Show Notes
Transcript
[00:00] Mike: In this episode, Rob and I are going to be talking about getting testimonials, getting inspired and competing on price. This is Startups for the Rest of Us: Episode 169.
[00:08] Music
[00:16] Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.
[00:25] Mike: And I’m Rob.
[00:26] Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week Rob?
[00:30] Rob: The word is don’t focus on more than one thing at a time. So I have a lot of apps. I have a portfolio of both training courses and the conference we run and the podcasts but I don’t tend to focus on more than one time. The exception is when MicroConf is coming up and I’m working on a single app. But for some reason I’m finding myself doing four things at once right now and it is nuts like it is really hard to keep up. I am either dropping the ball on things or I find myself staying up ‘til 1 in the morning just trying to keep ahead of the flow of tasks and emails and approval and stuff.
[01:08] Initially it was just supposed to be Drip this whole year. 2014 was going to be Drip and then planning to do two MicroConfs, one in Vegas, one in Europe. HitTail snuck in there because Google made exchanges not provided about 3 or 4 months ago and so now I’m trying to do a bunch of work on that and get the code written there and get things fixed up. And then we decided to do basically a revamp of the Micropreneur Academy. This has lead me down a path of doing too many things and so that’s kind of my thing for this quarter is to get out from under this and get back to a more sane working schedule because taking on too much is really just not fun.
[01:45] Mike: I totally know what you mean. I’m kind of in the same boat. Some of those things that I’m doing overlap because I’m obviously also involved in MicroConf and with the academy prelaunch and then there’s Audit Shark on my side of things plus I’ve got some consulting work that I’ve got going on right now. And you’re right. It’s an absolute nightmare. And I wonder how much of it has to do with the fact that don’t happen in December that you would normally except to happen, they kind of get dumped into January.
[02:08] Rob: Yeah. I’m wondering that too. If it’s the time of year and if it will be gone in a few weeks. Since none of these things, I guess only one of my mine – hopefully HitTail is going to be fixed here in the next week or two and if that’s the case then I cross one off my list and things will ease up but aside from that, or things on your list, you expect them go away soon or are they going to be around until April?
[02:29] Mike: I think most of them will go away soon. Maybe it just feels more like I didn’t necessarily work on them as much in December. I kind of was aware of some of them but I just didn’t necessarily put any effort or thought towards them because I had other things going on. I think that they’ll start to go away in the next couple of weeks but it’s just hard to juggle it all right now is really the issue.
[02:48] Rob: Right. So word on the street is you lost a “bet.” What we bet, and I put bet in quotes because we didn’t actually put anything on it but I think you owe me baby sushi and steak dinner. So the bet was about MicroConf and last year we had sold out the early bird tickets in about 50 hours or so and this year we were doing the over under was 24 hours, it turns out it sold out – Twitter was saying 15 minutes. I calculated 26 minutes when I was looking at my stuff that was coming in. it was definitely somewhere under an hour, a lot faster than we had thought.
[03:22] Now we did two launches right? We did a launch inside the academy first. We sold out a block of tickets and then we sold the rest of them to the early bird list but it went fast. And you had mentioned there were some folks that were basically saying they were refreshing their browser just watching the number tick down.
[03:36] Mike: Because I clicked the button to make the tickets go live and I could’ve scheduled it but I wanted to actually just sit there and do it so that I know when it took effect. It was three minutes in and there were 30 tickets gone and 10 minutes in there were 50 that were gone and that’s from the public availability. But they do get locked for about 15 minutes so it’s hard to say exactly when they were purchased versus when somebody went in and kind of claimed it because there were tickets that would pop back out. And I did catch some of those. About after 20 minutes, that stopped happening.
[04:05] Rob: There was also discussion mostly on Twitter about well, you get a larger venue and grow the conference or you should raise your prices and we’ve talked through all of those things. None of that is news to us. I think the end result is that we will probably bump the price up again next year. We did not do that this year. Odds are go little, we’re trying not to make it unaffordable. We want new entrepreneurs, new founders to be able to come. We also want experienced folks. I find that mix is a positive thing for everybody.
[04:33] In terms of growing numbers, we definitely don’t want to grow past the point where it feels intimate and so that’s where we haven’t increased the numbers but demand has obviously increased. With that said, we are talking with the hotel about getting just few, maybe another 10, 15 seats in the room that would allow us to basically start to dig into the wait list. I think we’re approaching triple digits on our waitlist in November right now. So if we could get even a handful of tickets and lots of more folks, I think that would be a good thing.
[05:00] Mike: So we have a follow-up question from one of our previous podcast in episode 167 where we were talking about masterminds and it’s from Andrew Connell and he asked what’s your take on having your cofounder in the same mastermind group that you’re in?
[05:13] Rob: I would lean towards not because the idea behind a mastermind is that you can say almost anything about your business, about your employees, about cofounders, kind of a 360 view and that’s your place that’s very safe that you can come and you don’t have to feel guarded about something. I think if there was ever an issue with your cofounder that you couldn’t bring up in your mastermind, that who is it that you go to with that issue? You kind of cut off that avenue.
[05:45] I guess the odds of that happening are not something super likely to happen but I lean on the side of caution on these things so my gut feeling would be that I would want to be in different masterminds. I also think splitting you up will bring in more – if you’re in two different masterminds, it will just bring in more points of view. Because think about it, we said a mastermind should be between 2 and 4 people and so if it’s two of you guys in there for the same company, at most, you’re going to get 1 or 2 other opinions. Whereas if you split up, you’re just going to have more variety of possible solutions.
[06:16] Mike: The standpoint that I took it from was I wouldn’t want to be in the same mastermind group as a cofounder just because your stories are going to be very, very similar. They’re going to be just like the discussions you have any other time and you’re really not getting an external point of view from your cofounder in that mastermind group. So if you split up and you each go to your own mastermind group, then you can essentially distill the ideas from those and when you talk to each other, then it gives you that much more insight into your business or that many more ideas that come from outside that you may not necessarily have gotten if you were both in the same mastermind group. But that question was left on the comments section of that podcast episode. So just wanted to say thanks Andrew.
[06:57] So that’s kind of outside the realm of the questions that we’re going to be answering. The rest of these questions came in through our questions@startupsfortherestofus.com. If you have a question, you can send it into that email address and our next question comes from Gifford Hanes. He says hi Rob and Mike. First I love the podcast. It’s the highlight of my week. I read start small, stay small and was a member of the academy. I‘m working on a product for pet sitters. My question’s about the early phase of the product. And let me give you some quick background. I came up with the idea because my wife does operations and is a sitter for a pet sitting company. I saw a lot of inefficiencies in her workflow and she was getting frustrated.
[07:32] Then I looked around at the web for competitors and only two seem to be Saas based. From there, I did an ad words campaign and got a few sign ups of people to stay informed on the products development. I plan on calling some more prospects and talking to them about the features they need and the pain they feel in their business. My question is should I focus more on marketing the site or the product right now? I have a simple page with launch rock for the signup and landing page and this is where I point the traffic for the ad words campaign. Your thoughts and opinions on this would be greatly appreciated. Thanks, Guildford.
[08:00] Rob: You should focus on vetting and validating this idea. I would not write line of code, not write a line of HTML, not write – well maybe I’d write along a copy. That’s what I’d start thinking about and I would definitely start talking to more prospects either on the phone or via email whatever works for them I guess is going to be more phone conversations. And I would do that early vetting that we talked about, get that list of 10 who are stoked to pay whatever price it is you’re asking, I’m assuming since it’s Saas its going to be 19, 39, 49, 99 somewhere in that range per month and you got to figure out that price point through these conversations and get 10 of them who are super excited that you’re going to be building this for them.
[08:41] Then, once that’s done, and that can easily take 6 weeks to do because you’re not – probably not going to be doing full time, it’s hard to get a hold of people. You need callbacks, I mean there’s so much stuff that you run into. Once that is done and even as you’re going through it you can consider – I would think about starting to write some copy, write some bullet points of features, even just in a text document based on the conversations you’re having and based on the paying points that you’re solving, try to focus it down to a single paying point for that big headline and then think about the other things that you’re adding and hearing from this folks.
[09:14] And to be honest, I think that updating your landing page which is great, it’s simple. Just updating that with a headline and one or two bullet points at most is going to be good for the time being.
[09:25] Mike: I tend to agree with you. I think the one thing that people tend to overlook is what sorts of ideas that they’re actually trying to – I’ll say validate. And when you start looking at say the lean startup methodology whereas build an MVP and kind of iterate from there, the thing that I think most people tend to heavily overlook is that an MVP is really not necessarily like a minimum viable product for your product itself. It’s you’re trying to figure out the least amount of work that you can do to validate what your assumptions are and currently your assumptions are people will pay for this. And the question really is what proof do you have of that? What is the smallest thing that you can do? What’s the least amount of effort that you can put into it to validate it? And that’s exactly what Rob put forth. It’s like that’s what you should be working on. That’s what you should try and validate. Will people pay for this?
[10:11] And you can kind of look to see what the other people are doing. Are there competitors in this space? And if there are competitors, that’s great. I mean it kind of validates that people are willing to pay for it but what it doesn’t validate is are you able to connect with these people and get in front of them and in front of enough of them so that they will pay you. And that’s really the part that you’re trying to solve.
[10:31] Rob: Right. And I think in general, I am a proponent of doing copywriting and building a marketing site before you build a product because it helps you think through the benefits and the points that you’re actually going to want to communicate. And so it helps you realize what the most important parts of the app are so then as you go to build it, you know what to invest the most time in. And with this, I would consider doing the same. Like once you vetted it and you have figured out that short list, sit down and either write a short or long form sales letter or sit down and try to put together that homepage, that Saas homepage with the screen shot and the benefits and the headline and that kind of stuff.
[11:08] Once you have just that singe page built, even if you go and buy a $10 themed forest template and put it together using that, that can work for you for quite some time. And if someone asks, if you’re on a phone call and they’re asking tell me more about this product or I’d like to see something of it, you say well it’s not finished but we do have this detailed description of it. And you can give them a URL to that, a link to that and it starts to give people an idea that it is something tangible. So I think that even before I really broke around with code, I consider doing that. That’s actually what I did with Drip. I really had the whole marketing side flushed out with most the copy written. It was really as the developer just started, the very early stages of code.
[11:47] I did have to change that later on because things did change as we developed it and I started on boarding people but that’s the process that I went through and I found that to be pretty helpful. It’s the whole market first. Right? It’s the marketing and market first approach rather than focusing on the product which we kind of all know that we can build.
[12:04] Mike: There are plenty of products out there that have all these features that very, very few people use yet they’re still there because nobody wants to delete them. And then if you go to competitor’s product, you’re going to end up copying all these features and you got no idea whether or not people are using them. That is the other side of the value of doing the marketing first is that you get to figure out from your perspective customers what it is that they’re finding valuable and you just implement those things as opposed to wasting your time doing things that nobody looks at and nobody uses. So Guildford, thanks for the question. Our next question comes in to us from Ryan Higgins and he sent us an mp3 of his question and here it is.
[12:39] Ryan: Hi guys, happy 2014. I am at a point now in my online endeavors where I’m making more money online than I am in my day to day work which is exciting and I’m hoping to leave my job sometime this year. My problem is that I for whatever reason have lost motivation. I don’t know how this happened or where it really comes from. It should be in an exciting time for me but I’m finding I don’t feel very inspired. And my question to you is how would you guys get into the zone? What are some of the strategies that you follow when you feel uninspired or demotivated? Thanks very much and have great year.
[13:16] Rob: Yeah. This is a good question and I think it takes two forms in my head. 1) They’re kind of these lolls that you’ll go through and if a dip or a lol or a lack of inspiration is lasting a month or six weeks and you find you can get out of it, I think that’s natural. I see those times where I’m just less motivated to crank and get a bunch of stuff done. Other times where I’m more motivated at the higher end of the curve. During those times, what I do is try to just attack the problem. You focus on the actual issue of just getting inspired for the next three hours.
[13:51] How do I get in a rhythm and break out of just my lack of desire to do the work and really the three things that I found that have helped me do that are 1) to drink a bit of caffeine. I’m pretty measured in the amount of caffeine I drink. The more caffeine you drink, the more focused you’ll be until you get jittery and can’t work. That is clinically proven. I think used in the right quantities and not abused, can be really helpful and it’s something that I definitely use in my times of low motivation.
[14:17] The other thing I do is I will meet and work with other friends. I’ll meet at a coffee shop or meet at an office, have them come up for my house and work there. Sometimes I find that helps with motivation. I also find that music is going to be your pick. For me, late at night, and the headphones is really loud. There’d be punk music and there’ll be metal, that, or almost always puts me in that zone and it can get me through those little lolls. And then the pomodoro technique I also like which is where you set a timer for 25 minutes and you do a sprint, you get as much done as you can and you typically, you can often pick a single task and limit it to 25 units, even if you think it’s going to take logger. When the timer goes off, you stop, you stretch, you get up or five minutes, you walk around and then after that five minutes you do another 25 minute sprint.
[14:59] Each of those is a mechanism for getting over that. It’s that little onetime thing. It’s kind of like imagine yourself as a car and if your car has a flat tire, you’re really just trying to patch it. That’s what this approach is. The next thing is if you have a longer term broader sense of really being uninspired and that’s when maybe – imagine your whole car like the frame is bent and you can’t just patch a tire. There’s really a deeper thing going on there and that’s where it takes I would say talking with trust friends, a mastermind group, asking yourself a lot of questions about what is giving me life and what is not, I think its Saint Peter – someone has a prayer called examine and its basically this thing you ask yourself what has given me life over the last week? What has not given me life? Some people do it over an entire year and take notes.
[15:46] It can shift the way that you approach your work and it can shift the work that you want to do. So if you find yourself being uninspired specifically with your product, then maybe it’s just the product. If you find yourself uninspired of work, it’s probably something else going on that is the leaking into your work. This has been in my experience kind of the two levels of uninspiration that I’ve encountered in my career.
[16:08] Mike: I really do think there are the two different levels and the shorter term stuff you can definitely – I’ll say lie to yourself in some ways to help make your brain do things that you wouldn’t otherwise think you should and the pomodoro technique is just one. I’m kind of partial to that one. And there’s a bunch of phone apps that you can use to basically help you manage that process. And I really like the ones that will show you kind of a graph of exactly how many you’ve done in any given day so that way you can try to match or beat what you did the day before.
[16:36] So at that point, it becomes something of a game not necessarily to do the work but to play the game. And in order to play the game, you have to do the work. So in some ways you’re tricking your brain into making the numbers and the timer go up and down but at the same time, as a byproduct of that, you’re getting worked on. So what that does is long term, it helps you get things moving along towards your goal and hopefully that helps break you out of the rut that you’re in over time.
[17:03] If this is the type of thing that’s been going on for a long time, it could be medical issue, it could be any number of things. One thing I’ll point out is that since this question came in recently, If you’re anywhere in the northern hemisphere, this is a bad time of year. There’s a lot of seasonal depression that goes around and it can be very easy to especially lose steam at the end of the year just because the holiday season and now its January and it’s like I’ve got all these work to do and I don’t know how I’m going to get it done and you look at just a sheer amount of stuff that you have to do and it’s so disheartening you don’t want to do any of it and so you’re now feeling unmotivated, so some of the techniques that Rob talked about can help get you through those, those are the types of things that I would think about.
[17:43] Rob: Yeah. I had a real tough time I did two New England winters when I lived in New Haven in Boston. I had a real tough time in the winter and I felt myself have a pretty sever lack of motivation and I had to buy the – there’s the happy lights, you know, to get your skin having the vitamin D, just had a tough time at the cold and being inside all the time. I think overall, what’s helped me the most during my entrepreneurial career is having these masterminds. That’s the one that most consistently has impacted my motivation and has given me that air space that I can talk about this in a way that I know I won’t be judged.
