Show Notes
- Getting Organized using Evernote by Andrew Connell
- How to Craft a Marketing Story that People Embrace and Share
- Storytelling for Fun and Profit
- To Tell a Tale, To Craft a Story
- The Hero’s Journey Outline
- The Science of Storytelling: Why Telling a Story is the Most Powerful Way to Activate Our Brains
- The Secrets of Storytelling: Why We Love a Good Yarn
Transcript
[00:00] Mike: In this episode of Startups for the Rest of Us, Rob and I are going to be talking about how to craft your story. This is Startups for the Rest of Us. Episode 195.
[00:06] Music
[00:13] Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at launching software products whether you built your first product or you’re just thinking about it. I’m Mike-
[00:21] Rob: -and I’m Rob.
[00:22] Mike: -and we’re here to share experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Rob?
[00:26] Rob: I want to say a congratulations to lifetime Academy member Adrian Rosebrock on his first four-figure launch. He emailed me, and I know he’s used a lot of tactics and techniques that we’ve outlined in the Academy. And he’s also, he moved over to Drip from MailChimp because it was getting too complex to try to manage in MailChimp with segments and groups. And so once we got the rules built, he moved over to Drip. And he said, “I just wanted to say that Drip has helped me hit my first four-figure launch, and I’ve only emailed about 130 people from my 800 person subscriber list. I’m looking forward to the rest of the launch this weekend.”
[00:57] You know, I actually I actually have read through his crash course. He has a 21-day crash course in computer vision and image search engines.
[01:06] Mike: Oh my God.
[01:07] Rob: Yeah.
[01:07] Mike: Twenty-one days?
[01:08] Rob: And it’s really good. Like I would check this out, even if you’re not interested in this, just to see how to write a really good crash course. The content is exceptional. And there’s a bunch of really good content on his site as well. He cranks out lot of content, and it’s high quality. He knows what he’s talking about. The URL is pyimagesearch.com. It’s PY (python) imagesearch.com. You can go sign up for the crash course. And he’s released a couple of e-books you can find certainly on the site if you’re interested in this stuff. So that’s what this is, right? It’s using pythons and libraries to identify faces in photos and identify checks and stuff. So it’s pretty cool stuff.
[01:45] Mike: Oh, that’s really cool. So you remember a couple weeks ago I said that I had a hard drive crash on my network-attached storage device?
[01:50] Rob: Yep.
[01:51] Mike: And so I bought those four new two-terrabyte drives, and two of them I’ve had to send back because they were bad drives.
[01:57] Rob: That’s terrible. And you were talking about how they were inexpensive, right? The storage was so cheap. Was it because the drives were cheap, do you think? Are they off-brands?
[02:06] Mike: No, they were Seagate drives, so they were decent quality. And plus they were the enterprise versions of them. They weren’t the lower end ones. The smart drive piece of it was failing, was giving me errors. And I tried it in a couple different ways. I used one of Seagate’s tools. They have their own utility to check the drive, and that was coming back and telling me everything was okay, but I’m just like, “Yeah, I just bought these, and I’ve got two other pieces of software that are telling me they’re bad, so I’m going to send them back just to be on the safe side.”
[02:32] Rob: That’s such a bummer. When that mean time between failures is two days, that’s [laughs] too short. Hey, so remember a couple episodes ago we talked about ABCDE, it’s a prioritization approach?
[02:43] Mike: Sure.
[02:44] Rob: We got some really good comments for that episode. It was episode 191, and I wanted to talk about a couple of them. One is from Martin Frank, and he said, “I’m a big procrastinator myself, and I was hooked on the ABCDE method you present. My question: how do you manage different tasks from different projects? Do you have multiple Trello boards or do you merge them all into one?”
[03:03] I responded to him, and I said I put everything into a single list because otherwise I get project hypnotized, and I won’t switch between them, but I only keep stuff that really needs to be worked on in that board. So future tasks, nice to haves, etc, they’re on a different board. Because I don’t think you can manage 50-100 items with any level of efficiency in Trello. I do think if you have a to do list and you literally have 100 or 200 items that need to be arranged, then I would probably not use Trello. I would probably use something more like FogBugz or a took like that where you priority, backlog, and filtering are kind of these multiple dimensions to it. And it’s just better for organizing more information because you have more things to pivot on.
[03:40] Mike: My thoughts are probably pretty similar. What I do on Trello is I have the things that are the most important to me. And there’s some things that I’ll take from FogBugz and put into my Trello board, but then there’s other things that I’ll take from my Trello board and then add them into FogBugz and I just kind of wipe the slate clean at that point. And so if I’m moving it from Trello to FogBugz, I delete it from Trello, so that it’s no longer there kind of on my top level list of things to do. For exactly the reason that you said. If there’s too many things on that list, they tend to get lost, and you don’t necessarily go through and reprioritize those Trello boards every single day. Those are the top level things that you should be working on, and I find with FogBugz a lot of the stuff that is in there is stuff that tends to get shifted into the B or C column, and sometimes it’s just stuff that you need to get rid of. I just started taking things and just throwing them away and saying, “Look, I’m just not going to do this. I’m not going to do that because they don’t matter any more because they’ve sat there long enough that they never became a priority, so what’s the point? Just get rid of them.”
[04:35] Rob: Exactly. I definitely go through and purge items when I figure out that they’re never going to make it to the top of the board.
[04:42] We got another comment too from Andrew Connell. He says, “Like you, I used Trello but I recently jumped into Evernote and the secret weapon process.” Now everything is in Evernote. Email integration is killer so my inbox stays uncluttered. He uses a one through five priority so it’s like ABCDE, but it’s just numbers. And he’s basically doubled down on putting everything into Evernote, and it’s working really, really well for him. He wrote up the full process on his blog, andrewconnell.com, and we will definitely link that up in the show notes.
[05:10] Mike: Yeah, I think I’d have a hard time using Evernote for that. I feel like I never actually go back and do anything with it.
[05:17] Rob: I’d be curious. You should read through his post because he goes through the exact detail of how he’s using it, and I wonder if that would sway you so you maybe you could take a look at it.
[05:25] Mike: Yeah, that’s a good idea. I’ll have to do that.
[05:27] Well, today we’re going to be talking a little bit about how to craft your story. Some of this is taken from literary sources. How to write a good novel or a good story that would be published. But some of it is directly applicable to how to talk about your company, how to talk about your product and how that product came to be, and use that as essentially a marketing story that you can then use in your marketing collateral when you’re talking to people, explain your product and the services that you offer in relation to that story. Because the fact of the matter is that stories really resonate with people. In fact, there’s an article in the Scientific American Mind by Jeremy Hsu where he essentially points out that personal stories and gossip make up 65% of our conversations. People tend to remember stories, and if you relate your product in a story, it’s going to resonate better with them.
[06:16] Rob: This was the main premise of the book, “Made to Stick,” by Dan and Chip Heath. And I highly recommend listening to that book. It’s mostly about being able to talk about something in a way that gets people to remember it, and a really big part of that is telling stories. I have used the stuff I learned from “Made to Stick” in writing marketing copy, in writing blog posts, in crafting these podcasts, in organizing conference talk. I use it in everything I do. Anything public facing now, I think, “How can I integrate stories? How can I use stories?” And it was really heavily influenced by me reading that book.
[06:52] Mike: So before we get into this, why don’t we talk about some of the different companies that really do this well. Three that I thought of off the top of my head are 37 Signals, Apple, and Groove. And if you take a look at those three companies, if you take a look at Apple and what they do and how they position themselves and how they talk about stuff, every single one of their yearly demos at WWDC is them telling stories. Every single sales pitch for every product they’ve ever launched it’s all stories. It’s all about what sorts of problems they encountered, and they all follow a very, very similar formula.
[07:23] And then if you look at a company like 37 Signals, they came out with the rails platform, and if you take a look at how they’ve positioned themselves, they really say, “This is what we stand for. These are the types of things that are important to us.” And these are things that as a developer I should not have to worry about. We’re worried about design, and it should look good, and they take that to an extreme, and they definitely alienate some people. But in alienating some people they attract other people.
[07:49] And then Groove. I don’t know if you’re familiar with Groove. They have a help desk product that they’ve been pushing. They have a newsletter that they put out, and they really use that to push their story and talk about themselves, where they came from. And it does allude to the product a little bit, but it really does talk about the growth of their business. It really does come out and say, “Hey, this is who we are. This is what we do, and these are the trials and tribulations we’ve had to go through to get to where we are today.”
[08:12] Rob: Yeah, I’m familiar with Groove. He and I’ve emailed back a number of times actually going all the way back to 2011 it looks like. I was just searching through Gmail. He had asked for advice on a few things, and he’s doing a killer job at content marketing these days and getting people invested in his story as you said. I can think of a bunch of other examples off the top of my head. Think of Joel Spolsky when he was getting Fog Creek going. Him telling all the stories of hiring developers and his approach and everything. You buy into it, and you start getting invested in his success.
[08:39] Eric Sink did it with Source Gear. He doesn’t do it anymore, but he used to blog, and then he wrote the Business of Software book. I was so invested in that just hearing what’s it like to really be on the inside and then you start rooting for him.
[08:50] I think patio11 did this really well when he was blogging every week about bingo card creator, and that’s how he got known, right? He talked a lot about SEO and analytics and tactics, but it wasn’t just the tactics. It was that it was this once guy sharing the story of what he was doing.
[09:08] I found on my blog as I blogged about my journey through DotNetInvoice and then through HitTail telling those stories, the tactics are helpful, but that was when people really started to become more engaged with me and what was going on.
[09:21] I think Buffer’s doing a really decent job of that these days. They don’t necessarily tell the inside story like all the other guys, but they are giving you glimpses into how they pay their people. They released all their compensation number publicly. They have all their metrics up on Baremetrics at, I think it’s buffer.baremetrics.io so you can basically see how much money they’re making. And their transparency is part of that story.
[09:43] So stories get people talking if they’re told well and they’re told consistently over a long period of time. Especially if people start relating to you. We talked about this a week or two ago that when we started telling more of our story on this podcast then people become more engaged and they put up with an episode or two that isn’t as tactical, isn’t as super ultra productive or super helpful for them because they’re really just invested in your story.
