Episode 381 | SaaS Marketing from Square One

Mike: In this episode of Startups For The Rest Of Us, Rob and I are going to be talking about SaaS marketing from square one. This is Startups For The Rest Of Us episode 381. 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: I had never realized that we say Startups For The Rest Of Us three times in the introduction.

Mike: Yeah. I stumble over it a little bit sometimes. I think you did it well.

Rob: It’s a long title. Yeah, I know. We should think about changing that.

But aside from that, things are actually going really well this week. As you know, I mentioned on the show before, Sherry and I have put together a book called the Entrepreneur’s Guide to Keeping Your Shit Together. Sherry was very much the first authored and the driving force behind this and I can contributed topics, stories, anecdotes, I did some of the writing, but for the most part it was Sherry writing. But super stoked to have it out, men.

It launched on Wednesday of last week and so far, sales have been good. We’re going with an all Amazon approach, which is interesting. It’s something I haven’t don’t before. It’s a trip because you don’t get your customer email addresses but the one click buy makes it so much easier for people to buy versus coming to your website and entering credit card and phone into a Stripe form or whatever.

So far two thumbs up. I think Sherry’s learning a ton. I’ve obviously been offering advice and helping draft emails and put the wrong link in the launch email, that was me in my own software. I said it though Drip and I told Sherry, “If it’s a bug in Drip, or it’s my copy paste error, I’m still screwed! I can’t even blame it on anybody. It’s my fault.” It wasn’t a bug in Drip. I just made a copy paste error and left the ‘h’ off the http for the book link. I had to resend the correction which I pretty much never done, ever in my launch career. I always triple check stuff and I was in too much of a hurry.

Mike: That’s funny. I was actually going to accuse you of writing only one line in the entire book and it was the little anecdote where it says Rob’s thoughts and then there is, “Uhm, no.” and then “and Rob.”

Rob: Yeah. Exactly. I wrote that. I also wrote a bunch of the stories in there. It was a fun project. You know what’s fun about it for me, was being able to contribute, I did more than just consult on it but the redrafts and the edit and help shape things. It was not the full burden. I was not the founder on this one, I was more like the board member, adviser or something. That’s kind of cool.

It’s also fun to see someone launch a product like this at this scale for the first time. Because you feel vulnerable, you’re excited but you’re not sure what to do, and you’re just stumbling along. I can just see all the stuff shaping up as she’s going through the process.

Mike: Yeah. I’m sure it’s nerve wracking for her too. When you first put something out there, especially with a book. I think with software there’s that layer of obstruction like, oh yeah, you created this but you’re in the background and the software is the thing that people are seeing. I think with the book, you’re putting your expertise out there as well and that can be a little nerve wracking, especially because you’re not sure how it’s going to be received, did you hit on the right pain points that people have, are they really the things that people are feeling. Not that you’re not confident, it’s just that there’s a difference between a small subset of people that you’ve actively worked with versus a much larger set, especially when you don’t know who those people are.

Rob: Totally. It’s always just vulnerable. I think vulnerable is the right word, when you throw something out and thousands of people in essence are going to wind up buying this book here and hopefully most of them read it. You just have to be prepared for thoughts and comments and that’ll be both positive as well as critiques. It’s just a lot to put yourself out there, whether it is with software or a book.

Mike: Yeah. I’m very glad that I got both the paperback version and the Kindle version because I had to fight my wife off for the book because she saw it and she took it.

Rob: Oh, that’s funny. Cool. Glad to hear it.

Mike: Yup. Anyway, we went through that over the weekends. It’s a good read, I liked it.

Rob: I was going to ask what you thought of it.

Mike: It touches on a lot of topics that have not been well talked about but they’re starting to and I think that Sherry’s probably a very big contributing factor to that just based on her talks at MicroConf and how well they’ve been received, but I think it’s a topic of discussion that people are a little bit more comfortable discussing now than they were 5 years or 10 years ago. It’s nice to have it now but I almost wish it was out there 10 years ago.