[18:14] And I know that other people will understand because they’ve probably been through it before or they know that they will go through it at some point and just being able to discuss it and have some folks help give feedback, even in terms of like well, let’s set one goal for the next two weeks. I’m uninspired but let me just try to achieve a minor thing. That kind of thing is stuff that can feasibly get you back on track.
[18:36] Mike: So Ryan, thanks for the question. The next one comes from Cal Damansky and he says hi Rob, quick question for today. When you’re running a few products, how big of a problem was collecting sensible testimonials from your clients and customers? I find myself in a heck of a lot of email exchanges about getting them since I started working with international companies and I was interested if you had a solution.
[18:56] Rob: The easiest way I found to get testimonials is any time someone emails you with a compliment. Right? So if someone says wow your support was amazing or wow I just love this product or you’ve done such a great job so far on this contract if you’re a consultant and I don’t always do it but if I happen to need testimonials I will just reply and say thanks I really appreciate that. It would help me a lot, would you mind if I just quoted you, link to your website the next time we update our testimonials or something like that? If they say yes, then I copy them to a Google doc with product name and testimonials and I pretty much always have kind of a cash of testimonials that way. And I find it, I almost never get into an email thread so I’m not sure if there is something else going here. Mike, have you had trouble getting testimonials and find yourself in email exchanges?
[19:41] Mike: I think the issue is really – I mean he specifically points out international companies and when you talk about international companies, the tendency and certainly not the rule, but the tendency is for those international companies to be large and they have rules in place that say they tend to be public companies. They tend to have rules in place to say what you can and can’t say publicly on behalf of the company and that I think is probably where this is coming from because if you go to a public company and you do any sort of work for them and then say hey, can I have a testimonial? They’ll probably give you a patent answer of no, they would have to go through their legal department because otherwise you’ve got a public company that’s endorsing some small firm. And that I think is the challenge that he’s running into. I could be wrong on those things.
[20:22] Rob: If you’ve gotten email exchanges and it’s a similar problem that each of them is saying like well, we can only give it if you have a specific testimonial for them, we’ll then create the testimonial for them or if they need a legal release in order to do it, then draft one up and have it ready for everybody or something like that. I don’t have any specifics beyond that because I haven’t experienced this kind of thing trying to get testimonials. I’ve gotten testimonials from large Fortune 500 or Fortune 1000 companies and didn’t have an issue with it or perhaps that was an exception.
[20:50] Mike: I wonder if having just a very generic form that you put together to have somebody fill out would be sufficient or just those email exchanges hey, can I use this in a testimonial? I think that Rob’s suggestion of using any sort of compliments that you get and just say hey can I quote you on that in a testimonial on my website? I think that is probably the way to go. Thanks for the question.
[21:10] Our next question comes from Jim and he says hi guys, love the podcast. It’s still number 1 in my pod catcher app. You espouse and rightly so the method of finding your market first then building a product to suit that. Sadly I wasn’t listening to this podcast before I spent two years building my first Saas app which is called solopracticemanager.com. I built it on some suggestions and encouragement from several people in my primary target market life coaches. Since listening to these podcast, I’ve basically gotten my MVP done and have stopped any have stopped any new development work in favor of marketing and growing the user base.
[21:40] But I’m nervous that I’m not going to find a good market for this. I’ve been doing keyword research and coming up pretty much dry as far as popular keywords. I can even buy ad words for which is what I’d like to validate it first given the start of organic search traffic. Rob, since you’ve bought a bunch of existing apps, do you have any suggestions on ways to market a product that already exists? Thanks for your time. Jim.
[21:57] Rob: I have a few thoughts on this. I think the first thing I see when I come to this site is solopracticemanager.com looks like it’s built for freelancers or just kind of for everyone. It looks like a horizontal document management product and that doesn’t jive with the – I get the feeling it was niched towards life coaches. That’s a decision that I think you’re going to want to make even if it’s just your first crack at it like yes, this is for life coaches then the headline should be document management for life coaches or saves life coaches 20% or $500 a month or something right? You got to figure out what the value is for them and then gear the whole marketing approach towards it as well as all the features you’re building.
[22:34] If life coach is not the market you want to go into, figure out which one you want to do. But staying horizontal like this and trying to apply it to everyone, as a first time bootstrap and entrepreneur, not the best approach in my opinion. I guess Jim’s question actually said you bought a bunch of existing apps. Do you have suggestions on ways to market a product that already exists, almost all the apps I bought were not already successful. They were all apps that were built and had a tight vertical niche typically and that I then had to make successful and the way I did that was through applying marketing approaches pretty systematically through each of them and growing them. And that’s why I was able to buy them for such little money because the technology itself is not worth very much. It has real value once you actually have revenue and paying customers and all that. Most of my apps were not successful when I bought them.
[23:18] With this app the first thing I would do is to figure out who is going to really, really need it and who it’s going to save a ton of time or a ton of money or a ton of pain from. That’s really your job at this point. Keyword research, it’s definitely one signal but there’s so many other ways to approach this. Like if you decide to focus on life coaches, you can find and target life coaches demographically using Facebook ads as an example. Whereas you’re looking at Google ad words then it’s always intent driven. Right?
[23:45] It’s what did someone type in? What did they intend to do right now? Are they looking for life coach document management software? The odds of that having many searches are very, very low and I can understand why you aren’t seeing a lot of volume. So think in terms of a demographic that has buying capabilities and it has its paying point. And so again, if you focus on life coaches, my next step would be to start emailing and or cold calling a bunch of life coaches and talking to them about the solution and just ask and say I’m not selling anything. I’m a software developer. I’m an entrepreneur and here’s what I built so far. Does this help you? And listen to their feedback. And then say okay, consider scrapping this whole thing.
[24:24] If everybody says no, but they say but, I really have this pain or problem with managing client appointments and invoicing or something like that, well then perhaps this wasn’t the right choice for life coaches, and then you have to evaluate do I try to pivot this document management thing into a different niche or would I prefer to stick with the life coaches because certainly if you have more of a knowledge of that market space or you have several friends in that space, that might make sense to stay with and dissolve a different paying point. And those are the two major approaches I would look at.
[24:54] Mike: Rob’s really hit the nail in the head here with identifying who this is for. I mean based on the name alone, to me, it seems like it should for dentists or massage therapists or something along those lines. And maybe it’s just because of the word practice and it makes me think of some sort of medical field. To me, a life coach does not indicate a practice. I look at it and even if you’re driving traffic to this, I don’t see how it would help me out. I don’t even see if I were a life coach or even if I were a dentist, I don’t see how this would help me because the headline itself says I spent more time managing documents than seeing clients. And it’s really focused on the problem itself as opposed to presenting itself as a solution to that particular problem.
[25:37] So talk to these people, as Rob said, figure out who it is your target market is and then adjust your marketing messages to basically tell them that you solved that problem and whatever that problem is that you’ve identified and discussing it with them, tweak your marketing messages to tell them I solved this problem with this particular product and here’s why you should sign up and use that to essentially help you gather new users. So Jim thanks for the question.
[26:02] Our next question comes in through Luigi and he says I work in a company that operates in the energy sector and quality of INC Engineer. Over the years I have developed applications for the AutoCAD environment better known as AutoCAD add-in applications in order to automate the engineering process. I didn’t invent the wheel since a lot of the software is already out there but the software is quite expensive and its not available for other CAD platforms such as BricsCAD further more there’s a lot of headroom for improvement by adding other features.
[26:29] Since the applications I’ve developed have had a lot of success in my company with several instillations of various kinds, I’m well aware of the fact that there are tens of thousands of other CAD users around the world. I’m seriously considering leaving my full time job to develop professional packages and launching them thus beginning my startup activity. I was wondering if offer my software at a lower price and including special features that other software doesn’t would be a good way to sell my software. In addition, the possibility of going more vertical with my software and other CAD software applications that don’t have that functionality might be a good idea. What are your thoughts? Thanks in advance.
[27:03] So I think what you’re basically asking is you work in developing AutoCAD add-ins and there’s other CAD applications out there that also have kind of a plug-in infrastructure and what your real question is can you build the plug-in that basically are already built or can you take those and go into other CAD applications and essentially add them into those other application and make that successful? I would say that you probably can. The other question I think is a little bit more concerning to me which is should you be dropping your price on those to be competing with other plug-in manufacturers? I would say probably not. I would use their pricing as a basis for comparison but I don’t know as I would start taking your price and just tanking it in order to start landing business that you might not otherwise get.
[27:50] Because if these companies are already paying tens and thousands of dollars for CAD applications, they clearly have the budget for paying for some of these add-ins especially if there are other vendors out there that are making money from their plug-in. I see it as very similar to the WordPress community where you got all these plug-in or you can go buy plug-in for WordPress and just add them into your website and the website will do glorious things at that point. And you’re kind of in the same situation. You want to sell these plug-ins.
[28:15] But the real question I think is can you get in front of them? Do you have the ability to market your software in such a way that it’s going to be seen by them? I think that price is much less of a consideration than whether or not you’re going to be visible to them and be seen as legitimate in their eyes. And I think that if you drop your price too low you’re going to be seen as an illegitimate competitor to some of these other products even especially if you are better than they are.
[28:40] Rob: Yup. I would echo what Mike says. Eric Sink where he said if I were to build some type of niched down version of Microsoft office or even just word, he said Microsoft’s selling it for $100. Your intuition will be well Microsoft certainly does more than mine. Mine’s a niche so I’m going to sell for $35 and he said go the other direction. Go 10 times that if you build a niche version of excel, sell it for $1,000 when Microsoft sells it’s for $100. So I would do a similar type of thing. I’m not saying necessarily 10x the price but I would say go for the premium route because it’s going to set you apart and that the way to build a larger business rather than trying to discount.
[29:16] The other thing I’ll add is that I love add-ins as a stair step product approach. Add-ins to WordPress, to Drupal, , add-ins to CAD, any of this stuff where you have an existing ecosystem is such a nice way to get that initial bump because if there are folks using CAD, the odds are that they run into problems with a need expansion. And so if there’s a CAD directory of their add-ons and you get listed in that thing, you have that nice channel of traffic.
[29:41] Also, if people are going in and they’re searching for AutoCAD fix this problem or AutoCAD had this feature and yours does that, you need to rank for those things because those types of intention driven queries, getting in front of them will result in very high conversion rates because you’re solving such a desperate focused paying point for people. I wouldn’t expect this to be some huge business that you’d be able to figure on but it’s that great business to get out there, you learn your marketing chops. You learn how to write productions software, how to sell it and really stair step this up into the future ideas that get bigger along the way.
[30:15] Mike: So Luigi, we hope that helps and thanks for the question. Our next one comes from Nadias. He says hi Mike and Rob. My question is regarding building a web business around a community of X and I know this idea is geared for much more specific niche market for the sake of a question. Let’s say it involves building a site for artists to show their work. Aside from artists friends I know personally I’d be starting this community with zero users. My question is is it a good idea to go out on the web and gather established artists work and create a profile for them, then invite them via email to let them see how their work would look in the community site and how it would benefit their work or business? I’d give them the ability to join the community or delete their profile if they didn’t want to be part of it. Is this approach too invasive or is it a good way to get initial users engaged with a brand new community? I hope my question’s clear enough and thanks in advance.
[31:00] P.S. just out of curiosity, I’d love to know what you guys have to say about building a business that requires a community to function. I’d imagine that the community site takes a lot more ramp up time to get going and product revenue because you need a healthy number of users to bring in income.
[31:12] Rob: I think his P.S. is really the most important question. Building community sites is super, super hard. And anyone who’s actually done it, there are not that many that are actually that successful. And even the ones that are successful like the old school forums that picked a niche early and got it in before everyone else did, those forums have trouble monetizing. The ad rates are really low, the CPM’s they can charge are low. So community sites are a real challenge. You probably have a clear monetization path of selling prints or selling t-shirts or whatever it is. Even then, it’s tough to just take a cut. When you’re bootstrapped, taking a cut of transactions whether it’s a market – did you say a market place or whether its community is a really long way to go. There’s definitely a much more of a long haul than someone just paying you for it.
[31:57] I would never start a community site. I tried to do it once and it was a tremendous amount of work and didn’t pan out. That’s not a reason not do it. It’s the hundreds of others that I’ve seen that have also failed and how few of them actually make it. So there’s a lot of talk about how in the early days Reddit was just hacking their front page because it was all the dudes inside Reddit were doing fake folks just to make it look like people are there because until you have people there, it’s a ghost town. And getting over that initial hump, I would say if you really want to do it seriously, then go start either a blog or a mailing list or something and start creating content or writing original content and build up that mailing list.
[32:32] And when that mailing list hits 1,000 people who are devoted and ravenous fans of yours, then go instruct this site. Then, bring them in because then you’re going to have that community. But until you do that, I mean starting from scratches are a really, really tough way to go. So that’s your PS. The other question was pulling someone’s heart off their site and building their profile, if you did that to me, I would be pretty surprised. I would probably be taken aback and not appreciative of but I think artists are really sensitive about their work being stolen and even though you give them the ability to delete it and all that stuff, this basically public facing web page where you have taken their art without permission, my opinion is that if you do get a little bit of momentum and you want to start doing this is that you do a pitch and say hey, here’s our community. Here’s what your profile could look like. Here’s my profiles and stuff.
[33:17] So you put up your profile with the art and said would you allow us to do this for free to grab your art, build our profile for free and then you can look at it and you tell me or you can delete it at that point or you can just have a look at it so at least you get their permission out front and you have much more opt in rather than more of a opt out approach.
[33:36] Mike: Yeah. With regards to the two questions I agree with Rob. Building a community site from the ground up is pretty difficult. There are a lot of different hacks that you can do to help grow a community site and just one of them as Rob said, guys over at Reddit were uploading the stuff that they were posting just to make it look like there was more activity. The illusion of activity is going to help. I remember I started a web based game back in ’99 or 2000 and I grew it to a reasonably successful size of people using it. I think the first 40 or 50 people that site on looked at I and I’ll say it was sort of a ghost town but I’d say probably a quarter of those accounts that were logged in at first, they were all mine. I mean it was basically just interacting with people as 10 different accounts to make it seem like there were more people playing the game than they really were.
[34:24] And eventually got to the point where I didn’t have to do that because there were hundreds of people playing it and they were logging in every single day. So you get to a certain point where it will avalanche into a more successful venture but I think Rob’s approach of gaining a mailing list and gaining a following and trying to get people all in one place so then you can say hey I’ve created this site where we’re going to have a community. Then you start seeding that community. You’ve picked people out of the mailing list who you’ve had interactions with. You talk to them individually and say hey I’m going to invite 15 or 20 people in here and you basically have them use it for a little while and then later on down the road, then you start inviting people in.
[35:02] So that way, when people will go to log in on day 1, the place isn’t empty. There’s a bunch of posts already there and you’ve kind of seeded the community with people who are going to be interacting there. So those are a couple of different hacks that you can use. In terms of going out and gathering established artist’s work, I would not do that. I agree with Rob. I think what you’re going to find is people are extremely sensitive about their work and artists in particular I think are exactly that way and you may very well come across the people who are much more organic and they sell the experience with what it is that they do.
[35:35] So for example musicians, if you’ve ever looked at the history of the band Phish for example, they’re very successful. They’re probably one of the single most successful bands that you’ll find that has very, very organic roots but they don’t sell albums. They don’t sell their music. They sell the experience of coming to their concerts which is why their concerts sell out. So unless you find those types of people, you’re probably not going to have very much success with it because they’re going to look at it as if you’ve just gathered up all their stuff and you’re going to profit from it in some way, shape or form by displaying it somewhere else and they’re just going to be pissed off.