[10:09] Mike: People can definitely have a story that they tell about themselves in relation to their company. It especially comes true when you talk about the product that you’ve built and you say, “I built this because” and you talk about some of your past work history experiences or problems you’ve encountered. And again, you’re telling a story, and it’s not necessarily about the product but it’s about the trials and tribulations that you went through in order to get to the point where you are today where you built that product because you had this problem that nobody seems to have solved in the way that you needed it to and here are the different reasons why those other things didn’t work. And you take a look at some of the corporate evangelists like Matt Cutts from Google and Rand Fishkin from Moz and then people like Scott Hanselmen from Microsoft, all of these people have a story about where they came from. As you start becoming more familiar with the things that they do you hear more and more bits of this story. Nobody ever sits down and listens to all of a particular person’s story, but you hear different pieces of it spaced out over the course of months or years in different places, and as you said, it’s one of those things that help the story resonate.
[11:10] So if you start looking at things like literary examples, a lot of what you would probably consider the classical stories that really resonate with millions of people, they tend to follow this common idea called the hero’s journey. Twelve different things in the hero’s journey. But if you start to think about classic literary examples that follow the hero’s journey you come across things like Lord of the Rings and Star Wars, The Godfather, Harry Potter, and the Lion King. All of these things kind of embody the hero’s journey. And one of the things that I came across in doing the research for this episode was Nick Reese, and I’ll link to his blog in this. He essentially simplifies this into what he calls the journey to success. And the journey to success boils down to these five basic points.
[11:51] And the first point is identity. Who were you when you started your journey? What was it that you were doing? How were you doing it? What was the lay of the land like when you first came into the picture where you want to start this story? Because obviously you don’t want to start all the way back when you were five years old unless the problem really came from that point. Where do you want to start talking about that? Where is the first place that you came across this problem and how can you introduce people to it in a way that’s going to be meaningful to them?
[12:18] Rob: Right, and you’ll notice as we step through these points, that this outline is very close to most Mixergy interviews. And Andrew has talked about that, how he uses the hero’s journey but how he uses that in his outlines to have a consistent format. And that’s what really separated his interviews early on from everyone else is that he started using this outline which is to- you’ll hear him start the interview, and the very first thing he says is, “Tell us where you are today.” So you want to start with success. And so my MicroConf talk two years ago was about HitTail and I was trying to talk about that journey, and I started- one of my first slides was the revenue curve. So I gave the punch line right at the beginning. And the revenue curve starts low and then does this big hockey stick thing. That’s what I started with. Then I said, “Now, let’s scroll it back, and let me tell you where I was and when I got it.” And I talked about the depths of getting started and how hard it was and how much money I paid. That was who I was when I started the journey, and again you’ll notice that Mixergy interviews do the same thing. He’ll say, “Where are you today?” And then he’ll say, “Okay, let’s roll the camera back. Let’s roll back a year or two. What were you doing then and then how did you move forward?”
[13:24] Mike: The second phase in this is turn against the status quo. What did you want to change about your prior identity or prior world? What sorts of things were you running into that were challenges? How were they not working out? How were you not able to overcome those challenges in a way that was satisfactory to you? This is kind of where you can start talking a little bit about your product or your service a little bit as well because those are the types of things that have led you to create the product or service you’re going to be selling.
[13:51] Rob: And so it depends on where you’re telling this story, but typically this is going to revolve around you being unhappy with all the software options that were out there or you really struggling with something that you needed to build a solution for. Or noticing that a friend had a problem and then going and building a solution. This is the impetus and this is where you really try to get people engaged because they can see themselves in your story. They start thinking, “Oh yeah, I have a problem too, and maybe I can do this.” or maybe “I’ve done this.” And then they start relating with you, and that’s really where stories start to succeed is when you bring people in and make them feel like they are or could be the protagonist.
[14:30] Mike: And that entire idea really helps them become much more engaged in the story. That kind of leads into number three which is the struggle. What sorts of things did you struggle against as you started to create this change?
[14:41] As you mentioned, if people kind of associate themselves as potentially that protagonist, you’re reaching out to people who may also have similar problems. You’re talking to them as if they’re they ones having these particular types of problems.
[14:53] Rob: This struggle has to be there. If there’s no struggle the story isn’t interesting. Because if you come out and say, “I was this person when I started, and then I really had this problem that I tried to solve. And then I coded it over a weekend, and it took off like a shot, and I’ve had a lot of success since then.” That’s interesting in a certain kind of unicorn and Cinderella way. It’s a Cinderella story. But most of us do struggle as we get our apps going and as we’re trying to start these businesses. It’s typically more interesting to hear about the long struggles and then breaking through and what they did to break through. We can relate more to that. As much as we do want that lottery ticket idea that just takes off, I think the struggle is a big part of it.
[15:37] Mike: I think the point you made about the Cinderella stories is only warranted in these cases where we want to be the person who doesn’t struggle. We want to be a Cinderella story. We want to be in a situation where things just get that hockey stick curve growth and we don’t really run into any challenges. That’s what we want for our own story, but at the same time, that’s not what we generally encounter and not what we experience. So those struggles resonate with us and that’s why they resonate with us. If you hear those stories where the person really didn’t struggle with whatever the challenges were, that doesn’t resonate with us which is why don’t tend to remember those types of things.
[16:13] Step four of this journey is insight. And what sorts of unique tools did you build or what insights did you have that made overcoming this challenge easier? Did you have ten or fifteen years’ experience in that particular industry? Was there some library that you came across that connected the dots for you that you decided to build on top of? There’s a lot of different things that kind of factor into this. But if you look at anybody who’s successful and look back at their history, generally there’s this situation that they were in that the reason they’re successful today is because of the situation they were in. And one of the things that I’ve seen is a lot of people relate themselves to other people, but along with that. You also have to remember that somebody else’s experiences helped shape them and get them to where they are today. And trying to copy somebody else’s success just by copying the things that they do is never going to work, and the reason it won’t work is because you didn’t go through the exact same experiences that they did. So because of that you’re not necessarily going to have the same insights that they did into the problems that they’re trying to solve.
[17:14] Rob: There’s a really good point here. If you don’t have struggles and it just takes off for you, you really rarely will have insights that are worth anything because if you don’t have to struggle through it and try different options and fail and then eventually succeed, then let’s say you had this amazing idea and it took off like a shot. You sell that app, you start the next one. You’re going to run into problems that you don’t know how to overcome because you have never faced them before because you lucked out with a good idea. We’ve seen this. There are entrepreneurs who A) have a really big first hit, and then they can’t repeat it, and they continuously struggle after that.
[17:49] The other thing that I’ve seen is people who have one big hit, and then they go write a book or they do talks or they write blog posts about how you can make it big or how they did it, but it’s not applicable. The insight isn’t there because they didn’t have to struggle through it. I especially think this is common with first-time entrepreneurs who have some success because they do learn a lot of things, but if they had that hockey stick idea right away and didn’t have to grind it out, then you do skip over a lot of the learning and you won’t have as much insight as someone who did in fact have to grind it out and who’s able to then repeat that, right? Because those insights are what allows them to do it a second, third, and fourth time.
[18:29] Mike: And this is kind of the very idea behind fail fast. You want to run into those challenges and try to overcome them and fail only to have to turn around and say, “Okay, that didn’t work. Let me try something else.” And the idea behind fail fast is to just simply iterate as quickly as you possibly can in order to gain insights as fast as you can.
[18:48] There’s people out there who say you shouldn’t aim to fail at all, and that’s not what that’s talking about. It’s about being able to make your mistakes quickly and then pivot and then make the right decision from there so you do get those insights and you do learn quickly.
[19:00] Step five in the journey to success that Nick Reese talks about is resolution. Who are you today and who do you serve? I do have a question for you. You said that you tend to start out with the resolution first as opposed to starting out with who you are. Do you find that that works better or is that something that you’ve tested or no?
[19:17] Rob: Yes. That’s what I’ve found. I haven’t tested it, I just know that I’ve done it many times in talks, done it in interviews where I start with the end. The thing that it does, it gets someone to buy in early to care about your story. Because if you just start and you say, “Here I am. I’m the founder of this, and five years ago I was a developer” and you start talking about your story from there, people aren’t that interested. But if you start and you say, “Look, I took an app and I grew it from zero to $25,000 a month.” That’s where you start with the resolution of the story, and then you back up, then everyone’s like, “Wow! I totally want to hear how he did that.” Right? It gives them that punch line. Now, you don’t tell them the whole resolution because your whole resolution might be a five or ten minute discussion. But you give them a glimpse into it. Just a teaser – maybe thirty seconds or sixty seconds – just enough to show them what it was, and then if they stick around at the end then you can really dive in to what it was and how you got there.
[20:09] Mike: So as you’re going through these different steps, there’s a bunch of things that you need to keep in mind. The first one is that you need to know what your audience is. And if you don’t have an audience because you’re really just starting out, you need to pick one. Who is it that you want to serve? Who is it that you can think of that’s going to be your ideal customer? And in many cases that’s going to be somebody who’s like you, who is in your situation, who’s experiencing similar problems, and you want to be able to talk to that person and essentially put them in your shoes. You could look at it the other way, you’re trying to put yourself in their shoes, but the reality is you have the insight from your point of view, and you’re trying to create a story or create surroundings around them that they can relate to. That they can say, “Oh, I went through this and it’s really close to the things that you’re talking about.”
[20:51] Rob: Yeah, and one thing you’ll notice is that a lot of the people that we’ve mentioned who have told their stories – Joel Spolsky or Eric Sink – they were telling their stories to designers, developers, startup founders. I think the reason these guys all come to mind is because that’s the space we’re in and that’s what we pay attention to. But I also think it just works better if your people are online because then it’s easier to tell that story online. I think there are limitations to picking an audience- if you pick an audience that’s completely offline and not talking to each other or they aren’t on forums and they aren’t doing the discussion stuff then it’s hard to tell your story online. Now, if you’re going to give a conference talk, that’s a different story, right? Then you know what your audience is and even if you’re talking to electricians or counter top installers or whatever, then you’re going to know them, you’re going to know how to communicate to them, and you have their ear for the duration of your talk.
