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In this episode of Startups For The Rest Of Us, Rob and Mike talk about soft skills for entrepreneurs. They define what soft skills are and list 5 of them that you need to develop as an entrepreneur.
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Mike: In this episode of the Startups For The Rest Of Us, Rob and I are going to be talking about soft skills for entrepreneurs. This is Startups For The Rest Of Us episode 394.
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: I’m Rob.
Mike: We’re here to share our experiences to help you avoid the same mistakes we’ve made. How you doing this week, Rob?
Rob: I’m doing pretty good man. I was thinking if folks were ever interested in having two episodes of Startups For The Rest Of Us each week, they can’t quite get that. You and I don’t have quite the time to do it, but I’ve been guest hosting on The Art of Product Podcast with my good friend, Derrick Reimer.
While Ben Orenstein is in Hong Kong, we’ve done, I think, two episodes live but we’ve recorded a third. There’s three episodes in a row where it’s us talking about launching products, theories, how to stay creative, how to build the right features, and how to validate an idea.
Derrick’s in the middle of building and validating his Slack competitor, called Level, so I want to call that out, Art of Product Podcast if you are interested in hearing more in the same vein. Obviously, it’s not the same because Mike’s not on, but it is in the same vein as this type of show.
Mike: Awesome.
Rob: How about you? What’s going on?
Mike: I was talking to Frank Denbow. I don’t know if you remember him. He came to the first MicroConf and he was the subject of the hot sauce incident all over his laptop.
Rob: That’s right.
Mike: I need to remind him of that. I had a call with him earlier this week. He is putting together a small conference in New York City called Inflection. It’s aimed in helping people build a profitable company. I thought that I’d mention it on the show just in case there was anybody who is interested.
It’s a one-day event. It’s on Saturday, June 16, starts at 8:00 AM. I think it’s in the lower east side of New York City. If you’re interested in that, go check it out. You can find the website over at inflection.splashthat.com.
We’ll link that up in the show notes just in case anybody’s interested in going to check it out. It’s very cheap to go to it, I think it’s only $100 for the tickets. He’s really trying to put together—he’s got a great speaker line up already.
It’s really aiming at taking a business that is either just getting off the ground or already has some level of funding whether it’s the founderse or they’ve taken a first seat round or something like that and getting them to profitability. I think he’s really doing a good job for that.
Rob: Frank’s been kind of a longtime friend of MicroConf. He’s been there several times and I’ve always enjoyed having conversations with him. That’s cool that he is setting that up. I wish him the best of luck with it.
This week for me, my brother is in town for California. Sherry and our 11-year-old went out of the country. She’s doing some volunteer work in Central America. There’s some good friends down there that they’re staying with and hanging out with.
I was kind of like, “Oh man, I’m going to be home all week with two 7-year-olds. What should I do?” Of course, Sherry and her infinite wisdom was like, “Find somebody out. Have your dad come out or someone who doesn’t come out very much.” I asked my brother who’s pretty busy right now. He has his own family. They’re actually relocating from the Bay Area down to the Monterey area. He was able to carve it out. It’s been super fun.
I have intentionally gotten very little done this week because I just cleared the schedule aside from this podcast. It’s Thursday morning, I think this has been the first work I’ve done this week. I checked email once or twice. It’s nice to have that flexibility and have been having a great time.
The one big thing that kind of happened this week is I’ve been working with a designer and a WordPress guy to redo softwarebyrob.com. I was using a blog theme. I think it was the original original copy Blogger theme from 2007 or 2008 on there. I just never carved the time out with all the stuff I’ve been doing to update it.
A new version just went live this morning and it uses updated pictures, not the ones from six years ago. The site barely mentioned—I didn’t even know if it did mention MicroConf before this. It was just so out of date, it was embarrassing.
If you go to softwarebyrob.com now, it’s more of a legitimate like, “Oh, this guy is not a clown.” How can I be in technology and have a site that look liked it. It was embarrassing.
Mike: You know what else is embarrassing though? Having the JavaScript pop up and say it can’t be loaded because it’s not SSL.
Rob: Is that what mine’s said?
Mike: Yes.
Rob: What browser are you in? Because we did all this Q&A last time on three different browsers and it works on my machine.
Mike: It’s in Chrome. It’s something to look into. It’s just a JavaScript. which I think I stumbled upon.
Rob: Are you on the homepage?
Mike: Yup.
Rob: Let me make a note of this real quick. This went live 10 hours ago at midnight. I Q&A’d for a few minutes and then I’m glad you’re able to find that.
Mike: Yeah, no problem. Just busting your chops on that.
Rob : Of course. How about you? What else is going on?
Mike: I’m kind of poking around at how to do basically a product launch because I’m looking to put Bluetick out on Product Hunt in the very near future. I’m thinking about possibly doing it as early as this coming Tuesday, which would be when this episode goes out, but it might not be until the following Tuesday.
Just kind of poking around of what it takes, and I’ve done stuff on Product Hunt before, but I would say that I wasn’t probably necessarily as up to date on all the things that needed to be done at that time and how to capitalize on the traffic. I’m looking pretty heavily into those kinds of things right now.
Rob: It’s always good to do a little research on these things because these things change. Every six months, it seems like there’s new techniques, new tactics, and new ways to kind of rank well on these sites and to kind of do it “the right way.” Whether you get the maximum impact from another or not, it’s nice to at least try, and at least try to push it up the rankings there.
Obviously, I’d like to up vote and tweet when you do the Product Hunt launch and I’m on your email list, is that the best way for someone to know about this? Like is it bluetick.io and they can get on your list there or is it singlefounder.com?
Mike: Over at bluetick.io, there’s a mailing list that you can sign up for. I think to get on that, you have to go and sign up for the email course. Justin Jackson has said that the easiest way to basically be notified of stuff like that is to go over to Product Hunt and then follow Single Founder over there, that way if I launch something, then you’d get a notification from there.
Rob: Cool, anything else?
Mike: I don’t usually do this, but I totally blew off last Friday to go fishing.
Rob: Yeah, why’s that?
Mike: Because I felt like it.
Rob: Well, the weather is nice, right?
Mike: Well, a friend of mine and I get together about once a year or so and we usually–we’ll either go out or go fishing or something like that, and last Friday, he reached out to me and said, “Hey, do you want to go out?” I was like, “Sure.” We went out and we went fishing, rented a boat. I think we caught two fishes over the course of five hours which kind of sucked. It was a good day to just go out.
We went to Tree House Brewery, which is a local beer brewery which they have their own local beers. They have about half a dozen to a dozen different things that they’re working at any given time. You basically have to stay in line, for some cases, people standing there for upwards of one and a half to two hours because they don’t use distributors.
They’re brewery is the only place that you can get their beer. You basically have to wait. They’ve used distributors like a couple of times in the past and then they just got rid of them. I think it’s because they’ve realized that they can charge a heck of a lot more for the beer. They make just so much more money.
I was kind of doing some mental calculations, and it’s for every hour that they’re open there, they’re probably making like $10,000-$20,000. It’s ridiculous how much they’re charging. You just see people coming out with cases and cases.
It’s an interesting business model, but you also have like an hour and a half or so to sit in line and talk to the people around you. I actually ran into a guy who is in the software space here in the Boston, Massachusetts area.
Rob: Oh, that’s cool. That’s always nice to do. Those businesses are a trip to me. It’s kind of the Cinderella story of the lightning in the bottle. They do exist, but if you and I started a brewery, it’s very unlikely that we would have that much pent up demand.
But the ones that do, it’s fascinating. You’re right, I imagined they’re minting money to a certain extent at least while they’re popular, because you don’t know, are they be going to be popular for 10 years? Or is this kind of something where they’re popular for a few years?
Mike: Yeah, I don’t know. I think it’s a total crap shoot as to whether–you could engineer that type of thing. I think that you could reverse engineer certain things and say, “This is why I think that this works.” But it’s hard to say exactly why everything happens the way that it does. You can’t say for sure whether it is going to continue to be like that for 10 years.
Rob: Very cool. What are we going to talk about today?
Mike: Today, we’re going to be talking about soft skills for entrepreneurs. I wanted to give a shout out to John Sonmez from Simple Programmer where I’m pretty sure that I got this idea from one of the emails that he sent out. I think one of the emails had said something about soft skills for developers. I just wanted to kind of give a little bit of attribution there.
I kind of put it in context as an entrepreneur, what are the soft skills that you need or that you should try to cultivate and what do they mean to you as you’re trying to run your business?
I thought we’d kind of run through a short list of things that I came up with. I kind of aggregated them from a bunch of different sources based on entrepreneurship, software development, and various other aspects of running a business.
Rob: Cool, let’s dive in.
Mike: To start with, I think it kind of requires a definition of what exactly is a soft skill? According to the definition that came up when I typed it into Google, they say that it is “personal attributes that enables someone to interact effectively and harmoniously with other people.” Seems a little nebulous, I guess, in certain aspects.
The basic idea is that these are the things that you have to probably practice and it’s not that you can’t learn them in school, but it’s probably not that they’re typically taught at a college or a university. There are classes and certain things that could can take, but you’re probably not going to get a degree in any of these things.
Rob: Soft skills are hard to quantify. I think when I was younger, when I was in my late teens and maybe in college, I kind of blew them off. I remember being like, “If I have solid engineering skills, it’s just black and white. I know the answer and I can accomplish what I need to.”
But as you get older, you kind of learn that a lot of people who do really interesting things and can really impact the world, or at least start companies and run them, it takes both. It takes both this left brain and also this right brain, or at least these interpersonal skills. Oftentimes, we’re not taught these even by our parents, I know that I really wasn’t. It took me until my middle late 20s before I picked up a lot of stuff we’re going to talk about today. I think, it’s pretty valuable.
Mike: I think the other thing is that you learn a lot of these things very indirectly. You’re probably not going to go and take a course on time management, for example, but there are things that you can learn or books that you can pick up about the topic. It’s not going to be like a core focus of whatever it is that you do especially if you’re going into entrepreneurship.
Rob: Yeah, that’s right.
Mike: We have five things on this soft skills list and the first one is empathy. With empathy, it really helps you to relate to your customers and understand what challenges you’re having. Some of the different things that I thought would be helpful in terms of trying to develop that empathy is to at least understand what it is and what it is in the context of your business.
When you’re having conversations with people, the first thing is to listen to them more. Instead of trying to talk and get your ideas out there, empathy is actually the reverse. It’s understanding what other people are thinking and where they’re coming from. By talking less, you’re going to just by default, listen more.
It gives them the opportunity to talk and you get to hear what their thoughts are, where they’re basing their opinions on or what they’re basing them on. Maybe some background about how they developed those opinions.
Rob: For those who are fans of the Hamilton Musical, you’ll know Aaron Burr’s line where he says, “Talk less. Smile more.” It’s actually seen as a negative thing because he won’t take a stance and he’s being a politician. But I have changed that line for my kids and I will say, “Talk less. Listen more.” It’s fascinating advice. It’s easy to give and hard to implement for all of us especially people who are smart, ambitious, tend in a lot of circles to be the person driving the ship.
If you’re a founder, you’ve probably been one of the smarter people in the room for most of your life. But just because you’re smart doesn’t mean that you should not listen to other people. Other people have really good ideas, but if you just take the time to listen to them, you can implement them.
The other thing where this really helps is if you get that angry customer email, angry tweet, or whatever it is, to be empathetic as a superpower, to be able to understand where they’re coming from and realize, “Hey, they’re probably just frustrated today. They’re not really personally attacking me even though it feels like they are right now.”
The best customer support reps and the best customer success folks that I’ve worked with really are able to dial in this empathy aspect.
Mike: The other interesting piece of developing empathy is that you can be right and still give off the vibe that you don’t care because you come across as arrogant or that you know everything. Part of empathy is sometimes you already know the answer to a question that somebody is going to ask and empathy is simply listening to them anyway instead of saying, “Here’s your answer,” or talking over them or trying to say commands to them like, “Hey, you need to listen to me and you need to do this.”
Some people just want to be heard and then you can give them whatever the answers are because then it sounds like you have or it appears to them that you have listened to everything and you fully understand.
Even if you already know the answer in advance, you can ask a couple of prodding questions, I guess. It positions the conversation differently in their mind. As long as you’re conscious of those types of things, then it allows you to not only project that empathy, but also to get people to go along with you; whereas if you were to come from that source of authority or commanding authority, they may take offense to it and tune out and not want to listen, regardless of whether you’re right or wrong.
Rob: If you want to see an example of that happening, exactly what we’re saying, go on Twitter and watch people discuss maybe a controversial topic or just an often misunderstood topic and you’ll quickly see that people in this world don’t have enough empathy for one another. That’s a good example of kind of what not to do as you’re running a business or in conversations is jump to conclusions and start attacking.
Empathy was the first soft skill. The second one is time management. Bottom-line is you’re never going to have enough time or enough resources to do everything you need to do and you want to do in business. You have to learn how to prioritize.
The first thing that I’d recommend is–you don’t need to do this forever, but in the early days, track your time. I literally used to use a time tracker where it had categories. Even when I wasn’t being paid, didn’t need to track my time, but I was tracking it either based on the task I was doing or the product I was working on when I had multiple products.
It was just a little desktop timer and I would select the project. At the end of the week or end of the month, I could look back and I was like, “I pissed away a bunch of time working on this product that isn’t even profitable. Should I sell that thing, should I shut it down or do I just need to be more deliberate and more disciplined about not spending that time doing that stuff?”
It’s kind of like budgeting. I believe you should budget or look at your budget for a certain amount of months until you get a feel for it. I’ve always stopped after that because I kind of have this stuff in my head of where we are and where we should be.
I believe that tracking time is like that. I didn’t track it for 10 years, but I tracked it for probably the first six months I was an entrepreneur, and it really helped me see that pie chart of where I was spending a lot of time and where I was spending a little. It helped me evaluate if that was the right mix.
Mike: One thing I really like to do in terms of time management is blocking off my calendar so that on Mondays, for example, I tend to not take calls of any kind whether they are with customers, doing demos, or anything like that. There’s just a time block on my calendar so you can’t schedule a meeting with me unless it’s super critical or important or I feel like I need to.
But generally speaking, that time is mine, so that I can actually get work done. I do that on occasion where I’ll throw a calendar block in there as well. It just marks my time as “busy” so that I can get other things done.
I do see people who have calendars where they will have like a very regimented schedule and they’ll say, “From from 6-7 I’m doing this, 7-8 this, etc.” I can’t do that as much. I feel like there’s a lot of things that I’m working where if I try to do that, I’m probably going to run over my time or going to be too conscious about what that time frame looks like or those hour blocks. It’s just going to conflict with my brain. I’m just not going to be able to pay attention to it or it’s just going to be distracting. I don’t like to do that as much but there are some people that that really works well for.
Rob: After time management, the third soft skill is negotiation. This overlaps a lot with sales skills. If you understand someone else’s objections and their motivations, you can identify ways to overcome the objections. Whether it’s convince or encourage them kind of down the path that you believe is correct for them. Hopefully, your product being at the other end of that will benefit them in the long run.
I think that’s the difference to me between someone who is an ethical salesperson versus someone who just wants the commission and is going to force someone into something they don’t like, is the ability to truly look and say, “Wow, we actually suit your needs better than your current provider or better than the alternative and here’s why.” And to be able to say that.
Negotiation/sales skills, I think, kind of fall into this same one. The one place to start if you’re going to get into either a sales conversation or negotiation. Negotiation could be with a vendor that you’re sending tons of emails through a company like SendGrid or Mandrill or something and you’re at an enterprise level, maybe you’re trying to negotiate a price there or maybe you’re negotiating the sale of your company. Maybe your negotiating the price of your enterprise plan to someone who is wanting to buy.
The first thing to do is to learn everything you can about the other person like what they’re trying to achieve, what’s important to them, what parts of the deals are deal breakers and which are not. Finding out what a win looks like for the other person is critical probably to your own version of what a win is because you know or you should know what a win is for you, and hopefully you can figure out what it is for them and try to merge those two things.
Mike: Surprisingly enough, I have said it earlier in the episode that there are not very many soft skills where you can take a college course on it. Negotiation and conflict management is actually a course that I took in college, which was taught by a professor that I know and respect, but he unfortunately passed away several years ago, but it was honestly one of the best courses that I had ever taken. I learned a heck of a lot of things in that. Not least of which was the fact that there are certain types of styles of negotiation that I prefer, which generally involves a win-win scenario.
We went through all of the different styles of negotiation and we practiced them in that class. One of the books that was a resource for that was one called Getting to Yes: Negotiating Agreement Without Giving In, which you can get on Amazon. It’s only a couple of dollars, but I don’t know if they have a Kindle version of it. It’s like $5-$6 for a used paperback version. I definitely recommend picking that up.
With negotiation, part of it is figuring out what it is that you want and knowing in advance what you can and can’t live without. If you are blindsided by a negotiation and you end up in one, the best thing to do is walk away and regroup and say, “Let’s schedule this or talk about it some other time.”
I have been in those situations where I was scheduled for a meeting. It was more of just come in and say “hi” and ended up in a negotiation for like what is this contract going to look like and what are going to be the dollar amounts? I was completely unprepared for it and basically did not negotiate very well.
I think that that is very common if you’re not prepared. If you haven’t done your homework on it, then you’re not going to understand where those different lines are for you. You’re not going to be able to keep them in mind and pay attention while you’re going through the course of that negotiation.
Along with that, make sure that you keep in mind what your emotions look like. Don’t let winning a negotiation get so far in a way of everything else that is going on that you can’t pay attention to the things that are the most important.
Rob: Yeah, I agree. Those are really good tips. Another book I’d liked to recommend that I haven’t read yet, but it’s on my wish list and I heard an interview with this guy and the interview was awesome.
It’s not often that I listen to a podcast interview and I’m instantly trying to find more from that guest. The book is , Never Split the Difference: Negotiating As If Your Life Depended On It. The guy was a hostage negotiator for years. I forget if it was with the SWAT team or for if it was with the FBI or somebody. Just really brilliant insights. Again, it’s on my wish list. I haven’t listened to it yet, but the 30 or 40-minute snippet that I’ve heard of him made me want to really dive in. It was another take.
I’ve also read Getting To Yes and it’s very good. I’ve read as I’ve sold multiple companies and software products, I have read at least half a dozen books on negotiating and Getting To Yes was one of the best ones. I’m glad that you called that out.
Mike: I picked up the book that you mentioned as well, Never Split the Difference. I haven’t read it either.
Rob: Yeah, it’s in the queue, am I right?
Mike: The one other thing I would comment on negotiation is that what’s important to you or what you think is important to the other person is not necessarily always the case. There’s times where you can negotiate for something where you may think or feel like it would take a lot to get the other person to agree to it. Based on the situation the person is in, it may take very, very little because they have other things going on, and have to learn what those are throughout the courses of the conversation.
Rob: Yeah. The last thing I’ll throw in is when you’re negotiating, there’s times when you’re negotiating and you’re going to have a relationship with this person after, then there’s times when you’re not.
An example of not is when you’re selling or buying a car. You’re only going to interact with this person at this point and there’s really no relationship past it. You can really go for the highest dollar or the lowest dollar as the case may be depending on which side of the deal you’re on.
But if you are selling a company and you’re going to work with that person for the next year or two afterwards, or you are selling an enterprise deal and you know that your company is going to have a relationship with that person for at least the next 12 months. You can’t just push it so far that you burn the relationship. That’s kind of a final thing. It’s like negotiating, you’ve heard this expression, “Pigs get fat, hogs get slaughtered.” That expression means, if you push for every last dollar and I’ve worked with people like this who just want every last nickel out of everything so that they feel like they got the best deal, but then you don’t want to do business with them anymore.
I’ve totally walked away from people like that where we cut a deal and it’s obvious that they wanted it extremely one-sided. If you’re always that way, you’re not going to have that many people who want to do business with you.
Just something to keep in mind is oftentimes, the best deal is not the best deal for you. It’s the best deal for everyone. It sounds like we can do a whole episode on this.
Mike: I was just thinking that. We could probably do an entire episode. We should do that some time.
Rob: Yeah, cool. How about our next one? What’s our fourth soft skill?
Mike: The next one is management and teamwork. I kind of lumped these together in terms of the management is managing other people, assigning tasks, and making sure that things are on track.
Teamwork is also putting yourself in a position where you have somebody else managing the piece of it and you’re acting as a teammate for them. It’s kind of two sides of the same coin.
The bottom-line here is you can do everything in your business, but it’s really hard to do all of it in a timeline that is efficient and gives you the ability to make money and turn a profit and do all the other things that you want to do.
Outsourcing or hiring or bringing on teammates helps to move things faster. That doesn’t necessarily mean that you hire somebody you might just collaborate with another person or do a joint venture of some kind, which you may negotiate some things there, but you’re still going to need to work with them moving forward to get whatever that joint venture is done.
A lot of management I find comes down to empowering people to make decisions, so that you don’t need to be in a position where you have to micromanage them. Tell them what is it you want to achieve, tell them why you want to do it, what’s important to you along that path, and then let them do it.
If you try to micromanage everything, it’s going to take so much time, work, and effort on your part that a lot of times it’s just not even worth trying to outsource it. You may as well just do it yourself because you have this vision in your head of exactly how everything needs to be done. If you’re micromanaging it, you’re just basically wasting your time. You’re having somebody else do it, and then you’re double-checking everything anyway. It’s not going to work out for you in terms of the time that you’re trying to gain from in and then out.
Rob: I think that’s a mistake that most beginning managers or delegators make. They’re used to doing things themselves and they want the control. I know that I made this mistake in the early days of hiring people that probably weren’t that good. I felt like I needed to give them a lot of instruction.
It wasn’t that they weren’t that good, but maybe they just didn’t have the experience, but I hired them because they were cheap and I didn’t have a lot of money. Like you said, it was probably not worth doing at all. I should’ve tried to find someone with the experience, waited until I had some budget, maybe had them work fewer hours and just on fewer tasks, but have someone who’s more of a fit.
I think one of the things that I’ve discovered about management and teamwork over the years, building this companies, is that a big part of it is getting the right people on the bus. It’s hiring people who work with your work style and hiring people who work well together.
If you do that, even if you don’t have a tremendous amount of budget, you can really get a lot of work done.
Mike: Something else that goes into managing a team is knowing when it’s not working out. Not everything is going to work out. There’s times where you have to cut your losses and move on whether that’s with a contractor an employee, you can do everything in your power to try and make sure that things go well and that you are managing them in a fair and effective way, and that they understand what is it that they’re supposed to do.
Ultimately, there are times when it just doesn’t work out. You need to be able to recognize those and move on in a way that is best for everyone involved.
Rob: The fifth soft skill, which kind of covers or applies to almost all the ones that we’ve talked about already is communication. In every interaction with someone else, it is critical that you have the ability to communicate clearly, to communicate effectively, and frankly, to communicate with empathy with the other person in mind, what their mindset is.
It is not just drilling down, “You need to do this!” But it’s like, “What do I know about this person that I’ve worked with for a year and how they think about things?” “How much control do they want? How much control am I willing to give?” “What kind of instructions do they need?” And kind of tailoring that message, so learning to communicate effectively with people is huge because it saves time and prevents misunderstandings.
This includes, when we think about communication, there’s written communication. It’s your emails; essays, if you’re writing blog post, or anything like that. It’s presenting. It is verbal communication both in meetings or in planning sessions or in brainstorming sessions.
I think a big part of this, I don’t know if this is the whole thing, but a big part of it is figuring out which mode of communication that works best for you and potentially, and I don’t know if it goes as far as to build a team around that, but to realize, “Wow, I really am better at verbal stuff that needs to be part of our culture of our team. They can take a voicemail from me or a voxer, or are willing to jump on a call and chat something really quick because I’m a 10x verbal processor, but my emails really suck,” or vice-versa.
If you’re really good at writing, then build a culture where it’s around Slack or it’s around email. If you’re going to build a company of 200 people, then that won’t work. You can’t dictate it. But if you’re going to build a team of 3-10 people, then a lot rotates around with the founder being effective at what they’re doing.
I do think that are discovering that and knowing it about yourself and potentially improving the other ways as well which is something I’ve done along the way. I’ve traditionally been a good writer. I’ve traditionally not been someone who was good both at public speaking or verbal interactions, in general.
Something that we’ve done in the podcast has made me much more able to process my thoughts verbally and to get stuff out there that’s kind of in my head, and then doing all the public speaking. Early on, it was at conferences from 2007-2010, and then we started MicroConf. Now you and I are in a good way, forced to speak basically two times a year. That just keeps your chops up. It keeps your ability to communicate a message in a way that’s really effective.
Mike: The ability to practice those types of things in some ways, it’s force, but at the same time, you also learn to enjoy it at some point, or at least, I would hope that you would enjoy it if you have to do it enough.
Those types of skills—the presenting skills and the public speaking—those really help when it comes to things like sales presentations or trying to go through an interview process and explain to somebody why it is that they should join your team, or when you’re negotiating with somebody about their salary requirements or what their needs are for them to on-board onto your product and determine what it is that’s holding them back and what their objections are.
All that stuff that goes along with the communication is extremely critical whether you need to follow up with an email or you need to explain it to them in person. Being able to recognize what the preferred mode of communication is for other people, and then adapt to yourself to their preferred mode of communication is really going to be helpful for you to be able to achieve your objectives within the context that they are comfortable in.
You can’t also go via email. I can speak for most introverts who are listening to this. My preferred mode is email, but that doesn’t mean that it works for everybody. Some people actually like getting on the phone and you have to be able to do that. If you want to do a demo of your product, then clearly, you have to get onto a call and do that with them.
There are ways around that. There are some exceptions where you can have videos and things like that, but for the most part, you still have to adapt to the world around you and put things out or present them in a way that other people are able to and willing to consume them.
Rob: That’s really a good point. It’s really hard to hide in a corner if you do truly want to be introverted and do everything via email. You really need a low priced self-service SaaS offering and you’re only going to be able to grow that to a certain size.
That’s not terrible. That’s what I did in the early days, to be honest, until I felt like I needed to force myself out of the shell. It’s not to say that’s something you can’t do, but you’re definitely going to limit—it’s a self-limiting behavior, to not want to improve on the modes of communication that you don’t necessarily enjoy.
One thing I want to touch on, as you mentioned having hard conversations or just having important conversations and there was a really good book recommended to me by Ruben Gomez from Bidsketch that’s called Crucial Conversations.
I’ve read it. I like it. I think if you want to improve your ability to have not just difficult conversations, just important conversations with people, I think it’s a really good look at framing how you should approach them and how you should view them.
To recap the five soft skills we looked at today were empathy, time management, negotiation, management and teamwork, and communication.
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Welcome to Startups For The Rest Of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching and growing software products, whether you built your first product or you’re just thinking about it. I’m Mike.
Rob: I’m Rob.
Mike: We’re here to share our experiences to help you avoid the same mistakes we’ve made. How you doing this week, Rob?
Rob: I’m doing pretty good man. I was thinking if folks were ever interested in having two episodes of Startups For The Rest Of Us each week, they can’t quite get that. You and I don’t have quite the time to do it, but I’ve been guest hosting on The Art of Product Podcast with my good friend, Derrick Reimer.
While Ben Orenstein is in Hong Kong, we’ve done, I think, two episodes live but we’ve recorded a third. There’s three episodes in a row where it’s us talking about launching products, theories, how to stay creative, how to build the right features, and how to validate an idea.
Derrick’s in the middle of building and validating his Slack competitor, called Level, so I want to call that out, Art of Product Podcast if you are interested in hearing more in the same vein. Obviously, it’s not the same because Mike’s not on, but it is in the same vein as this type of show.
Mike: Awesome.
Rob: How about you? What’s going on?
Mike: I was talking to Frank Denbow. I don’t know if you remember him. He came to the first MicroConf and he was the subject of the hot sauce incident all over his laptop.
Rob: That’s right.
Mike: I need to remind him of that. I had a call with him earlier this week. He is putting together a small conference in New York City called Inflection. It’s aimed in helping people build a profitable company. I thought that I’d mention it on the show just in case there was anybody who is interested.
It’s a one-day event. It’s on Saturday, June 16, starts at 8:00 AM. I think it’s in the lower east side of New York City. If you’re interested in that, go check it out. You can find the website over at inflection.splashthat.com.
We’ll link that up in the show notes just in case anybody’s interested in going to check it out. It’s very cheap to go to it, I think it’s only $100 for the tickets. He’s really trying to put together—he’s got a great speaker line up already.
It’s really aiming at taking a business that is either just getting off the ground or already has some level of funding whether it’s the founderse or they’ve taken a first seat round or something like that and getting them to profitability. I think he’s really doing a good job for that.
Rob: Frank’s been kind of a longtime friend of MicroConf. He’s been there several times and I’ve always enjoyed having conversations with him. That’s cool that he is setting that up. I wish him the best of luck with it.
This week for me, my brother is in town for California. Sherry and our 11-year-old went out of the country. She’s doing some volunteer work in Central America. There’s some good friends down there that they’re staying with and hanging out with.
I was kind of like, “Oh man, I’m going to be home all week with two 7-year-olds. What should I do?” Of course, Sherry and her infinite wisdom was like, “Find somebody out. Have your dad come out or someone who doesn’t come out very much.” I asked my brother who’s pretty busy right now. He has his own family. They’re actually relocating from the Bay Area down to the Monterey area. He was able to carve it out. It’s been super fun.
I have intentionally gotten very little done this week because I just cleared the schedule aside from this podcast. It’s Thursday morning, I think this has been the first work I’ve done this week. I checked email once or twice. It’s nice to have that flexibility and have been having a great time.
The one big thing that kind of happened this week is I’ve been working with a designer and a WordPress guy to redo softwarebyrob.com. I was using a blog theme. I think it was the original original copy Blogger theme from 2007 or 2008 on there. I just never carved the time out with all the stuff I’ve been doing to update it.
A new version just went live this morning and it uses updated pictures, not the ones from six years ago. The site barely mentioned—I didn’t even know if it did mention MicroConf before this. It was just so out of date, it was embarrassing.
If you go to softwarebyrob.com now, it’s more of a legitimate like, “Oh, this guy is not a clown.” How can I be in technology and have a site that look liked it. It was embarrassing.
Mike: You know what else is embarrassing though? Having the JavaScript pop up and say it can’t be loaded because it’s not SSL.
Rob: Is that what mine’s said?
Mike: Yes.
Rob: What browser are you in? Because we did all this Q&A last time on three different browsers and it works on my machine.
Mike: It’s in Chrome. It’s something to look into. It’s just a JavaScript. which I think I stumbled upon.
Rob: Are you on the homepage?
Mike: Yup.
Rob: Let me make a note of this real quick. This went live 10 hours ago at midnight. I Q&A’d for a few minutes and then I’m glad you’re able to find that.
Mike: Yeah, no problem. Just busting your chops on that.
Rob : Of course. How about you? What else is going on?
Mike: I’m kind of poking around at how to do basically a product launch because I’m looking to put Bluetick out on Product Hunt in the very near future. I’m thinking about possibly doing it as early as this coming Tuesday, which would be when this episode goes out, but it might not be until the following Tuesday.
Just kind of poking around of what it takes, and I’ve done stuff on Product Hunt before, but I would say that I wasn’t probably necessarily as up to date on all the things that needed to be done at that time and how to capitalize on the traffic. I’m looking pretty heavily into those kinds of things right now.
Rob: It’s always good to do a little research on these things because these things change. Every six months, it seems like there’s new techniques, new tactics, and new ways to kind of rank well on these sites and to kind of do it “the right way.” Whether you get the maximum impact from another or not, it’s nice to at least try, and at least try to push it up the rankings there.
Obviously, I’d like to up vote and tweet when you do the Product Hunt launch and I’m on your email list, is that the best way for someone to know about this? Like is it bluetick.io and they can get on your list there or is it singlefounder.com?
Mike: Over at bluetick.io, there’s a mailing list that you can sign up for. I think to get on that, you have to go and sign up for the email course. Justin Jackson has said that the easiest way to basically be notified of stuff like that is to go over to Product Hunt and then follow Single Founder over there, that way if I launch something, then you’d get a notification from there.
Rob: Cool, anything else?
Mike: I don’t usually do this, but I totally blew off last Friday to go fishing.
Rob: Yeah, why’s that?
Mike: Because I felt like it.
Rob: Well, the weather is nice, right?
Mike: Well, a friend of mine and I get together about once a year or so and we usually–we’ll either go out or go fishing or something like that, and last Friday, he reached out to me and said, “Hey, do you want to go out?” I was like, “Sure.” We went out and we went fishing, rented a boat. I think we caught two fishes over the course of five hours which kind of sucked. It was a good day to just go out.
We went to Tree House Brewery, which is a local beer brewery which they have their own local beers. They have about half a dozen to a dozen different things that they’re working at any given time. You basically have to stay in line, for some cases, people standing there for upwards of one and a half to two hours because they don’t use distributors.
They’re brewery is the only place that you can get their beer. You basically have to wait. They’ve used distributors like a couple of times in the past and then they just got rid of them. I think it’s because they’ve realized that they can charge a heck of a lot more for the beer. They make just so much more money.
I was kind of doing some mental calculations, and it’s for every hour that they’re open there, they’re probably making like $10,000-$20,000. It’s ridiculous how much they’re charging. You just see people coming out with cases and cases.
It’s an interesting business model, but you also have like an hour and a half or so to sit in line and talk to the people around you. I actually ran into a guy who is in the software space here in the Boston, Massachusetts area.
Rob: Oh, that’s cool. That’s always nice to do. Those businesses are a trip to me. It’s kind of the Cinderella story of the lightning in the bottle. They do exist, but if you and I started a brewery, it’s very unlikely that we would have that much pent up demand.
But the ones that do, it’s fascinating. You’re right, I imagined they’re minting money to a certain extent at least while they’re popular, because you don’t know, are they be going to be popular for 10 years? Or is this kind of something where they’re popular for a few years?
Mike: Yeah, I don’t know. I think it’s a total crap shoot as to whether–you could engineer that type of thing. I think that you could reverse engineer certain things and say, “This is why I think that this works.” But it’s hard to say exactly why everything happens the way that it does. You can’t say for sure whether it is going to continue to be like that for 10 years.
Rob: Very cool. What are we going to talk about today?
Mike: Today, we’re going to be talking about soft skills for entrepreneurs. I wanted to give a shout out to John Sonmez from Simple Programmer where I’m pretty sure that I got this idea from one of the emails that he sent out. I think one of the emails had said something about soft skills for developers. I just wanted to kind of give a little bit of attribution there.
I kind of put it in context as an entrepreneur, what are the soft skills that you need or that you should try to cultivate and what do they mean to you as you’re trying to run your business?
I thought we’d kind of run through a short list of things that I came up with. I kind of aggregated them from a bunch of different sources based on entrepreneurship, software development, and various other aspects of running a business.
Rob: Cool, let’s dive in.
Mike: To start with, I think it kind of requires a definition of what exactly is a soft skill? According to the definition that came up when I typed it into Google, they say that it is “personal attributes that enables someone to interact effectively and harmoniously with other people.” Seems a little nebulous, I guess, in certain aspects.
The basic idea is that these are the things that you have to probably practice and it’s not that you can’t learn them in school, but it’s probably not that they’re typically taught at a college or a university. There are classes and certain things that could can take, but you’re probably not going to get a degree in any of these things.
Rob: Soft skills are hard to quantify. I think when I was younger, when I was in my late teens and maybe in college, I kind of blew them off. I remember being like, “If I have solid engineering skills, it’s just black and white. I know the answer and I can accomplish what I need to.”
But as you get older, you kind of learn that a lot of people who do really interesting things and can really impact the world, or at least start companies and run them, it takes both. It takes both this left brain and also this right brain, or at least these interpersonal skills. Oftentimes, we’re not taught these even by our parents, I know that I really wasn’t. It took me until my middle late 20s before I picked up a lot of stuff we’re going to talk about today. I think, it’s pretty valuable.
Mike: I think the other thing is that you learn a lot of these things very indirectly. You’re probably not going to go and take a course on time management, for example, but there are things that you can learn or books that you can pick up about the topic. It’s not going to be like a core focus of whatever it is that you do especially if you’re going into entrepreneurship.
Rob: Yeah, that’s right.
Mike: We have five things on this soft skills list and the first one is empathy. With empathy, it really helps you to relate to your customers and understand what challenges you’re having. Some of the different things that I thought would be helpful in terms of trying to develop that empathy is to at least understand what it is and what it is in the context of your business.
When you’re having conversations with people, the first thing is to listen to them more. Instead of trying to talk and get your ideas out there, empathy is actually the reverse. It’s understanding what other people are thinking and where they’re coming from. By talking less, you’re going to just by default, listen more.
It gives them the opportunity to talk and you get to hear what their thoughts are, where they’re basing their opinions on or what they’re basing them on. Maybe some background about how they developed those opinions.
Rob: For those who are fans of the Hamilton Musical, you’ll know Aaron Burr’s line where he says, “Talk less. Smile more.” It’s actually seen as a negative thing because he won’t take a stance and he’s being a politician. But I have changed that line for my kids and I will say, “Talk less. Listen more.” It’s fascinating advice. It’s easy to give and hard to implement for all of us especially people who are smart, ambitious, tend in a lot of circles to be the person driving the ship.
If you’re a founder, you’ve probably been one of the smarter people in the room for most of your life. But just because you’re smart doesn’t mean that you should not listen to other people. Other people have really good ideas, but if you just take the time to listen to them, you can implement them.
The other thing where this really helps is if you get that angry customer email, angry tweet, or whatever it is, to be empathetic as a superpower, to be able to understand where they’re coming from and realize, “Hey, they’re probably just frustrated today. They’re not really personally attacking me even though it feels like they are right now.”
The best customer support reps and the best customer success folks that I’ve worked with really are able to dial in this empathy aspect.
Mike: The other interesting piece of developing empathy is that you can be right and still give off the vibe that you don’t care because you come across as arrogant or that you know everything. Part of empathy is sometimes you already know the answer to a question that somebody is going to ask and empathy is simply listening to them anyway instead of saying, “Here’s your answer,” or talking over them or trying to say commands to them like, “Hey, you need to listen to me and you need to do this.”
Some people just want to be heard and then you can give them whatever the answers are because then it sounds like you have or it appears to them that you have listened to everything and you fully understand.
Even if you already know the answer in advance, you can ask a couple of prodding questions, I guess. It positions the conversation differently in their mind. As long as you’re conscious of those types of things, then it allows you to not only project that empathy, but also to get people to go along with you; whereas if you were to come from that source of authority or commanding authority, they may take offense to it and tune out and not want to listen, regardless of whether you’re right or wrong.
Rob: If you want to see an example of that happening, exactly what we’re saying, go on Twitter and watch people discuss maybe a controversial topic or just an often misunderstood topic and you’ll quickly see that people in this world don’t have enough empathy for one another. That’s a good example of kind of what not to do as you’re running a business or in conversations is jump to conclusions and start attacking.
Empathy was the first soft skill. The second one is time management. Bottom-line is you’re never going to have enough time or enough resources to do everything you need to do and you want to do in business. You have to learn how to prioritize.
The first thing that I’d recommend is–you don’t need to do this forever, but in the early days, track your time. I literally used to use a time tracker where it had categories. Even when I wasn’t being paid, didn’t need to track my time, but I was tracking it either based on the task I was doing or the product I was working on when I had multiple products.
It was just a little desktop timer and I would select the project. At the end of the week or end of the month, I could look back and I was like, “I pissed away a bunch of time working on this product that isn’t even profitable. Should I sell that thing, should I shut it down or do I just need to be more deliberate and more disciplined about not spending that time doing that stuff?”
It’s kind of like budgeting. I believe you should budget or look at your budget for a certain amount of months until you get a feel for it. I’ve always stopped after that because I kind of have this stuff in my head of where we are and where we should be.
I believe that tracking time is like that. I didn’t track it for 10 years, but I tracked it for probably the first six months I was an entrepreneur, and it really helped me see that pie chart of where I was spending a lot of time and where I was spending a little. It helped me evaluate if that was the right mix.
Mike: One thing I really like to do in terms of time management is blocking off my calendar so that on Mondays, for example, I tend to not take calls of any kind whether they are with customers, doing demos, or anything like that. There’s just a time block on my calendar so you can’t schedule a meeting with me unless it’s super critical or important or I feel like I need to.
But generally speaking, that time is mine, so that I can actually get work done. I do that on occasion where I’ll throw a calendar block in there as well. It just marks my time as “busy” so that I can get other things done.
I do see people who have calendars where they will have like a very regimented schedule and they’ll say, “From from 6-7 I’m doing this, 7-8 this, etc.” I can’t do that as much. I feel like there’s a lot of things that I’m working where if I try to do that, I’m probably going to run over my time or going to be too conscious about what that time frame looks like or those hour blocks. It’s just going to conflict with my brain. I’m just not going to be able to pay attention to it or it’s just going to be distracting. I don’t like to do that as much but there are some people that that really works well for.
Rob: After time management, the third soft skill is negotiation. This overlaps a lot with sales skills. If you understand someone else’s objections and their motivations, you can identify ways to overcome the objections. Whether it’s convince or encourage them kind of down the path that you believe is correct for them. Hopefully, your product being at the other end of that will benefit them in the long run.
I think that’s the difference to me between someone who is an ethical salesperson versus someone who just wants the commission and is going to force someone into something they don’t like, is the ability to truly look and say, “Wow, we actually suit your needs better than your current provider or better than the alternative and here’s why.” And to be able to say that.
Negotiation/sales skills, I think, kind of fall into this same one. The one place to start if you’re going to get into either a sales conversation or negotiation. Negotiation could be with a vendor that you’re sending tons of emails through a company like SendGrid or Mandrill or something and you’re at an enterprise level, maybe you’re trying to negotiate a price there or maybe you’re negotiating the sale of your company. Maybe your negotiating the price of your enterprise plan to someone who is wanting to buy.
The first thing to do is to learn everything you can about the other person like what they’re trying to achieve, what’s important to them, what parts of the deals are deal breakers and which are not. Finding out what a win looks like for the other person is critical probably to your own version of what a win is because you know or you should know what a win is for you, and hopefully you can figure out what it is for them and try to merge those two things.
Mike: Surprisingly enough, I have said it earlier in the episode that there are not very many soft skills where you can take a college course on it. Negotiation and conflict management is actually a course that I took in college, which was taught by a professor that I know and respect, but he unfortunately passed away several years ago, but it was honestly one of the best courses that I had ever taken. I learned a heck of a lot of things in that. Not least of which was the fact that there are certain types of styles of negotiation that I prefer, which generally involves a win-win scenario.
We went through all of the different styles of negotiation and we practiced them in that class. One of the books that was a resource for that was one called Getting to Yes: Negotiating Agreement Without Giving In, which you can get on Amazon. It’s only a couple of dollars, but I don’t know if they have a Kindle version of it. It’s like $5-$6 for a used paperback version. I definitely recommend picking that up.
With negotiation, part of it is figuring out what it is that you want and knowing in advance what you can and can’t live without. If you are blindsided by a negotiation and you end up in one, the best thing to do is walk away and regroup and say, “Let’s schedule this or talk about it some other time.”
I have been in those situations where I was scheduled for a meeting. It was more of just come in and say “hi” and ended up in a negotiation for like what is this contract going to look like and what are going to be the dollar amounts? I was completely unprepared for it and basically did not negotiate very well.
I think that that is very common if you’re not prepared. If you haven’t done your homework on it, then you’re not going to understand where those different lines are for you. You’re not going to be able to keep them in mind and pay attention while you’re going through the course of that negotiation.
Along with that, make sure that you keep in mind what your emotions look like. Don’t let winning a negotiation get so far in a way of everything else that is going on that you can’t pay attention to the things that are the most important.
Rob: Yeah, I agree. Those are really good tips. Another book I’d liked to recommend that I haven’t read yet, but it’s on my wish list and I heard an interview with this guy and the interview was awesome.
It’s not often that I listen to a podcast interview and I’m instantly trying to find more from that guest. The book is , Never Split the Difference: Negotiating As If Your Life Depended On It. The guy was a hostage negotiator for years. I forget if it was with the SWAT team or for if it was with the FBI or somebody. Just really brilliant insights. Again, it’s on my wish list. I haven’t listened to it yet, but the 30 or 40-minute snippet that I’ve heard of him made me want to really dive in. It was another take.
I’ve also read Getting To Yes and it’s very good. I’ve read as I’ve sold multiple companies and software products, I have read at least half a dozen books on negotiating and Getting To Yes was one of the best ones. I’m glad that you called that out.
Mike: I picked up the book that you mentioned as well, Never Split the Difference. I haven’t read it either.
Rob: Yeah, it’s in the queue, am I right?
Mike: The one other thing I would comment on negotiation is that what’s important to you or what you think is important to the other person is not necessarily always the case. There’s times where you can negotiate for something where you may think or feel like it would take a lot to get the other person to agree to it. Based on the situation the person is in, it may take very, very little because they have other things going on, and have to learn what those are throughout the courses of the conversation.
Rob: Yeah. The last thing I’ll throw in is when you’re negotiating, there’s times when you’re negotiating and you’re going to have a relationship with this person after, then there’s times when you’re not.
An example of not is when you’re selling or buying a car. You’re only going to interact with this person at this point and there’s really no relationship past it. You can really go for the highest dollar or the lowest dollar as the case may be depending on which side of the deal you’re on.
But if you are selling a company and you’re going to work with that person for the next year or two afterwards, or you are selling an enterprise deal and you know that your company is going to have a relationship with that person for at least the next 12 months. You can’t just push it so far that you burn the relationship. That’s kind of a final thing. It’s like negotiating, you’ve heard this expression, “Pigs get fat, hogs get slaughtered.” That expression means, if you push for every last dollar and I’ve worked with people like this who just want every last nickel out of everything so that they feel like they got the best deal, but then you don’t want to do business with them anymore.
I’ve totally walked away from people like that where we cut a deal and it’s obvious that they wanted it extremely one-sided. If you’re always that way, you’re not going to have that many people who want to do business with you.
Just something to keep in mind is oftentimes, the best deal is not the best deal for you. It’s the best deal for everyone. It sounds like we can do a whole episode on this.
Mike: I was just thinking that. We could probably do an entire episode. We should do that some time.
Rob: Yeah, cool. How about our next one? What’s our fourth soft skill?
Mike: The next one is management and teamwork. I kind of lumped these together in terms of the management is managing other people, assigning tasks, and making sure that things are on track.
Teamwork is also putting yourself in a position where you have somebody else managing the piece of it and you’re acting as a teammate for them. It’s kind of two sides of the same coin.
The bottom-line here is you can do everything in your business, but it’s really hard to do all of it in a timeline that is efficient and gives you the ability to make money and turn a profit and do all the other things that you want to do.
Outsourcing or hiring or bringing on teammates helps to move things faster. That doesn’t necessarily mean that you hire somebody you might just collaborate with another person or do a joint venture of some kind, which you may negotiate some things there, but you’re still going to need to work with them moving forward to get whatever that joint venture is done.
A lot of management I find comes down to empowering people to make decisions, so that you don’t need to be in a position where you have to micromanage them. Tell them what is it you want to achieve, tell them why you want to do it, what’s important to you along that path, and then let them do it.
If you try to micromanage everything, it’s going to take so much time, work, and effort on your part that a lot of times it’s just not even worth trying to outsource it. You may as well just do it yourself because you have this vision in your head of exactly how everything needs to be done. If you’re micromanaging it, you’re just basically wasting your time. You’re having somebody else do it, and then you’re double-checking everything anyway. It’s not going to work out for you in terms of the time that you’re trying to gain from in and then out.
Rob: I think that’s a mistake that most beginning managers or delegators make. They’re used to doing things themselves and they want the control. I know that I made this mistake in the early days of hiring people that probably weren’t that good. I felt like I needed to give them a lot of instruction.
It wasn’t that they weren’t that good, but maybe they just didn’t have the experience, but I hired them because they were cheap and I didn’t have a lot of money. Like you said, it was probably not worth doing at all. I should’ve tried to find someone with the experience, waited until I had some budget, maybe had them work fewer hours and just on fewer tasks, but have someone who’s more of a fit.
I think one of the things that I’ve discovered about management and teamwork over the years, building this companies, is that a big part of it is getting the right people on the bus. It’s hiring people who work with your work style and hiring people who work well together.
If you do that, even if you don’t have a tremendous amount of budget, you can really get a lot of work done.
Mike: Something else that goes into managing a team is knowing when it’s not working out. Not everything is going to work out. There’s times where you have to cut your losses and move on whether that’s with a contractor an employee, you can do everything in your power to try and make sure that things go well and that you are managing them in a fair and effective way, and that they understand what is it that they’re supposed to do.
Ultimately, there are times when it just doesn’t work out. You need to be able to recognize those and move on in a way that is best for everyone involved.
Rob: The fifth soft skill, which kind of covers or applies to almost all the ones that we’ve talked about already is communication. In every interaction with someone else, it is critical that you have the ability to communicate clearly, to communicate effectively, and frankly, to communicate with empathy with the other person in mind, what their mindset is.
It is not just drilling down, “You need to do this!” But it’s like, “What do I know about this person that I’ve worked with for a year and how they think about things?” “How much control do they want? How much control am I willing to give?” “What kind of instructions do they need?” And kind of tailoring that message, so learning to communicate effectively with people is huge because it saves time and prevents misunderstandings.
This includes, when we think about communication, there’s written communication. It’s your emails; essays, if you’re writing blog post, or anything like that. It’s presenting. It is verbal communication both in meetings or in planning sessions or in brainstorming sessions.
I think a big part of this, I don’t know if this is the whole thing, but a big part of it is figuring out which mode of communication that works best for you and potentially, and I don’t know if it goes as far as to build a team around that, but to realize, “Wow, I really am better at verbal stuff that needs to be part of our culture of our team. They can take a voicemail from me or a voxer, or are willing to jump on a call and chat something really quick because I’m a 10x verbal processor, but my emails really suck,” or vice-versa.
If you’re really good at writing, then build a culture where it’s around Slack or it’s around email. If you’re going to build a company of 200 people, then that won’t work. You can’t dictate it. But if you’re going to build a team of 3-10 people, then a lot rotates around with the founder being effective at what they’re doing.
I do think that are discovering that and knowing it about yourself and potentially improving the other ways as well which is something I’ve done along the way. I’ve traditionally been a good writer. I’ve traditionally not been someone who was good both at public speaking or verbal interactions, in general.
Something that we’ve done in the podcast has made me much more able to process my thoughts verbally and to get stuff out there that’s kind of in my head, and then doing all the public speaking. Early on, it was at conferences from 2007-2010, and then we started MicroConf. Now you and I are in a good way, forced to speak basically two times a year. That just keeps your chops up. It keeps your ability to communicate a message in a way that’s really effective.
Mike: The ability to practice those types of things in some ways, it’s force, but at the same time, you also learn to enjoy it at some point, or at least, I would hope that you would enjoy it if you have to do it enough.
Those types of skills—the presenting skills and the public speaking—those really help when it comes to things like sales presentations or trying to go through an interview process and explain to somebody why it is that they should join your team, or when you’re negotiating with somebody about their salary requirements or what their needs are for them to on-board onto your product and determine what it is that’s holding them back and what their objections are.
All that stuff that goes along with the communication is extremely critical whether you need to follow up with an email or you need to explain it to them in person. Being able to recognize what the preferred mode of communication is for other people, and then adapt to yourself to their preferred mode of communication is really going to be helpful for you to be able to achieve your objectives within the context that they are comfortable in.
You can’t also go via email. I can speak for most introverts who are listening to this. My preferred mode is email, but that doesn’t mean that it works for everybody. Some people actually like getting on the phone and you have to be able to do that. If you want to do a demo of your product, then clearly, you have to get onto a call and do that with them.
There are ways around that. There are some exceptions where you can have videos and things like that, but for the most part, you still have to adapt to the world around you and put things out or present them in a way that other people are able to and willing to consume them.
Rob: That’s really a good point. It’s really hard to hide in a corner if you do truly want to be introverted and do everything via email. You really need a low priced self-service SaaS offering and you’re only going to be able to grow that to a certain size.
That’s not terrible. That’s what I did in the early days, to be honest, until I felt like I needed to force myself out of the shell. It’s not to say that’s something you can’t do, but you’re definitely going to limit—it’s a self-limiting behavior, to not want to improve on the modes of communication that you don’t necessarily enjoy.
One thing I want to touch on, as you mentioned having hard conversations or just having important conversations and there was a really good book recommended to me by Ruben Gomez from Bidsketch that’s called Crucial Conversations.
I’ve read it. I like it. I think if you want to improve your ability to have not just difficult conversations, just important conversations with people, I think it’s a really good look at framing how you should approach them and how you should view them.
To recap the five soft skills we looked at today were empathy, time management, negotiation, management and teamwork, and communication.
If you have a question for us, you call our voicemail number at 888-801-9690 or you can record an MP3 on your phone or your computer. You can email us at questions@startupsfortherestofus.com.
Our theme music is an excerpt from We’re Outta Control, it’s by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for startups. You can visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 393 | Marketing and Growth Questions Answered
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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike answer marketing and growth questions as well as give advice on starting a new venture.
Items mentioned in this episode:
Mike: In this episode of the Startups For The Rest Of Us, Rob and I are going to be answering marketing and growth questions. This is Startups For The Rest Of Us episode 393.
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: 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: You know man, I appreciated that you and Zander pulled the joke on me and put unemployed on my badge at MicroConf. It was hilarious. Everybody was commenting about it. It was super fun.
The big question people were asking me was like, “How’s unemployment/retirement treating you?” Now that I’m a couple weeks into it, it’s everything you imagine it would be in a good way. I haven’t felt this relaxed and focused almost, it sounds like an odd thing but for me, it’s like having the headspace to dive deep into topics that I just have the time to do.
It’s the freedom to not need to generate a result next day or next week based on what I do today but realizing that long term, yeah, probably we’re going to do something again, something interesting, but to have the freedom to just float from one thing to the next and do it, I haven’t felt like this since before HitTail, which was the 2010-2011 timeframe, we had our second son and I spent about 10 months where I worked 10-15 hours a week and it felt amazing.
It wasn’t until I got 4-6 months into that before I really started getting bored and anxious and wanting to do the next thing. That’s my first report of how it’s going, it’s I’m definitely not bored yet and I will, at a time when I think I will get bored, but I’m certainly feeling my days at this point.
One example of this, man, is, since we have a live in nanny a year or two ago and she was here for about six or eight months then her mom had a health issue and she moved away. Ever since then we’ve just struggled to have stable child care. It’s been a real problem because Sherry is trying to work, I was going to the office a few days a week and it was always a struggle.
Today, Sherry’s out of town speaking at a conference and one of our kids is sick, one of our 7 year olds. She stayed here at the house, but it wasn’t a big deal.
Obviously, I’d prefer during the day to do my stuff, but I don’t have to. It wasn’t this big scramble of, “Oh no! I need to tell my team that I can’t make these meetings,” or, “I had deliverable that now I can’t get done because I’m hanging out with a kid.” It’s that kind of flexibility that I hope that I relish and enjoy in the coming months.
Mike: I can definitely see that. When I’m out of town, my wife owns her own business, it’s
a fitness studio. She’s got things going on at the studio pretty much all week, so when I’m out of town for MicroConf for example, it’s makes it a lot more difficult for her to manage things and then there’s always stuff that comes up where somebody’s going to have to deal with it.
The other day, one of our kids fell in the driveway, literally just before school. That’s going to be dealt with as well. You can’t just say, “Oh well. I’ll deal with it this afternoon.” You’ve got to deal with it at that point and push other things around in order to work through whatever the issue is.
Two people having their own business in the same household is actually really, really hard.
Rob: Totally. Two businesses and kids. All of that. There’s just too many unknowns and there are too many surprises and there’s too many–schools get cancelled because of snow or some other thing, they have problem with busses, or one kid gets sick, or parent-teacher conference–there’s always something going on that is screwing with your schedule and your focus.
Mike: That’s why the general advice on kids is to get a fish instead.
Rob: A fish instead, indeed. How about you, what’s going on this week?
Mike: Now that MicroConf is winding down, I’m starting ramp up the marketing efforts for BlueTick again and I don’t have to worry about things from MicroConf interjecting in into that. Although, things with MicroConf Europe are going to probably interfere a little bit moving forward, but I don’t think that it’s going to be nearly as bad as with MicroConf in Vegas just because there were the two conferences and the sheer number of speakers that we had to work with but there’s just a lot less going on just because it’s only one conference.
But with the marketing efforts like I’m starting to get into the point where I’m focusing on doing things like webinars and the onboarding emails are getting better, there’s a few product updates that are going to go out there, are going to make things a lot easier for customers to do what they need to do in the app and guide them through it a little bit better because right now, I typically do on-boarding for people manually, which is helpful, but it’s not necessarily scalable.
There’s all these low hanging fruit that I still have not done yet because there were pieces of the app that I knew had issues and most of those have been cleared up, but I was waiting until after MicroConf was over in order to do the big marketing push again.
There’s been a couple of times in the past where I felt like things were ready to start pushing on the marketing and then I started to go down that path and then find something wrong. I’m hoping that that doesn’t happen again, but we’ll see how that works out. Nothing goes as planned but I feel reasonably confident again.
Rob: On my end, I found a couple of new podcasts I wanted to mention that are in the bootstrap
software space or the product space, because I have a Google alert for MicroConf, so if you review MicroConf on your podcast, I will tend to listen to at least that episode. It just so happened that there were a handful of podcast that mentioned it. One of which, I already listened to, but I wanted to call them out here and announce them for folks who were looking for other folks like us. It’s the Micropreneur, Startups For The Rest Of Us, MicroConf Crowd, and who are talking about the things that we’re doing.
First one is called Hooked On Products and this is from Phil Derksen and John Turner. Phil and I have known each other from Fresno for years and then John Turner is the co-founder of SeedProd. He’s been on the podcast.
The next one is Build Your SaaS. It’s Justin Jackson’s podcast. He co-host with his co-founder of transistor.fm, and then of course The Art of Product which is Derrick Reimer, my co-founder’s podcast with Ben Orenstein.
We will link those up in the show notes: Hooked On Products, Build Your SaaS and The Art of
Product, but definitely, if you’re looking for some new podcasts along these lines, those are the early 2018 winners at this point.
We have listener questions. First set of questions, it looks like three questions in the same email. It’s from Michael Palteon, and he says, “I have a couple questions. The first is, I’m working on a SaaS app in a server management/scaling. I have a large LinkedIn network and I’ve started posted the progress of the development on a weekly basis. I know Rob did something once with Derrick when he was building Drip, but I feels like the post or the content only stay on LinkedIn. What’s your view on posting the same content on possibly multiple channels? Like Medium, a blog, or maybe even a podcast versus focusing on LinkedIn.
Mike: I think the danger of focusing on just one place to post them like LinkedIn is that that stuff doesn’t tend to work it’s way out into other areas. By posting it on your blog and on Medium and on LinkedIn, then you start to cast a wider net, but I think that I would also be careful of posting them all on the exact same day, you space them out, so let’s say that you post an article on LinkedIn and then the next week, you post the same article on Medium, and then the next week after that, you post the same article on your blog. That’s going to cast a bit of a wider net because then you’re not only reaching more people in different channels, but you’re spacing it out such that you’re probably going to catch the people who would have caught it on LinkedIn on your blog, or on Medium in other ways.
There’s got to be some overlap between them, but by spacing them out a little bit, you get the advantage of getting it in front of people more than once, but you’re going to have to look into what’s going to be an appropriate schedule for that, and I don’t know off the top of my head what that would be. Obviously, it depends on a lot of different factors.
That’s how I would think about it. I don’t think I would just say, “Oh, just post it here.” Unless you have a newsletter or something like that where you’re telling them flat out, “We’re going to be posting exclusive stuff and it’s only going to be in our blog,” for example, and “You’re only going to get it if you’re on this newsletter.”
If you’re going to do that, do not also post it in other places because then you’re essentially lying to the people who are signing up for your mailing list, they’re not going to appreciate it.
Rob: This is a tough one. I think syndicating to multiple platforms tends to be a good idea. Back in the day, it was the duplicate content penalty from Google. I know that kind of exists these days and Google will pick a canonical version, but it’s this balance of trying to digital share crop on other people’s land which is the LinkedIn or Medium, or build your own following on a blog.
These days, it’s just so hard to do it on your own and to try to get people to come read it because you have to get those traffic sources and it’s harder to share on all these things.
I would probably lean towards doing both that if you do have something long form to put it on your blog, post it on LinkedIn and link back. You can say, “This was originally published on blank,” and link back to your blog. You could do the same thing on Medium.
The thing that I wonder is whether it’s going to help at all, whether you’re going to notice it. That’s something to test. When we did this with Drip, at a certain point, we were building the blog up, then we switched to where we were posting first on Medium just to try to see if we could gain critical mass there. We never did.
We switched back to doing both and it was fine. Posting to both was not a big time investment and so we kept doing it and it had a nominal return, but it was not some mind blowing growth engine or anything like that.
I think you’d either reeling to discover a clever hack or perhaps that time has passed for things like the Medium and the LinkedIn. You’ve got to get in early and get traction and be an early person and get a lot of followers, then you can do it.
You should try it for 60 days and just see what happens, but I have question if it’s going to move the needle at all, and then in terms of maybe doing a podcast, to me that’s a different question altogether, because if you’re going to write it and put it out, that’s one thing.
If you’re planning on just reading them on a podcast, you could certainly try it. Hopefully it’d be interesting, but like podcasting is such a different game than blogging. I think there’s a whole
different question you want to ask yourself is, “Can I make this entertaining? Will people want to listen to it?” That kind of thing versus writing one of articles, people will just stumble upon it.
Michael’s second question is, “I’ve been thinking about starting my own podcast for some time. But I like shows with two hosts. My question is how would you go about finding a co-host for a podcast? I don’t think I’ve heard you guys met and decided to start the podcast. It would also be interesting to hear that as well.”
Mike: Do you want me to take that one?
Rob: Yeah. I think we both know the story. Take it up.
Mike: The way Rob and I met was back in 2005. I had left the startup company that I was working for, went off on my own. I think Rob, you’ve talked a little bit about how you were doing independent consulting around that time.
Working from home alone is isolating and back at those days, there were not very many blogs and there were no communities for people who were a single founder working out of their living room or their kitchen or the basement. I looked around and the closest I ever found was the Joel on Software Blog.
Obviously, a lot of people were reading that, but I looked at that and said, “Well, I would like to blog about my own experiences.” I started doing that and I was looking around for people who are doing the same thing and I came across Rob’s blog.
I didn’t realize it at the time, but Rob was also doing the same exact thing and had come across my blog. We were peripherally aware of each other, but didn’t know each other, knew who we were. I think fast forward a little bit, Rob had ran through a bunch of different products and one of them he sold, he was selling from his blog. I looked at it and said, “Hey. I’d be interested in buying that.” We got in a conversation, I bought it from Rob.
I think it was for the next year or so, you and I traded blogpost back and forth before we posted them just because we weren’t real comfortable blogging on our own yet and just went through it like an iterative editing process and then once we got comfortable, we just went on our separate ways and that was around 2007, I think.
Fast forward a couple of years, you had started the MicroConf Academy and that was based on building a course around all the stuff that you had learned and you are just basically busy or too busy to turn out all the content with it and you looked through your Rolodex and I showed up
on the shortlist somehow and we got to talk and worked something out, and I basically joined you as you the co-founder of the MicroConf Academy. That was 2009; 2010, we started the podcast. Is that right?
Rob: I think so. 2010 podcast and 2011 MicroConf.
Mike: That’s how things worked out. I don’t if there’s a good lesson there in terms of finding a co-host for the podcast, but there was at least some level of familiarity there between us from editing each other’s blogpost and stuff before we got on to the podcast.