[36:11] I think that it’s going to leave a very bad taste in their mouth. I think that if you were to ask the upfront and say hey, can I do this for you? And then I will show it to you and if you don’t like it, you can delete it. That’s probably a better approach but I think that’s still going to be a very labor intensive endeavor. So we hope that helps and thanks for the question.
[36:26] Rob: If you have question for us, call our voice mail number at 1-888-801-9690 or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt used under Creative Commons. You can subscribe to us in iTunes by searching for startups or via RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening and we’ll see you next time.
Episode 168 | Things That Don’t Scale (And Why You Should Do Them)
Show Notes
Do things that don’t scale by Paul Graham (July 2013)
- Recruit users manually
- Expect to be Fragile
- Delight early customers
- Start in a niche
- Consult
- Human automation
- The Big Launch Usually Doesn’t Work (and neither do partnerships)
Transcript
[00:00] Rob: In this episode of Startups for the Rest of Us, Mike and I talked about things that don’t scale and why you should do them. This ladies and gentlemen is Startups for the Rest of Us: Episode 168.
[00:10] Music
[00:17] Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Rob.
[00:27] Mike: And I’m Mike.
[00:28] Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week Mike?
[00:33] Mike: Well we had a listener write in earlier this week named Denis Hennessey and he suggested, he was listening to the episode where we talked about some of the different apps we used and I mentioned that I was doing Commit to make sure that I do certain things on a very regular basis. And he actually suggested that I try out Goal Streaks and I really liked Goal Streaks because I checked it out and essentially the idea is very similar to Commit except that you can put in what are basically skip days which I think would work out actually a little bit better for me because there are certain days of the week where I know that I’m not going to do those things.
[01:06] So for example, working out on Friday is just never going to happen. Commit doesn’t allow me to put that in and say no, I’m not going to do that so I can’t schedule those sorts of things. I’m going to give it a shot and see how things go.
[01:17] Rob: Very cool. Well first of all, this is an IOS app is that right?
[01:20] Mike: Yes.
[01:21] Rob: Okay. And then what kinds of things do you have in there? I guess working out is one?
[01:24] Mike: I have working out. I have writing and then I also have working on Audit Shark.
[01:27] Rob: Good. So yeah, give Goal Streaks a try.
[01:30] Mike: What about you? What are you up to this week?
[01:31] Rob: Well I was pleasantly surprised this week. We started selling MicroConf tickets to Micropreneur Academy members. They get a slight discount and then they get early access to the tickets before the general public. We sold out their allotment pretty quickly and in fact we got a few emails from academy members wanting to buy kind of after all the tickets were gone and so it looks to be a sold out crowd again this year. And by the time this airs, we’ll likely already be sold out.
[01:58] But some tickets do become available so if you’re still interested in going to MicroConf, you can always go to microconf.com and click on the ticket link. We tend to have a pretty hefty wait list and if you get in that early, you do have a high likelihood of getting contacted because we have some tickets that become available as the conference approaches.
[02:17] Then the other thing I’ve been up to, my wife right now is on her two day annual retreat and I’m gearing up for mine here in about two weeks and that’s where I go off and don’t check email and look at my goals for the year, figure out really verify those are the things I want to do and then map out as closely as I can over the course of two days exactly how I’m going to achieve them and figure out what it’s going to take on a monthly or a quarterly basis and basically setup my game plan.
[02:42] The reason I do this, I’ve talked about it before. But it’s because I like pursuing too many things. So once this list is locked, I will do almost nothing else that is not on this list for the next year and that’s the only way I’ve found that I’ve been able to stick to things and grow them without wandering all over the place as the next new fun idea comes my way. So needless to say I’m looking forward to that. Looking forward to the quiet time, the thinking time and really getting down to business in 2014.
[03:12] Mike: I’ve been working on Audit Shark and talking to a few different customers getting some ideas about what their needs are for moving forward with the product. It looks like I’ve got a little bit more work to do. There’s a couple of demos that I’m trying to schedule but in order to actually do those demos there’s a few more features that I need to implement because I know there are things that they basically already told me that these are things that they need. So in an effort to kind of make the demo align very well with what their needs are, then I’ve got a little bit more work to do on the product to make sure that can do those things before I can show it off to them.
[03:44] But the demos are for more in the enterprise space so I’m really hoping those go well but again I think that it can definitely go the route of software plus services to make those things work. So I’m pretty excited about it and just kind of looking forward to banging out some of that code and seeing what comes out of those demos. How are things working with Drip?
[04:03] Rob: Drip’s going good. I’ve really started diving in heavy to paid acquisition and just in the learning phase, as usual I’m pretty impatient with things and I don’t know how many months it’s going to take for me to find the Drip flywheel but I certainly haven’t found it in the past maybe 7 to 8 days since I started and yet I’m already wondering why I haven’t. They’re just trial and error at this point to get into the marketing plan, have a bunch of different things going on, an eBook that’s already been written. It’s being designed. I’m working on an infographic. I have a bunch of blog posts in the hopper, stuff that’s just things that I’m going to be experimenting with.
[04:39] But really over the past 7-10 days I’ve wrote some long form sales copy cranked out several variations of landing pages and then basically testing those the traffic that I’m able to generate via the various advertising venues.
[04:53] Music
[04:56] Today we’re going to be talking about doing things that don’t scale. And this phrase has been bandied about quite a bit. I think Paul Graham since he has the largest kind of platform, he wrote an essay on it on July of 2013 so that’s seven months ago. The interesting thing is Paul Graham has such a larger view right? Because he’s invested in hundreds of companies and he thinks very critically about this stuff.
[05:20] The first time I’ve read this because I’ve heard about this essay for the last seven months since it came out but the first time I read it was preparing the outline for the interview and I was surprised at how many things not just the title of do things that don’t scale but how many specific things in his essay align directly with things that we’ve said in the past on the podcast. So that was kind of a nice confirmation that when multiple scientists do multiple experiments and they all arrive at the same results, its multiple confirmation that this theory may at least be more correct than the things people have been saying for the hundred years before that.
[05:55] So that’s the idea here is that multiple people coming up with things independently helps reinforce it and makes me believe that these things are not just our thoughts or our opinions but they’re actually things that multiple experts are starting to embrace. So I think to kick us off, we have seven things that you should do that don’t scale. And to kick us off before that, there’s a little intro piece I want to bring up and Paul kind of attacked this on the end of the episode but he says that people should start thinking of startups as two dimensional objects instead of just one dimension and what he means by that is most people think of a startup as an idea. It’s what you’re going to build.
[06:29] He says the idea of doing things that don’t scale is so important that we need to start thinking of startups as two dimensional objects. Basically the first dimension is what you’re going to build and the second is the unscalable things you’re going to do to get that company going. Now what that means is that when you come up with a startup idea, he’s saying that’s incomplete. That’s not actually a full pledged startup idea that you actually need not just a product idea but the plan to get those initial 100 users or whatever it’s going to take to kind of get you out of the earth’s atmosphere and into orbit. I thought that was kind of a fascinating thought that he thinks this concept of unscalable things is so powerful that he’s actually saying that a startup idea is incomplete unless you’ve fought those early days through.
[07:13] Mike: Well we’ve talked about that as well though. I mean we didn’t phrase it as like a two dimensional thing but we’ve also talked about and say there’s the idea itself and the second is how are you going to bring it to market? How are you going to get in touch with your target customer base? And in a lot of ways, in order to do that, you have to do those things that don’t scale.
[07:31] Rob: Very good. So let’s dive in. Our first point of seven is to recruit users manually. So Paul Graham says that the most common unscalable things founders have to do is recruit users manually. Nearly all startups have to. You can’t wait for users to come to you. You have to go out and get them. And then he gives a few examples, Stripe, Airbnb and a couple others.
[07:54] Well it lines up with two phases of stuff I’ve talked about recently with Drip. There was that initial phase of just vetting the idea where I emailed 17 founders and I’ve got 11 go ahead of yes I would buy this. I mean that was a very manual user recruiting process. And then the second part of it where once I had a launch list in the end it was about 3500 emails and I basically handpicked some early users and started inviting them in but it was that slow launch. It was the heavy on boarding heavy customer development time of basically walking users manually through your app, manually boarding them, finding out what they like, don’t like. If they’re going to stick around and if not, why not. I view that a lot as relating to this concept that he’s saying about recruiting users manually.
[08:38] Mike: I think there’s a couple of different things there. In the early days, you really have to do that because if you just setup a website and you have people sign up and you don’t really know anything about them, what you’re essentially doing is you’re basically taking a stab in the dark at what resonates with people and you don’t get any of that feedback. And they may come to your site and they just leave and you have absolutely no idea why versus if you start a mailing list and you get people – you kind of give them a one or two sentence description of what it is that you’re building or you’re talking to people and you’re giving them invested in it as well that you get to close that feedback loop.
[09:16] So it’s no longer this open loop system where it’s just hitting the gas and you’ve got no idea whether you’re going in the right direction or not. And I think that’s really the important part here is that you have to be able to get that feedback loop closed so that you understand about what direction it is that you’re going in.
[09:33] Rob: The next point that Paul Graham makes is he basically says expect your startup to be fragile in the early days. He says the question to ask about an early stage startup is not is this company going to take over the world? But the question is how big could this company get if the founders did things right? And he brings up Microsoft as an example. He says Microsoft can’t have seem very impressive when it was a couple guys in Albuquerque writing basic interpreters for a market of a few thousand hobbyists. But in retrospect that was the optimal path to dominating micro computer software.
[10:05] And then he also brings up the Airbnb founders and how earl on they were just manually taking professional photos of their first host apartment and that they were just trying to survive. So you couldn’t see them taking over the world at that point. It was very fragile and it was basically a 30 day swing where he says going out and engaging with users as the difference between Airbnb taking off and completely failing.
[10:28] Mike: I think this thought from Paul comes from a little bit of a different perspective than kind of where we come from because most of the stuff that we talk about generally speak in a lot of the people that I talk to and interact with tend to be starting stuff on the side. So this idea of like a 30 day swing before you go out of business just isn’t there because we don’t have investors to account to. Yes there’s these few people who’s decide that they’re going to burn the bridges behind them, quit their job and they’ve got 6 or 9 months worth of money in the bank and that’s it but that is probably the exception rather than a role. So I think to people like us, this is a lot less of it in issue than it is for funded companies where they’ve got to get to a certain point and they have a very, very tight timeline to do it or they’re toast.
[11:14] Rob: Yeah. I’d agree. This one doesn’t apply as much to bootstrappers. The piece of this I do think applies is I would change the world fragile to unstable. And what I mean by that is in their early days as they’re recruiting users, trying to turn them into customers, trying to retain them, you just don’t have enough information to have any kind of stability in your metrics or even in confidence in your sales process, confidence in your user retention, confidence even at sometimes unfortunately in your app.
[11:42] Bottom-line is if you’ve launched and you’re in the first 60 or 90 days and a customer emails and says wow there’s a major bug and there was some issue when I clicked the button and did this, if you’re in the first few months of your app, you really don’t know if you’ve introduced a bug. If your app’s been running for years and its mature and all this stuff, you know that there’s stability there. But I would say expect instability in the early days and expect a lot of uncertainty when there’s any type of challenge. If someone says your pricing is too high, that creates uncertainty because suddenly like oh man, is my pricing too high? You just don’t know yet. Once you’re successful and once you have a lot of people using it, you know that your pricing is fine. If anything, it’s probably too low.
[12:21] The other thing that I’ve seen is in the early days of Drip, someone email and said I would totally try this out but you’re asking for credit card upfront. You shouldn’t do that. And tells me why I shouldn’t do that. Now I know that I want to ask for credit card upfront for a bunch of reasons and for all my trial and error with all my apps, this is how I’m going to start. And yet at that moment the uncertainty and kind of the instability of that moment made me question and think oh, should I take the credit card wall down? I had to think about it. And of course I didn’t because I went back to all the research and the data on this and decided not to. I actually asked someone in my mastermind and he told me I was crazy for thinking about it. Instead of thinking about fragility, I think its more about instability and uncertainty is something that you should anticipate especially in those early days.
[13:06] Mike: Yeah. I’ve definitely gotten already I mean I’ve gotten people saying that the pricing of Audit Shark is too high for them and for some of them I look at their situation I’m like you’re really not in my target market but then there’s other people who are kind of are and it definitely does make you think about it and it does give you that level of uncertainty about whether or not you’re doing the right thing. And part of it’s just because there isn’t this giant history of customers or people that I’ve interacted with to be able to say one way or the other.
[13:36] Rob: Paul’s third point is about delighting early customers. And he says you should take extraordinary measures not just to acquire users but also to make them happy. And he says this whole concept of doing things manually to delight early users is counterintuitive for founders and then he gives three reasons why that is. 1) He says because a lot of founders are trained as engineers and customer service is not part of our training as engineers. Another is we’re worried that it won’t scale and then the third is that we’ve never received attention like that from other companies and so we just don’t feel like it’s something that you can do or should do as a business because frankly when you go into the Sprint store or call Verizon customer service you’re not going to see that kind service so naturally we think that it’s not something that we need to do off the bat.
[14:25] Mike: I agree that I think that this is not something that is widespread but I’ve seen it before. I’ve seen companies do it before and it makes an impression and I’ll give you an example. When I signed up for male chimp, after I had sent one of my first campaigns and made a payment with them, they sent me an email and said hey we’ve got a special gift for you. Click here. And I clicked there and I went to a page and it opened up just a form that I was supposed to fill out where I put in my name, address and everything else and then they would send me something. They sent me a mailchimp t-shirt. That kind of gave me the idea to do something similar for Audit Shark and it’s something that I’ve had kind of down the road.
[15:02] But I definitely wouldn’t say that those types of things couldn’t scale because I think one of the examples he uses is Wufoo sending each new user a handwritten thank you note. I think that if you start acquiring a thousand customers a week, that’s not going to scale as well but you can certainly – like if you’re sending people t-shirts for example, there are services that you can integrate with where they will print the t-shirts and send them and really all you need to do is give them an XML data feed that says hey, send this t-shirt here and here’s our information that says who to charge it to. There are ways to make other things scale but there’s definitely things that you can do that surprise and delight your customers that would not and I think it’s just a matter of hosing the right things it will.
[15:40] Rob: Yeah. I think delighting early customers ties back in with a lot of the manual on boarding stuff we’ve talked about. I do like the idea of t-shirts. I’ve been doing that with HitTail, with certain users when they hit a milestone they get it. Also people blog about it, they get a HitTail t-shirt. Drip, if you get your first conversion, you get an email that says roll out the red carpets. Your first subscriber converted to a paying customer because you can setup a goal in Drip and you can see when they convert and then we give them a link to a form where they can get a t-shirt. So that stuff does scale pretty easily. Once the t-shirts are printed it’s just like slapping an address label on it. So I think that all that rolls into it.
[16:17] Another piece of this and this is a little further down the essay but Paul Graham says over engaging with early users is not just a permissible technique for getting growth rolling. For most successful startups, it’s a necessary part of the feedback loop that makes the product good. Making a better mousetrap is not an atomic operation. Even if you start to weigh most successful startups have by building something you need yourself, the best thing you build is never quite right and so is conjectures that you need those early users to give you feedback on how to improve it.
[16:47] The fourth point we have from Paul Graham is to start in a niche. And he actually has an odd subheading for this. He calls it fire because he says it’s like keeping a fire contained before you go horizontal. But this actually lines up with the very fundamentals of the Micropreneur approach. What’s funny is he uses Facebook as the example of starting in a niche because it was a Harvard student network and then it was a university student network and then it went to everyone. I think more in terms of B to B startups so I think of like Kiss Metrics and how they really started as Saas metrics back in the day and now they’re much more all web and metrics and analytics.