[21:22] Mike: I heard a podcast, it was the business and boot strapping podcast, it was with Brecht Palumbo who gave an attendee talk at MicroConf a couple years ago. And he said that when he was first getting started one of the things that he did was he went to local groups of real estate investors and was talking to them about the types of challenges that he was running into as a real estate investor and how he was solving those. And it kind of led into his story about how he built his product from using public data sources and essentially selling subscriptions to that data online now. If you listen to that particular episode he very closely goes through that and sets that up. And he is affiliated with that audience. He is one of them, so it makes it a lot easier for him to relate that story to them even though it is in an offline fashion because he is giving a talk to them in person.
[22:30] The second thing is to choose your point of view, and it’s perfectly okay to be contrarian. If you look at a company like 37 Signals they are very contrarian. They really want to draw a line in the sand and divide people and say, “We’re on this side, and you’re on that side.” And then to the audience they’re essentially saying, “Choose. You need to choose whether you’re on our side and you understand what we’re talking about and are with us or you’re going to go off and be somebody else.” And in some ways at least early on it was very much about either you’re a designer or you’re not. If you’re not a designer, go away. This information is probably not for you. And since that time it has expanded quite a bit I think. But in the beginning stages you really need to draw those lines in the sand and figure out who it is that you’re affiliated with and who is probably not a good candidate to pay attention to you.
[23:17] Rob: Yeah, I would go beyond saying it’s okay to be contrarian. I would actually encourage you to try to think of insane things in ways that other people haven’t. I think that’s the way that if you believe in your opinions and you’re able to justify them and you are contrarian that’s a way to make a name for yourself. With that said, there’s a difference between being contrarian, having an opinion and being a jerk. And being overbearing and using words like “always” and “never” which I hear people use and it just pisses me off when someone comes out and they’re like, “You should always do this! You should never outsource your core product!” Whatever. You hear people say that, and that’s not true. Maybe it’s most of the time. Maybe it’s 70-80%, but it’s really troublesome to me. It’s okay to be contrarian, but you let people abuse this and they sometimes take it too far. Be careful with that. Know yourself. Know if you’re the kind of person that would take it too far, and just be careful with taking your frame of reference which is probably pretty limited and trying to extrapolate that to the whole world in always and never language.
[24:17] Mike: The third thing to keep in mind is that you need to choose the premise that sets up the story that you want to tell. And by that I really mean that you need to be able to set up your story in such a way that you can logically move from the beginning of the story to the end of the story without losing people in the middle. So that you’re not making these giant gaps where you talk a lot about getting your first customers and then fast forward a lot and skip over a lot of important things. You end up in a situation where you’ve got 10,000 or 20,000 customers, and people are like, “Wait a second. I don’t understand how you got from 100 customers to 20,000. That just doesn’t make any sense to me.” You really need to pay attention to the audience’s point of view, and understand that they simply don’t know everything that you are talking about. They don’t know the whole story. There’s lots of details that they’re not going to know, and if you have a completely fresh set of eyes on the story, you need to be able to make sure that you’re not skipping important things that are going to confuse them.
[25:09] Rob: Yeah, I think this touches on the next point that you make. You have an outline here which is honor the audience and view the story from their side. Everything needs to flow and make sense. This is what editors are for.
[25:20] So that means if you’re going to do a talk, if you haven’t written a bunch of talks, then you probably want someone to hear it before you give to everyone to make sure that there aren’t gaps because it is really easy to have gaps in a talk. It’s also easy to have gaps in a series of blog posts if you’re doing content or even on your about page. It is easy to have gaps. It’s also easy to give too much detail, right? It’s hard to edit it down to a palatable amount of data, palatable amount of information that still tells the story and doesn’t leave anything out. So there’s a lot of craftsmanship that comes into this, and I think that spending quite a bit of time honing the story will be well worth it because it will resonate with people more.
[26:03] Mike: I think that’s one of the things that when you start looking into how to write a good story and deliver a great presentation, things like that, I don’t know if enough time is spent on cutting stuff out. As you said, it’s very easy to overwhelm somebody, and if you start overwhelming them, you end up with all this content in there that isn’t necessarily relevant or doesn’t highlight what you wanted to highlight, and you get people bored. People start to listen or they’re invested early on but then they’re like, “Come on. Please move things along. You’re not getting to the point.” That’s one of the things that people definitely need to pay attention to when they’re trying to craft these stories.
[26:39] Rob: Yeah, I think an interesting illustration in this is that any Mixergy interview you listen to is going to be about an hour long, and typically when you listen to them you’re kind of like, “Huh.” I think it’d be nice if this was thirty minutes long because I would be able to listen to the whole thing. But what you don’t realize is when you’re being interviewed you’re leaving huge amounts of information out. You just have to. Because even to just squeeze your story down into an hour you have to leave so much out, and Andrew really pushes the thing along in order to really do it. So even getting a good story into an hour long interview or forty-five or fifty minute talk onstage is a lot harder than it sounds, and you will find that you have to leave things out and keep only the pertinent points that actually keep the story flowing and making sense.
[27:26] Mike: Yeah. And I think the last point I want to make about this is that your story is really an argument for a particular point of view. How it is that you address this particular challenge or this problem or if you have software that solves a problem in a very specific space, your story can be an argument for why your product is the best at doing that. And that helps you to position yourself against the competitors in a number of different ways. It can be not just pricing, but it can also be about where you came from. Are the people that you’re going against these large enterprise challenges or are they funded companies? Are you the underdog? And you really want to position yourself in a way that shows that you are struggling to do it, and you are overcoming challenges. Whereas those other people are lazy, they’re kicking back, they’re not really doing anything because they don’t really care. And if you can show those struggles you can illustrate them to people, that’s what will resonate with them, and that’s what will attract people to your brand.
[28:19] Rob: I’m going to let you in on a marketing secret that I’ve used for years. We just talked about how to tell your story. If you turn it around you learn how to tell your customers’ story, and you learn how to tell their hero’s journey from not having the software to having your software and what life will look like before and after that and the things they struggle with early on and the results they’ll get once they use it and you can learn to craft that story, that is one of the best long form sales letters you will ever read. You have to genere-size it. You have to talk to “you.” You can’t tell a story like, “Hey, John did this.” I guess you could, but it wouldn’t work as well. What you really have to do is get into the conversation that’s in the person’s head who is reading the sales letter, and tell them their story to themselves. And as you come along side them in the first few paragraphs, they will buy in and they’ll be like, “Yes, this is exactly me.” And then as you move on, then they’ll say, “Well, of course I want to do that. I want the end of my journey to look like that.” It’s an amazing marketing technique that is very powerful. I’ve done this with some long form sales copy. Actually, I’ve done it quite a few times. My most recent example of this is if you go to the Drip homepage, getdrip.com, we just pushed a new long form homepage live a couple days before recording this, and it pits us no longer against increasing conversions in email marketing, but it’s going into the marketing automation space. Email marketing automation. But if you read that story and it gets in the mind of someone who has tried marketing automation and is fed up with the status quo and Drip’s positioning itself to be the answer to that. So if you read through that it’s another way to tell a story, and it’s not about you in this case; it’s about the customer.
[29:59] Mike: So again, just to point out this outline was put together from a bunch of different resources including Nick Reese’s blog, Copy Blogger: Narrative First, The Writer’s Journey. We’ll link up to all the different references that were used for this in the show notes.
[30:11] Rob: If you have a question for us, call our voicemail number at 888-801-9690 or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for “startups” or by RSS at Startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 194 | Should You Charge Before Product/Market Fit?
Show Notes
- Craig McKeachie’s JavaScript Framework Guide
- The GrowthHackers.com thread we discuss in this episode
- Sean Ellis’ interview on Venture Hacks
Transcript
[00:00] Rob: In this episode of “Startups for the Rest of Us,” Mike and I discuss whether you should charge before product/market fit. This is “Startups for the Rest of Us,” episode 194.
[00:08] Music
[00:17] Rob: 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.
[00:25]Mike: And I’m Mike.
[00:26] Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. So, What’s the word this week, sir?
[00:31] Mike: I’ve undertaken the task of teaching my six- and seven-year-old boys how to play Dungeons & Dragons.
[00:37] Rob: Sweet!
[00:38] Mike: It’s not even the advanced Dungeons & Dragons. It’s, like, the original one from – I think the ’70s is when it first came out. But, yeah, it’s the really, really old stuff. [Laughs]
[00:46] Rob: Yeah, it’s fun.
[00:47] Mike: But it’s a lot more simple than, like, any of the advanced Dungeons & Dragons stuff. So, you know, they’re picking it up. They’re loving it.
[00:52] Rob: Yeah, I bet. It doesn’t have, like, encumbrance and pack loading and all that stuff. It’s super realistic, but it’s super time-consuming.
[00:59] Mike: Well, it does have that stuff. It’s just it’s a little bit different. Like, all the equipment lists are simplified, and –
[01:05] Rob: Right.
[01:05] Mike: – everything is just simpler. It’s more stripped-down. There’s less to keep track of. There’s less in terms of the equipment lists and stuff that you can buy, and prices aren’t measured in copper pieces for different things. It’s, like, all straight – you know, no matter what it is, it costs at least one gold piece.
[01:18] Rob: Right. Yeah, that makes sense.
You know, there’s a couple other options to teach their kid. There’s a game. It’s a board game called Dungeon. It’s like a Dungeons & Dragons board game; and it was put out, I think in the ’70s to kind of get – it’s like an on-road. It’s like D&D lite, basically – right? You actually have a board, and you have pieces that you move around in a dungeon. And it’s pretty cheap. I think it’s maybe 15 bucks on Amazon. That’s a pretty good way to get in there, because it’s really simple, and it’s all self-contained. You don’t have to create characters or any of that stuff.
[01:46] The other thing that I started teaching my son is Magic: The Gathering. And that’s, like, making a resurgence with, you know, the – I don’t know – the eight- to thirteen-year-old set. I played it in college back in the late ’90s, but you can get a Magic: The Gathering starter deck, or a couple starter decks, for – I think it’s like 15, 20 bucks on Amazon. And my son and I just sat down and just picked it right up, and so it’s great. We don’t have to bring all the stuff; and you can just sit down and, you know, just start playing with the cards. So, I don’t know if you played those in the past, but they’re really cool to get kids kind of on-ramped into this type of game.
[02:17] Mike: Yeah, I think Dungeon was re-released, and then there’s a couple of other variations. I think one of them is called “Hero,” or “Hero Quest,” or something along those lines. It’s another board game. I know I played Magic: The Gathering back in college, but I haven’t really played that in years. I still have a lot of my cards and stuff, which many of them they just don’t make anymore, so –
[02:33] Rob: Yeah.
