing a story like that is a really big deal and I think it’s helpful for a lot of people. This issue is coming up more and more. I don’t think it’s going away. These are successful and failed founders I’m talking about very real things that come up in the struggles of just starting a company. I think it’s helpful and I also – there have literally been suicides of venture funded founders who the pressure just gets to them or the stress just activates something in them and this is not something that I guess is uncommon and is kind of coming to light.

[35:15] Talk to Sherry about it quite a bit, my wife, she’s a PhD in psychology and she has talked to a few founders who are experiencing this kind of stuff and she’s actually interested in the topic and we at one point talked about her doing some research and doing a talk on it. So I think there’s more to be said on this topic and I really appreciate Greg for kind of bringing it into light and sharing it in such personal way because I’m sure as I said it resonates with a lot of us.

[35:38] Music

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