[17:25] Another example that’s happening right now is Drip. Drip has started in kind of the Saas and software space and we’re building out some features that are going to move us more broader into the email marketing space. It’s more become marketing automation tool where you can move people to and from different lists based on their behavior. That is – it’s not completed yet but that’s kind of in the works right now and is the next couple of weeks we’ll be rolling that out.
[17:49] Bidsketch is another example I can think of. Ruben’s app. Remember when Bidsketch was proposal software made for designers? Well that for designers went away a long time ago because there was just so many consultants in a number of niches and designers and developers and all types of people are using it. And so he eventfully went horizontal and opened up this market. But what that niche allows you to do is it allows you to take advantage of those early niche things like the fact that the market’s small that you can out market everyone else in the niche that you can provide a tool that is so good just for that group of people that you could beat out a broader horizontal product.
[18:23] Obviously this is one that I definitely agree with and especially with a startup that doesn’t have early funding, I don’t know how else he would do it. I don’t know many if any horizontal startups that come out guns blazing without funding at their backs.
[18:38] Mike: I think this is one of those things that for people who are launching something on the side, they have this idea in their head that if they make it too small or if they go after too small of a thing then they’re not going to be able to get enough customers to support what it is that they’re doing. And the other challenge that kind of goes hand in hand with that is that when you start thinking of a product and then you go through the process of building it, you always have these grand plans for what it’s eventually going to become. And it’s incredibly time consuming to make those plans come to fruition but at the same time you’re always thinking in the back of your head I want to do this and I want to do this and I want to do this and because of that, you end up with a lot of scope creep in your products. It starts making it larger and larger and you take more and more time to develop it as opposed to taking it to market and really nailing it for one small group of people.
[19:31] This is something that I’ve struggled with Audit Shark because I have thoughts and plans for the product 3, 5, 8 years down the road that I know are going to take a very, very long time to implement. And I’ve got to focus on today, not five years down the road. And it kind of sucks because I can only do so much in the next two weeks or eight weeks or whatever but in the back of my mind I always have these thoughts about oh, what am I going to do for X when X is really something that’s not going to be implemented for probably another three years?
[20:00] Rob: The fifth point that Paul makes about doing things that don’t scale is about consulting. He says sometimes we advice founders of B to B startups to take over engagement to an extreme and to pick a single user and act as if they were consultants building something just for that one user. The initial user serves as a form for your mold. Keep tweaking until you fit their needs perfectly and you’ll usually find you’ve made something other users want to.
[20:26] I have a bit of a tough time with this one. I think it’s dangerous unless you really know that customer number one and you know that they have a clear vision of what they need and that you somehow have other inputs in especially if it’s a domain that you don’t understand or that you’re not familiar with. Taking direction from just a single client I think could be pretty dangerous and could get you into a pigeon hole where basically you’ve built a super specific app for a single client and the one that doesn’t generalize to other people. And that the second side of that is just validating that there’s a market for it. Because finding that one person or one company needs an app is really not enough. You have to go out and verify that need expands into a full pledged market and that’s something I would definitely do before taking this consulting approach.
[21:15] Mike: Yeah. I think the consulting approach can definitely work if you have a product and you have knowledge of that particular space where you already know the space. It’s not that you’re trying to validate a market or doing MVP. You know that there’s money to be had there and you know what types of products are going to be successful. The problem that you have is maybe cash flow or something like that or you don’t have enough of the products built to be able to sell it as a standalone product so you essentially need to couple some services with it. That’s the place where I see consulting working really well but if you’re still trying to validate the market because you don’t necessarily understand it and it’s not some place you’ve worked before, I think this really starts to fall apart because it’s going to be hit or miss depending on the company that you end up working with.
[22:01] Rob: Yeah. That’s a good point. The other thing he points out, I think it’s kind of cool with this consulting. He says another consulting like technique for recruiting initially lukewarm users is to use your software on their behalf. His startup that he sold back in the 90’s was called via web and it was an early shopping cart software. And he says when we approached merchants asking if they wanted to use our software to make online store, some said no. But they’d let us make one for them. Now this is concierge. Right? That’s really what we’re talking about here is essentially a free concierge service to get everything setup and to go beyond and do really manual things that don’t scale to get those early users involved. And if you show them that they’re a success then hopefully they’ll stick around with you.
[22:42] And I love this quote. He says we felt pretty lame at the time. Instead of organizing big strategic e-commerce partnerships we were trying to sell luggage and pens and men’s shirts but in retrospect it was exactly the right thing to do because it thought us how it would feel to merchants to use our software.
[22:58] The sixth point that Paul brings up is he calls it manual and he says there’s an extreme variant where you don’t even write software. You just do all the manual leg work behind it. I’ve called this human automation. I talked about it in my book. We’ve talked about it in the podcast in terms of if I were to launch something like HitTail, I would just do manual keyword research and manually email reports back to someone instead of having any type of software do it and frankly probably hire a VA to do it as well.
[23:22] I think that if at all possible, that’s how you start a startup. That’s how you vet that there is in fact a need and you can get so much information out of working with customers without writing a line of code and without spending anytime. If you’re not a developer, finding a developer and so by the time you do in fact go to find a developer you have so much more information not only about what you want to build but you have the validation that this is in fact going to work and that you can get money from people for it and that it provides enough value that you’re willing to do the cash outlay or the time out lay to go and build it yourself.
[23:59] Mike: I think one thing to keep in mind about that is it’s really about vetting the idea. It’s about testing your hypotheses and that’s really what lean startup is about as well. It’s doing that MVP. And the reason you do an MVP is because you don’t know what the answer is. And if you don’t know what the answer is then you have to figure out a way to test it. And what’s the least amount of work that you can do to test that? And this really falls under that umbrella but again it goes back to the idea like if you know that there’s money there and you don’t necessarily need to prove it to yourself then building software might be the right thing to do especially if you already know how to solve those problems.
[24:38] Rob: The seventh and final point we took away from Paul’s essay is that the big launch usually doesn’t work and neither do partnerships. This one made me pretty happy when I read it. I mean he’s basically saying the tech crunch launch doesn’t work and I’m sitting there squealing with glee because we’ve said this so many times and I get halfway down and he says partnerships too usually don’t work. They don’t work for startups in general but they especially don’t work as a way to get growth started. It’s a common mistake among experienced founders to believe that a partnership with a big company will be their break. Six months later they’re all saying the same thing. That was way more work than we expected and we ended up getting practically nothing out of it.
[25:16] I’ve run into this a number of times and this is why these days partnerships are last on my list for growing things unless I know the founder, unless I know that they have a lot of customers and experience and they’re going to be easy to work with. I would almost never partner with a much larger and impersonal Fortune 500 company as a way to try to stem growth. The partnerships that have worked for me have typically been when I’ve gone and sought them out and when I actually have something to offer. So I already have a large enough customer base that I’m able to cold email or try to get a warm introduction to a founder or somewhat high up in another organization but it tends to be a smaller organization.
[25:55] Even if it’s a multimillion dollar in sales organization it’s still run by one or two decision makers and there’s not a big group at the top where it’s all corporate. I can talk to a single person and they can make a decision as to whether or not we want to do a joint mail and or whether or not we want to do an integration and promote it to everyone or one of these things. I mean these are the partnership things that I’m thinking about that I’ve seen win and unless they bring a lot of traffic and or existing paying customers to the table, it’s almost never worth pursuing.
[26:26] Mike: I think if you look back at the growth curves for I would say probably any successful company, there’s very few where you can look at their growth curve and you see these giant spikes in there from pretty much anything. You’ll see these gradual curves where thing start to work and they figure them out and then they double down on them and you get what’s called the hockey stick growth curve. But there’s never a hockey stick growth curve that I’ve ever seen where things will be going along and then suddenly they vault up like by a magnitude of 3 to 5 and then they level out again and that just doesn’t happen. The great big launch as you said, it doesn’t really work. It helps you get customers but it’s more of a gradual thing. It helps get things started. And the same thing with partnerships. They will help get things started. I think with partnerships, there’s so much work and so much effort involved that early on it’s just not worth the time and effort.
[27:21] Rob: Yeah. This is why with Drip I didn’t go for a big launch. Really didn’t get mentioned via mini press outlets the day that the Drip launched but I’ve been marketing it for what? Maybe 10 months before that and during that 10 months, it was building the email launch list. Right? And then gradually doing that slow launch over 90 days was almost the opposite of the big tech crunch launch where you want to get mentioned on Mashable and the next web and tech crunch and 20 other places all in that one day but that creates A) a lot of headache B) it’s a huge time investment to try to work with all those venues. It’s kind of a crazy thing. People’s sites go down because they get linked to by so many things.
[27:59] If you haven’t already spent time on boarding and figuring out if your software even works and if it’s going to retain people, you can get let’s say get 100,000 uniques in two days and everybody poof goes away then what do you have? You don’t have any assets after that because you haven’t built up something over a longer term. Suffice to say that I agree with Paul’s assertion here that the big launch usually doesn’t work and neither do partnerships.
[28:22] Mike: Well the other thing about that is if you do get at that giant influx of traffic as you said, even if you get a bunch of sign ups out of it, you don’t really know what to over them next and you don’t know how to capitalize on those people who did visit but didn’t sign up to bring them back. I think Joel Spolsky at one point had a blog article where he put it out there where if you have this giant launch and tons of people come and they look at your app and they say it sucks, then they’ll never come back and that’s going to be a big problem especially if you try to make a huge splash in the market about an app that quite frankly is really still in the very, very early stages.
[28:59] So that gradual build up over time is the better approach anyway. I mean you don’t want to go too big too fast because with any given startup, if you grow too fast in too many directions well I mean there’s several directions you kind of have to grow in. But if you grow in a way that is skewed in one direction and it goes much, much further than any of the others, so let’s say that your revenue scales much, much faster than the number of employees. Well, you’re going to have some serious growing pains because you have to grow quickly which means you’re going to drop your standards to bring people on faster. Bringing in too much traffic all at once is very similar. You’re not going to be able to capitals on that in a way that is going to be effective for your business long term.
[29:42] Rob: So to recap, the seven points we pulled out of Paul Graham’s essay do things that don’t scale are number 1) recruit users manually. 2) Expect to be fragile or unstable as we put it. 3) Delight early customers. 4) Start in a niche. 5) Consult. 6) Try human automation and 7) the big launch usually doesn’t work and neither do partnerships.
[30:06] Mike: If you have question for us, you can call it into our voice mail 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. You can subscribe to us in iTunes by searching for startups or via RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening and we’ll see you next time.
Episode 167 | How to Organize & Run a Startup Mastermind
Transcript
[00:00] Mike: This is Startups for the Rest of Us: Episode 167.
[00:04] Music
[00:11] Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.
[00:19] Rob: And I’m Rob.
[00:20] Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week Rob?
[00:24] Rob: You know, things are going pretty well. I’ve been spending some time in the code. I’ve been working on the HitTail keyword algorithm. I mentioned that since not provided came through. I found it through the Google web master tools, there’s another source of a bunch of keyword data and so I’ve spent a lot of time repurposing, tweaking that algorithm and it’s actually given me a better – before HitTail could say hey, here’s a keyword and yes it’s a suggestion you strut about or not.
[00:52] Now I actually have a gradient where I can give it a score and it’s a number on like a 1 to 100 scale. So it’s been fun to get back in the code ready to kind of get this thing out. Right now it’s in alpha and I have four different people who’ve sent me spreadsheets and I’m uploading them and seeing how it goes but it’s nice to be moving forward with the goal of getting HitTail back on track basically. Growth had really stalled and things starting to go sideways with it as the value that it provides is a lot less than it did 4 or 5 months ago.
[01:24] Mike: That’s really cool that you’re able to assign a score to those things that you use so people have some sort of ranking to help them decide what they should do next. That’s one of the things that people had asked me to do when Audit Shark was there like this information is great but I need you to score it so I know what to concentrate on. The analysis paralysis that people tend to experience when they just really don’t know what it is that they’re looking at and they don’t have a basis for comparison, that really hurts. And giving them those benchmarks or those ways to sort the data can be really, really helpful.
[01:56] Rob: Yeah. I agree. So hopefully, getting that out into production in the next couple weeks, I’m going to need to get a designer on board to make some minor tweaks to some stuff and then I’ll probably hire a developer. It’s just enough work. I think it’ll probably be 20 to 30 hours of work because there some complex stuff to actually implement it at scale. I’ve realized these days man, if I need to get 30 hours of coding done, it’s going to take me like a month to do it because I can’t get in the flow ever because there’s so many little things going on but hopefully fingers crossed, another few weeks maybe end of February have that all up and running.
[02:29] Mike: Very cool.
[02:30] Rob: How about you? What’s going on?
[02:32] Mike: Well I got an email from Wes O’Hare who put together a resource website for people who make web products and the URL, we’ll link it up in the show notes is produx.co. So check it out if you want. There’s a lot of good information on there. There’s a few couple things I’ve never heard of before. So if you’re building a web startup of any kind there are definitely some good resources there.
[02:55] Rob: I wanted to call out two things. The first is I was on a podcast this week. It’s the Linchpin podcast and I was talking all about email marketing and creating email mini courses so linchpin.net/podcast if you want to check that out. It’s a short one. It’s probably 25-30 minutes. The other thing is Brandon Dunn, lifetime academy member, he and I were emailing about some stuff and I loved the story he sent. He said hey, I set a new personal record. I had an idea for a WordPress plug-in last Friday, learned how to write said plug-in over the weekend because I’ve never really dug in a WordPress before. I’ve run paid ads today plus some inbound from my blog and so far I’ve admitted two new customers who weren’t friends or in my network. I love it. It’s like a super fast implementation. Talk about taking action. It’s at wordpressconversionfunnel.com.
[03:48] And if you do nothing else, checkout that URL because look at the way Brandon puts together this sales page. It’s a long form sales later. Its written from his perspective and it’s all about how the tactics that he’s included in these WordPress plug-in has helped his own business very elegant, well put together, very folksy, it feels like you’re just having a conversation with someone and they’re kind of just telling you about something while you’re sitting at a bar. I wanted to share that with the audience and kind of give an example of a way to get something done well and to do it fast and execute like Brandon did. So congrats sir.
[04:18] Music
[04:22] Mike: We’re talking about how to organize and run a startup mastermind. Over the past couple of months, I think that you’ve probably gotten just as many questions as I have if not more about what is a mastermind? How do I go about putting one together? What sorts of things go on? How can it help? So what we’re going to today is we’re going to take some time and set aside the entire podcast episode for talking about a startup mastermind and some of the different experiences that you and I have had in running our own.
[04:49] Rob: And to give you some background, the term mastermind as far as I know is first mentioned by Napoleon Hill in the book Think and Grow Rich and if you read through that, it’s going to almost barely resemble what we’re talking about today because A) things just have developed so far in the past 75 years since he wrote that book and B) we do some very specific things that work very well because we’re talking about a startup mastermind. It’s not just a generic group of people getting together to talk about something but really focus on a startup right on the startups that you’re all running with other founders. And so I think that’s something to keep in mind.
[05:25] The other thing I’d like to mention is that one of the reasons we’re doing this episode is because Mike and I have realized the value of masterminds in our successes and just the power of community through MicroConf and through the Micropreneur Academy and that’s one of the big reasons that we are revamping micropreneur.com this year and we’re going to put an extra focus on community.