[02:34] Mike: – they’re worth a lot of money now. But I haven’t played it in a long time.
[02:36] Rob: Yeah. So, you might want to buy a new, cheaper set if you’re going to play with a six-year-old [chuckles].
[02:39] So, things are going pretty well for me. DRIP – things are picking up with it. We’ve moved several people from MailChimp to DRIP in the past couple of weeks, and we’re doing the manual migration right now. Basically either myself or my support guy are helping people move not only subscribers, but auto-responder sequences and create rules based on stuff. We’ve integrated with Gumroad and Stripe now. You know, events in Stripe just can hit right into your DRIP account and send someone an email when their trial’s going to expire. Or, send someone an email when their card is charged, like an invoice email, with dynamic fields and everything. So, we’re hitting that critical mass point, I feel, where we have enough features that people are really starting to take notice; and we’re now differentiated from a lot of things.
[03:19] What’s a trip is that there really is this steady flow of people who are either outgrowing MailChimp, or who have tried to move from MailChimp to Infusionsoft, and they hate it. They don’t like the software, and it’s just not working for them. And so that’s where we’re getting refugees coming from – and I’m learning a ton about the next wave of features that we’re finishing up, but that we need to build in order to better serve those markets. So, it’s been a really good source of not only some new users, but more importantly, information on a future direction of the product.
[03:51] Mike: It’s interesting that you use the term “refugees” from other products, because it’s funny; because I’ve been talking to a lot of AuditShark users lately, and people who I’m trying to talk into using AuditShark. And they keep bringing up products that they’re essentially trying to move away from because they’ve either gotten too enterprisey, or they’re not serving their needs. They say, “Oh, we’ll, do this update,” and they never get through with it. And they talk to Product Management, and they’re like, “Oh, yeah, we decided that that wasn’t a feature that we were going to go after.” So, I’m seeing a lot of people take looks at AuditShark specifically because other products that they’re using and working with just aren’t doing it for them. So, it’s interesting. Maybe we should do a podcast about trying to target refugees [chuckles] from other products.
[04:29] Rob: Um-hm. Yeah, and the nice part about it is that these conversations – or, that type of thinking can then be worked into your marketing and into, like, a sales message of, “Have you outgrown product X?” or, “Are you using product Y; but this, this and that are wrong with it?” because I keep hearing the same this, this and that from all these people. Like, it’s the same stuff they all hate. And so to be able to address that and enter the mind of your prospect in that way – there’s a lot of power in that.
[04:57] For me, I’ve just rewritten the entire home page. It’s not live yet, but I’ve used a lot of that, and I’m hoping it’ll outperform what I have there now.
[05:03] Mike: Very cool. Well, I wanted to say congratulations to Micropreneur Academy member and MicroConf attendee Craig McKeitsche [phonetic], and he just recently launched his “JavaScript Framework Guide.” We’ll link it up to over in the show notes, but it’s at funnyant.com. And he basically walks through some of the different JavaScript frameworks, like Angular JS and Backbone and Ember and Knockout, and kind of talks about what sorts of things you can do with them, or why you should choose each of them. So, you know, kind of choosing the right tools for the job.
[05:31] Rob: Yeah, he sent me a copy, and I read through it. It’s good stuff. I definitely learned quite a bit about it.
[05:36] So, I have a retraction. Last week, I talked about Player.FM, and I said that I had downloaded and installed it on my iPhone. And when I went on to my iPhone to look for it, it wasn’t there. There was some other player there, and I was so confused. And it turns out Player.FM is Android-only. What I had done is I’d gone into the iTunes store. I searched for Player.FM, and I clicked the first one in there; but it’s some other thing called Pod Cruncher, which is a good app, but I realized as I listened to last week’s episode, it was like, “Uh-oh. Someone’s going to call me on this basically saying that I had downloaded something that didn’t exist.” So, if you’re on android, I’d recommend checking out Player.FM. Obviously, they got invited to Google.IO. Mike is doing something right.
[06:13]Music
[06:16] Rob: I want to give a thanks to Franz C for sending this into us. He sent us an email and pointed us to a growthhackers.com thread. I don’t know if you’ve noticed, but Hacker News is no longer moderated by Paul Graham. He’s handed off the moderation to someone else. This was months ago. And the focus of the site has shifted. There’s a lot less marketing stuff on there. There’s a lot less ways about how to grow product, and it’s become more – it’s startup stuff, but it’s definitely different than it was a few years ago; you know, even, maybe, a year ago. And so growthhackers.com was started by Sean Ellis. It has kind of become the de facto place for more of that marketing stuff – the startup marketing and the startup growth approaches. And Sean Ellis is on it, obviously, because he runs it; and he’s grown it pretty quick. And then you’ll see, you know, people chime in in the threads. And Noah Kagan, Hiten Shah, I’ve chimed in on a few of them. There’s a lot of people in there talking, and there’re some really knowledgeable marketers.
[07:08] So, there’s a thread on there. The question in the thread is, “Should you charge or not before you’ve reached product/market fit?” So, I’ll read through the original post, and then we’ll dive into some thoughts that we have on it. I’ll also bring up some thoughts that other folks have in the thread.
[07:23] So, the original post says, “In Sean Ellis’ prolific interviews on Venture Hacks, he recommends not charging before product/market fit, because you allow people to explore all of the functionality of your app and can continuously survey them until some are saying they would be very disappointed without the product.” And that’s kind of the definition of “product/market fit” they’re using.
[07:41] So, the exact quote from Sean in the interview is, “I think that it’s easier to evolve towards product/market fit without a business model in place, meaning users are free to try everything without worrying about price. As soon as you have enough users saying they would be very disappointed without your product, then it’s critical to quickly implement a business model; and it will be much easier to map the business model to user-perceived value.”
[08:03] And the original poster says, “So, I’d love to hear this discussed further.”
[08:06] I think, to start off, I’d like to limit our discussion; because, you know, does this apply to B to C? Does it apply to B to B only ? Is it only SaaS apps? Is it mobile? And I think for the sake of our discussion, I’d like to limit it to services that will one day have a price. But I think B to B or B to C could work. So, Shawn has worked on products like Dropbox; and you would say, especially when they launched, they were more of a B to C play than B to B. But I still think that what we’re going to talk about today applies to that. So, I don’t think it’s a B to B, B to C line. I think it’s if you have a service that people value and will pay money for – not like a social network, a marketplace, an ad-based revenue model which charging isn’t even really relevant at that point.
[08:44] Mike: And I think that a[n] issue [that’s?] kind of trying to go down that road is that you’re talking about trying to achieve this product/market fit where you’re solving some sort of a problem for people versus something where it’s very nebulous about whether or not there’s any actual value in it for them to be able to pay for – for the users to be paying you directly for it. So, obviously, Facebook kind of falls into that line; because if you were to ask a lot of Facebook users right now, “Would you be disappointed without Facebook?” a lot of them would probably say yes. But at the same time, can you charge those people for it? And the answer is “no.” And for our purposes, I think we just want to limit it and say, you know, it’s only if you are directly charging those people.
[09:22] Rob: Now what I’d like to run through are some dangers of charging, kind of some negative aspects to doing that, and then some dangers of not charging and how to deal with those. And then we’re going to wrap it up with what I consider kind of the middle ground, like suggested solutions and approaches to this after we’ve looked at the pros and cons of each side.
[09:39] So, just kick us off. The first danger of charging is pretty obvious. It limits your user pool, because you’re going to get so many fewer people to come in and use your app. You know, even if you have a free trial, even if you just have a price up front and are not actually charging for it yet, fewer people are going to sign up for it, for sure.
[09:54] Mike: I think this becomes much more of a problem where you don’t have a mechanism for getting in front of people, or you don’t necessarily truly understand the right profile of the ideal target customer. If you have ideas about it, I mean that’s helpful, but obviously charging them is going to push people away. And I don’t know whether this goes back to why Google decided, “All of our products are going to be in beta. We’re not going to charge for anything.” There’s lots of companies that do it that way. There’s lots of people who go down this path, and as soon as you start mentioning money, they’re going to want to kick the tires enough to say, “Is this worth my cash?” “Is this worth the business revenue that we’ve got?” It does negatively impact it because then they have to start making value decisions, and there may very well be a timeline around how much time they can dedicated to it, how much effort can they put forward to kick the tires before the end of that trial period.
[10:46] Rob: I think the second danger of charging is that not only does it limit the number of people that will be involved, but it’s going to limit the range of feedback. So, could there be a market that you had never even thought of that may not be as willing to pay up front; but that, if you let people in for free, you could get added feedback?
[11:05] And then the third danger of charging is that it’s going to take you longer to receive the same amount of feedback; because since you have fewer users, you have a smaller range of feedback. You’re going to have to wait longer; and if you’re, you know, an impatient start-up founder, like most of us are, that’s kind of a pain. You can’t move as quickly, and you can’t get to market as fast as if you let more people in if you’re not charging.
[11:25] Mike: I think there needs to be a clarification here, because I think when Sean is saying this, he doesn’t necessarily mean that it takes longer to receive feedback. What he’s really saying is that it takes you longer to receive enough feedback to be certain of what your conclusions are. It’s almost like making sure that you have a statistically valid response, because if you have a limited trial period for somebody and they only have 14 days, they’re going to try to get feedback back to you within that 14 days; because they know they’ve only got 14 days to work with the software versus if you’ve only got ten people, you’re only going to get those ten responses back from people. You’re not going to get a hundred, or a thousand, or a critical mass of responses that will help you draw the conclusions that you need to draw.
[12:04] Rob: Yeah, and if you’re listening to this and you haven’t read through the thread, it’s definitely worth the listen. There’s good discussion back and forth. Several of these dangers that we’re talking about, or the negatives of doing these things, I came up with and put them in the outline. Some of them I also pulled from the discussion, and I’ll try to credit people.