I don’t think that you need that. I don’t think you need to go into a business relationship with somebody before that part, but you have to at least be able to get along and know that I think that your general values and ethos are aligned. That’s our story. Rob, are there specific lessons that you can think of for that?
Rob: He’s asking how would you go about finding a co-host and I’m wondering, do you really want to start your own or do you want to find a podcast for the single host and try to get on an existing one.
Jordan Gal and Brian Casel did this. Brian had the podcast Bootstrapped Web first and then Jordan joined him later and made the podcast a lot better. I think you could consider doing that. If someone else is already doing it and they’re delivering and you get a little bit of an advantage of coming on late. That’s probably the first thing I would consider.
The other thing is if you’re starting it to talk about fun stuff like entrepreneurship or hobbies or whatever, then just go ahead and do it and start it and you’ll find people. If you’re starting around your business and you really wanted to be this super professional thing up front, then yeah, I do think you need to spend more time thinking about the concept and looking around.
There are podcasting forums, there are podcasts about podcasting and those that have communities. I think probably getting that intersection of people who listen to those podcast and listen to Startups For The Rest Of Us or go to MicroConf, if you’re going to talk about bootstrapping, then that’s going to be it.
You have to find that Venn Diagram, an intersection of someone who is interested in the topic and able to talk about it and also wanting to do it in a podcast form because it is no small commitment to do this. Ask anybody who podcasts. There’s an amount of time that you have to set aside and an amount of time that you have to that you have to have.
Podcasting is different than blogging where if you blog once a month, nobody really cares. It’s fine. Hey, it’s a good article and I got up on Hacker News or Product Hunt or whatever. If you podcast once a month, you might as well not. Unless you’re Dan Carlin’s Hardcore History which is a four hour thing. That’s an exemption. But for the most part, you need to ship fairly frequently, it is a commitment from that start that I would say if you don’t think you can keep that up, do not waste your time.
Mike: I think that commitment is something that people overlook and you really have to have an episode at least every week in order to start building an audience. I remember back when we started Startups For The Rest Of Us, we were doing it every week and then we decided, “Let’s change this up and let’s do every other week.” We did every other week for three or four months. It was very obvious that the growth slowed down. Once we went back to every week, it went right back up again. You have to be mindful of that.
I know that there’s articles all over the place that say, “How many times you should post? How many times you should create a new podcast and how long they should be?” And all these different things. It really boils down to the function of how much time and effort you have, and what it is that you’re going to do with it, what’s your goal for that? There’s just a lot of different factors, that’s all.
Rob: He’s third question. He says, “It’d be great if you guys could do another run down of the podcast you listen to or recommend.” I’m going to table that one for now because maybe in the next few episodes, we’ll do that. I’d like to revisit, it changes so frequently with me that I think it’d be worth doing.
He asks, “What equipment and recording devices do you use? Many other great podcast that
I used to listen to are no longer publishing new episodes as often and I’m also not sure why this happens to most podcasts.” That’s exactly what we were just saying. It’s because it just takes time and if you don’t have some type of something that you get out of it, whether it’s a personal brand or whether you’re selling conference tickets or whether you’re promoting an application where you’re getting some type of feedback loop, it is too much work to justify just doing a podcast for the sake of doing a podcast.
That’s why I’m sure a lot of these fade is they just figured the ROI isn’t there given the amount of work there is. Aside from that, what equipment and recording devices do we use, Mike? What complex, intricate system do we use?
Mike: Are you mocking me? We’re mocking ourselves.
Rob: We use USB headsets that we have for 10 years. I know sometimes now when I listen to podcasts I hear the plastic in the headsets jangling around. I’ve tried the Blue Yeti, and I’ve tried the Snowball and I don’t like the sound quality nearly as much in the finished product as these Plantronics (DSP) Digital Signal Processing headsets. I’m not going to name the exact model because they’re discontinued and whenever they come up on eBay, I buy them.
I have about 8 or 10 in the drawer in my house because I burn through them because they break. The mute button stops working, they get to janky, their cords are broken. I’ve probably gone through five or six in the past 10 years and I have another stock in this drawer here that Sherry and I share.
But what I would say is if you’re going to do this, you can get the Yeti or the Snowball, those are the recommended ones. You just have to have sound baffling, you have to have a very quiet environment. If you have kids five rooms away, it will totally pick that up.
If you want to do the USB headset where you can move your head a lot, definitely go USB and don’t go the audio auxiliary and then test several out. That’s what I did. I bought six or eight of them at the start and tested them all out. It was a noticeable difference in the sound quality.
Mike: Just some general advice when looking for headsets, you probably want something that’s relatively light. You don’t want something that’s massive and bulky. You definitely want something that has a boom or a microphone that is stable and is going to sit in front of your face.
As Rob had just said, the problems with the Blue Yeti and microphones like that is you really have to be speaking directly at them and hold your head at about the same distance the entire time. It can really be uncomfortable, especially if you’re the type of person that fidgets. I know Rob tends to walk around sometimes when he’s podcasting, I sit at my desk, but I also look around the room. I’m not always looking in the same direction. That screws with the sound quality.
I think that’s what most podcasters who are much more visible about what equipment they use, they talk about these things, “Oh, the sound quality for this and that.” The USB headset works fine. It doesn’t matter that much. You don’t have to go all out on all of these equipment.
I think the USB headsets that we use, I think they cost $40 or $50. It’s not very expensive. I have seen versions of the ones that you are not willing to talk about or disclose like $200 or $300 at this point because they are much newer versions. I’m using one right now that I can find for $60 or so and it’s a slightly different version than you use. It works fantastic.
Rob: Again, that’s Plantronics headsets. It’s not the super lightweight one. You want the one with the bigger mic with the pop filter and all that. Several of them will work for you, I don’t think you have to get so detailed and know exactly which models or whatever we’re using.
Mike: We used to just record over Skype and use either call recorder or Pamela. Pamela was on Windows that would hook into Skype and then Call Recorder is on the Mac. It worked reasonably well, but the problem is they record at both sides, so if your connection drops from Skype or it was not a great connection which happens frequently and feels like it happens more and more frequently these days with Skype, then you may end up recording the podcast again.
I’ve had entire podcast where we’ve had to dump it, not with ours, but with other people’s where Skype just dropped everything. There’s nothing you can do at that point.
We use a service called Zencastr right now. zencastr.com. It records the audio on both sides through the browser, there’s no additional software needed. You hop on it, records on both sides, uploads. I have to send it into Dropbox. It works out well.
Rob: I think the switch to Zencastr was definitely a good move for us. A lot less headaches. I don’t go on to Skype at all anymore. I do all my meetings through Zoom and then recordings through Zencastr. When someone asks to Skype me now, I’ll groan, I get figure out how to make a call because they redo the interface every four months and you don’t even know how to do it. It’s kind of a mess.
Mike: Your response should be, “Do you still have a yellow corded phone?”
Rob: Thanks for the questions Michael. I hope our answers were helpful. Next question is from Alex and he says, “Hello. I am interested in creating my own ecommerce website that will host new entrepreneurs’ products on my site for a subscription fee. Ideally, this will be for those who want cheaper advertising and not at the level of having their products on Amazon yet. My niche is American businesses and my goal is the support of small business. I’m still working out all the details. This is a new business platform but I’d love to hear some feedback.”
What do you think Mike?
Mike: I’m not sure what he’s selling.
Rob: I think this is a tough one. He’s trying to setup a website that can host ecommerce like physical products for people who don’t want to put their products on Amazon yet or on at the level. I just don’t know of any product that’s like that. It’s a theoretical of like they want cheaper advertising, but have you run into anyone in your life who fits this bill?
Mike: No.
Rob: Yeah, and I haven’t either. That’s the first thing I would do, Alex. I think it’s good that you asked. First thing I would do is you need to go out and find 10, 20, 30 people who have this exact need because I don’t believe that there are that many people. If there are, and if they’re not at the level where they want to have their product on Amazon, which is not a very high bar. I’m guessing that they’re not going to have enough money to want to pay a subscription fee to host it on your site.
Mike: Yeah. This is a classic case of saying, “It’s too expensive for me. So it must be too expensive for other people,” and you’re trying to squeeze blood from a stone at that point. It’s not a good business model.
I recognize and empathize with the desire to help the people who have no money, but you can’t do it by charging them, like you have to go up market, charge people who do have money and then turn around and use that to invest in products and services and things like that that can help that people at the bottom.
Honestly, that’s one of the things that we’ve done with the scholarship program this year with MicroConf. We got MicroConf to a certain point and it was growing and scaled up and we got enough people there now that it’s like, “How can we help those people at the bottom who could use that help to get up to our level? How do you bring other people up?” To do that, you need money. You can’t charge the people who don’t have any money. It’s not going to work.
Rob: I’m glad you asked the question because I’m guessing that if you don’t go out and validate this, you can spend a lot time either building it or hiring someone to build it or whatever. The first step that I would do is just figure out if this is viable at all because I think red flyers are going out for both you and I about the idea at least the way that he’s described it here.
All right, our next set of questions are from Linton Ye and he is with jimulabs.com. He says, “Thanks for another tremendously useful MicroConf. As I mentioned to Mike, I started building a course right after last year, 2017 MicroConf. I’ve been trying to follow the formulas I learned at the conference and I’m seeing some good signs. I’d really appreciate it if you could help me with some questions. Background: The product is a video course built for UI designers teaching them React, which is a JavaScript framework. The goal is not to convert them into developers but to help them work with developers more efficiently. As of now, I have 1300 subscribers in my list.” Assuming that’s an email list. “I’m still building the course, but there are around 30 people who have bought the first module for $79 or preordered the entire bundle at $169. About two-thirds preordered the whole thing, about one-tenth of all subscribers replied to my quick question email.”
He has a decent amount of engagement. “The majority of my subscribers came from a few post on Designer News, which is like Hacker News for designers. The post brought almost 800 subscribers last May and June, but the growth of the list has slowed down since then. I’m also doing blogging and guest blogging. I didn’t do much SEO intentionally, but many told me that they found the site by Googling. I have attached a chart of the history of my list with explanation of key events. Let me know if you need more data.” And he has a bar graph for us.
He has questions for us. It looks like maybe three or four. He says, “Does this product feel like something that will work?” That’s an interesting way to phrase that. I’m not sure what work means. It just depends on your goals. Do I think you’re going to sell copies of it? Absolutely. Do I think you’re going to make six figures from it? No. The list is too small. It’s not too small. The list is too small to make six figures from is what I’m going to say. You’ve got to start somewhere.
If you haven’t engaged with these subscribers and that’s the part I don’t know. I would be keeping them warm and then I would be taking other approaches that are probably free marketing at this point. If you watch the talk this year from Adam, that we talked about Adam Wathan. We talked about in the last episode, that was the blueprint of how to do this. It’s a lot of social media stuff and it’s a lot of getting into that community and having a reach in there.
Mike: I was going to mention as well. He talked to me about this product because he attended Growth edition and Adam spoken as Starter edition and Adam’s talk, go over to the MicroConf recap website and look up Adam Wathan’s talk, there’s all the notes there from the Christian Genco took and there’s a lot of detail there that you won’t get the full context of the talk but there’s a lot of stuff there that you’ll be able to take away.
I think that that will really help you figure out how to make certain things work and how to scale them up. But obviously, with your questions, there’s a lot of–it depends in there. How far do you want to take this? How much time do you have to dedicate to it? Do you want to grow into this massive business or do you just want to keep it small and put something out there that you can use a resume builder, but something to point at and say, “Hey, I’ve done this, so I have experience in this area.” It depends on what the purpose of it is.
If it’s a build a business, then yeah, you’re probably making into a business but as Rob said, not with just 1300 subscribers. That’s a great start, but you need to find other channels and I think, as he had mentioned in this email that most of those came from a Hacker News post. You need to find what those other channels are and whether that’s Twitter or Facebook or doing paid ads.
I think the difficult position you’re in is one, the product is not finished and two, you’ve already presold some of it. Preselling an unfinished product, especially with tiers is something that Adam had actually advised against.
Rob: What’s interesting is we’re talking about this list of 1300 people and that’s a great start, and can you make $5000 from this or $6000 or $7000 from that list? Yeah, I think so, if they’re engaged. I don’t think that’s an issue at all. But this is not anything that’s going to replace your income so it does depend on your goals.
His next questions is, “That is priority right now is to finish the course or should I work on growing the list at the same time? Most people have told me that it would be better to spend half of my time on both.” I agree with that. If you are just hammering the course out and not doing any list growth, I feel like you should be partitioning your time. Because keeping that list warm and keeping it going is how you’re going to build this business.
If you go through fits and starts where you’re going to try to grow the list for six months and then you’re going to build a course for four months, and you’re going to stop building a list, unless you’re at critical mass where you do have that 10,000; 20,000; 30,000-person list, that’s when you can start thinking about backing off growing it.
Do you agree with that Mike or what do you think?
Mike: I totally agree, but I think that there’s a little tactic that you can throw in there whereas you’re building the course, as you’re finishing it, you can take little snippets of that and post it on social media in order to help augment your existing list. Whether that is specific post on Twitter or on Facebook or you put something out on Medium that says, “Hey, I’m working on
this and this is what I’ve learned so far.”
Educating people about how to do something and talking about the struggles that you’re going through as you’re going through that process, that has a tendency to resonate with a lot of people. It’s not to say that everyone who joins your list is going to become a customer, but if they’re interested in the stuff that you’re teaching, not just the process but the content itself, those people will eventually turn into customers.
It also gives you the ability to take those things and email them out to your existing list and say, “Hey, just an inside view of what this looks like and where it’s at.” That will help keep the list warm as well, because the last thing you want to do is spend 80%, 90%, or even 100% of your time just finishing the product and then four months from now, you haven’t send a single email to your list and you drop an email on them that says, “Hey, this thing is now available, please buy it.” You and I have seen people do that for SaaS applications and software and it doesn’t work.
The reason it doesn’t work is because they’re like, “Oh, I totally forgotten you even existed.” They’re not excited about it.
Rob: Right. His next question is, “What else could I do to grow my list. Blogging and a free email course seems to work okay, but it takes a lot of time to create the content. I have seen others using ads. What you recommend?” My thoughts on this are the way that you typically do this is through social media, through blogging, through podcasting, through getting out there and doing a bunch of free marketing. That’s because most people don’t have a ton of money to spend
in the early days.
If you have money and you’re interested in running ads and that’s something that excites you then go run ads. Go run ads on Facebook or buy ads on Designer News, he talked about sponsor email newsletters and test that stuff. That stuff is always fun for me.
I’m some type of twisted individual that I enjoyed paying to see if I could get a sustainable flywheel. Other people hate that. If that is their business, they don’t want to do it. You look at how Rob and Mike built their list? How has Justin Jackson built his list? Through being out there and recording a podcast every week. Justin Jackson, he’s got a bunch. That’s how he built his list. It took him a few years, but it’s figuring out what it is that interests you that you think you can do long term and that you’re actually going to double down on.
Do I think ads could work? I absolutely do. But you have to ask yourself, is that something that you’re interested in doing? I know Brennan Dunn started with ebooks and courses and blogging and tweeting. It’s was a big social media thing, and then he got it to the point where it’s making enough money and he knew that for every person that gets on his list he gets X dollars back. Then he started running ads.
He doesn’t even need to be that good at running the ads because he had such a high LTV on list subscribers. You could take that approach, too. You build up the social following, you build up the brand, and then later you run the ads, you could do ads from the start. I think any of these will work, it’s a question of what am I really excited to do and to get up every morning and do. If it’s like, “I love the blogging and the rush of trying to get to the top of Hacker News, Product Hunt, and Designer News,” then go all in on that and blog three times a week.
If you prefer to podcast, then go all in on that. If you prefer to do ads like I was saying, which some people get more excitement out of, certainly, I think you could invest time in that.
Mike: His next question is, “Is it realistic to have a goal of 10,000 subscribers in the next year?” He says he spoken to some people who have 5000 subscribers, all of them have been writing and building their list for 3-5 years. “Have you see anyone who was able to grow a high quality list quickly?”
This is a hard question because it depends so much on what you do. Is it possible? Absolutely. It depends so much on the things that you do. These people who’ve been writing and building their list for 3-5 years, what tactics and techniques have they done? Have they systemized it? Have they created processes that are things that are repeatable and scalable and can be done without their input and toggling the different switches? Because if you’re relying out of process that depends on you doing something every single week, it’s less likely that you’re going do it.
It’s not to say that it is impossible and there’s definitely people who do it. We pump up this podcast every single week, almost without fail at this point. But it takes time and commitment and do you have the commitment to do whatever to toggle that switch or pull that lever every single week? If you don’t, it’s not going to happen, therefore it’s going to be pushed out.
Honestly, in a way, it ties back to email follow ups, that’s why I built Bluetick. I don’t have the mental capacity to sit there and write all of those follow up emails every single time because it’s hard to do, it’s hard to make yourself do it if you don’t want to. You need to find those things that you’re going to be able to do on a repeated basis or to automate in such a way that you don’t need to be directly involved in it. It’s still going to create Rob’s flywheel effect.
Rob: Yes. 10,000 subscribers in a year, absolutely possible. I have known many people
that do this. It’s not easy and it’s not just going to happen just by throwing things out, you have to be deliberate about it, you’ve got to be focused, you’ve got to ship either some type of content or some type of thing on a really recurring basis.
Product launches also help. If you do a big product launch, it will help you build the list, joint ventures would be a huge one. If you find anyone else that you could promote their product, they could promote your product, that is going to build the list because even if people don’t buy your product, they will sign up to hear from you about future stuff that you’re doing. Doing a podcast tour, there are a lot of ways to do this and if you really focus, yes, I think you can do it.
I think building a 5000 subscribers in 3-5 years sounds like a nice even keel side business pays where it’s like, “Yeah, I’m going to blog about this this week.” Which is fine, but it’s not. If you’re really aggressive about this and you want to get to 10K, I think you can absolutely do it.
Thanks for the question Linton, I hope our answers are helpful.
If you have a question for us, call our voicemail number at 888-801-9690 or email at us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control, it’s by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Welcome to Startups For The Rest Of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching and growing software products, whether you built your first product or you’re just thinking about it. I’m Mike.
Rob: I’m Rob.
Mike: We’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s going on this week, Rob?
Rob: You know man, I appreciated that you and Zander pulled the joke on me and put unemployed on my badge at MicroConf. It was hilarious. Everybody was commenting about it. It was super fun.
The big question people were asking me was like, “How’s unemployment/retirement treating you?” Now that I’m a couple weeks into it, it’s everything you imagine it would be in a good way. I haven’t felt this relaxed and focused almost, it sounds like an odd thing but for me, it’s like having the headspace to dive deep into topics that I just have the time to do.
It’s the freedom to not need to generate a result next day or next week based on what I do today but realizing that long term, yeah, probably we’re going to do something again, something interesting, but to have the freedom to just float from one thing to the next and do it, I haven’t felt like this since before HitTail, which was the 2010-2011 timeframe, we had our second son and I spent about 10 months where I worked 10-15 hours a week and it felt amazing.
It wasn’t until I got 4-6 months into that before I really started getting bored and anxious and wanting to do the next thing. That’s my first report of how it’s going, it’s I’m definitely not bored yet and I will, at a time when I think I will get bored, but I’m certainly feeling my days at this point.
One example of this, man, is, since we have a live in nanny a year or two ago and she was here for about six or eight months then her mom had a health issue and she moved away. Ever since then we’ve just struggled to have stable child care. It’s been a real problem because Sherry is trying to work, I was going to the office a few days a week and it was always a struggle.
Today, Sherry’s out of town speaking at a conference and one of our kids is sick, one of our 7 year olds. She stayed here at the house, but it wasn’t a big deal.
Obviously, I’d prefer during the day to do my stuff, but I don’t have to. It wasn’t this big scramble of, “Oh no! I need to tell my team that I can’t make these meetings,” or, “I had deliverable that now I can’t get done because I’m hanging out with a kid.” It’s that kind of flexibility that I hope that I relish and enjoy in the coming months.
Mike: I can definitely see that. When I’m out of town, my wife owns her own business, it’s
a fitness studio. She’s got things going on at the studio pretty much all week, so when I’m out of town for MicroConf for example, it’s makes it a lot more difficult for her to manage things and then there’s always stuff that comes up where somebody’s going to have to deal with it.
The other day, one of our kids fell in the driveway, literally just before school. That’s going to be dealt with as well. You can’t just say, “Oh well. I’ll deal with it this afternoon.” You’ve got to deal with it at that point and push other things around in order to work through whatever the issue is.
Two people having their own business in the same household is actually really, really hard.
Rob: Totally. Two businesses and kids. All of that. There’s just too many unknowns and there are too many surprises and there’s too many–schools get cancelled because of snow or some other thing, they have problem with busses, or one kid gets sick, or parent-teacher conference–there’s always something going on that is screwing with your schedule and your focus.
Mike: That’s why the general advice on kids is to get a fish instead.
Rob: A fish instead, indeed. How about you, what’s going on this week?
Mike: Now that MicroConf is winding down, I’m starting ramp up the marketing efforts for BlueTick again and I don’t have to worry about things from MicroConf interjecting in into that. Although, things with MicroConf Europe are going to probably interfere a little bit moving forward, but I don’t think that it’s going to be nearly as bad as with MicroConf in Vegas just because there were the two conferences and the sheer number of speakers that we had to work with but there’s just a lot less going on just because it’s only one conference.
But with the marketing efforts like I’m starting to get into the point where I’m focusing on doing things like webinars and the onboarding emails are getting better, there’s a few product updates that are going to go out there, are going to make things a lot easier for customers to do what they need to do in the app and guide them through it a little bit better because right now, I typically do on-boarding for people manually, which is helpful, but it’s not necessarily scalable.
There’s all these low hanging fruit that I still have not done yet because there were pieces of the app that I knew had issues and most of those have been cleared up, but I was waiting until after MicroConf was over in order to do the big marketing push again.
There’s been a couple of times in the past where I felt like things were ready to start pushing on the marketing and then I started to go down that path and then find something wrong. I’m hoping that that doesn’t happen again, but we’ll see how that works out. Nothing goes as planned but I feel reasonably confident again.
Rob: On my end, I found a couple of new podcasts I wanted to mention that are in the bootstrap
software space or the product space, because I have a Google alert for MicroConf, so if you review MicroConf on your podcast, I will tend to listen to at least that episode. It just so happened that there were a handful of podcast that mentioned it. One of which, I already listened to, but I wanted to call them out here and announce them for folks who were looking for other folks like us. It’s the Micropreneur, Startups For The Rest Of Us, MicroConf Crowd, and who are talking about the things that we’re doing.
First one is called Hooked On Products and this is from Phil Derksen and John Turner. Phil and I have known each other from Fresno for years and then John Turner is the co-founder of SeedProd. He’s been on the podcast.
The next one is Build Your SaaS. It’s Justin Jackson’s podcast. He co-host with his co-founder of transistor.fm, and then of course The Art of Product which is Derrick Reimer, my co-founder’s podcast with Ben Orenstein.
We will link those up in the show notes: Hooked On Products, Build Your SaaS and The Art of
Product, but definitely, if you’re looking for some new podcasts along these lines, those are the early 2018 winners at this point.
We have listener questions. First set of questions, it looks like three questions in the same email. It’s from Michael Palteon, and he says, “I have a couple questions. The first is, I’m working on a SaaS app in a server management/scaling. I have a large LinkedIn network and I’ve started posted the progress of the development on a weekly basis. I know Rob did something once with Derrick when he was building Drip, but I feels like the post or the content only stay on LinkedIn. What’s your view on posting the same content on possibly multiple channels? Like Medium, a blog, or maybe even a podcast versus focusing on LinkedIn.
Mike: I think the danger of focusing on just one place to post them like LinkedIn is that that stuff doesn’t tend to work it’s way out into other areas. By posting it on your blog and on Medium and on LinkedIn, then you start to cast a wider net, but I think that I would also be careful of posting them all on the exact same day, you space them out, so let’s say that you post an article on LinkedIn and then the next week, you post the same article on Medium, and then the next week after that, you post the same article on your blog. That’s going to cast a bit of a wider net because then you’re not only reaching more people in different channels, but you’re spacing it out such that you’re probably going to catch the people who would have caught it on LinkedIn on your blog, or on Medium in other ways.
There’s got to be some overlap between them, but by spacing them out a little bit, you get the advantage of getting it in front of people more than once, but you’re going to have to look into what’s going to be an appropriate schedule for that, and I don’t know off the top of my head what that would be. Obviously, it depends on a lot of different factors.
That’s how I would think about it. I don’t think I would just say, “Oh, just post it here.” Unless you have a newsletter or something like that where you’re telling them flat out, “We’re going to be posting exclusive stuff and it’s only going to be in our blog,” for example, and “You’re only going to get it if you’re on this newsletter.”
If you’re going to do that, do not also post it in other places because then you’re essentially lying to the people who are signing up for your mailing list, they’re not going to appreciate it.
Rob: This is a tough one. I think syndicating to multiple platforms tends to be a good idea. Back in the day, it was the duplicate content penalty from Google. I know that kind of exists these days and Google will pick a canonical version, but it’s this balance of trying to digital share crop on other people’s land which is the LinkedIn or Medium, or build your own following on a blog.
These days, it’s just so hard to do it on your own and to try to get people to come read it because you have to get those traffic sources and it’s harder to share on all these things.
I would probably lean towards doing both that if you do have something long form to put it on your blog, post it on LinkedIn and link back. You can say, “This was originally published on blank,” and link back to your blog. You could do the same thing on Medium.
The thing that I wonder is whether it’s going to help at all, whether you’re going to notice it. That’s something to test. When we did this with Drip, at a certain point, we were building the blog up, then we switched to where we were posting first on Medium just to try to see if we could gain critical mass there. We never did.
We switched back to doing both and it was fine. Posting to both was not a big time investment and so we kept doing it and it had a nominal return, but it was not some mind blowing growth engine or anything like that.
I think you’d either reeling to discover a clever hack or perhaps that time has passed for things like the Medium and the LinkedIn. You’ve got to get in early and get traction and be an early person and get a lot of followers, then you can do it.
You should try it for 60 days and just see what happens, but I have question if it’s going to move the needle at all, and then in terms of maybe doing a podcast, to me that’s a different question altogether, because if you’re going to write it and put it out, that’s one thing.
If you’re planning on just reading them on a podcast, you could certainly try it. Hopefully it’d be interesting, but like podcasting is such a different game than blogging. I think there’s a whole
different question you want to ask yourself is, “Can I make this entertaining? Will people want to listen to it?” That kind of thing versus writing one of articles, people will just stumble upon it.
Michael’s second question is, “I’ve been thinking about starting my own podcast for some time. But I like shows with two hosts. My question is how would you go about finding a co-host for a podcast? I don’t think I’ve heard you guys met and decided to start the podcast. It would also be interesting to hear that as well.”
Mike: Do you want me to take that one?
Rob: Yeah. I think we both know the story. Take it up.
Mike: The way Rob and I met was back in 2005. I had left the startup company that I was working for, went off on my own. I think Rob, you’ve talked a little bit about how you were doing independent consulting around that time.
Working from home alone is isolating and back at those days, there were not very many blogs and there were no communities for people who were a single founder working out of their living room or their kitchen or the basement. I looked around and the closest I ever found was the Joel on Software Blog.
Obviously, a lot of people were reading that, but I looked at that and said, “Well, I would like to blog about my own experiences.” I started doing that and I was looking around for people who are doing the same thing and I came across Rob’s blog.
I didn’t realize it at the time, but Rob was also doing the same exact thing and had come across my blog. We were peripherally aware of each other, but didn’t know each other, knew who we were. I think fast forward a little bit, Rob had ran through a bunch of different products and one of them he sold, he was selling from his blog. I looked at it and said, “Hey. I’d be interested in buying that.” We got in a conversation, I bought it from Rob.
I think it was for the next year or so, you and I traded blogpost back and forth before we posted them just because we weren’t real comfortable blogging on our own yet and just went through it like an iterative editing process and then once we got comfortable, we just went on our separate ways and that was around 2007, I think.
Fast forward a couple of years, you had started the MicroConf Academy and that was based on building a course around all the stuff that you had learned and you are just basically busy or too busy to turn out all the content with it and you looked through your Rolodex and I showed up
on the shortlist somehow and we got to talk and worked something out, and I basically joined you as you the co-founder of the MicroConf Academy. That was 2009; 2010, we started the podcast. Is that right?
Rob: I think so. 2010 podcast and 2011 MicroConf.
Mike: That’s how things worked out. I don’t if there’s a good lesson there in terms of finding a co-host for the podcast, but there was at least some level of familiarity there between us from editing each other’s blogpost and stuff before we got on to the podcast.
I don’t think that you need that. I don’t think you need to go into a business relationship with somebody before that part, but you have to at least be able to get along and know that I think that your general values and ethos are aligned. That’s our story. Rob, are there specific lessons that you can think of for that?
Rob: He’s asking how would you go about finding a co-host and I’m wondering, do you really want to start your own or do you want to find a podcast for the single host and try to get on an existing one.
Jordan Gal and Brian Casel did this. Brian had the podcast Bootstrapped Web first and then Jordan joined him later and made the podcast a lot better. I think you could consider doing that. If someone else is already doing it and they’re delivering and you get a little bit of an advantage of coming on late. That’s probably the first thing I would consider.
The other thing is if you’re starting it to talk about fun stuff like entrepreneurship or hobbies or whatever, then just go ahead and do it and start it and you’ll find people. If you’re starting around your business and you really wanted to be this super professional thing up front, then yeah, I do think you need to spend more time thinking about the concept and looking around.
There are podcasting forums, there are podcasts about podcasting and those that have communities. I think probably getting that intersection of people who listen to those podcast and listen to Startups For The Rest Of Us or go to MicroConf, if you’re going to talk about bootstrapping, then that’s going to be it.
You have to find that Venn Diagram, an intersection of someone who is interested in the topic and able to talk about it and also wanting to do it in a podcast form because it is no small commitment to do this. Ask anybody who podcasts. There’s an amount of time that you have to set aside and an amount of time that you have to that you have to have.
Podcasting is different than blogging where if you blog once a month, nobody really cares. It’s fine. Hey, it’s a good article and I got up on Hacker News or Product Hunt or whatever. If you podcast once a month, you might as well not. Unless you’re Dan Carlin’s Hardcore History which is a four hour thing. That’s an exemption. But for the most part, you need to ship fairly frequently, it is a commitment from that start that I would say if you don’t think you can keep that up, do not waste your time.
Mike: I think that commitment is something that people overlook and you really have to have an episode at least every week in order to start building an audience. I remember back when we started Startups For The Rest Of Us, we were doing it every week and then we decided, “Let’s change this up and let’s do every other week.” We did every other week for three or four months. It was very obvious that the growth slowed down. Once we went back to every week, it went right back up again. You have to be mindful of that.
I know that there’s articles all over the place that say, “How many times you should post? How many times you should create a new podcast and how long they should be?” And all these different things. It really boils down to the function of how much time and effort you have, and what it is that you’re going to do with it, what’s your goal for that? There’s just a lot of different factors, that’s all.
Rob: He’s third question. He says, “It’d be great if you guys could do another run down of the podcast you listen to or recommend.” I’m going to table that one for now because maybe in the next few episodes, we’ll do that. I’d like to revisit, it changes so frequently with me that I think it’d be worth doing.
He asks, “What equipment and recording devices do you use? Many other great podcast that
I used to listen to are no longer publishing new episodes as often and I’m also not sure why this happens to most podcasts.” That’s exactly what we were just saying. It’s because it just takes time and if you don’t have some type of something that you get out of it, whether it’s a personal brand or whether you’re selling conference tickets or whether you’re promoting an application where you’re getting some type of feedback loop, it is too much work to justify just doing a podcast for the sake of doing a podcast.
That’s why I’m sure a lot of these fade is they just figured the ROI isn’t there given the amount of work there is. Aside from that, what equipment and recording devices do we use, Mike? What complex, intricate system do we use?
Mike: Are you mocking me? We’re mocking ourselves.
Rob: We use USB headsets that we have for 10 years. I know sometimes now when I listen to podcasts I hear the plastic in the headsets jangling around. I’ve tried the Blue Yeti, and I’ve tried the Snowball and I don’t like the sound quality nearly as much in the finished product as these Plantronics (DSP) Digital Signal Processing headsets. I’m not going to name the exact model because they’re discontinued and whenever they come up on eBay, I buy them.
I have about 8 or 10 in the drawer in my house because I burn through them because they break. The mute button stops working, they get to janky, their cords are broken. I’ve probably gone through five or six in the past 10 years and I have another stock in this drawer here that Sherry and I share.
But what I would say is if you’re going to do this, you can get the Yeti or the Snowball, those are the recommended ones. You just have to have sound baffling, you have to have a very quiet environment. If you have kids five rooms away, it will totally pick that up.
If you want to do the USB headset where you can move your head a lot, definitely go USB and don’t go the audio auxiliary and then test several out. That’s what I did. I bought six or eight of them at the start and tested them all out. It was a noticeable difference in the sound quality.
Mike: Just some general advice when looking for headsets, you probably want something that’s relatively light. You don’t want something that’s massive and bulky. You definitely want something that has a boom or a microphone that is stable and is going to sit in front of your face.
As Rob had just said, the problems with the Blue Yeti and microphones like that is you really have to be speaking directly at them and hold your head at about the same distance the entire time. It can really be uncomfortable, especially if you’re the type of person that fidgets. I know Rob tends to walk around sometimes when he’s podcasting, I sit at my desk, but I also look around the room. I’m not always looking in the same direction. That screws with the sound quality.
I think that’s what most podcasters who are much more visible about what equipment they use, they talk about these things, “Oh, the sound quality for this and that.” The USB headset works fine. It doesn’t matter that much. You don’t have to go all out on all of these equipment.
I think the USB headsets that we use, I think they cost $40 or $50. It’s not very expensive. I have seen versions of the ones that you are not willing to talk about or disclose like $200 or $300 at this point because they are much newer versions. I’m using one right now that I can find for $60 or so and it’s a slightly different version than you use. It works fantastic.
Rob: Again, that’s Plantronics headsets. It’s not the super lightweight one. You want the one with the bigger mic with the pop filter and all that. Several of them will work for you, I don’t think you have to get so detailed and know exactly which models or whatever we’re using.
Mike: We used to just record over Skype and use either call recorder or Pamela. Pamela was on Windows that would hook into Skype and then Call Recorder is on the Mac. It worked reasonably well, but the problem is they record at both sides, so if your connection drops from Skype or it was not a great connection which happens frequently and feels like it happens more and more frequently these days with Skype, then you may end up recording the podcast again.
I’ve had entire podcast where we’ve had to dump it, not with ours, but with other people’s where Skype just dropped everything. There’s nothing you can do at that point.
We use a service called Zencastr right now. zencastr.com. It records the audio on both sides through the browser, there’s no additional software needed. You hop on it, records on both sides, uploads. I have to send it into Dropbox. It works out well.
Rob: I think the switch to Zencastr was definitely a good move for us. A lot less headaches. I don’t go on to Skype at all anymore. I do all my meetings through Zoom and then recordings through Zencastr. When someone asks to Skype me now, I’ll groan, I get figure out how to make a call because they redo the interface every four months and you don’t even know how to do it. It’s kind of a mess.
Mike: Your response should be, “Do you still have a yellow corded phone?”
Rob: Thanks for the questions Michael. I hope our answers were helpful. Next question is from Alex and he says, “Hello. I am interested in creating my own ecommerce website that will host new entrepreneurs’ products on my site for a subscription fee. Ideally, this will be for those who want cheaper advertising and not at the level of having their products on Amazon yet. My niche is American businesses and my goal is the support of small business. I’m still working out all the details. This is a new business platform but I’d love to hear some feedback.”
What do you think Mike?
Mike: I’m not sure what he’s selling.
Rob: I think this is a tough one. He’s trying to setup a website that can host ecommerce like physical products for people who don’t want to put their products on Amazon yet or on at the level. I just don’t know of any product that’s like that. It’s a theoretical of like they want cheaper advertising, but have you run into anyone in your life who fits this bill?
Mike: No.
Rob: Yeah, and I haven’t either. That’s the first thing I would do, Alex. I think it’s good that you asked. First thing I would do is you need to go out and find 10, 20, 30 people who have this exact need because I don’t believe that there are that many people. If there are, and if they’re not at the level where they want to have their product on Amazon, which is not a very high bar. I’m guessing that they’re not going to have enough money to want to pay a subscription fee to host it on your site.
Mike: Yeah. This is a classic case of saying, “It’s too expensive for me. So it must be too expensive for other people,” and you’re trying to squeeze blood from a stone at that point. It’s not a good business model.
I recognize and empathize with the desire to help the people who have no money, but you can’t do it by charging them, like you have to go up market, charge people who do have money and then turn around and use that to invest in products and services and things like that that can help that people at the bottom.
Honestly, that’s one of the things that we’ve done with the scholarship program this year with MicroConf. We got MicroConf to a certain point and it was growing and scaled up and we got enough people there now that it’s like, “How can we help those people at the bottom who could use that help to get up to our level? How do you bring other people up?” To do that, you need money. You can’t charge the people who don’t have any money. It’s not going to work.
Rob: I’m glad you asked the question because I’m guessing that if you don’t go out and validate this, you can spend a lot time either building it or hiring someone to build it or whatever. The first step that I would do is just figure out if this is viable at all because I think red flyers are going out for both you and I about the idea at least the way that he’s described it here.
All right, our next set of questions are from Linton Ye and he is with jimulabs.com. He says, “Thanks for another tremendously useful MicroConf. As I mentioned to Mike, I started building a course right after last year, 2017 MicroConf. I’ve been trying to follow the formulas I learned at the conference and I’m seeing some good signs. I’d really appreciate it if you could help me with some questions. Background: The product is a video course built for UI designers teaching them React, which is a JavaScript framework. The goal is not to convert them into developers but to help them work with developers more efficiently. As of now, I have 1300 subscribers in my list.” Assuming that’s an email list. “I’m still building the course, but there are around 30 people who have bought the first module for $79 or preordered the entire bundle at $169. About two-thirds preordered the whole thing, about one-tenth of all subscribers replied to my quick question email.”
He has a decent amount of engagement. “The majority of my subscribers came from a few post on Designer News, which is like Hacker News for designers. The post brought almost 800 subscribers last May and June, but the growth of the list has slowed down since then. I’m also doing blogging and guest blogging. I didn’t do much SEO intentionally, but many told me that they found the site by Googling. I have attached a chart of the history of my list with explanation of key events. Let me know if you need more data.” And he has a bar graph for us.
He has questions for us. It looks like maybe three or four. He says, “Does this product feel like something that will work?” That’s an interesting way to phrase that. I’m not sure what work means. It just depends on your goals. Do I think you’re going to sell copies of it? Absolutely. Do I think you’re going to make six figures from it? No. The list is too small. It’s not too small. The list is too small to make six figures from is what I’m going to say. You’ve got to start somewhere.
If you haven’t engaged with these subscribers and that’s the part I don’t know. I would be keeping them warm and then I would be taking other approaches that are probably free marketing at this point. If you watch the talk this year from Adam, that we talked about Adam Wathan. We talked about in the last episode, that was the blueprint of how to do this. It’s a lot of social media stuff and it’s a lot of getting into that community and having a reach in there.
Mike: I was going to mention as well. He talked to me about this product because he attended Growth edition and Adam spoken as Starter edition and Adam’s talk, go over to the MicroConf recap website and look up Adam Wathan’s talk, there’s all the notes there from the Christian Genco took and there’s a lot of detail there that you won’t get the full context of the talk but there’s a lot of stuff there that you’ll be able to take away.
I think that that will really help you figure out how to make certain things work and how to scale them up. But obviously, with your questions, there’s a lot of–it depends in there. How far do you want to take this? How much time do you have to dedicate to it? Do you want to grow into this massive business or do you just want to keep it small and put something out there that you can use a resume builder, but something to point at and say, “Hey, I’ve done this, so I have experience in this area.” It depends on what the purpose of it is.
If it’s a build a business, then yeah, you’re probably making into a business but as Rob said, not with just 1300 subscribers. That’s a great start, but you need to find other channels and I think, as he had mentioned in this email that most of those came from a Hacker News post. You need to find what those other channels are and whether that’s Twitter or Facebook or doing paid ads.
I think the difficult position you’re in is one, the product is not finished and two, you’ve already presold some of it. Preselling an unfinished product, especially with tiers is something that Adam had actually advised against.
Rob: What’s interesting is we’re talking about this list of 1300 people and that’s a great start, and can you make $5000 from this or $6000 or $7000 from that list? Yeah, I think so, if they’re engaged. I don’t think that’s an issue at all. But this is not anything that’s going to replace your income so it does depend on your goals.
His next questions is, “That is priority right now is to finish the course or should I work on growing the list at the same time? Most people have told me that it would be better to spend half of my time on both.” I agree with that. If you are just hammering the course out and not doing any list growth, I feel like you should be partitioning your time. Because keeping that list warm and keeping it going is how you’re going to build this business.
If you go through fits and starts where you’re going to try to grow the list for six months and then you’re going to build a course for four months, and you’re going to stop building a list, unless you’re at critical mass where you do have that 10,000; 20,000; 30,000-person list, that’s when you can start thinking about backing off growing it.
Do you agree with that Mike or what do you think?
Mike: I totally agree, but I think that there’s a little tactic that you can throw in there whereas you’re building the course, as you’re finishing it, you can take little snippets of that and post it on social media in order to help augment your existing list. Whether that is specific post on Twitter or on Facebook or you put something out on Medium that says, “Hey, I’m working on
this and this is what I’ve learned so far.”
Educating people about how to do something and talking about the struggles that you’re going through as you’re going through that process, that has a tendency to resonate with a lot of people. It’s not to say that everyone who joins your list is going to become a customer, but if they’re interested in the stuff that you’re teaching, not just the process but the content itself, those people will eventually turn into customers.
It also gives you the ability to take those things and email them out to your existing list and say, “Hey, just an inside view of what this looks like and where it’s at.” That will help keep the list warm as well, because the last thing you want to do is spend 80%, 90%, or even 100% of your time just finishing the product and then four months from now, you haven’t send a single email to your list and you drop an email on them that says, “Hey, this thing is now available, please buy it.” You and I have seen people do that for SaaS applications and software and it doesn’t work.
The reason it doesn’t work is because they’re like, “Oh, I totally forgotten you even existed.” They’re not excited about it.
Rob: Right. His next question is, “What else could I do to grow my list. Blogging and a free email course seems to work okay, but it takes a lot of time to create the content. I have seen others using ads. What you recommend?” My thoughts on this are the way that you typically do this is through social media, through blogging, through podcasting, through getting out there and doing a bunch of free marketing. That’s because most people don’t have a ton of money to spend
in the early days.
If you have money and you’re interested in running ads and that’s something that excites you then go run ads. Go run ads on Facebook or buy ads on Designer News, he talked about sponsor email newsletters and test that stuff. That stuff is always fun for me.
I’m some type of twisted individual that I enjoyed paying to see if I could get a sustainable flywheel. Other people hate that. If that is their business, they don’t want to do it. You look at how Rob and Mike built their list? How has Justin Jackson built his list? Through being out there and recording a podcast every week. Justin Jackson, he’s got a bunch. That’s how he built his list. It took him a few years, but it’s figuring out what it is that interests you that you think you can do long term and that you’re actually going to double down on.
Do I think ads could work? I absolutely do. But you have to ask yourself, is that something that you’re interested in doing? I know Brennan Dunn started with ebooks and courses and blogging and tweeting. It’s was a big social media thing, and then he got it to the point where it’s making enough money and he knew that for every person that gets on his list he gets X dollars back. Then he started running ads.
He doesn’t even need to be that good at running the ads because he had such a high LTV on list subscribers. You could take that approach, too. You build up the social following, you build up the brand, and then later you run the ads, you could do ads from the start. I think any of these will work, it’s a question of what am I really excited to do and to get up every morning and do. If it’s like, “I love the blogging and the rush of trying to get to the top of Hacker News, Product Hunt, and Designer News,” then go all in on that and blog three times a week.
If you prefer to podcast, then go all in on that. If you prefer to do ads like I was saying, which some people get more excitement out of, certainly, I think you could invest time in that.
Mike: His next question is, “Is it realistic to have a goal of 10,000 subscribers in the next year?” He says he spoken to some people who have 5000 subscribers, all of them have been writing and building their list for 3-5 years. “Have you see anyone who was able to grow a high quality list quickly?”
This is a hard question because it depends so much on what you do. Is it possible? Absolutely. It depends so much on the things that you do. These people who’ve been writing and building their list for 3-5 years, what tactics and techniques have they done? Have they systemized it? Have they created processes that are things that are repeatable and scalable and can be done without their input and toggling the different switches? Because if you’re relying out of process that depends on you doing something every single week, it’s less likely that you’re going do it.
It’s not to say that it is impossible and there’s definitely people who do it. We pump up this podcast every single week, almost without fail at this point. But it takes time and commitment and do you have the commitment to do whatever to toggle that switch or pull that lever every single week? If you don’t, it’s not going to happen, therefore it’s going to be pushed out.
Honestly, in a way, it ties back to email follow ups, that’s why I built Bluetick. I don’t have the mental capacity to sit there and write all of those follow up emails every single time because it’s hard to do, it’s hard to make yourself do it if you don’t want to. You need to find those things that you’re going to be able to do on a repeated basis or to automate in such a way that you don’t need to be directly involved in it. It’s still going to create Rob’s flywheel effect.
Rob: Yes. 10,000 subscribers in a year, absolutely possible. I have known many people
that do this. It’s not easy and it’s not just going to happen just by throwing things out, you have to be deliberate about it, you’ve got to be focused, you’ve got to ship either some type of content or some type of thing on a really recurring basis.
Product launches also help. If you do a big product launch, it will help you build the list, joint ventures would be a huge one. If you find anyone else that you could promote their product, they could promote your product, that is going to build the list because even if people don’t buy your product, they will sign up to hear from you about future stuff that you’re doing. Doing a podcast tour, there are a lot of ways to do this and if you really focus, yes, I think you can do it.
I think building a 5000 subscribers in 3-5 years sounds like a nice even keel side business pays where it’s like, “Yeah, I’m going to blog about this this week.” Which is fine, but it’s not. If you’re really aggressive about this and you want to get to 10K, I think you can absolutely do it.
Thanks for the question Linton, I hope our answers are helpful.
If you have a question for us, call our voicemail number at 888-801-9690 or email at us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control, it’s by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 392 | 10 Key Takeaways from MicroConf 2018
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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about their 10 key takeaways from MicroConf 2018.
Items mentioned in this episode:
Rob: In this episode of Startups For The Rest Of Us, Mike and I talk about the 10 key takeaways from MicroConf 2018. This is Startups For The Rest Of Us episode 392.
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. To where this week sir?
Mike: Well, just following-up on all the post-conference work from MicroConf. We had the two editions back-to-back again. It was an overall resounding success. Most of the feedback that I have seen has been pretty good. The conference itself has been outstanding. If you downsize in terms of certain hotel rooms and things like that, but I think generally speaking, everything went really, really well.
Rob: Yeah, at this scale, we know now that something will always go wrong with someone. When you’re moving 400-425 people, whatever it is, something is going to happen at some point. You just hope that overall—the conference, the speakers do well, and the contents there, and the attendees are cool, and everybody gets along—you just kind of try to manage it.
I felt really good about this year. This is the second year since we split Starter and Growth, and I feel like this was perhaps, had better overall conference experience this year.
Mike: I agree. I definitely agree with that.
Rob: In other MicroConf news, I realized–I don’t know but we had promoted that our 2017 MicroConf talk videos are all available for purchase. It’s $99 for Starter, $99 for Growth, or $149 for both. We will link that up in the show notes, but if you go to Vimeo, and you search for MicroConf 2017, you can just purchase it right there through Vimeo.
I sent out an email yesterday, if you’re already on the list, but if you’re interested in hearing about future videos, we sell the videos in order to subsidize the cost of the recording, because it’s no trivial feat to get a company like LessFilms to fly two guys out with all the camera equipment and hang out for four days, in essence, and then edit all that, and produce it, so we’re selling to help augment that.
If you have enjoyed MicroConf videos in the past, we do have MicroConf 2012 through 2016 that are all live for free, available on the microconf.com website. You can check that out.
Another thing is we need questions for the podcast. I think we’re down to maybe three or four questions at this point, so if you have a question for us, you should record an mp3 and you can email it at questions@startupsfortherestofus.com or you can call our voicemail at 888-801-9690 or you can always email a text question, and we’ll read it on air.
We’ve been doing one or two Q&A episodes a month and those seem to be pretty valuable to folks. It’s nice to have other voices on the podcast. If you have questions, please send them in.
Mike: I assume that our agenda for this week is the takeaways from MicroConf 2018. Correct?
Rob: That’s right. We’re going to pull some takeaways from some of the talks. Unfortunately, I was trying to do the math in my head and I think between Starter and Growth, and the attendee talks, there were 30 different talks on stage–give or take one.
I was trying to do the math in my head, but there’s no way we could possibly talk about all the talks even though the quality of the talks this year was very, very high. I’m not just saying that because it’s a conference we run. I was really impressed with a lot of newcomers who had never spoken on the MicroConf stage, and how typically there are some misses when that happens because MicroConf is such a high-speaking bar, and it’s so different than so many other conferences, but really, people kind of crushed it, almost across the board.
We can’t possibly mention all 30 talks, but we have distilled it down. We’re going to talk about 10 key takeaways that we got. If you want to do a deep dive into the talks, there is a site, it’s at microconfrecap.com. Thanks to Christian Genco for taking copious notes over the course of that four days and then John Hwang who was helping him by recording audio files, there’s kind of like 6-minute versions of some of the talks where they interviewed speakers, and then they’re posting it there, there are photographs of the speakers. They really did it up this year in a way that makes it look really cool.
Mike: That whole MicroConf Recap site that Christian put together is absolutely amazing. You can go over there and sign-up for a mailing list that he’s got there, but every single speaker is listed. There’s all sorts of stuff there.
I was talking with him about this, he wrote an app that would allow him to basically take these notes better and put them out there, which is just amazing that he went through all that effort to be able to take notes quicker, and to be able to publish them faster, and format them in a way that actually looks really, really nice.
Rob: conferencenotes.com. I see a SaaS app in his future. It would be a rough market, but it is funny and it was cool that he kind of put it together. Across the two conference, I think we had about 250 folks at Growth, and we had somewhere around 150 at Starters. Somewhere between 400-425, I think is what we’re talking about who came through over the course of those four days.
I picked out some feedback because we’ve got the Growth and Starter surveys back where we ask attendees to rate speakers and give us feedback. I wanted to call a couple of them out. The first one, you had asked for jokes because that’s kind of our schtick, we tell kind of nerdy, programmery, and often bad jokes from stage, and one comment was, “I thought Rob’s jokes were funny and spot on.” Boom.
Mike: Was that comment from you? Did you put in that?
Rob: No. That’s a good guess. I don’t know. I didn’t recognize the name of who it’s from, but I think they were kind of implying like, “Why you’re asking for other jokes, it sounds like you guys got this dialed in.” I thought that was funny.
But then there was another comment that was like, “Any jokes but the ones Rob was telling.” It was the exact opposite. It was great.
Here’s this other–this would literally like one was above the other in the document. This is to show you, if you haven’t run an event like this or you haven’t worked with a community, the amount of information, and differing information, and differing opinions you can see is illustrated by these two things and I brought them in here because I literally read one above it and I went down, and I was like, “Oh, you’ve got to be kidding me.”
The first comment is, “The Q&A With Patrick Collison, Co-Founder of Stripe was outstanding. It would be nice to see more Q&A sessions with high profile individuals.” Right below that, “The Stripe Q&A seemed really out of place and was probably the worst talk for me. It was unrelatable. If I wanted to hear about Silicon Valley, I would go to a Silicon Valley Conference.” Isn’t that kind of just where you have to sit when you have this many people?
Mike: I think it is, but I think it also illustrates a big problem that as entrepreneurs, we kind of have to navigate where you get all these information that’s coming in and some of it is directly conflicting with one another. You have to interpret or read between the lines a little bit and see how certain things feel versus what’s the feedback is that you’re getting, because a lot of the feedback that you’re getting comes from a certain point view or a set of past experiences and interests that people have.
You can’t always align with everything. You can’t make everybody happy. It’s just not going to happen, but you have to do what you believe is right even if that means pissing some people off or making them upset about what the decisions you’re making are.
It’s a tough road to navigate I think, but at the end of the day, you’ve got to make the decisions to move forward. You can’t just be paralyzed and not do anything because then you’ll just never get anything done.
Rob: To realize that it’s never going to be perfect. You’re never going to please everybody and your apps are never going to be down, your conferences are never going to be down. This is our 15th time we’ve run a MicroConf and you’re always adjusting and trying to make it better.
With that, let’s dive into a few of the takeaways. I’ll start with some of the talks from Growth, in no particular order.
I really enjoyed Nadya Khoja’s talk. It was called the 12 Principles Of Viral Content. Nadya is the Director of Marketing at Venngage. It’s a SaaS app that helps you create infographics and interesting viral content in essence.
My takeaway from here is that there really can be a thought process and almost a system for creating content that is more likely to go viral. I’ve seen Matt Inman, The Oatmeal, he was interviewed by Andrew Warner of Mixergy about how do you make this stuff go viral and he was just like, “Look,” this was Matt, he was like, “I’m one of the best in the world at this. This is really hard to do.” Andrew kept trying to pull a system out and Matt just has one in his head, but he wasn’t totally able to communicate it.
What I liked about Nadya’s talk is that she broke it down into pieces. Just a couple of it—we’re not going to go through all 12, obviously—but a couple the things she mentioned were like, bust a myth, challenge the status quo, reframe the question, bring in a new perspective, mash up multiple topics like Star Wars with Game of Thrones or whatever. I enjoyed this and I also heard positive feedback from folks in the audience about it.
Mike: I think the other thing that I took away from her talk was because of her role at Venngage. They have all these things that they’re doing and they’re constantly doing that stuff. Not everything is going to be a hit, not everything is not going to go viral, but being consistent about trying these different things and putting out different infographics or making different articles, concentrated on different headlines, those all contribute to the overall success.
It’s not about whether an individual thing that you do goes viral, it’s about the number of attempts that you make and trying to get at least some of them to go viral. You don’t need to make everything successful, but as long as a certain percentage of them do well, then you’re fine.
Rob: For her, it’s pattern matching. They’ve tried a bunch of different things and this is what has worked for them, and that’s what I like. I always love those stories on MicroConf stage. It’s like coming out of the experience of someone who has actually boots on the ground doing it.
Another talk that was–well, it was the Q&A I mentioned earlier. It was Patrick Collison, co-founder of Stripe which, at this point, what’s their valuation, you think? $10 billion or something? $8-$12 billion?
Mike: That’s above what it is. I think I saw $9 billion but it’s almost immaterial when you get up to those many zeroes.
Rob: It’s crazy. The reason we have Patrick on stage, one of the reasons, is that he and his brother, John bootstrapped it for months and months. I don’t if it was over a year, but it was a long time before they went and raised funding and really at the core of the company is this bootstrapper ethos.
I enjoyed talking to him. I had interviewed him a couple years ago on stage. You had interviewed his brother, John last year on the Starter stage. It’s always kind of a pleasure to have those guys come into town and hang out with some of MicroConf attendees.
Mike: I do find his outlook on just the world and the technology industry very enlightening and very different, I think, from most of what you find in Silicon Valley, and most of the tech companies that are out there. They see their role as really to foster the tech community because by helping other startups, basically like you are raising the ocean, you’re floating all ships in the tech industry.
I think that that’s a really unique approach that they’re at the scale where they can do that at scale and not really have to worry about the finances and the ROI of certain things. They can just do things that they think are the right thing to do that will help certain parts of the ecosystem.
I think their Stripe Atlas program is exactly one of those things. One of the things that I thought was extremely, I’ll say gratifying in some way, but the fact that they essentially launched those on the same day that MicroConf started, and they started talking about it that day, and again, from the stage as well, it was just really nice to see that that was brought to the MicroConf community.
Rob: The Stripe Atlas LLC, right? Because Atlas had previously been C Corps. I guess, you could change stuff in the S Corps, but realizing that a lot of business just want to be an LLC and have pass through revenue and it took a lot of work for them to do this, and they basically kind of announce it at MicroConf. In essence, it was super cool.
Mike: The other thing I like is the humility of where they came from. The one quote that really caught me off guard on stage when he was talking about their early days, when they were trying to partner with one of the larger banks was he said, “We were like three squirrels in a trenchcoat masquerading as a real business.” Of course, it got a lot of laughs from the audience, but that’s, I think how a lot of entrepreneurs feel when they’re trying to pitch a big business. They’re just the small fish in the giant ocean. They have no power and they’re just sort of lying to everybody about who they are, but they’re not lying about themselves. It’s just that they feel that way.
Rob: I love that image of the squirrels in a trenchcoat. It’s just like in the cartoons. Our next talk was my talk. It was 12 Lessons I learned Moving from Bootstrapped to Venture Backed, where I talk about having bootstrapped really since 2000 was when I started bootstrapping companies and then in 2016, Drip was acquired by Leadpages and I had two years kind of looking on the inside of a venture backed company.
I pulled out the pros and cons that I felt like venture funding lent to this company. Now, I think it hurt the org and how I think it made some of the things we did a lot easier. I was less stressed and we could hire a specialist. We could hire senior talent instead of having to train everybody we could use a dedicated recruiter.
Didn’t have to worry about so much about little dollars—$100, $200 subscription. I used to spend hours and hours trying to find the cheapest thing because as a bootstrapper, every penny counts, but when you have some funding, you can be a tiny bit looser that and that saves quite a bit of time.
Mike: I think what you talked about was a really good contrast between being in a position where you can let things slip through the cracks and it doesn’t matter. I remember years and years ago, I was looking at various things that were going on in the industry. I’ve had a conversation with a support rep, or some piece of software wouldn’t work, or even when I was back at Pedestal, there was a bug that I distinctly remember, I was like, “We really need to fix this. This is a problem.” They’re like, “We’ll just push it. It’ll go out in the next release or the release after.” I was like, “But this is big. This is an important thing.” And they’re like, No, no. Later on.” I’m like, “How can you not care about it?” The reality is it’s not that you don’t care. It’s about prioritization.
I think, as a bootstrapper, your priorities tend to be around preserving money so that the business has financial room to operate versus when you’re a big business or you’re funded, it doesn’t matter so much. You can let things go until later on because they are not so large that it makes that big of an impact in the business or how it operates or customers at their tracks.
Rob: Right. I think my key takeaway, kind of the second takeaway for this episode is that you should never be dogmatic about being anti-venture or anti-bootstrapping or whatever. I did come to the conclusion–kind of in the talk that I don’t think anyone in this room should probably raise venture funding because it brings with it a board, and you lose the control, and it’s really tough but it does come with some pluses.
But that there is this in between ground that has just started to develop over the past, I’ll say, three to five years, and it’s this concept of fund strapping where you raise a small round and you never plan to raise institutional money. You only get from individual investors so you don’t have a board, and you don’t give up control, and you don’t get it to $100 millon to make a lot of money for everybody, and so that “could be” an alternative.
I was saying, at the top of my head, I was like, “I bet it’s like 5% of the people in here maybe should consider this.” Because you have to be growing fast enough, it has to be a big enough market for that to make sense, and everyone else should keep bootstrapping—just like we’ve always talked about—but this was just kind of one more alternative that gets you some of the advantages of raising funding without the disadvantages of going a true venture model because one you do venture, it’s institutional money, and the game changes.
Our next talk was How to Be Funny (Even If You’re Not): Improv-Inspired Copywriting Tips for Software Founders. It was from Lianna Patch and it was hilarious. It was really, really well-done. This was one of my favorite talks.
Mike: I agree. I would have to say it was probably my favorite talk as well. I’m not biased just because she wrote some of the copy that’s on the Bluetick website and in the Bluetick emails, but just her stage presence, her ability to break it down, and be serious about like, “These are the things that will resonate with your audience and these are the things that you should really avoid when trying to be funny in your copy.” She knew that stuff cold.
It’s obvious she practices her craft a lot and deeply understands what is going to work and what isn’t. I think that’s partly because of her improv background as well. She does a lot of that. I think she’d done stand up comedy as well, but she really appreciates the value of being able to put yourself in other people’s shoes and understand what is going to be funny to everybody versus being deprecating about your comedy to other people.
Rob: The takeaway here—there’s obviously a lot of takeaways. Again, microconfrecap.com if you want to see the detailed notes. But the big takeaway I got is humor makes people happy. You want people to be happy while they’re using your app. It gives your app personality. It makes people give you the benefit of the doubt. I really enjoyed this talk and hope to have Lianna back at a future conference.
Mike: I do think that it was ironic that the second question that she got in the Q&A was somebody who got up and said, “I’m in the funeral industry.”
Rob: Man, that was funny. I thought that was the first question. I don’t think he meant it to be funny, but I was laughing hysterically. Her reaction on stage, it was like a face palm. She’s like, “I cannot believe that’s the question.”
Mike: She had a great answer for it though. She said, “It depends a lot on how your audience views death.” I think that’s just very insightful. That’s part of why I like her so much because she has that ability to hone in on what makes it funny and why, and when is it appropriate and when it is not. I think that that differentiates you from people who are jerks about it versus they’re actually legitimately funny. Because they know when to be funny and when not to.
Rob: Another talk from Growth that I wanted to call out was from Ankur Nagpal, From $0 To $10M ARR: The Tactics We Used To Scale Teachable. He founded teachable.com. I imagine many people listening to this have heard of it and has done a lot of hustle to get where they are.
My takeaway was he talked about, they set a pretty aggressive growth pace, and that they found things that didn’t scale every month to hit that growth pace. Then at a certain point, they couldn’t get to that point anymore. They’d have to grow $100,000 of MRR in a month and they couldn’t just throw one-off things like they were doing for the first couple of years, that’s when they had to switch into this kind of sustainable flywheel mode. There was a lot of actionable stuff.
If you want to bootstrap a business and you wanted to let that business grow it to a few hundred grand, that’s great, and this talk probably won’t be for you, there’ll be some takeaways. But if you find yourself in a space like we did a couple of years ago with Drip where suddenly it was like, “Oh, good God. This is a huge market. It’s really big. We kind of need to grow or we’re going to get squashed.” This is the kind of talk that you need to hear. It was super actionable and I appreciated Ankur sharing that with the audience.
Mike: I think it was very insightful that he also showed the scale that they’re at, it takes people to get there, because you can’t just slap together an app, and expect that three people are going to be able to build something that’s going to get to millions of dollars of revenue each year and, yes, you hear those Silicon Valley stories about people who create this app and then it gets acquired by Facebook for billions of dollars, but that’s not common. Most people never go through that. That’s a unicorn story. But unfortunately, that resonates in the news and in the tech articles that you see.
He talked about how the fact was that in order to get to 12,000 customers, it took them 64 people to get there. It’s interesting that if you look at the graphs of the revenue and stuff that he showed, it takes time, and it’s a fairly steady slope. It’s kind of The Long, Slow, SaaS Ramp of Death from Gail Goodman from Constant Contact. She had that talk at Business of Software several years ago. Almost without fail, like you talked to most founders, that’s exactly what it looks like—it’s long, slow, and it’s boring but it’s what gets you there.
Rob: The last Growth talk I wanted to call out was just such an outlier, it was really well-delivered. It was an attendee talk by Chad DeShon. He runs boardgametables.com and the title was Everything You’ve Learned at MicroConf is Wrong*—with an asterisk by it. It was a little tongue and cheek but it was the fact that he basically started a B2C company make selling physical goods with no recurring revenue.