[05:47] And this mastermind stuff will be part of that. I mean we want to foster, help people get involved in mastermind and help them run them well whether they setup local Micropreneur meet ups as we’re seeing spark up. Last count, they were approaching maybe 10 worldwide of these Micropreneur meet ups just people getting together. That’s a little different than a mastermind but there’s overlap there. I mean the flipside is setting up Skype masterminds, as we’ll surely talk about in this episode.
[06:13] Mike: So the first question that somebody might have is what is a startup mastermind? To me, a startup mastermind is a group of people who are business owners or have applications that they are selling online and they want to talk to other people who are in a similar boat, other people who are encountering similar problems have a similar type of business because if you’re talking to somebody who’s running a brick and mortar type business, they’re going to have very, very different problems than you would as somebody who’s selling software over the web. So you really want to make sure that you’re talking to people who are in at least a similar situation as you and these types of people will help you make decisions. You can open up to them. You can talk about the types of problems that you’re having. They can give you suggestions. It tends to be a lot easier to talk to these types of people than it is to talk to your customers or your employees.
[07:04] And as a business owner it can be very I’ll say isolating when you’re running a business and maybe you have employees or contractors and you need advice but you don’t necessarily know where to turn. And a startup mastermind can really help with that because you can open up and you can talk about a lot of different things and essentially lay all your cards on the table and get the feedback that you really need in order to move your business forward. And if you don’t have a mechanism for doing that, then you may very well reduced to talking to your spouse or talking to your friends who if they don’t do that sort of thing, then they don’t have any basis for making decisions or offering advice. It becomes very difficult to get anything out of those conversations.
[07:44] Rob: Your spouse, your employees and your non-founder friends will never ever understand what it is you’re doing at the level that you need them to actually provide you with helpful support and feedback. You must have someone who understands that founders are a different breed and what we’re doing in startups is such a unique thing that talking to your parents or god forbid your employees about this, it almost never yields helpful information.
[08:12] I think the point that you brought up about isolation is a big one and I just double underline that on the notes I’m taking here. Isolation is something you need to avoid. I’ve gone through it. I think a lot of founders go through it. I see a mastermind as a way to get a group of supportive people around you, a way to have accountability, a way to have people invested in your startup not financially but just mentally invested without having a cofounder. So if you do have one or two cofounders, I don’t know that you necessarily need a mastermind because that’s kind of you have your mastermind there. But especially if you’re a single founder, I just view the startup mastermind as a semi-replacement for having cofounders.
[08:52] Mike: So the next question you might have is how many people should you have in your startup mastermind and this number I think can vary quite a bit. I’ve heard a lot of people say 2, 3, 4, 5. I think I heard one group that had I think 6 or 7 people in their mastermind. I feel like that’s way too much. My mastermind group has three people in it and with three people, we each get about half an hour to talk and we talk about our own products and we used to talk about our own stuff every single time we meet so it’s not as if you’re going 2, 3, 4, session or something like that without talking.
[09:24] Half an hour seems like its enough time for you to be able to get through everything that you’re talking about. And if you go a little bit long, it’s usually not a big deal but to me, I feel like three people is a good number to have. I think it can work well if you have two people. I think that once you start getting to a 4 or 5 people I feel like the mastermind gets too big and people don’t necessarily have enough focus and you spend more time waiting than you do talking about the things that you’re working on and getting the feedback that you need to move forward.
[09:52] Rob: Yeah. I take a pretty hard line on this. I think a mastermind, its best startup mastermind only works with 2 to 4 people and I’ve been in one that was 2 people and it worked great. I think 3 is the ideal number because then you’re getting two perspectives on things instead of just the other person. You want someone to have 20–30 minutes to really get in deep because if each person has 5 minutes to talk, you just can’t understand really what’s going on with their business.
[10:20] Now I have heard of masterminds like you said with 5, 6 I’ve heard of 8 person masterminds. Those are just run entirely differently than what you and I do. Those are run where it’s like every meeting 1 or 2 people get to speak for a longer period of time. Maybe you get 20 minutes when you’re on the hot seat and everybody else only gets a 5 minute update. I can’t imagine being part of a group like that. That’s not called a startup mastermind. Maybe that’s some other type of meet up or something else but it’s not at the level that we’re talking about when we’re using the term startup mastermind.
[10:53] Mike: So the next question is how often should you meet? I’ve heard of a lot of other groups that will meet once a week or even a couple of times a week. My group meets once every other week and I feel like every other week is the right amount of time because with half an hour allotted to each person, you get to talk a fair amount but at then at the end of it there’s an accountability area and that gives you – or the week in between each meeting gives you enough time to really buckle down and work on those things. And if you run into any sort of issues, you still have time to be able to get some of that stuff done from one week to the next. If you’re meeting every single week, it almost feels like any sort of commitments that you have or that you’ve set for yourself, it may very well be very difficult to meet some of those commitments just because you don’t have enough time to do it.
[11:40] It’s like okay well I’ve got things that I’m going to work on and its going to take me 2 weeks to do or 3 weeks to do and your report for the week is for 3 or 4 weeks straight is going to be well yeah, I’m still working on that. I’m not done yet. I’m sure you can go into a lot of detail about it but to me it seems like meeting every other week has worked out really, really well for us and with that sort of schedule, you can still move it around a little bit during the week. It’s not that big a deal. I think that we’ve only had to move ours I think twice but we still resorted to email updates on those weeks where we just couldn’t meet. There are ways around that sort of thing but to me it feels like once every other week is probably ideal. I think you could get away with once every week. I think Rob you’re in one that meets every week right?
[12:23] Rob: No, both of mine are every other week and it’s for the reasons you’ve outlined. There just isn’t enough time to bite off a large enough chunk to make it interesting if you’d meet every week. Plus if your mastermind like you said, yours run 90 minutes and mine typically run between 90 minutes and two hours and that’s a big chunk to bite off every week just to sit down and talk about work and not actually work. And so to bite off two hours a week, I want to kill that time but certainly it’s helpful in the broader sense but to not be able to be productive for those hours would be a big deal.
[12:55] I agree with you pretty largely that every other week since to be the ideal tempo. If struggling kind of with your business or with the mental side of it that then it would feel like too long and that there’s not enough accountability that you could feel isolated so that’s where I feel the two week touch point that even if you’re having a rough time, that’s often enough that it can kind of get you back on track.
[13:17] Mike: So here’s another question for you specifically. Since I’m only part of one mastermind group, you said that you’re in two different ones. How does that work and how does that I guess correspond to when you were a member of just one because I imagine the experience is a little different but as you said, dedicating that time every week would be really hard but again you’re in two so you’re basically dedicating twice as much on those weeks where you do have the meeting and then none when you don’t. Do you find that it’s more helpful to have a second one?
[13:48] Rob: That’s a good point because since I’m in two every other week it’s kind of like I’m in one a week. The reason that it works for me is because I’m not in two Skype mastermind groups. I feel like for me, that would be too much time because that would essentially be two hours every week on Skype. One of them’s in person and one of them’s via Skype. And the Skype one is with some more experience founders who are in other parts of the country and we really dig into a lot of nuts and bolts and detailed stuff that literally maybe 10,000 people in the world have any interest in at the level that we’re talking about. I mean it’s just such a small – maybe it’s 50,000 but it’s just a tiny, tiny number. And so there are just aren’t that many people who can discuss the intimate metrics that we’re talking about and really understand the design element. So that’s where the Skype comes in as just finding people to do it is tough.
[14:36] The in person one is a little more casual, it’s a little more fun and we almost always do it at happy hour. And so we go to a pub and we’ll have a few drinks and we’ll have appetizers and then we’ll chat. Sometimes we’ll do it in my house and I’ll host but it’s basically the same thing. I’m pouring drinks and more hanging out in the evening. So that’s where I almost use it as its both a social/have fun type thing but we also, we do get into the nitty gritty of our business but our businesses aren’t as closely aligned as with the Skype mastermind. I think I’d have a tough time being in two intense hardcore masterminds like my Skype mastermind is.
[15:13] Mike: Do you find that you actually get anything done while you’re drinking like that or no?
[15:16] Rob: Yeah. We do. It’s not like we’re frat boys doing keg stands. I mean we’re having conversations. We’re reading from notes, taking notes, asking opinions. Definitely making decisions and helping each other. Yes. We definitely get things done. The nice part about being in person is a couple guys come over and we’re sitting there chatting and having drinks for three hours, it doesn’t feel that long because we’re just hanging out. But being on a three hour Skype call is pretty irritating. It just gets old and you’re sitting or too long and we can be more casual with the time and even at times go into more depth on certain topics just because you have the luxury of being there in person.
[15:57] Mike: So one of the things that we did which was actually a recommendation from you was when we were setting up our startup mastermind, one of the things that we did was we essentially setup expectations for what that mastermind should be and what we expected from everybody. And two other things that really came out was 1) an expectation of complete confidentiality from everybody. Anything that you talked about during that meeting or during those various meetings would not go beyond the people that were there. It was kind of regardless of the topic whether it was personal stuff that came up or whether it was business related or contracts and stuff like that because there are legal issues that you may need to discuss with people and those are the things that you don’t necessarily want going out to anybody else or discuss outside of your circle.
[16:40] The second thing that also came as a recommendation from you was having an opt out clause after some sort of a trial period. I think it was something like eight weeks to say is this working for me or is it not because eight weeks, it sounds like a long time but it was really just four meetings and I think that if you don’t really gel as a group within four meetings or so, it probably isn’t going to happen and you might want to go off and find other people to be part of your startup mastermind group. Are there other rules that you setup in your masterminds?
[17:09] Rob: I can’t think of any but the confidentiality I think is one that I want to underscore because if I’m going to do this, if you’re going to be serious about this, you need to bring it to the table. I bring everything. I bring my lifetime value, my customer churn numbers, revenue, net profit, super decisions I make. I bring stuff in there that I don’t talk about with anybody else and that means there has to be confidentiality. They can’t go talking to other people about it. I think that’s a key. And then you mentioning the out clause, that’s something that I’ve done with both of mine and I think the important thing is that you’re going to probably be setting this up with people you know. Right? It’s kind of friends. And so if it doesn’t work out, there really needs to be a no hard feelings opt out period for 6-8 meetings or whatever.
[17:56] So as you said, yours was four meeting and I think that’s the ideal duration to really figure out if you’re going to get value out of it because think about it. If you get in there and you’re talking and maybe let’s just say you think you know these acquaintances or these friends and you get in and one person just dominates and doesn’t really offer a lot of information and you feel like you’re wasting that 90 minutes every two weeks, you need to feel comfortable that you can say you know what guys, this just isn’t working out for me. I’m sorry. And be able to back out and have that no hard feelings thing. Just as anyone else who comes in, maybe they just don’t feel comfortable. They want to be on their own or whatever that you don’t have the judgment of them if they decided to leave.
[19:34] So I think those are some pretty key aspects of it to keep it less stressful because anytime you’re setting something like this up with friends, it always has the potential to kind of go downhill.
[18:44] Mike: So in terms of logistics, we talked previously about the schedule and for us, we have a very regular schedule. We meet every Tuesday night at 8:30 and it’s from 8:30 ‘til about 10 or 10:30. Do you use a regular schedule or no?
[18:59] Rob: So the Skype one is a regular schedule every two weeks Wednesday morning and then the in-person was regular for a while and now we’ve kind of let it flux and I’ll find that we, unless one of us thinks about it, it will go three weeks and its even over the holidays when I think a month. I was thinking the other day that we need to get it back because it used to be every Thursday afternoon at three o’clock at this one place. There’s a happy hour and so we probably just need to kind of pencil that in the game. I think there’s a lot of value to making it regular because if you have to plan it individually every time it’s so frustrating but if everyone just blocks this thing out for the next year and blocks out that same time on Tuesday or Wednesday or whatever, that’s really the way to go.
[19:36] Mike: Yeah and I think that you and I found that even just recording this podcast very, very early on, just setting that regular schedule really helps because it was like oh well, at this time and every single week I know that I have X planned so I can’t plan anything else for that as oppose to saying okay well I can move this around or always trying to find a place for it and it’s just logistically it’s hard to think and plan for stuff when its constantly changing every week. So I really feel strongly that having that regular schedule is extremely helpful not just for mastermind but for other things that you’re working on.
[20:08] So the same point, using the same type of media mechanism every week to prevent technical issues or from cropping up and switching let’s say between Google hangouts and then to Skype and then to something else, always trying to new things just because they’re new, I feel like that’s not really conducive to having a mastermind or we use Google hangouts every week. I think you said you use Skype?
[20:30] Rob: Yeah. We used Google hangouts for a while but they kept changing the interface and it was causing us problems. Just the technical part of it. People weren’t getting invites and all this stuff so we have switched to Skype. I paid for – you know you have to pay for a pro account for a year. It’s like $50 but then you can do the multiple video Skypeing with multiple people. And so I just forked it over and now at 10 AM we’re all there and I call both people.
[20:55] Mike: Yeah. We’ve definitely had some issues with Google hangouts. It depends on what everybody’s comfortable with whether you use Google hangouts or whether you use Skype, I would definitely recommend this and I think Rob, you’ll probably agree with me that you definitely want to use something that has video. I think that’s something that people might overlook when they’re beginning to build up a startup mastermind and I think that people don’t necessarily think about it but I think having that phase in front of you where people are talking and you’re actually seeing them talk and facial expressions and having them be able to hold stuff up and show you things, that is such a valuable experience because it just adds so much context to the things that they’re talking about. If you’re just hearing this voice on the other end of the line, it’s a little bit disconnected and it doesn’t necessarily give you the same impression that you get when you’re talking to somebody through video.
[21:44] Rob: Invaluable. Yup, I echo that.
[21:47] Mike: So what about accountability? We have our own mechanism for accountability but what do you do in yours?
[21:53] Rob: So we use Google docs. We have a single Google doc with bullet points and the three people’s names in the doc and then we talk about what we’ve done and what we’re planning to do over the next two weeks and challenges that we faced or stuff we need opinions on. I’ll admit that as of late, we’ve started to fall off the wagon with that. I have just started it up again with the most recent mastermind meeting and started updating their Google doc again but we did that for maybe six months and then just kind of we go from the top of our head now and it’s not quite as valuable I think to be able to look back through the history. It’s really interesting to look through the history and see what you’ve talked about and to think wow, you know, I remember when this was making $1,000 a month and now it’s making – that’s just crazy that I was actually at that point. It really gives you a sense of accomplishment and a sense perhaps of what the group has done for you.
[22:43] Beyond that, I know you guys touch base between or you have a message that comes out between your meetings and I think that’s a really good idea. I’ve never done that but I think it could be really helpful. Why don’t you tell folks how that works?
[22:55] Mike: Sure. So as I said before, our startup mastermind meets on Tuesday nights between 8:30 and 10 to 10:30 or however long it goes. And what I do is I essentially assign myself to be the scribe for the startup mastermind and what I’ll do is I basically keep track of who is supposed to be speaking and what the schedule is. So there’s three of us and everyone’s got I guess an assigned slot. And then if I spoke first this week then the next that we meet, I would speak third and I would speak second and then I would speak first again. And we just rotate so that everybody starts in different slots. So it does rotate and that’s definitely helpful.
[23:36] The other thing that we do is there’s essentially three different things that I take notes on. The first one is what people’s previous commitments were and those are generally copied from the previous week so whenever I start a new meeting, I fire up Evernote. I throw everything in there and I basically just write down everything that they said they were going to accomplish last time. And then I have a section for what people’s accomplishments were and then what they have said that they were going to accomplish the following week or the following time that we meet.