[12:19] I couldn’t think of a ton of dangers of charging aside from the ones we’ve covered, but I can think of a lot of drawbacks to not charging. And the first one is that, if you’re not charging, and you have an app that people are using, you need a bucket of money to build and support the app in the meantime. So, what this means is really, if you’re truly, truly bootstrapping – and I don’t mean self-funding; there’s a difference – right? Bootstrapping is when you have a hundred bucks to start, or 200 bucks, or a very small budget; and you get to market, and you need revenue just to stay alive. Whereas, self-funding means you have some funding that is coming out of your pocket. And that may only be – maybe it’s 500 or a thousand dollars a month, or maybe it’s 10 or 20 grand that you’ve saved up for it. But if you’re truly bootstrapping it, then you really can’t go this way, because you need revenue up front very quickly.
[13:09] Mike: Yeah, I would say that that’s probably the biggest danger of not charging. I can’t think of too many other things that would so negatively impact your ability to move forward with a product, is this one right here.
[13:20] Rob: [A] second danger of not charging is you can potentially receive too much feedback, some of which can be from people who might never be willing to pay for the product. So, the original poster actually said – and I’m quoting him. He says, “It creates less noise. You can listen to the feedback of people who are paying, if you charge.”
[13:37] And then Sean Ellis talks back and forth about this, which is kind of cool. He gives kind of both sides of it, and he says, “Even if you are a great marketer, you can only get people to keep using your app if it actually provides real value. The noise issue tends to sort itself out further down the funnel, and here’s how. Each step in the funnel that a user takes imposes a real cost on that user’s time and effort.” And he doesn’t just mean marketing funnel. He actually means usage of your app funnel – like, how deep do they get in, and how much usage do they do, and how much value do they get out of it.
[14:05] So, continuing with Sean, he says, “If you think of repeat usage as a step in the funnel, the reward of a great, useful experience needs to be there to justify coming back. Fact is people are just as fickle about a free product as they are for a paid product. Free can drive lots of sign-ups, but often those people give up on the product just as impulsively.” Then he goes on to say, “If you have KISSmetrics, you can actually query specific users; get their emails if they’ve done X, Y and Z events; and then you’ll have a great customer development pool. Even without charging, you’ll know who’s really getting the value from the app.”
[14:36] And he wraps up by saying, “In my original answer, I did say it depends. For pure enterprise products, I generally don’t recommend having it be free during a beta period,” for some of the reasons the original poster had mentioned in his original question.
[14:48] So, what do you think about this issue of having too much feedback, or that you could potentially be receiving it from people who aren’t willing to pay?
[14:55] Mike: That’s definitely a danger when you’ve got a lot of people in there who aren’t paying for it, because they’re like, “Oh, this would be cool if X.” And suddenly, everybody’s an expert in what your software should do, even if they’re not going to use it. And so the danger there is you’ve got these people who are not necessarily well-qualified leads who are giving you feedback and advice that you look at their advice, and it may sound reasonable on the surface, and you don’t necessarily know whether or not they’re going to use it down the road. So, you may follow that advice and find out, oh, well, sure. That’s what they said, but they weren’t going to pay for it anyway. So, you build these features, or do these things that just have no bearing on what the critical mass of users that really would pay for it need or want.
[15:35] So, you do have to, I think, prequalify some of those people a little bit better than just taking in advice from those people. So, when you ask questions, you do things like you ask them what their market is; you know, what problems they’re trying to solve; what it is they do on a regular basis – basically, take a lot of their input with a grain of salt. And until you hear enough people saying the same types of things, you don’t necessarily go down those directions, even if you’re having great conversations with them; because they can definitely you down those rabbit holes that you’re not going walk out of with paying customers.
[16:05] Rob: Yeah, I’ve gotten in a lot of really in-depth conversations with people who weren’t willing to pay for one of my products. And they’ve given a lot of feedback. I’ll say some of it’s good. Some of it is kind of wandery, but I didn’t really know if they were going to pay for it or not. And, in retrospect, I should have; and the feedback sent me off-track. So, I do like Sean’s hack of looking in KISSmetrics and querying what users have done X, Y and Z events and then using those as the people who are actually using the app. So, I think that’s a nice, feasibly work-around around this issue.
[16:35] The third danger of not charging is the danger of legitimate users or businesses not checking out your tool because it’s free and their concern that it’s of low value, or that it’s going to be shut down. I try to avoid tools that really are free, because I know that either they’re not going to stay around very long, or at some point they’re going to implement a business model where they need to charge. And then they’re either going to dump the free users, or give them crappy service. I mean we see this happen time and time again; and, frankly, the switching cost once I’m invested in using an app is bigger than the savings of moving somewhere else.
[17:07] Mike: Yeah, I look at this a lot as well. I think it’s a little different if the app or the business behind it is funded, because you know that they’ve got money and they’ll figure out a business model eventually. And although you may not be paying for it initially, the concern, of course, is that at some point down the road, the pricing may be such that it just doesn’t work for you. And as you said, the switching cost is big; and it’s not necessarily just the monetary cost of switching. It’s the time investment of doing that. If you’re faced with a decision between two players, one of whom is well-established, and they’re doing a reasonably okay job versus another one that’s new; and it sounds great, but who knows what their business model is and whether they’re going to be around or not, I don’t know about you. I tend to bank on the ones that have been around for a while just by default, because I don’t want to have to move my stuff later on.
[17:53] Rob: Yeah, I’m the same way.
[17:54] So, the fourth danger of not charging is that you don’t know if people will pay for your product, or if they’re just using it because it’s free. And Sean weighs in on this point. He said, “The benefit of charging from day one is that it tells you if your product promise is something people would pay for.” And when he says “promise,” he’s talking about the value proposition – right – the value that your customer is going to get out of it.
[18:15] Back to Sean. He says, “In my experience, I can rarely guess the product promise.” I found that very interesting. And he says, “I have to learn what it is based on the feedback from people who consider the product a must-have.” And here he’s implying that, whether they’re paying for it or not, that if it is a must-have for them, that their feedback is valuable.
[18:34] Mike: But I think that goes back to finding out why. If they are paying for it, you need to ask the direct questions about exactly, “What is it that this product is doing for you that is making you pay for it, giving you the necessary impetus to pull out your credit card and say, I’m willing to pay for this?'” “What are the key features for you?” “What business problems or personal problems are you having that you’re using this software to solve?” And whatever those features happen to be, those are the things that you can harp on in your marketing collateral as your headlines and as your product promise. And you can use it to hone in and to help you get to that product/market fit.
[19:09] Rob: And the fifth danger of not charging, Trevor Owens posted in the thread. And he actually does a good of this, so I’ll just quote him directly. He says, “My problem with doing a free beta is that when users stop using the product, I wouldn’t know if it was because the product wasn’t good enough, or they weren’t serious enough. If I charge a small amount, I only get people who, based on the idea of the product, actually have a need for it. Furthermore, if they cancel their account, I can immediately reach out and get their feedback.”
[19:37] Mike: Yeah, this is one of those situations where it’s kind of like one of those long-distance relationships where you gradually grow apart, and you don’t necessarily have that feedback loop, or the daily check-in, or weekly check-in to kind of know really what’s going on. And customers are kind of the same way, but if you’re not getting that feedback from them and they kind of gradually drift apart from your product, sometimes it’s hard to know when that happens, or there was some other, external event. And if they are paying for it, you can reach out and directly ask them. But you also want to draw a line between how often you check in with them; because, sure, you can reach out to them on a weekly or monthly basis; but eventually they’re going to stop listening anyway. You know, I’ve seen email and auto-responder campaigns where you send them a bunch of emails; and gradually over time, most people tune out over time. There’s a lot of engagement up front, and then over time – unless they’re continually using it – that engagement just fades.
[20:31] Rob: Most of the time, when someone actually cancels, they actually churn out of your SaaS app. They’ve typically already churned two months earlier. They just never cancelled. Most people stop using your app and then cancel a few months later, and it’s way too late at that point to try to rescue it.
[20:47] Mike: Oh, yeah. It also depends on what type of application it is, too. Like, I recently cancelled my LessAccounting subscription, and I stopped using it back in January. And I only recently cancelled it within the past couple of weeks, so you’re talking six months later. And the reason I kept it around was because of, you know, the tax season; and I wanted to make sure I got all my data out. And I wanted to make absolutely sure that I didn’t need to go in there for anything else. And to their credit, they did follow up with me and say, “Hey, we see that you haven’t logged in in X number of days.” I think it was a month, or two months, or something like that. They reached out a couple of times [and] said, “Hey, you haven’t logged in in a little while. Is there something we can help you out with?”
[21:19] I thought that their follow-up was extremely good, but at that point, I had obviously already made the decision way, way in advance to say, “Look, I’m going to move to something else, and I just really just need my data here.”
[21:30] Rob: The last bit I’ll add is a quote from Andy Newborn, who weighs in in this thread, and I really liked the way he’s thinking about product/market fit. I never heard it phrased this way. You know, typically product/market fit means that your product solves a problem for everybody, and you’ve found the market, and that’s when it’s time to scale. And you pump money in. You pump marketing, and you just scale that sucker up. It’s really hard to get there. Most apps never get to that point. And Sean Ellis has a test. It’s a three- or four-question quiz. Maybe it’s a one-question quiz, but the big question that he looks at is, if product X went away today and you could no longer use it, would you be mildly inconvenienced? Would you kind of care? Would you be a little bit disappointed? Very disappointed? Extremely disappointed? And if – I think the number is 40 percent or more are very or extremely, then that’s his definition. That’s when you’ve hit product/market fit. Okay?
[22:19] Andy Newborn chimes in. He says, “I’ve found that someone getting excited about your product does not mean you have product/market fit. It only means that you are good at explaining it and found an obvious solution-need pairing. What makes true product/market fit, in my opinion, is when the user changes their behavior to match your product or service and it becomes sticky. That’s fit that can be charged for.”
[22:43] And so while it’s only tangentially related to the topic at hand today, I love the way he put that. In fact, Sean references it back in the thread again. I love the idea of someone using your app, because you know you have a lot of people who come in and log in, and then they never really get on board. And you have some people who come in and get on-boarded and start using it, and then they kind of drift away. And then there are those who use it all the time. Like, they log into it every day to look at an analytics dashboard. Or, they get an email. They rely on an email they get from it once a week. Or, they need it every time they talk to their customers, or every project management “to do” is in there. You know, that’s when an app really becomes sticky, and that’s when you can scale something up; because people really need it.