He had points like recurring revenue is so overrated. He talks about how if you get your LTV all upfront, you have more cash coming in and your plan is overrated. It is possible to move downmarket, just listen to podcast at 1x. He says, “Seriously, you don’t have to cram information into your ears as fast as possible. Take a deep breath and relax, it will be okay.” It was great. It was filled with humor but also, it’s a nice sanity check on the stuff that we pour out that yes, it is best practice and will get you to the multi-million dollar SaaS company or the hope you grow, whatever. He had another lens on it and I felt it was a bit of a breath of fresh air in his 12-minute attendee talk.
Mike: I think Chad’s real point is just that just because something is best practice information or that it’s a general practice that most people should follow, doesn’t mean that it’s an absolute, concrete rule that everyone needs to follow, and that will always work. There are cases like his where those things will not work or there are exceptions that you can leverage based on what your product is and what your industry is. You can still do what you want and be successful if you are mindful of those other things–those general practices, but don’t take them as absolute law.
Rob: Then switching over to Starter, in the interest of time here, this is really is a bummer, man. I wish we could talk about more of the talks because there were a lot of other exceptional talks that were given at both conferences. I wanted to kickoff Starter by giving a big shout out and a thank you to Justin Jackson. He emceed and he had basically the kickoff talk that kind of sets the stage for MicroConf. It’s a ton of work to emcee a conference, you and I know, and so to ask him to do it—volunteer basis—it was super cool that he was able to do it and he did a great job.
The first talk was Justin’s. It was called, An Unconventional Way to Validate Your Product Idea. In typical fashion, he tells a story, he talks about choosing the right customer is more important than what you sell, starting small is always almost better than going big, on and on. Other stuff that was, I think, really pertinent to the Starter audience.
I really liked the way he thought about there’s product market fit, product founder fit, and founder market fit, talking about what do you value? Do you enjoy this market? Then talked about customer resource. He kind of laid out a blueprint for validating. I think the talk was quite well-received.
Mike: Definitely, a big thanks to Justin. I do appreciate that he came on stage and he said the things that are not necessarily directly related to making the business itself successful, it’s making sure that it’s successful for you as well. Because as you said, the founder market fit, that’s a big thing. If you get bored by a particular product or industry, you’re not going to want to do it, you’re going to be less motivated.
I think that other founders have talked about that in the past in certain public and potentially non-public areas. I’m not going to name names or anything, but that can definitely happen. If you don’t really like what it is that you’re doing, it’s really hard to be motivated to go through those tough times, and it’s easier to give up.
Rob: Another notable talk was from Adam Wathan, it was called Nailing Your First Launch. Also, good story with actionable takeaways, talked about launching essentially information products about teaching people how to use Laravel, and testing their Laravel, and that kind of stuff, and in just two years, he made about $650,000 from his info-products, kind of a not a cold start but almost. He pulled things in, he pulled my stair-step approach in, he talked about building an audience but gave super actionable things, of actual screenshots of tweets, and kind of what works, talked about picking an idea, testing it, and on and on. This was one of the talks that I heard the most about at Starter–that people loved. It was almost like a case study but it was entertaining as well, so it wasn’t dry. He just had a ton of info here.
Mike: I think part of the thing that resonated with most people is that it was starting from ground zero because most of the people at Starter are at that very, very early stage–anywhere from, “I’m still looking for an idea,” all the way up to, “I just launched but I’m certainly nowhere close to making a fulltime revenue on it. It’s going to a while before I get there.” I think Adam’s talk really resonated with a lot of people because it demonstrated how to get some of the growth and some of the different levers that you could toggle in order to get, and it’s obviously not all of them, but an info-product is a lot different than a SaaS product.
Being able to have the confidence that, “Oh, yes, it’s just a book or just a course,” but $600,00 over the course of two years is nothing to sneeze at. I think that that message alone resonates with people to be able to get to that point in only a couple of years versus the people who sit there and say, “Well, I’d really like to start a business but I’m not sure about it,” and it takes them five years or even 10 years to even pull the trigger and do something.
Rob: Another notable talk was from Alli Blum who has appeared on this podcast, title was, Why (and how) to start thinking about teaching people how to use your product… even if it isn’t built yet. She went deep into onboarding which is her area of specialization.
She calls herself a SaaS onboarding optimization consultant and so she’s knee-deep in tons of SaaS apps. She talked about the mistakes she sees that are super common, the vacation photos approach, the too much too soon approach, the bad intern approach, and then she talks about how to improve upon that, and how to keep it simple, but then really dives into the nuts and bolts of how to put your email together, and then the impact that can have, and then kind of had a case study at the end.
Again, what I liked about this is it was a process, and a very specific instructional thing that if this is the problem you’re trying to solve right now, this is like mind blowingly applicable.
Mike: I think that the whole email onboarding process is something that can be difficult to figure out when you’re first doing it because there’s so many things you could do. It’s a question of where do I start, what should I say here, how do I fit all these pieces together, and you can very easily find yourself in a situation where you’re going too far in a particular direction and you’re not thinking strategically about the whole picture of bringing somebody on-boarded into your app, so you go too far on one direction or the other. Alli’s talk was a great way to balance those things out and provide that instructional manual or the roadmap to tell you, “This is how to do it. These are the steps to go through and this is how it will work for you.”
Rob: Another talk I wanted to call out was from Mr. Mike Taber. It’s called Following up… Without looking and feeling like a dirt bag. You talk about email follow-up, why to do it, what happens on the other end, and why don’t we follow-up. This, of course, is from all your experience with Bluetick. How did you feel about your talk?
Mike: I thought it went really well. I gave a version of this talk in FemtoConf a couple of months ago. I did make some changes to it based on the feedback that I got. Overall, it was still largely the same talk, I just cut out pieces that were irrelevant or didn’t make much difference. I definitely spruced up the slides a little bit more this time around because I think before, there were some things that I think weren’t necessarily as clear, and the new presentation I think helped.
Rob: The key takeaway for me here was you had the four pillars of follow-up success. The first is when to send, second is personalization, third is clearly defining a single action you want to take, and the fourth is to automate it so you don’t have to sit there and do everything yourself.
Mike: I think that last piece there is the one that most people don’t really get to. They don’t systemize it or processize it so that it makes sense and can kind of operate in the background because most of the times, I see people coming over to Bluetick to use it. They’ve done a few follow-ups here and there, but lots of things start slipping through the cracks and that’s really why you need to have a process or a system in place that’s going to help prevent those types of things, because everytime you don’t follow-up on an email, whether it’s the third or fourth one, that’s what’s going to cost you the money.
Rob: Another talk that I thought was quite well-done was Marie Poulin’s talk. It was called The Sustainable SaaS: What Permaculture Can Teach Us About Building Software. She’s in the midst of co-founding a SaaS herself. She has online courses. She has all kinds of stuff, and so again, was able to pull from her experience.
Permaculture, if you’re not familiar with it, it’s a set of techniques and principles for designing sustainable human settlements. It’s a lot about like farming, and gardening, and keeping things so that you don’t need a bunch of outside resources in order to live. It was cool that she kind of had her timeline, 2014 through 2018 of these missteps, and how they line up with things that you would do on permaculture. It was a running metaphor the entire time.
Mike: As a running metaphor, I think it fit really well because the audience itself at MicroConf, whether you’re talking about the Growth edition or Starter edition, the vast majority of these people are coming because they want to build a life for themselves and their families that is going to be sustainable over the long term.
They’re not looking to come in and find a market, build something, get a bunch of money into it, and flip it in two years, three years, four years. They’re looking much longer term and it’s not to say that they won’t sell it in two, or three years, or fours years, but they’re trying to find something that’s going to be sustainable for them moving forward, that they can build a life around that allows them to do the things that they want to, and have the freedom of flexibility that being an entrepreneur should be able to give you.
Rob: The last talk from Starter is Courtland Allen’s talk, Navigating the Startup Landscape. Courtland Allen who has also appeared on the show, he founded IndieHackers, they’ve been acquired by Stripe. He and his brother now work for Stripe and run indiehackers.com. I thought he nailed it. He compared starting a startup to this four different landscapes. One is like an airplane taking off, one is panning for gold, one is climbing a rock wall at a gym, and he had these pretty deep metaphors that run well.
He talked a lot of the myths and that’s what I appreciate about him. He’s done, I think he said 300 or 400 interviews with startup founders. If you go to indiehackers.com, there’s this big wall of apps and revenue, and all that kind of stuff. He’s kind of pulled that out between him and his brother have pulled that out of all of these people. To me, I loved hearing the myths of like, “Well, this is probably how you think. You think that Dropbox just started growing because they had this dual referral system and that’s what everyone always talks about. Here’s what it actually look like,” and then he called some other apps where the common myth is that they grew through this one big thing.
Hotmail, with their email link and the footer or Airbnb where they added photographers and hockey sticked them. It was kind of like, “Yeah, it helped.” But there were also 50 other things they were doing really doing well and they had a huge team of people constantly executing, and eventually they just hit critical mass.
I appreciated the reality check and I also thought his talk was really well-delivered. I thought the metaphor held up and I thought the analogies helped me kind of understand the content better.
Mike: The one I actually thought was really funny in his talk was the startup runway of almost certain death. He had a picture of an airplane going off of a cliff and on the other side of the cliff, there’s an ocean, and it’s got a shark jumping out of the water, and there’s snakes, and a wall of spears, and fire. It was just very on point, I’ll say.
Rob: Yeah, that was cool. Two more MicroConfs down, sir. 14 and 15, I think it took a lot out of both of us this year.
Mike: Yeah, definitely for sure. Although, I do want to say there’s one other thing that we did this year that we have not done at scale in the past, which was we instituted the scholarship program for Starter Edition.
Of all the things that have happened this year, I’m probably most proud of that one because it was a lot of behind-the-scene stuff that we really didn’t talk about on the podcast, and we didn’t talk about or market too much because I was still trying to figure things out. But we had a bunch of sponsors who stepped up and really helped make it happen. I think that it’s something that we could do more often moving forward. In the past we’ve had individuals do it, Patrick Mackenzie has done it a couple of times.
We’ve obviously offered sponsors quietly in the background because we can’t help everyone, but there are certain situations where it feels warranted and you really just want to do the right thing and help people who are in a position to help themselves but they just need that little extra push.
I want to send a big thanks out to Stripe, Sureswift Capital, Brian Marble, Scott Nixon, and Balsamiq Software, and Azlo for helping put the scholarship program together and make it possible for, I think it was between 12 and 15 scholarships that we gave out this year for Starter Edition. Definitely, a big round of thanks to those guys.
Rob: Sure. You know man, you obviously headed this part up, I know you put a ton of time and energy into it, so thanks for doing that. I think it’s a huge win for MicroConf and I think it’s a big win for the community as well.
Mike: I think, with that, we’d call it a day. If you have a question for us, you can call it into our voicemail number at 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. We’ll see you next time.
Welcome to Startups For The Rest Of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Rob.
Mike: I’m Mike.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. To where this week sir?
Mike: Well, just following-up on all the post-conference work from MicroConf. We had the two editions back-to-back again. It was an overall resounding success. Most of the feedback that I have seen has been pretty good. The conference itself has been outstanding. If you downsize in terms of certain hotel rooms and things like that, but I think generally speaking, everything went really, really well.
Rob: Yeah, at this scale, we know now that something will always go wrong with someone. When you’re moving 400-425 people, whatever it is, something is going to happen at some point. You just hope that overall—the conference, the speakers do well, and the contents there, and the attendees are cool, and everybody gets along—you just kind of try to manage it.
I felt really good about this year. This is the second year since we split Starter and Growth, and I feel like this was perhaps, had better overall conference experience this year.
Mike: I agree. I definitely agree with that.
Rob: In other MicroConf news, I realized–I don’t know but we had promoted that our 2017 MicroConf talk videos are all available for purchase. It’s $99 for Starter, $99 for Growth, or $149 for both. We will link that up in the show notes, but if you go to Vimeo, and you search for MicroConf 2017, you can just purchase it right there through Vimeo.
I sent out an email yesterday, if you’re already on the list, but if you’re interested in hearing about future videos, we sell the videos in order to subsidize the cost of the recording, because it’s no trivial feat to get a company like LessFilms to fly two guys out with all the camera equipment and hang out for four days, in essence, and then edit all that, and produce it, so we’re selling to help augment that.
If you have enjoyed MicroConf videos in the past, we do have MicroConf 2012 through 2016 that are all live for free, available on the microconf.com website. You can check that out.
Another thing is we need questions for the podcast. I think we’re down to maybe three or four questions at this point, so if you have a question for us, you should record an mp3 and you can email it at questions@startupsfortherestofus.com or you can call our voicemail at 888-801-9690 or you can always email a text question, and we’ll read it on air.
We’ve been doing one or two Q&A episodes a month and those seem to be pretty valuable to folks. It’s nice to have other voices on the podcast. If you have questions, please send them in.
Mike: I assume that our agenda for this week is the takeaways from MicroConf 2018. Correct?
Rob: That’s right. We’re going to pull some takeaways from some of the talks. Unfortunately, I was trying to do the math in my head and I think between Starter and Growth, and the attendee talks, there were 30 different talks on stage–give or take one.
I was trying to do the math in my head, but there’s no way we could possibly talk about all the talks even though the quality of the talks this year was very, very high. I’m not just saying that because it’s a conference we run. I was really impressed with a lot of newcomers who had never spoken on the MicroConf stage, and how typically there are some misses when that happens because MicroConf is such a high-speaking bar, and it’s so different than so many other conferences, but really, people kind of crushed it, almost across the board.
We can’t possibly mention all 30 talks, but we have distilled it down. We’re going to talk about 10 key takeaways that we got. If you want to do a deep dive into the talks, there is a site, it’s at microconfrecap.com. Thanks to Christian Genco for taking copious notes over the course of that four days and then John Hwang who was helping him by recording audio files, there’s kind of like 6-minute versions of some of the talks where they interviewed speakers, and then they’re posting it there, there are photographs of the speakers. They really did it up this year in a way that makes it look really cool.
Mike: That whole MicroConf Recap site that Christian put together is absolutely amazing. You can go over there and sign-up for a mailing list that he’s got there, but every single speaker is listed. There’s all sorts of stuff there.
I was talking with him about this, he wrote an app that would allow him to basically take these notes better and put them out there, which is just amazing that he went through all that effort to be able to take notes quicker, and to be able to publish them faster, and format them in a way that actually looks really, really nice.
Rob: conferencenotes.com. I see a SaaS app in his future. It would be a rough market, but it is funny and it was cool that he kind of put it together. Across the two conference, I think we had about 250 folks at Growth, and we had somewhere around 150 at Starters. Somewhere between 400-425, I think is what we’re talking about who came through over the course of those four days.
I picked out some feedback because we’ve got the Growth and Starter surveys back where we ask attendees to rate speakers and give us feedback. I wanted to call a couple of them out. The first one, you had asked for jokes because that’s kind of our schtick, we tell kind of nerdy, programmery, and often bad jokes from stage, and one comment was, “I thought Rob’s jokes were funny and spot on.” Boom.
Mike: Was that comment from you? Did you put in that?
Rob: No. That’s a good guess. I don’t know. I didn’t recognize the name of who it’s from, but I think they were kind of implying like, “Why you’re asking for other jokes, it sounds like you guys got this dialed in.” I thought that was funny.
But then there was another comment that was like, “Any jokes but the ones Rob was telling.” It was the exact opposite. It was great.
Here’s this other–this would literally like one was above the other in the document. This is to show you, if you haven’t run an event like this or you haven’t worked with a community, the amount of information, and differing information, and differing opinions you can see is illustrated by these two things and I brought them in here because I literally read one above it and I went down, and I was like, “Oh, you’ve got to be kidding me.”
The first comment is, “The Q&A With Patrick Collison, Co-Founder of Stripe was outstanding. It would be nice to see more Q&A sessions with high profile individuals.” Right below that, “The Stripe Q&A seemed really out of place and was probably the worst talk for me. It was unrelatable. If I wanted to hear about Silicon Valley, I would go to a Silicon Valley Conference.” Isn’t that kind of just where you have to sit when you have this many people?
Mike: I think it is, but I think it also illustrates a big problem that as entrepreneurs, we kind of have to navigate where you get all these information that’s coming in and some of it is directly conflicting with one another. You have to interpret or read between the lines a little bit and see how certain things feel versus what’s the feedback is that you’re getting, because a lot of the feedback that you’re getting comes from a certain point view or a set of past experiences and interests that people have.
You can’t always align with everything. You can’t make everybody happy. It’s just not going to happen, but you have to do what you believe is right even if that means pissing some people off or making them upset about what the decisions you’re making are.
It’s a tough road to navigate I think, but at the end of the day, you’ve got to make the decisions to move forward. You can’t just be paralyzed and not do anything because then you’ll just never get anything done.
Rob: To realize that it’s never going to be perfect. You’re never going to please everybody and your apps are never going to be down, your conferences are never going to be down. This is our 15th time we’ve run a MicroConf and you’re always adjusting and trying to make it better.
With that, let’s dive into a few of the takeaways. I’ll start with some of the talks from Growth, in no particular order.
I really enjoyed Nadya Khoja’s talk. It was called the 12 Principles Of Viral Content. Nadya is the Director of Marketing at Venngage. It’s a SaaS app that helps you create infographics and interesting viral content in essence.
My takeaway from here is that there really can be a thought process and almost a system for creating content that is more likely to go viral. I’ve seen Matt Inman, The Oatmeal, he was interviewed by Andrew Warner of Mixergy about how do you make this stuff go viral and he was just like, “Look,” this was Matt, he was like, “I’m one of the best in the world at this. This is really hard to do.” Andrew kept trying to pull a system out and Matt just has one in his head, but he wasn’t totally able to communicate it.
What I liked about Nadya’s talk is that she broke it down into pieces. Just a couple of it—we’re not going to go through all 12, obviously—but a couple the things she mentioned were like, bust a myth, challenge the status quo, reframe the question, bring in a new perspective, mash up multiple topics like Star Wars with Game of Thrones or whatever. I enjoyed this and I also heard positive feedback from folks in the audience about it.
Mike: I think the other thing that I took away from her talk was because of her role at Venngage. They have all these things that they’re doing and they’re constantly doing that stuff. Not everything is going to be a hit, not everything is not going to go viral, but being consistent about trying these different things and putting out different infographics or making different articles, concentrated on different headlines, those all contribute to the overall success.
It’s not about whether an individual thing that you do goes viral, it’s about the number of attempts that you make and trying to get at least some of them to go viral. You don’t need to make everything successful, but as long as a certain percentage of them do well, then you’re fine.
Rob: For her, it’s pattern matching. They’ve tried a bunch of different things and this is what has worked for them, and that’s what I like. I always love those stories on MicroConf stage. It’s like coming out of the experience of someone who has actually boots on the ground doing it.
Another talk that was–well, it was the Q&A I mentioned earlier. It was Patrick Collison, co-founder of Stripe which, at this point, what’s their valuation, you think? $10 billion or something? $8-$12 billion?
Mike: That’s above what it is. I think I saw $9 billion but it’s almost immaterial when you get up to those many zeroes.
Rob: It’s crazy. The reason we have Patrick on stage, one of the reasons, is that he and his brother, John bootstrapped it for months and months. I don’t if it was over a year, but it was a long time before they went and raised funding and really at the core of the company is this bootstrapper ethos.
I enjoyed talking to him. I had interviewed him a couple years ago on stage. You had interviewed his brother, John last year on the Starter stage. It’s always kind of a pleasure to have those guys come into town and hang out with some of MicroConf attendees.
Mike: I do find his outlook on just the world and the technology industry very enlightening and very different, I think, from most of what you find in Silicon Valley, and most of the tech companies that are out there. They see their role as really to foster the tech community because by helping other startups, basically like you are raising the ocean, you’re floating all ships in the tech industry.
I think that that’s a really unique approach that they’re at the scale where they can do that at scale and not really have to worry about the finances and the ROI of certain things. They can just do things that they think are the right thing to do that will help certain parts of the ecosystem.
I think their Stripe Atlas program is exactly one of those things. One of the things that I thought was extremely, I’ll say gratifying in some way, but the fact that they essentially launched those on the same day that MicroConf started, and they started talking about it that day, and again, from the stage as well, it was just really nice to see that that was brought to the MicroConf community.
Rob: The Stripe Atlas LLC, right? Because Atlas had previously been C Corps. I guess, you could change stuff in the S Corps, but realizing that a lot of business just want to be an LLC and have pass through revenue and it took a lot of work for them to do this, and they basically kind of announce it at MicroConf. In essence, it was super cool.
Mike: The other thing I like is the humility of where they came from. The one quote that really caught me off guard on stage when he was talking about their early days, when they were trying to partner with one of the larger banks was he said, “We were like three squirrels in a trenchcoat masquerading as a real business.” Of course, it got a lot of laughs from the audience, but that’s, I think how a lot of entrepreneurs feel when they’re trying to pitch a big business. They’re just the small fish in the giant ocean. They have no power and they’re just sort of lying to everybody about who they are, but they’re not lying about themselves. It’s just that they feel that way.
Rob: I love that image of the squirrels in a trenchcoat. It’s just like in the cartoons. Our next talk was my talk. It was 12 Lessons I learned Moving from Bootstrapped to Venture Backed, where I talk about having bootstrapped really since 2000 was when I started bootstrapping companies and then in 2016, Drip was acquired by Leadpages and I had two years kind of looking on the inside of a venture backed company.
I pulled out the pros and cons that I felt like venture funding lent to this company. Now, I think it hurt the org and how I think it made some of the things we did a lot easier. I was less stressed and we could hire a specialist. We could hire senior talent instead of having to train everybody we could use a dedicated recruiter.
Didn’t have to worry about so much about little dollars—$100, $200 subscription. I used to spend hours and hours trying to find the cheapest thing because as a bootstrapper, every penny counts, but when you have some funding, you can be a tiny bit looser that and that saves quite a bit of time.
Mike: I think what you talked about was a really good contrast between being in a position where you can let things slip through the cracks and it doesn’t matter. I remember years and years ago, I was looking at various things that were going on in the industry. I’ve had a conversation with a support rep, or some piece of software wouldn’t work, or even when I was back at Pedestal, there was a bug that I distinctly remember, I was like, “We really need to fix this. This is a problem.” They’re like, “We’ll just push it. It’ll go out in the next release or the release after.” I was like, “But this is big. This is an important thing.” And they’re like, No, no. Later on.” I’m like, “How can you not care about it?” The reality is it’s not that you don’t care. It’s about prioritization.
I think, as a bootstrapper, your priorities tend to be around preserving money so that the business has financial room to operate versus when you’re a big business or you’re funded, it doesn’t matter so much. You can let things go until later on because they are not so large that it makes that big of an impact in the business or how it operates or customers at their tracks.
Rob: Right. I think my key takeaway, kind of the second takeaway for this episode is that you should never be dogmatic about being anti-venture or anti-bootstrapping or whatever. I did come to the conclusion–kind of in the talk that I don’t think anyone in this room should probably raise venture funding because it brings with it a board, and you lose the control, and it’s really tough but it does come with some pluses.
But that there is this in between ground that has just started to develop over the past, I’ll say, three to five years, and it’s this concept of fund strapping where you raise a small round and you never plan to raise institutional money. You only get from individual investors so you don’t have a board, and you don’t give up control, and you don’t get it to $100 millon to make a lot of money for everybody, and so that “could be” an alternative.
I was saying, at the top of my head, I was like, “I bet it’s like 5% of the people in here maybe should consider this.” Because you have to be growing fast enough, it has to be a big enough market for that to make sense, and everyone else should keep bootstrapping—just like we’ve always talked about—but this was just kind of one more alternative that gets you some of the advantages of raising funding without the disadvantages of going a true venture model because one you do venture, it’s institutional money, and the game changes.
Our next talk was How to Be Funny (Even If You’re Not): Improv-Inspired Copywriting Tips for Software Founders. It was from Lianna Patch and it was hilarious. It was really, really well-done. This was one of my favorite talks.
Mike: I agree. I would have to say it was probably my favorite talk as well. I’m not biased just because she wrote some of the copy that’s on the Bluetick website and in the Bluetick emails, but just her stage presence, her ability to break it down, and be serious about like, “These are the things that will resonate with your audience and these are the things that you should really avoid when trying to be funny in your copy.” She knew that stuff cold.
It’s obvious she practices her craft a lot and deeply understands what is going to work and what isn’t. I think that’s partly because of her improv background as well. She does a lot of that. I think she’d done stand up comedy as well, but she really appreciates the value of being able to put yourself in other people’s shoes and understand what is going to be funny to everybody versus being deprecating about your comedy to other people.
Rob: The takeaway here—there’s obviously a lot of takeaways. Again, microconfrecap.com if you want to see the detailed notes. But the big takeaway I got is humor makes people happy. You want people to be happy while they’re using your app. It gives your app personality. It makes people give you the benefit of the doubt. I really enjoyed this talk and hope to have Lianna back at a future conference.
Mike: I do think that it was ironic that the second question that she got in the Q&A was somebody who got up and said, “I’m in the funeral industry.”
Rob: Man, that was funny. I thought that was the first question. I don’t think he meant it to be funny, but I was laughing hysterically. Her reaction on stage, it was like a face palm. She’s like, “I cannot believe that’s the question.”
Mike: She had a great answer for it though. She said, “It depends a lot on how your audience views death.” I think that’s just very insightful. That’s part of why I like her so much because she has that ability to hone in on what makes it funny and why, and when is it appropriate and when it is not. I think that that differentiates you from people who are jerks about it versus they’re actually legitimately funny. Because they know when to be funny and when not to.
Rob: Another talk from Growth that I wanted to call out was from Ankur Nagpal, From $0 To $10M ARR: The Tactics We Used To Scale Teachable. He founded teachable.com. I imagine many people listening to this have heard of it and has done a lot of hustle to get where they are.
My takeaway was he talked about, they set a pretty aggressive growth pace, and that they found things that didn’t scale every month to hit that growth pace. Then at a certain point, they couldn’t get to that point anymore. They’d have to grow $100,000 of MRR in a month and they couldn’t just throw one-off things like they were doing for the first couple of years, that’s when they had to switch into this kind of sustainable flywheel mode. There was a lot of actionable stuff.
If you want to bootstrap a business and you wanted to let that business grow it to a few hundred grand, that’s great, and this talk probably won’t be for you, there’ll be some takeaways. But if you find yourself in a space like we did a couple of years ago with Drip where suddenly it was like, “Oh, good God. This is a huge market. It’s really big. We kind of need to grow or we’re going to get squashed.” This is the kind of talk that you need to hear. It was super actionable and I appreciated Ankur sharing that with the audience.
Mike: I think it was very insightful that he also showed the scale that they’re at, it takes people to get there, because you can’t just slap together an app, and expect that three people are going to be able to build something that’s going to get to millions of dollars of revenue each year and, yes, you hear those Silicon Valley stories about people who create this app and then it gets acquired by Facebook for billions of dollars, but that’s not common. Most people never go through that. That’s a unicorn story. But unfortunately, that resonates in the news and in the tech articles that you see.
He talked about how the fact was that in order to get to 12,000 customers, it took them 64 people to get there. It’s interesting that if you look at the graphs of the revenue and stuff that he showed, it takes time, and it’s a fairly steady slope. It’s kind of The Long, Slow, SaaS Ramp of Death from Gail Goodman from Constant Contact. She had that talk at Business of Software several years ago. Almost without fail, like you talked to most founders, that’s exactly what it looks like—it’s long, slow, and it’s boring but it’s what gets you there.
Rob: The last Growth talk I wanted to call out was just such an outlier, it was really well-delivered. It was an attendee talk by Chad DeShon. He runs boardgametables.com and the title was Everything You’ve Learned at MicroConf is Wrong*—with an asterisk by it. It was a little tongue and cheek but it was the fact that he basically started a B2C company make selling physical goods with no recurring revenue.
He had points like recurring revenue is so overrated. He talks about how if you get your LTV all upfront, you have more cash coming in and your plan is overrated. It is possible to move downmarket, just listen to podcast at 1x. He says, “Seriously, you don’t have to cram information into your ears as fast as possible. Take a deep breath and relax, it will be okay.” It was great. It was filled with humor but also, it’s a nice sanity check on the stuff that we pour out that yes, it is best practice and will get you to the multi-million dollar SaaS company or the hope you grow, whatever. He had another lens on it and I felt it was a bit of a breath of fresh air in his 12-minute attendee talk.
Mike: I think Chad’s real point is just that just because something is best practice information or that it’s a general practice that most people should follow, doesn’t mean that it’s an absolute, concrete rule that everyone needs to follow, and that will always work. There are cases like his where those things will not work or there are exceptions that you can leverage based on what your product is and what your industry is. You can still do what you want and be successful if you are mindful of those other things–those general practices, but don’t take them as absolute law.
Rob: Then switching over to Starter, in the interest of time here, this is really is a bummer, man. I wish we could talk about more of the talks because there were a lot of other exceptional talks that were given at both conferences. I wanted to kickoff Starter by giving a big shout out and a thank you to Justin Jackson. He emceed and he had basically the kickoff talk that kind of sets the stage for MicroConf. It’s a ton of work to emcee a conference, you and I know, and so to ask him to do it—volunteer basis—it was super cool that he was able to do it and he did a great job.
The first talk was Justin’s. It was called, An Unconventional Way to Validate Your Product Idea. In typical fashion, he tells a story, he talks about choosing the right customer is more important than what you sell, starting small is always almost better than going big, on and on. Other stuff that was, I think, really pertinent to the Starter audience.
I really liked the way he thought about there’s product market fit, product founder fit, and founder market fit, talking about what do you value? Do you enjoy this market? Then talked about customer resource. He kind of laid out a blueprint for validating. I think the talk was quite well-received.
Mike: Definitely, a big thanks to Justin. I do appreciate that he came on stage and he said the things that are not necessarily directly related to making the business itself successful, it’s making sure that it’s successful for you as well. Because as you said, the founder market fit, that’s a big thing. If you get bored by a particular product or industry, you’re not going to want to do it, you’re going to be less motivated.
I think that other founders have talked about that in the past in certain public and potentially non-public areas. I’m not going to name names or anything, but that can definitely happen. If you don’t really like what it is that you’re doing, it’s really hard to be motivated to go through those tough times, and it’s easier to give up.
Rob: Another notable talk was from Adam Wathan, it was called Nailing Your First Launch. Also, good story with actionable takeaways, talked about launching essentially information products about teaching people how to use Laravel, and testing their Laravel, and that kind of stuff, and in just two years, he made about $650,000 from his info-products, kind of a not a cold start but almost. He pulled things in, he pulled my stair-step approach in, he talked about building an audience but gave super actionable things, of actual screenshots of tweets, and kind of what works, talked about picking an idea, testing it, and on and on. This was one of the talks that I heard the most about at Starter–that people loved. It was almost like a case study but it was entertaining as well, so it wasn’t dry. He just had a ton of info here.
Mike: I think part of the thing that resonated with most people is that it was starting from ground zero because most of the people at Starter are at that very, very early stage–anywhere from, “I’m still looking for an idea,” all the way up to, “I just launched but I’m certainly nowhere close to making a fulltime revenue on it. It’s going to a while before I get there.” I think Adam’s talk really resonated with a lot of people because it demonstrated how to get some of the growth and some of the different levers that you could toggle in order to get, and it’s obviously not all of them, but an info-product is a lot different than a SaaS product.
Being able to have the confidence that, “Oh, yes, it’s just a book or just a course,” but $600,00 over the course of two years is nothing to sneeze at. I think that that message alone resonates with people to be able to get to that point in only a couple of years versus the people who sit there and say, “Well, I’d really like to start a business but I’m not sure about it,” and it takes them five years or even 10 years to even pull the trigger and do something.
Rob: Another notable talk was from Alli Blum who has appeared on this podcast, title was, Why (and how) to start thinking about teaching people how to use your product… even if it isn’t built yet. She went deep into onboarding which is her area of specialization.
She calls herself a SaaS onboarding optimization consultant and so she’s knee-deep in tons of SaaS apps. She talked about the mistakes she sees that are super common, the vacation photos approach, the too much too soon approach, the bad intern approach, and then she talks about how to improve upon that, and how to keep it simple, but then really dives into the nuts and bolts of how to put your email together, and then the impact that can have, and then kind of had a case study at the end.
Again, what I liked about this is it was a process, and a very specific instructional thing that if this is the problem you’re trying to solve right now, this is like mind blowingly applicable.
Mike: I think that the whole email onboarding process is something that can be difficult to figure out when you’re first doing it because there’s so many things you could do. It’s a question of where do I start, what should I say here, how do I fit all these pieces together, and you can very easily find yourself in a situation where you’re going too far in a particular direction and you’re not thinking strategically about the whole picture of bringing somebody on-boarded into your app, so you go too far on one direction or the other. Alli’s talk was a great way to balance those things out and provide that instructional manual or the roadmap to tell you, “This is how to do it. These are the steps to go through and this is how it will work for you.”
Rob: Another talk I wanted to call out was from Mr. Mike Taber. It’s called Following up… Without looking and feeling like a dirt bag. You talk about email follow-up, why to do it, what happens on the other end, and why don’t we follow-up. This, of course, is from all your experience with Bluetick. How did you feel about your talk?
Mike: I thought it went really well. I gave a version of this talk in FemtoConf a couple of months ago. I did make some changes to it based on the feedback that I got. Overall, it was still largely the same talk, I just cut out pieces that were irrelevant or didn’t make much difference. I definitely spruced up the slides a little bit more this time around because I think before, there were some things that I think weren’t necessarily as clear, and the new presentation I think helped.
Rob: The key takeaway for me here was you had the four pillars of follow-up success. The first is when to send, second is personalization, third is clearly defining a single action you want to take, and the fourth is to automate it so you don’t have to sit there and do everything yourself.
Mike: I think that last piece there is the one that most people don’t really get to. They don’t systemize it or processize it so that it makes sense and can kind of operate in the background because most of the times, I see people coming over to Bluetick to use it. They’ve done a few follow-ups here and there, but lots of things start slipping through the cracks and that’s really why you need to have a process or a system in place that’s going to help prevent those types of things, because everytime you don’t follow-up on an email, whether it’s the third or fourth one, that’s what’s going to cost you the money.
Rob: Another talk that I thought was quite well-done was Marie Poulin’s talk. It was called The Sustainable SaaS: What Permaculture Can Teach Us About Building Software. She’s in the midst of co-founding a SaaS herself. She has online courses. She has all kinds of stuff, and so again, was able to pull from her experience.
Permaculture, if you’re not familiar with it, it’s a set of techniques and principles for designing sustainable human settlements. It’s a lot about like farming, and gardening, and keeping things so that you don’t need a bunch of outside resources in order to live. It was cool that she kind of had her timeline, 2014 through 2018 of these missteps, and how they line up with things that you would do on permaculture. It was a running metaphor the entire time.
Mike: As a running metaphor, I think it fit really well because the audience itself at MicroConf, whether you’re talking about the Growth edition or Starter edition, the vast majority of these people are coming because they want to build a life for themselves and their families that is going to be sustainable over the long term.
They’re not looking to come in and find a market, build something, get a bunch of money into it, and flip it in two years, three years, four years. They’re looking much longer term and it’s not to say that they won’t sell it in two, or three years, or fours years, but they’re trying to find something that’s going to be sustainable for them moving forward, that they can build a life around that allows them to do the things that they want to, and have the freedom of flexibility that being an entrepreneur should be able to give you.
Rob: The last talk from Starter is Courtland Allen’s talk, Navigating the Startup Landscape. Courtland Allen who has also appeared on the show, he founded IndieHackers, they’ve been acquired by Stripe. He and his brother now work for Stripe and run indiehackers.com. I thought he nailed it. He compared starting a startup to this four different landscapes. One is like an airplane taking off, one is panning for gold, one is climbing a rock wall at a gym, and he had these pretty deep metaphors that run well.
He talked a lot of the myths and that’s what I appreciate about him. He’s done, I think he said 300 or 400 interviews with startup founders. If you go to indiehackers.com, there’s this big wall of apps and revenue, and all that kind of stuff. He’s kind of pulled that out between him and his brother have pulled that out of all of these people. To me, I loved hearing the myths of like, “Well, this is probably how you think. You think that Dropbox just started growing because they had this dual referral system and that’s what everyone always talks about. Here’s what it actually look like,” and then he called some other apps where the common myth is that they grew through this one big thing.
Hotmail, with their email link and the footer or Airbnb where they added photographers and hockey sticked them. It was kind of like, “Yeah, it helped.” But there were also 50 other things they were doing really doing well and they had a huge team of people constantly executing, and eventually they just hit critical mass.
I appreciated the reality check and I also thought his talk was really well-delivered. I thought the metaphor held up and I thought the analogies helped me kind of understand the content better.
Mike: The one I actually thought was really funny in his talk was the startup runway of almost certain death. He had a picture of an airplane going off of a cliff and on the other side of the cliff, there’s an ocean, and it’s got a shark jumping out of the water, and there’s snakes, and a wall of spears, and fire. It was just very on point, I’ll say.
Rob: Yeah, that was cool. Two more MicroConfs down, sir. 14 and 15, I think it took a lot out of both of us this year.
Mike: Yeah, definitely for sure. Although, I do want to say there’s one other thing that we did this year that we have not done at scale in the past, which was we instituted the scholarship program for Starter Edition.
Of all the things that have happened this year, I’m probably most proud of that one because it was a lot of behind-the-scene stuff that we really didn’t talk about on the podcast, and we didn’t talk about or market too much because I was still trying to figure things out. But we had a bunch of sponsors who stepped up and really helped make it happen. I think that it’s something that we could do more often moving forward. In the past we’ve had individuals do it, Patrick Mackenzie has done it a couple of times.
We’ve obviously offered sponsors quietly in the background because we can’t help everyone, but there are certain situations where it feels warranted and you really just want to do the right thing and help people who are in a position to help themselves but they just need that little extra push.
I want to send a big thanks out to Stripe, Sureswift Capital, Brian Marble, Scott Nixon, and Balsamiq Software, and Azlo for helping put the scholarship program together and make it possible for, I think it was between 12 and 15 scholarships that we gave out this year for Starter Edition. Definitely, a big round of thanks to those guys.
Rob: Sure. You know man, you obviously headed this part up, I know you put a ton of time and energy into it, so thanks for doing that. I think it’s a huge win for MicroConf and I think it’s a big win for the community as well.
Mike: I think, with that, we’d call it a day. If you have a question for us, you can call it into our voicemail number at 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. We’ll see you next time.
Episode 391 | The 5 Stages of Your Sales Funnel & Tools to Use At Each One
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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about the 5 stages of your sales funnel and tools you can use at each stage. This episode is based off of a Ignite Visibility article, the guys give their takes on the points made in the article as well as add additional tool options.
Items mentioned in this episode:
Mike: In this episode, Startups For the Rest of Us, Rob and I are going to be talking about the five stages of your sales funnel and the tools to use in each one. This is Startups For the Rest of Us episode 391.
Welcome to Startups For The Rest Of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products. Whether you’ve built your first product, or you’re just thinking about it. I’m Mike.
Rob: And I’m Rob.
Mike: And we’re here to share experiences to help you avoid the same mistakes we’ve made. How are you doing this week, Rob?
Rob: I’m doing alright, I actually have a bit of an announcement to make, my last day at Drip. When this goes live, it would have been a couple of weeks since I decided to leave.
Mike: Does that mean that you are gone or you’re in the process of leaving?
Rob: No, I’m gone. It was totally amicable. Obviously this has to happen at some point. Your company gets acquired and you hang around for the transition. Both Derrick and I worked there for almost two years after the Leadpages acquired Drip and Derrick left in February. That of course got me thinking working on Drip without Derrick was less fun for me and it definitely got me thinking about plans of what I wanted to do and I started thinking about, “Hey, am I going to stick around for all of 2018?” And then in all honesty, the team came together really well.
We hired a CTO, and there’s the senior director of product who I mentioned on the show in the past really came up to speed super fast and suddenly I looked around and I thought to myself, “What am I doing here anymore? What am I contributing?” Obviously there’s value that I bring as the cofounder and as someone who’s worked on it for five and a half years. Realistically, people are kicking ass and taking names and they’re really fired up about it in the company. There’s 60 something people working on Drip now.
What I can contribute is so much less valuable than what I could when we were 5 or 10 people. Five and a half years for me is a really long time to work on anything. The longest I’ve ever worked on something before that, I had a job for two and a half years. We talked about this on the podcast, I tend to do these 18, maybe 24-month things, and then I move on to the next thing.
Drip was a long one because it was big and there was an acquisition and all that. It makes me happy, I really do—I know everybody says, “I left it in really good hands.” I wouldn’t have left if it wasn’t in good hands. This is a pretty big part of my career, I spent like a third of my career—I was doing the math—about a third of my career working on Drip. I still run several businesses and mailing lists on it, so it’s not anything that I’ll be switching away from, I still think it’s the best tool out there to do it.
We mapped out the roadmap for about a year, and there’s a two to three-year vision that we talked through. There’s all the stuff in place that I feel honestly pretty good about. But it is bittersweet. It’s always bittersweet to do anything like this because I don’t get to go in the office and I like the team, I like working with the people. That was probably the hardest part of that decision for me.
Mike: I’ll be blunt about it, you’re unemployed, is that what you’re saying?
Rob: Exactly, that is a very good way. Unemployed and unemployable is probably better. You’re right, man. Should I file for unemployment?
Mike: I don’t know if you can if you quit. You’d have to look into that but my guess is probably not.
Rob: Probably not, yeah. I’ve never even filed for unemployment in my life so I don’t know what that would be like. You’re right, man, I’m just—aside from MicroConf and and doing some writing like I’ve been talking about in the two podcasts—hanging around, taking some time off. I think I want to take the whole summer off and not do anything serious, not tackle anything. I’m still sticking by my, “I’m never doing that again,” thing. I’m not doing that again, man, I just can’t, not from the ground up, it’s just too much.
Mike: Cool. I’m not sure how this really factors into it but I’ve been meaning to bring this up for a while and I kept forgetting. I was driving downtown in the town that I live in the other day, I came across this street, it was Atwood Ave, it immediately made me think of Jeff Atwood. Then, I came across Walling Ave literally right next to it. If I come across Spolsky Boulevard without seeing Taber Street, I’m going to piss.
Rob: Without Taber Street, that’s awesome. Jeff Atwood, the man, codinghorror.com. I used to read his blog years ago. I haven’t read it in a while, have you?
Mike: I pop over there on occasion but he doesn’t blog nearly as much as he used to. The content doesn’t refresh as regularly. He still does really highly in-depth articles on various things. I was reading about the stuff he does. High performance, low power computing things that he puts together because he’s always looking for ways to improve on previous designs with lower cost and better computer parts and things like that. I think it’s a home theater PC, that he’s basically […].
Rob: I love how his pieces are really long which is very much in vogue today, but he has been doing that since he started the blog. I’m thinking his blog has been around since—I started mine in 2005 and I think we started within a few months of each other because we were in some early blogging books together and that’s how he and I ran across each other. An interesting thing, my first big speaking gig was in 2008 or 2009 and it was a business offering, it was a lightning talk, it was the PechaKucha seven-minute thing where the slides flip automatically. I was encouraged to do that by Jeff Atwood and I saw him at one of Spolsky’s events.
Remember when they used to do the Stack Overflow, Dev days, it was $99. I ran into Jeff Atwood, we have never met, and I introduced myself and said, “I’m Software by Rob,” and he said, “I love that blog,” so we connected, we had emailed before. In the back of my mind, I was super nervous going up to him because I never met him and I hold him in high regard, and I’ve never once regretted having that conversation because it really—I’ve never been to BoS, I went, I talked. A bunch of people knew who I was and I was like, “That’s weird, how did they know me?” and it was from this blog. This is early days, this was before all of the podcasts and all this other stuff.
I didn’t realize how small our community actually was. I knew I had at the time probably 20,000 readers but I didn’t realize that a huge chunk of them would be at a conference like BoS. It was a very concentrated thing. That was my first thing that then encouraged me to write a book. I don’t know, there was something about the momentum that that created. I guess the moral of that story is it has always encouraged me to do things that are really terrifying because that one move—I actually left the building, I was walking up to my car, I had seen Jeff Atwood and I left.
I’m too scared or nervous to go up to him. I walked back in from the parking lot and I walked up to him. He was in a buffet line and I just said, “Jeff Atwood, Rob Walling,” that moment, I think it literally changed my life may be a little overstating it but it’s had a pretty profound impact on the course of my professional career.
Mike: Long story short, you met Jeff Atwood a long time ago and now you’re buying roads in my town and naming them after yourself.
Rob: That’s right, indeed, sir. How about you? What’s new this week?
Mike: I recently went through a disaster. I used Chrome for my web browser, and for whatever reason, the last time I went through an update, you get that little green arrow in the corner, it’s just like click here and it will shut down everything and open up all the windows for you again. When it did that, it blew away my local cache for literally every website that I’ve ever gone to. For some reason, I have no idea why or how this happened.
All my two-factor authentication stuff went away, I had to relog-in to all the different sites that I was using whether it was Facebook or Twitter and Amazon, a bunch of stuff. It was all gone for some reason. Fortunately, I have LastPass, so it wasn’t that bad. There were some of these websites, “Use your authenticator,” like crap, I’ve got three of them, which one is this?
Rob: That sucks, dude. It nuked your two-factor authentication, I hate it when that happens, and then all the sites are slow now because it has to recache everything?
Mike: No, the sites don’t seem slow. It’s just that all my cookies and stuff are gone and I use Clicky for my website analytics and I have my own machine, I was logged into it, it excludes all my IP address information. It automatically filters out me when I visit the site and I hadn’t realized that it blew away everything until I went to check my analytics that day and realized that there were tons of actions and “visitors” on there because it was me doing a bunch of testing on it so all my stats for that day are totally screwed up.
Rob: That’s a bummer, man. iOS has done that to me a couple of times where it will install an update and it nukes a bunch of my setting and I’ll be like, “Why am I not getting texts on my MacBook anymore?” and I just go into the settings, off, and it used to be on. It was on last week. I’m not quite sure why that would happen. Obviously, it’s a bug in the upgrade but it’s really irritating, certainly not as bad as what you’ve experienced but that’s a pain in the butt when that happens.
Mike: That’s the only time that that’s ever happened to me, at least that bad with Chrome, but that’s one of those things that it encourages people to not upgrade software or their devices.
Rob: To resist doing it, I hear you.
Mike: That’s why I try to really be careful about doing updates and stuff on my own software. Sometimes there’s the need to sort of break stuff on occasion.
Rob: Cool, what are we talking about today?
Mike: Today, we’re going to be going through the five stages of your sales funnel and the tools to use at each stage. This is an outline that I put together based on an article over at ignitevisibility.com and we’ll link that up in the show notes. I found it fascinating the way that they broke out the stages of the sales funnel and specifically showed different tools that you could use in each one. I looked back through our archives and we don’t have an episode on how to put together a sales funnel, or specifically what it looks like or what tools to use. I thought it would be good to go through this article and talk about what they have to say and then provide our own take on it.
Rob: Cool, sounds good, let’s dive in.
Mike: Stage one in today’s list is awareness. The basic idea with stage one is that unless somebody knows that you even exist, they’re not aware of it, of course. They’re not going to come to your website, they’re not going to download anything, they’re not going to go put their name in for a trial or sign up for a trial, they’re not going to come to a webinar, nothing. You have to make them aware that you exist to begin with.
In this stage, they put a bunch of tools that we talked about on the show in the past and the lists that are probably used in the past, things like SEMrush, Ahrefs, Buffer, Hootsuite, LinkedIn Sales Navigator, and there’s several others in there that are probably much further ahead than most people, one example is Growbots, but that’s $500 a month and they bill it annually. I think anyone who’s starting out, that’s really beyond their price range, but the basic gist of a lot of these things is that there are ways to help put you in front of people or to connect with people. If you categorize those tools, it’s really based around SEO and social media. There’s lots of other ways to find channels of customers, but those are the ones that they kind of focus on with the tools that they showed.
Rob: If you’re interested in more, this is the list of marketing approaches. This is putting together a marketing plan. You can go back to episode 384, just a few weeks back, where you and I tore down the Bluetick marketing plan. You can also read the book Traction that gives you 15 or 20 different ideas for driving traffic and SaaS Marketing Essentials by Ryan Battles. Those are the three off the top of my head that I would read if I was thinking about creating awareness for a new or an existing app.
Mike: I do want to take a few minutes to dive into some additional tools that they don’t use here or call out here and maybe that’s just because their company provides certain services and the other marketing channels are not including those. But some of the things that came to mind was paid advertising. Whether it’s Facebook ads, or Twitter ads, it’s just traffic acquisition in stage one and trying to get people to know who you are. You can also do billboard advertisements for example or you could pay to be in a newsletter that gets sent out regularly.
There’s several that I’ve seen out there where you can take $500 or $1000 and they will include an advertisement, basically a sponsorship for whatever your product is or your service to their newsletter list. And then there’s tools like Canva which helps you provide marketing collaterals that you can either publish on your website or send to people. Another option for social media would be TweetDeck which I think is offered directly from Twitter.
Rob: I believe they acquired it a few years ago.
Mike: That’s another alternative to either HootSuite or Buffer. Stage one is really just about building awareness that you even exist as an option to solve the problem that a customer may have.
Rob: Stage two is about interest. It’s finding out if a customer is interested, keeping them on your website, or getting an email address from them. This is not a full qualification when you think of qualifying a sales lead. This is really just getting one more step past, they’re on your website now, are they going to click around or opt-in to hear more from you.
Mike: One other thing that I want to point out as we go through these is that the way that they break down these different stages, it seems to me like there’s a little bit of a difference between how they would do it versus I would do it, but the basic gist of what they’re trying to do here is say that when you get past the point of where they’re aware of you, they express some sort of interest, but you still don’t know who they are as the vendor.
You have to use tools like Unbounce or Crazy Egg, or visual website optimizer to try and find out are they browsing around on your website, and are they taking an interest in whatever it is that you’re doing. That stage one are those people who you put an advertisement from, maybe they clicked through it to come to your website and then immediately bounced, or they searched for something and they get on your website and they’re like, “Nope, this is not what I was looking for.” They hit the back button.
Whereas with interest, you try to engage how interested are those people who are coming to your website in what it is that you have to offer, whether it’s articles, or educational materials, or an email list, or lead magnets, any of those kinds of things. Are they clicking around the website and actually reading? Because if they’re not, they’re not interested and they really fall in that first bucket. But if they are, you can see heat maps and things like that that will help you provide a better idea of what is going on.
Rob: Yeah. To summarize, these are people on your website who you don’t know who they are yet. Tools for this are going to be things like Google Analytics which is going to give you a lot of aggregate data. Clicky, which is essentially a competitor, one of the main competitors I know to Google Analytics, it’s real-time web analytics, and then tools for capturing that email address, obviously something like OptinMonster or Drip with its email capture widget, or Kickofflabs. Kickofflabs, they do more than just landing pages and pre-launch pages.
Mike: They have widgets that you can embed into your website that would allow people to sign up and then they can take those and they can add additional metadata to them and then send it over to whatever your marketing platform is. If you have Drip, they’ll pre-populate it based on the email address and then sent it over to you.
Rob: That’s cool, that makes sense. Sumo Media is another one that’s going to help you capture emails. I think Mixpanel and Kissmetrics at this point would also be helpful. They are designed more to measure funnels and actually maybe at this step, it would be less helpful, but I think to cover all five stages of the funnel, one of those tools that gets into—it’s not just aggregate data but you can look at individuals once they’re identified and see where they stopped.
Mike: Another good tool in this stage is Hotjar. I have an account with them, they’ve got a free account that you can sign up for. It’s pretty good if you don’t have a ton of traffic to your website, and it will give you some of that heat mapping information and show you click conversion rates where people are going to let’s say the homepage and you want to see how many people who come to the website are coming to the pricing page for example. It will show you that information.
You can also do screen recordings as people browse around your website, or on certain pages, and it will give you an idea of what people are looking at. That can be helpful for deciding what it is that you should be focusing on or what changes you should make on your website. Stage two is really about tracking what people are doing on the website and then optimizing it to help move them onto stage three.
Rob: I think Hotjar is a good tool. We’ve used it on Drip as well.
Mike: The third stage is called evaluation. I don’t like the phrasing of this solely because if you say evaluations, to me it means you’re doing a trial, but the context that they mean it in is they’re evaluating whether or not to give your tool a chance or which tool it is that they’re going to spend some time and effort looking into, whether they’re going to find a trial for it or they’re going to go to some webinars.
This is just them trying to gather more information about your tool and potentially some others to give them more information. Tools that fall into this category are things like Camtasia Studio, Jing, Wistia, Soapbox, really for capturing videos. Whether it’s a demo of your product, or a webinar, or an educational video of some kind, or even just a marketing video of the founder talking about a specific reason why he or she built the product.
For hosting those things, you want to use something like Wistia or Vimeo, you can also use YouTube. And then additional pieces of the evaluation stage is providing educational content to people. Things like ebooks fall into this category as well.
Rob: Yeah, this is that education stage where you are trying to get people to raise their hand and essentially either sign up for a trial, or sign up for a demo, or continue to ask for more information so that their lead score or their interest score rises to the point where you reach out to them directly.
Mike: As you said with raising their hands, if they do that, then they end up in stage four which is engagement. I hear the prospects have made a conscious decision that they’re interested in finding out more. I would almost say that there’s probably a few more things in between here, between stage four and stage five, because stage four, the way that they lay it out, you’re getting somebody to sign up for your email list or get on a demo, whether it’s GoToWebinar or Zoom or a variety of other webinar tools, something like Bluetick or Drip falls into this category as well.
I feel like CRMs almost fall into this category as well, into stage four because you’re gathering more information about them. You’ve had them signup for your email list and you started populating that data, whether you’ve asked them for information in a form, you’ve had them fill out a survey. Those types of things have to end up some place and the CRM is really the logical place to start putting some of that information so that you can use that information in additional marketing materials to help move them to the next step.
Rob: Some people phrase it as lead nurturing. Obviously, an email tool is going to be a really nice way to do it as well as webinars that will get you that one to many. Like you said, CRM, it depends on if you are truly a self-serve business or self service where people just come up and they sign up for a $10 a month account. Obviously, your CRM is probably your ESP; that was really jargoning. I just put two acronyms back-to-back. Your CRM is probably your email service provider.
It’s a tool like MailChimp, or Drip, or Infusion Software, you actually keep a lot of your prospect and customer data. If you have a higher price point and you really are doing some medium touch sales, then having something like a Pipedrive, or Base CRM, or Highrise, one of the CRMs I think is obviously going to be helpful, and Salesforce obviously. Something like that is really going to help move people through the funnel, and then it attracts your individual one-on-one communication, you obviously need sales people to use tools like that or get a lot of benefit out of them.
Mike: The thing I was mentioning earlier where I feel like there should be more between stage four and stage five is that, here they played stage five as the commitment in the purchase. They list a bunch of ways to take payments. Whether it’s PayPal or WooCommerce, for whatever reason Stripe is not on this list, but they have a couple of shopping carts in there as well. It seems to me like even in stage four, there’s a lot of flexibility for somebody to move forward and back in the funnel here a little bit because somebody might download an ebook for example and then you don’t see or hear from them for two weeks, five weeks, eight weeks because they got busy doing other things.
There’s a lot of circular patterns between customers who come in, they enter in your sales funnel, and then they just repeat in this area for a while before they move on. You may look at it as it just takes them longer to get from stage four to stage five. The reality is that sometimes people can regress a little bit inside of your sales funnel. You have to make sure that you have enough marketing materials in there to nurture those people along to the point that they go to that demo and ask the questions that you want them to ask or you find ways to turn them out on your own.
Rob: Yeah, I think this sales funnel that ignite visibility is in essence more of a services sales funnel because they’re a services firm. I guess it can also be a one-time purchase but certainly if you have SaaS and you have a trial, there’s a step after engagement before the purchase, and I think that’s where this is just a little bit different.
Mike: Yeah, once you get into a SaaSified version of this, then you get into that measuring the trial and seeing how many people are going from the email list into the trial and then how many people are converting from a trial into a paid customer. And then you also have to talk about things like on-boarding, and are they using certain features in your products, are they getting the most value out of it, who is using the features that will turn them into a paid customer, who’s not, how do you get them to use those features, should you make them front and center, or should you provide them a walkthrough videos inside the app.
There’s all these things that you can measure in that area. It could get complicated but it’s very specific to whatever your app is because what somebody does in Bluetick for example is going to be very different than what somebody does in Drip, or any countless other applications in order to be successful with that product.
Rob: Right, and in terms of measuring what people are doing in the product, Hotjar like you said can do a lot of things. I know that Crazy Egg, you can do in-app heat maps. Do you know of any other tools off the top of your head that help you kind of be aware of it? It’s almost in-app analytics and metrics.
Mike: One I would take a look at is probably Segment. You install Segment and there’s a developer edition or a developer tier that is in the people with less than a thousand what they call MT Uses monthly, transactional users or something like, that but monthly total users. What it does is if you have it in the app and you’re only using two data sources they say, then it’s free. Otherwise, it’s $100 a month and the monthly total users could actually kill you depending on how much traffic you have.
If you put it on your website and you’re using that as a source, if you get 10,000 unique visitors a month, it’s counted as 10,000 MTUs. Depending on how big your business is, that could get expensive. But if you’re just doing it in the app, then you’re trying to pinpoint things and optimize things inside the app, you can send the data into Segment, and then from there, you can take a look at another product called Amplitude—which is amplitude.com—and that allows you to take information that comes directly out of Segment or get a JavaScript snippet that you could plug-in and it will allow you to track people through your app and what they’re doing.
Their product is free as well until you get to something 10 million events per month. You have to be fairly large in order to hit their pricing tier but I would imagine once you get to that, it’s going to be really expensive, but if you’re at that level, it’s probably going to be worth it for you because it allows you to drill in and see exactly who is using which features, how much they’re paying, and you can have all that data piped in through Segment from your website or from your backend database and through to Amplitude.
Rob: Very nice, I haven’t heard of Amplitude before so that’s a cool little stack that you hacked together there. We’ve used Segment for years but getting it into those other data analysis platforms I think is probably a head kicker and a real value there.
Mike: Yeah, Amplitude, I just found out about it recently so I’ve been looking into it. It’s interesting to see some of the dashboards and stuff that they have available. It’s an example so you can just see who is using what in your app and how much they’re using it, it gives you real time data so that you can take a look at who’s doing what today, and how many times have they performed this action, or how many times does this thing happen in the background? You can use those customized dashboards to help you make decisions about your own product versus some off the shell tool like Crazy Egg which has one very specific use case, to see where people are clicking. Yes, you can do other things but the dashboard allows you to customize a lot of things and create one that is specific for your own app.
Rob: Cool. To recap the five stages of your sales funnel, number one is awareness, number two is interest, three is evaluation, four is engagement, and five is commitment. If you have a question for us, call our voicemail number at 888-801-9690 or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups. Visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Welcome to Startups For The Rest Of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products. Whether you’ve built your first product, or you’re just thinking about it. I’m Mike.
Rob: And I’m Rob.
Mike: And we’re here to share experiences to help you avoid the same mistakes we’ve made. How are you doing this week, Rob?
Rob: I’m doing alright, I actually have a bit of an announcement to make, my last day at Drip. When this goes live, it would have been a couple of weeks since I decided to leave.
Mike: Does that mean that you are gone or you’re in the process of leaving?
Rob: No, I’m gone. It was totally amicable. Obviously this has to happen at some point. Your company gets acquired and you hang around for the transition. Both Derrick and I worked there for almost two years after the Leadpages acquired Drip and Derrick left in February. That of course got me thinking working on Drip without Derrick was less fun for me and it definitely got me thinking about plans of what I wanted to do and I started thinking about, “Hey, am I going to stick around for all of 2018?” And then in all honesty, the team came together really well.
We hired a CTO, and there’s the senior director of product who I mentioned on the show in the past really came up to speed super fast and suddenly I looked around and I thought to myself, “What am I doing here anymore? What am I contributing?” Obviously there’s value that I bring as the cofounder and as someone who’s worked on it for five and a half years. Realistically, people are kicking ass and taking names and they’re really fired up about it in the company. There’s 60 something people working on Drip now.
What I can contribute is so much less valuable than what I could when we were 5 or 10 people. Five and a half years for me is a really long time to work on anything. The longest I’ve ever worked on something before that, I had a job for two and a half years. We talked about this on the podcast, I tend to do these 18, maybe 24-month things, and then I move on to the next thing.
Drip was a long one because it was big and there was an acquisition and all that. It makes me happy, I really do—I know everybody says, “I left it in really good hands.” I wouldn’t have left if it wasn’t in good hands. This is a pretty big part of my career, I spent like a third of my career—I was doing the math—about a third of my career working on Drip. I still run several businesses and mailing lists on it, so it’s not anything that I’ll be switching away from, I still think it’s the best tool out there to do it.
We mapped out the roadmap for about a year, and there’s a two to three-year vision that we talked through. There’s all the stuff in place that I feel honestly pretty good about. But it is bittersweet. It’s always bittersweet to do anything like this because I don’t get to go in the office and I like the team, I like working with the people. That was probably the hardest part of that decision for me.
Mike: I’ll be blunt about it, you’re unemployed, is that what you’re saying?
Rob: Exactly, that is a very good way. Unemployed and unemployable is probably better. You’re right, man. Should I file for unemployment?
Mike: I don’t know if you can if you quit. You’d have to look into that but my guess is probably not.
Rob: Probably not, yeah. I’ve never even filed for unemployment in my life so I don’t know what that would be like. You’re right, man, I’m just—aside from MicroConf and and doing some writing like I’ve been talking about in the two podcasts—hanging around, taking some time off. I think I want to take the whole summer off and not do anything serious, not tackle anything. I’m still sticking by my, “I’m never doing that again,” thing. I’m not doing that again, man, I just can’t, not from the ground up, it’s just too much.
Mike: Cool. I’m not sure how this really factors into it but I’ve been meaning to bring this up for a while and I kept forgetting. I was driving downtown in the town that I live in the other day, I came across this street, it was Atwood Ave, it immediately made me think of Jeff Atwood. Then, I came across Walling Ave literally right next to it. If I come across Spolsky Boulevard without seeing Taber Street, I’m going to piss.
Rob: Without Taber Street, that’s awesome. Jeff Atwood, the man, codinghorror.com. I used to read his blog years ago. I haven’t read it in a while, have you?
Mike: I pop over there on occasion but he doesn’t blog nearly as much as he used to. The content doesn’t refresh as regularly. He still does really highly in-depth articles on various things. I was reading about the stuff he does. High performance, low power computing things that he puts together because he’s always looking for ways to improve on previous designs with lower cost and better computer parts and things like that. I think it’s a home theater PC, that he’s basically […].
Rob: I love how his pieces are really long which is very much in vogue today, but he has been doing that since he started the blog. I’m thinking his blog has been around since—I started mine in 2005 and I think we started within a few months of each other because we were in some early blogging books together and that’s how he and I ran across each other. An interesting thing, my first big speaking gig was in 2008 or 2009 and it was a business offering, it was a lightning talk, it was the PechaKucha seven-minute thing where the slides flip automatically. I was encouraged to do that by Jeff Atwood and I saw him at one of Spolsky’s events.
Remember when they used to do the Stack Overflow, Dev days, it was $99. I ran into Jeff Atwood, we have never met, and I introduced myself and said, “I’m Software by Rob,” and he said, “I love that blog,” so we connected, we had emailed before. In the back of my mind, I was super nervous going up to him because I never met him and I hold him in high regard, and I’ve never once regretted having that conversation because it really—I’ve never been to BoS, I went, I talked. A bunch of people knew who I was and I was like, “That’s weird, how did they know me?” and it was from this blog. This is early days, this was before all of the podcasts and all this other stuff.