[24:04] And then what I do is once the meeting is done, I take the three sections for what people have committed to doing by the following meeting, I throw those into an email that I send out using boomerang that I schedule for the following Tuesday. I might do it on Monday. I forget which. But it’s basically early on the following week so that once about a week goes by you may have kind of forgotten about what some of your commitments were to the group for the next meeting and that email in your inbox basically becomes a trigger that says hey, these are the things that you said you were going to get done. Where are you?
[24:33] And I started this I don’t know, it was probably about after 6 or 7 meetings because I started to realize hey, I’m waiting until Monday to start working on some of these things and go back and look and see what it is that I should’ve been doing for the last 12 or 13 days. So instead, as a trigger to myself I was like well let me remind myself of the things that I should’ve been working on and I said well why don’t I just send this to everybody? And people loved it. I mean nobody complained about it. Everyone said hey, that’s an awesome idea. Thanks a lot for doing that. And it’s worked out really really well and I actually even get requests here and there for me to resend it on occasion if we move a meeting or if we have to skip one because of the holiday or something like that.
[25:16] Rob: Yeah. I really like that idea. I can see the value of it. When we’re having our masterminds, I’m taking notes and then I typically put them in my Trello board when I say here’s what I’m going to do over the next two weeks. I put them in Trello to do but that can get lost pretty easily if I come back and there’s a bunch of email and I really don’t get back to Trello because I’m too busy churning through a bunch of fires. It’s easy to forget that so I could see a lot of value and have that email sent out off week.
[25:40] Mike: The one thing that I liked about what you said was that you guys use Google docs and I don’t know, I guess I didn’t really think about that because I throw all of my notes into Evernote and then I just have a separate note for each of the meetings that we have but it probably makes a lot more sense for me to switch over and take everything, throw it into a Google doc and then share it with everybody so that everybody can see the entire history of everything as opposed to me just having the history in Evernote.
[26:04] Rob: Right. And then other people can modify if maybe you misquote by accident or you put some in there and they decide they want to add some extra things, it’s kind of nice to be able to collaborate.
[26:16] Mike: So next major question that I think somebody might have is how to find people for your mastermind and I think this is a hard question because you really have to look at who your peers are and you have to know the people that you’re going to invite. I mean you at least want to have some sense of what it is that they do. You want to make sure that they are doing the same types of things that you are and for me, I met the people who are in my mastermind group at MicroConf. So for me that made it extremely easy. If you’re going to MicroConf, definitely look around for people to join a startup mastermind with. But what about you? How did you go about finding the people who are in your startup mastermind?
[26:51] Rob: Pretty much the same way. It was through MicroConf and the academy and just kind of the stuff we’re doing. I can’t imagine starting a mastermind with someone I had not met in person. I received this question. How do you find people for your mastermind? And I’ve heard suggestions like well, go on forums or get to know people via email and this and that. And that might work but there’s always a large part to how to people interact and the intimacy of a startup mastermind and what you’re sharing, it really depends on interaction style. Do people listen? Do they always want to talk? Do they want to dominate? Do they just want to give advice? There’s a lot of subtlety there that you can’t pickup over a forum or another non in-person mechanism. So personally I would go to an in-person event.
[27:33] The most masterminds I’ve heard come out of anywhere is out of the MicroConfs. We’re these Micropreneur meet ups and masterminds just springing up out of MicroConf Europe a number of them have already come out of it and same with the Vegas one. And I think the other place where I have seen stuff start to spring up is of course the academy. It’s our membership website so there’s a community there. And like I said, this year we’re going to be doubling down on that and really focusing on building that community and expanding it and so that’s the kind of place that I think you can go.
[28:02] I don’t know if you can go to a public forum like the old business is software stuff or answers down on startups.com or those kinds of places. I don’t know if you can go and do that. I’ve never done it and I haven’t heard of it being done. I’m sure it’s possible but I really think that you kind of have to go to that in person aspect. The other thing I’ll say is when you’re looking for the types of people to invite, you really want to find people that are ahead of you.
[28:30] In an ideal world, the other two people would be just enough ahead of you that they still remember what it’s like to be where you are but that they can give you advice based on what they’ve learned. Now obviously, that’s not possible if there’s three people. Everyone can’t be a head of the other. But what I have found interesting is that in the masterminds I’m in, there’s typically some expertise in a certain area. So one guy might be really solid on UX and ahead of everybody else and another person might be a head in terms of high touch sales and another might be ahead in terms of content marketing, another ahead in terms of paid advertising. There’s these different aspects of it.
[29:04] And so I think when you’re setting up a mastermind, don’t just grab the first three people you know who are your friends who are also founders but think about who is doing what I’m doing? So if you’re running a Saas app, try to find two other Saas founders. If you have a WordPress plug-in, try to find two other WordPress folks and if you’re doing info products, try to find info products etcetera. It’s not to say that’s the only way to do it but I think that in the ideal scenario, if you’re B to B, they would also be B to B and the type of software and they would be relatively close to you within let’s say a year ahead or behind you in terms of the path you’re traveling as a founder.
[29:39] Mike: I found that even when you’re working with other people in the mastermind group it’s really nice to get that additional perspective because other people have different experiences than you especially if their background are different. So I don’t know as I would necessarily shy away from people who are not Saas founders for example because Audit Shark is a Saas based business and the people that are in my mastermind group, none of them have a Saas based business right now. So I still get a lot of good information from them though so I don’t necessarily know as I would shy away from them. I’ve gotten a lot of great things out of it and even just in how to deal with a recurring revenue business, they’ve had some really, really great ideas that I’ve been able to take and implement. There’s other sides of it as well.
[30:21] Rob: Absolutely. It can work both ways for sure.
[30:23] Mike: It depends a lot on the type of people but I mean we’ve kind of talked about that is like you need to have the right types of people and make sure that the personalities don’t clash and get that trial period or opt out clause in there so somebody can walk away with no hard feelings as long as things are working.
[30:38] Rob: I think what you’re saying is personality may trump similarity of business and I would agree with that. The personality mix in your mastermind is going to have 80% to do with whether or not it’s actually successful because again, if you get people, if you come into the mastermind and you feel judged or you feel put down or again you feel like someone dominates, you feel there’s personality clashes in any direction and people are trying to pull away, it can really degrade the experience of the mastermind and it ruins the trust.
[31:08] I’ve also heard that mastermind’s going downhill because certain people just don’t show up or they commit to stuff and they just never do it. I mean there’s a bunch of things that can really kind of degrade the experience so you have to think to yourself are these folks reliable and are they someone who I want to spend two hours talking to every other week and really invest this time? Because that two hours is valuable. As a founder you can do a lot with that and I think you really need to think hard before you get into a mastermind relationship and I think that you will need to make sure that the folks are going to be compatible with kind of your working style.
[31:40] So that’s our show for today. If you have question for us, call our voice mail number at 1-888-801-9690 or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for startups or via RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening. See you next time.
Episode 166 | Quitting Your Job When You Have a Mortgage, How to Get 1,000 Pages of Content Indexed in Google, and More Listener Questions
Show Notes
Episodes for New Founders:
Mindset
Episode 4 | 8 Things We Wish We Knew When We Started Out
Episode 11 | The Five Biggest Hurdles to Getting Started
Episode 29 | 5 Steps to Beating Your Startup Demons
Mailing list
Episode 72 | 8 Tactics for Building Your Pre-Launch Mailing List
Episode 152: Strategies For Loading Up Your Pre-launch Email Lists
Choosing an idea
Episode 92 | 12 Rules for Building Your First Profitable Startup
Episode 130 | Capitalizing on Your Unfair Advantage
Episode 134 | The Product Test (9 Attributes that Will Determine the Success of Your Product)
Practical
Episode 17 | Eleven Ways to Make Ends Meet While Starting Up
Transcript
[00:00] Rob: In this episode of Startups for the Rest of Us, Mike and I discussed quitting your job when you have a mortgage, how to get 1,000 pages of content indexed by Google and more listener questions. This is Startups for the Rest of Us: Episode 166.
[00:12] Music
[00:20] Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Rob.
[00:29] Mike: And I’m Mike.
[00:30] Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week sir?
[00:35] Mike: Well I finally got all the new pricing code in place for my sales website for AuditShark this week but it was just a total nightmare. It should’ve only been a couple of days worth of work and it was probably 3 or 4 weeks ago and back and forth with one of my contractors and I think I just didn’t get what I wanted across very well and he didn’t understand how things were setup or how they needed to be changed. And I just got fed up with it at one point and I just said look, just check in what you’ve got, I’ll take care of it. And it took me probably 4 or 5 hours to get it done but it’s just all the back and forth totally killed my productivity.
[01:09] Rob: Yeah that’s a bummer. This is in your billing code? It’s like upgrading and downgrading people?
[01:14] Mike: It’s on the sales website so it gives me the ability to change the pricing options that are out there. It allows me to setup like custom billing entries for people like if they had a very specific situation or for enterprise pricing which is not something I had until now. And that was a big thing, it’s basically making it so that if somebody wants to sign up for an enterprise plan, they basically have to contact me. But I don’t have any way to put them onto any sort of enterprise billing plan unless they create an account and then I can go in and modify things which I’m not real happy about. So I’d rather give them an option where they can actually just signup for something directly from the website if they get in touch with me and just setup the pricing plans the way that they need to be.
[01:58] Rob: Right. Have you had any enterprise folks trying to sign up? You mentioned you had some calls or at least some discussion going on?
[02:04] Mike: Yeah, I have the discussions going on. Nobody’s followed through yet. I just didn’t want to be in a situation where they try to and I didn’t have a good way to handle it.
[02:11] Rob: Well, we’ve nailed down dates for MicroConf. MicroConf is on April 14 and 15 in Las Vegas at the Tropicana. If you’re interested in attending its conference for self funded startup founders that is at microconf.com. So in addition to that, I’ve added a yearly goal. Remember how we did our 2014 goals? My goal this year is to not file a tax extension again. I don’t want to be filing taxes in August or September. By March 15th corporate and April 15th I’m trying to do it for the personal stuff.
[02:42] Mike: And that’s really going to throw a wrench in things because of MicroConf because MicroConf is on the 14th and 15th of April which is when your taxes are going…
[02:49] Rob: Right.
[02:50] Mike: You’re going to have to do them even earlier.
[02:51] Rob: Exactly.
[02:52] Mike: And on that note I’m actually really close to handing off all of my book keeping and personal finances to my new bookkeeper so almost migrated to a completely new bank and incredibly excited about the handoff because it means I’ll never have to look at most of my mail ever again.
[03:05] Rob: That’s a really big deal. What a big time saver and a recurring time saver at that. So I haven’t had a bookkeeper do anything with my personal stuff. My personal stuff, I don’t know if it’s simpler than yours or I guess – see, I do all electronic bills. They go directly to my bank so I literally get just a couple physical paper bills in the mail each month from companies that are too small to do e-bills or even recurring payments I can setup online. So I haven’t done anything like that with my personal stuff.
[03:34] The business stuff I did as we discussed on the podcast, I hired a bookkeeper early in 2013 I had him go all the way back through pull everything out of indinero go into Xero and then we also moved some stuff in the outright for different business. I’m feeling good about it though. I was just looking at my profit and loss for 2013 and I know it’s all dialed in and the numbers are correct and I don’t have to go back and do a bunch of comparing with PayPal spreadsheets like I used to because that’s just been done, I hired somebody to do that.
[04:05] Mike: I don’t know if my personal stuff is any more complicated. It’s kind of all over the place. Part of the issue is because I got like investment accounts and I’ve got checking accounts and savings accounts, it’s just kind of complicated how things come into my bank account and kind of get spread out from there. Up here we’ve got these local vendors who come in for just various services for the house. For example, we have oil delivery comes in because we heat our house with oil and they just put a little thing in the door when they come and do an oil delivery. It’s not like they mail out invoices or anything like that. They definitely don’t do anything electronically. You just have to send it on your own.
[04:43] Rob: So a little update on what I’ve been up to in terms of my businesses. Drip has basically been just in development mode, haven’t done any marketing for the last couple weeks because it’s been Christmas and new years and so I’m going to resume marketing on it next week. I have paid acquisition and some content marketing, this can be starting. In addition there’s a potential partnership that’s in the works but I would say if you’re considering a partnership, really be critical about who you’re dealing with. The only reason I’m even considering doing this is because 1) the guy’s a successful founder. I’ve known him for about a year. I know that he’s at the goal and he’s ever to work with and he also has a large business with a large customer base. And so the upside for drink is substantial.
[05:26] I think upside for him obviously is there as well but this is not someone to contact me out of the blue. I almost find that none of those work unless it’s a warm intro or some kind of a relationship someone I know and can trust and verify what they’re saying is legitimate. It’s just too easy for someone to approach with kind of a sky high idea that requires a lot of work for me that isn’t actually going to yield you any customers.
[05:52] Mike: Its interesting you mentioned that because I just gave an Audit Shark demo to a consulting company that’s past week and they were really impressed by what Audit Shark can do and they’re looking at their customer base to see which of their customers would be a good fit for it and I’ve known these guys for probably 5 or 6 years so I totally agree with you when you say anyone who’s a cold intro or cold calls you to ask about partnerships is probably not necessarily a good fit. Funny enough, I recently was approached to be acquired.
[06:18] Rob: Wow. How did that check out?
[06:20] Mike: It didn’t because it was one of those things where they just said hey, we’d like to look at your finances because we’re looking to acquire businesses that are in your realm and I’m like you have no idea what I do.
[06:32] Rob: Wow that’s crazy. I’ve never been contacted like that. You think they were just trying to get an idea of your business so they could copy the model or what’s the story?
[06:39] Mike: It looked like it was some sort of investment firm out of Philadelphia or something like that and I really think all they did was they went through listings of domain names and businesses and just said okay which of these have been around for 5 or 8 years or something like that and how many of them are in this general region of the country and how many of them are in the software technology space. I think that’s all that they did because they did virtually no research on me what so ever. There was just a letter in the mail saying hey, would you be interested…
[07:07] Rob: Wow. And I happen to have the acquisition offers. I probably get an email a week from some unknown venture capital firm saying they’re looking to invest, wondering if we’re going to take investments. They send to the HitTail, to my email address at HitTail or the one at GetDrip and that’s always fun and I know a lot of Saas apps that are one or two persons that get those and aren’t looking for funding, so probably something similar it sounds like.
[07:32] Mike: Most likely.
[07:33] Rob: So we received a very nice email from Henry Oswald with the subject line you’ve helped my profitable bootstrap more than any other resource. And he says hey guys, one of the best parts about my bootstrap businesses is the nice user feedback I get from people saying it’s changed the way they work and how grateful they are for it. This is the way I feel about your podcast. My online LaTex editor sharelatex.com, it’s a software tool, says it targets the niche of scientific academics in students. A cofounder and myself went full time six months ago and are now making enough money to get by which we are really pleased with. Whenever I meet someone who wants to start their own business, the first thing I do is point them to your podcast. Thanks so much for your help.
[08:14] So I think we should add Henry to the list of success stories if he’s not already on there, on our website, startupsfortherestofus.com/successstories. We have several folks who have quit their job after being influenced by the podcast or implementing stuff we’ve talked about. So we only have a handful out there now. I know there’s literally several dozens of people that I’ve talked to so we need to get going and build that list out a little more.
[08:37] The other thing I wanted to mention before we dive into some really good listener questions is a productivity tip. It’s going old school with your bug and to do trucking. And this is from Carlos from Spain. He says I like to share a small productivity tip with you. I recently purchased a big white board and attached it to the wall behind my development computer. I track all bugs, features, to-do’s, etcetera there. It’s awesome. I turn my head from time to time to make indentations, erase things that are already done and draw small diagrams. Thanks for the podcast. Keep it up.