[23:20] Mike: I think another way to phrase that is that they start using it for things that it was never really originally designed for. You see this with products like FogBugz, where people are using it for customer support. And it wasn’t necessarily meant for that, but people really shoe-horn it in there, and Fog Creek to their credit, has kind of made the products do that sort of thing; because they kind of did it internally for themselves. And then it has kind of caught on, and a lot of people use it for that. But there’s all sorts of things that, you know, that particular product and lots of other products are doing today that are not advertised on their website; because they weren’t ever really designed do that. But they work for it, so people use it for that, and it works for their own mental way of picturing the world of that particular problem.
[24:00] Rob: So, we’ve covered the dangers of both sides. Let’s look at three suggested solutions. These are things that I came up with. These are middle-ground approaches. I came up with the three of them, and then I went and looked in the thread, and all three of them were suggested in the thread as well. So, it was cool to see that the collective had also come up with some good approaches.
[24:19] So, the first of the three is to maybe not charge right from the start, but to have a free trial and maybe have a really long free trial when you start, like a 90-day free trial, or a 60-day, or something that gives people a ton of time to get in there and really knock it out and use it. At the back of my mind, you could even have some lower pricing at the start to allow more people to sign up, because there is a barrier. If you’re going to start, “All right, 99 bucks a month is my lowest plan,” you’re going to get a lot fewer people than if you dropped that down to $20 or $30. They’re going to get different people signing up; but, hopefully, you know, more people signing up. And as I said, it’s like a middle ground, so it’s not charging at all; but it’s giving people a long time to really get in and get on-boarded. And this was also suggested in the forums by Anonda Sanwal [phonetic]. So, I wanted to give him credit there.
[25:02] Mike: The second one is to make it free, but with the expectation that it’s not going to be free forever. So, the way Sean puts it is essentially the product is free during beta. And whether that beta is 30 days, or three months, or six months, it doesn’t necessarily matter. The idea is that you’re setting the expectation up front that they are going to be charged for it, and you have a rough idea of what it is that they’re going to be charged.I think the difference between this and the previous one is that, with a free trial you’re specifying, and there’s almost like this hard line in the sand that’s like, you know, “Once you cross this, we’re going to start charging for it.” But with free and the expectation being placed that it’s not going to be free forever, you’re essentially going to bring in on in the future. And I think you actually did this with DRIP. You basically said to people, “Hey, this is going to cost you money, but it’s going to be free for the time being until you start seeing value out of it.” And I really like that approach just because you’re on-boarding people, and at the point where you feel like they’re getting the value out of it and they can justify paying for it, that’s when you start charging them for it. You don’t draw this arbitrary line in the sand that says, “Okay, after 30 days,” or 90 days, “that’s when I’m going to charge you,” because you don’t necessarily know if they’ve gotten the value out of it. And you don’t know if the product itself needs to be adjusted or changed in order to meet some of their needs.
[26:16] Rob: Yeah, I did this with DRIP, like you said. I did it when I was doing the high-touch sales early on, or the high-touch, on boarding when it had – maybe it was up to about the first 15. “Early-access users” is what I called it – right? And so Sean says “free during beta.” Mine really was “free during early access until you get enough value out of that it’s worth 49 bucks a month.” And since I emailed with every person and manually on-boarded everybody – we didn’t even have a sign-up page at the time, I don’t think – I created their account, and then I would let them know that, like, “We intend to charge this much, but you can have as long as you want until you get value out of it.” I think that was a decent approach.
[26:50] I mean you could do that with – let’s say you have 500 or a thousand people that you’re emailing all at once. I suppose you could just put that as a line, that it’s free during early access. And early access is as long as it takes, but a minimum of 60 or 90 days. I think this could work. I really do feel like this is a decent middle ground to get a lot of people in and trying it. To be honest, early on I didn’t ask for a credit card. Again, we even didn’t have a credit card form in there. So, I had no credit card info for people, and this is for me – right – the guy who always wants to put a credit [chuckles] card form up and have the commitment. But I knew that people were committed. If they were going to take the time to get in and use it and get on-boarded and spend the time to just try stuff out, that if it worked for them, they’d probably be willing to pay for it.
[27:30] Mike: That’s kind of a difference – or, you know, one of those quantifiable points is you said that it’s going to take them some effort. It’s not like a drive-by, where you can sign up for an account, and you can check something out and then kind of walk away and never come back to it, and it’s not really a big deal. With DRIP – and there’s a lot of other applications that are like this, where you go to sign up for it, and it takes some work to set things up. I mean it’s not sign up for a form, and you immediately get value out of it; or, you could start seeing all these analytics from your web server, or something along those lines. You really have to put some effort in in order to make it work for you. It’s not something that you can just be up and running in a couple of minutes with.
[28:05] Rob: And the third middle-ground suggested solution is to go freemium. And I know this is not going to work in all cases; but if you have that bucket of money, and if you have maybe the support staff; or, your app is of low support, and you can actually handle a good number of people using the app, I think freemium could be interesting. Even if you were only freemium during early access, and you had a premium plan that people could upgrade to; or, even having a limited plan – I mean there are cases when this is going to work, and it’s definitely going to get you a lot of feedback. And it gets you a lot of users quickly. And then if you can pinpoint those who are getting a lot of value out of it, whether they’re free, or whether they’re on the premium plan and paying you – and if you can use the technique Sean talked about in KISSmetrics, or if you can just query your own data of who’s using what, I think there’s some potential merit to this approach.
[28:56] But to couch this, I don’t love freemium. I haven’t done it. I didn’t do it with DRIP, but I do think there are some times when it could be used.
[29:04] Mike: If you’re making it a freemium up until you’ve lost and are actually putting a revenue model behind it, then it’s not really freemium; it’s more that free trial. But you’re right. Unless you’ve got this bucket of money behind you, I still don’t think the freemium’s really the way to go – especially out of the gate. I mean once you’ve got everything kind of scaled up, and you’re trying to figure out how to scale the business, and you’ve got a lot of quantifiable metrics behind it in terms of on-boarding and how much it costs to acquire a customer; and, you know, you’ve got your product/market fit, then maybe it makes sense to try out freemium.
[29:34] Mike: Well, I think that about wraps us up. If you have a question for us, you can call it in to our voicemail number at 1.888.801.9690. Or, you can email it to us at questions@startupsfortherestofus.com.
Our theme music is except “We’re Outta Control” by MoOt, used under Creative Commons. You can subscribe to us on iTunes by searching for startups, or by 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 193 | Distributed Team Collaboration for Startups
Show Notes
- SqlSmash by Latish Sehgal
- Remote: Office Not Required by Jason Fried & David Heinemeier Hansson
- Episode 64 – Hiring and Managing Remote Developers
- Episode 68 – How to Hire and Manage Virtual Assistants
- Episore 143 – How to Hire Like a Bootstrapper with Special Guest Laura Roeder
Transcript
[00:00] Mike: In this episode of Startups For The Rest of Us, Rob and I are going to be talking about distributed team collaboration for startups. This is Startups For The Rest of Us episode 193.
[00:07] Music
[00:15] Mike: 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.
[00:23] Rob: And I’m Rob.
[00:24] Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s going on this week Rob?
[00:28] Rob: We, meaning you and I and this podcast appeared on the floor of Google IO last week.
[00:34] Mike: Wooo Hoooo!!!
[00:35] Rob: Yeah. We were contacted by Michael Mahemoff. He’s the creator of player.fm. Which is a podcast app. And he said that 13 companies were invited by Google to participate in the developer sandbox at IO. And he emailed us. He wanted to find out if he could basically use our logo or use us as one of the place holders in the big player.fm app on the floor.
[00:58] So, it was really cool. He sent me two pictures of what the display looked like. You can see our logo. And it’s huge on this big on this extra large monitor. That’s always exciting. It’s kind of a nice tip of the hat and I really appreciate it. You know, Michael doing that for us.
[01:11] I have not checked out player.fm. I have since downloaded it. And let me tell you it’s quite a bit better than the built in Apple podcast app. Which I have been looking to leave for…Well, since pretty much the day they launched it. I think I might be trying to start migrating to player.fm.
[01:28] Mike: Got it. I’ve been using Casts, which is an interesting app. I like the fact that you can just set it up to download everything in the background. And you can set up these filters so that you can filter in different criteria. And what I do is I set mine up so that it is unplayed and then I have it unplayed by date in reverse order. So that way if I’m behind at all I can just catch up in the order that the podcasts were received on my phone.
[01:50] Mike: So it’s kind of nice it doesn’t make you go episode 30 then 29, 28 ect. You go the other direction. So that’s kind of a nice feature. And then like I said, it just downloads stuff in the background while you’re connected to wifi. And you don’t necessarily have to worry about it. It pops up little notifications to let you know that new episode have been downloaded. It cleans up after itself after things have been played. And you just have to delete stuff afterwards.
[02:13] Rob: Yeah. None of those things happen in the Apple podcast app. It’s a mess.
[02:17] Mike: The biggest problem I had with it was it would start to download an episode and then wouldn’t download the whole thing and if you were not home or on Wi-Fi then it would say “Oh! I can’t play this would you like to stream it?” I’m like; I don’t really want to be sucking up all my data.
[02:31] Rob: But even then if it got stuck in the middle and then you tried to stream it, it would choke.
[02:35] Mike: Yeah. Well, we got an email from Latish Sehgal. And he says “Hi, guys! I’ve been a regular listener for the last year or so. I’m a developer and love building tools and utilities. Over the last year I worked on one of my side projects and launched it last month. It’s called SQL smash. It’s productivity plug-in for people who work with SQL server. I have a few paying customers and I’m getting a lot of good feedback. I’ve made mistakes on this journey but have avoided a lot more because of everything you guys talk about. Just wanted to drop a note and say thanks.”
[03:00] Rob: Very cool. Congrats Latish.
[03:02] So, we have some new iTunes reviews, several actually. One is from Santa Monica Boone and he says “Best podcast for how to do anything in business. Podcast gets right to real advice on how to implement tactics. There’s no fluff, filter or lame teasers. Content is not just for software startups any business can benefit from Rob and Mike’s advice.
[03:22] I have another one from Lucas. And he says, “Amazing show-always learn something. Love the show and listen to it all the time. Rob and Mike always have interesting items to talk about and they don’t “talk down” to the audience at all- they move at a fast pace that is perfect for any developer looking to start a business.”
[03:36] We really appreciate 5 star reviews in iTunes. It helps us out tremendously.