I didn’t realize how small our community actually was. I knew I had at the time probably 20,000 readers but I didn’t realize that a huge chunk of them would be at a conference like BoS. It was a very concentrated thing. That was my first thing that then encouraged me to write a book. I don’t know, there was something about the momentum that that created. I guess the moral of that story is it has always encouraged me to do things that are really terrifying because that one move—I actually left the building, I was walking up to my car, I had seen Jeff Atwood and I left.
I’m too scared or nervous to go up to him. I walked back in from the parking lot and I walked up to him. He was in a buffet line and I just said, “Jeff Atwood, Rob Walling,” that moment, I think it literally changed my life may be a little overstating it but it’s had a pretty profound impact on the course of my professional career.
Mike: Long story short, you met Jeff Atwood a long time ago and now you’re buying roads in my town and naming them after yourself.
Rob: That’s right, indeed, sir. How about you? What’s new this week?
Mike: I recently went through a disaster. I used Chrome for my web browser, and for whatever reason, the last time I went through an update, you get that little green arrow in the corner, it’s just like click here and it will shut down everything and open up all the windows for you again. When it did that, it blew away my local cache for literally every website that I’ve ever gone to. For some reason, I have no idea why or how this happened.
All my two-factor authentication stuff went away, I had to relog-in to all the different sites that I was using whether it was Facebook or Twitter and Amazon, a bunch of stuff. It was all gone for some reason. Fortunately, I have LastPass, so it wasn’t that bad. There were some of these websites, “Use your authenticator,” like crap, I’ve got three of them, which one is this?
Rob: That sucks, dude. It nuked your two-factor authentication, I hate it when that happens, and then all the sites are slow now because it has to recache everything?
Mike: No, the sites don’t seem slow. It’s just that all my cookies and stuff are gone and I use Clicky for my website analytics and I have my own machine, I was logged into it, it excludes all my IP address information. It automatically filters out me when I visit the site and I hadn’t realized that it blew away everything until I went to check my analytics that day and realized that there were tons of actions and “visitors” on there because it was me doing a bunch of testing on it so all my stats for that day are totally screwed up.
Rob: That’s a bummer, man. iOS has done that to me a couple of times where it will install an update and it nukes a bunch of my setting and I’ll be like, “Why am I not getting texts on my MacBook anymore?” and I just go into the settings, off, and it used to be on. It was on last week. I’m not quite sure why that would happen. Obviously, it’s a bug in the upgrade but it’s really irritating, certainly not as bad as what you’ve experienced but that’s a pain in the butt when that happens.
Mike: That’s the only time that that’s ever happened to me, at least that bad with Chrome, but that’s one of those things that it encourages people to not upgrade software or their devices.
Rob: To resist doing it, I hear you.
Mike: That’s why I try to really be careful about doing updates and stuff on my own software. Sometimes there’s the need to sort of break stuff on occasion.
Rob: Cool, what are we talking about today?
Mike: Today, we’re going to be going through the five stages of your sales funnel and the tools to use at each stage. This is an outline that I put together based on an article over at ignitevisibility.com and we’ll link that up in the show notes. I found it fascinating the way that they broke out the stages of the sales funnel and specifically showed different tools that you could use in each one. I looked back through our archives and we don’t have an episode on how to put together a sales funnel, or specifically what it looks like or what tools to use. I thought it would be good to go through this article and talk about what they have to say and then provide our own take on it.
Rob: Cool, sounds good, let’s dive in.
Mike: Stage one in today’s list is awareness. The basic idea with stage one is that unless somebody knows that you even exist, they’re not aware of it, of course. They’re not going to come to your website, they’re not going to download anything, they’re not going to go put their name in for a trial or sign up for a trial, they’re not going to come to a webinar, nothing. You have to make them aware that you exist to begin with.
In this stage, they put a bunch of tools that we talked about on the show in the past and the lists that are probably used in the past, things like SEMrush, Ahrefs, Buffer, Hootsuite, LinkedIn Sales Navigator, and there’s several others in there that are probably much further ahead than most people, one example is Growbots, but that’s $500 a month and they bill it annually. I think anyone who’s starting out, that’s really beyond their price range, but the basic gist of a lot of these things is that there are ways to help put you in front of people or to connect with people. If you categorize those tools, it’s really based around SEO and social media. There’s lots of other ways to find channels of customers, but those are the ones that they kind of focus on with the tools that they showed.
Rob: If you’re interested in more, this is the list of marketing approaches. This is putting together a marketing plan. You can go back to episode 384, just a few weeks back, where you and I tore down the Bluetick marketing plan. You can also read the book Traction that gives you 15 or 20 different ideas for driving traffic and SaaS Marketing Essentials by Ryan Battles. Those are the three off the top of my head that I would read if I was thinking about creating awareness for a new or an existing app.
Mike: I do want to take a few minutes to dive into some additional tools that they don’t use here or call out here and maybe that’s just because their company provides certain services and the other marketing channels are not including those. But some of the things that came to mind was paid advertising. Whether it’s Facebook ads, or Twitter ads, it’s just traffic acquisition in stage one and trying to get people to know who you are. You can also do billboard advertisements for example or you could pay to be in a newsletter that gets sent out regularly.
There’s several that I’ve seen out there where you can take $500 or $1000 and they will include an advertisement, basically a sponsorship for whatever your product is or your service to their newsletter list. And then there’s tools like Canva which helps you provide marketing collaterals that you can either publish on your website or send to people. Another option for social media would be TweetDeck which I think is offered directly from Twitter.
Rob: I believe they acquired it a few years ago.
Mike: That’s another alternative to either HootSuite or Buffer. Stage one is really just about building awareness that you even exist as an option to solve the problem that a customer may have.
Rob: Stage two is about interest. It’s finding out if a customer is interested, keeping them on your website, or getting an email address from them. This is not a full qualification when you think of qualifying a sales lead. This is really just getting one more step past, they’re on your website now, are they going to click around or opt-in to hear more from you.
Mike: One other thing that I want to point out as we go through these is that the way that they break down these different stages, it seems to me like there’s a little bit of a difference between how they would do it versus I would do it, but the basic gist of what they’re trying to do here is say that when you get past the point of where they’re aware of you, they express some sort of interest, but you still don’t know who they are as the vendor.
You have to use tools like Unbounce or Crazy Egg, or visual website optimizer to try and find out are they browsing around on your website, and are they taking an interest in whatever it is that you’re doing. That stage one are those people who you put an advertisement from, maybe they clicked through it to come to your website and then immediately bounced, or they searched for something and they get on your website and they’re like, “Nope, this is not what I was looking for.” They hit the back button.
Whereas with interest, you try to engage how interested are those people who are coming to your website in what it is that you have to offer, whether it’s articles, or educational materials, or an email list, or lead magnets, any of those kinds of things. Are they clicking around the website and actually reading? Because if they’re not, they’re not interested and they really fall in that first bucket. But if they are, you can see heat maps and things like that that will help you provide a better idea of what is going on.
Rob: Yeah. To summarize, these are people on your website who you don’t know who they are yet. Tools for this are going to be things like Google Analytics which is going to give you a lot of aggregate data. Clicky, which is essentially a competitor, one of the main competitors I know to Google Analytics, it’s real-time web analytics, and then tools for capturing that email address, obviously something like OptinMonster or Drip with its email capture widget, or Kickofflabs. Kickofflabs, they do more than just landing pages and pre-launch pages.
Mike: They have widgets that you can embed into your website that would allow people to sign up and then they can take those and they can add additional metadata to them and then send it over to whatever your marketing platform is. If you have Drip, they’ll pre-populate it based on the email address and then sent it over to you.
Rob: That’s cool, that makes sense. Sumo Media is another one that’s going to help you capture emails. I think Mixpanel and Kissmetrics at this point would also be helpful. They are designed more to measure funnels and actually maybe at this step, it would be less helpful, but I think to cover all five stages of the funnel, one of those tools that gets into—it’s not just aggregate data but you can look at individuals once they’re identified and see where they stopped.
Mike: Another good tool in this stage is Hotjar. I have an account with them, they’ve got a free account that you can sign up for. It’s pretty good if you don’t have a ton of traffic to your website, and it will give you some of that heat mapping information and show you click conversion rates where people are going to let’s say the homepage and you want to see how many people who come to the website are coming to the pricing page for example. It will show you that information.
You can also do screen recordings as people browse around your website, or on certain pages, and it will give you an idea of what people are looking at. That can be helpful for deciding what it is that you should be focusing on or what changes you should make on your website. Stage two is really about tracking what people are doing on the website and then optimizing it to help move them onto stage three.
Rob: I think Hotjar is a good tool. We’ve used it on Drip as well.
Mike: The third stage is called evaluation. I don’t like the phrasing of this solely because if you say evaluations, to me it means you’re doing a trial, but the context that they mean it in is they’re evaluating whether or not to give your tool a chance or which tool it is that they’re going to spend some time and effort looking into, whether they’re going to find a trial for it or they’re going to go to some webinars.
This is just them trying to gather more information about your tool and potentially some others to give them more information. Tools that fall into this category are things like Camtasia Studio, Jing, Wistia, Soapbox, really for capturing videos. Whether it’s a demo of your product, or a webinar, or an educational video of some kind, or even just a marketing video of the founder talking about a specific reason why he or she built the product.
For hosting those things, you want to use something like Wistia or Vimeo, you can also use YouTube. And then additional pieces of the evaluation stage is providing educational content to people. Things like ebooks fall into this category as well.
Rob: Yeah, this is that education stage where you are trying to get people to raise their hand and essentially either sign up for a trial, or sign up for a demo, or continue to ask for more information so that their lead score or their interest score rises to the point where you reach out to them directly.
Mike: As you said with raising their hands, if they do that, then they end up in stage four which is engagement. I hear the prospects have made a conscious decision that they’re interested in finding out more. I would almost say that there’s probably a few more things in between here, between stage four and stage five, because stage four, the way that they lay it out, you’re getting somebody to sign up for your email list or get on a demo, whether it’s GoToWebinar or Zoom or a variety of other webinar tools, something like Bluetick or Drip falls into this category as well.
I feel like CRMs almost fall into this category as well, into stage four because you’re gathering more information about them. You’ve had them signup for your email list and you started populating that data, whether you’ve asked them for information in a form, you’ve had them fill out a survey. Those types of things have to end up some place and the CRM is really the logical place to start putting some of that information so that you can use that information in additional marketing materials to help move them to the next step.
Rob: Some people phrase it as lead nurturing. Obviously, an email tool is going to be a really nice way to do it as well as webinars that will get you that one to many. Like you said, CRM, it depends on if you are truly a self-serve business or self service where people just come up and they sign up for a $10 a month account. Obviously, your CRM is probably your ESP; that was really jargoning. I just put two acronyms back-to-back. Your CRM is probably your email service provider.
It’s a tool like MailChimp, or Drip, or Infusion Software, you actually keep a lot of your prospect and customer data. If you have a higher price point and you really are doing some medium touch sales, then having something like a Pipedrive, or Base CRM, or Highrise, one of the CRMs I think is obviously going to be helpful, and Salesforce obviously. Something like that is really going to help move people through the funnel, and then it attracts your individual one-on-one communication, you obviously need sales people to use tools like that or get a lot of benefit out of them.
Mike: The thing I was mentioning earlier where I feel like there should be more between stage four and stage five is that, here they played stage five as the commitment in the purchase. They list a bunch of ways to take payments. Whether it’s PayPal or WooCommerce, for whatever reason Stripe is not on this list, but they have a couple of shopping carts in there as well. It seems to me like even in stage four, there’s a lot of flexibility for somebody to move forward and back in the funnel here a little bit because somebody might download an ebook for example and then you don’t see or hear from them for two weeks, five weeks, eight weeks because they got busy doing other things.
There’s a lot of circular patterns between customers who come in, they enter in your sales funnel, and then they just repeat in this area for a while before they move on. You may look at it as it just takes them longer to get from stage four to stage five. The reality is that sometimes people can regress a little bit inside of your sales funnel. You have to make sure that you have enough marketing materials in there to nurture those people along to the point that they go to that demo and ask the questions that you want them to ask or you find ways to turn them out on your own.
Rob: Yeah, I think this sales funnel that ignite visibility is in essence more of a services sales funnel because they’re a services firm. I guess it can also be a one-time purchase but certainly if you have SaaS and you have a trial, there’s a step after engagement before the purchase, and I think that’s where this is just a little bit different.
Mike: Yeah, once you get into a SaaSified version of this, then you get into that measuring the trial and seeing how many people are going from the email list into the trial and then how many people are converting from a trial into a paid customer. And then you also have to talk about things like on-boarding, and are they using certain features in your products, are they getting the most value out of it, who is using the features that will turn them into a paid customer, who’s not, how do you get them to use those features, should you make them front and center, or should you provide them a walkthrough videos inside the app.
There’s all these things that you can measure in that area. It could get complicated but it’s very specific to whatever your app is because what somebody does in Bluetick for example is going to be very different than what somebody does in Drip, or any countless other applications in order to be successful with that product.
Rob: Right, and in terms of measuring what people are doing in the product, Hotjar like you said can do a lot of things. I know that Crazy Egg, you can do in-app heat maps. Do you know of any other tools off the top of your head that help you kind of be aware of it? It’s almost in-app analytics and metrics.
Mike: One I would take a look at is probably Segment. You install Segment and there’s a developer edition or a developer tier that is in the people with less than a thousand what they call MT Uses monthly, transactional users or something like, that but monthly total users. What it does is if you have it in the app and you’re only using two data sources they say, then it’s free. Otherwise, it’s $100 a month and the monthly total users could actually kill you depending on how much traffic you have.
If you put it on your website and you’re using that as a source, if you get 10,000 unique visitors a month, it’s counted as 10,000 MTUs. Depending on how big your business is, that could get expensive. But if you’re just doing it in the app, then you’re trying to pinpoint things and optimize things inside the app, you can send the data into Segment, and then from there, you can take a look at another product called Amplitude—which is amplitude.com—and that allows you to take information that comes directly out of Segment or get a JavaScript snippet that you could plug-in and it will allow you to track people through your app and what they’re doing.
Their product is free as well until you get to something 10 million events per month. You have to be fairly large in order to hit their pricing tier but I would imagine once you get to that, it’s going to be really expensive, but if you’re at that level, it’s probably going to be worth it for you because it allows you to drill in and see exactly who is using which features, how much they’re paying, and you can have all that data piped in through Segment from your website or from your backend database and through to Amplitude.
Rob: Very nice, I haven’t heard of Amplitude before so that’s a cool little stack that you hacked together there. We’ve used Segment for years but getting it into those other data analysis platforms I think is probably a head kicker and a real value there.
Mike: Yeah, Amplitude, I just found out about it recently so I’ve been looking into it. It’s interesting to see some of the dashboards and stuff that they have available. It’s an example so you can just see who is using what in your app and how much they’re using it, it gives you real time data so that you can take a look at who’s doing what today, and how many times have they performed this action, or how many times does this thing happen in the background? You can use those customized dashboards to help you make decisions about your own product versus some off the shell tool like Crazy Egg which has one very specific use case, to see where people are clicking. Yes, you can do other things but the dashboard allows you to customize a lot of things and create one that is specific for your own app.
Rob: Cool. To recap the five stages of your sales funnel, number one is awareness, number two is interest, three is evaluation, four is engagement, and five is commitment. If you have a question for us, call our voicemail number at 888-801-9690 or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups. Visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 390 | SaaS Pricing, Sponsoring Events, Subscription Boxes and More Listener Questions
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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike answer a number of listener questions. The topics in this episode include GDPR, SaaS pricing, sponsoring events as a marketing strategy and subscription box companies.
Items mentioned in this episode:
- MicroConf
- ZenFounder
- RobWalling.com
- FounderCafe
- Cloudforecast.io
- Crated with Love
- Bigfoot Capital Solutions
- Angel List
Rob: In this episode of Startups for the Rest of Us, Mike and I talk about SaaS pricing, sponsoring events as a SaaS marketing strategy, subscription box approaches, and even revisit GDPR once again, and we answer more listener questions. This is Startups for the Rest of Us Episode 390.
Welcome to Startups for the Rest of Us–the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve built your first product or you’re just thinking about it, or even your second, or third. I’m Rob.
Mike: And I’m Mike.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. What is the word this week, sir?
Mike: I’ve spent a lot of time this past week cleaning up my email list, setting up some marketing automations, and working on my website. With the email list, there was a time frame of about six-seven months where I didn’t have I any sort of captcha in place and the form for adding your email address onto the list was embedded directly into the website. Because of that, because it wasn’t being loaded through JavaScript, there were a lot of bots that came through and just randomly entered in email addresses and I did not have double opt-ins enabled for this short-time period. I could very clearly see it in Drip like there were stuff that just should not have been in there.
Rob: Yup, totally. That’s a good way to do it. Like you said if it had been a Drip JavaScript widget, I think it’s just one checkbox in Drip where you can add captcha to it, you add re-captcha, but obviously if it’s embedded form, that’s not so easy. Cool, nice work there. I meant to ask you at the top of the episode through the magic of time travel, MicroConf is happening right now as this episode goes live. It’s Tuesday morning. What do you think you’re doing? Are you hungover or regretting that you stayed up so late?
Mike: No, I doubt it. I learned that back in 2011 not to do that.
Rob: You’re pacing yourself these days especially because it’s four days for us now which is definitely a bigger deal because we have obviously growth for two days and starter.
Mike: Definitely. I head out on Friday so I’m there from Friday to Friday. It’s not just four days, it’s seven days.
Rob: Dude, that is a long time to be in Vegas.
Mike: I know.
Rob: Drink a lot of water, go to bed early, use chapstick. All the things we said last week on the episode, you’re going to really want to double down on those.
Mike: Yeah, last week’s episode was sort of a reminder for me like, “Hey, these are all the things to make sure you remember to do it just so you can fix yourself.”
Rob: Yup. I’m in Vegas one day less than you are and I will be thanking my lucky stars. After about three or four days in Vegas, man, I’m done.
Mike: Yeah. I considered staying until Saturday but I decided against it.
Rob: That would be a tough call. My grandma used to live in Vegas and so we would visit her couple of times a year. I’ve been to Vegas 30, 40 times. I live in California so it’s a super quick hop from Oakland Airport. Yeah, they would always be 2-3 day trip and it was a perfect amount of time, it was like, “Oh yeah, that’s what this place is like—” Then by the time you’re three days in you’re like, “Oh yeah, that’s what this place is like.”
For me, I just came back from a two night, almost three day retreat, it’s the longest retreat I’ve taken in quite some time. I was trying to think, because I took like a one day last year and then in 2016 I took three days and got away but I got strepthrough so it wasn’t exactly a restful retreat, it’s more like recovery. But I really enjoyed it. I drove 2 ½ hours North up to Duluth, Minnesota which is right on the southern tip of Lake Superior. Lake Superior is so big you can’t see the other side. Aside from there being no waves, it kind of feels a little bit like the ocean because there’s no beaches as well, no planes flying over with the little banner saying rent the surfboards and stuff.
But I thought about a lot of different things, probably stuff that I’ll talk about in the coming weeks and months on the podcast. But a good reminder, if you haven’t taken your retreat for 2018, check out The Zen Founder Guide to Founders Retreat, go to zenfounder.com, and Sherry wrote like a 30-page guide that I use religiously, has all the questions, and all the things you should be thinking about if you go on a founder retreat.
Mike: Awesome. What’s the word for this week?
Rob: We’re answering some more listener questions, they keep trickling in at an even pace which is really nice, allows us to do these Q&A episodes pretty frequently. The subject line of this email is, “Loved episode 384, GDPR. I’m Chris Duke. I’ve been listening for a while in my walks through town. This is the first time I probably laughed and shouted out loud. I try not to use the word stupid very much but it is hard these days and GDPR is one of those things that brings it to mind. Not the basic idea, it’s good to make those of us in technology business think about protecting data but the people who think of things like GDPR completely clueless and I have no business coming up with the regulation on something they don’t understand.
I keep thinking about one example, MailChimp. If I tell them to forget me, does that mean they have to forever take my email off of every list? What if removing my data from an application breaks something in the app or someone else that I willingly given permission, has used my email, it’s called referential integrity. Thanks for talking about this, guys. We’ve already written a sequel script to delete data in my SaaS app, we used it as part of our development and testing. That and some clarity on our terms is about it for me. Keep up the great work.” I know the answer to this one, do you know?
Mike: Didn’t we talk about it last week or the week before where the forget me is on a per-provider basis? Let’s say you and somebody else are my customer and people have data for both of them. If they tell you to delete it, the other person does not have to. The person has to go to each of the individuals and it has to do with who’s the data provider and who’s the data processor.
Rob: In the case of MailChimp, If you emailed MailChimp and said, “My email is on a bunch of your customer’s email lists, forget me,” MailChimp would say, “You have to contact the MailChimp customers.” We can’t delete it out of their account or we’re not required to, I guess. Now if you went to meet MailChimp and said, “Remove me from your list and forget me,” obviously they could do that from their own list that they own, but that’s exactly right.
Mike: I still don’t think that it answers the question of how do you remember that you deleted somebody.
Rob: That’s right. Yeah, if they sign up again, I don’t think you’re supposed to block or I don’t think you’re required to block them. Because like you said, you have to keep their email if you are not going to allow them to sign up again.
Mike: The other thing I’ve wondered about is if you could just anonymize their data so it’s no longer personally identifiable and you just overwrite the IP addresses with all zeros or all ones or something like that.
Rob: I think that’s a realistic approach the people should evaluate because in complex systems, you don’t delete stuff. As a rule, you don’t delete rows from database tables especially as you get larger and more complicated. As a listener out there, if you’re thinking about this, just changing their email to something@example.com to gooit@example.com, like you said overwriting their IP with blank stuff and having some probably on a flag or whatever that this is anonymized but I do think that’s an interesting approach.
Mike: No, I don’t even think it says that it’s just an interesting approach, like in certain business situations you almost have to do that because it’s not even just about deleting the data, it’s about knowing historically how different things that you’ve done turned out. Like if you go in and you have to delete a bunch of data for all these people that came in and visit your website for example on a certain month, it skews all of your reporting for all those months so you can’t really see how things went or what happens during that time. All of your decision making moving forward is completely screwed up, you can’t delete it, you have to just anonymize it and be done with it.
Rob: Cool. Thanks for the question, Chris. I hope that was helpful. Our next question is from Kenneth. He says, “Hey guys, as always, love your podcast, been a fan for a few years since I read Rob’s book, Start Small, Stay Small in 2011. Rob’s book was a huge inspiration for me. However, I realized it’s been almost a decade or about eight years to be exact since he wrote it. Obviously many things have changed since then in the internet, it’s totally a different world today.
My question, if Rob were to update or rewrite the book in 2018, what would he change? Would he remove chapters, focus more on certain points include new topics, etc.? That’s about it. Thanks for all the resources, podcast stories, etc., that you guys have openly shared. Been a constant inspiration for me and hopefully one day I’ll be able to share my own story on how much you guys have impacted my life. Best regards, Ken.”
Mike: I think I know the answer to this, you’d rename it to Start Small and Get Big.
Rob: I don’t think I would.
Mike: No?
Rob: No. Because that’s the thing. Obviously that’s what I wound up doing when I was starting small and then going into something much bigger than I had originally intended. But I still think there is a really good case to be made for doing this kind of micro SaaS or micropreneur approach where you just have a lifestyle business and you never need to worry about all the headaches that I dealt with starting in 2013 of growing this company larger. It obviously came with rewards as well but I also think it’s a totally viable approach to start small and stay small. I wouldn’t presume just because I did something that everyone should. You know what I’m saying? I think it’s totally legit that startup business make low six figures and if you’re happy with that, man, that’s a great life.
Mike: I was just pointing out that it should have been renamed to Start Small and Get Big just because on your website where’d you go to sign up for your newsletter, it says exactly that. And then there’s also that in the Drip widget where you can sign up for the newsletter.
Rob: Yeah. Which I did that once Drip started getting big. I realized I’m not just talking about staying small anymore, isn’t even that appropriate. I need to rename that headline anyway. I’ve kind of neglected that unfortunately. That’s on my personal website at robwalling.com.
This question is interesting. I’ve thought about it a bit over the years. To be honest, I had not opened my book, I mean it’s been five years since I went back and looked at it all, maybe more. This forced me to go back and take a copy and flip through it. What I’ve realized is that so many of the concepts are still 100% valid today, it’s some of the tactics that are not. I go really deep. I thought it was like half the book where I deep-dive and then like break out, I forget micro-niche finder, or market samurai, and I click this button, and I have screenshot, almost like it’s some web tutorial but it’s only 5 or 10 pages of the book is that and that’s the part that I would remove because that part changed so fast. It was like probably less than 18 months after it’s published, a bunch of those links and screenshots were just invalidated. Realizing that it’s a book and it’s not a living, breathing online course that I can edit easily, that is part of it that I would pull out.
I would still talk about niching down, I have a lot of concepts in there to still hold but I would remove some of the tactics that—and again it wouldn’t be a huge chunk of them, it would be a small part of the book—but there’s tons of stuff about outsourcing and hiring VAs, the mindset, and product last, market first. All that stuff I still hold true.
I was trying to think of anything else that I would add today, certainly there are marketing channels I didn’t even cover like Facebook ads that are probably mentioned. I would double down. I had a whole section of building your email list, I would probably expand that given how much more powerful I believe email is today and how much more I know about it.
I wrote the book in 2010 in essence, you can say I’ve learned quite a bit about it in eight years so there are parts that I would expand. I have butted this around obviously for years and I get talked about every since I started going even slightly how the data I was going to do an updated version or second edition, I toyed around, I talked to a couple of publishers, talked about doing a little more of a mainstream release. It’s still in the back of my mind somewhere to go back and revise it.
Flipping through the book made me realize I always thought that’s going to be too much effort, it’s going to take a tremendous amount of time, might as well write a new book, but that’s not the case. It wouldn’t be near the effort of writing a new book. As I flipped through it I was like, “Oh, this stuff’s still really good content that’s applicable.”
What do you think? You think I should go back and redo it?
Mike: I think that there’s definitely room for a second edition. It really depends on whether or not you want to go through and have a second edition versus writing a new book. Obviously if you write a new book, it’s going to be a different topic of some kind. But whereas if you’re simply revising the current book, it’s obviously a lot less work and you could probably bang that out in like a couple of weeks. It’s not like it’s that much effort, I don’t think, because really you’re just cutting out a bunch of pages where it’s hyper-specific, and the tools themselves or the URLs have changed, or maybe you replace the tools or you drop the pages entirely, and there is probably a few things that you left out that you want to add, maybe stories that you’ve shared over the years that resonated that with people that never just made it into the book or better examples you have of different things. I think that with the book itself you’re mostly concentrated on your own experiences. I doubt you’d go into sharing things that you’ve heard from other people but like specific examples from other people but I don’t know. It’s a toss up, I guess.
Rob: I think that’s a good point. As you were talking, I realized that was the one other thing that I felt was a bit dated with the examples I used. I used a lot of my own examples because there was really no one else that I knew. It was like Patrick McKenzie, Ruben from Bidsketch, Harry and Ted from Moraware. Then I used a bunch of the sites that I owned in Basecamp. It’s like there just wasn’t that much going on in 2010 when I was reading this in terms of the bootstrapping and the Micro-SaaS in the micropreneur space. Now I have dozens if not hundreds of examples. That’s where I could really beef it up.
I don’t know if I would go so far as to interview people or you and I just know the stories of so many people who have taken this approach, whether they’re Founder Cafe lifetime members, or they’ve come to MicroConf, or they listen to the podcast, or they’ve read one of our books, we just have that knowledge so much more. There’s so much more of a community than there is today. Now I’m kind of fired up about it as you’re talking about it.
It would be almost fun to go back and see, because you’re right if I write another book, it can’t be on that same topic and I wouldn’t even have the interest to really focus on that exact same topic today. But rewriting it and just making it better is actually something that I think would be interesting. Thanks for the question, Ken. I’ll definitely keep noodling on it and see if it leads anywhere.
Our next question is a question about SaaS pricing. It’s from François at cloudforecaste.io. He sent us a couple of questions I think. He says, “I’m reaching out to you again because we’re trying to figure out our pricing model for a new feature. Here’s my question, cloudforecaste.io is currently helping our clients monitor their AWS cost and we are now working on a new feature to help them save money.
The new feature will tell them how they can easily save money by fixing naive mistakes, unused resources, reserved instances, etc. on a weekly basis. We have a hard time figuring out the pricing since the first email is much more valuable because there’s a lot of potential optimization then the email in the third month, or the fourth month, or whenever. The first one’s going to have a lot of value.
The value also depend on the size of their AWS account. Here are a few ideas we have in mind, first one is a percentage based monthly price based on their overall spend. Second one is a flat-monthly price based on their overall spend. Third one is an expensive first email followed by a low flat-monthly price. The fourth one is remove the weekly cadence offered as a stand-alone product, and charge a percentage of what they can potentially save. Looking forward to hearing your thoughts on this. Thanks for the podcast.” What do you think, sir?
Mike: I think this is a really interesting question just because there are situations where people can really undervalue what a piece of software can provide for them. I can definitely see, there is an analogy for this situation which I saw, I think it was an online tool where you could go and somebody would basically build an example of how to use as your services or something like that and they were letting you put in your email address and find out if it had been hacked across hundreds of millions of records. It was coming back too quickly. People did not believe the results that they were getting because it came back so fast. They ended up inserting some artificial delays into it to make it appear like it was doing more work than it actually was.
I’ve heard similar examples in other places as well from different people doing different things and this seems to me like that’s one of those situations where people may look at that and say, “Oh, your software is doing this but I don’t value it as much even though I’m on paper saving a heck of a lot of money.” I wonder if the solution to this would not be to price it like as a stand-alone thing but to price it as, “Hey, here’s a service that we offer and it’s X thousand dollars or a percentage of whatever the monthly prices that’s saved,” and you offered it as such as a service, not as something you can just go in and automatically get this report that shows you all this information. That way gives the impression that you’re doing all this extra work and analysis.
The reality is most of it’s automatically generated but it’s based on all the work that you have done already. Then the ongoing monthly reports could be some flat-monthly price that is related to their overall spend to kind of help them save money. Because that first email, I totally agree that if you’re saving them a heck a lot of money up front, then trying to go down the path of having a SaaS pricing model that is variable in some way that reflects the value that you’re providing to them is really not going to work very well. I think that positioning it as a service as opposed to like, “Hey, here’s this off-the-shelf thing that you can buy that the software will do everything for you, that’s probably the approach I’d at least look at and test it out with a few people first.
Rob: You’re saying like present it as, “Hey, we do this manually type thing,” maybe not coming out and saying that but like, “This is a valuable service the we offer,” and don’t imply that software is doing all of it.
Mike: No. I wouldn’t say that, I would say that it is not something that you can go in, you can just click a few buttons, and automatically get the report. You have to talk to somebody in order to get it.
Rob: I see. Yeah.
Mike: Yeah. That way you can look at that and you could almost give them a ballpark estimate or price based on what you’re seeing from the stats and say, “Hey, this is the price that we have for this and we think that you’re going to save probably in this neighborhood.” You could give them a range like they’re going to save $10,000-$20,000 a month. You can tell them that and you say, “This is going to be $5,000 and just ballpark looking at what you’ve got, this is what we think you will save.” Then when you give them the actual report, it will show them exactly the steps they need to do that will both give them $17,000 a month in savings.
Rob: Yeah, that makes sense. I think that’s a pretty good approach, actually. I’m kind of torn on a couple things, I think the percentage based on how much they spend, it’s very logical, I’m curious to see what customers think of that. I guess it all depends on what the percentage is. I guess it makes a lot of sense, you can tell I’m torn on it. I like that you have better flat pricing but I actually do think the percentage could make a lot of sense because when we were tiny, and bootstrapped, and AWS bill was $5000 a month and if you said it was 1%—that’s $50 a month—that would probably have been a no brainer for me. Then of course once you’re doing $30 or $40 a month it is worth more, and at $300, $400 a month kind of feels equivalent. That’s probably what I would lean towards as this percentage.
I think trying to make the first email more expensive, I think it’s kind of a tough call. I don’t think I would go that way. But I would consider making this kind of an annual only thing that you give, they can get a sample email or they can get the first 20% of what the email looks like. You give them some information to prove that it does something.
Then like you said, they have to talk to someone in order to get this and it’s relatively high-priced and you do annual. The challenge with annual is their spending’s going to go up and down over the years, so how do you build a whole year when metered in a sense, with that you can either do it on a credit-based system or you can bill them where they are today and then bill them just the incremental each month, if they’re up or down you can keep it there.
I think this is an interesting thing with their two data the points in essence and I think talking to either existing customers or prospects is going to be your next step to basically say, “We’re going to do it based on a percentage and it’s going to be quarterly only or it’s going to be annual only. Do you want to sign up?” That, you are going to see if the rubber meets the road at that point.
Our next question is about sponsoring events as a SaaS marketing strategy. This is from Ed Freyfogle who is a speaker at this year’s MicroConf Europe. He says, “Given that you’ve run many events, I’m wondering what you think of sponsoring events as a marketing strategy? Particularly, I’d love to hear any tangible tips or best practices you’ve seen from sponsors as a way to make the most out of an event in terms of general brand building, but also specifically winning new customers.” What do you think, Mike?
Mike: Obviously, I run the sponsorship side of MicroConf so I have a lot of thoughts on this and I’ll try to keep them briefer than I would if we were doing an entire episode on it. When you’re looking to sponsor events, the thing I would keep in mind is that before you even try to figure out which events you’re going to be sponsoring, figure out what your goal is.
If your goal is to build brand awareness, then make sure that you know that in advance. You don’t try to do things that go outside of building brand awareness. That would include going to events or conferences where it’s not the right audience for building brands, like if you’re selling a marketing tool, going to a developer’s conference, obviously like there’s probably a little bit of crossover if you’re going for entrepreneurs but you don’t want to just build brand awareness with developers if they’re not the ones making the decisions. Because if you’re trying to get customers, you want to be able to get in touch with the decision makers, not the people who are at the other end of it, like the bottom layer of the organization.
The other thing I think to keep in mind is that when you are talking to people at a conference or an event, how close are you to the decision maker? How many hops are you going to have to make between the person that you talk to and the rest of the team or the people who actually make the decision? Because you may be able to run into the people who would use your products but they don’t necessarily care.
For example if you sell transactional email service of some kind and you go to a developer’s conference, those developers may not actually care about deliverability rates. The marketers would, but they’re not the ones that you are talking to. You’re going to have to convince the developer to give you an introduction to the marketer or whoever the VP of sales is that is going to say, “Hey, this deliverability is important to me and we should possibly switch providers in order to get better deliverability.” Those are the types of things that I would think of to start off with, and then beyond that, you want to stand out from the other sponsors.
If you have an opportunity to customize whatever it is that you are doing, whether it’s a specific giveaway to the audience or you are trying to drive traffic or drive conversations with people, figure out ways to do that so you might do like up Q&A session that is informal either during lunch, or after the conference, or during one evening event, something along those lines. If you do give away, you can provide people with that giveaway as a link and then you capture their email address.
The other thing is make sure that when you attend these events, if you try to sponsor an event from afar, it’s probably not going to get nearly the level of engagement or awareness that you’re looking for so make sure that you have business cards to hand out and make sure that you collect business cards or contact information from people while you’re there. Then once you’ve done that, absolutely make sure that you follow up with those people to take it to whatever the next logical step happens to be, whether it’s to having other conversation, or to get on a demo, or to just discuss what sorts of things you’re doing.
The last piece of advice I’d say is to make sure that if you can lead things in that direction to get to a promise of a future conversation and not suck up somebody’s time at the conference, that’s also not a bad thing.
Rob: Awesome, yeah. I’m actually going to leave it there because I feel like you have so much more experience dealing with this topic. I think that was a pretty good little primer there. We’ll probably do a whole episode on that, huh?
Mike: Probably.
Rob: Our next question is a subscription box company asking about technical issues and funding. It’s from Tyler Turk at cratedwithlove.com. He says, “I’m a Fresno-based startup and I have a question for you. I own a subscription box company. I found the company with my wife while attending Fresno State in 2015. In our first three years we’ve accumulated over $500,000 in revenue. I’ve been pretty much on my own from a business perspective doing all the ideation, curation, and even packing and shipping. My wife helps occasionally.”
They’re a monthly box subscription company obviously and it looks like they’re kind of date night boxes. You would buy it and then there’s activities and stuff for you to do with your significant other. Our biggest weakness right now is our technology and product market fit. We have a large amount of subscribers that have been with us for two years or more and the average active subscriber stays about eight months. But our churn is higher than we’d like. I know where the holes are in our website but I lack the technical skills to fix them.
In addition, I think the future of our company is more digital but I’m having a hard time figuring out how I pitch the future technology based on the data from the physical products we sell now, especially since the biggest needs are technical. I feel like I’m in a vicious circle where I won’t be able to raise money I need to scale until I fix our churn problem, but I can’t fix our churn problem until I get funds to fix the technical problems. I have two questions, is a startup from a smaller market with no relative experience in fundraising or network in larger markets, where should I start? Second, how do I transition from a product-based company to a tech company or a hybrid of both using the data I have now to support our pitch?” Do you have thoughts on either of those?
Mike: With these two questions, just before I answer them, I do want to kind of at least comment on one thing. Tyler said that he has a large number of subscribers that have been there for two or more years and the average subscribers stays about eight months but the churn is higher than they’d like.
I’m not sure exactly what the problem is on the website that would have any bearing on that. I’ll say an open question that I might have on that. If you’re sending those emails to them and they are making purchases and sticking around for a while, what is it about the website that would make them go away? Are things fundamentally broken which are causing people to drop through the cracks or is there something wrong with your email provider? I’m just kind of curious about what that is.
But neglecting that, going back to the two questions, the first one which was as someone who have no experience with fundraising or network some larger markets, how should I start? Coincidentally, one of our sponsors from MicroConf this year is called Bigfoot Capital. They provide funding for subscription-based businesses. I think that they’re focused mainly on SaaS businesses but this is a subscription business so it might fall under their wheelhouse, you can go check them out at bigfootcap.com.
Basically what they do is they look at your financials and they have a wide variety of people that they have provided funding to and they give you a loan. That loan is whatever percentage but it’s going to be based on the risk that they see, and you’re probably going to have a much better chance or opportunity of getting a loan to address some of the technical challenges that you have from somebody like that than you would from a traditional bank who has absolutely no understanding of online businesses. They just don’t get it.
He asks with $500,000 revenue over 3 years, they may be able to do something but my guess is that they just do not understand. I would look for some sort of private funding like that. I don’t know about fundraising—Rob, you could probably speak to them.
The second question he has is, “How do I transition from a product-based company to a tech company or a hybrid of both using the data I have now to support our pitch?” I think we’re going to have to make some assumptions here because I don’t really understand what you are specifically intending by that. But my assumption is that what you’re trying to do is take your current offerings that you probably sent to people physically through the mail, whether it’s worksheets, or PDFs that you deliver digitally, basically make them into online worksheets that you can fill out on the website and share them, or through your app, or something along those lines.
With that in mind, I think that you need to test some of these things out and get information from the subscribers that you currently have now. Can you get hard data that really says, “Hey, this is why I left, and it has to do with like the convenience factor.” Because I think that if you try to look at this as a way to simply cut costs, like if you’re suffering from a problem were your cost of goods sold is too high and you’re trying to cut into that, I don’t know if going down the road of automated things and putting all this technical stuff in place is going to really change that because developers are going to be expensive to build all custom stuff for that. I think that you’re really just going to end up burning a hole in your pocket to try and build that stuff.
In the meantime you’re still paying those current costs for the goods that you’re selling. Later on, you’re still going to need to have ongoing updates, and maintenance, and things like that. There’s always going to be a subset of people who do not want to switch from the physical stuff that they are already getting, so then you have to make some decisions about do you cut those people off and abandon them, or do you try to move them over and say, “Look, if you don’t move, we really can’t do anything for you,” or you just force them. Those are the things that I would have to say about that. Rob, what are your thoughts on this?
Rob: Yeah. I would definitely agree on the second part about trying to move into software I think is a great long term play but I would not do that without funding if you’re not technical because it’s just going to be really expensive and you’re going to get more bang for your buck if you take whatever earnings you have and put them essentially back into the business.
I do agree that this is the kind of business where funding is actually kind of meted like physical goods are just really time consuming and really expensive. At a certain point you’re going to need a small warehouse, you’re going to need to pay rent, and the margin on physical goods obviously is nothing like software. This is one of those cases where I think, especially since you have some traction—because if you look at an 8 month lifetime is 12%, 12.5% churn and that’s not terrible. You want to improve upon that, obviously, and it sounds like you have some ideas on how to do it but there are companies raising funding that are pre-revenue in let’s say the $1-$3 million dollar range. If there’s like a proven founder, they can raise $4 million or $5 million pre-revenue. If they’re in Y Combinator, they can raise $10 million or whatever.
The fact that you have revenue, and you have some type of numbers, and you have a business model, and you’ve shown the hustle over three years, it’s a big plus. For angel investors, I’m not saying it’s going to be a slam dunk, it would be great if you had a network but if you raise $250,000, I would say you’re not raising enough. I think you probably need to raise half a million. I mean you really need to look at what you want to do with the money. If you want to do a series A later, then you have to think, “I want this money to last about 12 to 18 months.” If you never want to raise a series A and you want this to get you growth and then take you to the profitability, that I think somewhere between $250,000 and $500,000 is a decent number.
In a couple of ways, I would get on AngelList, angel.co, I would try to connect with either local investors because there is money to be had, I know it’s crazy but there’s money, to be had in the Central Valley of California. It’s lot of farmland but there are a lot of people who’ve made money and want to invest especially in local startups.
Since I happen to have the hometown advantage of having lived there, industries downtown, that’s the tech hub for really Fresno and the Central Valley, that’s why I would somehow get on their radar, they have pitch competitions every once in awhile, I attended one when I still lived there and there were three or four startups that pitched. With your story, I really do think that you could hustle and raise the money. You’ve already shown that you have the hustle to see this business through for three years on your own and sort of me raising funding is not actually going to be that difficult for someone with the focus and the kind of the grip that you’ve shown already.
That really would be my next move if I were on your shoes is to go out and again I would raise an angel round. I would probably stay away from institutional money where it’s someone investing in someone else’s money because they want quite a bit of control and there’s complications with that but it certainly is interesting and a vortuitous place to find yourself in.
Really nice work on this, man. You’ve done something that not many people can do, A, getting in business to last for three years and essentially I guess break even or be profitable, and B, to do it with physical products. Good for you. Thanks for the question, Tyler. I wish you the best of luck moving forward.
Mike: Are we all set for today?
Rob: We are, that will do it.
Mike: If you have a question for us, you can call it into our voicemail number at 1-888-801-9690 or you can email to us at questions@startupsfortherestofus.com.
Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening and we’ll see you next time.
Welcome to Startups for the Rest of Us–the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve built your first product or you’re just thinking about it, or even your second, or third. I’m Rob.
Mike: And I’m Mike.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. What is the word this week, sir?
Mike: I’ve spent a lot of time this past week cleaning up my email list, setting up some marketing automations, and working on my website. With the email list, there was a time frame of about six-seven months where I didn’t have I any sort of captcha in place and the form for adding your email address onto the list was embedded directly into the website. Because of that, because it wasn’t being loaded through JavaScript, there were a lot of bots that came through and just randomly entered in email addresses and I did not have double opt-ins enabled for this short-time period. I could very clearly see it in Drip like there were stuff that just should not have been in there.
Rob: Yup, totally. That’s a good way to do it. Like you said if it had been a Drip JavaScript widget, I think it’s just one checkbox in Drip where you can add captcha to it, you add re-captcha, but obviously if it’s embedded form, that’s not so easy. Cool, nice work there. I meant to ask you at the top of the episode through the magic of time travel, MicroConf is happening right now as this episode goes live. It’s Tuesday morning. What do you think you’re doing? Are you hungover or regretting that you stayed up so late?
Mike: No, I doubt it. I learned that back in 2011 not to do that.
Rob: You’re pacing yourself these days especially because it’s four days for us now which is definitely a bigger deal because we have obviously growth for two days and starter.
Mike: Definitely. I head out on Friday so I’m there from Friday to Friday. It’s not just four days, it’s seven days.
Rob: Dude, that is a long time to be in Vegas.
Mike: I know.
Rob: Drink a lot of water, go to bed early, use chapstick. All the things we said last week on the episode, you’re going to really want to double down on those.
Mike: Yeah, last week’s episode was sort of a reminder for me like, “Hey, these are all the things to make sure you remember to do it just so you can fix yourself.”
Rob: Yup. I’m in Vegas one day less than you are and I will be thanking my lucky stars. After about three or four days in Vegas, man, I’m done.
Mike: Yeah. I considered staying until Saturday but I decided against it.
Rob: That would be a tough call. My grandma used to live in Vegas and so we would visit her couple of times a year. I’ve been to Vegas 30, 40 times. I live in California so it’s a super quick hop from Oakland Airport. Yeah, they would always be 2-3 day trip and it was a perfect amount of time, it was like, “Oh yeah, that’s what this place is like—” Then by the time you’re three days in you’re like, “Oh yeah, that’s what this place is like.”
For me, I just came back from a two night, almost three day retreat, it’s the longest retreat I’ve taken in quite some time. I was trying to think, because I took like a one day last year and then in 2016 I took three days and got away but I got strepthrough so it wasn’t exactly a restful retreat, it’s more like recovery. But I really enjoyed it. I drove 2 ½ hours North up to Duluth, Minnesota which is right on the southern tip of Lake Superior. Lake Superior is so big you can’t see the other side. Aside from there being no waves, it kind of feels a little bit like the ocean because there’s no beaches as well, no planes flying over with the little banner saying rent the surfboards and stuff.
But I thought about a lot of different things, probably stuff that I’ll talk about in the coming weeks and months on the podcast. But a good reminder, if you haven’t taken your retreat for 2018, check out The Zen Founder Guide to Founders Retreat, go to zenfounder.com, and Sherry wrote like a 30-page guide that I use religiously, has all the questions, and all the things you should be thinking about if you go on a founder retreat.
Mike: Awesome. What’s the word for this week?
Rob: We’re answering some more listener questions, they keep trickling in at an even pace which is really nice, allows us to do these Q&A episodes pretty frequently. The subject line of this email is, “Loved episode 384, GDPR. I’m Chris Duke. I’ve been listening for a while in my walks through town. This is the first time I probably laughed and shouted out loud. I try not to use the word stupid very much but it is hard these days and GDPR is one of those things that brings it to mind. Not the basic idea, it’s good to make those of us in technology business think about protecting data but the people who think of things like GDPR completely clueless and I have no business coming up with the regulation on something they don’t understand.
I keep thinking about one example, MailChimp. If I tell them to forget me, does that mean they have to forever take my email off of every list? What if removing my data from an application breaks something in the app or someone else that I willingly given permission, has used my email, it’s called referential integrity. Thanks for talking about this, guys. We’ve already written a sequel script to delete data in my SaaS app, we used it as part of our development and testing. That and some clarity on our terms is about it for me. Keep up the great work.” I know the answer to this one, do you know?
Mike: Didn’t we talk about it last week or the week before where the forget me is on a per-provider basis? Let’s say you and somebody else are my customer and people have data for both of them. If they tell you to delete it, the other person does not have to. The person has to go to each of the individuals and it has to do with who’s the data provider and who’s the data processor.
Rob: In the case of MailChimp, If you emailed MailChimp and said, “My email is on a bunch of your customer’s email lists, forget me,” MailChimp would say, “You have to contact the MailChimp customers.” We can’t delete it out of their account or we’re not required to, I guess. Now if you went to meet MailChimp and said, “Remove me from your list and forget me,” obviously they could do that from their own list that they own, but that’s exactly right.
Mike: I still don’t think that it answers the question of how do you remember that you deleted somebody.
Rob: That’s right. Yeah, if they sign up again, I don’t think you’re supposed to block or I don’t think you’re required to block them. Because like you said, you have to keep their email if you are not going to allow them to sign up again.
Mike: The other thing I’ve wondered about is if you could just anonymize their data so it’s no longer personally identifiable and you just overwrite the IP addresses with all zeros or all ones or something like that.
Rob: I think that’s a realistic approach the people should evaluate because in complex systems, you don’t delete stuff. As a rule, you don’t delete rows from database tables especially as you get larger and more complicated. As a listener out there, if you’re thinking about this, just changing their email to something@example.com to gooit@example.com, like you said overwriting their IP with blank stuff and having some probably on a flag or whatever that this is anonymized but I do think that’s an interesting approach.
Mike: No, I don’t even think it says that it’s just an interesting approach, like in certain business situations you almost have to do that because it’s not even just about deleting the data, it’s about knowing historically how different things that you’ve done turned out. Like if you go in and you have to delete a bunch of data for all these people that came in and visit your website for example on a certain month, it skews all of your reporting for all those months so you can’t really see how things went or what happens during that time. All of your decision making moving forward is completely screwed up, you can’t delete it, you have to just anonymize it and be done with it.
Rob: Cool. Thanks for the question, Chris. I hope that was helpful. Our next question is from Kenneth. He says, “Hey guys, as always, love your podcast, been a fan for a few years since I read Rob’s book, Start Small, Stay Small in 2011. Rob’s book was a huge inspiration for me. However, I realized it’s been almost a decade or about eight years to be exact since he wrote it. Obviously many things have changed since then in the internet, it’s totally a different world today.
My question, if Rob were to update or rewrite the book in 2018, what would he change? Would he remove chapters, focus more on certain points include new topics, etc.? That’s about it. Thanks for all the resources, podcast stories, etc., that you guys have openly shared. Been a constant inspiration for me and hopefully one day I’ll be able to share my own story on how much you guys have impacted my life. Best regards, Ken.”
Mike: I think I know the answer to this, you’d rename it to Start Small and Get Big.
Rob: I don’t think I would.
Mike: No?
Rob: No. Because that’s the thing. Obviously that’s what I wound up doing when I was starting small and then going into something much bigger than I had originally intended. But I still think there is a really good case to be made for doing this kind of micro SaaS or micropreneur approach where you just have a lifestyle business and you never need to worry about all the headaches that I dealt with starting in 2013 of growing this company larger. It obviously came with rewards as well but I also think it’s a totally viable approach to start small and stay small. I wouldn’t presume just because I did something that everyone should. You know what I’m saying? I think it’s totally legit that startup business make low six figures and if you’re happy with that, man, that’s a great life.
Mike: I was just pointing out that it should have been renamed to Start Small and Get Big just because on your website where’d you go to sign up for your newsletter, it says exactly that. And then there’s also that in the Drip widget where you can sign up for the newsletter.
Rob: Yeah. Which I did that once Drip started getting big. I realized I’m not just talking about staying small anymore, isn’t even that appropriate. I need to rename that headline anyway. I’ve kind of neglected that unfortunately. That’s on my personal website at robwalling.com.
This question is interesting. I’ve thought about it a bit over the years. To be honest, I had not opened my book, I mean it’s been five years since I went back and looked at it all, maybe more. This forced me to go back and take a copy and flip through it. What I’ve realized is that so many of the concepts are still 100% valid today, it’s some of the tactics that are not. I go really deep. I thought it was like half the book where I deep-dive and then like break out, I forget micro-niche finder, or market samurai, and I click this button, and I have screenshot, almost like it’s some web tutorial but it’s only 5 or 10 pages of the book is that and that’s the part that I would remove because that part changed so fast. It was like probably less than 18 months after it’s published, a bunch of those links and screenshots were just invalidated. Realizing that it’s a book and it’s not a living, breathing online course that I can edit easily, that is part of it that I would pull out.
I would still talk about niching down, I have a lot of concepts in there to still hold but I would remove some of the tactics that—and again it wouldn’t be a huge chunk of them, it would be a small part of the book—but there’s tons of stuff about outsourcing and hiring VAs, the mindset, and product last, market first. All that stuff I still hold true.
I was trying to think of anything else that I would add today, certainly there are marketing channels I didn’t even cover like Facebook ads that are probably mentioned. I would double down. I had a whole section of building your email list, I would probably expand that given how much more powerful I believe email is today and how much more I know about it.
I wrote the book in 2010 in essence, you can say I’ve learned quite a bit about it in eight years so there are parts that I would expand. I have butted this around obviously for years and I get talked about every since I started going even slightly how the data I was going to do an updated version or second edition, I toyed around, I talked to a couple of publishers, talked about doing a little more of a mainstream release. It’s still in the back of my mind somewhere to go back and revise it.
Flipping through the book made me realize I always thought that’s going to be too much effort, it’s going to take a tremendous amount of time, might as well write a new book, but that’s not the case. It wouldn’t be near the effort of writing a new book. As I flipped through it I was like, “Oh, this stuff’s still really good content that’s applicable.”
What do you think? You think I should go back and redo it?
Mike: I think that there’s definitely room for a second edition. It really depends on whether or not you want to go through and have a second edition versus writing a new book. Obviously if you write a new book, it’s going to be a different topic of some kind. But whereas if you’re simply revising the current book, it’s obviously a lot less work and you could probably bang that out in like a couple of weeks. It’s not like it’s that much effort, I don’t think, because really you’re just cutting out a bunch of pages where it’s hyper-specific, and the tools themselves or the URLs have changed, or maybe you replace the tools or you drop the pages entirely, and there is probably a few things that you left out that you want to add, maybe stories that you’ve shared over the years that resonated that with people that never just made it into the book or better examples you have of different things. I think that with the book itself you’re mostly concentrated on your own experiences. I doubt you’d go into sharing things that you’ve heard from other people but like specific examples from other people but I don’t know. It’s a toss up, I guess.
Rob: I think that’s a good point. As you were talking, I realized that was the one other thing that I felt was a bit dated with the examples I used. I used a lot of my own examples because there was really no one else that I knew. It was like Patrick McKenzie, Ruben from Bidsketch, Harry and Ted from Moraware. Then I used a bunch of the sites that I owned in Basecamp. It’s like there just wasn’t that much going on in 2010 when I was reading this in terms of the bootstrapping and the Micro-SaaS in the micropreneur space. Now I have dozens if not hundreds of examples. That’s where I could really beef it up.
I don’t know if I would go so far as to interview people or you and I just know the stories of so many people who have taken this approach, whether they’re Founder Cafe lifetime members, or they’ve come to MicroConf, or they listen to the podcast, or they’ve read one of our books, we just have that knowledge so much more. There’s so much more of a community than there is today. Now I’m kind of fired up about it as you’re talking about it.
It would be almost fun to go back and see, because you’re right if I write another book, it can’t be on that same topic and I wouldn’t even have the interest to really focus on that exact same topic today. But rewriting it and just making it better is actually something that I think would be interesting. Thanks for the question, Ken. I’ll definitely keep noodling on it and see if it leads anywhere.
Our next question is a question about SaaS pricing. It’s from François at cloudforecaste.io. He sent us a couple of questions I think. He says, “I’m reaching out to you again because we’re trying to figure out our pricing model for a new feature. Here’s my question, cloudforecaste.io is currently helping our clients monitor their AWS cost and we are now working on a new feature to help them save money.
The new feature will tell them how they can easily save money by fixing naive mistakes, unused resources, reserved instances, etc. on a weekly basis. We have a hard time figuring out the pricing since the first email is much more valuable because there’s a lot of potential optimization then the email in the third month, or the fourth month, or whenever. The first one’s going to have a lot of value.
The value also depend on the size of their AWS account. Here are a few ideas we have in mind, first one is a percentage based monthly price based on their overall spend. Second one is a flat-monthly price based on their overall spend. Third one is an expensive first email followed by a low flat-monthly price. The fourth one is remove the weekly cadence offered as a stand-alone product, and charge a percentage of what they can potentially save. Looking forward to hearing your thoughts on this. Thanks for the podcast.” What do you think, sir?
Mike: I think this is a really interesting question just because there are situations where people can really undervalue what a piece of software can provide for them. I can definitely see, there is an analogy for this situation which I saw, I think it was an online tool where you could go and somebody would basically build an example of how to use as your services or something like that and they were letting you put in your email address and find out if it had been hacked across hundreds of millions of records. It was coming back too quickly. People did not believe the results that they were getting because it came back so fast. They ended up inserting some artificial delays into it to make it appear like it was doing more work than it actually was.
I’ve heard similar examples in other places as well from different people doing different things and this seems to me like that’s one of those situations where people may look at that and say, “Oh, your software is doing this but I don’t value it as much even though I’m on paper saving a heck of a lot of money.” I wonder if the solution to this would not be to price it like as a stand-alone thing but to price it as, “Hey, here’s a service that we offer and it’s X thousand dollars or a percentage of whatever the monthly prices that’s saved,” and you offered it as such as a service, not as something you can just go in and automatically get this report that shows you all this information. That way gives the impression that you’re doing all this extra work and analysis.
The reality is most of it’s automatically generated but it’s based on all the work that you have done already. Then the ongoing monthly reports could be some flat-monthly price that is related to their overall spend to kind of help them save money. Because that first email, I totally agree that if you’re saving them a heck a lot of money up front, then trying to go down the path of having a SaaS pricing model that is variable in some way that reflects the value that you’re providing to them is really not going to work very well. I think that positioning it as a service as opposed to like, “Hey, here’s this off-the-shelf thing that you can buy that the software will do everything for you, that’s probably the approach I’d at least look at and test it out with a few people first.
Rob: You’re saying like present it as, “Hey, we do this manually type thing,” maybe not coming out and saying that but like, “This is a valuable service the we offer,” and don’t imply that software is doing all of it.
Mike: No. I wouldn’t say that, I would say that it is not something that you can go in, you can just click a few buttons, and automatically get the report. You have to talk to somebody in order to get it.
Rob: I see. Yeah.
Mike: Yeah. That way you can look at that and you could almost give them a ballpark estimate or price based on what you’re seeing from the stats and say, “Hey, this is the price that we have for this and we think that you’re going to save probably in this neighborhood.” You could give them a range like they’re going to save $10,000-$20,000 a month. You can tell them that and you say, “This is going to be $5,000 and just ballpark looking at what you’ve got, this is what we think you will save.” Then when you give them the actual report, it will show them exactly the steps they need to do that will both give them $17,000 a month in savings.
Rob: Yeah, that makes sense. I think that’s a pretty good approach, actually. I’m kind of torn on a couple things, I think the percentage based on how much they spend, it’s very logical, I’m curious to see what customers think of that. I guess it all depends on what the percentage is. I guess it makes a lot of sense, you can tell I’m torn on it. I like that you have better flat pricing but I actually do think the percentage could make a lot of sense because when we were tiny, and bootstrapped, and AWS bill was $5000 a month and if you said it was 1%—that’s $50 a month—that would probably have been a no brainer for me. Then of course once you’re doing $30 or $40 a month it is worth more, and at $300, $400 a month kind of feels equivalent. That’s probably what I would lean towards as this percentage.
I think trying to make the first email more expensive, I think it’s kind of a tough call. I don’t think I would go that way. But I would consider making this kind of an annual only thing that you give, they can get a sample email or they can get the first 20% of what the email looks like. You give them some information to prove that it does something.
Then like you said, they have to talk to someone in order to get this and it’s relatively high-priced and you do annual. The challenge with annual is their spending’s going to go up and down over the years, so how do you build a whole year when metered in a sense, with that you can either do it on a credit-based system or you can bill them where they are today and then bill them just the incremental each month, if they’re up or down you can keep it there.
I think this is an interesting thing with their two data the points in essence and I think talking to either existing customers or prospects is going to be your next step to basically say, “We’re going to do it based on a percentage and it’s going to be quarterly only or it’s going to be annual only. Do you want to sign up?” That, you are going to see if the rubber meets the road at that point.
Our next question is about sponsoring events as a SaaS marketing strategy. This is from Ed Freyfogle who is a speaker at this year’s MicroConf Europe. He says, “Given that you’ve run many events, I’m wondering what you think of sponsoring events as a marketing strategy? Particularly, I’d love to hear any tangible tips or best practices you’ve seen from sponsors as a way to make the most out of an event in terms of general brand building, but also specifically winning new customers.” What do you think, Mike?
Mike: Obviously, I run the sponsorship side of MicroConf so I have a lot of thoughts on this and I’ll try to keep them briefer than I would if we were doing an entire episode on it. When you’re looking to sponsor events, the thing I would keep in mind is that before you even try to figure out which events you’re going to be sponsoring, figure out what your goal is.
If your goal is to build brand awareness, then make sure that you know that in advance. You don’t try to do things that go outside of building brand awareness. That would include going to events or conferences where it’s not the right audience for building brands, like if you’re selling a marketing tool, going to a developer’s conference, obviously like there’s probably a little bit of crossover if you’re going for entrepreneurs but you don’t want to just build brand awareness with developers if they’re not the ones making the decisions. Because if you’re trying to get customers, you want to be able to get in touch with the decision makers, not the people who are at the other end of it, like the bottom layer of the organization.
The other thing I think to keep in mind is that when you are talking to people at a conference or an event, how close are you to the decision maker? How many hops are you going to have to make between the person that you talk to and the rest of the team or the people who actually make the decision? Because you may be able to run into the people who would use your products but they don’t necessarily care.
For example if you sell transactional email service of some kind and you go to a developer’s conference, those developers may not actually care about deliverability rates. The marketers would, but they’re not the ones that you are talking to. You’re going to have to convince the developer to give you an introduction to the marketer or whoever the VP of sales is that is going to say, “Hey, this deliverability is important to me and we should possibly switch providers in order to get better deliverability.” Those are the types of things that I would think of to start off with, and then beyond that, you want to stand out from the other sponsors.
If you have an opportunity to customize whatever it is that you are doing, whether it’s a specific giveaway to the audience or you are trying to drive traffic or drive conversations with people, figure out ways to do that so you might do like up Q&A session that is informal either during lunch, or after the conference, or during one evening event, something along those lines. If you do give away, you can provide people with that giveaway as a link and then you capture their email address.
The other thing is make sure that when you attend these events, if you try to sponsor an event from afar, it’s probably not going to get nearly the level of engagement or awareness that you’re looking for so make sure that you have business cards to hand out and make sure that you collect business cards or contact information from people while you’re there. Then once you’ve done that, absolutely make sure that you follow up with those people to take it to whatever the next logical step happens to be, whether it’s to having other conversation, or to get on a demo, or to just discuss what sorts of things you’re doing.
The last piece of advice I’d say is to make sure that if you can lead things in that direction to get to a promise of a future conversation and not suck up somebody’s time at the conference, that’s also not a bad thing.
Rob: Awesome, yeah. I’m actually going to leave it there because I feel like you have so much more experience dealing with this topic. I think that was a pretty good little primer there. We’ll probably do a whole episode on that, huh?
Mike: Probably.
Rob: Our next question is a subscription box company asking about technical issues and funding. It’s from Tyler Turk at cratedwithlove.com. He says, “I’m a Fresno-based startup and I have a question for you. I own a subscription box company. I found the company with my wife while attending Fresno State in 2015. In our first three years we’ve accumulated over $500,000 in revenue. I’ve been pretty much on my own from a business perspective doing all the ideation, curation, and even packing and shipping. My wife helps occasionally.”
They’re a monthly box subscription company obviously and it looks like they’re kind of date night boxes. You would buy it and then there’s activities and stuff for you to do with your significant other. Our biggest weakness right now is our technology and product market fit. We have a large amount of subscribers that have been with us for two years or more and the average active subscriber stays about eight months. But our churn is higher than we’d like. I know where the holes are in our website but I lack the technical skills to fix them.