[09:07] So while I like this idea, it would be really hard if you were working with anyone else, if you’re working with a team because no one else can access those bugs. The weird thing about to-do is that to be able to reorder things, what are you really cumbersome, almost like having paper like I used to. So that’s where I like a software tool like Trello for that convenience but I totally wish I had a wall in my office that I could paint as a white board because there’s nothing like having that tact out feeling and having everything written up there where you can just use your own two hands to move things around. A lot of benefits to that, I agree.
[09:44] Mike: You know, I had the exact same thought that you can go in with a white board would be the thing to do and I have two of them in my office. I wish it worked for me. It just doesn’t.
[09:50] Music
[09:54] Rob: So let’s dive into questions. Our first question today is about quitting your job went you have a mortgage it’s from Chris Soils and he says hi guys, thanks so much for putting the time and effort each week into the podcast. It’s a big source of inspiration for me. Quick question, I know you’ve already done an episode a long time ago on how you quit your jobs but I was wondering whether you had a mortgage at the time and how you handled that both psychologically and financially. How much runway did you leave for yourself etc.
[10:19] Mike: When I first started out, I did have a mortgage and to be perfectly honest, if you have a mortgage already, it’s a lot easier to quit your job than it is to quit your job and then go get a mortgage just because the sheer amount of paperwork that the bank will send you in order to get a mortgage if you’re self employed is just astounding. You’re much better off just going and finding someone to pay them to hire you at whatever salary you want and in order to be on their payroll instead of having your own just because banks have this thing about you’re self employed, you’re risky. And it’s like you’re probably making decent money in order to be able to do that.
[10:55] But I think in terms of dealing with that psychologically I didn’t really have any issues with it because at the time, I was making enough money to be able to make ends meet and then some. So to me, I didn’t see it as any sort of risk to go down that path the money that was coming in was substantial more than it was for me to make ends meet and in addition to that, my wife was working at the time. So there were a lot of things that played into that. It felt comfortable. Now, things change over time of course but when I was first doing it, it was just not a big deal to me.
[11:28] Rob: And for me I definitely had a mortgage. I may have had multiple at the time because I was investing in houses in Los Angeles but those are rented out. So it’s fine. But yeah, I’ve had a mortgage the entire time I mean really since I got married in 2000. Financially, the way I handle it, so there were two breaks from me. One was from salary to consulting and then the next one is from consulting to products. The first time when I made the leap I was actually making more consulting than I was from salary. So financially it wasn’t a big deal nor was it really that much of an emotional deal because I knew I had a project that was going to last at least a few months and then I could get a nice stock pile in so that I could have a pretty easy 3 to 6 month runway within a month or two of starting consulting. I just honker down. I saved a lot of money really quickly and that gave me at least a bit of an unwary in case consulting work dried up.
[12:16] Making the leap to products was a little scarier since I wasn’t dealing with Saas at that time, I didn’t have recurring revenue for the most part. It was not as financially as much of a burden because I have been consulting then for several years and so I had a bit of a stock pile setup for myself that I could probably – I couldn’t have received zero income from my products but at the level they were at, I could’ve gone off 6 to 12 months at least and still made the mortgage without trouble. So that’s how kind of the financial part worked out. Psychologically I was a bit concerned. There’s always a concern especially me being less likely to bet the farm or to lose a house on this kind of stuff. I think psychologically I had to get to the point where I felt comfortable quitting and I knew I could get to the point where the mortgage was covered quickly.
[13:09] Different people have had their own risk tolerances. It really depends on what you feel good about and how much stress you can handle and live with. But for me, with consulting, I was making 2-3 times what I needed to live so what I did was look at how much product revenue do I actually need? I don’t need as much revenue as I was making consulting. I really only needed – it wound up being $7,000 to $8,000 a month at the time. And so it was much, much less than I was making as a consultant and so when I was about 70% to 80% of the way there with my product revenue and I realized I was going to have a ton more time once I quit in order to build that number up, that’s when I decided to take the plunge so thanks for the question Chris. I hope that’s helpful. Our next question is a voicemail from Dave in Ohio.
[13:56] Dave: Hi guys, this is Dave from Ohio, just calling with a quick question I’m actually traveling but I thought I’d give you a quick call. I just finished episode 163 and Rob says something really interesting I thought I’d maybe comment on. You mentioned something earlier in the podcast, unless I’m mistaken that HitTail now has like 1,000 pages of indexed content and that really struck me as a huge number for a web app where if you might comment on that a little bit more. Thanks so much. Have a great day. All the best.
[14:23] Rob: Yeah. So thanks for the question Dave. The quickest way to find out how many pages your site is indexing Google, I mean you just go to Google and type in site: and then your domain name. Site, colon, domain name. And you can put sub domains in there or you can just do the top level domain and it will show all the sub domains included underneath that. So as of today, at least via my search here, it shows HitTail with 889 pages indexed in Google. And what it amounts to, it’s around I think it’s between 150 and 200 pages are the actual core marketing website and then the rest are all blog articles because you remember when WordPress and most blogging engines, every blog post gets its own individual page.
[15:08] And so the question is how you get there? The first thing that the previous owner said all this up, I haven’t created that much content for it. Previous owners added a new page for each FAQ question that they answered. I think that’s a pretty interesting approach to it. It all depends on if you think that people are going to find those pages based on those searches are actually going to convert because if not, then having them as individual pages isn’t that helpful.
[15:31] The other way that people who started HitTail set this up is they used HitTail on itself. So they took the suggestions that HitTail was giving about what to blog about and the guy blogged 2 to 3 times a week on these topics and that grew the traffic over time and actually created a nice bit of a long tail flywheel. Now I would back up and say is your market right for SEO? Is this even a good place to head into? Because having a thousand pages in Google doesn’t actually do that much for you if your audience is not online, if your audience isn’t searching for some of the terms that you’re covering and if those terms aren’t going to actually convert into business, so that’s the first question that I would ask.
[16:11] But if the answer to all those is yes, then thinking about scaling content out, there’s a number of ways to do this. Mike, you’re trying one right now. I’ll give you in a second you can talk about that. But Patrick McKenzie’s talked at length about this. Brecht Palombo on bootstrap with kids. There are ways to do it where you just cover a bunch of long tail keyword terms and you’re able to generate the pages or you can do it the old fashioned way, use a tool like HitTail, get suggestions and write it short even if it’s a 200 to 300 word blog post, a couple of times a week and you can build that flywheel up over time or hire a writer which is what I’ve seen. There’s a couple other SaaS folks I know who’ve had success building up long tail traffic using hired writers.
[15:50] Because these articles don’t need to be as high quality as say a pillar piece or some type of big piece of content marketing. They need to be decent. They need to be readable. But they don’t have to be sharable as long as it provides solid information, you are likely to actually get someone in there and provide them value and hopefully guide them into signing up for your app. But Mike, what have you been up to with your scalable content stuff for Audit Shark? How’s that fairing?
[17:12] Mike: What I did was I went through in all the different things that Audit Shark looks for on people’s servers, basically what I did was I took every single one of those thing and I’m calling them controlled points because the idea is you just take a look at one specific question that you’re going to answer basically yes or no to does this conform to whatever the standard is supposed to be, yes or no? And what I did was I created a code that just generates a page from every single one of those. And if you go into Google right now just plug-in site: www.auditshark.com it comes up with says 746 results. So there’s 746 pages indexed and I would say probably at least 700 of them are all auto generated content over the course of the last month.
[17:54] And December is about the time frame that this went in, my organic search results have increased by around 50% or so. The last two weeks of December I had very, very little traffic to my site. It was substantially lower over the last two weeks of December than it was. It was probably half. Basically my traffic probably about doubled for organic search results over the course of the first two weeks of the month and then the last two weeks, it dropped back down to I guess what I would call normal levels. So it’s still kind of working its way through. I’ll probably have a better idea of it in the next couple of weeks but my guess is that over the course of January I’m probably going to see my organic search traffic double because of doing that.
[18:36] Rob: So thanks for the question Dave. I hope that’s helpful. Next question is about how to land your first paying customer and that’s from Sebastian. He says I recently launched my new startup queuerific it’s a queue management app to better serve as your waiting customer sousing their mobile phone and SMS technology. Although I have a couple of early adaptors within this open beta stage, I’ve researching sales strategies to get my first paying customer. How did you manage to get your firs paying customer and what sales techniques might be best when you’re starting out. Thanks and love the show.
[19:06] Mike: So Sebastian, if I understand you correctly, what you’re really asking is how do you convert those beta people or beta customers into paying customers? And I think what you have to do is have one on one conversations with them and understand that those conversations, it’s not about getting the money from them. It’s about getting that vote of confidence from them that you have something that they’re willing to pay for. And when you talk to them, what I’ve been doing for Audit Shark is asking people very poignantly are you seeing value from this and if not, where would you see value from it? What are the things that it doesn’t do that you would need it to do in order to see value?
[19:45] You have to phrase it in such a way that you’re asking them where is that tipping point? What feature is it that’s critical for them to have that they need to have in order to justify giving you some amount of money. And whatever that money is whether its $5 or $50 or $5,000 it doesn’t matter. What you want from them is the information about what the things are that are essentially pausing their buttons and providing them the value. And I’ve had conversations with people about Audit Shark where they’ve told me flat out this particular report will be really nice to have and that’s essentially what’s preventing me from paying for it. So what I did was I basically took that back and said okay, in order to get this person to pay then I need to build such and such report.
[20:24] And is that going to be generally useful? Most likely to other people yes. For me, the key piece of information there was that he needed better reporting. So whether it’s just that one report that he’s willing to pay for, are there other reports that other people would need that they would be willing to pay for? And this is going to be very dependent upon what your product is and what source of things that it does for people because those are the things that you’re looking for as what is the value that your product is offering to them.
[20:53] And those are the things that you want to hit on and you want to ask them leading questions but not ultimatums I’ll say because there are going to certainly be people that you talk to where they’re going to tell you flat out I don’t see the value in this or its not doing enough for me or I’ve got other options that are better. And you’re going to have to be able to take those on the chin and walk away and go find other customers who are willing to try it out.
[21:14] Rob: I think the important thing that you pointed out is its much less about sales techniques and sales tactics. It’s not really a sales job at this point if you don’t have a paying customer. You’re still really in product development as far as I’m concerned because until you have someone who’s willing to pay you, you don’t know that you have a product that anyone’s willing to pay you for. Now, let’s say you’re at 100 paying customers and you know your value prop nd you know that people are willing to pay for it, then knowing sales techniques is important.
[21:40] But as you pointed out and as we’ve done both with Drip as you’ve done with Audit Shark these early days, it’s about finding out what is that one more feature that you can build, what’s that one more piece of value you need to deliver? I was the same way. I was constantly asking people who were in my trial, my early access, is this providing enough value for you to pay $49 a month and I wait to her back. And if they’d say no then I’d say alright, what else does it need? And typically they’d be very forthcoming with well, it needs to do this. It needs to show me this. It needs to be able to integrate with this.
[22:10] I didn’t build all of those features because I had a general roadmap in my head of the market we were after and some people just went off the rails and they went in a very different direction than what we’re building. So you can’t just blindly listen to folks and invest a month of development just to get your next customer. But at the same time, if its something that you think you may be building ultimately anyway, then there’s no better time to build that right now when you can actually get someone to pay you some money for it. So I hope that helps. Our next question is a clarification of concierge services and it’s actually a voicemail from Nathan. He’s an academy member.
[22:40] Nathan: Hi Mike and Rob, this is Nathan Stuller from Unstoppable Software and I’m also a member of the Micropreneur Academy. So all the talk about concierge services, what approaches should be taken to make sure that service offerings don’t seem scammy? As an extreme example, some malware programs nag these computer users until they pay to have it removed. I assume there’s a balance between offering service as a value add versus giving the appearance that the product only exists to drive potentially un necessary service revenue. Thanks and keep up the good work.
[23:13] Mike: So I think there’s a couple of different factors here. The first one is that you can have paid concierge services and then unpaid concierge services. So with your example of malware where it’s essentially popping up all the time saying hey, if you pay us, we’ll get rid of these popups for you. That is definitely scammy and nobody wants to see that kind of thing. In contrast, when you’ve got a website where you’re trying to sell somebody something and you are offering them free services to help them get onboard onto the software, that’s completely different because for a couple of different reasons.
[23:48] The first one is that they probably came to you and it’s not like you’re already on their machine and popping stuff up. The second thing is you do have to strike some sort of a balance between how much you are I’ll say getting in their face versus how much you’re letting them come to you. And if you’re popping something up on their desktop or sending them emails every single day without any way of them opting out of it, then of course that’s going to come across as scammy. But if you setup for example a Drip campaign or an email newsletter or something like that and you have unsubscribe links in those, those are obvious ways to essentially opt out of the relationship.
[24:24] So as long as you’re offering those types of things, and you can be very clear about what it is that you’re offering, what it is that you’re trying to accomplish with those email campaigns, you tell them upfront we don’t like spam. You can unsubscribe at anytime. There’s all these things that you can do to essentially help people have trust in the information that you’re sending to them.
[24:45] The other thing as I said before, there’s a difference between paid services versus unpaid services. And when you’re trying to learn and do product development for your product, that’s the time when you really want to offer a lot of the free concierge services because you want to get people using your product with as little obstacle in their way as possible. For example if you have an email campaign software, what you might want to do is offer them hey, we’ll come into your existing software and we’ll export everything and import it into our software so that you don’t lose stuff.
[25:16] If you have an accounting software, you might offer the same sort of thing. That would probably be cost just in terms of the sheer amount of work but at the same time you would probably learn a lot of information about what sorts of other products people are using and you could use that to essentially build translation software to go from for example QuickBooks into your software or from any of the other accounting vendors into your software. So there’s a lot of different plays there that you could use but the bottom-line is if it feels scammy to you then it probably is.
[25:47] Rob: The thing to think about, does it push towards you value proposition? What is the value that your product offers and do your concierge services push towards that? Whether they’re free or paid, if its helping them take that next step, I don’t know how it could be viewed as spammy if you’re doing that. If someone signs up for an SEO tool and you offer to write articles for them or to build links or to do anything manual that is obviously not able to be done by a computer, people are either not going to expect them for free, not going to want to pay for it either way.
[26:24] I don’t know that I’ve ever seen a concierge service where I felt like oh man, these guys are just trying to sell me services. If it was an app that I was actually using and already getting value out of and they were just trying to help me get there faster or help me get there with less work on my part, it almost always comes across as a value add for the customer. So thanks for the question Nathan.
[26:43] Our next question is about blogging and it’s from Scott at digitaltrackandfield.com he says hey guys, I’ve been writing articles providing free small video segments and I occasionally write about another video on YouTube with some comments and tips. After about 18 months of almost weekly posts I’m wondering if it’s worth the time to do this, I make a small income from the website but if for an hourly wage it might b $2 an hour. So I wonder, is it better to have 7-8 great pillar type articles on the site that link back to specific products or should I post weekly content? Do weekly posts make it harder to navigate the site and potential customers lose focus and move on? Thanks for the help. Scott.
[27:19] Mike: I think part of the issue that you’re probably experiencing is when you’re doing blogging, there’s something of a disconnect between you and the end users and its difficult to figure out whether or not any given article that you’re writing is resonating with your audience. And that becomes a lot easier when you start migrating over to email lists. And I would choose to use email lists as more of an engagement mechanism than a blog. Because if it’s something like a blog, you’re going to want to us that for SEO, for attracting in bound traffic versus an email campaign where you may very well send the exact same articles from your blog to the email list but essentially what you’re doing is you’re using that to get that feedback look from people. You can interact with people ask them questions at the end of the email.