Rob: Yeah, I know. Absolutely, I wish I had this book when I started. If you don’t know what this book is about, it’s about how to run your business without letting it run you. It’s how not to spin out of control and be super stressed out and how to know yourself more, how not to burn your relationships, how to stay human, how to stay connected to people. She calls it like Founder Mental Health but I always think of that as like, I don’t know, if I’m not depressed, or I don’t have an anxiety, I don’t need it. But it’s not that. It’s just how to fight through and really stay sane and maintain solid relationship to not piss off your wife, and your kids, and neglect your family, and gain a bunch of weight, and go crazy. I was so freaking stressed running Drip and selling Drip, I wish that I had a resource like this.

If that sounds like you, or you think you might be encountering that anytime soon, you can search on Amazon, there’s a Kindle and a paperback version, Entrepreneur’s Guide To Keeping your Shit Together, and we’ll link it up in the show notes for sure. Sherry recorded an audio version and has submitted it to Audible but it is not approved yet. I’ll probably talk about that once it’s approved as well.

Mike: Very cool. I’m in the middle of working on my FemtoConf Talk and it’ll probably be something of a preview of my MicroConf Talk to be honest. It’s nice to be getting that much of a jumpstart on it. I don’t think that usually I start on my talks until probably a month or so before the conference. It’s like two and a half, three months out at this point. It’ll be nice to get that done in advance and then give a preview of it and see what resonates and what doesn’t and be able to go through it a few times in addition before a live audience as opposed to just getting up there and giving it in front of a live audience for the first time at MicroConf.

Rob: Yeah. I could see that. It’s really nice to be able to give a talk twice. I always give a talk better, almost always given better the second time.

Mike: And the other thing is paper spiders. If you enjoy pranks of any kind, go into the bathroom, and on the other side of the toilet paper roll, draw a giant black spider and then put it back so they can’t see it.

Rob: Really. Even though it’s just drawn?

Mike: Because you can’t see it until you flip the roll over.

Rob: Nice. Where did you hear about this?

Mike: I saw it online but I practiced that yesterday and my son was not pleased.

Rob: Yeah. That’s funny. Cool. What are we talking about today?

Mike: Today we’re going to be talking about SaaS marketing from square one. This actually comes to us as a sort of a listener question. I put out on Twitter a couple of weeks ago asking if there were any topics specifically that people wanted to hear about. One of them is from Phillip who’s asked, “How to start a product from scratch? After my MVP is ready, because growth hacks are everywhere but nobody talks about starting marketing from a blank page. No social media, no newsletter recipients, no SEO, nothing, zero traffic.” I thought we would go through this and talk though some ideas around where you would even start with that.

At the very base level, you’ve got an MVP, we talked about this extensively. If you haven’t done marketing before, you get to this point where you got a product to put out there, then you’ve done things wrong but I also feel like we just get a number of questions that are around this where people have already made that mistake and it’s too late to change it, so now what do I do?

We’re going to talk thorough where you start, different types of channels you can use, and strategies to put the product out there and try to make it into a success even if you haven’t started doing any of the marketing beforehand.

Rob: Sounds good. I know this is a common question. It’s something that overtime, if you listen back to previous episodes, and if you look in both of our books, Start Small, Stay Small, The Single Founder Handbook, or even blog posts. This is just such a common topic that we’ve covered but it’s worth revisiting every so often and trying to see if there is either new information or just to revisit for all of our edification and a reminder for all of us.

Mike: The first question to ask is where do you even start? I think that in a situation like this, you need to work a little bit backwards. The first thing to look at is knowing what’s your timeline and your runway look like. By this, I mean really what date is it that you need to be making x dollars and MRR, whether it’s $5000 a month or $10,000 a month. How much money is it that you’re spending on a monthly basis, how much do you need to leave your job, how much money do you need to recover in order to pay back a particular loan or something like that. What are the hard deadlines that you have set that you need to be conscious of? Then based on those things, what are their current pricing plans that you have, how many customers would you need in order to be able to meet whatever that MRR goal is?

Establishing this timeline really does two things for you. The first one is that it provides you with a required trajectory. How many customers do you need to add on a daily, weekly, or monthly basis in order to get there? And the second thing this does is it helps you to eliminate certain types of marketing channels, because if you have a really short timeline, some longer term marketing channels are simply not going to work for you so you can completely throw the out the window and focus on other things that are shorter. And they may not be repeatable or suitable but they will help get you to where you need to be.