In addition, I think the future of our company is more digital but I’m having a hard time figuring out how I pitch the future technology based on the data from the physical products we sell now, especially since the biggest needs are technical. I feel like I’m in a vicious circle where I won’t be able to raise money I need to scale until I fix our churn problem, but I can’t fix our churn problem until I get funds to fix the technical problems. I have two questions, is a startup from a smaller market with no relative experience in fundraising or network in larger markets, where should I start? Second, how do I transition from a product-based company to a tech company or a hybrid of both using the data I have now to support our pitch?” Do you have thoughts on either of those?
Mike: With these two questions, just before I answer them, I do want to kind of at least comment on one thing. Tyler said that he has a large number of subscribers that have been there for two or more years and the average subscribers stays about eight months but the churn is higher than they’d like.
I’m not sure exactly what the problem is on the website that would have any bearing on that. I’ll say an open question that I might have on that. If you’re sending those emails to them and they are making purchases and sticking around for a while, what is it about the website that would make them go away? Are things fundamentally broken which are causing people to drop through the cracks or is there something wrong with your email provider? I’m just kind of curious about what that is.
But neglecting that, going back to the two questions, the first one which was as someone who have no experience with fundraising or network some larger markets, how should I start? Coincidentally, one of our sponsors from MicroConf this year is called Bigfoot Capital. They provide funding for subscription-based businesses. I think that they’re focused mainly on SaaS businesses but this is a subscription business so it might fall under their wheelhouse, you can go check them out at bigfootcap.com.
Basically what they do is they look at your financials and they have a wide variety of people that they have provided funding to and they give you a loan. That loan is whatever percentage but it’s going to be based on the risk that they see, and you’re probably going to have a much better chance or opportunity of getting a loan to address some of the technical challenges that you have from somebody like that than you would from a traditional bank who has absolutely no understanding of online businesses. They just don’t get it.
He asks with $500,000 revenue over 3 years, they may be able to do something but my guess is that they just do not understand. I would look for some sort of private funding like that. I don’t know about fundraising—Rob, you could probably speak to them.
The second question he has is, “How do I transition from a product-based company to a tech company or a hybrid of both using the data I have now to support our pitch?” I think we’re going to have to make some assumptions here because I don’t really understand what you are specifically intending by that. But my assumption is that what you’re trying to do is take your current offerings that you probably sent to people physically through the mail, whether it’s worksheets, or PDFs that you deliver digitally, basically make them into online worksheets that you can fill out on the website and share them, or through your app, or something along those lines.
With that in mind, I think that you need to test some of these things out and get information from the subscribers that you currently have now. Can you get hard data that really says, “Hey, this is why I left, and it has to do with like the convenience factor.” Because I think that if you try to look at this as a way to simply cut costs, like if you’re suffering from a problem were your cost of goods sold is too high and you’re trying to cut into that, I don’t know if going down the road of automated things and putting all this technical stuff in place is going to really change that because developers are going to be expensive to build all custom stuff for that. I think that you’re really just going to end up burning a hole in your pocket to try and build that stuff.
In the meantime you’re still paying those current costs for the goods that you’re selling. Later on, you’re still going to need to have ongoing updates, and maintenance, and things like that. There’s always going to be a subset of people who do not want to switch from the physical stuff that they are already getting, so then you have to make some decisions about do you cut those people off and abandon them, or do you try to move them over and say, “Look, if you don’t move, we really can’t do anything for you,” or you just force them. Those are the things that I would have to say about that. Rob, what are your thoughts on this?
Rob: Yeah. I would definitely agree on the second part about trying to move into software I think is a great long term play but I would not do that without funding if you’re not technical because it’s just going to be really expensive and you’re going to get more bang for your buck if you take whatever earnings you have and put them essentially back into the business.
I do agree that this is the kind of business where funding is actually kind of meted like physical goods are just really time consuming and really expensive. At a certain point you’re going to need a small warehouse, you’re going to need to pay rent, and the margin on physical goods obviously is nothing like software. This is one of those cases where I think, especially since you have some traction—because if you look at an 8 month lifetime is 12%, 12.5% churn and that’s not terrible. You want to improve upon that, obviously, and it sounds like you have some ideas on how to do it but there are companies raising funding that are pre-revenue in let’s say the $1-$3 million dollar range. If there’s like a proven founder, they can raise $4 million or $5 million pre-revenue. If they’re in Y Combinator, they can raise $10 million or whatever.
The fact that you have revenue, and you have some type of numbers, and you have a business model, and you’ve shown the hustle over three years, it’s a big plus. For angel investors, I’m not saying it’s going to be a slam dunk, it would be great if you had a network but if you raise $250,000, I would say you’re not raising enough. I think you probably need to raise half a million. I mean you really need to look at what you want to do with the money. If you want to do a series A later, then you have to think, “I want this money to last about 12 to 18 months.” If you never want to raise a series A and you want this to get you growth and then take you to the profitability, that I think somewhere between $250,000 and $500,000 is a decent number.
In a couple of ways, I would get on AngelList, angel.co, I would try to connect with either local investors because there is money to be had, I know it’s crazy but there’s money, to be had in the Central Valley of California. It’s lot of farmland but there are a lot of people who’ve made money and want to invest especially in local startups.
Since I happen to have the hometown advantage of having lived there, industries downtown, that’s the tech hub for really Fresno and the Central Valley, that’s why I would somehow get on their radar, they have pitch competitions every once in awhile, I attended one when I still lived there and there were three or four startups that pitched. With your story, I really do think that you could hustle and raise the money. You’ve already shown that you have the hustle to see this business through for three years on your own and sort of me raising funding is not actually going to be that difficult for someone with the focus and the kind of the grip that you’ve shown already.
That really would be my next move if I were on your shoes is to go out and again I would raise an angel round. I would probably stay away from institutional money where it’s someone investing in someone else’s money because they want quite a bit of control and there’s complications with that but it certainly is interesting and a vortuitous place to find yourself in.
Really nice work on this, man. You’ve done something that not many people can do, A, getting in business to last for three years and essentially I guess break even or be profitable, and B, to do it with physical products. Good for you. Thanks for the question, Tyler. I wish you the best of luck moving forward.
Mike: Are we all set for today?
Rob: We are, that will do it.
Mike: If you have a question for us, you can call it into our voicemail number at 1-888-801-9690 or you can email to us at questions@startupsfortherestofus.com.
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Episode 389 | Pro Tips for Attending Conferences
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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike share tips for attending conferences. They discuss things to do before, during, and after a conference in order to get the most out of the event.
Items mentioned in this episode:
Mike: In this episode of Startups For The Rest Of Us, Rob and I are going to be talking about pro tips for attending conferences. This is Startups For The Rest Of Us episode 389.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.
Rob: And I’m Rob.
Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. How are you doing this week, Rob?
Rob: Doing alright. I was just thinking, the subset 389 man, we have 11 more episodes until episode 400.
Mike: That’s insane.
Rob: What kind of cray-cray celebration are we going to do for 400?
Mike: Or what sort of group therapy are we going to have for the people who listen to 400?
Rob: I hope that there is no one out there who’s listened to all 400. That would be catastrophic.
Mike: We should have Sherry come on and just do a group therapy session for Episode 400. I think that’d be prudent.
Rob: I agree. If we just said 30 minutes per episode, that gives us 200 hours, which is 8.33 days straight. Whereas if you stayed up, you could hear the entire journey of this eight years and eight days, wouldn’t that be crazy?
Mike: Yeah. I don’t know if anyone would even attempt that.
Rob: It wouldn’t just be crazy, it would be clinical, you should get committed for trying to do something like that.
Mike: Yeah, definitely, definitely.
Rob: But we do have 595 worldwide iTunes reviews. You know what I’m going to ask you, the listener, to do? Get is to 600. Seriously. In the next couple of days, this comes out on a Tuesday, I would love that by Friday of this week, we’re over 600 reviews. Some of our recent reviews include awesome show, highly recommended from [00:01:52], he says, “Rob and Mike are truly two of the best in the biz at expertly extracting those bits of gold listeners are looking for.” We really appreciate reviews of course, and it does help us spread the word, keep us motivated to do it. Right now, we are accepting five star reviews, five stars reviews only, and look forward to seeing that number tick over to 600 well before our episode count/ticks over the 400. How about you, what’s going on?
Mike: I’m still doing a lot of stuff to prepare for MicroConf but last night I drove into Downtown Boston, into Cambridge and went to Wistia. They had a panel of people discussing how to use video and your marketing efforts, and different ways to use to it, different parts of the funnel that you can address to it. It was very interesting, it was nice to get some perspective from people who are actively doing it a lot as opposed to just reading around certain things. I wouldn’t say that it was a course, but it was definitely a crash briefing on things to pay attention to and edge cases that you might run into. It was cool to meet everybody there as well.
Rob: Oh, that is fun. That’s always nice to get out and go to events like that. I really enjoy those, as long as there’s at least some cool people to meet or some type of cool presentation that’s given out that provides value and gets me thinking about things. I do enjoy hitting up a local event just to see who’s in town in my field every once in a while.
Mike: I did get some laughs when people asked me why it was that I came in for that. I said, “I haven’t left the house all weekend. Figured it was about time.”
Rob: Yeah, totally. Alright, what are we talking about today?
Mike: In preparation for MicroConf, I thought it’d be a good idea to go through some pro tips for attending conferences and I know that we’re probably going to give some advice about attending MicroConf specifically but there’s also a lot of general advice in terms of how to approach going to a conference. This isn’t something that I think we’ve talked about specifically before. We’ve touched on it in a couple of episodes here and there but we never really just sat down and gone through what sorts of things should you do in preparation for going to a conference. Whether it’s a business conference, or a developer conference, or marketing, or what have you. I thought it’d be good to go through that stuff and give our own take on it since we do run a conference.
Rob: Cool. Let’s dive in.
Mike: Some of this is loosely based on an article from Justin Jackson, he specifically talked about MicroConf. We’ll link that up in the show notes. I did want to call that out before we get started into this. The first thing that came to mind when I was putting together this list was making a point to look up what the weather is in advance and plan accordingly. I just think that I remember last year at MicroConf where it was late at night on I forgot how far into the conference we were but we were standing outside and it was freezing. It was not something I had actually thought about doing because I was like, oh, it’s Vegas, it’s a desert, it’s going to be generally warm and I hadn’t realized how much earlier in the year it was and how much of a cold wave was going through the country at that time, I did not dress accordingly for it.
I think that that’s the thing that I would say is pay attention to what the temperature is and actually go look at it, don’t just assume that it’s 70 degrees and it’s sunny because it may not be.
Rob: Yeah. That’s a good point. Especially the desert gets really cold at night. I’m just looking at the forecast for the next week in Vegas and highs are all 80s and 90s but the lows get down 61 and when it’s 61 and it’s dark and there’s no sun and the wind’s blowing, it’s pretty dang cold. Have some type of long sleeve because often aside from just my collared shirts, I don’t tend to think about bringing a long sleeve shirt to Vegas, but of course, in this case, you’re going to want some type of light jacket or windbreaker or something.
Mike: And also because it’s a desert, you have to pay attention a little bit to the climate because it does get cold and because it’s a desert and so dry, you have to bring ChapStick or lip balm or something like that. It’s something that I just happen to keep it in my jacket at all times anyways so I never have to think about it, but if you’re not the type of person who travels a lot or just keeps it around, it’s definitely worth thinking about stuff like that.
Rob: Yup. What I used to do is I used to get to Vegas and then my lips would get all red and chapped and then I would start applying it, and my lips look like Ronald McDonald’s lips because they were red and then they were all glossy. What I do now is bring it with me, from the moment I hit the ground, I start applying it, and that’s worked for the past three or four years. I also drink a ton of water. I bring my water bottle and pretty much a refillable one. From the time I hit the ground, I’m just chugging water constantly.
Mike: The other thing is that there’s also the opposite problem sometimes where if you go someplace and you don’t have gloves, for example, when we went over to FemtoConf in Germany. It was cold enough that it started to snow in certain cases. It’s like you have to just bring the things that you need for that type of weather. Even if you don’t think that you’re going to be outside very much, make sure that you have those things available and consider them before you even walk out the door. I’d say the bulk of the first third of this particular podcast is going to be to all the things that you should do before the conference, before you even get on the plane to go there.
Rob: Another thing you want to think about is spend time in advance to consider your goals for the conference. Think about if there are specific people that you want to meet. You can research attendees, you can look at the speakers, and make it a point that you introduce yourself or try to catch a meal with somebody. Think about the types of relationships you want to establish. Who can you help and who can help you now or in the future because that’s one way to make a conference so much more valuable is to be really deliberate about who you are going to hang around with and who you’re going to surround yourself with while you’re at the conference.
Of course there’s always serendipity, especially at a really focused conference where everyone is doing interesting things. Almost everybody you meet is going to be a fun conversation. But I’ve got to get more value myself out of conferences when I look at the speaker list, look at the attendee list and really pi point who it is that I want to talk to and about what.
Tacking onto that, also I think of two other things, one, are there any questions that you want answered? Are they questions you want to just ask a bunch of people, do you want to ask a specific person, do you want to ask knowledgeable people? I know that Harry and Ted from Moraware Software do a really good job at this. They come each year to MicroConf with a question that they are thinking through, and they get a bunch of knowledgeable opinions on it and I’ve heard it helped shape their decision making.
And then finally, are there any topics that you really are interested in discussing, even though it’s not a question you have but something that you think is going to be relevant to attendees.
Mike: Or if you just want to use somebody as a sounding board because you have a particular thought in mind about hey, there’s a problem that I have, or some sort of challenge that I’m facing. I’d like some external opinions on it. If you’re working at home, or at a remote office, or remote office environment where you go to work and you sit down and you don’t really talk to any co-workers all day except over Slack or email or anything like that, it can be very isolating and you don’t get the benefit of having brainstorm sessions or a lot of external input into your thoughts and thought processes. It’s very helpful to have those topics in mind and written down so that you consider them in advance instead of, “Hey, I want to get other perspectives on this,” and then take them to the conference and hash it out with people, just to hear what they have to say.
Another thing to do is to do some pre conference networking and try to find out who’s going to be there. If there is a conference coordinator that is putting things together, whether they have an online community or something like that that they’re building, or a Slack chat. Anything along those lines, it gives you a sense of who else is going to be at the conference. Try to find out who’s going to be there and reach out in advance of the conference to people that you really want to spend some time and meet.
Whether they are new people that you want to introduce yourselves to, or you’re searching for people who are experts in this particular field or situation, you can always go out to that list or that community and ask them like, “Hey, can we schedule breakfast or lunch or chat for a few minutes?” Even if you just want to put your name on the radar so that they’re actively looking for you and if you happen to be in a conversation, they say, “Oh, I remember I got an email from you or a message from you and you wanted to talk about X.” Just being able to put your name directly in front of them with a message that says, “Hey, I wanted to talk to you about this. I’d love to chat about this for X minutes or whatever.” That will help you establish some of those relationships.
Rob: Another thing is to research local travel and potential scams or things that could trip you up. A few years ago, Vegas didn’t allow Lyft and Uber into the airport. I think before that, they didn’t have Lyft and Uber, they didn’t allow it within city limits. And then they eventually allowed in the airport, and now, it’s everywhere. You can take a Lift at the airport. But before then, it was either a shuttle, or you can just grab a cab, and it’s so close to the airport, it was not worth doing a shuttle because it took a lot longer. It’s things like that that can save you a lot of time and a bit of money.
And then another thing is, talking about potential scams or whatever, before we went to Portugal last year, I was reading through the Lonely Planet and they said pick pocketing is really big there. That just made me more aware to have everything zipped up. And then you had mentioned that the cabbies that drives south out of the airport, they go this long way around right on the freeway, it’s a much longer fare because it’s almost right next to the airport.
Mike: Yeah. That was a classy scam several years ago before Lyft and Uber came around because what would happen is that people would get into a cab and the cab would say, “Do you want to take the highway to the hotel or do you want to go north?” They wouldn’t really give you a clear indication that the highway is actually south out of the airport, then you have to go all the way around. They would really just basically scam you because they could.
I remember that specifically happened to Andrew Warner because he wasn’t paying attention back in 2011 and he was telling me about it afterwards. I was like, “You totally got scammed by them.” Which sucks but at the same time, you wouldn’t know that unless you actively looked for that, either behavior or things to watch out for.
Rob: Another thing to do is to install or update the conference app before you leave. Often, conferences will issue a new app each year or you can update it and get the updated content and that’s certainly something that you can think about. You can obviously do that on site too, but I know that before I leave, I’m downloading a bunch of shows for the plane, I’m downloading any new games or anything to play on the plane but that’s less about for the conference and more just about the travel.
Mike: Yeah. But I think it’s important to make sure that if you have a bunch of updates to your apps, or your phone, or your laptop that you get those things taken care of before you hit the road so that you’re not trying download stuff over wifi because you don’t always have a lot of control over what gets downloaded when or what’s updated first or you may not even have a lot of bandwidth to work with. Like oh, I suddenly need to install this app so that I know where to go next, and then all this other stuff is in the way and taking precedence then you have to wait a heck of a lot more time to get it done.
Another thing to make sure you have taken care of is your passport and travel documents of any kind. Make sure that they’re up to date before you leave. I have heard of people who’ve forgotten to get that stuff taken care of before they go for a big trip that they’ve been planning or they planned three months, six months in advance, and they didn’t think about that, and then suddenly the night before or the day of, they realize oh, this stuff is out of date and it’s going to take three weeks to get it taken care of and I can’t go. Be mindful of those types of things as well. Because there’s literally nothing you can do at that point. You can’t argue with TSA agents, for example, if you’re trying to go to another country.
Rob: Yeah, that’s brutal. I’ve heard of few friends who’ve had that where their passport expired or even if it expires within six months or something, and when you’re travelling, it’s pretty crazy. That would be a serious bummer to have to cancel a trip or miss a conference because of that.
Another thing to think about is figure out, potentially even rehearse your answers to common questions like what are you working on, what do you do, what company are you with, what are you hoping to get out of the conference. Just think about that stuff in advance so that it couldn’t come as a shock, you’re going to get asked the same thing over and over.
And, think about what questions you want to ask of people. Often times, I will try not to ask the same questions that everyone else does. Typically, I want to get to what are you working on, what’s really interesting you right now. I’ll often ask people what books they are reading or listening to to try to get more ideas, or what their favorite podcast is. Just because people like to talk about themselves and share their knowledge, and if it’s something new that I haven’t heard, that’s good. I totally want to add it to my content queue if you will. That’s a perfect place to do it because I’m surrounded by people that are similar to us, they’re one of us in essence.
Mike: The opposite of that is also true. Make sure that you have some ways to gracefully exit a conversation whether it’s hey, I need to go get a drink, or use a restroom, or you need to go take a phone call, or make a phone call to somebody, to call your spouse or significant other, or you just see somebody else that you really wanted to meet and you need to step out of the conversation and go talk to them.
This is more about protecting your time and making sure that you get the most out of the time that you are there. Because sometimes there’s a conversation going on and it’s not like you don’t like the people that you’re talking to or you don’t appreciate the things that they have to say but you have other things and other priorities that you need to pay attention to and your time is one of them. Because your time at that event is very limited and it will be over before you know it.
Rob: That’s a big deal. Don’t get cornered and get stuck talking to someone that you don’t have anything in common or the person is just talking too much and it really isn’t providing value. Like you said, you only have a limited amount of time. It’s not all about take, take, take. It’s about giving some value as well. But there are just some conversations that are mutually awesome and you know that’s going somewhere and you know that it’s valuable. Other ones, they just wander and you realize this is just mindless and I don’t really want to do this. Really be mindful and figure out how you’re going to gracefully exit those kinds of conversations.
Mike: Now we’re finished talking about the things that you should do before the conference, let’s talk about the stuff that you should pay attention to at the conference. You already mentioned this, the number one thing I think is to stay hydrated and there’s a corollary there which is to also get enough sleep. But with the hydration, if it’s the type of conference where you’re going to be talking a lot, you’re going to find yourself dehydrated. Make sure that you are drinking enough water to get you through the days.
There are certain environments, like a desert in Las Vegas, that’s going to amplify that. It’s going to make you even more dehydrated, so does alcohol. You have to be careful about that stuff because it’s very easy to go to a conference in Vegas and I’ve had this happen to myself where I didn’t drink anything alcoholic, it was just water, I didn’t drink enough water though. I woke up the next day and I felt hungover even though I hadn’t had anything to drink. That’s just going to impact the rest of your day. You do have to pay attention to how much water you’re drinking.
Rob: Big time. It’s easier said than done to say get enough sleep, but I have really found that I enjoy conferences more when I am at least getting seven hours of sleep and I can feel rested getting into it, otherwise I’m sitting in a ballroom for seven to eight hours, and I’m tired and not listening. You’re not getting a ton of value from things anymore.
It’s easy to hang out especially when you’re at a conference with friends, and colleagues, and relationships that you’ve built and you only see them once or twice a year. I think that making a graceful exit at midnight and getting your solid eight hours. That’s something that we’ve done past couple of years with MicroConf is we moved the start times of all the conferences to 10:00AM, and I actually think that was a really good idea because we’ve gotten positive feedback about it, about how people have time to get breakfast together, especially people who are on later time zones, Central or Eastern time zone. But it also just allows if you do stay up late, it’s just gives you that a little bit more leeway. You could feasibly wake up at 9:00AM and still have a nice breakfast and get to the conference on time.
Mike: What do you mean feasibly? I think we do that, don’t we?
Rob: That is what I do. I was trying not to be too overt about it, but yes. I’m not embarrassed to say, even though I should be on Central time, 9:00AM is like 11:00AM for me. I think last year, I had to set my alarm for 8:30AM and 8:45AM both days. All four days of the conference just to make sure that I didn’t sleep through it.
Mike: One thing that I found to be a little bit less valuable over time is taking notes at a conference. I used to be the type of person who go to a conference and I would take pages and pages of notes. What I realized overtime was that I was writing down stuff but not necessarily paying attention to how important it was or whether it was new to me. I’d have these pages of notes and a lot of it turned out to be irrelevant, but I was writing it down just because I felt like I should because the speaker had said something or commented on it.
I was trying to create almost a transcript of what they were talking about and the reality is if you already know that stuff, don’t bother writing it down. Only write down the stuff that is new, or that you find insightful, or if an idea pops into your head and you find that it’s going to be actionable. Those are the things that you need to write down because you will probably forget them later on. But the stuff that you already know, there’s no need to write that stuff down.
In addition, there’s usually other people who are taking notes or there may even be an official note taker for the conference, a lot of speaker make their slides available for after their talks, definitely write down the URLs for those, or get them from the conference afterwards if they’re collecting them and just distributing them. But don’t feel compelled to write down every little thing that the speakers say. Just write down the stuff that’s important.
Rob: Another thing to consider is to think about asking questions during speaker Q&A. It’s a valuable opportunity to get interesting feedback. Obviously, be respectful of time and whether an answer to your question is generally applicable to other people. You can always follow up with the speaker when they’re off stage.
I do think that part of the beauty of a conference is everybody is in the same room. One way to bring value is to ask interesting questions. That gives you an excuse to then follow up later if you ask a question a speaker answers in general and you can come up and say, “Hey, I actually have this specific thing I want to talk to you about.” But if it is generally applicable, it can be helpful to the whole audience. I think that’s good to give back to community in that way.
Mike: A really nice way to stand out in the minds of the speakers who are presumably leaders in the community is to thank them directly if you found what they were talking about helpful. I would obviously encourage people to put feedback into the conference surveys but I think that for most speakers, it’s really helpful for them and gratifying to hear that somebody got a lot out of their talk. Definitely make it a point to thank them and if you have follow up questions, don’t hesitate to ask them after the talk, especially in situations where if you have a question that you think you might want to ask during the Q&A session but you realized that that question is so very specific to your business, or your particular problem, then save that for a later conversation when you’re not going to be using other people’s time to hear an answer to a question that just has no bearing or relevance on them.
Rob: Another thing to do is to make sure that you are social. It’s easy to go and lock yourself in your hotel room and watch this week’s episode of Walking Dead instead of hanging out. If it’s a good conference, the hallway track is worth almost as much as or more than the actual speaker track.
With that said, I will say know your limits. Get out and meet people. There comes a point where that’s demising returns and you can become so tired or so over stimulated or overwhelmed that you’re no longer having fun and you’re no longer really getting that much value.
I think there’s a balance to be struck here. I do notice that as I get older, and as I go to more conferences, I’m still quite social but I don’t do the 4:00AM nights like the early MicroConfs. Maybe that’s just a factor of sleep but I definitely get my fill of conversation earlier than I did maybe seven or eight years ago.
Mike: Moving on to the last section of this is after the conference is over, take some time to follow up with the people that you met. Whether you exchanged business cards or contact information.
It was funny last night, when I was at the Wistia event, there were a lot of people there who would ask me for business cards, I’m like, “I don’t have business cards.” Certain conferences you go to, that’s the expectation and then there are certain ones where it really isn’t. But if you are exchanging contact information with people because you want to talk to them later, or follow up on a business opportunity, or ask them more questions, definitely make sure that you follow up with them and help maintain those relationships that you started with them and you can maintain those relationships over time. Don’t feel that you can just let those lapse because I think if you let more than a couple of weeks go by once a conference is over, and you’ve met somebody, I think it starts to become more awkward to reintroduce yourself to the person and you feel weird about reaching out to them. The earlier you do that after the conference is over the better.
Rob: Another thing to do after the conference is review your notes to see if you need to fill in any gaps. That’s a great thing to do on the plane. I’m assuming you’re going to take notes locally, you probably have no internet, it’s a great time to sit and think back, are there any takeaways or any people that I met or any things that I want to take away that aren’t in these notes? Because I like my notes to capture the entire event and really be able to refer back to them and refresh everything that came out of it because it can spark new information later when you view it through different eyes if you look at it 6 months or 12 months from now. Be sure that your notes are buttoned up and they don’t have to be super professional, but at least in a format that you feel like you can interpret them in 6-12 months.
Mike: Another thing I’d highly recommend, and this comes from the stance of an event coordinator but make sure that you fill out the conference surveys. I say this not just because it’s a nice thing to do but a conference is not going to get any better if you don’t provide them with helpful feedback or at least with a good sense of where their conference did well and where they didn’t. If you don’t give them an idea of where they stand, then it’s very difficult for them to make decisions that will help improve things moving forward.
Rob: And then finally, I think it’s helpful to reflect, especially if this is the first or second conference you’ve gone to. Reflect on your time there and make a few notes about what you feel worked really well and things that you regret that you did or didn’t do. Let’s just be honest in Vegas, there’s a lot to regret that you did. Use the list. Honestly, use the list to improve your ROI on conferences in the future. Without reflecting and looking at your process figuring out what worked and what didn’t, it’s hard to improve upon that in the future.
Mike: I don’t think that the things that you regret doing or not doing are limited to just being in Vegas. One thing that comes to mind is there has been conferences where I’ve gone to where I stayed up way too late involved in a conversation that really was not of any value to me. I ended up being extremely tired the next day, for no good reason. I felt like I’ll stay up because of the people here and you really have no obligation to other people to stay involved in a conversation if there are other things that you could or should be doing like going to bed and getting some sleep.
Rob: Yep. I’ve done that. I’ve stayed up too late, I have done the wasn’t social enough, didn’t meet enough people, wasn’t deliberate enough about picking up the people in advance that I wanted to meet, a lot of things in this list, I have certainly made those mistakes. With that, go to your next conference, enjoy it, and get the most value that you can, we hope to see you at this MicroConf happening next week or MicroConf in the future. If you have a question for us, you can call it into our voicemail number at 1-888-801-96-90 or you can email to us at questions@startupsfortherestofus.com. As I like to say, voicemails go to the top of the queue.
Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.
Rob: And I’m Rob.
Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. How are you doing this week, Rob?
Rob: Doing alright. I was just thinking, the subset 389 man, we have 11 more episodes until episode 400.
Mike: That’s insane.
Rob: What kind of cray-cray celebration are we going to do for 400?
Mike: Or what sort of group therapy are we going to have for the people who listen to 400?
Rob: I hope that there is no one out there who’s listened to all 400. That would be catastrophic.
Mike: We should have Sherry come on and just do a group therapy session for Episode 400. I think that’d be prudent.
Rob: I agree. If we just said 30 minutes per episode, that gives us 200 hours, which is 8.33 days straight. Whereas if you stayed up, you could hear the entire journey of this eight years and eight days, wouldn’t that be crazy?
Mike: Yeah. I don’t know if anyone would even attempt that.
Rob: It wouldn’t just be crazy, it would be clinical, you should get committed for trying to do something like that.
Mike: Yeah, definitely, definitely.
Rob: But we do have 595 worldwide iTunes reviews. You know what I’m going to ask you, the listener, to do? Get is to 600. Seriously. In the next couple of days, this comes out on a Tuesday, I would love that by Friday of this week, we’re over 600 reviews. Some of our recent reviews include awesome show, highly recommended from [00:01:52], he says, “Rob and Mike are truly two of the best in the biz at expertly extracting those bits of gold listeners are looking for.” We really appreciate reviews of course, and it does help us spread the word, keep us motivated to do it. Right now, we are accepting five star reviews, five stars reviews only, and look forward to seeing that number tick over to 600 well before our episode count/ticks over the 400. How about you, what’s going on?
Mike: I’m still doing a lot of stuff to prepare for MicroConf but last night I drove into Downtown Boston, into Cambridge and went to Wistia. They had a panel of people discussing how to use video and your marketing efforts, and different ways to use to it, different parts of the funnel that you can address to it. It was very interesting, it was nice to get some perspective from people who are actively doing it a lot as opposed to just reading around certain things. I wouldn’t say that it was a course, but it was definitely a crash briefing on things to pay attention to and edge cases that you might run into. It was cool to meet everybody there as well.
Rob: Oh, that is fun. That’s always nice to get out and go to events like that. I really enjoy those, as long as there’s at least some cool people to meet or some type of cool presentation that’s given out that provides value and gets me thinking about things. I do enjoy hitting up a local event just to see who’s in town in my field every once in a while.
Mike: I did get some laughs when people asked me why it was that I came in for that. I said, “I haven’t left the house all weekend. Figured it was about time.”
Rob: Yeah, totally. Alright, what are we talking about today?
Mike: In preparation for MicroConf, I thought it’d be a good idea to go through some pro tips for attending conferences and I know that we’re probably going to give some advice about attending MicroConf specifically but there’s also a lot of general advice in terms of how to approach going to a conference. This isn’t something that I think we’ve talked about specifically before. We’ve touched on it in a couple of episodes here and there but we never really just sat down and gone through what sorts of things should you do in preparation for going to a conference. Whether it’s a business conference, or a developer conference, or marketing, or what have you. I thought it’d be good to go through that stuff and give our own take on it since we do run a conference.
Rob: Cool. Let’s dive in.
Mike: Some of this is loosely based on an article from Justin Jackson, he specifically talked about MicroConf. We’ll link that up in the show notes. I did want to call that out before we get started into this. The first thing that came to mind when I was putting together this list was making a point to look up what the weather is in advance and plan accordingly. I just think that I remember last year at MicroConf where it was late at night on I forgot how far into the conference we were but we were standing outside and it was freezing. It was not something I had actually thought about doing because I was like, oh, it’s Vegas, it’s a desert, it’s going to be generally warm and I hadn’t realized how much earlier in the year it was and how much of a cold wave was going through the country at that time, I did not dress accordingly for it.
I think that that’s the thing that I would say is pay attention to what the temperature is and actually go look at it, don’t just assume that it’s 70 degrees and it’s sunny because it may not be.
Rob: Yeah. That’s a good point. Especially the desert gets really cold at night. I’m just looking at the forecast for the next week in Vegas and highs are all 80s and 90s but the lows get down 61 and when it’s 61 and it’s dark and there’s no sun and the wind’s blowing, it’s pretty dang cold. Have some type of long sleeve because often aside from just my collared shirts, I don’t tend to think about bringing a long sleeve shirt to Vegas, but of course, in this case, you’re going to want some type of light jacket or windbreaker or something.
Mike: And also because it’s a desert, you have to pay attention a little bit to the climate because it does get cold and because it’s a desert and so dry, you have to bring ChapStick or lip balm or something like that. It’s something that I just happen to keep it in my jacket at all times anyways so I never have to think about it, but if you’re not the type of person who travels a lot or just keeps it around, it’s definitely worth thinking about stuff like that.
Rob: Yup. What I used to do is I used to get to Vegas and then my lips would get all red and chapped and then I would start applying it, and my lips look like Ronald McDonald’s lips because they were red and then they were all glossy. What I do now is bring it with me, from the moment I hit the ground, I start applying it, and that’s worked for the past three or four years. I also drink a ton of water. I bring my water bottle and pretty much a refillable one. From the time I hit the ground, I’m just chugging water constantly.
Mike: The other thing is that there’s also the opposite problem sometimes where if you go someplace and you don’t have gloves, for example, when we went over to FemtoConf in Germany. It was cold enough that it started to snow in certain cases. It’s like you have to just bring the things that you need for that type of weather. Even if you don’t think that you’re going to be outside very much, make sure that you have those things available and consider them before you even walk out the door. I’d say the bulk of the first third of this particular podcast is going to be to all the things that you should do before the conference, before you even get on the plane to go there.
Rob: Another thing you want to think about is spend time in advance to consider your goals for the conference. Think about if there are specific people that you want to meet. You can research attendees, you can look at the speakers, and make it a point that you introduce yourself or try to catch a meal with somebody. Think about the types of relationships you want to establish. Who can you help and who can help you now or in the future because that’s one way to make a conference so much more valuable is to be really deliberate about who you are going to hang around with and who you’re going to surround yourself with while you’re at the conference.
Of course there’s always serendipity, especially at a really focused conference where everyone is doing interesting things. Almost everybody you meet is going to be a fun conversation. But I’ve got to get more value myself out of conferences when I look at the speaker list, look at the attendee list and really pi point who it is that I want to talk to and about what.
Tacking onto that, also I think of two other things, one, are there any questions that you want answered? Are they questions you want to just ask a bunch of people, do you want to ask a specific person, do you want to ask knowledgeable people? I know that Harry and Ted from Moraware Software do a really good job at this. They come each year to MicroConf with a question that they are thinking through, and they get a bunch of knowledgeable opinions on it and I’ve heard it helped shape their decision making.
And then finally, are there any topics that you really are interested in discussing, even though it’s not a question you have but something that you think is going to be relevant to attendees.
Mike: Or if you just want to use somebody as a sounding board because you have a particular thought in mind about hey, there’s a problem that I have, or some sort of challenge that I’m facing. I’d like some external opinions on it. If you’re working at home, or at a remote office, or remote office environment where you go to work and you sit down and you don’t really talk to any co-workers all day except over Slack or email or anything like that, it can be very isolating and you don’t get the benefit of having brainstorm sessions or a lot of external input into your thoughts and thought processes. It’s very helpful to have those topics in mind and written down so that you consider them in advance instead of, “Hey, I want to get other perspectives on this,” and then take them to the conference and hash it out with people, just to hear what they have to say.
Another thing to do is to do some pre conference networking and try to find out who’s going to be there. If there is a conference coordinator that is putting things together, whether they have an online community or something like that that they’re building, or a Slack chat. Anything along those lines, it gives you a sense of who else is going to be at the conference. Try to find out who’s going to be there and reach out in advance of the conference to people that you really want to spend some time and meet.
Whether they are new people that you want to introduce yourselves to, or you’re searching for people who are experts in this particular field or situation, you can always go out to that list or that community and ask them like, “Hey, can we schedule breakfast or lunch or chat for a few minutes?” Even if you just want to put your name on the radar so that they’re actively looking for you and if you happen to be in a conversation, they say, “Oh, I remember I got an email from you or a message from you and you wanted to talk about X.” Just being able to put your name directly in front of them with a message that says, “Hey, I wanted to talk to you about this. I’d love to chat about this for X minutes or whatever.” That will help you establish some of those relationships.
Rob: Another thing is to research local travel and potential scams or things that could trip you up. A few years ago, Vegas didn’t allow Lyft and Uber into the airport. I think before that, they didn’t have Lyft and Uber, they didn’t allow it within city limits. And then they eventually allowed in the airport, and now, it’s everywhere. You can take a Lift at the airport. But before then, it was either a shuttle, or you can just grab a cab, and it’s so close to the airport, it was not worth doing a shuttle because it took a lot longer. It’s things like that that can save you a lot of time and a bit of money.
And then another thing is, talking about potential scams or whatever, before we went to Portugal last year, I was reading through the Lonely Planet and they said pick pocketing is really big there. That just made me more aware to have everything zipped up. And then you had mentioned that the cabbies that drives south out of the airport, they go this long way around right on the freeway, it’s a much longer fare because it’s almost right next to the airport.
Mike: Yeah. That was a classy scam several years ago before Lyft and Uber came around because what would happen is that people would get into a cab and the cab would say, “Do you want to take the highway to the hotel or do you want to go north?” They wouldn’t really give you a clear indication that the highway is actually south out of the airport, then you have to go all the way around. They would really just basically scam you because they could.
I remember that specifically happened to Andrew Warner because he wasn’t paying attention back in 2011 and he was telling me about it afterwards. I was like, “You totally got scammed by them.” Which sucks but at the same time, you wouldn’t know that unless you actively looked for that, either behavior or things to watch out for.
Rob: Another thing to do is to install or update the conference app before you leave. Often, conferences will issue a new app each year or you can update it and get the updated content and that’s certainly something that you can think about. You can obviously do that on site too, but I know that before I leave, I’m downloading a bunch of shows for the plane, I’m downloading any new games or anything to play on the plane but that’s less about for the conference and more just about the travel.
Mike: Yeah. But I think it’s important to make sure that if you have a bunch of updates to your apps, or your phone, or your laptop that you get those things taken care of before you hit the road so that you’re not trying download stuff over wifi because you don’t always have a lot of control over what gets downloaded when or what’s updated first or you may not even have a lot of bandwidth to work with. Like oh, I suddenly need to install this app so that I know where to go next, and then all this other stuff is in the way and taking precedence then you have to wait a heck of a lot more time to get it done.
Another thing to make sure you have taken care of is your passport and travel documents of any kind. Make sure that they’re up to date before you leave. I have heard of people who’ve forgotten to get that stuff taken care of before they go for a big trip that they’ve been planning or they planned three months, six months in advance, and they didn’t think about that, and then suddenly the night before or the day of, they realize oh, this stuff is out of date and it’s going to take three weeks to get it taken care of and I can’t go. Be mindful of those types of things as well. Because there’s literally nothing you can do at that point. You can’t argue with TSA agents, for example, if you’re trying to go to another country.
Rob: Yeah, that’s brutal. I’ve heard of few friends who’ve had that where their passport expired or even if it expires within six months or something, and when you’re travelling, it’s pretty crazy. That would be a serious bummer to have to cancel a trip or miss a conference because of that.
Another thing to think about is figure out, potentially even rehearse your answers to common questions like what are you working on, what do you do, what company are you with, what are you hoping to get out of the conference. Just think about that stuff in advance so that it couldn’t come as a shock, you’re going to get asked the same thing over and over.
And, think about what questions you want to ask of people. Often times, I will try not to ask the same questions that everyone else does. Typically, I want to get to what are you working on, what’s really interesting you right now. I’ll often ask people what books they are reading or listening to to try to get more ideas, or what their favorite podcast is. Just because people like to talk about themselves and share their knowledge, and if it’s something new that I haven’t heard, that’s good. I totally want to add it to my content queue if you will. That’s a perfect place to do it because I’m surrounded by people that are similar to us, they’re one of us in essence.
Mike: The opposite of that is also true. Make sure that you have some ways to gracefully exit a conversation whether it’s hey, I need to go get a drink, or use a restroom, or you need to go take a phone call, or make a phone call to somebody, to call your spouse or significant other, or you just see somebody else that you really wanted to meet and you need to step out of the conversation and go talk to them.
This is more about protecting your time and making sure that you get the most out of the time that you are there. Because sometimes there’s a conversation going on and it’s not like you don’t like the people that you’re talking to or you don’t appreciate the things that they have to say but you have other things and other priorities that you need to pay attention to and your time is one of them. Because your time at that event is very limited and it will be over before you know it.
Rob: That’s a big deal. Don’t get cornered and get stuck talking to someone that you don’t have anything in common or the person is just talking too much and it really isn’t providing value. Like you said, you only have a limited amount of time. It’s not all about take, take, take. It’s about giving some value as well. But there are just some conversations that are mutually awesome and you know that’s going somewhere and you know that it’s valuable. Other ones, they just wander and you realize this is just mindless and I don’t really want to do this. Really be mindful and figure out how you’re going to gracefully exit those kinds of conversations.
Mike: Now we’re finished talking about the things that you should do before the conference, let’s talk about the stuff that you should pay attention to at the conference. You already mentioned this, the number one thing I think is to stay hydrated and there’s a corollary there which is to also get enough sleep. But with the hydration, if it’s the type of conference where you’re going to be talking a lot, you’re going to find yourself dehydrated. Make sure that you are drinking enough water to get you through the days.
There are certain environments, like a desert in Las Vegas, that’s going to amplify that. It’s going to make you even more dehydrated, so does alcohol. You have to be careful about that stuff because it’s very easy to go to a conference in Vegas and I’ve had this happen to myself where I didn’t drink anything alcoholic, it was just water, I didn’t drink enough water though. I woke up the next day and I felt hungover even though I hadn’t had anything to drink. That’s just going to impact the rest of your day. You do have to pay attention to how much water you’re drinking.
Rob: Big time. It’s easier said than done to say get enough sleep, but I have really found that I enjoy conferences more when I am at least getting seven hours of sleep and I can feel rested getting into it, otherwise I’m sitting in a ballroom for seven to eight hours, and I’m tired and not listening. You’re not getting a ton of value from things anymore.
It’s easy to hang out especially when you’re at a conference with friends, and colleagues, and relationships that you’ve built and you only see them once or twice a year. I think that making a graceful exit at midnight and getting your solid eight hours. That’s something that we’ve done past couple of years with MicroConf is we moved the start times of all the conferences to 10:00AM, and I actually think that was a really good idea because we’ve gotten positive feedback about it, about how people have time to get breakfast together, especially people who are on later time zones, Central or Eastern time zone. But it also just allows if you do stay up late, it’s just gives you that a little bit more leeway. You could feasibly wake up at 9:00AM and still have a nice breakfast and get to the conference on time.
Mike: What do you mean feasibly? I think we do that, don’t we?
Rob: That is what I do. I was trying not to be too overt about it, but yes. I’m not embarrassed to say, even though I should be on Central time, 9:00AM is like 11:00AM for me. I think last year, I had to set my alarm for 8:30AM and 8:45AM both days. All four days of the conference just to make sure that I didn’t sleep through it.
Mike: One thing that I found to be a little bit less valuable over time is taking notes at a conference. I used to be the type of person who go to a conference and I would take pages and pages of notes. What I realized overtime was that I was writing down stuff but not necessarily paying attention to how important it was or whether it was new to me. I’d have these pages of notes and a lot of it turned out to be irrelevant, but I was writing it down just because I felt like I should because the speaker had said something or commented on it.
I was trying to create almost a transcript of what they were talking about and the reality is if you already know that stuff, don’t bother writing it down. Only write down the stuff that is new, or that you find insightful, or if an idea pops into your head and you find that it’s going to be actionable. Those are the things that you need to write down because you will probably forget them later on. But the stuff that you already know, there’s no need to write that stuff down.
In addition, there’s usually other people who are taking notes or there may even be an official note taker for the conference, a lot of speaker make their slides available for after their talks, definitely write down the URLs for those, or get them from the conference afterwards if they’re collecting them and just distributing them. But don’t feel compelled to write down every little thing that the speakers say. Just write down the stuff that’s important.
Rob: Another thing to consider is to think about asking questions during speaker Q&A. It’s a valuable opportunity to get interesting feedback. Obviously, be respectful of time and whether an answer to your question is generally applicable to other people. You can always follow up with the speaker when they’re off stage.
I do think that part of the beauty of a conference is everybody is in the same room. One way to bring value is to ask interesting questions. That gives you an excuse to then follow up later if you ask a question a speaker answers in general and you can come up and say, “Hey, I actually have this specific thing I want to talk to you about.” But if it is generally applicable, it can be helpful to the whole audience. I think that’s good to give back to community in that way.
Mike: A really nice way to stand out in the minds of the speakers who are presumably leaders in the community is to thank them directly if you found what they were talking about helpful. I would obviously encourage people to put feedback into the conference surveys but I think that for most speakers, it’s really helpful for them and gratifying to hear that somebody got a lot out of their talk. Definitely make it a point to thank them and if you have follow up questions, don’t hesitate to ask them after the talk, especially in situations where if you have a question that you think you might want to ask during the Q&A session but you realized that that question is so very specific to your business, or your particular problem, then save that for a later conversation when you’re not going to be using other people’s time to hear an answer to a question that just has no bearing or relevance on them.
Rob: Another thing to do is to make sure that you are social. It’s easy to go and lock yourself in your hotel room and watch this week’s episode of Walking Dead instead of hanging out. If it’s a good conference, the hallway track is worth almost as much as or more than the actual speaker track.
With that said, I will say know your limits. Get out and meet people. There comes a point where that’s demising returns and you can become so tired or so over stimulated or overwhelmed that you’re no longer having fun and you’re no longer really getting that much value.
I think there’s a balance to be struck here. I do notice that as I get older, and as I go to more conferences, I’m still quite social but I don’t do the 4:00AM nights like the early MicroConfs. Maybe that’s just a factor of sleep but I definitely get my fill of conversation earlier than I did maybe seven or eight years ago.
Mike: Moving on to the last section of this is after the conference is over, take some time to follow up with the people that you met. Whether you exchanged business cards or contact information.
It was funny last night, when I was at the Wistia event, there were a lot of people there who would ask me for business cards, I’m like, “I don’t have business cards.” Certain conferences you go to, that’s the expectation and then there are certain ones where it really isn’t. But if you are exchanging contact information with people because you want to talk to them later, or follow up on a business opportunity, or ask them more questions, definitely make sure that you follow up with them and help maintain those relationships that you started with them and you can maintain those relationships over time. Don’t feel that you can just let those lapse because I think if you let more than a couple of weeks go by once a conference is over, and you’ve met somebody, I think it starts to become more awkward to reintroduce yourself to the person and you feel weird about reaching out to them. The earlier you do that after the conference is over the better.
Rob: Another thing to do after the conference is review your notes to see if you need to fill in any gaps. That’s a great thing to do on the plane. I’m assuming you’re going to take notes locally, you probably have no internet, it’s a great time to sit and think back, are there any takeaways or any people that I met or any things that I want to take away that aren’t in these notes? Because I like my notes to capture the entire event and really be able to refer back to them and refresh everything that came out of it because it can spark new information later when you view it through different eyes if you look at it 6 months or 12 months from now. Be sure that your notes are buttoned up and they don’t have to be super professional, but at least in a format that you feel like you can interpret them in 6-12 months.
Mike: Another thing I’d highly recommend, and this comes from the stance of an event coordinator but make sure that you fill out the conference surveys. I say this not just because it’s a nice thing to do but a conference is not going to get any better if you don’t provide them with helpful feedback or at least with a good sense of where their conference did well and where they didn’t. If you don’t give them an idea of where they stand, then it’s very difficult for them to make decisions that will help improve things moving forward.
Rob: And then finally, I think it’s helpful to reflect, especially if this is the first or second conference you’ve gone to. Reflect on your time there and make a few notes about what you feel worked really well and things that you regret that you did or didn’t do. Let’s just be honest in Vegas, there’s a lot to regret that you did. Use the list. Honestly, use the list to improve your ROI on conferences in the future. Without reflecting and looking at your process figuring out what worked and what didn’t, it’s hard to improve upon that in the future.
Mike: I don’t think that the things that you regret doing or not doing are limited to just being in Vegas. One thing that comes to mind is there has been conferences where I’ve gone to where I stayed up way too late involved in a conversation that really was not of any value to me. I ended up being extremely tired the next day, for no good reason. I felt like I’ll stay up because of the people here and you really have no obligation to other people to stay involved in a conversation if there are other things that you could or should be doing like going to bed and getting some sleep.
Rob: Yep. I’ve done that. I’ve stayed up too late, I have done the wasn’t social enough, didn’t meet enough people, wasn’t deliberate enough about picking up the people in advance that I wanted to meet, a lot of things in this list, I have certainly made those mistakes. With that, go to your next conference, enjoy it, and get the most value that you can, we hope to see you at this MicroConf happening next week or MicroConf in the future. If you have a question for us, you can call it into our voicemail number at 1-888-801-96-90 or you can email to us at questions@startupsfortherestofus.com. As I like to say, voicemails go to the top of the queue.
Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 388 | GDPR, Why You Should Strive For High Prices, and More Listener Questions
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In this episode of Startups For The Rest Of Us, Rob and Mike continue their discussion on GDPR and get additional insight from a listener. They also talk about why to strive for higher price points.
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Episode 387 | Before You Run Any Facebook Ads, Listen to This
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In this episode of Startups For The Rest Of Us, Mike interviews Mojca Mars, a Facebook Ads expert, about what things you need to do before you even begin running Facebook ads. Some of the topics discussed include lead magnets, custom audiences, email sequences and more.
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Mike: In this episode of Startups for the Rest of Us I’m gonna be talking about Mojca Mars about the foundational work you need to do before even getting started with Facebook Ads. This is Startups for the Rest of Us episode 387.
Welcome to Startups for the Rest of Us–the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.
Mojca: I’m Mojca.
Mike: We’re here to share our experiences to help you avoid the same mistakes we’ve made. How are you doing this week?
Mojca: I’m doing very well this week.
Mike: You just got back from an extended vacation, didn’t you?
Mojca: Oh, yeah. I did. It was actually a seven-day vacation. I wish it was a little bit longer but the good thing about it is that I turned off everything. I turned off my phone, I wasn’t on my laptop, and I was completely offline, aside from my Kindle, but that was about it and it felt amazing.
Mike: I used to own a cottage up in the Adirondack Mountains up in upstate New York and it did not have electricity or running water. I noticed that when I went up there–because I just couldn’t charge my phone or anything, I just left it off–just the feeling of being that far disconnected. You couldn’t even hear the refrigerator hum because there was not a refrigerator. It was just very relaxing. I don’t know if you found something with like turning off your phone for that long.
Mojca: Yeah. I was at the beach actually and it felt so good not having my phone and not checking my notifications every two seconds. My brain started to breathe again.
Mike: Yeah. It’s almost like having a giant reset button for your brain.
Mojca: Oh, yeah. It was so good.
Mike: That’s awesome. Today I wanna have you on the show because you are a Facebook Ads Expert and you’re also an Author, a Public Speaker. You spoke in a Double Your Freelancing Conference, you spoke in a FemtoConf, you spoke in a MicroConf Europe this past year, and you’re also speaking at MicroConf in Vegas this coming Spring in about five or six weeks.
I wanted to have you on the show and have you talk a little bit about Facebook Ads because it’s something that we get asked about but I wouldn’t say that we have nearly the level of knowledge that you do so I think that you could definitely shed some light on the topic for us and for the listeners.
Mojca: Yeah. I would love to do that. Yeah.
Mike: Aside from the Facebook Ads Expert, Author, Public Speaker like leave anything out that was a major.
Mojca: Not really, just maybe an interesting story that I actually got fired from my first job.
Mike: Oh.
Mojca: Yeah. That’s how I got into the business of Facebook Ads.
Mike: I was gonna say I hope it wasn’t a Facebook Ads job that you got fired from.
Mojca: It wasn’t a Facebook Ads job, I was a copywriter at an advertising agency. It was similar but not the same. But the thing is that I started to notice that all of our clients were asking about social media—Facebook—and our agency, they weren’t interested in that. We started to drift apart and they fired me. That’s how I got into the business.
Mike: You kind of fell into it, it wasn’t like you actively sought it out and decided, “Hey, I’m gonna do this.”
Mojca: I was thinking about it for a while. I was always saying, “I’m gradually going to make that transfer or that change and gradually go from being employed to working for myself.” But then I got fired and I said, “Okay, this is my chance.”
Mike: Not everything kind of goes exactly as planned anyway. I think there’s a lot of people who listen to this show who’ve kind of just fallen into whatever it is that they got into. I don’t think that that’s necessarily uncommon but it’s interesting that you took that opportunity or took that—I don’t wanna say low point in your career—but like that native experience and turned it around into a greatly positive one.
Mojca: Exactly, yeah. Looking back now, that kick-in-the-butt was the best thing that happened to me.
Mike: Awesome. I wanted to talk to you today specifically about setting up a foundation for how you’re going to run Facebook Ads. We’ve talked a little bit about this before the show about what is it that people need to know, what common mistakes they make. I wanted to walk through what you feel is the foundational things that people need to put into place before they even start running Facebook Ads because I think it’s very easy to get wrapped up in all the things that you need to do in order to set up a Facebook Ads account but not think about the fundamental framework or structures that you need to have in place to actually manage an advertising campaign using those tools that they provided. I wanted to talk through those and just figure out what exactly it is that people need to do first.
Mojca: Yeah. You are totally right about that. I think that when a person decides to use or to start experimenting with Facebook advertising, they all just say, “Okay, I have a product to sell, what can I do now? How can I sell this product with Facebook?” But they don’t think about the other things that you need to have updated or you need to have ready to go when you start advertising.
Mike: Right. I think the first one that you had thrown out there was a lead magnet. I think this is something that most people—myself included—kind of put at the end of the list. But we’re gonna talk about that first because it’s almost like the most important thing that the have to have in place.
Mojca: Oh yeah, absolutely. I think it’s the most underestimated marketing asset when it comes to your Facebook advertising.
Mike: Let’s talk about the lead magnet itself. When you’re creating these Facebook Ads, what forms can a lead magnet take? What sorts of things should you be advertising to people in order to move them through that sales funnel using a Facebook Ad?
Mojca: Yeah. It should be something that’s very valuable and just easy to consume so you don’t want a very long ebook, let’s say, that you offer for free. You want it to be like a snackable PDF, a cheat sheet, or maybe, let’s say, a chapter of your ebook, let’s say just a free chapter, a couple of pages, something that’s easily consumable. Once they download it, they can browse through it very quickly and get the sense of your business, of your expertise, of what do you do, and so on.
Also, one good lead magnet is, for example, an email course or a webinar. Webinars do really, really well with Facebook Ads. If you, let’s say, sell services or a software and you can have a webinar on that topic explaining something your software does, or not your software but maybe just talking about your expertise and what your software, some problem that it solves, that’s a very good start. Having a webinar on that topic is a great start.
Mike: There’s two things that I kind of wanna unpack that you just said. The first one was like a full book is not a good idea. Why is that? It seems to me like the more value you’re giving them upfront, isn’t that better?
Mojca: With a lead magnet, you want that lead magnet to be very snackable. Usually, we advertise the lead magnet to someone that has visited our webpage for the first time. We want to offer them something for free but we don’t want to overwhelm them with different possibilities and we want them to get that value. Let’s say you had someone does visit your webpage and soon after, he or she sees a Facebook Ad for your lead magnet. If it’s the ebook, they won’t go through that ebook, they won’t read it through if it’s a 50 page long ebook because they don’t know you at the moment. They will download it but that lead is not going to be very qualified so you want to offer a very snackable asset like a PDF so they would go through it and they will be interested in seeing more of that.
Mike: I got it. That’s like actually a very subtle difference, I think because like an ebook for example, they might download it and according to Facebook would be a conversion but later on I guess moving them through your sales funnel, they’re gonna end up to be a poor converting prospect because they just didn’t read it.
Mojca: Exactly. I think that’s one of the aspects that a lot of marketers are forgetting about so you don’t want to just collect leads, you want to get quality leads, someone that you can convert at the end.
Mike: Excellent. It’s not even just like how much value you are supplying to them, it is the appropriate amount of value at the stage of the relationship that you’re in.
Mojca: Exactly. That’s a perfect description.
Mike: Perfect. The other thing that you said was that email courses and webinars do really well. Could you unpack that a little bit? Why is it that those do so well?
Mojca: For webinars specifically, it let’s you connect with your target audience in a totally different way. They see your face, they get to know you personally, so to speak. That’s a good connection to establish with your target audience. You want them to connect with you on a personal level because they would be easier to convert.
I’ve done this for such a long time so I have a ton of webinars and I do them very regularly. I see that change in my target audience. Once I started doing webinars, I started collecting a lot more leads because people were drawn to me and were drawn to my personality and my content and they wanted to get advice from me. That really helped with all of the other marketing aspects. The people that came to my webinars came to another webinar that I had later on and they just stuck to it. That was a really big difference, just connecting with them on a totally different level.
Mike: Does that impact the initial conversion rate or you’re really referring to the total conversion rate from first touch to end when you’re hopefully making a sale? Obviously, those two things are different but it goes back to what I just asked about delivering the appropriate amount of value based on the stage of the relationship. Is it localized or is it really like a global improvement?
Mojca: It works both ways. People are really easy to convert and come to webinars. When they see an ad for a webinar, they usually sign up very quickly and they also come to the webinar. That conversion is really, really easy.
The people that come to the webinars are more likely to purchase. That happened to me time and time again. People that actually attended and came to my webinars, they were so easy to convert at the end because we had a totally different relationship than someone that just downloaded a lead magnet and read through it and that was it.
Mike: Awesome. I think it absolutely has a much bigger factor associated with that. Anything with either advertising or demos. I found that demos for example convert really, really well just because there’s that one on one interaction, but I think even in a webinar, you can get a good sense from somebody whether or not they are selling snake oil versus actually committed to solving whatever the problem happens to be.
Mojca: That’s a good point. I worked with a lot of software companies and demos, they work amazing. We frequently have webinars that are just pretty much live demos and people sign up to that and people convert at the end. At the end of a demo, we offer let’s say, a free trial or a special price for the software and they convert really, really well.
Mike: Now that you’ve got an idea for lead magnet or you’ve gotten one developed, how do you go about promoting that on Facebook? Because that obviously lead the next step like you have to have that asset first and then once you have that, then you have to promote it whether it’s through retargeting audience or to a completely new audience. How do you go about putting it in front of people and finding the right people to do it?
Mojca: You have two different objectives that you can use when it comes to advertising lead magnet. There’s this thing called a Lead Ad, Facebook calls it a Lead Ad. It’s basically a type of ad that lets a user download your lead magnets, PDF preferably, in just a couple of clicks. Facebook collects your email and basically kind of passes it on to you.
The other objective that you can use is more like a traditional ad that is called website conversions. You can choose whatever feels good for you. Lead Ads are very easy to set up so you don’t even need a landing page, you just need that lead magnet and Facebook will take care of the rest.
On the other hand, you have the traditional ads called website conversions. Per my experience, website conversions, when it comes to Lead Ads, tend to work a little bit better although you still need a landing page. The set up takes a little bit longer but it converts a lot better and the leads are more qualified. But anyone listening to this podcast, I do recommend experimenting with both objectives and see what works for you and what type of leads you get from each of these objectives.
Mike: I understand in general why it’s best practice to experiment with those things. But what sorts of things have you seen when you go through and start doing the experimentation? Because you’ve said that the website conversions tend to work better even though the Facebook Lead Ads are easier to set up. What have you seen as a direct result of the experiments?
Mojca: With traditional ads, with website conversions, the cost per lead was a bit higher but the quality of those leads was definitely better than the leads that we collected through Lead Ads. Maybe that has something to do with just how easy it is to collect leads with Lead Ads so a lot of people just collect those two buttons and download the lead magnet and you have their email. Just people really going to the landing page where you have your lead magnet described for example, that’s a bit harder to do. I think, that’s where most quality leads come from.
Mike: Now that we’ve kind of gotten through the lead magnet itself and talk a little bit about how to promote them inside of Facebook, the next step is taking a look at the email sequences that you need to setup because obviously, once somebody has downloaded the lead magnet, you want to be able to email them. Obviously, your Facebook is gathering their email address. Then the next step is to put them in some sort of email campaign. What sorts of things should people pay attention to there?
Mojca: When it comes to email sequences, I think that like you said, this is definitely one of the things that you do need to have set up before you start advertising because once a person downloads the lead magnet, you want to do something with that lead, not just have it on your email list and that’s it.
Usually, I recommend doing five to seven emails long email sequences that talk about a specific topic that has something to do with the product or a software or a service that you’re going to pitch at the end. Each email sequence that you write has to have some sort of an outcome. You want to reach or you want to achieve a goal at the end. You definitely want to pitch that goal or to pitch something at the end whether that is an ebook, a service, a software.
Mike: Somebody just came to mind as you were talking about pitching the product or service in that email sequence, one thing that I was wondering about was going back to the lead magnets, will a good lead magnet be a video versus a webinar or a demo? Because it almost seems like that’s a way to automate that piece of it without actually being there.
I’ve seen a lot of webinar like automated webinar things and they tend to look very scammy. I’m curious to know whether just like a video hosted it like YouTube, or Wistia, or Vimeo or anything like that. Is that a decent lead magnet or not?
Mojca: I have a love-hate relationship with automated webinars. Like you said, they do look scammy and people recognize that and people tend to move away from that kind of content. What I would recommend is, like you said video demos that aren’t kind of gift wrapped into, “Wow, this is a live demo that we’re doing and everyone knows that it’s not a live demo.” Maybe just say, unpack that into, “This is a video demo that has been pre-recorded, etc., etc.” If you pack it like that and offer video content as a lead magnet, that’s definitely a very good way to go about it especially because video consumption is on the rise and people are watching videos regularly so just doing that is definitely a great way to go.
Mike: I was just trying to think about how to combine the two things without actually being present because automated things, if people are working on product themselves, it will be in present for webinar is not always the easiest thing in the world. Video’s kind of the next best but you’re absolutely right. Everytime I go to one of those automated webinars where they tried to pitch you do something live, it really comes across the wrong way just because you’re using that.
Mojca: Yeah. I think it has an impact on your brand as well. People will look at you in a different way once you do that. Like I said, if I do any demos or anything like that, I pack it in a different way. I don’t say, “Yeah, this is the live demo that we’re doing.” Everyone knows that it’s not. But I just pack it, “Here’s a video con, here’s a video over demo.” I’m not trying to say that it’s live or anything. I’d want to kind of communicate that integrity.
Mike: Okay. Kind of going back to the email sequences, you said pitch your products or your service at the end. Did you mean by the end of the entire series or was there something specific, should your goal for the entire email sequence of five to seven emails be the same at the end of each email or is it wise to kind of divide it up and have different mini goals or something like that along the way? I’m not sure how to get too complicated with it, that’s really what I’m saying.
Mojca: Yeah. I don’t wanna get too complicated with it as well. I think it depends on how well structured your funnels are. Some people have the same goals for every email sequences and some people have mini goals. Some people have two different funnels and two different email sequences for two different target audiences so it all depends on what setup you have.
If you’re just starting out, I do recommend just making it easy on yourself and just have one goal. As your business gets more structured, you can definitely work your way down and just kind of create different funnels and work your way from there.
Mike: I think that’s the best advice; don’t create more complexity just for the sake of creating complexity.
Mojca: Yeah. I did that, I did that once and I regret it.
Mike: I think we all do.
Mojca: My Drip is going crazy with the different funnels and it’s just too complicated and whenever I login, I just get so stressed. It’s my own downfall too.
Mike: Now that we’ve got the lead magnet in place, we’ve got the email sequence set up, what’s the next step? It seems to me like you need to dive into Facebook at some point along the way if you’re gonna get into this Facebook Ads. What’s the first step in setting up Facebook Ads?
Mojca: The absolute first step that you should do is implement a Facebook Pixel to your webpage so you can retarget anyone that visits your webpage. You want to do that as soon as possible so you are collecting all of that data before you launch your first campaign. That is one step that a lot of people just forget to take once they are ready to implement their first campaign they’re like, “Woah, how am I going to retarget people?” The first thing, the absolute first thing is to implement a Facebook Pixel to your webpage and it’s a two minute task so it shouldn’t take you too long and it just has a lot of benefits to it.