[28:07] You can also use it to drive traffic to very specific offerings that you have on your site or through an affiliate link or something like that. I think there’s definitely a lot of ways that you can leverage the content that you have. In terms of making it harder to navigate the site, I think that’s more of a design question than anything else. I don’t want to say it’s impossible to have too much content but there definitely ways to organize your content so that it isn’t something that’s completely overwhelming to people versus stuff that if its clearly organized and people can get to the things that they want, it really doesn’t matter how much content you have as long as you have the content that they’re looking for.
[28:44] So those are probably my thoughts on it but it really depends a lot on specifically what your goals are for blogging. And if it’s to attract traffic then great I mean that’s probably what you’re doing with it. If it’s to engage in a feedback look with people and connect with them, I’m hesitant to think that a blog is going to be able to do that as well as something like an email newsletter.
[29:05] Rob: I think the other thing to think about with a blog is is your market online and are they searching Google for this? Because if you’re looking to build an audience with your blog, that’s one thing in which case you don’t rely on a lot of long tail search traffic. But if you’re looking to build inbound search traffic by spreading out like we talked about earlier getting a thousand pages index in Google, then that’s a different approach.
[29:29] And so that’s probably the first question I would ask is are people searching on those keywords or is this more of a play where you can actually build an audience. Because if you’re working with more of offline audience and digitaltrackandfield.com, my guess is track and field audience is not going to be heavily online the I think you’re going to have to go for that first one, the inbound traffic thing of just trying to get a lot of long tail stuff. And if you’ve tried it now for 18 months, and you’re not making enough money to make it worthwhile then either you’re not hitting the right keywords. You don’t have great calls to action perhaps on your post kind of funnel people into an email list like Mike said where you can build a more sustainable relationship.
[30:08] Because if someone searches for a term and they find a single blog post, they’re going to read it and they’re never going to come back. So if you can’t get them onto an email list, get them to somehow subscribe, then the value of that visitor is very, very low. So that’s what I would look at. I would almost definitely would not continue to post weekly if I felt like I’ve been doing it for 18 months and I’m still not actually yielding that much revenue out of it.
[30:33] The last thing to think about is the time you spent on your blog. I wouldn’t consider it wasted because now you have so much content you realize that you can repurpose that and do all kind of stuff. You can make it into email courses, you can make it into a long auto responder sequence over time because those things that are a year old, people very likely will not dig through your archives and find them. And so packaging them together into an eBook that you giveaway when people sign up for your list or as I said, just turning it into an auto responder sequence is a good way to get continued value out of that content you’ve already created. So I hope that helpful Scott. Our next question is another voicemail and this one’s about high touch SaaS app.
[31:16] Robert: Hi this is Robert Hartline founder of callproof.com. Love the show. Your podcast keeps me pushing to make a better product. Over the last three years, we have built a SaaS app for sales managers to manage outside sales tasks. We currently work on android and iPhone and are only listed for North America in the app stores. My question is we know we can be listed in the app store for other countries and we’ll get more signups and increase sales but it seems that by adding other countries, we would be challenged with language barriers, time zone issues, not understanding laws for each countries and a list of other challenges. We have a long sales cycles and are high touch with our customers.
[31:59] Our team is less than 10 employees. It would take only a couple of weeks of development for our platform to go international but we don’t know if the signups would be worth the trouble. We’d like to hear your thoughts on going international with a SaaS product. Again, Robert Hartline here. You can reach me at Robert@callproof.com. Thanks again for the show. Keep it up.
[32:17] Mike: I guess here’s my take on it. If you have a business that is probably less than several hundred people and you’re thinking about going international I would probably advice heavily against it and here’s why. The idea that you have almost entirely saturated the entire local market is probably not well founded. Unless you really have saturated your local market to like 95% and every single one of them is using your product, then there’s still room for you to grow in the existing market.
[32:51] So that’s probably what I would caution you against because there’s open field for you to push your product and grow it bigger and bigger in the existing market where you do speak the language where you’re not going to have to deal with international issues. You’re not going to have to deal with international laws. You’re not going to have to deal with international taxes and international businesses and all that other stuff because that stuff gets complicated. And when you have less than 10 employees, that seems to me like it has so much overhead that it’s just totally not worth the effort.
[33:20] So I think as a general rule of thumb, if you have a small team and you’re considering going international, I would definitely take a really hard look at that and figure out whether or not you have saturated your local market. And if you haven’t, try and figure out how far you have to go in your market before you do saturate it. Now if you have saturated it, that’s a completely different story but looking at callproof.com I would say if a mobile app or field sales people, I would be hard pressed to believe that in the US market that it’s been completely saturated.
[33:51] Rob: It sounds like Robert you’re talking about app store listing as a marketing channel. It’s basically a search engine listing and you rank well for some terms. I think that’s really cool. So one way to think about this is as you said, just expanding to other app stores, kind of a no brainer. Another way to think about it is what are the other marketing channels that you can explore that don’t require you to go outside of the continental United States or North America as you’ve said. So obviously there’s SEO, there’s content marketing, there’s just straight up paid acquisition driving folks within the US to your site whether that’s through LinkedIn, Facebook ads, ad words, you know all the traditional stuff that we talked about with paid acquisition.
[34:32] There’s all the JB partnerships and all the tactics that we basically spouse here, how to get new customers for SaaS. Consider looking at those and keeping it within the US at this point rather than branching out into other countries. And I say that because I think there’s probably other marketing channels you haven’t explored. They may not be as low hanging fruit but if you expand into those you are going to be able to grow this business. Now with all that said, I’m actually a little bit more bullish on this than Mike is I think. If you aren’t already in Canada, I don’t remember if you said North America or Canada, but if you aren’t already in Canada I do think that’s a no brainer to get listed in the Canadian app store to give it a try because what’s the worse that happens? If things go sideways with it, you can always pull it out of the app store and just call it a failed experiment.
[35:19] I also think you can consider if you’re already in Canada, you can look at either England or the UK or Australia and New Zealand. Now, these markets are not huge but I think that they’re the easiest way to get out there without having to have your app translated because as soon as you get to other languages as you’ve said, the hassles of marketing sales and support in those other languages crops up. That becomes a large burden. So that’s not something that I would venture into as a 10 person company.
[35:44] But I would consider exploring if you’ve already approached amazing out all your other marketing channels or the app store marketing just seems more appealing and its really working for you, I would consider taking a test, maybe a one month test into Canada, England or Australia and New Zealand since they do share the same language and there would be very, very little localization you need to do on just stuff with dates and currencies and you would still be able to support it.
[36:10] And that way, you could run kind of basically a profit of concept and figure out is this going to work, is this even worth our time to be listed in these stores or maybe these customers don’t have the same process and culturally there’s a difference or something like that. So at least you could give it a try and worst case, pull it out at the end. So I hope that gives you a few ideas to think about.
[36:28] Our next question is from Arthur and he’s asking about episodes for people in the early stages. He says hi guys, I’m really enjoying the show and I feel it’s helping me avoid a lot of pitfalls that as an engineer I would tend to fall into. I’m still at the stage of looking at ideas so the episodes that help me most were episode 133 which was our founder test, episode 128 which is nine steps for finding startup ideas and episode 138 which is more tips for identifying startup ideas. And Arthur asked are there any other episodes that you think are especially helpful for people who are still in the early stages of identifying ideas?
[37:00] We’re going to include a complete list. It’s about 10 episodes. We’ll include these in the show notes. I did want to call a few out. I think I kind a grouped them up into a different areas. One we have the mindset group and this is about getting over the limiting mindset stuff that keeps you from actually launching and one of our most popular episodes for a long time was episode 29. If you haven’t heard, it’s pretty good. It’s called five steps to beating your startup demons. And this is about the fear of launching and really how to get over that. I have a couple other mindset ones we’ll include in the show notes.
[37:35] The next category is mailing list, it’s building your mailing list and episode 72 and 152 are basically the tactics that almost all the tactics we know on how to build mailing list, critical stuff if you’re thinking about building a product, then you’ll kind of want to know how to build that mailing list first. So I’d definitely go listen to those. Then the other episodes on choosing an idea were episode 92 which is 12 rules for building your first profitable startup, episode 130 which is capitalizing on your unfair advantage which helps you decide what kind of idea to pursue. And then episode 134 which is basically a companion to the founder test that Arthur mentioned and that was the product test. Nine attributes that can determine the success of your product. So as I said, there are a few others that I recommend that we’ll go through them all here. I hope that helps and thanks for the question Arthur.
[38:21] And wrapping is up for the day, our final question is about how to handle the frustration of a user canceling. It’s from Jeff Gaudette. He’s at runnersconnect.net and he says I really enjoy the show even though I’m not a technical founder. I have a potential question or topic for the podcast. How do you deal with the disappointment and at least for me, anger when a customer cancels after you spend a lot of one on one time with them? Or customer starts a free trial and then provides no feedback what so ever. For example, you personally emailed them multiple times and they don’t respond. For example, with both of your more personalized on boarding solutions right now, it must be extremely frustrating when you spend hours with a potential clients only for them to say no thanks.
[38:59] Well I know the feedback from why customer cancels is always data we can use to improve, I almost have animosity towards these customers and its one of the most difficult mental aspects of running a Saas company. Am I the only one or is this something that you deal with as well? I’m relatively new to this. I know these feelings will make I hard to stay in the ups and downs a startup must go through. Thanks and I look forward to your answer.
[39:18] Mike: I think when you’re evaluating the reasons that people cancel or they basically say no after you’ve gone through the free trial or if they don’t provide any feedback what so ever, there’s a lot of different reasons for that but at the end of the day its ultimately a form of rejection and nobody likes to get rejected. But the one thing that I point out to people who kind of go through this is that there are people who come to you website every single day and probably 90% of them leave without ever signing up, without ever doing anything. And for some reason, people just completely gloss over that fact and it doesn’t faze them at all its like oh I got 10 signups. For some reason, those 90 people who visited the website, they just gloss over that and they just let it roll off. They don’t think about it.
[40:04] There’s two sides of that. The first one is of course, getting rejected on a fairly regular basis and for whatever reason, you’re just blocking that out. The second thing is that when you do start getting into those relationships and started to talk to people you have to understand that whatever the final outcome is and it has to be a learning experience because you have to understand what are the challenges that people are running into? If they don’t have enough time to implement it, what are the things that you can do that will make it so that they don’t have to? Are there ways for you to make it easier? Can you offer a concierge service so that they don’t have to implement it and you can offer that implementation on their behalf? Is there data that they have to migrate in? Are there importers that you could create so that they would have to do a lot less work? What does your on boarding process look like?
[40:53] And then there’s going to be those customers where they sign up and it really just wasn’t what they thought it was or what they were expecting. In cases like that, it’s difficult to blame the customer because they didn’t understand it. What you really have to do is you have to go back and look at your own marketing material and try to understand why is it that they felt that way. What is it that your marketing material was saying that made them think that? Because it’s not like they plucked ideas out of the air and went to your website and said oh, I’m looking for database software. I’m just going to sign up for this random service and I’m going to get a database. Oh, you don’t do database? Oh I’m not going to pay for this. That’s definitely not what happened.
[41:30] What happened was they went to your website, they looked at it, they thought it was one thing, they signed up and they found out it was something else. What is it in your marketing material that made them think that? And those are the things that you need to look at and use those as learning experiences. And I understand that every single one of those is going to feel like a rejection. That’s actually a good thing. There’s something to be said for filtering people out who are not a good fit for you product. You don’t want to be supporting people who are going to use your product and say oh, well it would be great if it did X or it did Y or if it did X, Y and Z because then you’re going to be building this Frankenstein product that does a lot of things sort of well but nothing really, really well.
[42:11] Rob: I think that’s a good point in that figure out how to prequalify customers early. You know that the sales people who are doing high touch sales. They have basically lead ranking where they can take a list of leads and they sort them based on some criteria that they’ve decided. It means that customers are more likely to convert and more likely to get value out of the product. You have to learn to do that early. I’ll say with my Drip early access, very, very few customers didn’t work out. I spent a lot of time with a lot of them. I learned a lot from them. The ones that didn’t work out, I knew – I’ll say somewhat early on I had a gut feeling that they just weren’t going to be right for the product.
[42:45] Drip offers a lot of value for SaaS startups, for software companies, for info marketers, for the people who are into their lists and are using it as a marketing effort. Bloggers, not so much. And I had someone in early on who had a pretty successful blog and the features that he wanted and the things that he was confused about were so far separate from what everyone else was asking about that I knew he was an outlier and I had a pretty good feeling that he just wasn’t going to work out.
[43:14] And so I think getting that gut feeling that what later becomes a report, it later becomes kind of your customer happiness index, who’s going to cancel next, who’s going to convert next, who’s unlikely to convert, that will be a report that you build. But for now, it has to be that gut feeling of who is a good fit for a product and why and if they aren’t, trying to almost discourage them, I actually have a couple of snippets in our support software that we’ll send to people and I will heavily clarify you need to have X thousand visitors per month, our product starts at $49 a month so you should probably be selling something or that needs to be valuable to you, almost trying to clarify and discourage them from moving forward because you just get that gut feeling that wow, this person’s probably not the best fit for this product or they don’t understand enough to understand the value of this product.
[44:02] So that’s where I lean with it. I think Jeff’s original question is how do we deal with the frustration when someone does in fact cancel after you’ve spent a lot of time with them. And I did have a few of those. It was frustrating. I think the way I dealt with it was I thought to myself I’m going to try not to do that again. I’m going to take this as a learning experience and I’m going to probably not invest a lot of time into someone who has very similar attributes as that person and I’m going to focus on these other 10 people that did convert that I spent time with and chalk it up to a learning experience and then see how I can scale that up down the line.
[44:36] Now that is also helping me as I’m going to start scaling up my marketing efforts that I’m not going to advertise to the niches of those people who really didn’t understand the value of Drip or who didn’t really convert as high a level as the folks who are Saas and software and info and product marketers and that kind of stuff.
[44:56] Mike: One of the things that you can do to help identify those types of people is as soon as they start I’ll say haggling over price or pointing to the price and say well, if it was half the price I would consider it. Those are the people who you definitely want to discourage from using your products because they’re not buying it based on value. They’re buying it based on price.
[45:16] Rob: Yeah and I have an old blog article called how to detect a toxic customer and it’s tangentially related to this. I’d recommend you check it out. It talks about that, about the people who really want price or who want a ton of upfront time, they want high touch sales for $100 or $200 onetime product where you just can’t afford to give that kind of sales and they get really demanding and angry when you don’t give them that or they demand a phone number upfront and they want to talk to someone in sales and you explain we don’t have a sales department. We just don’t do phone support and they get upset about that.
[45:51] But it’s always like huh, then you’re not a good fit. I’ve stopped getting my feelings hurt about that kind of thing because I’m not a good fit for them and they’re not a good fit for us. They need to go talk to sales force or some huge company that can charge them $1,000 a month and can handle basically the high level of need and the high touch they need. But as lower end, less expensive SaaS app. You just can’t offer that kind of both upfront support and the ongoing support. So you don’t even want to bend over backwards to get them as a customer because then they’re just going to be as demanding once they’re actually using your app.
[46:25] And the last thing I’ll note is that down the line, once you start to scale, you’re going to want to remove yourself from that cancellation flow. You don’t want to handle it yourself because it is frustrating and its taxing and so as you start to scale up, and move on to other things and hire someone whether it’s your tier one support person or someone else but let them handle the cancellations obviously with trainings and such. But you need to remove that pain from your day to day because trust me, as you scale up, there’s going to be plenty of other pains in your life and you’re not going to want to be dealing with this one.
[46:54] Mike: So thanks for the question Jeff. If you have question for us, you can call it into our voice mail number at 1-888-801-9690 or 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. You can subscribe to us in iTunes by searching for startups or via RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening and we’ll see you next time.