Rob: I like the idea of this one. I think that as you get more experience, let’s say it’s your second or third app, or second or third success, I think you can get really good at determining these timelines, build timelines, actually building the product and then ramping up marketing and taking a half ass guess at it.

I remember that doc I put together for HitTail, it was like the marketing game plan. It wound up being somewhat accurate but I wasn’t as experienced as I was when we launched Drip in 2013. That doc, I put together this whole analysis of how many uniques I thought I could drive to the site each month, how many would convert to trial, how many would convert to paid, what the growth would look like. I mapped it out and it wound up being shockingly accurate. The only thing that killed us was we didn’t have a product market fit yet and so I underestimated churn.

When you don’t have product market fit, your churn can be 20%, 25%, so you lose a lot more people. If churn had been closer to what I thought, the growth would have been very, very much in line with what I was guessing at.

The one issue I have with this, with the thing that I think could be hard, if this is literally your first time, you don’t know any of the rules of thumb. You don’t know, hey if I asked for credit card up front, I’m going to get between 0.5% and 2% of visitors convert to trial depending on how appealing my site is, what the price point is, and all that. You don’t know if you’re asking for credit card upfront, you should convert between 40% and 60% of trials to paid users and then your churn should be pretty thing in the first two months and then drop.

It’s just all that stuff you can either learn from experience or you can listen to podcasts like this, when we had Ruben Gomez on the show, probably, 50-100 episodes ago, he and I threw out a bunch of rules of thumb exactly around this and it’s towards the end of that episode. If you want to go back and listen to it, I also put it in my MicroConf Talk last year or the year before. I just had one slide, the rules of thumb things I use to do it.

I like the idea of asking where do you need to get to because this is something investors would ask you if you took them. If you’re not taking investment, it is nice to think about where you’re going and not just go out and wander. I feel like if you don’t know where you’re going, how do you know how to get there?

Mike: That introduces the idea of having a fudge factor. The timeline that you can put together based on your pricing plans and how many customers you need and the timeline, that’s a best case scenario. You’re going to have to go over that. Let’s say that you need 200 customers in order to get to 10,000 a month, how many do you realistically need to shoot for? Is it 200? Probably not, because you’re going to have people who sign up and then decide that they are not going to become customers or they go through a trial and then they say, “This isn’t for me.” Or they just never even set up the software, or set up their account and do anything with it. There’s lots of people who fall into that category.

You have to overshoot by some margin but at the same time you need a starting point of some kind. This simple calculation of your timeline runway and number of customers is going to at least help put you in the right ballpark. That’s really what you’re looking for. How do I get in the right ballpark? How do I get started on the right path versus I’m not going to do anything because I don’t even know where to start.

The next step is once you got that information in mind, the next thing to do is to break out your plan of attack into the different types of marketing channels that you’re going to go after. These aren’t specifically marketing channels you probably find in a book that it would say that okay, these are all encompassing.

These are two that I thought would apply specifically to this type of situation. The first pair of marketing channel is sustainable versus unsustainable. It’s really just a broad categorization of the different types of marketing approaches you might try. And then the second one is inbound versus outbound efforts. There’s lots of different ways to categorize or classify different marketing efforts but let’s just focus on these two pair.

Sustainable versus unsustainable, the way I really put these into perspective or talk about these is that with sustainable, it requires some sort of systematic repetition over time. It’s usually harder to get going but they tend to have a longer life to them.

Some examples of this will be things like SEO, content marketing, blogging, email newsletters, video channels on YouTube, paid acquisition, etc. And then with unsustainable marketing channels, these tend to be one time or burstable activities. If it’s one time, typically you can do it once and then that’s it. An example of something like that would be listing your website on product time. You could do that once but the chances of you being able to do that more than once for the same application are probably pretty slim. You can come out with new features or subsets of things you could add on there but they tend to be things that you’re not going to do for a while.

And then there’s burstable activities like doing a podcast story. You’re probably not going to go on the same podcast over and over again but you could go to multiple podcasts and do it like a podcast story. You could answer a bunch of questions on Quora, you could do joint seminars with other people, you could do integration marketing. Again, that’s an example of something that you would be able to do one time but you’re not going to integrate with Calendly more than once for example.