Mike: You can just install this on your website even if you are not running the Facebook Ads, you can always just put it there and then go off like create the lead magnet and then email sequence and then come back to this.
Mojca: Oh yeah, absolutely. You can do it right away and maybe come back to it after two months. You don’t need to be creating the campaign immediately after you implement your Facebook Pixel. Actually, the preferred way is not to launch a campaign, especially not a retargeting campaign, immediately after implementing a Facebook Pixel.
Mike: Why is that?
Mojca: The most effective campaign to start with is a retargeted campaign where you are retargeting for example people that are visiting your web page so people that already know what you do. Without a Facebook Pixel implemented to your site and without all of that data collected, you won’t be able to retarget people so you would be stuck with interest targeting and targeting based on different interests and behaviors which is a good approach but definitely not as effective as retargeting.
Mike: Got it. Once you’ve got the Facebook Pixel in place, is there anything especially need to pay attention to when you’re implementing the Facebook Pixel or is it just like you install this one little snippet and everything takes care of itself?
Mojca: You install this one little snippet but you have to install it in the right place.
Mike: Oh, okay.
Mojca: Yeah.
Mike: You really have to follow their guidelines of exactly where it needs to go?
Mojca: Yeah. You need to put it in the head section of your webpage. A lot of businesses do a mistake and implement it into a body section. For example, that Facebook Pixel triggers just on their homepage, not on their whole webpage. Just be careful where you implement it. Facebook has really clear instructions on how to do that. It’s really, really easy. You just have to implement it once in the head section and you’re good to go.
Mike: Awesome. Now that we’ve got the Facebook Pixel in place, what’s the next step? How do you get started setting up who’s gonna get targeted? Assuming the Facebook has been there a little while–should you start with retargeting? Is there a different approach that you should use?
Mojca: If you have your Facebook Pixel implemented for a while, let’s say for a month and it has collected a lot of data from your website visitors, you definitely want to implement a custom audience. Custom audiences is a fancy word of you uploading your email list or just connecting your Facebook Pixel to custom audiences and just build up your retargeted audience, so to speak. That’s definitely the first thing that you should do because custom audiences take a little while to properly populate, it doesn’t take a day but it does take an hour so you want to take care of that before you launch your first campaign.
Mike: This is one of the situations were even though you wanna get it done right away, you wanna be able to allocate that hour to go over and get this taken care of, it could very well take you two, three, five hours, depending on how long it takes Facebook to process things and put things together for you.
Mojca: Yeah. You can actually, as soon as you implement a Facebook Pixel, you can actually create your first custom audience of just retargeted audience of your website visitors, you can create it immediately. Even if you come back after a month, that audience will still grow and regularly update day after day. You don’t need to wait for a month and then create a custom audience but you can do it right away and just wait for it to populate properly even if it takes a month.
Mike: Got it. You uploaded, you set up this custom audience, you recommend getting started with the retargeting audience first.
Mojca: Yeah. Correct.
Mike: After that, now you’ve got this retargeting audience set up, now what?
Mojca: Now, what you wanna do is because you want to start retargeting and you want to start retargeting people with a lead magnet, you need to let Facebook know somehow what a conversion is.
Setting up a custom conversions is the right thing to do as a next step. You have a custom conversions tab in your Facebook Ads Manager. Basically what you need to set up is you need to let Facebook know what your Thank You page is. For example for this lead magnet, this is the Thank You page and you connect Facebook to that Thank You page. Anytime someone lands on that Thank You page, the Facebook Pixel gets triggered and Facebook recognizes that as a conversion.
When you set up custom conversions, you will be able to optimize for those conversions. For example, you will create a campaign that’s called website conversions and you’ll say, “Okay, I want this website conversion.” Facebook will optimize everything properly. When someone downloads or converts, Facebook will analyze that person and then target similar people to that person because they are able to optimize based on conversions because you created that custom conversions in the first place.
Mike: Now, I know that you can go in there and you override that and just say, “I’m gonna manage this based on behaviors or interests or things like that.” Is that something that you would recommend people do or do you generally recommend that people just let Facebook analyze that data itself? Because I think the concern that people have—myself included—is that what an incentive does Facebook have to make them convert for you because the more that they put those advertisements out, the more clicks that they get even if it doesn’t necessarily convert. It kind of makes you pay more. It’s almost like not in their best interest to drive the greatest returns on that. What kinds of things do you have to comment on about that?
Mojca: When it comes to retargeting people, especially if I work with smaller audiences, I tend not to narrow down based on interests or behaviors, it will impact the results if I narrow it down especially if an audience is already really, really small. If an audience is a little bit bigger, I do experiment with narrowing that down. That said, as you said, Facebook has its own ways of analyzing who to show your ad to. Based on my experience, that works really, really well. I mean, not only would generate a lot of leads for a very effective price, those leads are actually of good quality as well.
That said, if you do work with interest targeting and if you’re using interest targeting as your targeting approach, or behavioral targeting for that matter, you do want to narrow it down based on different behaviors so you don’t want to, for example, target two million people and let Facebook do its job because they won’t attract the most quality audience, to be honest.
Mike: I guess one of the ballpark ranges of, in terms of size, when should you decide to start tweaking based on behaviors or interests and things like that versus when should you just let Facebook do its job. Is there guidelines around like different sizes?
Mojca: If you have, let’s say, a retargeted audience of 100,000 people, I would definitely start playing with narrowing that down.
Mike: Got it. Anything less than that, maybe you could probably make a judgement call around 50k or so but less than that is fine just let them retarget.
Mojca: Yeah, yeah, yeah. It really depends on the service that you’re offering of yourself or whatever. It’s not really the size of the audience but the ballpark figure would be around 100,000 people. You can start playing around with it with a little smaller audience, like you said 50k. That said, what I do recommend is just keeping your eye on that campaign in case you noticed that, “Okay, that approach definitely isn’t working.”
Mike: Okay. Again, all of this stuff that we’ve talked about just in the past couple of minutes is really for a custom audience built around retargeting?
Mojca: Correct. Yeah. Because like I said, retargeting is the best way to start with Facebook Ads.
Mike: Okay. Now that the we’ve got the custom audience based on that retargeting campaign, we’ve got the custom conversion set up for our Thank You page, is there anything else that we really need to pay attention to or does that really put us in a good position to start optimizing from there?
Mojca: That definitely puts you in a good position. You will have all the assets in place to successfully launch your first campaign with Facebook Ads.
Mike: The other one that I’ve heard people talk about in addition to retargeting audiences is look alike audiences. Can you talk a little bit about specifically what those are and how those play into people that you’re retargeting from your website?
Mojca: For sure. Look alike audiences are basically cold audiences that are created on top of some data that Facebook has or basically the data that you provide to Facebook. For example, let’s say you have collected a lot of data on your website visitors, you have 1,000 website visitors connected to your Facebook Ad account. But you do want to experiment with cold audiences but you’re not sure what interests to use, what behavioral targeting to do, you’re not exactly sure how to go about that. But you do know that your website visitors are very qualified.
What you can do is create a lookalike audience based on your website visitors. What Facebook will do is they will analyze your website visitors and they will analyze their behaviors, their interests, their demographic data, where are they coming from, how old are they, and they will create a brand new audience based on that information. A lookalike audience is an audience to feel that, don’t know who you are, it’s a cold audience but it’s built upon, for example, website visitors. It’s built up on a custom audience.
Mike: Got it. They work together not necessarily directly opposing from one and each other.
Mojca: Yeah. Correct, correct.
Mike: Okay. Once you’ve got all of these fundamentals in place, at this point you obviously can go and you need to start optimizing things but I think the other approach that I can think of here is to go back and start almost like creating a sequence where people are moving through a sales funnel. Does that really not makes sense in this case where you’re moving them from one Facebook conversion to the next? Is it the point to really just get their contact information or email address and put them on your newsletter?
Mojca: Creating different funnels definitely makes a lot of sense but I also wanna come back to what we previously talked about. You don’t want to make things too complicated for yourself. If you already have a funnel that starts let’s say with the lead magnet and then with the demo and then gradually ends up with a pitch, you definitely want to implement that to your Facebook Ads. But if you don’t have that funnel already developed, you want to make things as easy for yourself as possible and maybe just use one lead magnet. Once they go through an email sequence and at the end kind of connect Facebook to your email sequence again and start pitching them when they enter the pitch sequence in your email sequence as well.
Mike: Got it. That makes a lot of sense. One of the things I did before this episode is I went on on Twitter and asked people if they had any questions for you. I’m gonna go through a couple of questions here and just kind of rapid fire through them and let you kind of answer them.
The first one is from Jamie Laurence. He said, “Is it morally wrong to use Facebook Ads? It feeds the money machine and makes us culpable in data collection.” I think what he’s really referring to is the new information kind of coming out about like how much data Facebook is actually collecting on people, which I think people knew but I don’t think they had ever looked at it before, had a way to look at it.
Mojca: Yeah. I think that’s a fantastic question and it’s definitely something that we need to be talking about. I talk about it with my clients, I talk about it with my students, I talk about it with everyone that wants to talk about it. I wouldn’t exactly say that it makes us culpable because the data collection that we’ve seen was a different one, it was a misuse of data, it was a criminal offense. It’s not similar to the data collection or targeting options that you see on Facebook. There are different nuances to it. That said, what I do think is that you have to decide on your own.
When you do Facebook advertising, the truth to it all is that you will be investing in Facebook. You will be investing in that business funnel, you will be investing in data collection as well. If you feel fine with that, by all means, just continue advertising and just use Facebook advertising as it is intended for you to use it. If not, just not don’t do Facebook anymore, don’t do Facebook advertisements anymore.
To be honest, I did have a couple of clients that left for that specific reason. With the upcoming news, they just decided that they don’t want to invest on Facebook Ads anymore, they don’t want to support that and I support their decision. I know where they’re coming from so I’m fine with it. That said, I do think people will still advertise on Facebook. But coming back to the idea, what I do recommend is just using Facebook advertising as it was intended for you to use it.
Mike: Yeah. I saw an interesting–it was a meme but it was a picture about the US government going in and starting to look at Facebook and how they’d announce that they were gonna do an investigation. On the page itself where they said they were investigating them, it said, it had a Share this through Facebook link.
Mojca: They probably had a Facebook Pixel implemented to their page as well.
Mike. I’m sure that they did.
Moving on, Jeremy asked, “Can Facebook Ads be visual rather than text based? My product is visual and I’d rather show it to people than tell them about it.”
Mojca: Oh, yeah, absolutely. I do support any visual based ads. What I do recommend is—I’m not sure about the product that he was referring to—if you have an opportunity to use video to show off your product, by all means, do that. It’s a similar approach that ecommerce businesses have been using all that time. They are really, really visual based, they have a lot of images or videos of their product. If you have a product that’s similar to that, you can, by all means, go ahead and use the same approach. Like I said, coming back, I do recommend using video in that case, it brings the best results.
Mike: With the video, this kind of goes into how you structure your Facebook Ads, maybe we touched on that for a couple of minutes, but obviously, there’s lots of different ways that you could advertise on Facebook. One of them is to have a video and you could also have like long form copy, short form copy. Could you just kind of touch very briefly on each of those and what your experience has been with them because I don’t necessarily think that we’ve talked about the specifics of what you’re going to put in your ad once it’s out there.
Mojca: Yeah, for sure. First of all, referring to long form copy, what I recently discovered through multiple A/B tests that I’ve done with all of my clients is that long form copy works really, really well, especially if you are advertising a software or a service business, long form copy tends to work really, really well.
Videos as well, along with long form copy. For example, if I’m working with a client that is trying to promote their software, we use long form copy so it’s a very long sales page like copy along with a video of them. It tends to work really well. But for other businesses, I have a couple of ecommerce companies that I worked with this as well, we don’t use long form copy but what we do use is a lot of images of their products.
But if you have a software company, if you offer services, what I do recommend is A/B testing with copy. Launch an ad, one ad with short copy, same visual, one ad using a short copy, one ad using a long copy. I’m definitely taking a bet on that and I think that long form copy will prevail on that case.
Mike: Awesome. The next question comes from Ed and he asked, “Will Facebook tracking effectiveness drop as more people use ad blockers?”
Mojca: Yeah. I love that question. They have been actually saying this for years now. For years, my clients have been coming to me saying, “More and more people are using ad blockers, is effectiveness going to drop?” Actually, we haven’t seen a bigger drop since I started talking about this with my clients two years ago. I think maybe that that drop is gradual, but to be honest, right now I would say that it’s not going to affect Facebook advertising as we might think that it’s going to affect it.
Mike: Our next question comes from [Kelso] and he says, “Do you have any case studies that you can point us to for successful ad campaigns? The second question he says, “How deep should you go with segmentation?” Do you have a couple of things we could link up on the show notes?
Mojca: I’m actually working on them but you will be able to find them on my webpage, definitely.
Mike: Awesome.
Mojca: A couple of results, with Facebook we’ve seen—I’ve worked with an ecommerce company—and we’ve seen up to 400% ROI. That was actually a standard especially when we did retargeting, we had 400% ROI. Or for example working with software companies, one software company in particular, we were paying $20 for an acquisition where lifetime value of a customer was $500 or right now I’m working with another software company and we are paying $50 for a conversion and they’re paying on Google $500 for the same conversions. It’s been incredibly effective.
But as far as segmentation goes, I definitely recommend as much segmentation as possible. That said, you always need to be careful of potential reach, you can segment all you want but if, let’s say, a specific custom audience that you really segmented out, the potential reach is only 20 people, that will not be effective. Be careful of that.
Also you need to keep in mind that the more segmentation that you have, the more work you’ll have with your Facebook Ad campaigns so you really need to decide if you want to do that or not. Segmentation is incredibly effective when it comes to Facebook Ads, like I said, it’s a tricky thing to do especially if you’re working with a bit smaller audiences, but if you have a lot of data collected already, by all means, segment as much as you want, I really recommend it.
Mike: This kind of brings me to a couple of questions. I kind of specifically had like when you are looking at what your ad spend is gonna be and what your minimum reach are, are there kind of guidelines that you would follow? Say make sure that you’re spending at least this much on a daily or weekly basis and make sure that your reach is at least this because otherwise, it’s probably not worth your time. Is there some quick calculation you could do based on “performance metrics” or average conversions kind of going through those Facebook Ads to figure out like if its 20,000 people, you have to have a conversion rate of at least 10% in order for it to be worth it if your cost per good sold is X. Is there anything like that that you can go and point to?
Mojca: Everyone asked me about that and that’s a very, very hard question to answer because for example, I’ve worked with multiple software businesses and they are so different when it comes to conversion rate and ROIs. With each and every customer, and with each and every client, I have to figure out a way of how to properly measure that and how to properly determine how big of an investment we need in order for our Facebook Ads to be effective. If you’re starting with Facebook Ads right now, if you haven’t done this before, I do recommend starting it slow. Don’t say, “Oh well, we have a well established business and we can spend $10,000 a day on Facebook Ads. Let’s just do that.”
Even if right now you have a lot of assets that you can promote, you have the money to do that, I definitely recommend starting slow with investing $50 a day or $100 a day and just kind of seeing what do you can do with that money and establishing where the ROI is coming from and what you need to do and what kind of cost per lead magnet download you can get for that kind of money. Just filling your way through that and then investing more and more once you get the hang of it.
If you do have a small business, so to speak, for example you’re just starting out, you just launched your new product, it hasn’t generated any revenue yet but you do want to experiment with lead generation with Facebook advertising, I recommend starting with $10-$20 a day and just seeing how that goes.
Facebook offers a lot of different tracking options, you can really track your ROI, you can input for example for each lead or for each conversion, you can connect that conversion to a specific value and Facebook will track ROI. It all comes down to your setup and so on.
Mike: Thanks. That’s extremely helpful because I think that the ballpark numbers that people have, people just don’t even really know where to start in terms of how much to spend, I mean is it $5, $10, $20. I think that the guideline of $10-$20 a day, at least to start of with especially if you’re just starting out and you just have a new business or product that you’re pushing out there, it sounds totally reasonable and I think within the reach of most people. We hear people talk about like you just mentioned, $10,000 a day, some products are just not even gonna make that in a year. It’s just not realistic.
Mojca: Yeah, yeah.
Mike: I think the last question I had was how do you go about managing or documenting your custom audiences and the custom conversions because one thing that I find, especially when it gets into like marketing automation side of things, you tend to lose track of stuff over time even if you’re working on it right now, it’s very easy to forget all the specifics of it and a week or five weeks or two months down the road. How do you go about tracking those things in a way that’s going to be easy for you to come back to later?
Mojca: Yeah. I absolutely know what you’re talking about because you have different campaigns within Facebook, you have different custom conversions, different custom audiences, just a ton of different things that you need to be tracking off and you need to have a higher level approach and just a higher level view on.
First of all, what I would emphasize is to properly name your custom conversion so you don’t get lost in, for example, lead number one or lead number two, you want to name them properly. Kind of the formula that I use on Facebook when it comes to custom conversions is I describe that custom audience as much as possible. For example, if you’re using a retargeted audience, I use website visitors 180 days landing page or website visitors 180 days this blog post. I use very specific names that I always know what this is when I come in Facebook.
Same for custom conversions and I document everything in Google Docs or Spreadsheets. I also document a lot of my custom conversions especially audiences and basecamps so I have documents for each client, for different audiences, it piles up, I tell you. Just using Spreadsheets, I think that is kind of the best way to go about it just to keep track of everything and for you not to get lost in the amount of data and different audiences and custom conversions and every other assets.
Mike: Awesome. I think that’s probably a pretty good place for us to wrap up. Is there anything that you wanna add or leave the listeners with?
Mojca: Maybe just giving one advice. I know that the Facebook might look very overwhelming. When you decide that you want to start advertising, you come on Facebook and you open up your Facebook Ads Manager and there are a ton of different options that you can choose from, don’t be afraid, it’s all very manageable. Facebook is really trying to simplify the process of advertising. Just like I said, start slow, invest a couple of bucks in launching your first campaign and see where that takes you and I promise that it will be worth it.
Mike: Awesome. If people have questions for you or they wanna follow up and kind of check into what you’re working on or if they wanna have you manage their Facebook Ads, where can they find you?
Mojca: Yeah. I would love for them to write me, I have my email so mojca@superspicymedia.com. I would be more than happy to answer any questions or hesitation or to just help them with setting up their first campaign. Send me an email at mojca@superspicymedia.com or if you’re interested in my blog posts and videos that I publish, services, you can find me on superspicymedia.com and you’ll find everything there.
Mike: I also see a link here for the facebookadsacademy.com?
Mojca: Oh, correct, yeah. I have the Facebook Ads Academy. If you’re just starting out with advertising and you need someone to pretty much hold your hand and help you with launching your first campaign or if you already launched the campaign and you have a question of how to set things up or what does this mean or what do these results mean, Facebook Ads Academy is definitely a great way to start. It’s basically a community of small business owners, we just help each other out when it comes to Facebook advertising, give each other advice, comment on specific visuals or copy.
Mike: I could say from experience that looking through the Facebook Ads Manager right next to somebody else who’s supposedly using the exact same thing, sometimes the interfaces can be very different from one to the next. I remember you telling me over FemtoConf that the ads manager, they’re running like a couple dozen of them at the same time basically A/B testing between them. Your interface could very well be different from somebody else’s.
Mojca: Yeah. I actually heard that they’re running hundreds of different Facebook Ads Manager. You might have a Facebook Ads Manager version that I do not have. I used to remember FemtoConf, I think they were like three different versions of Facebook Ads but it’s just that we were working with.
Mike: Yeah. They were like six or seven people in the room which makes that even scary.
Mojca: Yeah, it was crazy.
Mike: I think that about wraps us up for the day. Mojca, thank you very much for coming on the show. I really appreciate you having you.
Mojca: Thank you so much for having me.
Mike: We will see you at MicroConf in about five weeks or so too.
Mojca: Yeah. I’m so excited. This is going to be my first time in Vegas.
Mike: Awesome. You will be there straight through Growth Edition through Start Edition.
Mojca: Oh yeah.
Mike: If anyone is there, feel free to stop by and say hi.
Mojca: Yup.
Mike: If you have a question for us, you can call it into our voicemail number at 1-888-801-96-90 or you can email to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening and we’ll see you next time.
Welcome to Startups for the Rest of Us–the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.
Mojca: I’m Mojca.
Mike: We’re here to share our experiences to help you avoid the same mistakes we’ve made. How are you doing this week?
Mojca: I’m doing very well this week.
Mike: You just got back from an extended vacation, didn’t you?
Mojca: Oh, yeah. I did. It was actually a seven-day vacation. I wish it was a little bit longer but the good thing about it is that I turned off everything. I turned off my phone, I wasn’t on my laptop, and I was completely offline, aside from my Kindle, but that was about it and it felt amazing.
Mike: I used to own a cottage up in the Adirondack Mountains up in upstate New York and it did not have electricity or running water. I noticed that when I went up there–because I just couldn’t charge my phone or anything, I just left it off–just the feeling of being that far disconnected. You couldn’t even hear the refrigerator hum because there was not a refrigerator. It was just very relaxing. I don’t know if you found something with like turning off your phone for that long.
Mojca: Yeah. I was at the beach actually and it felt so good not having my phone and not checking my notifications every two seconds. My brain started to breathe again.
Mike: Yeah. It’s almost like having a giant reset button for your brain.
Mojca: Oh, yeah. It was so good.
Mike: That’s awesome. Today I wanna have you on the show because you are a Facebook Ads Expert and you’re also an Author, a Public Speaker. You spoke in a Double Your Freelancing Conference, you spoke in a FemtoConf, you spoke in a MicroConf Europe this past year, and you’re also speaking at MicroConf in Vegas this coming Spring in about five or six weeks.
I wanted to have you on the show and have you talk a little bit about Facebook Ads because it’s something that we get asked about but I wouldn’t say that we have nearly the level of knowledge that you do so I think that you could definitely shed some light on the topic for us and for the listeners.
Mojca: Yeah. I would love to do that. Yeah.
Mike: Aside from the Facebook Ads Expert, Author, Public Speaker like leave anything out that was a major.
Mojca: Not really, just maybe an interesting story that I actually got fired from my first job.
Mike: Oh.
Mojca: Yeah. That’s how I got into the business of Facebook Ads.
Mike: I was gonna say I hope it wasn’t a Facebook Ads job that you got fired from.
Mojca: It wasn’t a Facebook Ads job, I was a copywriter at an advertising agency. It was similar but not the same. But the thing is that I started to notice that all of our clients were asking about social media—Facebook—and our agency, they weren’t interested in that. We started to drift apart and they fired me. That’s how I got into the business.
Mike: You kind of fell into it, it wasn’t like you actively sought it out and decided, “Hey, I’m gonna do this.”
Mojca: I was thinking about it for a while. I was always saying, “I’m gradually going to make that transfer or that change and gradually go from being employed to working for myself.” But then I got fired and I said, “Okay, this is my chance.”
Mike: Not everything kind of goes exactly as planned anyway. I think there’s a lot of people who listen to this show who’ve kind of just fallen into whatever it is that they got into. I don’t think that that’s necessarily uncommon but it’s interesting that you took that opportunity or took that—I don’t wanna say low point in your career—but like that native experience and turned it around into a greatly positive one.
Mojca: Exactly, yeah. Looking back now, that kick-in-the-butt was the best thing that happened to me.
Mike: Awesome. I wanted to talk to you today specifically about setting up a foundation for how you’re going to run Facebook Ads. We’ve talked a little bit about this before the show about what is it that people need to know, what common mistakes they make. I wanted to walk through what you feel is the foundational things that people need to put into place before they even start running Facebook Ads because I think it’s very easy to get wrapped up in all the things that you need to do in order to set up a Facebook Ads account but not think about the fundamental framework or structures that you need to have in place to actually manage an advertising campaign using those tools that they provided. I wanted to talk through those and just figure out what exactly it is that people need to do first.
Mojca: Yeah. You are totally right about that. I think that when a person decides to use or to start experimenting with Facebook advertising, they all just say, “Okay, I have a product to sell, what can I do now? How can I sell this product with Facebook?” But they don’t think about the other things that you need to have updated or you need to have ready to go when you start advertising.
Mike: Right. I think the first one that you had thrown out there was a lead magnet. I think this is something that most people—myself included—kind of put at the end of the list. But we’re gonna talk about that first because it’s almost like the most important thing that the have to have in place.
Mojca: Oh yeah, absolutely. I think it’s the most underestimated marketing asset when it comes to your Facebook advertising.
Mike: Let’s talk about the lead magnet itself. When you’re creating these Facebook Ads, what forms can a lead magnet take? What sorts of things should you be advertising to people in order to move them through that sales funnel using a Facebook Ad?
Mojca: Yeah. It should be something that’s very valuable and just easy to consume so you don’t want a very long ebook, let’s say, that you offer for free. You want it to be like a snackable PDF, a cheat sheet, or maybe, let’s say, a chapter of your ebook, let’s say just a free chapter, a couple of pages, something that’s easily consumable. Once they download it, they can browse through it very quickly and get the sense of your business, of your expertise, of what do you do, and so on.
Also, one good lead magnet is, for example, an email course or a webinar. Webinars do really, really well with Facebook Ads. If you, let’s say, sell services or a software and you can have a webinar on that topic explaining something your software does, or not your software but maybe just talking about your expertise and what your software, some problem that it solves, that’s a very good start. Having a webinar on that topic is a great start.
Mike: There’s two things that I kind of wanna unpack that you just said. The first one was like a full book is not a good idea. Why is that? It seems to me like the more value you’re giving them upfront, isn’t that better?
Mojca: With a lead magnet, you want that lead magnet to be very snackable. Usually, we advertise the lead magnet to someone that has visited our webpage for the first time. We want to offer them something for free but we don’t want to overwhelm them with different possibilities and we want them to get that value. Let’s say you had someone does visit your webpage and soon after, he or she sees a Facebook Ad for your lead magnet. If it’s the ebook, they won’t go through that ebook, they won’t read it through if it’s a 50 page long ebook because they don’t know you at the moment. They will download it but that lead is not going to be very qualified so you want to offer a very snackable asset like a PDF so they would go through it and they will be interested in seeing more of that.
Mike: I got it. That’s like actually a very subtle difference, I think because like an ebook for example, they might download it and according to Facebook would be a conversion but later on I guess moving them through your sales funnel, they’re gonna end up to be a poor converting prospect because they just didn’t read it.
Mojca: Exactly. I think that’s one of the aspects that a lot of marketers are forgetting about so you don’t want to just collect leads, you want to get quality leads, someone that you can convert at the end.
Mike: Excellent. It’s not even just like how much value you are supplying to them, it is the appropriate amount of value at the stage of the relationship that you’re in.
Mojca: Exactly. That’s a perfect description.
Mike: Perfect. The other thing that you said was that email courses and webinars do really well. Could you unpack that a little bit? Why is it that those do so well?
Mojca: For webinars specifically, it let’s you connect with your target audience in a totally different way. They see your face, they get to know you personally, so to speak. That’s a good connection to establish with your target audience. You want them to connect with you on a personal level because they would be easier to convert.
I’ve done this for such a long time so I have a ton of webinars and I do them very regularly. I see that change in my target audience. Once I started doing webinars, I started collecting a lot more leads because people were drawn to me and were drawn to my personality and my content and they wanted to get advice from me. That really helped with all of the other marketing aspects. The people that came to my webinars came to another webinar that I had later on and they just stuck to it. That was a really big difference, just connecting with them on a totally different level.
Mike: Does that impact the initial conversion rate or you’re really referring to the total conversion rate from first touch to end when you’re hopefully making a sale? Obviously, those two things are different but it goes back to what I just asked about delivering the appropriate amount of value based on the stage of the relationship. Is it localized or is it really like a global improvement?
Mojca: It works both ways. People are really easy to convert and come to webinars. When they see an ad for a webinar, they usually sign up very quickly and they also come to the webinar. That conversion is really, really easy.
The people that come to the webinars are more likely to purchase. That happened to me time and time again. People that actually attended and came to my webinars, they were so easy to convert at the end because we had a totally different relationship than someone that just downloaded a lead magnet and read through it and that was it.
Mike: Awesome. I think it absolutely has a much bigger factor associated with that. Anything with either advertising or demos. I found that demos for example convert really, really well just because there’s that one on one interaction, but I think even in a webinar, you can get a good sense from somebody whether or not they are selling snake oil versus actually committed to solving whatever the problem happens to be.
Mojca: That’s a good point. I worked with a lot of software companies and demos, they work amazing. We frequently have webinars that are just pretty much live demos and people sign up to that and people convert at the end. At the end of a demo, we offer let’s say, a free trial or a special price for the software and they convert really, really well.
Mike: Now that you’ve got an idea for lead magnet or you’ve gotten one developed, how do you go about promoting that on Facebook? Because that obviously lead the next step like you have to have that asset first and then once you have that, then you have to promote it whether it’s through retargeting audience or to a completely new audience. How do you go about putting it in front of people and finding the right people to do it?
Mojca: You have two different objectives that you can use when it comes to advertising lead magnet. There’s this thing called a Lead Ad, Facebook calls it a Lead Ad. It’s basically a type of ad that lets a user download your lead magnets, PDF preferably, in just a couple of clicks. Facebook collects your email and basically kind of passes it on to you.
The other objective that you can use is more like a traditional ad that is called website conversions. You can choose whatever feels good for you. Lead Ads are very easy to set up so you don’t even need a landing page, you just need that lead magnet and Facebook will take care of the rest.
On the other hand, you have the traditional ads called website conversions. Per my experience, website conversions, when it comes to Lead Ads, tend to work a little bit better although you still need a landing page. The set up takes a little bit longer but it converts a lot better and the leads are more qualified. But anyone listening to this podcast, I do recommend experimenting with both objectives and see what works for you and what type of leads you get from each of these objectives.
Mike: I understand in general why it’s best practice to experiment with those things. But what sorts of things have you seen when you go through and start doing the experimentation? Because you’ve said that the website conversions tend to work better even though the Facebook Lead Ads are easier to set up. What have you seen as a direct result of the experiments?
Mojca: With traditional ads, with website conversions, the cost per lead was a bit higher but the quality of those leads was definitely better than the leads that we collected through Lead Ads. Maybe that has something to do with just how easy it is to collect leads with Lead Ads so a lot of people just collect those two buttons and download the lead magnet and you have their email. Just people really going to the landing page where you have your lead magnet described for example, that’s a bit harder to do. I think, that’s where most quality leads come from.
Mike: Now that we’ve kind of gotten through the lead magnet itself and talk a little bit about how to promote them inside of Facebook, the next step is taking a look at the email sequences that you need to setup because obviously, once somebody has downloaded the lead magnet, you want to be able to email them. Obviously, your Facebook is gathering their email address. Then the next step is to put them in some sort of email campaign. What sorts of things should people pay attention to there?
Mojca: When it comes to email sequences, I think that like you said, this is definitely one of the things that you do need to have set up before you start advertising because once a person downloads the lead magnet, you want to do something with that lead, not just have it on your email list and that’s it.
Usually, I recommend doing five to seven emails long email sequences that talk about a specific topic that has something to do with the product or a software or a service that you’re going to pitch at the end. Each email sequence that you write has to have some sort of an outcome. You want to reach or you want to achieve a goal at the end. You definitely want to pitch that goal or to pitch something at the end whether that is an ebook, a service, a software.
Mike: Somebody just came to mind as you were talking about pitching the product or service in that email sequence, one thing that I was wondering about was going back to the lead magnets, will a good lead magnet be a video versus a webinar or a demo? Because it almost seems like that’s a way to automate that piece of it without actually being there.
I’ve seen a lot of webinar like automated webinar things and they tend to look very scammy. I’m curious to know whether just like a video hosted it like YouTube, or Wistia, or Vimeo or anything like that. Is that a decent lead magnet or not?
Mojca: I have a love-hate relationship with automated webinars. Like you said, they do look scammy and people recognize that and people tend to move away from that kind of content. What I would recommend is, like you said video demos that aren’t kind of gift wrapped into, “Wow, this is a live demo that we’re doing and everyone knows that it’s not a live demo.” Maybe just say, unpack that into, “This is a video demo that has been pre-recorded, etc., etc.” If you pack it like that and offer video content as a lead magnet, that’s definitely a very good way to go about it especially because video consumption is on the rise and people are watching videos regularly so just doing that is definitely a great way to go.
Mike: I was just trying to think about how to combine the two things without actually being present because automated things, if people are working on product themselves, it will be in present for webinar is not always the easiest thing in the world. Video’s kind of the next best but you’re absolutely right. Everytime I go to one of those automated webinars where they tried to pitch you do something live, it really comes across the wrong way just because you’re using that.
Mojca: Yeah. I think it has an impact on your brand as well. People will look at you in a different way once you do that. Like I said, if I do any demos or anything like that, I pack it in a different way. I don’t say, “Yeah, this is the live demo that we’re doing.” Everyone knows that it’s not. But I just pack it, “Here’s a video con, here’s a video over demo.” I’m not trying to say that it’s live or anything. I’d want to kind of communicate that integrity.
Mike: Okay. Kind of going back to the email sequences, you said pitch your products or your service at the end. Did you mean by the end of the entire series or was there something specific, should your goal for the entire email sequence of five to seven emails be the same at the end of each email or is it wise to kind of divide it up and have different mini goals or something like that along the way? I’m not sure how to get too complicated with it, that’s really what I’m saying.
Mojca: Yeah. I don’t wanna get too complicated with it as well. I think it depends on how well structured your funnels are. Some people have the same goals for every email sequences and some people have mini goals. Some people have two different funnels and two different email sequences for two different target audiences so it all depends on what setup you have.
If you’re just starting out, I do recommend just making it easy on yourself and just have one goal. As your business gets more structured, you can definitely work your way down and just kind of create different funnels and work your way from there.
Mike: I think that’s the best advice; don’t create more complexity just for the sake of creating complexity.
Mojca: Yeah. I did that, I did that once and I regret it.
Mike: I think we all do.
Mojca: My Drip is going crazy with the different funnels and it’s just too complicated and whenever I login, I just get so stressed. It’s my own downfall too.
Mike: Now that we’ve got the lead magnet in place, we’ve got the email sequence set up, what’s the next step? It seems to me like you need to dive into Facebook at some point along the way if you’re gonna get into this Facebook Ads. What’s the first step in setting up Facebook Ads?
Mojca: The absolute first step that you should do is implement a Facebook Pixel to your webpage so you can retarget anyone that visits your webpage. You want to do that as soon as possible so you are collecting all of that data before you launch your first campaign. That is one step that a lot of people just forget to take once they are ready to implement their first campaign they’re like, “Woah, how am I going to retarget people?” The first thing, the absolute first thing is to implement a Facebook Pixel to your webpage and it’s a two minute task so it shouldn’t take you too long and it just has a lot of benefits to it.
Mike: You can just install this on your website even if you are not running the Facebook Ads, you can always just put it there and then go off like create the lead magnet and then email sequence and then come back to this.
Mojca: Oh yeah, absolutely. You can do it right away and maybe come back to it after two months. You don’t need to be creating the campaign immediately after you implement your Facebook Pixel. Actually, the preferred way is not to launch a campaign, especially not a retargeting campaign, immediately after implementing a Facebook Pixel.
Mike: Why is that?
Mojca: The most effective campaign to start with is a retargeted campaign where you are retargeting for example people that are visiting your web page so people that already know what you do. Without a Facebook Pixel implemented to your site and without all of that data collected, you won’t be able to retarget people so you would be stuck with interest targeting and targeting based on different interests and behaviors which is a good approach but definitely not as effective as retargeting.
Mike: Got it. Once you’ve got the Facebook Pixel in place, is there anything especially need to pay attention to when you’re implementing the Facebook Pixel or is it just like you install this one little snippet and everything takes care of itself?
Mojca: You install this one little snippet but you have to install it in the right place.
Mike: Oh, okay.
Mojca: Yeah.
Mike: You really have to follow their guidelines of exactly where it needs to go?
Mojca: Yeah. You need to put it in the head section of your webpage. A lot of businesses do a mistake and implement it into a body section. For example, that Facebook Pixel triggers just on their homepage, not on their whole webpage. Just be careful where you implement it. Facebook has really clear instructions on how to do that. It’s really, really easy. You just have to implement it once in the head section and you’re good to go.
Mike: Awesome. Now that we’ve got the Facebook Pixel in place, what’s the next step? How do you get started setting up who’s gonna get targeted? Assuming the Facebook has been there a little while–should you start with retargeting? Is there a different approach that you should use?
Mojca: If you have your Facebook Pixel implemented for a while, let’s say for a month and it has collected a lot of data from your website visitors, you definitely want to implement a custom audience. Custom audiences is a fancy word of you uploading your email list or just connecting your Facebook Pixel to custom audiences and just build up your retargeted audience, so to speak. That’s definitely the first thing that you should do because custom audiences take a little while to properly populate, it doesn’t take a day but it does take an hour so you want to take care of that before you launch your first campaign.
Mike: This is one of the situations were even though you wanna get it done right away, you wanna be able to allocate that hour to go over and get this taken care of, it could very well take you two, three, five hours, depending on how long it takes Facebook to process things and put things together for you.
Mojca: Yeah. You can actually, as soon as you implement a Facebook Pixel, you can actually create your first custom audience of just retargeted audience of your website visitors, you can create it immediately. Even if you come back after a month, that audience will still grow and regularly update day after day. You don’t need to wait for a month and then create a custom audience but you can do it right away and just wait for it to populate properly even if it takes a month.
Mike: Got it. You uploaded, you set up this custom audience, you recommend getting started with the retargeting audience first.
Mojca: Yeah. Correct.
Mike: After that, now you’ve got this retargeting audience set up, now what?
Mojca: Now, what you wanna do is because you want to start retargeting and you want to start retargeting people with a lead magnet, you need to let Facebook know somehow what a conversion is.
Setting up a custom conversions is the right thing to do as a next step. You have a custom conversions tab in your Facebook Ads Manager. Basically what you need to set up is you need to let Facebook know what your Thank You page is. For example for this lead magnet, this is the Thank You page and you connect Facebook to that Thank You page. Anytime someone lands on that Thank You page, the Facebook Pixel gets triggered and Facebook recognizes that as a conversion.
When you set up custom conversions, you will be able to optimize for those conversions. For example, you will create a campaign that’s called website conversions and you’ll say, “Okay, I want this website conversion.” Facebook will optimize everything properly. When someone downloads or converts, Facebook will analyze that person and then target similar people to that person because they are able to optimize based on conversions because you created that custom conversions in the first place.
Mike: Now, I know that you can go in there and you override that and just say, “I’m gonna manage this based on behaviors or interests or things like that.” Is that something that you would recommend people do or do you generally recommend that people just let Facebook analyze that data itself? Because I think the concern that people have—myself included—is that what an incentive does Facebook have to make them convert for you because the more that they put those advertisements out, the more clicks that they get even if it doesn’t necessarily convert. It kind of makes you pay more. It’s almost like not in their best interest to drive the greatest returns on that. What kinds of things do you have to comment on about that?
Mojca: When it comes to retargeting people, especially if I work with smaller audiences, I tend not to narrow down based on interests or behaviors, it will impact the results if I narrow it down especially if an audience is already really, really small. If an audience is a little bit bigger, I do experiment with narrowing that down. That said, as you said, Facebook has its own ways of analyzing who to show your ad to. Based on my experience, that works really, really well. I mean, not only would generate a lot of leads for a very effective price, those leads are actually of good quality as well.
That said, if you do work with interest targeting and if you’re using interest targeting as your targeting approach, or behavioral targeting for that matter, you do want to narrow it down based on different behaviors so you don’t want to, for example, target two million people and let Facebook do its job because they won’t attract the most quality audience, to be honest.
Mike: I guess one of the ballpark ranges of, in terms of size, when should you decide to start tweaking based on behaviors or interests and things like that versus when should you just let Facebook do its job. Is there guidelines around like different sizes?
Mojca: If you have, let’s say, a retargeted audience of 100,000 people, I would definitely start playing with narrowing that down.
Mike: Got it. Anything less than that, maybe you could probably make a judgement call around 50k or so but less than that is fine just let them retarget.
Mojca: Yeah, yeah, yeah. It really depends on the service that you’re offering of yourself or whatever. It’s not really the size of the audience but the ballpark figure would be around 100,000 people. You can start playing around with it with a little smaller audience, like you said 50k. That said, what I do recommend is just keeping your eye on that campaign in case you noticed that, “Okay, that approach definitely isn’t working.”
Mike: Okay. Again, all of this stuff that we’ve talked about just in the past couple of minutes is really for a custom audience built around retargeting?
Mojca: Correct. Yeah. Because like I said, retargeting is the best way to start with Facebook Ads.
Mike: Okay. Now that the we’ve got the custom audience based on that retargeting campaign, we’ve got the custom conversion set up for our Thank You page, is there anything else that we really need to pay attention to or does that really put us in a good position to start optimizing from there?
Mojca: That definitely puts you in a good position. You will have all the assets in place to successfully launch your first campaign with Facebook Ads.
Mike: The other one that I’ve heard people talk about in addition to retargeting audiences is look alike audiences. Can you talk a little bit about specifically what those are and how those play into people that you’re retargeting from your website?
Mojca: For sure. Look alike audiences are basically cold audiences that are created on top of some data that Facebook has or basically the data that you provide to Facebook. For example, let’s say you have collected a lot of data on your website visitors, you have 1,000 website visitors connected to your Facebook Ad account. But you do want to experiment with cold audiences but you’re not sure what interests to use, what behavioral targeting to do, you’re not exactly sure how to go about that. But you do know that your website visitors are very qualified.
What you can do is create a lookalike audience based on your website visitors. What Facebook will do is they will analyze your website visitors and they will analyze their behaviors, their interests, their demographic data, where are they coming from, how old are they, and they will create a brand new audience based on that information. A lookalike audience is an audience to feel that, don’t know who you are, it’s a cold audience but it’s built upon, for example, website visitors. It’s built up on a custom audience.
Mike: Got it. They work together not necessarily directly opposing from one and each other.
Mojca: Yeah. Correct, correct.
Mike: Okay. Once you’ve got all of these fundamentals in place, at this point you obviously can go and you need to start optimizing things but I think the other approach that I can think of here is to go back and start almost like creating a sequence where people are moving through a sales funnel. Does that really not makes sense in this case where you’re moving them from one Facebook conversion to the next? Is it the point to really just get their contact information or email address and put them on your newsletter?
Mojca: Creating different funnels definitely makes a lot of sense but I also wanna come back to what we previously talked about. You don’t want to make things too complicated for yourself. If you already have a funnel that starts let’s say with the lead magnet and then with the demo and then gradually ends up with a pitch, you definitely want to implement that to your Facebook Ads. But if you don’t have that funnel already developed, you want to make things as easy for yourself as possible and maybe just use one lead magnet. Once they go through an email sequence and at the end kind of connect Facebook to your email sequence again and start pitching them when they enter the pitch sequence in your email sequence as well.
Mike: Got it. That makes a lot of sense. One of the things I did before this episode is I went on on Twitter and asked people if they had any questions for you. I’m gonna go through a couple of questions here and just kind of rapid fire through them and let you kind of answer them.
The first one is from Jamie Laurence. He said, “Is it morally wrong to use Facebook Ads? It feeds the money machine and makes us culpable in data collection.” I think what he’s really referring to is the new information kind of coming out about like how much data Facebook is actually collecting on people, which I think people knew but I don’t think they had ever looked at it before, had a way to look at it.
Mojca: Yeah. I think that’s a fantastic question and it’s definitely something that we need to be talking about. I talk about it with my clients, I talk about it with my students, I talk about it with everyone that wants to talk about it. I wouldn’t exactly say that it makes us culpable because the data collection that we’ve seen was a different one, it was a misuse of data, it was a criminal offense. It’s not similar to the data collection or targeting options that you see on Facebook. There are different nuances to it. That said, what I do think is that you have to decide on your own.
When you do Facebook advertising, the truth to it all is that you will be investing in Facebook. You will be investing in that business funnel, you will be investing in data collection as well. If you feel fine with that, by all means, just continue advertising and just use Facebook advertising as it is intended for you to use it. If not, just not don’t do Facebook anymore, don’t do Facebook advertisements anymore.
To be honest, I did have a couple of clients that left for that specific reason. With the upcoming news, they just decided that they don’t want to invest on Facebook Ads anymore, they don’t want to support that and I support their decision. I know where they’re coming from so I’m fine with it. That said, I do think people will still advertise on Facebook. But coming back to the idea, what I do recommend is just using Facebook advertising as it was intended for you to use it.
Mike: Yeah. I saw an interesting–it was a meme but it was a picture about the US government going in and starting to look at Facebook and how they’d announce that they were gonna do an investigation. On the page itself where they said they were investigating them, it said, it had a Share this through Facebook link.
Mojca: They probably had a Facebook Pixel implemented to their page as well.
Mike. I’m sure that they did.
Moving on, Jeremy asked, “Can Facebook Ads be visual rather than text based? My product is visual and I’d rather show it to people than tell them about it.”
Mojca: Oh, yeah, absolutely. I do support any visual based ads. What I do recommend is—I’m not sure about the product that he was referring to—if you have an opportunity to use video to show off your product, by all means, do that. It’s a similar approach that ecommerce businesses have been using all that time. They are really, really visual based, they have a lot of images or videos of their product. If you have a product that’s similar to that, you can, by all means, go ahead and use the same approach. Like I said, coming back, I do recommend using video in that case, it brings the best results.
Mike: With the video, this kind of goes into how you structure your Facebook Ads, maybe we touched on that for a couple of minutes, but obviously, there’s lots of different ways that you could advertise on Facebook. One of them is to have a video and you could also have like long form copy, short form copy. Could you just kind of touch very briefly on each of those and what your experience has been with them because I don’t necessarily think that we’ve talked about the specifics of what you’re going to put in your ad once it’s out there.
Mojca: Yeah, for sure. First of all, referring to long form copy, what I recently discovered through multiple A/B tests that I’ve done with all of my clients is that long form copy works really, really well, especially if you are advertising a software or a service business, long form copy tends to work really, really well.
Videos as well, along with long form copy. For example, if I’m working with a client that is trying to promote their software, we use long form copy so it’s a very long sales page like copy along with a video of them. It tends to work really well. But for other businesses, I have a couple of ecommerce companies that I worked with this as well, we don’t use long form copy but what we do use is a lot of images of their products.
But if you have a software company, if you offer services, what I do recommend is A/B testing with copy. Launch an ad, one ad with short copy, same visual, one ad using a short copy, one ad using a long copy. I’m definitely taking a bet on that and I think that long form copy will prevail on that case.
Mike: Awesome. The next question comes from Ed and he asked, “Will Facebook tracking effectiveness drop as more people use ad blockers?”
Mojca: Yeah. I love that question. They have been actually saying this for years now. For years, my clients have been coming to me saying, “More and more people are using ad blockers, is effectiveness going to drop?” Actually, we haven’t seen a bigger drop since I started talking about this with my clients two years ago. I think maybe that that drop is gradual, but to be honest, right now I would say that it’s not going to affect Facebook advertising as we might think that it’s going to affect it.
Mike: Our next question comes from [Kelso] and he says, “Do you have any case studies that you can point us to for successful ad campaigns? The second question he says, “How deep should you go with segmentation?” Do you have a couple of things we could link up on the show notes?
Mojca: I’m actually working on them but you will be able to find them on my webpage, definitely.
Mike: Awesome.
Mojca: A couple of results, with Facebook we’ve seen—I’ve worked with an ecommerce company—and we’ve seen up to 400% ROI. That was actually a standard especially when we did retargeting, we had 400% ROI. Or for example working with software companies, one software company in particular, we were paying $20 for an acquisition where lifetime value of a customer was $500 or right now I’m working with another software company and we are paying $50 for a conversion and they’re paying on Google $500 for the same conversions. It’s been incredibly effective.
But as far as segmentation goes, I definitely recommend as much segmentation as possible. That said, you always need to be careful of potential reach, you can segment all you want but if, let’s say, a specific custom audience that you really segmented out, the potential reach is only 20 people, that will not be effective. Be careful of that.
Also you need to keep in mind that the more segmentation that you have, the more work you’ll have with your Facebook Ad campaigns so you really need to decide if you want to do that or not. Segmentation is incredibly effective when it comes to Facebook Ads, like I said, it’s a tricky thing to do especially if you’re working with a bit smaller audiences, but if you have a lot of data collected already, by all means, segment as much as you want, I really recommend it.
Mike: This kind of brings me to a couple of questions. I kind of specifically had like when you are looking at what your ad spend is gonna be and what your minimum reach are, are there kind of guidelines that you would follow? Say make sure that you’re spending at least this much on a daily or weekly basis and make sure that your reach is at least this because otherwise, it’s probably not worth your time. Is there some quick calculation you could do based on “performance metrics” or average conversions kind of going through those Facebook Ads to figure out like if its 20,000 people, you have to have a conversion rate of at least 10% in order for it to be worth it if your cost per good sold is X. Is there anything like that that you can go and point to?
Mojca: Everyone asked me about that and that’s a very, very hard question to answer because for example, I’ve worked with multiple software businesses and they are so different when it comes to conversion rate and ROIs. With each and every customer, and with each and every client, I have to figure out a way of how to properly measure that and how to properly determine how big of an investment we need in order for our Facebook Ads to be effective. If you’re starting with Facebook Ads right now, if you haven’t done this before, I do recommend starting it slow. Don’t say, “Oh well, we have a well established business and we can spend $10,000 a day on Facebook Ads. Let’s just do that.”
Even if right now you have a lot of assets that you can promote, you have the money to do that, I definitely recommend starting slow with investing $50 a day or $100 a day and just kind of seeing what do you can do with that money and establishing where the ROI is coming from and what you need to do and what kind of cost per lead magnet download you can get for that kind of money. Just filling your way through that and then investing more and more once you get the hang of it.
If you do have a small business, so to speak, for example you’re just starting out, you just launched your new product, it hasn’t generated any revenue yet but you do want to experiment with lead generation with Facebook advertising, I recommend starting with $10-$20 a day and just seeing how that goes.
Facebook offers a lot of different tracking options, you can really track your ROI, you can input for example for each lead or for each conversion, you can connect that conversion to a specific value and Facebook will track ROI. It all comes down to your setup and so on.
Mike: Thanks. That’s extremely helpful because I think that the ballpark numbers that people have, people just don’t even really know where to start in terms of how much to spend, I mean is it $5, $10, $20. I think that the guideline of $10-$20 a day, at least to start of with especially if you’re just starting out and you just have a new business or product that you’re pushing out there, it sounds totally reasonable and I think within the reach of most people. We hear people talk about like you just mentioned, $10,000 a day, some products are just not even gonna make that in a year. It’s just not realistic.
Mojca: Yeah, yeah.
Mike: I think the last question I had was how do you go about managing or documenting your custom audiences and the custom conversions because one thing that I find, especially when it gets into like marketing automation side of things, you tend to lose track of stuff over time even if you’re working on it right now, it’s very easy to forget all the specifics of it and a week or five weeks or two months down the road. How do you go about tracking those things in a way that’s going to be easy for you to come back to later?
Mojca: Yeah. I absolutely know what you’re talking about because you have different campaigns within Facebook, you have different custom conversions, different custom audiences, just a ton of different things that you need to be tracking off and you need to have a higher level approach and just a higher level view on.
First of all, what I would emphasize is to properly name your custom conversion so you don’t get lost in, for example, lead number one or lead number two, you want to name them properly. Kind of the formula that I use on Facebook when it comes to custom conversions is I describe that custom audience as much as possible. For example, if you’re using a retargeted audience, I use website visitors 180 days landing page or website visitors 180 days this blog post. I use very specific names that I always know what this is when I come in Facebook.
Same for custom conversions and I document everything in Google Docs or Spreadsheets. I also document a lot of my custom conversions especially audiences and basecamps so I have documents for each client, for different audiences, it piles up, I tell you. Just using Spreadsheets, I think that is kind of the best way to go about it just to keep track of everything and for you not to get lost in the amount of data and different audiences and custom conversions and every other assets.
Mike: Awesome. I think that’s probably a pretty good place for us to wrap up. Is there anything that you wanna add or leave the listeners with?
Mojca: Maybe just giving one advice. I know that the Facebook might look very overwhelming. When you decide that you want to start advertising, you come on Facebook and you open up your Facebook Ads Manager and there are a ton of different options that you can choose from, don’t be afraid, it’s all very manageable. Facebook is really trying to simplify the process of advertising. Just like I said, start slow, invest a couple of bucks in launching your first campaign and see where that takes you and I promise that it will be worth it.
Mike: Awesome. If people have questions for you or they wanna follow up and kind of check into what you’re working on or if they wanna have you manage their Facebook Ads, where can they find you?
Mojca: Yeah. I would love for them to write me, I have my email so mojca@superspicymedia.com. I would be more than happy to answer any questions or hesitation or to just help them with setting up their first campaign. Send me an email at mojca@superspicymedia.com or if you’re interested in my blog posts and videos that I publish, services, you can find me on superspicymedia.com and you’ll find everything there.
Mike: I also see a link here for the facebookadsacademy.com?
Mojca: Oh, correct, yeah. I have the Facebook Ads Academy. If you’re just starting out with advertising and you need someone to pretty much hold your hand and help you with launching your first campaign or if you already launched the campaign and you have a question of how to set things up or what does this mean or what do these results mean, Facebook Ads Academy is definitely a great way to start. It’s basically a community of small business owners, we just help each other out when it comes to Facebook advertising, give each other advice, comment on specific visuals or copy.
Mike: I could say from experience that looking through the Facebook Ads Manager right next to somebody else who’s supposedly using the exact same thing, sometimes the interfaces can be very different from one to the next. I remember you telling me over FemtoConf that the ads manager, they’re running like a couple dozen of them at the same time basically A/B testing between them. Your interface could very well be different from somebody else’s.
Mojca: Yeah. I actually heard that they’re running hundreds of different Facebook Ads Manager. You might have a Facebook Ads Manager version that I do not have. I used to remember FemtoConf, I think they were like three different versions of Facebook Ads but it’s just that we were working with.
Mike: Yeah. They were like six or seven people in the room which makes that even scary.
Mojca: Yeah, it was crazy.
Mike: I think that about wraps us up for the day. Mojca, thank you very much for coming on the show. I really appreciate you having you.
Mojca: Thank you so much for having me.
Mike: We will see you at MicroConf in about five weeks or so too.
Mojca: Yeah. I’m so excited. This is going to be my first time in Vegas.
Mike: Awesome. You will be there straight through Growth Edition through Start Edition.
Mojca: Oh yeah.
Mike: If anyone is there, feel free to stop by and say hi.
Mojca: Yup.
Mike: If you have a question for us, you can call it into our voicemail number at 1-888-801-96-90 or you can email to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening and we’ll see you next time.
Episode 386 | Balancing Feature Development with Marketing, the Cost of Technical Debt, and More Listener Questions
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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike answer a number of listener questions. The topics include balancing development and marketing, overcoming hesitations about partnering, and the costs of technical debt.
Items mentioned in this episode:
Rob: In this episode of Startups for the Rest of Us, Mike and I talk about balancing feature development with marketing, the cost of technical debt, and answer more listener questions. This is Startups for the Rest of Us Episode 386.
Welcome to Startups for the Rest of Us–the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Rob.
Mike: I have the plague.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. You were sick all weekend?
Mike: Yeah. My eldest son got sick the last Wednesday, I think it was. It was like Wednesday and Thursday and we sent him back to school on Friday. Then my wife got sick between Friday and Saturday and then I got sick between Saturday and Sunday. It’s been a rough week to say the least.
Rob: Yeah. That’s brutal. Being sick just tears you up, means you can’t get anything done, especially when you don’t have vacation time, you don’t have to paid time off and you’re trying to drive a business forward, it’s like every hour is precious.
Mike: Yeah. Fortunately for us, it was kind of over the weekend but still we’re recording now, we don’t usually record till Thursday but today’s Monday and after this podcast episode, I’m probably gonna go to bed.
Rob: Right, right. Yeah. Today, we’re actually continuing kind of a continuation of last week’s episode. I had picked out several questions last week that you and I were gonna go through and answer and we only got through a couple of them because the GDPR conversation was so extensive. I think that was a good thing. I think we went in depth and gave ideas and feedback but it meant that we had this big block of unanswered questions and I wanted to keep going with them.
Now we have a few voicemails and some others today. But before we do that, I want to tell you, I know I haven’t talked about Drip features in a while but I’m pretty excited about this upcoming feature. We’ve been working on it for–I’m trying to think–it’s gotta have to be about four months now so it’s one of the larger features we’ve embarked on but it’s a visual email builder.
Mike: Oh, nice. What’s that involve?
Rob: A lot of stuff. Yeah, you can imagine not only the frontend which is obviously a lot of dynamic stuff, a lot of Javascript and pointing and clicking and moving things around the screen but then taking something that is essentially JSON and translating into the table-based email render to HTML is a challenge.
We found some AltSize and trade secret workarounds that we found, we’ve really done a lot of research and I think I’ve done a good job with it. But what I’ve heard from folks who have built visual email builders is building the visual portion of it is one project and it will takes six months or nine months, depending on how many […] we have on it and how good they are. Then just doing the table-based rendering and getting all of that to work and working all the clients is at whole separate project. It can take as long as building the actual visual builder. This is why a lot of upstart ESPs don’t build them because the time investment is so extensive.
Mike: When you say rendering the stuff and the clients–I understand what you mean by the differences between them–but when you go back to the visual email builder, what advantages does that have over what Drip does now?
Rob: Right. Today, Drip just has a nice little WYSIWYG text editor and I’m still gonna use that. I never use visual email builders because I like the personal interaction or it just feels more like you’re getting a plain-text email when you send using our standard plain-text template. This is how I’ve always recommended doing it. I believe the conversation rates are higher when you do that.
However, there are a few industries where they have done tests–so they’ve done tests across many industries in terms of visual email with a lot of images and table-based layout, two columns and this and that versus just something that kind of looks like a plain-text email, much like we send out to a MicroConf list, or I send out to my blogs Software by Rob list, they tend to be more personal. It’s from Rob Walling, Founder, it looks like he’s actually typing it to you. But there are few industries—ecommerce is one and travel is another—where having back these more exotic layouts and emails can and will convert better.
Since we do have a large ecommerce contingent and since we’ve been focusing on commerce-based businesses, people who are selling things, we have found a time to break ground on a visual builder. It allows you to do the things where you see the fancy, neat template, you can just insert your images and have that layout. It’s not something I’m gonna recommend for everybody but there are instances and match your converts better.
Mike: Got it. Kind of like if you go over to MailChimp for example, they’ve got like 30 or 50 different templates you can choose from and okay, that makes sense.
Rob: Exactly.
Mike: That makes sense.
Rob: Right. We won’t have 30 or 50 templates to start with but obviously that’s a direction that you’ll wind up going and it’s become table stakes. Again, in certain industries if you’re doing ecommerce and you’re working with companies using let’s say a platform like Shopify, BigCommerce, or WooCommerce, or if they have their own custom solution for ecommerce, they tend to want to send emails with a lot of images and not just to frustrate top to bottom flow where it’s image-text, image-text, you wanna have things that just look nicer than that.
Mike: Yeah. Things that come to mind for that are things like Amazon, Newegg, or ThinkGeek, all those, it’s exactly the same. I totally get what you’re saying where that’s going, but it totally makes sense.
Rob: Yup. The reason I’m excited about it is because I feel much like we did with workflows, we went back to the first principles and said, “What did everyone else do wrong? What do we hate about builders? How can we do this differently?” It isn’t just look at what everyone did and copy the best features, just like we’re doing things that are different than anyone else. There are obviously gonna be commonalities. There’s stuff on the left that you’re text and your image block and your divider and whatever, then there’s the email on the right. That’s common stuff but there’s certain paradigms that we use that I think are superior and gonna make for a better user experience.
The team has been working hard on it and everytime I see it down the road, I’m like, “Man, this is super cool, actually. I wanna use this even though I don’t really…” Like I said, I don’t use other visual builders as a rule when I’m writing my emails because I’ve always liked the more plain-text feel.
Mike: Awesome. Let’s dive right into the episode and they’ve got a couple of questions outlined here. Let’s get started on this.
Rob: For sure. Our first one is a voicemail and it’s about how to balance feature development and marketing specifically for an IOS app. But let’s hear the question and we can figure out what form we wanna answer it.
Steven: Hi Mike and Rob. This is Steven Johnson with […] Plus, an iOS and Mac app for hikers. My website is […]studios.com. I have a question about how you work […] user feedback. I’ve been getting a lot of feedback about my app on the Apple Watch, it’s still like I’m missing out on some opportunities as well as on just keeping up with where the market’s going.
However, right now I’ve really been prioritizing a lot of marketing efforts, working on conversion rates, lowering churn, […] partnerships with business development and […] by knowing […] you talk a lot about having more marketing always speeds out features and I completely agree with that. I’m just trying to figure out how do I kind of balance these two priorities and knowing how to balance user requests that come in, especially one that feel like the market’s making changes and I feel like am I missing out on something, maybe I am and maybe I’m not, but I know that there’s opportunities that I’m not capturing with my marketing, I know there’s conversion opportunities as well as churn that I need to work on. I’m just curious about your thoughts on that. Thanks for the show. Love what you guys do. Thanks.
Mike: I think this is an interesting question mainly because it’s an iOS and Mac app but there’s also the recurring annual subscription from productivity. I think the prices–there is a free plan–but then they range from $20 a year up to $80 a year which is of around what, $5-$8 a month, something along those lines. I think that the challenge here is identifying why that churn happens. Is it legitimately because people are churning out and they’re no longer using it or is it just they find that the app doesn’t help them nearly as much as they thought it would? I think it’d be easy to assume that, “Oh, you should be doing this.” Or, “You should be implementing that feature.” But I think I might dive a little bit more into the churn itself and start ask a lot more detailed questions about why the people aren’t using that.
My concerns/fear here would be that what you’re offering people is conceptually what they want but either the implementation itself is not really what they’re looking for or it doesn’t really quite match up with what the value proposition they were sold on is and it could turn out to be that somebody tries one app and they think that it’s gonna work and once they get out of the field and they’re using it, it sort of works or does most of what they want but it’s not quite enough so they just decide to switch and use something else. Maybe look at your performance metrics or your usability metrics to see like are people actually using it after three or four months in or is it that they’ve paid for and it was a low enough price point that they said, “Well, I paid $50 for this and it’s not a big deal so I’ll just try this other thing over here for another $50.”
As I said, the fear/concern that I would have is something that people use and it may just not be able to deliver on the promise. It’s not to say that you can never deliver on that promise. The fear that I have is it even possible to do what it is that they really want. I don’t know the answer to that, you have to ask people to find out. But as you said, the other component is like do you invest more on the marketing side and try and ramp it up or do you drill in and start trying to fix those things and add more features?
I think the first place to start to find out why people are churning out and what the fundamental issue is there and from there look back and say is it important enough for you to fix? The reason I say that is because there’s a question for road map and what is the most important to you, not roadmap, runway is more it than anything else, are you able to make ends meet with the app the way it is or are you chewing through runway and sort of losing money on it as you’re going along? In that case, you need to lean more towards scaling things up and then fixing things versus being able to make ends meet on a regular basis and you don’t have to worry about it as much. At that point, you can dig in and start fixing things in the app. That’s probably the place that I would start. Rob, I’m sure you have some thoughts on this as well.
Rob: Yeah. This is the age-old question. I think it’s a really good one to think about. I think in general, as developers, we think features are the answer, and in general, they are not. Not to say, all at all times because in certain markets, in certain niches, it really will make a big difference like Drip launching workflows was game changing for us, it doubled our month over month growth. It can happen.