[03:41] Mike: So we are slightly behind on this announcement but June was back up awareness month. And in the spirit of that I recently had a hard drive in my network attached storage device die on me earlier this week. It’s a 1.5 TB drive and fortunately I didn’t lose any data because I have everything at rate six already but I ordered 4 new 2 TB drives for measly $330.
[04:04] Rob: Oh Jeez.
[04:04] Mike: [Laughter] I think I paid more than that back when I bought one of my first computers for a 1.6 GB drive
[04:11] Rob: Incredible, yeah I paid more than that for my hard drive on my Apple IIe. That’s for sure. It had…but it wasn’t hard dive, I’m sorry. It was a floppy disk drive. It had no storage. [Laughter] Ahhh. That’s crazy.
[04:22] Mike: Crazy how much things have advanced. And how cheap, just computer parts in general have gotten.
[04:27] Music
[04:31] Mike: Today we’re going to be talking about distributed team collaboration for startups. And some of the topic sections are kind of pulled from the 37 signals book called, Remote: Office Not Required. So what we’re going to do is we’re going to talk through some of the different general topics of the book and kind of give it our own unique spin for much smaller teams.
[04:49] Rob: So, it looks like you’ve put together 5 points and each of those points has several specific items that we will be talking about. This first point is why you should think about hiring a remote team.
[04:59] Mike: Yeah. And I think the first one is for somebody who is starting a small business or running a small business, the first one is probably the most important one, which is it’s a lot more cost effective both for hiring the people themselves and for avoiding the office costs. Office costs tend more to be more of a sunk cost. I mean, you put the money in. You don’t necessarily get anything out of it. And then in terms of hiring people you are somewhat limited to the people that you have in your geographic vicinity. One problem that I had, for example, I put out an advertisement to hire people, several years ago, because my office was located near the monster.com office my advertisements for employees were getting overrun by their advertisements on their own website. Which totally sucked. I complained to them and everything.
[05:42] But the issue of course is that if I want somebody to come into my office they have to be located near me. And within a reasonable commuting distance. I know that there’s people out there who have 2 and 3 hour commutes each way. And that absolutely sucks. I mean, that’s probably part of why a lot of people gravitate towards building their own businesses. But when you kind of extend your reach and you say “Hey! I don’t care about you coming into an office. I don’t need you to do that.” Then you can extend your reach across the globe. And then you can use things like Odesk and outsourcing facilities and lots of other ways to get quality people in the door to help you build a unique business.
[06:19] Rob: Yeah. And I think you touched on two things there. One is that it tends to be more cost effective. And the second is that you’re not limited to geography. And so you can find the best talent in the world, at basically the budget that you can afford. I think another reason to think about hiring a remote team is that generally people like working remotely. Right. They like either working at a co-working facility working at their house and to be able to save time and avoid a commute and avoid sitting in traffic with everyone else. That flexible telecommuting type situation. But a lot of developers that I talk to that work for big companies, they’re still grinding it out on the 405 in L.A. an hour each way, you know. What is that 10 hours a week of wasted time? And not only is that exhausting mentally but it’s a huge time suck. And it’s time you can’t spend with your kids or you can’t spend working, frankly, developing the product.
[07:06] So, I think that the benefit, the perk of allowing people to work remotely not only benefits the employee but the employer as well.
[07:13] Mike: I mean, with something you just mentioned there, is if you’re spending two hours a day commuting, that’s 10 hours a week. That’s an extra full day of work that you’re not actually getting anything done, which totally sucks. You know both for the employer and for the employee.
[07:26] The other thing I think that people tend to forget a little bit about when you’re putting together a distributed team is that when you have a distributed team it means that any sort of office disaster is not nearly as destructive to the productivity of the team. And by office disaster I mean the electricity goes out or there’s a storm. I live in New England. So snowstorms are fairly common. And that will just kill productivity because you don’t necessarily want people to come into work at that point anyway but then you also have to deal with the aftermath because of the weather. And sometimes there are power outages that go along with it. If people are working in a distributed fashion that might happen to one or two people but that doesn’t necessarily happen to everybody all at the same time.
[08:03] Rob: Yeah, this is one that I haven’t really counted on or thought of as a big benefit in the past. But I do suppose that if you do have customers around the world it’s nice to have folks in time zones around the world, both to handle support as well as get around local disasters like you’re saying.
[08:18] Mike: When you’re talking about putting together a distributed team there’s a lot of common objections that come about. And many of these come from what I’ll call the big company line of thinking. One of which is how do I know that people are working? How do I keep my data secure? How do I keep things moving along because they’re not working in the same time zone as I am, so I send them a message and it takes 4 hours or 8 or sometimes 12 hours to get a response back. Which means you’re kind of pushing answers into the next day.
[08:45] Those are some fairly common objections. All of which have some fairly straight forward answers. In terms of knowing how people are working, you just look at what they’re doing. Whether it’s…If they’re developers you can look at code commits, whether they are closing out bugs anything like that. I can almost guarantee that in large companies there are so many different ways that data can be lost or compromised that it almost doesn’t matter. You’re almost on par with the large companies as you are with a small company in terms of data security. And obviously you have to do at least the bare minimums, like making sure that you don’t have open firewalls and you’re running antivirus and basic things like that.
[09:21] But at the same time you don’t necessarily have to worry too much about losing IP because really the marketing behind your products is the core of it. It’s not necessarily about the code or compiling everything. It’s about all the different business processes that you are putting in place. That’s where the value of your business is. Not necessarily just the source code.
[09:40] Rob: I understand both of these objections, I think. How do I know people are working is reasonable. Right, it’s a reasonable concern to have especially when I’ve worked with contractors internationally, some of whom took advantage of the fact that we were remote. And they basically just billed me for hours that, in retrospect as I looked through stuff that they were not working. And that’s one of the reasons that I really liked when Odesk came out with their thing that actually gave you screen shots every 5-7 minutes.
[10:07] Because it was a really effective tool for managing people. And now anyone I work with who I don’t know already I will ask them to use Odesk. Working locally here now that I have a couple of developers that I work with. I know these guys well enough that if one of them moved away; I know they are working because I trust them. This trust has been built up through a relationship and through working close with people. So, to me that those are the two sides of it. If you know and trust them then you know they’re working. If you don’t know them well enough to trust them then I think you need to fall back on some software whether it’s Odesk or there are actual third party apps that you can buy that will monitor what people are doing, with their permission of course. You tell them this is a condition of getting hired or whatever. And they have to install it and it will send you screen shots. Or of you don’t trust your employees. And that’s just a problem, right? Then I think you’ve hired the wrong people. If you do know them well enough and you still don’t trust them. That’s kind of a whole other issue that I think is unrelated to whether or not they are working remotely or not.
[11:03] Mike: One of the things that the book Remote brings up is that if you can’t see somebody. If they’re not in your line of sight then you have a much harder time feeling like you’re in control of the situation. And what they’re working on and what they’re doing. And I feel like that’s more of a mental hurdle than anything else. There’s lots of people who just because they’re sitting in a chair does not necessarily mean they’re working. If you can see them that doesn’t necessarily indicate progress is being made. It’s really what you need to focus on is the work itself as opposed to seeing them as a person.
[11:33] Rob: Yeah, I totally agree. I do agree with the objection of “How do we keep things moving along because of latency issues”. Because that is probably my one biggest hang-up that still gets me to this day having worked with dozens and dozens of remote workers for the past, what?, 7 years maybe, is the latency issues. And I’ve figured out some work arounds and ways where I will stay up late. And make sure to work on that stuff late or early so that if I do have questions they’re at least online and they can back to me and stuff. But overall I think, this is the…Perhaps the biggest drawback for me, is that if people are not in your same time zone there’s just latency and in my opinion the other positives outweigh it. But I don’t know anyone who is getting around this that effectively.
[12:16] Mike: And that’s something I have a little bit of trouble with as well. What I’ve found is that, you suggested one mechanism for handling it which is kind of arrange your hours to overlap with the people who are working in different zones. Another one that is helpful, but obviously not something you can do all the time, is if you’re able to plan far enough in advance to be able to have them working on something that isn’t necessarily time critical. Then you can ask them questions about it and kind of have a couple of different things going on at the same time. I do find it when a project sprint is coming down to the wire and you really need things done on a specific time schedule. That’s when it becomes much more of a problem. At that point you really have to just start adjusting your schedule to be able to get the answers you need. But otherwise you can sort of slip stream things in as you’re working.
[13:04] Rob: Another common objection to having remote workers is that you won’t have a company culture. And if you listen back to episode 143 of this podcast where we had Laura Roeder on the show. One thing that she said that we discussed at length was that she says that every company even companies with remote workers have a culture. And that you need to be deliberate about it. And the companies that I’ve seen make the remote thing work. They definitely have a culture. And they have a culture whether it’s be it through their email system, whether they’re all in kind of a chat window at the same time, whether they meet up once or twice a year as a group but there’s definitely a culture and a vibe to the company. And I think it’s …It’s possible to have it. It may not be as easy to have as when everyone is in the same office. In fact I know it’s not. But it’s still possible to have a specific culture and a specific, kind of, mentality that everyone at the company embodies
[13:58] Mike: Yeah, one of the things that I’ve found that’s pretty helpful for keeping everybody on the same page in terms of company culture is getting HipChat up and running. HipChat basic is free right now. They recently changed it over. Previously it was up to five users it was free. And now it’s unlimited users and it’s free forever. So, you can just install HipChat on your Windows machine or your Mac machine. And it will just be sitting there running in the background and it’s basically just a nice private instant messaging utility that everybody can be on. They also have HipChat Plus which is only $2 per user, which gives you video chat and screen sharing and several other features. But again that’s still very very cheap for what it is.
[14:39] Rob: Right. And the other tool, that Ruben actually just mentioned to me today, is Slack. Slack.com. And supposedly it has a better UI than HipChat. Definitely has mobile versions and all types of stuff. So, I think those are two pretty good options if you want everyone to be basically chatting all day or available to chat during the day. I think those are pretty good ways to do it. I think the last objection that we’ll look at is “Who will answer the phone?” And this one’s laughable. I’m pretty much going to skip it. Because in this day in age with IP phones. It’s like, you can have a phone number and you can actually have more people answering it at more hours of the day if you have them on multiple time zones, right? You don’t need a physical phone in a physical location in order to do this.