Those are the types of sustainable versus unsustainable activities that I would look at and I will classify your marketing activities as one of the two. That leads us down the road in the inbound versus outbound.

Rob: Yeah. Some of the sustainable channels you mentioned, most of them require ongoing work but they’re like a flywheel, they’re this big heavy wheel that just getting going is going to take you months and months. It’s going to start yielding rewards maybe three, six, nine months down the line. But the longer you push it, the faster it’s going to go.

SEO is that where boy, you’re going to see nothing for maybe six months. Obviously, there’s ways to hack around that and stuff, I’m just setting some expectations. It’s like don’t expect a bunch of results right away. But if you start seeing results, then you just build on those and build on those and then they last for a long time.

As you said, the unsustainable are those one time activities that I do actually think so you have questions on Quora in the unsuitable. I’ve seen some folks take an approach where those get upvoted and they wind up being popular and they get a lot of SEO traffic overtime. It depends on how you do it. I think there are still some question I’ve answered on Quora that continued to get votes two, three years later. When you look at it, they’ve had thousands and thousands of views.

I think you need a mix of both but as I said, I think it was last episode, an answer to Craig Hewitt’s question. The one time things or the things I would do early on because they get you the big boost, they’re one time and they’re quick. Doing that joint webinar, if that gets you 10, 20 paying customers, you might not see 20 paying customers from SEO for six months or more. Right now, what you need is revenue. You need customers, you need people paying you. Once you have the people paying you, then you can use that money then to par lay up and reinvest it back into more joint webinars or you can invest in SEO content marketing, etc.

Mike: When I mentioned answering questions on Quora, it wasn’t so much that your traffic was sustainable, it was like you can’t answer the same questions on Quora more than once or it’s a burstable thing where you might answer 10 or 15 or 20 different questions and then you wouldn’t continue looking for more questions because there aren’t more questions to answer. You basically have to wait a while. That’s really what I meant by classifying it as unsustainable. Not that ongoing benefit from it is not sustained, but the activity that you do around it is just that one time or you do it a couple of times and that’s it. Does that makes sense?

Rob: Oh yeah, totally.

Mike: Again, I think as Rob pointed out, some of these things will cross over from one side to the other. It’s not very much black and white. Some things will cross over from one type to the next. That leads us over into inbound versus outbound. The way I separate or classify things as inbound or outbound is inbound is functions on the basis of attracting people versus outbound activities and marketing channels, they function on the basis of actively and proactively going out and contacting people.

Inbound would be things like the SEO content marketing where you’re publishing things and you’re trying to attract people to your platform or you blog or email newsletter, things like that, versus outbound which is you’re actively doing cold calling, sending out cold emails, doing outbound email prospecting on LinkedIn or doing paid advertisements. Paid ads is kind of a mixed bag as well because that flips a couple of different categories of these channels. That’s the main differences between inbound versus outbound.

When you’re early on and if your timeline is short, you want to focus mostly on the outbound efforts. The reason for that is because you need a lot more control over the activity. You want to be able to tie the activity that you’re doing to the number of people coming in because waiting for customers to come to you is not going to be enough. You could wait for months or years, you may not still get the number of customers that you need versus doing those outbound activities where you can essentially drive the conversation and you can go actively get in front of those people as opposed to waiting for them to come to you.

Rob: I agree. I think that outbound has become more and more prominent in SaaS. I think it’s become more prominent as the enterprise players or enterprise software has come in. If you think back 10 years, they were very, very few enterprise SaaS or even mid-market SaaS companies that were targeting mid-market and enterprise companies. In those fields, there’s a lot outbound. There’s a lot of outbound cold calling, is what it’s traditionally been.

I think when SaaS was mostly focused on the Fortune 5 Million as 37signals says, it’s so much more about creating content. It’s the Joel Spolsky approach, it’s the Basecamp approach, and those were the models that I think we saw and those are the models that certainly resonated with me coming over as a developer. I didn’t want to do the cold calls, and the cold emails, and the outbound stuff.