But so many of the little features that are constantly being requested, if you have thousands of users you’re gonna get 50 or 100 feature requests a month and most of them you need to not build. Not only to keep the product simple enough that it doesn’t become bloated, but because you just don’t have the time to build them all. The caller is so much closer to his business than we are so it’s hard for me to make a recommendation to him, but my recommendation in general would be stir away from the mindset that I just need this one more feature to do this thing, unless everyone’s requesting it.
There comes a certain point where 10% of your feature requests are for the exact same feature. At that point, that’s when we break down–in the early days, we build a lot more now, we have a team of 18 developers or whatever, but in the early days when we were super cash and resource trapped, it was pretty much no by default and yes to these highly focused things that we knew were gonna move the needle. That’s how I balance it.
I think that the caller’s approach to doing joint ventures and focusing on marketing is genius. That’s exactly what I would be doing because the more marketing you do, assuming it’s effective, the more revenue you get, and that revenue will allow you to then hire a contractor in essence or perhaps the first time employee, how ever you wanna work it. But hire a developer that you can supervise because that will then, I should take one step back first, first person I would hire is a part-time VA to handle all your support, if you’re still handling that, because that will free up.
Then start thinking about hiring someone to write the code and this is the part that developers always struggle with because no one “is going to write the code as well as I do.” However, if you can free up 12-30 hours of your time in a week and features are still moving forward and you have some budget to pay someone, it can be game changing for your business and that frees you up to focus on really moving the needle.
I think marketing in the early days is such a big deal because you need to get the revenue to allow yourself to start stepping away from certain roles that while you may enjoy doing them are probably in the early days are less effective and what more if the needle is matched.
Thanks for the question. I hope that was helpful. Our next question is about overcoming hesitations about partnerships to move the business forward.
Joshua: Hi Mike and Rob. This is Joshua from [Perspexa Labs]. First, thanks so much to this podcast. Every episode is invaluable. My question is this, how do I overcome my hesitancy of partnering with someone to move the business forward?
For context, I run a B2B SaaS company that offers monthly subs in the range of 100-350 a month, and we’ve plateaued about $2,500 in MRR I co-founded the business with an office colleague but I just realized circumstances he really isn’t able to participate materially in the business anymore and our product is solid at this point but I know we need to move the needle and sell the marketing in a big way. Try as I might, I just can’t seem to crack that nut.
I know that finding the right person to bring onboard will probably do wonders and turn us into a vital business but on a do-it-yourself-er and I just have trouble, one, convince myself that I ought to do this, and two, coming up with the vital way to achieve it. Any advice for effectively a solopreneur who doesn’t wanna be stuck in a half business for forever? Thanks so much for the both of you. Everyone, go leave a review to this podcast on iTunes. Thanks guys. Bye.
Rob: Joshua was kind enough to also send us an email with a bit more background and he said, “The main product outreach is at [perspexalabs.com], we’ve got a core group of customers and service businesses like pest control and electricity and we’ll soon be getting into healthcare providers because our revenue is only $2,500 a month with margins of around 70%. It’s not enough yet to pay salaries. I’m guessing that bringing someone onboard will probably need to be an equity arrangement which I’d be fine with.
With regards to my own efforts to sales and marketing I’ve gone to the Traction book and tried several different approaches including online ads, cold-calls, cold-email outreach and attended a very targeted trade show. That really hasn’t generated fruit as nearly all of our current customers are referrals from other customers. Unmentioned to my question bills are related issue, should I let my current co-founder remain in the business? I’d really like him to be here if we can get into healthcare because of his connections, but I know this isn’t the first priority anymore.” What do you think, Mike? It’s a tough one.
Mike: Yeah. I think you can almost divide this into two entirely different things. One of which is what to do about the co-founder and then the other is how do you move the business forward when you’ve got $2,500 a month and not enough money to do a lot and you’ve also obviously got the co-founder onboard and I don’t know what the relationship there is in specifically call that out.
Rob: It sounds like it’s still amicable and he’d like to keep him on if they were to go into healthcare but not if they don’t. You don’t know if they vested so the first thing is that you should have done four year vesting probably so that your co-founder wouldn’t own the entire percentage that they had. Because if they decide to leave, that will go back into the pool to get the next person.
Mike: I think, with regards to what to do about the co-founder, that’s probably the first thing to do. It sounds like you wanna keep them on but the question is how much is he going to be able to contribute. As Rob said, the vesting schedule maybe he owns 25% because he’s stuck around a year, 50% because he’s stuck around for 2 years. That seems to me like the first thing to look at and try and figure out and if he has to walk away because he’s just not involved, that doesn’t mean he still doesn’t own a certain percentage of the business anymore and can’t contribute under the […] capacity or something along those lines. That’s something I think you have to work out with your co-founder and sit down and have an honest conversation about what him stepping away from the business really means for the business and for the relationship between you guys.
Then once you’ve figured that out, the next question to tackle is what do you do about the business itself. I think you didn’t specify what your own personal situation is or whether you’re taking money from the business and living off of it. But with the $2,500 a month, it sounds to me like because you’re a do-it-yourself-er, it might be a viable strategy to go out and find a business coach who can walk you through a bunch of different things and that does a couple of things.
One, is it avoids handing equity over to somebody else, and two, it still allows you to do those things yourself and you get that personalized assistance from somebody else and a sounding board from somebody who’s vested in the business because you are paying them to give you ideas and take a hard look at what it is that you’re doing and how effective those things are but you’re still doing those things yourself and you still don’t necessarily hand over control to a third party or a co-founder or another partner in the business and avoid some of those other issues that maybe you’re struggling with right now.
I don’t think that it’s wise to introduce too many changes all at once. That could be a nice bridge scenario where you are involving somebody else but you’re not handing over the reins to somebody else in a co-founder capacity while you’re having your current co-founder step away from the business a little bit. That’s probably where I’d start looking and see if that makes sense to you.
Rob: Yeah. I think you’re right, there are two separate issues here, it’s existing co-founder and then pulling on a new partner. I think given that the business you have to de-risk the business a small amount that bringing on a new partner, you could obviously give equity without giving an enormous amount. It wouldn’t need to be a third of the equity or something. It depends on your aspirations and think where the business is headed and who you can find but I’m thinking in the 10%-20% range given where you are. If you were gonna go raise funding and you’re gonna go try to find like a COO or something or a CTO, they get 5%, but you’re in a little bit different situation because it doesn’t sound like you’re gonna get so big so fast, that that’s gonna be warranted. As a result you have to bump that equity to 10% or 15% or whatever. But at this point, in my opinion wouldn’t just be an even split.
I think the hard part is finding that person and vetting them and it’s like a marriage because you guys are gonna have shared ownership of things and breaking that up later can be like a divorce. I think getting over your hesitation is one thing, but I think the harder thing is to find someone who is good enough or who’s gonna work with your style, who’s willing to be in the trenches with you, who I think it really wants to stick around and is able to work because it sounds like this is gonna be nights and weekends, people are not cut out for that in general, most people just think they wanna do it and then a month or two months and they just flick out or they just decide not to do it.
I think finding someone who meets all this criteria is really hard but I think if you can, then what I would look at doing is definitely have kind of a trial period, maybe 90 days, just to say how things feel, I would definitely have four year vesting on that with the one year cliff, meaning they don’t get any shares until they’ve been around for a year. I think that’s how I would approach it and I would look to be meeting people in person so I would be going to the MicroConfs and the businesses software and these conferences where there are folks who could potentially be in that pool for you separately regarding your current co-founder. I think you just need to make the choice sooner rather than later whether they’re going to healthcare. If you’re gonna go onto it and he wants to stay around, you wanna keep him around, that’s great, and if you’re not, then I think the decision is made there.
I know it’s not always that crystal clear but it does, given that information you’ve provided, seem perhaps how I would perceive. Thanks for the question, hope that was helpful.
The next question is about technical debt. Mike, does technical debt really come back to bite you?
Mike: Oh, yeah. No question on that.
Rob: Alright. The subject line of the email is actually, “Have technical debt decisions been easy to pay down later or did they really come back to bite you?” He says, “Love the show, listened for the past year, really love the practical advice. I’m looking for your technical perspective about what matters in the early days of getting a site running while keeping customers happy with mission critical data, building a data heavy B2B SaaS startup.
The frontend is in Angular, the backend is in Rails, intermediate self-taught developers, new things I haven’t done before can sometimes take a week or two to figure out. I’m making early technical debt tradeoffs hosting using Heroku versus AWS, database PostgreSQL versus Aurora, and the other miscellaneous things relating to data structures.
I’m not looking for technical help but the question is more geared to your experience of how much this stuff matters up front and really needs to be solved to get functional versus it’s not too hard to change it later. Theoretically important but won’t kill you so pick the simpler thing even if you know you’ll need it to change it after launch. Am I wasting a lot of time by taking the shortcut now and having to pull the app apart later to move it around when I have real customers using it in production?”
Mike, this is not gonna be as long as GDPR, I promise, but I feel like we have a lot to say on this, so go. Just start rolling with this. What do you think?
Mike: Yeah. Do we have like beeps cued up immediately for all the profanity that’s about to be dropped on this?
Rob: Yeah. Technical debt, it’s a *.
Mike: Yes, it is, yes, it is. I think looking back on this particular piece of it, some of the things that he had brought up, the things like hosting and the database selection and the data structures that you’re using on a backend, some of those can be really hard to change later on, versely impossible. In some cases, you’re looking at a complete rewrite.
You at least have to have enough technical knowledge to make those decisions in a way that is not going to completely kill the app later on or force you to do an absolute rewrite from the ground up. That said, I do know people who have done complete rewrites after they’ve gotten to a point where they’ve gotten customers onboard and it basically delays things, you may have to take three, six, nine months of accepting the fact that you’re just not gonna make any progress on the features in order to fix that fundamental positions that will bust it.
Then, there’s kind of a second level which is where you’re trying to make decisions about how do you structure the data or how do you create the database in such a way that it makes easy to do certain queries or provide a solid error handling, error returns to the API for example. I think in those cases, you can mitigate them to some extent by using dependency injection and creating these interfaces that sit in front of it and if you need to rewrite one, then you can, you’re almost swapping out an entire layer of the application for another in a very specific way.
I’ll give an example with Bluetick, like the backend storage system for storing emails has been rewritten four times. It’s because at first it was like let’s just get something working and then it was trying to optimize for local storage and then the next level was things are not working in local storage because there’s so much data coming in at all times like I just can’t scale that much on one machine and then I kind of move everything into the cloud and into the Azure tables in no sequel storage. Then the fourth rewrite was essentially making that more scalable and optimized.
Each level on the way like there was some level of rewrite but because it was essentially being able to flip a switch and say instead of using this set of data structures, you can do those on a per user basis or on small sub-segments of the users and not affect others. I would definitely do some research on dependency injection.
The other nice by-product of them is that it helps with writing unit test to be able to make sure that those things that are working from one version of your rewrite to the next in that particular component or module. Beyond that, there’s always gonna be things that you run into where you think that one way is a good way to solve a technical challenge and you turn around and find that it just wasn’t, you get down in the weed sometimes and you realize that you made a really, really big mistake and the only way to resolve that at that point is to rewrite it and there’s nothing you can do at that point.
The only way to have mitigated those four types of problems is to run into them and then realize after the fact that it was a mistake. It’s really hard to generalize from one application or problem space to the next and say like, “Oh, you should never do it this way. You should always do it this way.” Those things don’t apply. Each problem space has its own unique way of storing data or things that need to be surfaced to the user and you don’t always know what those are until afterwards. Sometimes, you just make the best decision that you have and you find out later that it was wrong, there’s nothing you can do.
Rob: Yeah. I would just say in general, technical debt is underrated in the startup space. I think people think that it’s not a big deal and it’s a way bigger deal than most people do because if you aren’t technical, it’s hard to understand why you can’t just quickly rewrite a piece or quickly change a decision you made later. These metaphors don’t always work but it’s akin to building a building and then needing to go back and replace the concrete foundation because you poured it incorrectly. You literally have to jack the building up and it’s just painstaking and agonizing to replace that and that’s what code is. You’re building things on top of each other.
I think of it like a 4×4 matrix where there’s basically two binary things. One is I know that this is a shortcut and I’m gonna take it anyways versus I don’t know this is a shortcut like I accidentally introduced technical debt. I think that’s the switch you’re talking about.
Then I think the other one is it’s easy to undo later versus it’s a complete fiasco to undo it. You can imagine that 4×4 matrix and we’ll go through all of those matching up but obviously any decision you make on purpose to introduce technical debt, you need to explore and thought experiment like how hard is this to undo later. If it’s hard, then don’t do it.
There were a lot of decisions Derrick and I made in the early days that were very slow, they caused Drip development to be very slow in the early days and it was pretty agonizing when we were bleeding cash and we couldn’t get the features out the door to keep people from churning because it was a very specific feature set that people wanted, and it was taking us months to build them and it was because Derrick wanted to build them very carefully with extensive unit test and he wanna do it right and he had to refactor the database twice in the first year of the app, because the app went from a very simple thing to very complicated thing.
It was agonizing but it was the right decision, because now, it would be catastrophic right now, we would probably have to have rewritten major parts of Drip. I don’t know if it would have impacted the acquisition or if it just would have been post acquisition or what it would have been but it would have been really hard and between he and I, we figured out a good sense of what was gonna be hard to change later–things that are easier to change later like you said where you can just build an interface and then swap it out later. Obviously those are the ones that you can maybe take shortcuts on.
But I think some people take shortcuts on like not running unit test, some people make cold-quality shortcuts where they just start hacking things together and later on, everything’s buggy because you took a shortcut and you didn’t build that right in the first place. In general, I have seen no less than half a dozen or maybe closer to a dozen companies get to the point where they’re between 10k and 50k MRR, they’re growing fast and they have to rewrite their entire codebase. I’ve seen some that have done it more than ones.
It is so painful to spend six months of standing still while your competition gains on you because you took shortcuts in the early days. Now, you’re just hanging out, waiting to build more features until your codebase can be completely rewritten. I would say proceed with caution, obviously, you’re always gonna have some level of technical debt, but be very deliberate about those choices because I think it’s easy to be in such a hurry to get to the point where you have more revenue and this is certainly a tradeoff because in the early, early days, when you just trying to get to $5,000 or $10,000 revenue, you’re gonna have to make some trade offs but try to take shortcuts on things that are easy to change later. That’s how I think about it.
Mike: I think one of the biggest places to make that trade off is that when you’re looking at unit tests, I’m not saying you write unit tests for everything because I certainly don’t think that that has a ton of value for a startup but I do think that there’s value in having like continuous integration server of some kind or a build system put in place so that later on you don’t have to figure out, “Okay, how am I gonna deploy my app?” You want that to be a systematic thing where you can literally just click a button and it runs through everything and is able to deploy the app.
But with that comes at least some level of unit tests or a mechanism for running those, and even if you don’t write a ton of unit tests, as bugs come in, you should be adding those unit tests to make sure that if a bug comes in and it breaks something that you had a unit test in there so that later on, as you’re making other changes, it doesn’t break that again.
Like I said, I don’t think you should write unit tests for everything, but I do think that as those bugs come in you should be writing them to make sure that once you fix a particular problem that you don’t have to refix it 3, 4, 5, 10 different times moving forward because it just keeps coming up.
Rob: Thanks for the question. I hope that was helpful.
Next question is from Jay Pablo Fernandez and he says, “I just finished going through all my newsletter subscribers and I noticed there are a few industries that are well-represented such as education, health, IT and government. When it comes to my product, they all use it in the same way. The feature set they made is pretty much the same. I wouldn’t say they are verticals in the SaaS way of thinking. I can sell to all of them or I can focus on one industry. Are there any advantages to either approach?”
Mike: I think this is a tough question, as you said you don’t wanna paint yourself into a corner and make people think that you don’t serve their industry. I think what I would do in this case sn focus on the specific problem that you solve and then maybe have different case studies for each of those industries and even segment your list a little bit so that when you talk to them, when you’re sending out newsletters or you’re sending out articles to them, maybe you’ll only send an article that highlights a case study for the electric and gas industry to those people who were subscribers that fit into that bucket. It seems to me like that would probably be an appropriate way to go, but at the same time there’s value to be had to for saying, “Hey, this also works in other industries because there’s gonna be some crossover between them.”
Let’s say that you have a case study on the nuclear power plant industry, if it’s safe enough for them to use, pure application, then whatever other industry they happen to be in, they would probably translate that and say, “Oh, well, if these guys are using it, then surely it’s passed master and I could use it as well.” I would think about it in terms of just trying to make sure that you’re covering enough of each of them but not focusing so hard on any of them that it makes people think that, “Oh, this is not for me.”
Rob: I think I might try to run an experiment. He has this list and he has these four sectors, four verticals, and I would consider trying to do physically exploratory calls, I don’t know if you wanna call it customer development or even just sales calls, if the product’s already there, across all of them, and figure out that you wanna validate your assumption that they use it in the same way with the same feature set. Because I find that a little bit hard to believe, just having run the apps that I’ve run, different industries tend to want slightly different feature sets and have a slightly to just enough it settle but by the time you really get and they start using it, it becomes a pain-in-the-butt to have four different industries or wanting something just slightly, “Oh, just tweak this one thing, oh, can I just have a setting to do this? But we have a permission in the reporting thing.” It’s just enough that there will be a difference. I guess it’s what I’m guessing.
If you have the time to do this upfront and just have a bunch of phone calls with these folks and try to do the demos and try to figure out is it truly gonna be something that they all can use, then that’s fine. But I do think you’re gonna find differences in payment terms, like you said sales cycle because government’s gonna take forever to come through, maybe in your early days since you’re trying to get ahead of funding running out or whatever, you go after the ones that close quickest, which I don’t know if that’d be IT, education, sure it seems like it’s gonna take a long time too, so focus on the one that are gonna close the quickest and get the early value in order to keep around long enough to focus on all four.
But I would try to answer that question, there’s still a question in my mind of is the product actually gonna serve all four? If that’s the case and you can work your entire list and work all four of them at once and try to get as many customers paying you on day one, then that’s what I would do. Right now, you’re just trying to get revenue and see how people use the app and if they’re gonna get value out of the app and there are across four different industries, then you’re gonna learn more about all four and maybe later you decide to focus down on one industry.
I do think that there are some advantages focusing on one industry in terms of how your marketing can really speak to people so you’re gonna close more deals probably, how you are sales conversation can focus on them, how your features set can focus, and how word of mouth would be such a big component of it. Assuming that people in your industry hang out at conferences, or hang out online, word of mouth if you just become the defacto in in the industry and in a vertical then you can land and expand words like, “Alright, we are the go-to for this task in the IT space. Now we’re gonna start adding on these other verticals.”
That’s the other way to approach it. It’s just a pick one based on your information so far, your best guess, and then later on, a year or two down the line, once you own a big chunk of this, you’ll expand into the others but I feel like you don’t have enough information to do either approach right now and I would try to close as many deals as I could, see if they actually will all use it and then try to make the decision once you have a little more information.
For our final question of the day, we have a question from Ed Freyfogle. He was a MicroConf Europe speaker this year. He says, “Hey, guys. Long time listener, first time asker. One target audience of my SaaS service is academic researchers. They are not the best customers as typically they’re low budget and they only need this service for a project or semester. Nevertheless their niche seems to like my service. Often they ask for academic discounts. My pricing is already very affordable and I offer discounts for annual purchases. Still, I can’t help but wonder if I might be able to grow this niche by offering an academic discount.
Alternatively, I have also thought about selling to universities and offering them a bulk rate. But so far I’ve always been busy with other things so I haven’t acted on this idea. I’m wondering if you guys have any advice on academic discounts in general, how to ensure they are not abused by other customers and selling to universities. Thanks for the great show, I learn a lot.”
This is a tough question. I like the fact that he’s thinking pretty strategically about it. I think that if you haven’t had the time to try to sell to the universities and offer them a bulk rate, if you haven’t made the time, it’s probably not that important. That’s where I found like this is right. It’s like you go toward the money’s coming in and your biggest fires are. I’m guessing that unless you are to hire someone to handle that that it’s not gonna make it to the top of your to-do list anytime soon.
I tend to think about discounts in two ways. There is academic and then there’s non-profit discounts. I don’t know if you have a non-profit discount as well, that’s something that I would consider modelling it after and there you just ask for proof of their non-profit status which can totally be abused. I think with DotNetInvoice we had profit one and it was maybe 1 in 20 or 1 in 30 who ask for it and show the stock seemed a little bit like, “You signed up with this just to get the discount.”
In terms of academic stuff, it depends on what volume you have coming in, it’s like if it really isn’t education it’s 1 in 50 people ask for it. You can always have an unpublished academic discount and you just need to get proof from them, I don’t know it’s a student ID or if it’s a professor ID, what it is, but it’s gonna be a process, it’s fairly lightweight. I personally don’t see a huge drawback to doing it. I’m curious when people email and ask for academic discounts and you say no, how many sales do you think you loose? Is it worth even doing any of this effort to get those sales?
Your pricing is already reasonable, if you offered another 20%, 30%, 40% off for academic discounts and that’s probably the range, I would think, although I haven’t done any research about this, but mentally it would be in that range. Is that worth it if you have to go through validation of some type of ID, I don’t know, there’s some trade offs here.
If the volume is high enough that you’re asking this question, I would probably just do an experiment where the next time I got an email about it, I would say, “Yes, we have a 25% discount, but you have to prove you’re a student or you’re faculty.” See where it goes from there and handle it as a one off to start and then I don’t know if it has support people or not, but if you distract them to do that and then tally up in a Google Spreadsheet how often it gets asked and which sales come through, you can start getting at least a little bit of data about it.
Those are my initial thoughts without a ton of experience, to back that up, it’s more of the got feel, so much of entrepreneurship is making enough as you go along. It’s just figuring out what’s the priority and making the best judgment call based on the information you have. What do you think, Mike? You have other thoughts?
Mike: I’ve looked at the academic discounts in the past. You just do a quick search for academic discounts for software and you’ll find that they can be upwards of 85% which is extremely high especially for something like a SaaS, I mean. Is the money that you’re getting even enough to offset the cost of you actually doing business for that person? I don’t know the answer to that. I think you need to figure out what that is.
Rob: Yeah. I know that Microsoft and Adobe and those guys discount because they’ve been pirated so much. Too often students who don’t have the money and they do these huge discounts. When you’re a SaaS app, especially when you’re Bootstrap like this and cash is important, there’s no chance I would offer a discount that large.
Mike: Yeah. I mean I think that part of the reason that those types of companies offer discounts that are high is one, it’s downloadable software so they don’t have to worry about their own cost, and two, they’re really just trying to make sure that there’s some form of legitimacy for the software that you’re using and giving that high of a discount helps them to get market penetration so that Microsoft has 90% market penetration on the best app for Office and Windows.
I agree, I wouldn’t go that high, but it’s not to say that you couldn’t have a discount for students versus a discount for academic researchers/the university itself. Because if somebody’s using it for a class, then they’re probably not going to be able to pay nearly as much as the person who’s doing it for the university and offering it on behalf of the class itself. I might think about that, but I do agree with Rob that you probably want to go through and run at least some tests to find out like what is it that people are using it for.
Something else to consider is that if somebody is purchasing it on behalf of the classroom because they’re teaching it, what’s the value of having those people in the class know about your product and then they leave and graduate and go out and do things in the workforce and having them know, “Hey, I can come over to opencagedata.com and buy this stuff off-the-shelf and we use it in our classroom so it has a lot of legitimacy.” There’s probably some value in that, I don’t know what that level is because I mean if you go through like an engineering degree, chances are good you’ll probably use Autocad some place along the way. When you get out into the industry like you first thought is, “Oh, I need to create some 3D models of something. Where’s the copy of Autocad?” There’s a student discount that you can get but once you get out in that at the real world, your company has to pay for it.
Having those people go to their bosses and say, “Hey, I use this data over here from opencagedata.com. We should buy a license for that.” There’s value there. I don’t know what that is but I definitely think there’s some value there. I would look into it, I don’t know how much time and effort I would spend on it because the return on that is probably gonna be wild. It’s gonna be a couple of years.
Rob: Yeah. Those are good points. I like your idea of not making an academic discount but making it a student discount. It’s an interesting thing because students really don’t have the money whereas if a university is buying it for a class, they do have some budget, and he’s right, his prices are reasonable like a university should be able to afford it.
Mike: Even with like a student. A student could probably get away with a free trial or even like the extra small plan that they have there for like a class or project or something like that but the university, if it’s for a class, and they’re buying it on behalf of the students for a class, I’ll offer them a 30% discount if you’re a student and you just want to use it for yourself, maybe it’s a 60% discount. I don’t know, but if you separate them, I think that there’s a way of targeting those people in that way that says, “Oh, we give individual students 60% and for universities we give them 30%.” It shows that you’re doing both. It shows you’re helping out on both sides.
Rob: It’s a question of whether or not the volume of incoming request warrant spending the time to figure all this out. If the answer is no, we have reasonable prices and we aren’t able to support any of these because you don’t have the bandwidth. It’s less about money and it’s more about Bootstrap startup with not a lot of time and just having yet another program to maintain and then we have to get a fax of your idea or an email with a screenshot and then check that off that it’s approved and then they just want more process that you have to wait if that’s gonna be worth it for in order to make another few discounted sales.
Mike: Thanks for the question, Ed. I think that about wraps us up for the day. If you have a question for us, you can call it into our voicemail number at 1-888-801-96-90 or you can email to us at questions@startupsfortherestofus.com.
Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening and we’ll see you next time.
Welcome to Startups for the Rest of Us–the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Rob.
Mike: I have the plague.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. You were sick all weekend?
Mike: Yeah. My eldest son got sick the last Wednesday, I think it was. It was like Wednesday and Thursday and we sent him back to school on Friday. Then my wife got sick between Friday and Saturday and then I got sick between Saturday and Sunday. It’s been a rough week to say the least.
Rob: Yeah. That’s brutal. Being sick just tears you up, means you can’t get anything done, especially when you don’t have vacation time, you don’t have to paid time off and you’re trying to drive a business forward, it’s like every hour is precious.
Mike: Yeah. Fortunately for us, it was kind of over the weekend but still we’re recording now, we don’t usually record till Thursday but today’s Monday and after this podcast episode, I’m probably gonna go to bed.
Rob: Right, right. Yeah. Today, we’re actually continuing kind of a continuation of last week’s episode. I had picked out several questions last week that you and I were gonna go through and answer and we only got through a couple of them because the GDPR conversation was so extensive. I think that was a good thing. I think we went in depth and gave ideas and feedback but it meant that we had this big block of unanswered questions and I wanted to keep going with them.
Now we have a few voicemails and some others today. But before we do that, I want to tell you, I know I haven’t talked about Drip features in a while but I’m pretty excited about this upcoming feature. We’ve been working on it for–I’m trying to think–it’s gotta have to be about four months now so it’s one of the larger features we’ve embarked on but it’s a visual email builder.
Mike: Oh, nice. What’s that involve?
Rob: A lot of stuff. Yeah, you can imagine not only the frontend which is obviously a lot of dynamic stuff, a lot of Javascript and pointing and clicking and moving things around the screen but then taking something that is essentially JSON and translating into the table-based email render to HTML is a challenge.
We found some AltSize and trade secret workarounds that we found, we’ve really done a lot of research and I think I’ve done a good job with it. But what I’ve heard from folks who have built visual email builders is building the visual portion of it is one project and it will takes six months or nine months, depending on how many […] we have on it and how good they are. Then just doing the table-based rendering and getting all of that to work and working all the clients is at whole separate project. It can take as long as building the actual visual builder. This is why a lot of upstart ESPs don’t build them because the time investment is so extensive.
Mike: When you say rendering the stuff and the clients–I understand what you mean by the differences between them–but when you go back to the visual email builder, what advantages does that have over what Drip does now?
Rob: Right. Today, Drip just has a nice little WYSIWYG text editor and I’m still gonna use that. I never use visual email builders because I like the personal interaction or it just feels more like you’re getting a plain-text email when you send using our standard plain-text template. This is how I’ve always recommended doing it. I believe the conversation rates are higher when you do that.
However, there are a few industries where they have done tests–so they’ve done tests across many industries in terms of visual email with a lot of images and table-based layout, two columns and this and that versus just something that kind of looks like a plain-text email, much like we send out to a MicroConf list, or I send out to my blogs Software by Rob list, they tend to be more personal. It’s from Rob Walling, Founder, it looks like he’s actually typing it to you. But there are few industries—ecommerce is one and travel is another—where having back these more exotic layouts and emails can and will convert better.
Since we do have a large ecommerce contingent and since we’ve been focusing on commerce-based businesses, people who are selling things, we have found a time to break ground on a visual builder. It allows you to do the things where you see the fancy, neat template, you can just insert your images and have that layout. It’s not something I’m gonna recommend for everybody but there are instances and match your converts better.
Mike: Got it. Kind of like if you go over to MailChimp for example, they’ve got like 30 or 50 different templates you can choose from and okay, that makes sense.
Rob: Exactly.
Mike: That makes sense.
Rob: Right. We won’t have 30 or 50 templates to start with but obviously that’s a direction that you’ll wind up going and it’s become table stakes. Again, in certain industries if you’re doing ecommerce and you’re working with companies using let’s say a platform like Shopify, BigCommerce, or WooCommerce, or if they have their own custom solution for ecommerce, they tend to want to send emails with a lot of images and not just to frustrate top to bottom flow where it’s image-text, image-text, you wanna have things that just look nicer than that.
Mike: Yeah. Things that come to mind for that are things like Amazon, Newegg, or ThinkGeek, all those, it’s exactly the same. I totally get what you’re saying where that’s going, but it totally makes sense.
Rob: Yup. The reason I’m excited about it is because I feel much like we did with workflows, we went back to the first principles and said, “What did everyone else do wrong? What do we hate about builders? How can we do this differently?” It isn’t just look at what everyone did and copy the best features, just like we’re doing things that are different than anyone else. There are obviously gonna be commonalities. There’s stuff on the left that you’re text and your image block and your divider and whatever, then there’s the email on the right. That’s common stuff but there’s certain paradigms that we use that I think are superior and gonna make for a better user experience.
The team has been working hard on it and everytime I see it down the road, I’m like, “Man, this is super cool, actually. I wanna use this even though I don’t really…” Like I said, I don’t use other visual builders as a rule when I’m writing my emails because I’ve always liked the more plain-text feel.
Mike: Awesome. Let’s dive right into the episode and they’ve got a couple of questions outlined here. Let’s get started on this.
Rob: For sure. Our first one is a voicemail and it’s about how to balance feature development and marketing specifically for an IOS app. But let’s hear the question and we can figure out what form we wanna answer it.
Steven: Hi Mike and Rob. This is Steven Johnson with […] Plus, an iOS and Mac app for hikers. My website is […]studios.com. I have a question about how you work […] user feedback. I’ve been getting a lot of feedback about my app on the Apple Watch, it’s still like I’m missing out on some opportunities as well as on just keeping up with where the market’s going.
However, right now I’ve really been prioritizing a lot of marketing efforts, working on conversion rates, lowering churn, […] partnerships with business development and […] by knowing […] you talk a lot about having more marketing always speeds out features and I completely agree with that. I’m just trying to figure out how do I kind of balance these two priorities and knowing how to balance user requests that come in, especially one that feel like the market’s making changes and I feel like am I missing out on something, maybe I am and maybe I’m not, but I know that there’s opportunities that I’m not capturing with my marketing, I know there’s conversion opportunities as well as churn that I need to work on. I’m just curious about your thoughts on that. Thanks for the show. Love what you guys do. Thanks.
Mike: I think this is an interesting question mainly because it’s an iOS and Mac app but there’s also the recurring annual subscription from productivity. I think the prices–there is a free plan–but then they range from $20 a year up to $80 a year which is of around what, $5-$8 a month, something along those lines. I think that the challenge here is identifying why that churn happens. Is it legitimately because people are churning out and they’re no longer using it or is it just they find that the app doesn’t help them nearly as much as they thought it would? I think it’d be easy to assume that, “Oh, you should be doing this.” Or, “You should be implementing that feature.” But I think I might dive a little bit more into the churn itself and start ask a lot more detailed questions about why the people aren’t using that.
My concerns/fear here would be that what you’re offering people is conceptually what they want but either the implementation itself is not really what they’re looking for or it doesn’t really quite match up with what the value proposition they were sold on is and it could turn out to be that somebody tries one app and they think that it’s gonna work and once they get out of the field and they’re using it, it sort of works or does most of what they want but it’s not quite enough so they just decide to switch and use something else. Maybe look at your performance metrics or your usability metrics to see like are people actually using it after three or four months in or is it that they’ve paid for and it was a low enough price point that they said, “Well, I paid $50 for this and it’s not a big deal so I’ll just try this other thing over here for another $50.”
As I said, the fear/concern that I would have is something that people use and it may just not be able to deliver on the promise. It’s not to say that you can never deliver on that promise. The fear that I have is it even possible to do what it is that they really want. I don’t know the answer to that, you have to ask people to find out. But as you said, the other component is like do you invest more on the marketing side and try and ramp it up or do you drill in and start trying to fix those things and add more features?
I think the first place to start to find out why people are churning out and what the fundamental issue is there and from there look back and say is it important enough for you to fix? The reason I say that is because there’s a question for road map and what is the most important to you, not roadmap, runway is more it than anything else, are you able to make ends meet with the app the way it is or are you chewing through runway and sort of losing money on it as you’re going along? In that case, you need to lean more towards scaling things up and then fixing things versus being able to make ends meet on a regular basis and you don’t have to worry about it as much. At that point, you can dig in and start fixing things in the app. That’s probably the place that I would start. Rob, I’m sure you have some thoughts on this as well.
Rob: Yeah. This is the age-old question. I think it’s a really good one to think about. I think in general, as developers, we think features are the answer, and in general, they are not. Not to say, all at all times because in certain markets, in certain niches, it really will make a big difference like Drip launching workflows was game changing for us, it doubled our month over month growth. It can happen.
But so many of the little features that are constantly being requested, if you have thousands of users you’re gonna get 50 or 100 feature requests a month and most of them you need to not build. Not only to keep the product simple enough that it doesn’t become bloated, but because you just don’t have the time to build them all. The caller is so much closer to his business than we are so it’s hard for me to make a recommendation to him, but my recommendation in general would be stir away from the mindset that I just need this one more feature to do this thing, unless everyone’s requesting it.
There comes a certain point where 10% of your feature requests are for the exact same feature. At that point, that’s when we break down–in the early days, we build a lot more now, we have a team of 18 developers or whatever, but in the early days when we were super cash and resource trapped, it was pretty much no by default and yes to these highly focused things that we knew were gonna move the needle. That’s how I balance it.
I think that the caller’s approach to doing joint ventures and focusing on marketing is genius. That’s exactly what I would be doing because the more marketing you do, assuming it’s effective, the more revenue you get, and that revenue will allow you to then hire a contractor in essence or perhaps the first time employee, how ever you wanna work it. But hire a developer that you can supervise because that will then, I should take one step back first, first person I would hire is a part-time VA to handle all your support, if you’re still handling that, because that will free up.
Then start thinking about hiring someone to write the code and this is the part that developers always struggle with because no one “is going to write the code as well as I do.” However, if you can free up 12-30 hours of your time in a week and features are still moving forward and you have some budget to pay someone, it can be game changing for your business and that frees you up to focus on really moving the needle.
I think marketing in the early days is such a big deal because you need to get the revenue to allow yourself to start stepping away from certain roles that while you may enjoy doing them are probably in the early days are less effective and what more if the needle is matched.
Thanks for the question. I hope that was helpful. Our next question is about overcoming hesitations about partnerships to move the business forward.
Joshua: Hi Mike and Rob. This is Joshua from [Perspexa Labs]. First, thanks so much to this podcast. Every episode is invaluable. My question is this, how do I overcome my hesitancy of partnering with someone to move the business forward?
For context, I run a B2B SaaS company that offers monthly subs in the range of 100-350 a month, and we’ve plateaued about $2,500 in MRR I co-founded the business with an office colleague but I just realized circumstances he really isn’t able to participate materially in the business anymore and our product is solid at this point but I know we need to move the needle and sell the marketing in a big way. Try as I might, I just can’t seem to crack that nut.
I know that finding the right person to bring onboard will probably do wonders and turn us into a vital business but on a do-it-yourself-er and I just have trouble, one, convince myself that I ought to do this, and two, coming up with the vital way to achieve it. Any advice for effectively a solopreneur who doesn’t wanna be stuck in a half business for forever? Thanks so much for the both of you. Everyone, go leave a review to this podcast on iTunes. Thanks guys. Bye.
Rob: Joshua was kind enough to also send us an email with a bit more background and he said, “The main product outreach is at [perspexalabs.com], we’ve got a core group of customers and service businesses like pest control and electricity and we’ll soon be getting into healthcare providers because our revenue is only $2,500 a month with margins of around 70%. It’s not enough yet to pay salaries. I’m guessing that bringing someone onboard will probably need to be an equity arrangement which I’d be fine with.
With regards to my own efforts to sales and marketing I’ve gone to the Traction book and tried several different approaches including online ads, cold-calls, cold-email outreach and attended a very targeted trade show. That really hasn’t generated fruit as nearly all of our current customers are referrals from other customers. Unmentioned to my question bills are related issue, should I let my current co-founder remain in the business? I’d really like him to be here if we can get into healthcare because of his connections, but I know this isn’t the first priority anymore.” What do you think, Mike? It’s a tough one.
Mike: Yeah. I think you can almost divide this into two entirely different things. One of which is what to do about the co-founder and then the other is how do you move the business forward when you’ve got $2,500 a month and not enough money to do a lot and you’ve also obviously got the co-founder onboard and I don’t know what the relationship there is in specifically call that out.
Rob: It sounds like it’s still amicable and he’d like to keep him on if they were to go into healthcare but not if they don’t. You don’t know if they vested so the first thing is that you should have done four year vesting probably so that your co-founder wouldn’t own the entire percentage that they had. Because if they decide to leave, that will go back into the pool to get the next person.
Mike: I think, with regards to what to do about the co-founder, that’s probably the first thing to do. It sounds like you wanna keep them on but the question is how much is he going to be able to contribute. As Rob said, the vesting schedule maybe he owns 25% because he’s stuck around a year, 50% because he’s stuck around for 2 years. That seems to me like the first thing to look at and try and figure out and if he has to walk away because he’s just not involved, that doesn’t mean he still doesn’t own a certain percentage of the business anymore and can’t contribute under the […] capacity or something along those lines. That’s something I think you have to work out with your co-founder and sit down and have an honest conversation about what him stepping away from the business really means for the business and for the relationship between you guys.
Then once you’ve figured that out, the next question to tackle is what do you do about the business itself. I think you didn’t specify what your own personal situation is or whether you’re taking money from the business and living off of it. But with the $2,500 a month, it sounds to me like because you’re a do-it-yourself-er, it might be a viable strategy to go out and find a business coach who can walk you through a bunch of different things and that does a couple of things.
One, is it avoids handing equity over to somebody else, and two, it still allows you to do those things yourself and you get that personalized assistance from somebody else and a sounding board from somebody who’s vested in the business because you are paying them to give you ideas and take a hard look at what it is that you’re doing and how effective those things are but you’re still doing those things yourself and you still don’t necessarily hand over control to a third party or a co-founder or another partner in the business and avoid some of those other issues that maybe you’re struggling with right now.
I don’t think that it’s wise to introduce too many changes all at once. That could be a nice bridge scenario where you are involving somebody else but you’re not handing over the reins to somebody else in a co-founder capacity while you’re having your current co-founder step away from the business a little bit. That’s probably where I’d start looking and see if that makes sense to you.
Rob: Yeah. I think you’re right, there are two separate issues here, it’s existing co-founder and then pulling on a new partner. I think given that the business you have to de-risk the business a small amount that bringing on a new partner, you could obviously give equity without giving an enormous amount. It wouldn’t need to be a third of the equity or something. It depends on your aspirations and think where the business is headed and who you can find but I’m thinking in the 10%-20% range given where you are. If you were gonna go raise funding and you’re gonna go try to find like a COO or something or a CTO, they get 5%, but you’re in a little bit different situation because it doesn’t sound like you’re gonna get so big so fast, that that’s gonna be warranted. As a result you have to bump that equity to 10% or 15% or whatever. But at this point, in my opinion wouldn’t just be an even split.
I think the hard part is finding that person and vetting them and it’s like a marriage because you guys are gonna have shared ownership of things and breaking that up later can be like a divorce. I think getting over your hesitation is one thing, but I think the harder thing is to find someone who is good enough or who’s gonna work with your style, who’s willing to be in the trenches with you, who I think it really wants to stick around and is able to work because it sounds like this is gonna be nights and weekends, people are not cut out for that in general, most people just think they wanna do it and then a month or two months and they just flick out or they just decide not to do it.
I think finding someone who meets all this criteria is really hard but I think if you can, then what I would look at doing is definitely have kind of a trial period, maybe 90 days, just to say how things feel, I would definitely have four year vesting on that with the one year cliff, meaning they don’t get any shares until they’ve been around for a year. I think that’s how I would approach it and I would look to be meeting people in person so I would be going to the MicroConfs and the businesses software and these conferences where there are folks who could potentially be in that pool for you separately regarding your current co-founder. I think you just need to make the choice sooner rather than later whether they’re going to healthcare. If you’re gonna go onto it and he wants to stay around, you wanna keep him around, that’s great, and if you’re not, then I think the decision is made there.
I know it’s not always that crystal clear but it does, given that information you’ve provided, seem perhaps how I would perceive. Thanks for the question, hope that was helpful.
The next question is about technical debt. Mike, does technical debt really come back to bite you?
Mike: Oh, yeah. No question on that.
Rob: Alright. The subject line of the email is actually, “Have technical debt decisions been easy to pay down later or did they really come back to bite you?” He says, “Love the show, listened for the past year, really love the practical advice. I’m looking for your technical perspective about what matters in the early days of getting a site running while keeping customers happy with mission critical data, building a data heavy B2B SaaS startup.
The frontend is in Angular, the backend is in Rails, intermediate self-taught developers, new things I haven’t done before can sometimes take a week or two to figure out. I’m making early technical debt tradeoffs hosting using Heroku versus AWS, database PostgreSQL versus Aurora, and the other miscellaneous things relating to data structures.
I’m not looking for technical help but the question is more geared to your experience of how much this stuff matters up front and really needs to be solved to get functional versus it’s not too hard to change it later. Theoretically important but won’t kill you so pick the simpler thing even if you know you’ll need it to change it after launch. Am I wasting a lot of time by taking the shortcut now and having to pull the app apart later to move it around when I have real customers using it in production?”
Mike, this is not gonna be as long as GDPR, I promise, but I feel like we have a lot to say on this, so go. Just start rolling with this. What do you think?
Mike: Yeah. Do we have like beeps cued up immediately for all the profanity that’s about to be dropped on this?
Rob: Yeah. Technical debt, it’s a *.
Mike: Yes, it is, yes, it is. I think looking back on this particular piece of it, some of the things that he had brought up, the things like hosting and the database selection and the data structures that you’re using on a backend, some of those can be really hard to change later on, versely impossible. In some cases, you’re looking at a complete rewrite.
You at least have to have enough technical knowledge to make those decisions in a way that is not going to completely kill the app later on or force you to do an absolute rewrite from the ground up. That said, I do know people who have done complete rewrites after they’ve gotten to a point where they’ve gotten customers onboard and it basically delays things, you may have to take three, six, nine months of accepting the fact that you’re just not gonna make any progress on the features in order to fix that fundamental positions that will bust it.
Then, there’s kind of a second level which is where you’re trying to make decisions about how do you structure the data or how do you create the database in such a way that it makes easy to do certain queries or provide a solid error handling, error returns to the API for example. I think in those cases, you can mitigate them to some extent by using dependency injection and creating these interfaces that sit in front of it and if you need to rewrite one, then you can, you’re almost swapping out an entire layer of the application for another in a very specific way.
I’ll give an example with Bluetick, like the backend storage system for storing emails has been rewritten four times. It’s because at first it was like let’s just get something working and then it was trying to optimize for local storage and then the next level was things are not working in local storage because there’s so much data coming in at all times like I just can’t scale that much on one machine and then I kind of move everything into the cloud and into the Azure tables in no sequel storage. Then the fourth rewrite was essentially making that more scalable and optimized.
Each level on the way like there was some level of rewrite but because it was essentially being able to flip a switch and say instead of using this set of data structures, you can do those on a per user basis or on small sub-segments of the users and not affect others. I would definitely do some research on dependency injection.
The other nice by-product of them is that it helps with writing unit test to be able to make sure that those things that are working from one version of your rewrite to the next in that particular component or module. Beyond that, there’s always gonna be things that you run into where you think that one way is a good way to solve a technical challenge and you turn around and find that it just wasn’t, you get down in the weed sometimes and you realize that you made a really, really big mistake and the only way to resolve that at that point is to rewrite it and there’s nothing you can do at that point.
The only way to have mitigated those four types of problems is to run into them and then realize after the fact that it was a mistake. It’s really hard to generalize from one application or problem space to the next and say like, “Oh, you should never do it this way. You should always do it this way.” Those things don’t apply. Each problem space has its own unique way of storing data or things that need to be surfaced to the user and you don’t always know what those are until afterwards. Sometimes, you just make the best decision that you have and you find out later that it was wrong, there’s nothing you can do.
Rob: Yeah. I would just say in general, technical debt is underrated in the startup space. I think people think that it’s not a big deal and it’s a way bigger deal than most people do because if you aren’t technical, it’s hard to understand why you can’t just quickly rewrite a piece or quickly change a decision you made later. These metaphors don’t always work but it’s akin to building a building and then needing to go back and replace the concrete foundation because you poured it incorrectly. You literally have to jack the building up and it’s just painstaking and agonizing to replace that and that’s what code is. You’re building things on top of each other.
I think of it like a 4×4 matrix where there’s basically two binary things. One is I know that this is a shortcut and I’m gonna take it anyways versus I don’t know this is a shortcut like I accidentally introduced technical debt. I think that’s the switch you’re talking about.
Then I think the other one is it’s easy to undo later versus it’s a complete fiasco to undo it. You can imagine that 4×4 matrix and we’ll go through all of those matching up but obviously any decision you make on purpose to introduce technical debt, you need to explore and thought experiment like how hard is this to undo later. If it’s hard, then don’t do it.
There were a lot of decisions Derrick and I made in the early days that were very slow, they caused Drip development to be very slow in the early days and it was pretty agonizing when we were bleeding cash and we couldn’t get the features out the door to keep people from churning because it was a very specific feature set that people wanted, and it was taking us months to build them and it was because Derrick wanted to build them very carefully with extensive unit test and he wanna do it right and he had to refactor the database twice in the first year of the app, because the app went from a very simple thing to very complicated thing.
It was agonizing but it was the right decision, because now, it would be catastrophic right now, we would probably have to have rewritten major parts of Drip. I don’t know if it would have impacted the acquisition or if it just would have been post acquisition or what it would have been but it would have been really hard and between he and I, we figured out a good sense of what was gonna be hard to change later–things that are easier to change later like you said where you can just build an interface and then swap it out later. Obviously those are the ones that you can maybe take shortcuts on.
But I think some people take shortcuts on like not running unit test, some people make cold-quality shortcuts where they just start hacking things together and later on, everything’s buggy because you took a shortcut and you didn’t build that right in the first place. In general, I have seen no less than half a dozen or maybe closer to a dozen companies get to the point where they’re between 10k and 50k MRR, they’re growing fast and they have to rewrite their entire codebase. I’ve seen some that have done it more than ones.
It is so painful to spend six months of standing still while your competition gains on you because you took shortcuts in the early days. Now, you’re just hanging out, waiting to build more features until your codebase can be completely rewritten. I would say proceed with caution, obviously, you’re always gonna have some level of technical debt, but be very deliberate about those choices because I think it’s easy to be in such a hurry to get to the point where you have more revenue and this is certainly a tradeoff because in the early, early days, when you just trying to get to $5,000 or $10,000 revenue, you’re gonna have to make some trade offs but try to take shortcuts on things that are easy to change later. That’s how I think about it.
Mike: I think one of the biggest places to make that trade off is that when you’re looking at unit tests, I’m not saying you write unit tests for everything because I certainly don’t think that that has a ton of value for a startup but I do think that there’s value in having like continuous integration server of some kind or a build system put in place so that later on you don’t have to figure out, “Okay, how am I gonna deploy my app?” You want that to be a systematic thing where you can literally just click a button and it runs through everything and is able to deploy the app.
But with that comes at least some level of unit tests or a mechanism for running those, and even if you don’t write a ton of unit tests, as bugs come in, you should be adding those unit tests to make sure that if a bug comes in and it breaks something that you had a unit test in there so that later on, as you’re making other changes, it doesn’t break that again.
Like I said, I don’t think you should write unit tests for everything, but I do think that as those bugs come in you should be writing them to make sure that once you fix a particular problem that you don’t have to refix it 3, 4, 5, 10 different times moving forward because it just keeps coming up.
Rob: Thanks for the question. I hope that was helpful.
Next question is from Jay Pablo Fernandez and he says, “I just finished going through all my newsletter subscribers and I noticed there are a few industries that are well-represented such as education, health, IT and government. When it comes to my product, they all use it in the same way. The feature set they made is pretty much the same. I wouldn’t say they are verticals in the SaaS way of thinking. I can sell to all of them or I can focus on one industry. Are there any advantages to either approach?”
Mike: I think this is a tough question, as you said you don’t wanna paint yourself into a corner and make people think that you don’t serve their industry. I think what I would do in this case sn focus on the specific problem that you solve and then maybe have different case studies for each of those industries and even segment your list a little bit so that when you talk to them, when you’re sending out newsletters or you’re sending out articles to them, maybe you’ll only send an article that highlights a case study for the electric and gas industry to those people who were subscribers that fit into that bucket. It seems to me like that would probably be an appropriate way to go, but at the same time there’s value to be had to for saying, “Hey, this also works in other industries because there’s gonna be some crossover between them.”
Let’s say that you have a case study on the nuclear power plant industry, if it’s safe enough for them to use, pure application, then whatever other industry they happen to be in, they would probably translate that and say, “Oh, well, if these guys are using it, then surely it’s passed master and I could use it as well.” I would think about it in terms of just trying to make sure that you’re covering enough of each of them but not focusing so hard on any of them that it makes people think that, “Oh, this is not for me.”
Rob: I think I might try to run an experiment. He has this list and he has these four sectors, four verticals, and I would consider trying to do physically exploratory calls, I don’t know if you wanna call it customer development or even just sales calls, if the product’s already there, across all of them, and figure out that you wanna validate your assumption that they use it in the same way with the same feature set. Because I find that a little bit hard to believe, just having run the apps that I’ve run, different industries tend to want slightly different feature sets and have a slightly to just enough it settle but by the time you really get and they start using it, it becomes a pain-in-the-butt to have four different industries or wanting something just slightly, “Oh, just tweak this one thing, oh, can I just have a setting to do this? But we have a permission in the reporting thing.” It’s just enough that there will be a difference. I guess it’s what I’m guessing.
If you have the time to do this upfront and just have a bunch of phone calls with these folks and try to do the demos and try to figure out is it truly gonna be something that they all can use, then that’s fine. But I do think you’re gonna find differences in payment terms, like you said sales cycle because government’s gonna take forever to come through, maybe in your early days since you’re trying to get ahead of funding running out or whatever, you go after the ones that close quickest, which I don’t know if that’d be IT, education, sure it seems like it’s gonna take a long time too, so focus on the one that are gonna close the quickest and get the early value in order to keep around long enough to focus on all four.
But I would try to answer that question, there’s still a question in my mind of is the product actually gonna serve all four? If that’s the case and you can work your entire list and work all four of them at once and try to get as many customers paying you on day one, then that’s what I would do. Right now, you’re just trying to get revenue and see how people use the app and if they’re gonna get value out of the app and there are across four different industries, then you’re gonna learn more about all four and maybe later you decide to focus down on one industry.
I do think that there are some advantages focusing on one industry in terms of how your marketing can really speak to people so you’re gonna close more deals probably, how you are sales conversation can focus on them, how your features set can focus, and how word of mouth would be such a big component of it. Assuming that people in your industry hang out at conferences, or hang out online, word of mouth if you just become the defacto in in the industry and in a vertical then you can land and expand words like, “Alright, we are the go-to for this task in the IT space. Now we’re gonna start adding on these other verticals.”
That’s the other way to approach it. It’s just a pick one based on your information so far, your best guess, and then later on, a year or two down the line, once you own a big chunk of this, you’ll expand into the others but I feel like you don’t have enough information to do either approach right now and I would try to close as many deals as I could, see if they actually will all use it and then try to make the decision once you have a little more information.
For our final question of the day, we have a question from Ed Freyfogle. He was a MicroConf Europe speaker this year. He says, “Hey, guys. Long time listener, first time asker. One target audience of my SaaS service is academic researchers. They are not the best customers as typically they’re low budget and they only need this service for a project or semester. Nevertheless their niche seems to like my service. Often they ask for academic discounts. My pricing is already very affordable and I offer discounts for annual purchases. Still, I can’t help but wonder if I might be able to grow this niche by offering an academic discount.
Alternatively, I have also thought about selling to universities and offering them a bulk rate. But so far I’ve always been busy with other things so I haven’t acted on this idea. I’m wondering if you guys have any advice on academic discounts in general, how to ensure they are not abused by other customers and selling to universities. Thanks for the great show, I learn a lot.”
This is a tough question. I like the fact that he’s thinking pretty strategically about it. I think that if you haven’t had the time to try to sell to the universities and offer them a bulk rate, if you haven’t made the time, it’s probably not that important. That’s where I found like this is right. It’s like you go toward the money’s coming in and your biggest fires are. I’m guessing that unless you are to hire someone to handle that that it’s not gonna make it to the top of your to-do list anytime soon.
I tend to think about discounts in two ways. There is academic and then there’s non-profit discounts. I don’t know if you have a non-profit discount as well, that’s something that I would consider modelling it after and there you just ask for proof of their non-profit status which can totally be abused. I think with DotNetInvoice we had profit one and it was maybe 1 in 20 or 1 in 30 who ask for it and show the stock seemed a little bit like, “You signed up with this just to get the discount.”
In terms of academic stuff, it depends on what volume you have coming in, it’s like if it really isn’t education it’s 1 in 50 people ask for it. You can always have an unpublished academic discount and you just need to get proof from them, I don’t know it’s a student ID or if it’s a professor ID, what it is, but it’s gonna be a process, it’s fairly lightweight. I personally don’t see a huge drawback to doing it. I’m curious when people email and ask for academic discounts and you say no, how many sales do you think you loose? Is it worth even doing any of this effort to get those sales?
Your pricing is already reasonable, if you offered another 20%, 30%, 40% off for academic discounts and that’s probably the range, I would think, although I haven’t done any research about this, but mentally it would be in that range. Is that worth it if you have to go through validation of some type of ID, I don’t know, there’s some trade offs here.
If the volume is high enough that you’re asking this question, I would probably just do an experiment where the next time I got an email about it, I would say, “Yes, we have a 25% discount, but you have to prove you’re a student or you’re faculty.” See where it goes from there and handle it as a one off to start and then I don’t know if it has support people or not, but if you distract them to do that and then tally up in a Google Spreadsheet how often it gets asked and which sales come through, you can start getting at least a little bit of data about it.
Those are my initial thoughts without a ton of experience, to back that up, it’s more of the got feel, so much of entrepreneurship is making enough as you go along. It’s just figuring out what’s the priority and making the best judgment call based on the information you have. What do you think, Mike? You have other thoughts?
Mike: I’ve looked at the academic discounts in the past. You just do a quick search for academic discounts for software and you’ll find that they can be upwards of 85% which is extremely high especially for something like a SaaS, I mean. Is the money that you’re getting even enough to offset the cost of you actually doing business for that person? I don’t know the answer to that. I think you need to figure out what that is.
Rob: Yeah. I know that Microsoft and Adobe and those guys discount because they’ve been pirated so much. Too often students who don’t have the money and they do these huge discounts. When you’re a SaaS app, especially when you’re Bootstrap like this and cash is important, there’s no chance I would offer a discount that large.
Mike: Yeah. I mean I think that part of the reason that those types of companies offer discounts that are high is one, it’s downloadable software so they don’t have to worry about their own cost, and two, they’re really just trying to make sure that there’s some form of legitimacy for the software that you’re using and giving that high of a discount helps them to get market penetration so that Microsoft has 90% market penetration on the best app for Office and Windows.
I agree, I wouldn’t go that high, but it’s not to say that you couldn’t have a discount for students versus a discount for academic researchers/the university itself. Because if somebody’s using it for a class, then they’re probably not going to be able to pay nearly as much as the person who’s doing it for the university and offering it on behalf of the class itself. I might think about that, but I do agree with Rob that you probably want to go through and run at least some tests to find out like what is it that people are using it for.
Something else to consider is that if somebody is purchasing it on behalf of the classroom because they’re teaching it, what’s the value of having those people in the class know about your product and then they leave and graduate and go out and do things in the workforce and having them know, “Hey, I can come over to opencagedata.com and buy this stuff off-the-shelf and we use it in our classroom so it has a lot of legitimacy.” There’s probably some value in that, I don’t know what that level is because I mean if you go through like an engineering degree, chances are good you’ll probably use Autocad some place along the way. When you get out into the industry like you first thought is, “Oh, I need to create some 3D models of something. Where’s the copy of Autocad?” There’s a student discount that you can get but once you get out in that at the real world, your company has to pay for it.
Having those people go to their bosses and say, “Hey, I use this data over here from opencagedata.com. We should buy a license for that.” There’s value there. I don’t know what that is but I definitely think there’s some value there. I would look into it, I don’t know how much time and effort I would spend on it because the return on that is probably gonna be wild. It’s gonna be a couple of years.
Rob: Yeah. Those are good points. I like your idea of not making an academic discount but making it a student discount. It’s an interesting thing because students really don’t have the money whereas if a university is buying it for a class, they do have some budget, and he’s right, his prices are reasonable like a university should be able to afford it.
Mike: Even with like a student. A student could probably get away with a free trial or even like the extra small plan that they have there for like a class or project or something like that but the university, if it’s for a class, and they’re buying it on behalf of the students for a class, I’ll offer them a 30% discount if you’re a student and you just want to use it for yourself, maybe it’s a 60% discount. I don’t know, but if you separate them, I think that there’s a way of targeting those people in that way that says, “Oh, we give individual students 60% and for universities we give them 30%.” It shows that you’re doing both. It shows you’re helping out on both sides.
Rob: It’s a question of whether or not the volume of incoming request warrant spending the time to figure all this out. If the answer is no, we have reasonable prices and we aren’t able to support any of these because you don’t have the bandwidth. It’s less about money and it’s more about Bootstrap startup with not a lot of time and just having yet another program to maintain and then we have to get a fax of your idea or an email with a screenshot and then check that off that it’s approved and then they just want more process that you have to wait if that’s gonna be worth it for in order to make another few discounted sales.
Mike: Thanks for the question, Ed. I think that about wraps us up for the day. If you have a question for us, you can call it into our voicemail number at 1-888-801-96-90 or you can email to us at questions@startupsfortherestofus.com.
Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening and we’ll see you next time.
Episode 385 | GDPR, Preparing to be Acquired, Technical Debt, and More Listener Questions
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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about GDPR, preparing to be acquired, and technical debt. With the regulations of GDPR coming into effect, the guys discuss how it will affect small businesses and what you should do. Also an in depth discussion on things to have in order before you get acquired.
Items mentioned in this episode:
- Mike’s Indie Hackers Article
- Mike’s Interview on Product People
- Sherry Walling Interview on Mixergy
- FemtoConf Recap
Rob: In this episode of Startups For The Rest Of Us, Mike and I talked about GDPR, preparing to be acquired, technical debt and we answered more listener questions. This is Startups For The Rest Of Us episode 385.
Welcome to Startups For The Rest Of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching and growing software products whether you built your first product or you’re just thinking about it. I’m Rob.
Mike: And I’m Mike.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. What is our word this week, sir?
Mike: Why is it in Zencastr it says Chronomustard?
Rob: Chronomustard, that’s my name this week. I think that’s gonna confuse our editor. I’m trying a new thing, creativity. I’m trying to enter a different name each week just to see if I can make you laugh.
Mike: They usually do make me laugh, I appreciate that.
Rob: For sure. What’s going on this week?
Mike: I did a demo yesterday for a customer who’s looking at switching over from a competitor and they have a bunch of different users for the product that are in the competitor. When I went through and was doing the demo, afterwards he’s just like, “Wow this is way more advanced than what we’re currently using.” I’m just thinking to myself, “Is that a good thing or a bad thing?” Apparently it was a good thing.
They were looking through and signing up for it. Next week they’re gonna reach internally. Hopefully they’ll turn into a fairly large customer for Bluetick.
Rob: It’s always good to get off a demo and get that feeling that you’re gonna be making more money, it’s always worth it.
Mike: What was really interesting to me was just the fact that they had said how advanced it was in relation to this competitor because the impression that I get from their website and all the things that it seems like it does is that it’s probably more advanced than Bluetick but I got the distinct feeling that that was not the case.
I knew that they were having problems with it but I wasn’t clear until the phone call and exactly what those problems were and how they were dealing with them and what they were looking to do.
Rob: That’s awesome, man. Do you have any avenue if you sign this guys up that you’re able to find more customers like them?
Mike: I do but I think it’s gonna be more word of mouth relationship than anything else. This one came through a personal relationship so it’s not as if they came in through a marketing channel or anything like that. I knew who the person was and contact them and went from there.
Rob: You could also think about going to build with your Datanyze. Since they are using this competitor pulling down the list to people who are using the competitor doing the cold email thing, we talked a little bit about that last week. It’s obviously time consuming but that can be an interesting avenue if you do know that you are better than a specific competitor.
Mike: I don’t know how well BuiltWith would identify that because it’s through email so there’s no really a lot of onsite stuff that’s gonna tell me who’s using that unless they have a JavaScript which I don’t have that so nobody will be able to use BuiltWith to reverse engine but maybe they do, I’d have to go take a look though.
Rob: Probably be worth a few minutes. You have been busy, man. I was pleased to see an article on Indie Hackers, Starting and Growing a Conference for Internet Entrepreneurs, got quite a few upvotes. You said you spent several hours doing this, it’s one of the most in depth Indie Hackers Q and A I had seen.
Mike: I spent a lot of time on that, probably close to a day and a half to two days. I threw in the word because I was curious since how long it actually was, it came in at 6000 words.
Rob: It’s like a book chapter or two. It has screenshots and everything, you did a really good job. If folks are interested in hearing about the history of MicroConf, what it was like starting it, how it runs today. There’s just a ton of insight stuff, although some of it is projected revenue, I think you gave this year. Some years don’t include MicroConf Europe, it’s not all exact but there are graphs and everything that I think that Indie Hackers folks put together.
Mike: They took the attendance numbers and extrapolated with the revenue was from those numbers. It’s off a little bit but it’s not really that big deal, it’s more of the trajectory, I think, that’s important to see.
Rob: It doesn’t include sponsorships and all which are big chunk. It’s fun for me to read because I could be like, “Oh yeah.” I was nodding along like, “I remember that. I can’t believe Mike remembers this.” You are pulling stuff out, all the anecdotes that I had long forgotten.
Mike: Some of the things I had to go back. I looked through my email to see when it was that we first started talking about MicroConf and I traced it back to the exact day which I don’t know if we talked about. We had a name for it before then and we were talking about it separately and just calling it a conference or we had the name and we picked it on the day and went from there.
I don’t remember how long we talked about it before we decided to register the domain name and start looking forward or if it was just like spare the moment thing.