I see a lot of value in both, to be honest. Probably not cold calls myself these days but I think even if you’re bootstrapped, I think getting over the mental stigma of not doing outbound, I think is something that you’re going to want to at least wrestle with internally and not just focus on the SEO, and the split testing, and the content marketing. Those are the things that I was blogging about 2007, 2008, and they do still work but they’re not nearly as easy because there’s so much more competition.

If you want to get somewhere faster than I do think you’re going to a mix of inbound and outbound. Again, going back to HitTail, I did no outbound except for JV emails that I would do with folks, but with Drip, we absolutely did outbound cold emails and we did a lot of paid advertising both for HItTail and Drip.

Mike: Once you’ve established a revenue base or gotten to your initial goals, you can switch over a little bit. Or if your timeline is long enough because you’ve got a lot of runway to work with or you love your full time job and you don’t want to quit but you like doing something on the side, then it’s easier to wait for those longer term strategies to pan out. Basically, it gives you more options when you’ve got a longer runway or you’ve got a longer timeline.

At that point, things like concept marketing make a lot more sense because you can decouple the customer acquisition rate from the activities that you’re doing. You can do link building, you can create content, create videos for YouTube, all those different things because you have the time to spare. But if you are in a position where you want to find out quickly whether or not this is going to go anywhere, you need to push on those things and you need to do those outbound efforts in order to verify quickly versus waiting because you could wait for a very long time to find out, and you almost never know for sure. But obviously, if somebody posts a link on Reddit or something like that and you get 10,000 customers, yeah, that’s a pretty good stamp of approval. But the chances of that happening are so minute that it’s not realistic to even think about depending on those things.

I think with the things that we’ve talked about so far, the next question that comes to mind is, okay, all of this sounds great but where do I actually start? We’ve talked around the issue and I think to address it head on, the first place that I would start is looking at your personal network and seeing if there’s anyone in that personal network who can help you.

The prime example that I think I would point people to in most cases is go to your LinkedIn profile and see who you’re connected to, who you’ve worked with in the past, or go to your Twitter profile and see who you follow or who follows you and find those people, contact them, and say, “This is what I’m doing, this is what I’m working on. Is there a use for this either in your business or do you know somebody it could be useful for?”

There’s ways to go about it without seeming overly salesy. You can definitely just say, “Hey, I’m working on this. Can you take a look at it and give me some advice.” Or, “I’d like a little bit of help. What do you think that I should do?” Those are great places to start the conversations because it’s asking somebody for help versus, “Hey, can I sell this to you?”

That’s a much better starting point for conversation especially if you don’t have a good working relationship with that person or you haven’t met them in person before because then it opens the door for them to put themselves in a position of “expert” where they’re giving you advice. People love to give advice on whatever your new product is.

No matter what you built, people will always want to give you advice on it. It doesn’t mean that it’s good or bad or that it’s going to be exactly what you should be doing, but it’s at least a starting point for conversation. From there, you can branch out, find out who they know, see if there’s channels that they can promote it through, or if they’re just interested.

Some types of products are going to resonate very, very well with certain people and they may say, “Hey, I can’t personally use this but I have an audience that I cater to and they would love to take a look at this. Can we take a look at it and do a deep dive, or get on a call and talk about a little bit more, or maybe go through a demo?” That gives them a little bit more materials to work with than you just sending them a cold email saying, “Hey, I would like you to take a look at this and I think it might help your business.” Those conversations and discussions are going to get you a lot farther if you have some sort context with the person, try to help them to understand what it is that you’re doing.

Rob: That’s a good point. I think that if I was starting out today, some of the approaches that I would focus on early on, I would definitely be looking at paid acquisition. I’d be looking depending on your product, it’s going to be Facebook, or Instagram, or LinkedIn, or Twitter probably. AdWords is probably not going to work because it’s just too expensive these days. It depends on how much you want to get in to run the ads.

I know some people just are averse to it and I had someone doing some marketing for me at one point. I was mentoring and teaching him and he said, “Is there anything I can do aside from running ads?” He just really didn’t want to learn that. It’s an interesting opinion and perspective.

Some people want to do it more the viral approach or with content. You have to figure out what you’re going to enjoy. If you have budget to hire somebody, that’s great because folks who know how to run ads are going to be way, way, way better at it than you. But if you have to suck it up and you don’t have any money to hire someone, then obviously, that’s going to be an option.

The thing that I like about paid acquisition, man, is even in the early days, if it’s not profitable at least you’re getting people in there to try it out and you get some kind of feedback.

Another thing I would consider right off the bat of course is an email newsletter. Email has just been a critical part for everything I have ever done including MicroConf, and my blog, and selling books, and selling software, getting people to use SaaS. It’s just such an asset to have.

I don’t know these days that I would start a blog if I were going to try to market a new SaaS app. If I was going to do content marketing, I would probably take a different approach to it. I would at least debate whether the resources that I would need and the on-going publication, the on–going article cost would not be better spent doing more bigger content efforts. We did this with Drip, we started getting success, we had an ebook, and then I did an audio version of that ebook. It was about email marketing automation I think I was getting started with.

I think maybe we did a video course and we submit those to Producton, and we put it on Gumroad, and we sold a bunch of copies but we gave it away for the first few days and it got a bunch of traction through those. They were more one time bursts but they did help longer term with SEO because we had so many backlinks from these things. It’s an interesting thing to think about instead of publishing content constantly.

Is it an option to do less frequent content but just try to make a bigger splash? This is part of the thing that you see, let’s say Neil Patel or some of the other big blogger, content marketers moving in that direction writing. Even if they aren’t doing ebooks or package products that they’re giving away, they are doing this longer form stuff. It’s less content or fewer posts but they’re a lot longer form.

Of course then that leads you to SEO. If you know how to do SEO and you’re good at it, by all means do it. If you’re trying to learn it from scratch today, it’s going to take a while, I’m not saying don’t do it but it is much harder than it used to be and it’s going to be a big road up there, but if you can get SEO content marketing, email newsletter, and paid acquisition, if you get two of those working, you’re going to have a pretty nice growth engine.

In the early days of Drip, I just have alerts on Quora and when stuff would come up in the email marketing category or startup category, I try to jump in and answer those. I’m a big fan of podcasts tours. I have done them for years and if you can pull one off, I think there’s a lot of value there, for not a lot of time investment.

And then of course, join webinars if you do have the network. It all depends on what your unique asset it. If you’re really good at SEO, then go after that, if you’re good at paid acquisition then go after that, and if you have a good network then you can work that to get people to email you.

If you have none of these, one day, back in the day, all of us had none of those. You have to pick one, you have to start from scratch, you have to hustle.

That’s the thing is it’s never going to be as hard as this first app. When you’re starting it with no revenue, no customer base, no network, no audience, that’s when it’s going to be the hardest. That’s when you have to push the hardest. It’s only going to get easier from then on.

Mike: Something else I mentioned that goes along with what you said was that in those early days, when you’re trying to get the product out the door and get it in the hands of people, there’s almost no substitute for getting directly in front of somebody and talking to them about your products and what it is that you’re trying to achieve and how it solves the problem that you went after.

There’s a lot of credibility and trust that goes into signing up for a SaaS app these days. You can overcome a lot of objections just by having a conversation with somebody. Whether it’s a phone call, or a webinar, or one on one demo through a Zoom account or Skype or something like that, you can overcome a lot of trust issues just by having that one on one conversation with somebody and answering their questions. Your website doesn’t need to look fantastic, you don’t have to have a great onboarding experience.

You can hand walk somebody through your onboarding and talk them through every single question they have and the information you’re going to get from them about what concerns they have or just the questions that they ask are going to be very valuable to you and being able to come up with answers that will not only answer them but also answer everyone after them who’s going to have the same types of questions. If they ask, “How do I use this piece over here?” You know that that’s probably going to come up for other customers. Or if they say, “What does this button on the bottom right here do?” If it’s got a weird icon, they may say something to you. If they do, you can use that to make the product better and hopefully reduce the number of questions which ultimately reduces the friction which helps people move through the sales pipeline a little bit better.

Yes, it’s tedious. It takes a long time to get through that but the insights that you’re going to get from that are massive. It just helps you move things along. It is slow, it’s a slow process but it does work over the long term. You just have to walk through every single step of it.

Rob: 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 Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening, we’ll see you next time.