Rob: I remember being very spur of the moment. It just made sense, it was like, “Why don’t we just do that?” That’s cool. There’s a lot of engagement, a lot of really good comments and in depth discussion going on and 36 upvotes, I get the feeling that’s quite a few for most articles. Anyways, if you’re interested in hearing that story, we’ll link it up in the show notes but you can obviously go to indiehackers.com and give it a search. You also went on Justin Jackson’s podcast, MegaMaker. It was a couple weeks ago.
Mike: I think that was last week as well. We recorded it and then it went live either later that day or the very next day. It was all about MicroConf itself and what Starter Edition was about. We’ve announced that Justin Jackson is going to be emcee for Starter Edition.
We did that last year, Starter Edition as well, with Jordan Gal from CartHook. He was the emcee for that, we basically turned over the reins to him and let him run the show at Starter Edition which was really cool because it’s nice to be able to sit back a little bit and enjoy the conference a little bit more. I don’t know how you feel about that but it’s nice to let somebody else take the reins for a little while.
Rob: That was something that Zander, our conference coordinator, encouraged us to do because since Growth and Starter are back to back, we’d be solo energy by the fourth day of trying to emcee and run the conference that I think he knew that it would just wouldn’t come off as well as it could. Jordan certainly knocked it out the park as the emcee that was really, really good and to give them their style up there on stage is fun.
You know, with Starter, Justin is such a good fit for it because that is really the crowd that he is talking to everyday and interacting with so he knows that crowd perhaps these days, you know better than I do in all honesty. It was years ago that I was really knee deep in all of the transitioning from developer to marketer and talking about all that stuff. He just has his finger on the pulse of that. I think he’s a good fit to emcee. This year he’s also doing a talk which is cool.
Mike: How about you, what have you been up to?
Rob: I’ve just been working, kicking back a little bit. I have a spring break coming in a week or two. We are heading down to Florida, starting to warm up in Minneapolis but still in the 30s and we wanna get some sun. It’s an easy flight down to Miami and we rented up Big Ol’ Airbnb off of 80 and we’re looking forward to that.
I was enjoying, I don’t know if you’ve heard it but Sherry was on Mixergy. It’s actually her second time on Mixergy. Her first time, it was when she interviewed Andrew Warner and put it on ZenFounder and he simulcast that basically onto Mixergy. But this time it’s called Keeping Your Feet Together As A Founder and it’s Andrew Warner interviewing Sherry about the book and about the stuff she’s doing in the entrepreneurial communities. It’s really a pretty intense interview but it’s really good. Have you had the chance to listen to it?
Mike: I have not, no. I don’t get a chance to listen to Mixergy too often. I’m actually about two months behind on most of my podcast at the moment anyway.
Rob: I listen to select Mixergy interviews just because there’s a lot of them and they are long but this is one that obviously I jumped on, I just wanted to hear the content. It’s a good one, we’ll link it up in the show notes but you can obviously search for Sherry Walling Mixergy and find that in Google.
Mike: Awesome. What are we talking about today?
Rob: We’re gonna answer a bunch of listener questions and see how many we get through. It was cool, we were down to one listener question. When we announced it on the show, I think we’re up to 12 or 15 now and so we can hammer through. I feel like this cadence every other week answering these questions has become something that I’ve enjoyed and I’ve gotten positive feedback about it.
Voicemails are even better because it shows people that there are all these different people with different businesses listening to the show. You and I know we have tens of thousands of listeners but as a listener, you don’t know that. It would be hard to know or understand your fellow listeners and your fellow entrepreneurs doing it. I have enjoyed this and I think we’ll keep doing it as long as the questions keep coming in.
Our first question today is for me, it’s actually from a guy, Louis. He said, “The question I have is what would Rob wished he had prepared in advance in going through the process of selling Drip? Imagine there might be things like intellectual property who may have purchased the use with his own name but now need to be transferred to the company, manuals and processes, bank issues such as PayPal not being able to transfer, etc. The list could be endless, maybe a good topic for a book.”
I’ve actually thought about this. There are two thing I wanted to say here. The first is I’m gonna make an announcement but not really an announcement, Mike, I haven’t even told you this. I’ve started writing what I think may become a book. That’s the exact right response. I don’t know if it will yet. My goal for this year is not to tackle any big new projects.
There’s a lot to tell, there’s a lot of story that has happened since the last book I wrote. Maybe it’ll just be about Drip and the trials and tribulations, the last year of personal finance hell and being unable to fund the business and then the year of the acquisition and then the year of moving. As I started thinking about it, I was like, “Isn’t this interesting enough? Will anyone care?”
I sat down with a notebook and I just wrote out what were the most stressful parts of my life both personally and professionally since 2011 in essence. The list was crazy long. Each of them just shaped into this narrative and they link together in this very interesting way. Even if I were to write about acquiring HitTail and not use it in the book, it’s still […] for me to write about the process of growing it and then selling it. There’s a bunch of stress that went along with that sale.
I started just thinking about all the stuff that happened growing Drip. I made this big list, when I looked at it I feel like it’s interesting enough, at least worth sitting down and hacking some stuff out. I had like three pages of just bulleted list. About a week and a half ago, I just sat down one evening, I started doing it on a weekend. It’s kind of writing itself because it’s a narrative. I’m pulling out actionable things but I’m trying to get the grit of what it was actually like.
I have emails, I have Voxers, I have all this, I have my MicroConf talk from last year talking about the sale and my thought process, I started to listen to that and transcribing pieces of it. It’s cool in this day and age, all the digital elements that we have because I can’t remember exact dates but Gmail sure doesn’t forget. It remembers the exact date of this email that I sent to Derrick about this topic.
I’ve literally just been doing it on the side almost as a journal but trying to be very honest about everything, trying not to sugarcoat things. I’m about 7000 words in and it has just poured out of me, it’s all out of order, I just picked the next thing on the list that I think, “Man, I really wanna write about that today,” and I’m cranking it out.
I don’t know if it will be a book, I don’t know if I will ever release it but it’s something that I think could have the potential to be that. It’s always funny, when I got this question I started thinking, “Maybe that should be a piece of this.” Because I don’t just want it to be a narrative, I actually want it to be in typical or a podcast style and MicroConf style. I want it to have lessons that people can take away.
Whether they’re acquired or not, even just the growing part of it, the mistakes that they can avoid that I made or smart decisions that we made that I feel like people can learn from.
Mike: There are two pieces of that because there are people who would read that just because they know who you are or they’ve seen you speak and they just want the inside baseballs so to speak. They’re interested in the story, I totally hear what you’re saying about having the lessons but I think you could do both where you’ve got the story itself and then after each chapter or after each section you have a list of things that you personally pull out and be like, “Here are the lessons that you could take away from this, here’s the story piece of it and then here’s the lessons that go with each of these.”
Some of them may not have any lessons at all, it’s just something happened and you got lucky or unlucky and you just had to deal with the consequences or fallout. There may not have been anything that you could do about it. Maybe that’s the lessons, you can’t plan for everything but I think that it’s still going to be interesting to a lot of people.
Rob: I appreciate that. I kind of think of it as I think of any MicroConf talk I’ve ever given or at least the best talks that I’ve given tend to be a story, like a hero’s journey and then pulling out super actionable tactical things. That’s how I’m envisioning it. I’ve read only a couple books like that, I like it because it’s different, it’s not just a narrative. I want them to be not obvious takeaways, it’s not like work hard and persevere and you will make it. It’s not stupid stuff like that.
I realized that I think I’m telling myself that I don’t know if it’ll be a book so that I don’t feel in pressure or anxiety. I don’t want to feel forced to write it, I don’t want the writing to feel forced. I’m telling myself no one will ever read this because I wanna tell the story honestly, because there’s obviously a lot that went on that no one else knows that was very internal, that was between Derrick and I or between Clay and I or whatever.
Eventually, I’m sure I’ll have to edit some of that out but I’m trying to get it all out and then evaluate, is this worth doing? Maybe it’s an ebook or maybe it’s a series of blog posts that I’ll release or maybe it’s an audiobook, I don’t even know. It’s an interesting project. Hopefully it’ll turn into something.
Mike: Man, if it doesn’t, you did it for yourself and that’s not a big deal either. There’s something to be said for just doing things for yourself once in a while.
Rob: Exactly. That’s what I said, it’s like what’s the worst that can happen, I should just write this out. If nothing else, my kids can read it someday or something.
Mike: All of these aside and back to the question, are there any top level things that you can take away that you wish you had done that were probably a major things that you either overlooked or hadn’t thought about upfront that needed to be transferred or you wish you had done?
Rob: The prep work that I think everyone should do that you don’t think about is it’s far more mental prep work than anything else. I listened to the book Built to Sell three or four times, I listened to Finish Big multiple times, I did a lot of journaling, I did a lot of thinking. You have to know what your deal breakers are, you have to know probably what your drop dead price is. There’s a bunch of stuff that you need to think about and that it the prep work that I would focus on. I’ll just put that out there, first and foremost spend more time doing that.
The examples that the guy brought up, the guy who answered the question, most of these were not an issue. He brought up intellectual property, I had already transferred all of that into an LLC. If I hadn’t done that, it would’ve been disastrous, it would’ve been a huge pain in the ass.
One big thing that I do think you need to think about as you’re building your companies to have a clean IP, meaning that all of your contractors who touch your code, all of your employees who touch your code, you need to have them sign in their employee agreement, it should say, “Everything I do, the company owns.” I had that, I had only missed one contractor. I went back and asked him nicely, we still have a good relationship and everything was fine.
Had I not had that, it would’ve been really tough because when we went through the acquisition, they needed that. This funded company is not going to pay a premium for my startup if there are IP holes that someone could come back later and sue them or ask for ownership with the code or whatever. It’s not something you think about when you’re two, four or five person startup but it’s something that you should definitely have.
I signed to the same employee agreement, and Derrick signed, even us cofounders. We had to have agreements that basically Drip, the S Corp that owned everything own everything, that Derrick and I couldn’t walk away with that. That’s one thing I would think about.
The guy mentioned manuals and processes, that was not an issue because we were an eight person team and they’re acquiring the team. They weren’t looking to automate everything. I think if the team was walking away, yes they would want manuals and processes to hand off to the next team but there was zero questions about that. There were more questions about what our vacation policy and HR staff and employment agreements looks like than anything like that.
In terms of bank issues, they didn’t acquire the company, if you think about it. They acquired all the assets of the company and that’s typically how it’s done because they don’t want any of the liabilities. They left an S Corp that Derrick and I still own the same amount that we’ve always owned, they just bought all the internal assets of it including the code and the goodwill and the recurring revenue and employment agreements and all that stuff.
As a result, the corp still owns the bank account, they didn’t acquire any of that stuff. Thankfully we never had to setup a PayPal account or anything like that. Same thing with domain names, we just transferred them over. They were all in the GoDaddy account and we transferred them over to their GoDaddy account.
The only other thing I could think of as I was going through this list that I think would be interesting to think about it they ask for, this is typical, the standard due diligence stuff, all corporate documentation, your articles of incorporation, every single amendment you’ve ever made to them, everything. Have that all in one place because going out and finding it and scanning it is a pain in the ass.
Having record keeping doesn’t seem like a big deal when you’re a three person startup or when you’re a solo founder. But if you’re ever planning being acquired, you probably want all of this stuff somewhere so it doesn’t take you weeks to put these docs together.
The next thing is having really solid books, basically having income statements for every month. For me it was literally just a Google Doc with revenue, expenses and that kind of stuff. I also had Xero, the accounting software that they could look at. When they were asking for high level numbers, top line revenue and that kind of stuff, I was sending them Google Docs.
They’re gonna ask every single service you use, what’s every SaaS app that you pay for? Hopefully they’re all on a credit card, you could just go to credit card, that’s what I did and just started listing those out. Copies of leases and every contract you’ve ever signed for every service. Transferring the Stripe account did happen because all the subscriptions were in there.
That’s the high level overview, I think it’s something that I hadn’t thought about. When there’s a technology transfer, you think more about, “Boy, the tech has to be good and has to be automated and you want processes in place.” When it’s a company acquisition, it can be different. When people bought HitTail just as a product, they didn’t ask for articles of incorporation because they weren’t buying the team, it wasn’t a strategic acquisition. Those are my high level thoughts.
Mike: I hadn’t realized that they did not acquire the entire company itself and they were just acquiring the assets from the company. That’s the way that my wife had purchased the fitness studio that was in town. She didn’t acquire the business, she acquired the assets of the business.
I was very clear to her about just because the records of the business were obviously a little screwy and the person who own the business before couldn’t really explain certain things and was a little cagey about certain pieces of it where I’m just like, “Do not acquire the business.” Because let’s say she’s got a car, for example, that is owned by the business, if you acquire the business, you’re also acquiring the debts that go with it and any liens or anything else that goes with it. You will be on the hook for those things. If you don’t know about it, it doesn’t matter, you still have acquired them which may suck.
Rob: If you buy the company, you acquire the assets and all liabilities. That’s why almost without exception, anyone who knows what they’re doing, when they buy a “company” they’re just buying the assets of the business, that’s the standard. When Facebook bought Instagram, you can bet, their lawyers did not buy the Instagram LLC or C Corp. They bought just the assets of it.
As a result, you have to then list out what all the assets are which is interesting because you have to list out your code and the database and this, it’s just a big long list of stuff.
Mike: With my wife, there was a tax bill that ended up coming in. It was sent to her and she’s like, “No, this isn’t me because I didn’t acquire the business.” There was stuff that came up afterwards that had she’d acquired it, she would’ve been stuck with it and there is nothing she would’ve been able to do.
The other thing I find interesting is that when I worked for Pedestal Software and they got acquired by Altiris, the Altiris acquisition team came in and they handed us, all the employees, these documents that we had to sign that were basically more or less a copy of what our previous agreement with Pedestal had been for all the IP rights and signing them over to Pedestal but it was their version of it.
We’d already signed all the stuff but they said, “Yes that’s fine and everything looks good but you also have to sign these.” I think maybe there are updated ways of covering additional holes or something like that, I’m not sure.
Rob: I guess our agreements were perhaps good enough for their lawyers, they probably looked at them and said, “This covers everything.” Because it was recent, it was within the last year or something and everyone had signed. I broke everything out, Numa Group which is my umbrella LLC that owns a bunch of stuff, it owned Drip until maybe 9 or 10 months before it was acquired.
I was already in the process of ripping it out of Numa Group because that was when Derrick was taking some equity in the company and he essentially became cofounder. I was already in that process which was painful and agonizing and took five months and more money than it should have. Drip was already in an S Corp. I was very, very thankful for that because if it did not, then it would’ve been a fiasco to try it doing during the negotiation and the acquisition process.
When that all happened, I basically fired all of us from Numa Group, we all got new jobs with Drip, S Corp, Drip Incorporated. We all signed agreements at that point again even though some of us already signed up with Numa Group. Then, essentially when Leadpages acquired us, we all got fired from Drip Incorporated and all got new employment agreements with Leadpages.
I think they probably had some IP stuff in their employment agreement as well which is fine because then anything you do for them they own but they didn’t have a specific additional stuff we had to sign.
Mike: I wonder if it maybe it was because Altiris was a public company and they had additional things that they had to cover themselves, I don’t know.
Rob: I can see that, it makes sense. Thanks for the question, guy. I hope that was helpful. Our next question is actually not a question, it’s some kudos for us and it’s a voicemail.
“I just listened to episode 838 with the questions. It was great to have that interactive […] podcast, I just wanna give you guys some feedback, a long time listener. My name is Chris. I really enjoyed the episode, just hearing those questions and getting some more of your perspectives and your background and experience. […]. Take care, guys. Thank you again. Keep up the good work.”
Awesome. Thanks for calling, Chris. I wanted to play that because it’s good to hear feedback and folk’s opinion. He said episode 838 but I think he meant 383 which was just another one of these Q and A episodes. I specifically mentioned in that one that I like doing them more often and that I like getting voicemails because it shows it has the interaction. Thanks for that, man. I’m always happy to hear from folks.
Our next question is from Mr. Andrew Connell about GDPR. “Hey Rob and Mike, this is Andrew Connell from Voitanos, that’s voitanos.io. I do online training and I do it for everybody around the world or developers around the world. With the coming effectiveness of the GDPR for data privacy and personal privacy data at Europe, I’m curious if you guys can comment a little bit, of course not being lawyers, I’m not a lawyer either. I just think about what kinds of things developers really need to be paying attention to? What kinds of things you need to be careful of?
I’m asking these guys because it’s also very much in the way of how we’ve all be listeners of your show worked on doing email based marketing and collecting email addresses and potentially phone numbers and other information about users. What kinds of things you need to think about, I’ve seen things about privacy statements that you need to have on your site, how you’re collecting the data, what talent is being used, how you’re protecting it, all those kinds of things.
I’m just curious, what things do you really need to be paying attention to? There’s probably the gold standard but also what’s the standard that you can do where you’re at least defensible. Maybe you’re collecting data and the user finds out, they decided they no longer wanna be tracked by you. Can you just go back to them and say, ‘Yes I track you by your email address. Here’s all the information I have about you. If you want me to delete you, I can delete you.’ I’m just curious, do you guys have some comment there or maybe even have somebody who is a lawyer who can jump on the show and maybe comment? Thanks a lot. I love the show. See you guys in Vegas.”
The riveting conversation topic of GDPR.
Mike:Oh, joy.
Rob: Everyone is thinking about it so it’s important, it’s just such a fiasco. I’m gonna use the word stupid a lot in this conversation insight. Big parts of it, I think, are really dumb. There’s a 250 page doc or whatever and Brandon, our senior director product, went through the entire thing.
The end result is gonna wind up being something like we have to rewrite a bunch of internal policies and we’re gonna add a checkbox to a form for our users. That’s very similar to what MailChimp is doing and Active Campaign, all the ESPs. I’ll stop there and circle back because I’ve been talking a lot this episode. I know that you saw a talk at FemtoConf about it and I’m sure you have other thoughts on this.
Again couching it that we aren’t lawyers, we are not giving personal advice to anyone and certainly don’t have an exhaustive understanding of this but this is just our general thoughts on what we feel like folks might wanna do for GDPR.
Mike: The talk that I saw on FemtoConf, there’s a linkable posted in the show notes from Aleth, she’s the one who gave the talk. There’s a link to an overview of her talk as a recap from Christoph. He runs FemtoConf with Benedikt. You can go out there, there’s an overview of it but I’ll say it glosses over certain details that she talked about specifically.
With GDPR, the thing that you really have to make sure that you’re aware of is that if you touched the data in any way, shape or form, you’re on the hook for it. You have to make sure that you are both protecting it and if you are able to personally identify somebody, that you are complying to those GDPR policies.
If you have metadata about somebody, like custom fields or something like that, that’s not considered personally identifiable information but there are certain pieces that are. For example, an email address would be personally identifiable, an IP address would be personally identifiable, first name, last name, address, those kinds of things.
You tag somebody, that’s not considered personally identifiable but you have to spell it out in your privacy policy what you are doing with those types of things. Are you adding those types of things?
Rob: How is an IP address personally identifiable? That’s stupid. It’s not personally identifiable because IP address, a, can change constantly, b, you could have a single IP address for 100 people at a company, there’s so many ways that that’s not. I will stop.
Mike: You just have to be careful about what it is that you’re doing with that data. A couple of big things that I’ve seen that you have to really pay attention to if you’re selling stuff is that one, people have to be able to request a copy of all of the data that is associated with them.
If you’re running a SaaS app and it’s collecting the information, let’s say it’s Drip ESP, your customers are gathering information based on that email address, the person who owns that email address has to be able to come in and say, “Show me everything that you collected about me.” You have to provide them with the mechanism to give them that data dump. I’ve seen this recently, Facebook is doing this, Twitter is doing this.
You can go and you can request a download of all the information that Facebook has on you, the same thing with Twitter, you can get a download of it. I haven’t done that with mine yet but my understanding is that it is absurd and I’ve seen the amount that Facebook has on you, for example. There’s obviously backlash in the news right now about the amount of data and how personal it can be in certain cases. That’s something you have to pay attention to when you’re trying to comply to these, you need to give that to somebody.
Rob: Here’s what I would say, if you’re a developer, you don’t have to have an automated way. They can email you and you can go run a sequel query. I would not go and build something consul or anything especially it’s a small company. You know that you can do stuff agile and just do it when it happens, do it just in time, whatever.
They can also request that you have to delete everything, then at that point, the first time, it’s gonna be a pain in the butt but you’re gonna write that sequel query to delete it out, it probably gonna break something then you’re gonna fix it and then the next time you’ll have the same query. That’s how I would think about it. If you’re Facebook, that’s not gonna work because it’s not scalable. The odds of you getting a request when you have 1000 users or 5000 users, it’s pretty low.
Mike: The downside of that, though—I was just about to mention that—with deleting the information because you do have to comply to the right to be forgotten clauses.
Rob: Which is the stupidest thing I’ve ever heard.
Mike: I think you said it in the middle of the other comment as well, we’ll say it’s three. The right to be forgotten says that somebody can say, “Completely forget about me.” The problem I have with this is that where do you draw the line for that? I know that there’s a timeline that you have in which you can say, “We’ll get this taken care of.” You have a certain amount of time or this 14 days or 30 days to get rid of the data.
The question I have in my mind is that yes, I understand that that applies to backups but does that mean you have to go into your backups or you are only allowed to basically hold 30 days worth of backups? For the sake of arguments, say that it’s 30 days, is that all you’re allowed to maintain because that seems scary.
Rob: That’s why this is insane. It’s a legislation, it’s government getting involved in something that technically is a bad choice for a company or a bad choice for a business. We know as IT people, as developers, as professionals, as DBAs, you wanna have weekly backups or monthly backups for literally years probably. It’s not so you can hoard and use a bunch of information, it’s so if stuff goes sideways at some point and you realized you have this big error, you always go back, it’s a safety mechanism.
Mike: The other thing that bugs me about this is the right to be forgotten. I get the intent and I understand it but let’s say that somebody comes to you and says, “Rob, I want Drip to forget about Mike Taber.” What happens in three days if my contact information makes it back into Drip? How do you prevent my information from going back into the system without knowing who I am and keeping track of that? That’s a total chicken and egg problem.
Rob: None of that, as far as we’ve seen, is in GDPR. That isn’t addressed. The example is you say you want the right to be forgotten, you sign up for Rob Walling’s newsletter and you, Mike Taber, say, “I want to be pulled out of there.” You’re pulled out. What if you’re in 10 of our other customer’s accounts, are you only forgotten out of that one account? Are you forgotten out of everyone? It’s not specified.
Like you said, what if you then go to sign up to a new newsletter tomorrow and XYZ person is also hosting on Drip. There are so many edgy cases. The problem is every version is gonna be this much of a pain in the ass. If they do V2 in a year, think of how many personal hours and how many dollars have been pissed away by companies that would otherwise have been productive building products, doing interesting things, creating jobs.
Marketing alone on the Drip team which is not a huge app, we’ve wasted hundreds of hours and thousands, if not tens of thousands, on legal fees just having our lawyer’s advice and stuff. That sucks, that’s money that could’ve actually been productive and instead it’s sitting here dealing with what essentially is legislation.
Another issue I have is that in the US, they often will pass things, they’ll pass laws like this but they will exempt small businesses. If you’re 25 employees or less, you don’t have to comply to certain things. They do that because they don’t wanna put an undo burden on small companies because small companies are the ones that don’t have the budget, that don’t have the analysis council and that don’t have the bandwidth to handle a 250 page doc that’s completely opaque and everyone is confused about and freaking out. I think there should be an exception.
Isn’t this really meant to be for Google and Facebook and Apple and Fortune 1000 or Fortune 5000 Companies. How much do they care about these tiny little 3 person, 5 person, 10 person companies. They’re just trying to run a business, they’re just trying to make a living. That’s where I think they overlooked having some kind of exemption for small businesses.
Mike: There are certain pieces of it that are exempt; there’s the security officer, a dedicated security officer. Stuff like that, I believe is exempt. If you’re a small business below a certain size, you don’t have to have that. But the reality, at the end of the day is if you’re a single owner, that’s you anyway. It almost doesn’t matter. I totally agree, they’ve overreached is really what it comes down to. It doesn’t makes sense for much smaller businesses to try and have to comply to that.
Rob: Again, you and I agree, we understand the spirit of what they are trying to do. I don’t disagree with any of that, I disagree with the amount of burden that they’re placing on all the small businesses. Everyone is talking about this right now. It’s a waste of everyone’s time. When I say everyone, in our circles, in the startup circles. Yes, Facebook should worry about it but it’s so much wasted bandwidth.
Mike: The other thing that I saw that was interesting was when you spell out in your privacy policy what data you have that you’re collecting and what you’re using it for, you also have to give the person the ability to opt out of individual pieces of it which to me seems absurd. I don’t know why you would allow that.
Rob: I have not come across that, I don’t know about that. That’s an interesting piece.
Mike: Let me give you an example, if on your website you have Google Analytics, a Facebook Pixel, and a Drip Widget for example, somebody can come and say, “I don’t want you to track me using Facebook Pixels but the other things are okay, just not that.”
Rob: I had a guy who read all 250 pages of it and that is not on our list. I would look to see if perhaps there’s an exemption or there’s something in there that says you can otherwise not do that because, again, I haven’t heard anyone else talk about that.
Mike: The thing is there’s a piece that revolves whether or not you’re a data processor or a data controller. That’s the part that revolves on it. You mentioned earlier that there’s a question in your mind about whether or not if somebody is asked to be forgotten, is it just for that one account or is it for all them? My understanding is it’s all of them.
They could go to Facebook, you don’t have control over but they could go to Facebook and say, “Opt me out of everything, don’t track me. Forget me completely.” That has a trickle down effect on you running Drip because if you guys use the Facebook Pixel to track people, then you can’t track me, for example. Facebook essentially blocked it. Again it goes back to how do you keep track of that unless you know who the person is to not track them.
Rob: To be honest, I asked someone who I know is familiar with GDPR and had spent some time looking at it. He runs a small business, less than 10 employees. I was saying, “What are you actually gonna do here?” He said he is gonna handle things as they come in in terms of the request, in terms of deleting and in terms of giving a report of what they know.
He is seriously considering not creating all the documents because they basically say you have to have these 10 policies or 12 policies, all this internal documentation you’re supposed to have, processes to do this. He was going to say that his company is compliant with the spirit of GDPR and we’ll live up to the request but they do not have all of those policies in place.
It was like some verbiage of we believe in the spirit of it, we will comply as needed type of thing with the thought in mind that he’s not in Europe so he’s not European business so it would be very unlikely that the EU is gonna reach across the pond and come and try to take some little 10 person company out. Like I was saying, this is really more intended, my understanding is more intended for these larger companies.
That’s the balance, is being practical about it and not putting your head in the sand and not doing anything but understanding some basic fundamentals which is what we’ve talked about here. If folks are opting in to hear from you or receive marketing, there’s supposed to be a specific checkbox that says you agree to the privacy policy and our terms of service or whatever which again I think is idiotic because they already know that.
A checkbox and them checking a checkbox is gonna make a difference, it’s like agreeing to a ULA, user license agreement with Apple, no one reads those things. You’re gonna put a checkbox with the link and it’s just gonna become this route thing that everyone does. It’s not gonna change anything but that is what it says technically. Consider if you’re asking for keeping your customer’s customers data somewhere, it gets more complicated.
In Andrew’s case, he runs online training. He has an online training, video training, people can sign in. He’s not collecting his customer’s customers data so it’s very much more simplified. I would consider a just in time or a simplified approach if I were in his shoes. How about you, Mike? You wanna talk about how every aspect of your business is not gonna comply and open yourself up towards the EU?
Mike: That’s the interesting thing is that for businesses that are not based in Europe, they don’t have the jurisdiction to force you to do any of that anyway. There’s literally nothing that they can do, they can’t sue you and say, “You are not complying to this.”
Rob: They could sue you in US court, they could. The EU could file a sue in Massachusetts court. You would have to fight it out, you would have to settle or you would have to fight. The odds of that happening, though, for you are almost non existent.
Mike: The thing is there’s a difference between them filing suit versus them having jurisdiction over. The sucky part would be you’re gonna have to comply to it just to make that lawsuit go away or you’re gonna have to fight it which you’ll win if you fight but you’re gonna incur a ton of legal fees over the course of doing that because they don’t have the jurisdiction and that’s what the court would rule.
I certainly wouldn’t recommend trying to fight it yourself and be your own lawyer there. I’m sure that somebody probably is skilled enough to be able to do that but I wouldn’t wanna be that person, I wouldn’t wanna risk it.
Rob: Here’s another option I heard someone throw out. They said EU customers are less than 10% of my business, I’m gonna reject, not allow EU customers anymore because I don’t have the bandwidth to do it. That’s what someone told me, that was really interesting. That’s a super bummer but at some point you have to throw your hands up and you gotta do IP detection or you just ask, “Are you in the EU, yes or no?” If they say yes, during the signup, you just say, “Sorry we can’t support you through the GDPR.” It’s pretty fascinating, I hope it does not come to that but I can imagine some businesses that’s just going to be easier and simpler to do that.
Mike: I’ve heard some people tried to, I think it came up at MicroConf Europe this past year about the legislation. There is someone there I met who was basically basing his higher business idea off of the idea that there were going to be US based businesses who aren’t going to comply to GDPR and they were gonna say. “You can use our service and you will be compliant.” I disagree that that’s a great business idea because all they have to do is comply and then suddenly your whole business value proposition goes off the window.
Rob: Obviously it’s complicated but I do think there’s a pragmatic way to approach this. As with any legislation, it will iron itself out, it will be more understood. You can watch companies like MailChimp or Drip Leadpages or whatever, GitHub, or Slack and watch how they handle it and then evaluate, “Do I need to do some other things?” You can also read that 250 pages doc and try to sort it out.
I don’t think it’s as bad as people make it out, I’m hoping it’s not gonna be that way. I do think if you’re in the EU, there is definitely more of a cause for concern if you’re running a business. Thanks for the question, Andrew. I think that was super helpful and a timely topic to discuss.
Mike: I think with that question, we’ll wrap things up for the day. If you have a question for us, you can call it into our voicemail number at 1-888-801-9690 or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups. Visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Welcome to Startups For The Rest Of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching and growing software products whether you built your first product or you’re just thinking about it. I’m Rob.
Mike: And I’m Mike.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. What is our word this week, sir?
Mike: Why is it in Zencastr it says Chronomustard?
Rob: Chronomustard, that’s my name this week. I think that’s gonna confuse our editor. I’m trying a new thing, creativity. I’m trying to enter a different name each week just to see if I can make you laugh.
Mike: They usually do make me laugh, I appreciate that.
Rob: For sure. What’s going on this week?
Mike: I did a demo yesterday for a customer who’s looking at switching over from a competitor and they have a bunch of different users for the product that are in the competitor. When I went through and was doing the demo, afterwards he’s just like, “Wow this is way more advanced than what we’re currently using.” I’m just thinking to myself, “Is that a good thing or a bad thing?” Apparently it was a good thing.
They were looking through and signing up for it. Next week they’re gonna reach internally. Hopefully they’ll turn into a fairly large customer for Bluetick.
Rob: It’s always good to get off a demo and get that feeling that you’re gonna be making more money, it’s always worth it.
Mike: What was really interesting to me was just the fact that they had said how advanced it was in relation to this competitor because the impression that I get from their website and all the things that it seems like it does is that it’s probably more advanced than Bluetick but I got the distinct feeling that that was not the case.
I knew that they were having problems with it but I wasn’t clear until the phone call and exactly what those problems were and how they were dealing with them and what they were looking to do.
Rob: That’s awesome, man. Do you have any avenue if you sign this guys up that you’re able to find more customers like them?
Mike: I do but I think it’s gonna be more word of mouth relationship than anything else. This one came through a personal relationship so it’s not as if they came in through a marketing channel or anything like that. I knew who the person was and contact them and went from there.
Rob: You could also think about going to build with your Datanyze. Since they are using this competitor pulling down the list to people who are using the competitor doing the cold email thing, we talked a little bit about that last week. It’s obviously time consuming but that can be an interesting avenue if you do know that you are better than a specific competitor.
Mike: I don’t know how well BuiltWith would identify that because it’s through email so there’s no really a lot of onsite stuff that’s gonna tell me who’s using that unless they have a JavaScript which I don’t have that so nobody will be able to use BuiltWith to reverse engine but maybe they do, I’d have to go take a look though.
Rob: Probably be worth a few minutes. You have been busy, man. I was pleased to see an article on Indie Hackers, Starting and Growing a Conference for Internet Entrepreneurs, got quite a few upvotes. You said you spent several hours doing this, it’s one of the most in depth Indie Hackers Q and A I had seen.
Mike: I spent a lot of time on that, probably close to a day and a half to two days. I threw in the word because I was curious since how long it actually was, it came in at 6000 words.
Rob: It’s like a book chapter or two. It has screenshots and everything, you did a really good job. If folks are interested in hearing about the history of MicroConf, what it was like starting it, how it runs today. There’s just a ton of insight stuff, although some of it is projected revenue, I think you gave this year. Some years don’t include MicroConf Europe, it’s not all exact but there are graphs and everything that I think that Indie Hackers folks put together.
Mike: They took the attendance numbers and extrapolated with the revenue was from those numbers. It’s off a little bit but it’s not really that big deal, it’s more of the trajectory, I think, that’s important to see.
Rob: It doesn’t include sponsorships and all which are big chunk. It’s fun for me to read because I could be like, “Oh yeah.” I was nodding along like, “I remember that. I can’t believe Mike remembers this.” You are pulling stuff out, all the anecdotes that I had long forgotten.
Mike: Some of the things I had to go back. I looked through my email to see when it was that we first started talking about MicroConf and I traced it back to the exact day which I don’t know if we talked about. We had a name for it before then and we were talking about it separately and just calling it a conference or we had the name and we picked it on the day and went from there.
I don’t remember how long we talked about it before we decided to register the domain name and start looking forward or if it was just like spare the moment thing.
Rob: I remember being very spur of the moment. It just made sense, it was like, “Why don’t we just do that?” That’s cool. There’s a lot of engagement, a lot of really good comments and in depth discussion going on and 36 upvotes, I get the feeling that’s quite a few for most articles. Anyways, if you’re interested in hearing that story, we’ll link it up in the show notes but you can obviously go to indiehackers.com and give it a search. You also went on Justin Jackson’s podcast, MegaMaker. It was a couple weeks ago.
Mike: I think that was last week as well. We recorded it and then it went live either later that day or the very next day. It was all about MicroConf itself and what Starter Edition was about. We’ve announced that Justin Jackson is going to be emcee for Starter Edition.
We did that last year, Starter Edition as well, with Jordan Gal from CartHook. He was the emcee for that, we basically turned over the reins to him and let him run the show at Starter Edition which was really cool because it’s nice to be able to sit back a little bit and enjoy the conference a little bit more. I don’t know how you feel about that but it’s nice to let somebody else take the reins for a little while.
Rob: That was something that Zander, our conference coordinator, encouraged us to do because since Growth and Starter are back to back, we’d be solo energy by the fourth day of trying to emcee and run the conference that I think he knew that it would just wouldn’t come off as well as it could. Jordan certainly knocked it out the park as the emcee that was really, really good and to give them their style up there on stage is fun.
You know, with Starter, Justin is such a good fit for it because that is really the crowd that he is talking to everyday and interacting with so he knows that crowd perhaps these days, you know better than I do in all honesty. It was years ago that I was really knee deep in all of the transitioning from developer to marketer and talking about all that stuff. He just has his finger on the pulse of that. I think he’s a good fit to emcee. This year he’s also doing a talk which is cool.
Mike: How about you, what have you been up to?
Rob: I’ve just been working, kicking back a little bit. I have a spring break coming in a week or two. We are heading down to Florida, starting to warm up in Minneapolis but still in the 30s and we wanna get some sun. It’s an easy flight down to Miami and we rented up Big Ol’ Airbnb off of 80 and we’re looking forward to that.
I was enjoying, I don’t know if you’ve heard it but Sherry was on Mixergy. It’s actually her second time on Mixergy. Her first time, it was when she interviewed Andrew Warner and put it on ZenFounder and he simulcast that basically onto Mixergy. But this time it’s called Keeping Your Feet Together As A Founder and it’s Andrew Warner interviewing Sherry about the book and about the stuff she’s doing in the entrepreneurial communities. It’s really a pretty intense interview but it’s really good. Have you had the chance to listen to it?
Mike: I have not, no. I don’t get a chance to listen to Mixergy too often. I’m actually about two months behind on most of my podcast at the moment anyway.
Rob: I listen to select Mixergy interviews just because there’s a lot of them and they are long but this is one that obviously I jumped on, I just wanted to hear the content. It’s a good one, we’ll link it up in the show notes but you can obviously search for Sherry Walling Mixergy and find that in Google.
Mike: Awesome. What are we talking about today?
Rob: We’re gonna answer a bunch of listener questions and see how many we get through. It was cool, we were down to one listener question. When we announced it on the show, I think we’re up to 12 or 15 now and so we can hammer through. I feel like this cadence every other week answering these questions has become something that I’ve enjoyed and I’ve gotten positive feedback about it.
Voicemails are even better because it shows people that there are all these different people with different businesses listening to the show. You and I know we have tens of thousands of listeners but as a listener, you don’t know that. It would be hard to know or understand your fellow listeners and your fellow entrepreneurs doing it. I have enjoyed this and I think we’ll keep doing it as long as the questions keep coming in.
Our first question today is for me, it’s actually from a guy, Louis. He said, “The question I have is what would Rob wished he had prepared in advance in going through the process of selling Drip? Imagine there might be things like intellectual property who may have purchased the use with his own name but now need to be transferred to the company, manuals and processes, bank issues such as PayPal not being able to transfer, etc. The list could be endless, maybe a good topic for a book.”
I’ve actually thought about this. There are two thing I wanted to say here. The first is I’m gonna make an announcement but not really an announcement, Mike, I haven’t even told you this. I’ve started writing what I think may become a book. That’s the exact right response. I don’t know if it will yet. My goal for this year is not to tackle any big new projects.
There’s a lot to tell, there’s a lot of story that has happened since the last book I wrote. Maybe it’ll just be about Drip and the trials and tribulations, the last year of personal finance hell and being unable to fund the business and then the year of the acquisition and then the year of moving. As I started thinking about it, I was like, “Isn’t this interesting enough? Will anyone care?”
I sat down with a notebook and I just wrote out what were the most stressful parts of my life both personally and professionally since 2011 in essence. The list was crazy long. Each of them just shaped into this narrative and they link together in this very interesting way. Even if I were to write about acquiring HitTail and not use it in the book, it’s still […] for me to write about the process of growing it and then selling it. There’s a bunch of stress that went along with that sale.
I started just thinking about all the stuff that happened growing Drip. I made this big list, when I looked at it I feel like it’s interesting enough, at least worth sitting down and hacking some stuff out. I had like three pages of just bulleted list. About a week and a half ago, I just sat down one evening, I started doing it on a weekend. It’s kind of writing itself because it’s a narrative. I’m pulling out actionable things but I’m trying to get the grit of what it was actually like.
I have emails, I have Voxers, I have all this, I have my MicroConf talk from last year talking about the sale and my thought process, I started to listen to that and transcribing pieces of it. It’s cool in this day and age, all the digital elements that we have because I can’t remember exact dates but Gmail sure doesn’t forget. It remembers the exact date of this email that I sent to Derrick about this topic.
I’ve literally just been doing it on the side almost as a journal but trying to be very honest about everything, trying not to sugarcoat things. I’m about 7000 words in and it has just poured out of me, it’s all out of order, I just picked the next thing on the list that I think, “Man, I really wanna write about that today,” and I’m cranking it out.
I don’t know if it will be a book, I don’t know if I will ever release it but it’s something that I think could have the potential to be that. It’s always funny, when I got this question I started thinking, “Maybe that should be a piece of this.” Because I don’t just want it to be a narrative, I actually want it to be in typical or a podcast style and MicroConf style. I want it to have lessons that people can take away.
Whether they’re acquired or not, even just the growing part of it, the mistakes that they can avoid that I made or smart decisions that we made that I feel like people can learn from.
Mike: There are two pieces of that because there are people who would read that just because they know who you are or they’ve seen you speak and they just want the inside baseballs so to speak. They’re interested in the story, I totally hear what you’re saying about having the lessons but I think you could do both where you’ve got the story itself and then after each chapter or after each section you have a list of things that you personally pull out and be like, “Here are the lessons that you could take away from this, here’s the story piece of it and then here’s the lessons that go with each of these.”
Some of them may not have any lessons at all, it’s just something happened and you got lucky or unlucky and you just had to deal with the consequences or fallout. There may not have been anything that you could do about it. Maybe that’s the lessons, you can’t plan for everything but I think that it’s still going to be interesting to a lot of people.
Rob: I appreciate that. I kind of think of it as I think of any MicroConf talk I’ve ever given or at least the best talks that I’ve given tend to be a story, like a hero’s journey and then pulling out super actionable tactical things. That’s how I’m envisioning it. I’ve read only a couple books like that, I like it because it’s different, it’s not just a narrative. I want them to be not obvious takeaways, it’s not like work hard and persevere and you will make it. It’s not stupid stuff like that.
I realized that I think I’m telling myself that I don’t know if it’ll be a book so that I don’t feel in pressure or anxiety. I don’t want to feel forced to write it, I don’t want the writing to feel forced. I’m telling myself no one will ever read this because I wanna tell the story honestly, because there’s obviously a lot that went on that no one else knows that was very internal, that was between Derrick and I or between Clay and I or whatever.
Eventually, I’m sure I’ll have to edit some of that out but I’m trying to get it all out and then evaluate, is this worth doing? Maybe it’s an ebook or maybe it’s a series of blog posts that I’ll release or maybe it’s an audiobook, I don’t even know. It’s an interesting project. Hopefully it’ll turn into something.
Mike: Man, if it doesn’t, you did it for yourself and that’s not a big deal either. There’s something to be said for just doing things for yourself once in a while.
Rob: Exactly. That’s what I said, it’s like what’s the worst that can happen, I should just write this out. If nothing else, my kids can read it someday or something.
Mike: All of these aside and back to the question, are there any top level things that you can take away that you wish you had done that were probably a major things that you either overlooked or hadn’t thought about upfront that needed to be transferred or you wish you had done?
Rob: The prep work that I think everyone should do that you don’t think about is it’s far more mental prep work than anything else. I listened to the book Built to Sell three or four times, I listened to Finish Big multiple times, I did a lot of journaling, I did a lot of thinking. You have to know what your deal breakers are, you have to know probably what your drop dead price is. There’s a bunch of stuff that you need to think about and that it the prep work that I would focus on. I’ll just put that out there, first and foremost spend more time doing that.
The examples that the guy brought up, the guy who answered the question, most of these were not an issue. He brought up intellectual property, I had already transferred all of that into an LLC. If I hadn’t done that, it would’ve been disastrous, it would’ve been a huge pain in the ass.
One big thing that I do think you need to think about as you’re building your companies to have a clean IP, meaning that all of your contractors who touch your code, all of your employees who touch your code, you need to have them sign in their employee agreement, it should say, “Everything I do, the company owns.” I had that, I had only missed one contractor. I went back and asked him nicely, we still have a good relationship and everything was fine.
Had I not had that, it would’ve been really tough because when we went through the acquisition, they needed that. This funded company is not going to pay a premium for my startup if there are IP holes that someone could come back later and sue them or ask for ownership with the code or whatever. It’s not something you think about when you’re two, four or five person startup but it’s something that you should definitely have.
I signed to the same employee agreement, and Derrick signed, even us cofounders. We had to have agreements that basically Drip, the S Corp that owned everything own everything, that Derrick and I couldn’t walk away with that. That’s one thing I would think about.
The guy mentioned manuals and processes, that was not an issue because we were an eight person team and they’re acquiring the team. They weren’t looking to automate everything. I think if the team was walking away, yes they would want manuals and processes to hand off to the next team but there was zero questions about that. There were more questions about what our vacation policy and HR staff and employment agreements looks like than anything like that.
In terms of bank issues, they didn’t acquire the company, if you think about it. They acquired all the assets of the company and that’s typically how it’s done because they don’t want any of the liabilities. They left an S Corp that Derrick and I still own the same amount that we’ve always owned, they just bought all the internal assets of it including the code and the goodwill and the recurring revenue and employment agreements and all that stuff.
As a result, the corp still owns the bank account, they didn’t acquire any of that stuff. Thankfully we never had to setup a PayPal account or anything like that. Same thing with domain names, we just transferred them over. They were all in the GoDaddy account and we transferred them over to their GoDaddy account.
The only other thing I could think of as I was going through this list that I think would be interesting to think about it they ask for, this is typical, the standard due diligence stuff, all corporate documentation, your articles of incorporation, every single amendment you’ve ever made to them, everything. Have that all in one place because going out and finding it and scanning it is a pain in the ass.
Having record keeping doesn’t seem like a big deal when you’re a three person startup or when you’re a solo founder. But if you’re ever planning being acquired, you probably want all of this stuff somewhere so it doesn’t take you weeks to put these docs together.
The next thing is having really solid books, basically having income statements for every month. For me it was literally just a Google Doc with revenue, expenses and that kind of stuff. I also had Xero, the accounting software that they could look at. When they were asking for high level numbers, top line revenue and that kind of stuff, I was sending them Google Docs.
They’re gonna ask every single service you use, what’s every SaaS app that you pay for? Hopefully they’re all on a credit card, you could just go to credit card, that’s what I did and just started listing those out. Copies of leases and every contract you’ve ever signed for every service. Transferring the Stripe account did happen because all the subscriptions were in there.
That’s the high level overview, I think it’s something that I hadn’t thought about. When there’s a technology transfer, you think more about, “Boy, the tech has to be good and has to be automated and you want processes in place.” When it’s a company acquisition, it can be different. When people bought HitTail just as a product, they didn’t ask for articles of incorporation because they weren’t buying the team, it wasn’t a strategic acquisition. Those are my high level thoughts.
Mike: I hadn’t realized that they did not acquire the entire company itself and they were just acquiring the assets from the company. That’s the way that my wife had purchased the fitness studio that was in town. She didn’t acquire the business, she acquired the assets of the business.
I was very clear to her about just because the records of the business were obviously a little screwy and the person who own the business before couldn’t really explain certain things and was a little cagey about certain pieces of it where I’m just like, “Do not acquire the business.” Because let’s say she’s got a car, for example, that is owned by the business, if you acquire the business, you’re also acquiring the debts that go with it and any liens or anything else that goes with it. You will be on the hook for those things. If you don’t know about it, it doesn’t matter, you still have acquired them which may suck.
Rob: If you buy the company, you acquire the assets and all liabilities. That’s why almost without exception, anyone who knows what they’re doing, when they buy a “company” they’re just buying the assets of the business, that’s the standard. When Facebook bought Instagram, you can bet, their lawyers did not buy the Instagram LLC or C Corp. They bought just the assets of it.
As a result, you have to then list out what all the assets are which is interesting because you have to list out your code and the database and this, it’s just a big long list of stuff.
Mike: With my wife, there was a tax bill that ended up coming in. It was sent to her and she’s like, “No, this isn’t me because I didn’t acquire the business.” There was stuff that came up afterwards that had she’d acquired it, she would’ve been stuck with it and there is nothing she would’ve been able to do.
The other thing I find interesting is that when I worked for Pedestal Software and they got acquired by Altiris, the Altiris acquisition team came in and they handed us, all the employees, these documents that we had to sign that were basically more or less a copy of what our previous agreement with Pedestal had been for all the IP rights and signing them over to Pedestal but it was their version of it.
We’d already signed all the stuff but they said, “Yes that’s fine and everything looks good but you also have to sign these.” I think maybe there are updated ways of covering additional holes or something like that, I’m not sure.
Rob: I guess our agreements were perhaps good enough for their lawyers, they probably looked at them and said, “This covers everything.” Because it was recent, it was within the last year or something and everyone had signed. I broke everything out, Numa Group which is my umbrella LLC that owns a bunch of stuff, it owned Drip until maybe 9 or 10 months before it was acquired.
I was already in the process of ripping it out of Numa Group because that was when Derrick was taking some equity in the company and he essentially became cofounder. I was already in that process which was painful and agonizing and took five months and more money than it should have. Drip was already in an S Corp. I was very, very thankful for that because if it did not, then it would’ve been a fiasco to try it doing during the negotiation and the acquisition process.
When that all happened, I basically fired all of us from Numa Group, we all got new jobs with Drip, S Corp, Drip Incorporated. We all signed agreements at that point again even though some of us already signed up with Numa Group. Then, essentially when Leadpages acquired us, we all got fired from Drip Incorporated and all got new employment agreements with Leadpages.
I think they probably had some IP stuff in their employment agreement as well which is fine because then anything you do for them they own but they didn’t have a specific additional stuff we had to sign.
Mike: I wonder if it maybe it was because Altiris was a public company and they had additional things that they had to cover themselves, I don’t know.
Rob: I can see that, it makes sense. Thanks for the question, guy. I hope that was helpful. Our next question is actually not a question, it’s some kudos for us and it’s a voicemail.
“I just listened to episode 838 with the questions. It was great to have that interactive […] podcast, I just wanna give you guys some feedback, a long time listener. My name is Chris. I really enjoyed the episode, just hearing those questions and getting some more of your perspectives and your background and experience. […]. Take care, guys. Thank you again. Keep up the good work.”
Awesome. Thanks for calling, Chris. I wanted to play that because it’s good to hear feedback and folk’s opinion. He said episode 838 but I think he meant 383 which was just another one of these Q and A episodes. I specifically mentioned in that one that I like doing them more often and that I like getting voicemails because it shows it has the interaction. Thanks for that, man. I’m always happy to hear from folks.
Our next question is from Mr. Andrew Connell about GDPR. “Hey Rob and Mike, this is Andrew Connell from Voitanos, that’s voitanos.io. I do online training and I do it for everybody around the world or developers around the world. With the coming effectiveness of the GDPR for data privacy and personal privacy data at Europe, I’m curious if you guys can comment a little bit, of course not being lawyers, I’m not a lawyer either. I just think about what kinds of things developers really need to be paying attention to? What kinds of things you need to be careful of?
I’m asking these guys because it’s also very much in the way of how we’ve all be listeners of your show worked on doing email based marketing and collecting email addresses and potentially phone numbers and other information about users. What kinds of things you need to think about, I’ve seen things about privacy statements that you need to have on your site, how you’re collecting the data, what talent is being used, how you’re protecting it, all those kinds of things.
I’m just curious, what things do you really need to be paying attention to? There’s probably the gold standard but also what’s the standard that you can do where you’re at least defensible. Maybe you’re collecting data and the user finds out, they decided they no longer wanna be tracked by you. Can you just go back to them and say, ‘Yes I track you by your email address. Here’s all the information I have about you. If you want me to delete you, I can delete you.’ I’m just curious, do you guys have some comment there or maybe even have somebody who is a lawyer who can jump on the show and maybe comment? Thanks a lot. I love the show. See you guys in Vegas.”
The riveting conversation topic of GDPR.
Mike:Oh, joy.
Rob: Everyone is thinking about it so it’s important, it’s just such a fiasco. I’m gonna use the word stupid a lot in this conversation insight. Big parts of it, I think, are really dumb. There’s a 250 page doc or whatever and Brandon, our senior director product, went through the entire thing.
The end result is gonna wind up being something like we have to rewrite a bunch of internal policies and we’re gonna add a checkbox to a form for our users. That’s very similar to what MailChimp is doing and Active Campaign, all the ESPs. I’ll stop there and circle back because I’ve been talking a lot this episode. I know that you saw a talk at FemtoConf about it and I’m sure you have other thoughts on this.
Again couching it that we aren’t lawyers, we are not giving personal advice to anyone and certainly don’t have an exhaustive understanding of this but this is just our general thoughts on what we feel like folks might wanna do for GDPR.
Mike: The talk that I saw on FemtoConf, there’s a linkable posted in the show notes from Aleth, she’s the one who gave the talk. There’s a link to an overview of her talk as a recap from Christoph. He runs FemtoConf with Benedikt. You can go out there, there’s an overview of it but I’ll say it glosses over certain details that she talked about specifically.
With GDPR, the thing that you really have to make sure that you’re aware of is that if you touched the data in any way, shape or form, you’re on the hook for it. You have to make sure that you are both protecting it and if you are able to personally identify somebody, that you are complying to those GDPR policies.
If you have metadata about somebody, like custom fields or something like that, that’s not considered personally identifiable information but there are certain pieces that are. For example, an email address would be personally identifiable, an IP address would be personally identifiable, first name, last name, address, those kinds of things.
You tag somebody, that’s not considered personally identifiable but you have to spell it out in your privacy policy what you are doing with those types of things. Are you adding those types of things?
Rob: How is an IP address personally identifiable? That’s stupid. It’s not personally identifiable because IP address, a, can change constantly, b, you could have a single IP address for 100 people at a company, there’s so many ways that that’s not. I will stop.
Mike: You just have to be careful about what it is that you’re doing with that data. A couple of big things that I’ve seen that you have to really pay attention to if you’re selling stuff is that one, people have to be able to request a copy of all of the data that is associated with them.
If you’re running a SaaS app and it’s collecting the information, let’s say it’s Drip ESP, your customers are gathering information based on that email address, the person who owns that email address has to be able to come in and say, “Show me everything that you collected about me.” You have to provide them with the mechanism to give them that data dump. I’ve seen this recently, Facebook is doing this, Twitter is doing this.
You can go and you can request a download of all the information that Facebook has on you, the same thing with Twitter, you can get a download of it. I haven’t done that with mine yet but my understanding is that it is absurd and I’ve seen the amount that Facebook has on you, for example. There’s obviously backlash in the news right now about the amount of data and how personal it can be in certain cases. That’s something you have to pay attention to when you’re trying to comply to these, you need to give that to somebody.
Rob: Here’s what I would say, if you’re a developer, you don’t have to have an automated way. They can email you and you can go run a sequel query. I would not go and build something consul or anything especially it’s a small company. You know that you can do stuff agile and just do it when it happens, do it just in time, whatever.
They can also request that you have to delete everything, then at that point, the first time, it’s gonna be a pain in the butt but you’re gonna write that sequel query to delete it out, it probably gonna break something then you’re gonna fix it and then the next time you’ll have the same query. That’s how I would think about it. If you’re Facebook, that’s not gonna work because it’s not scalable. The odds of you getting a request when you have 1000 users or 5000 users, it’s pretty low.
Mike: The downside of that, though—I was just about to mention that—with deleting the information because you do have to comply to the right to be forgotten clauses.
Rob: Which is the stupidest thing I’ve ever heard.
Mike: I think you said it in the middle of the other comment as well, we’ll say it’s three. The right to be forgotten says that somebody can say, “Completely forget about me.” The problem I have with this is that where do you draw the line for that? I know that there’s a timeline that you have in which you can say, “We’ll get this taken care of.” You have a certain amount of time or this 14 days or 30 days to get rid of the data.
The question I have in my mind is that yes, I understand that that applies to backups but does that mean you have to go into your backups or you are only allowed to basically hold 30 days worth of backups? For the sake of arguments, say that it’s 30 days, is that all you’re allowed to maintain because that seems scary.
Rob: That’s why this is insane. It’s a legislation, it’s government getting involved in something that technically is a bad choice for a company or a bad choice for a business. We know as IT people, as developers, as professionals, as DBAs, you wanna have weekly backups or monthly backups for literally years probably. It’s not so you can hoard and use a bunch of information, it’s so if stuff goes sideways at some point and you realized you have this big error, you always go back, it’s a safety mechanism.
Mike: The other thing that bugs me about this is the right to be forgotten. I get the intent and I understand it but let’s say that somebody comes to you and says, “Rob, I want Drip to forget about Mike Taber.” What happens in three days if my contact information makes it back into Drip? How do you prevent my information from going back into the system without knowing who I am and keeping track of that? That’s a total chicken and egg problem.
Rob: None of that, as far as we’ve seen, is in GDPR. That isn’t addressed. The example is you say you want the right to be forgotten, you sign up for Rob Walling’s newsletter and you, Mike Taber, say, “I want to be pulled out of there.” You’re pulled out. What if you’re in 10 of our other customer’s accounts, are you only forgotten out of that one account? Are you forgotten out of everyone? It’s not specified.
Like you said, what if you then go to sign up to a new newsletter tomorrow and XYZ person is also hosting on Drip. There are so many edgy cases. The problem is every version is gonna be this much of a pain in the ass. If they do V2 in a year, think of how many personal hours and how many dollars have been pissed away by companies that would otherwise have been productive building products, doing interesting things, creating jobs.
Marketing alone on the Drip team which is not a huge app, we’ve wasted hundreds of hours and thousands, if not tens of thousands, on legal fees just having our lawyer’s advice and stuff. That sucks, that’s money that could’ve actually been productive and instead it’s sitting here dealing with what essentially is legislation.
Another issue I have is that in the US, they often will pass things, they’ll pass laws like this but they will exempt small businesses. If you’re 25 employees or less, you don’t have to comply to certain things. They do that because they don’t wanna put an undo burden on small companies because small companies are the ones that don’t have the budget, that don’t have the analysis council and that don’t have the bandwidth to handle a 250 page doc that’s completely opaque and everyone is confused about and freaking out. I think there should be an exception.
Isn’t this really meant to be for Google and Facebook and Apple and Fortune 1000 or Fortune 5000 Companies. How much do they care about these tiny little 3 person, 5 person, 10 person companies. They’re just trying to run a business, they’re just trying to make a living. That’s where I think they overlooked having some kind of exemption for small businesses.
Mike: There are certain pieces of it that are exempt; there’s the security officer, a dedicated security officer. Stuff like that, I believe is exempt. If you’re a small business below a certain size, you don’t have to have that. But the reality, at the end of the day is if you’re a single owner, that’s you anyway. It almost doesn’t matter. I totally agree, they’ve overreached is really what it comes down to. It doesn’t makes sense for much smaller businesses to try and have to comply to that.
Rob: Again, you and I agree, we understand the spirit of what they are trying to do. I don’t disagree with any of that, I disagree with the amount of burden that they’re placing on all the small businesses. Everyone is talking about this right now. It’s a waste of everyone’s time. When I say everyone, in our circles, in the startup circles. Yes, Facebook should worry about it but it’s so much wasted bandwidth.
Mike: The other thing that I saw that was interesting was when you spell out in your privacy policy what data you have that you’re collecting and what you’re using it for, you also have to give the person the ability to opt out of individual pieces of it which to me seems absurd. I don’t know why you would allow that.
Rob: I have not come across that, I don’t know about that. That’s an interesting piece.
Mike: Let me give you an example, if on your website you have Google Analytics, a Facebook Pixel, and a Drip Widget for example, somebody can come and say, “I don’t want you to track me using Facebook Pixels but the other things are okay, just not that.”
Rob: I had a guy who read all 250 pages of it and that is not on our list. I would look to see if perhaps there’s an exemption or there’s something in there that says you can otherwise not do that because, again, I haven’t heard anyone else talk about that.
Mike: The thing is there’s a piece that revolves whether or not you’re a data processor or a data controller. That’s the part that revolves on it. You mentioned earlier that there’s a question in your mind about whether or not if somebody is asked to be forgotten, is it just for that one account or is it for all them? My understanding is it’s all of them.
They could go to Facebook, you don’t have control over but they could go to Facebook and say, “Opt me out of everything, don’t track me. Forget me completely.” That has a trickle down effect on you running Drip because if you guys use the Facebook Pixel to track people, then you can’t track me, for example. Facebook essentially blocked it. Again it goes back to how do you keep track of that unless you know who the person is to not track them.
Rob: To be honest, I asked someone who I know is familiar with GDPR and had spent some time looking at it. He runs a small business, less than 10 employees. I was saying, “What are you actually gonna do here?” He said he is gonna handle things as they come in in terms of the request, in terms of deleting and in terms of giving a report of what they know.
He is seriously considering not creating all the documents because they basically say you have to have these 10 policies or 12 policies, all this internal documentation you’re supposed to have, processes to do this. He was going to say that his company is compliant with the spirit of GDPR and we’ll live up to the request but they do not have all of those policies in place.
It was like some verbiage of we believe in the spirit of it, we will comply as needed type of thing with the thought in mind that he’s not in Europe so he’s not European business so it would be very unlikely that the EU is gonna reach across the pond and come and try to take some little 10 person company out. Like I was saying, this is really more intended, my understanding is more intended for these larger companies.
That’s the balance, is being practical about it and not putting your head in the sand and not doing anything but understanding some basic fundamentals which is what we’ve talked about here. If folks are opting in to hear from you or receive marketing, there’s supposed to be a specific checkbox that says you agree to the privacy policy and our terms of service or whatever which again I think is idiotic because they already know that.
A checkbox and them checking a checkbox is gonna make a difference, it’s like agreeing to a ULA, user license agreement with Apple, no one reads those things. You’re gonna put a checkbox with the link and it’s just gonna become this route thing that everyone does. It’s not gonna change anything but that is what it says technically. Consider if you’re asking for keeping your customer’s customers data somewhere, it gets more complicated.
In Andrew’s case, he runs online training. He has an online training, video training, people can sign in. He’s not collecting his customer’s customers data so it’s very much more simplified. I would consider a just in time or a simplified approach if I were in his shoes. How about you, Mike? You wanna talk about how every aspect of your business is not gonna comply and open yourself up towards the EU?
Mike: That’s the interesting thing is that for businesses that are not based in Europe, they don’t have the jurisdiction to force you to do any of that anyway. There’s literally nothing that they can do, they can’t sue you and say, “You are not complying to this.”
Rob: They could sue you in US court, they could. The EU could file a sue in Massachusetts court. You would have to fight it out, you would have to settle or you would have to fight. The odds of that happening, though, for you are almost non existent.
Mike: The thing is there’s a difference between them filing suit versus them having jurisdiction over. The sucky part would be you’re gonna have to comply to it just to make that lawsuit go away or you’re gonna have to fight it which you’ll win if you fight but you’re gonna incur a ton of legal fees over the course of doing that because they don’t have the jurisdiction and that’s what the court would rule.
I certainly wouldn’t recommend trying to fight it yourself and be your own lawyer there. I’m sure that somebody probably is skilled enough to be able to do that but I wouldn’t wanna be that person, I wouldn’t wanna risk it.
Rob: Here’s another option I heard someone throw out. They said EU customers are less than 10% of my business, I’m gonna reject, not allow EU customers anymore because I don’t have the bandwidth to do it. That’s what someone told me, that was really interesting. That’s a super bummer but at some point you have to throw your hands up and you gotta do IP detection or you just ask, “Are you in the EU, yes or no?” If they say yes, during the signup, you just say, “Sorry we can’t support you through the GDPR.” It’s pretty fascinating, I hope it does not come to that but I can imagine some businesses that’s just going to be easier and simpler to do that.
Mike: I’ve heard some people tried to, I think it came up at MicroConf Europe this past year about the legislation. There is someone there I met who was basically basing his higher business idea off of the idea that there were going to be US based businesses who aren’t going to comply to GDPR and they were gonna say. “You can use our service and you will be compliant.” I disagree that that’s a great business idea because all they have to do is comply and then suddenly your whole business value proposition goes off the window.
Rob: Obviously it’s complicated but I do think there’s a pragmatic way to approach this. As with any legislation, it will iron itself out, it will be more understood. You can watch companies like MailChimp or Drip Leadpages or whatever, GitHub, or Slack and watch how they handle it and then evaluate, “Do I need to do some other things?” You can also read that 250 pages doc and try to sort it out.
I don’t think it’s as bad as people make it out, I’m hoping it’s not gonna be that way. I do think if you’re in the EU, there is definitely more of a cause for concern if you’re running a business. Thanks for the question, Andrew. I think that was super helpful and a timely topic to discuss.
Mike: I think with that question, we’ll wrap things up for the day. If you have a question for us, you can call it into our voicemail number at 1-888-801-9690 or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups. Visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