[15:19] Mike: Yeah. I think that even, I’d say probably 3 years ago this was a much bigger problem because I think it’s only been in the past 2 or 3 years that it’s been a lot easier to have essentially a virtual PDX that you can, kind of, manage from your phone or manage from the web and be able to redirect people to from a centralized number to be calling different people in your organization. So, like I said, even 3 years ago I think that it was a lot harder than it is today. I mean, today you can just sign up for a Grasshopper account and you’re up and running.
[15:51] Rob: So, we’ve talk about why you should think about hiring a remote team, talk about common objections. The next step, the third point we have here is how to hire a remote team.
[16:01]Mike: Yeah, so I don’t know as we should dig too much into how to hire people because I think that we’ve talked about this quite a bit before in three different episodes that I can think of; episode 64, where we talked about hiring and managing remote developers. And then in episode 68 we talked specifically about how to hire and manage virtual assistants. And then again in 143 we talked about how to hire like a bootstrapper. And that was the one with Laura Roeder.
[16:25] So I think we’ll go on to the next one which is how to collaborate effectively. And the primary thing here I think to keep in mind is you really need to be using web based tools, especially ones that you are not actively managing. You know, there’s any number of services out there for all kinds of different tools that you can sign up for. That most of them are subscriptions based but you just pay that monthly fee. And you can add in the users that you need to be able to access the system. Whether its wikis or bug tracking, source control. I use a combination of things like Basecamp, HipChat, Skype and then there are all these CRM systems out there like PipeDrive and Act CRM. You can also use Grasshopper if you need phone systems. You can also use WebEx. I use a WebEx account. There’s … You can also use GoToMeeting. GoToMeeting and WebEx are pretty comparable I think in terms of features. But those are all the different tools you can use and just sign up for an account for them. And it’s like I said some of them are free. And you can use them until you get to a certain point. Once you get to that point chances are really good that your business is in a position to be able to pay for those services.
[17:24]Rob: Another tool someone told me about just today is called I done this. Idonethis.com. And it’s basically email as UI. So everybody on your team gets an email and they reply to it and I done this parses though it and gives everyone a status report the next morning with what everyone accomplished. And if you’re running into things you can comment on their stuff. But it just tracks your progress every day. This is obviously not a real time thing but it can be super helpful for distributed teams. And knowing what’s going on on your team. Because even whether you are the manager of the team or you’re just a member of the team it’s a good tool to know what everyone else is up to.
[17:58] Mike: Another key piece of collaborating effectively with your team is to try to operate on a non interruptive schedule. And by that I really mean make sure that you’re reserving voice and instant messaging communication for critical items. Not the everyday stuff. For all of the everyday stuff use email. Use something like I Done This. There’s also a service you can sign up for called 15 Five. It’s the numbers 15 and then f i v e. com. And essentially what that does is that … You’re essentially getting these weekly reports from people to help the management stay informed about what’s going on. And does I Done This go to everybody or just the managers?
[18:37] Rob: Everyone.
[18:38] Mike: I think that 15five only goes to the managers, but I could be wrong on that. But I came across that a few weeks ago as well. But the idea there is that you’re really trying to get information from people and surface it in a way that does not interrupt your daily flow. And leave it up to the people who are working to not only get their jobs done but at some point communicate information back. And that kind of goes back to the latency thing that we talked about a little bit before. And if you can kind of plan around that you’re impacting people’s productivity a lot less which allows them to get more done.
[19:09] Rob: Yeah, I have heard of some remote teams who are in a chat window all day. So they’re in CampFire or HipChat all day. I did that about 10 or 15 years ago when I worked at a dot com startup in the first wave of the dot com boom. And it was great fun but it was not very productive. And these days I have no chat windows open ever. And if my team needs to get a hold of me then they email me. If they need to get a hold of me urgently they text me. Those are the ways that I want to be contacted because I’ve found that being in a chat window, for me personally, it leads me to either get interrupted more than I want or to interrupt other people more than I want. Because if something pops into my head I’ll just ask them and often times it’s better to just have to wait. Right? It’s better for the whole teams productivity if it’s not as easy for me to just interrupt somebody and if I kind of get the discipline where I can just send someone an email and then wait for it. And then if there is something urgent then we do communicate on the spot but other than that. Personally I am not a fan of this. Not to say that this is right or wrong to all be in the same chat window, everyone has their own working style, but that’s the direction I tend to lean.
[20:15] Mike: Yeah, I think that just comes down to just how you’re comfortable working and how your team’s comfortable working. We use HipChat. And it’s kind of nice. But if I need to get work done I’ll put myself on do not disturb. So that even if stuff goes in there I don’t end up seeing it. But you can also just use email to schedule time to say, “Hey, can you get on chat. We’ll chat at such and such time.” One thing that I like doing is using a common set of sprints or scheduled milestones to get people working towards the same things at the same time. Remember before I talked about how if you have a couple of different things going on at the same time if one of them is sort of a blocking issue and you need an answer to move forward on it, you can kind of switch to the next one. It’s nice to be able to kind of aggregate some of those into a specific sprint or a scheduled milestone so that everyone is working toward the same goal. And they know when those deadlines are coming up.
[21:02] They know when that stuff’s got to be done. So they’re rearranging whatever their personal lives schedule is in order to be able to meet those. And it’s nice because then everybody is on the same page. I find that just having those, I’ll call them snapshots or of points of where people’s work crosses one another, you know, converge. That can be very very helpful for keeping people on track. And not only meeting that particular milestone but meeting further milestones moving forward.
[21:28] Rob: Yeah, I think this makes sense if you’re working on big features in separate subsystems. Right. And this allows people to sync up and not just do integration testing but see how the whole app works and get an idea of how everything is working together. I think with our stuff with HitTail and Drip since we are building and deploying new features constantly. I mean, we may do, there are days we do multiple deployments in a day. And launching tiny little features as they’re done. We have less of a need for this. We don’t really have, aside from like the rules engine, that was a milestone. Aside from that we don’t tend to have many grouped launches of features. They just tend to go out when they’re tested and when they are ready. There doesn’t tend to be so much overlap between work people are doing. Now I also don’t have 5 developers working on one product either. People are kind of spread out among multiple products.
[22:19] Mike: If you’re deploying a lot of things very very quickly then having those sprints or milestones doesn’t make nearly as much sense. But it’s obviously the things that are a little more complicated. And your situation also with those developers is a little bit different because they’re working in the same office. So, it’s a little bit easier to coordinate some of those things because you can just stop by and talk to somebody. And hash things out over half an hour and that’s not to say that you can’t do that over Skype or through a chat message or something like that. But obviously some of those things play into it a little bit.
[22:49] Rob: Yeah. That’s true.
[22:51] Mike: So I think the next section we’re going to talk about is some of the common pitfalls that people run into. And I think the first major one that I’ve seen is that people are not on the same page. If you set yourself up as the manager for a bunch of different people who are working for you and you don’t keep everybody informed about everything that’s going on. Then everybody feel like they’re in a closet and in the dark. And they don’t necessarily know all the other stuff that’s going on and they don’t know the interdependencies between the stuff that they’re working on and the things that other people are working on. And I find that that is not helpful for the team morale but it’s also not helpful for making sure that people are kind of working on their timelines and deadlines. So, if somebody doesn’t know that there’s 4 or 5 different things coming together and they just know what they’re working on and they say “Oh! It’s got to be done by Friday.” But if they know that there’s 3 or 4 other things that are also coming together on Friday and there’s a press release or something like that going out. Or some new marketing campaign and if they don’t get it done everything is going to be held up because of them. I’ve seen that this has kind of a motivational factor to it. People tend to make sure that they buckle down and rearrange their schedule to be sure those deadlines are being met.
[23:57]Rob: Yeah, I think there’s a lot of ways to get people on the same page. The daily check-ins that we talked about with 15five and I Done This is a really nice way to keep people communicating. I think another way is to have coding standards. And style guides for HTML/CSS and that kind of stuff. This sounds like big company stuff but its shocking how once you have two or three developers working on the same project. Things like how many spaces should a tab be in your editor? Should you always run the clear trailing spaces command when you’re done with a file? Are the variable names upper camel case, lower camel case or do we put under scores in the variable names? I mean there’s all this kind of stuff and if you want consistency in your code files then this is stuff that even a one page doc can do wonders. If someone is able to refer back to that. And there’s some pretty good examples of this, there’s a GitHub ruby style guide and I think there’s one for CSS as well. If you read through it, it’s like “Yeah. This stuff makes sense.” They’ve done a good job in a very short amount of time. This is not a 50 page style guide. Its one to two pages but they communicate a lot with it. And I think being able to document that in one place where everyone can go back to. And it’s living and breathing too, right. We can go in and edit it. And anyone should be able to keep it up to date as it goes. It’s not set in stone. But just to have a common understanding, keep your consistency across all the technical assets you have will keep that consistency high.
[25:21] Mike: Yeah. And some of those things you can do with technical controls as well. So like for C# there’s things like Style Cop and FX Cop that you can use to essentially do a static code analysis of the software that is being written. To make sure that it is conforming to whatever the style guides that you’ve set forth are. And then you can just integrate it directly into the build process. If somebody checks some code in that doesn’t meet the style guidelines you can kick it out and say “Hey! You’ve got to go fix this because it’s not passing. The build server’s crashing on it.” It says “No! I’m not going to allow you to build this and push it out because you’re not following the style guidelines.”
[25:54] Another thing you can do is incorporate some of those things into just standard operating documents or procedures, some of your general operating guidelines. As long as people generally know how the business is being run and this isn’t just necessarily about software development. But how the business processes are done. If they run into a situation where they’re going to be doing something and there may very well be a situation where somebody could come in after them and have to do it themselves. They should be empowered to go in there and modify those to be able to document that stuff and say “This is how it is done.” And if we need to change this process later on it’s not a big deal but here’s the documentation that explains how to do this.
[26:31] My bookkeeper’s actually been really good about documenting the things that she’s been doing and adding them into our Google Docs so that she just links to them from our standard operating documents. And just puts it in there so that if she ever moves on and goes to do something else then whoever comes in afterwards and picks up the books can go in and basically pick up where she left off. And know exactly how everything is supposed to be done. And if they don’t like it they can change the documents and change the process. But you need to be able to empower these people to actually do that stuff, so that everybody’s doing it consistently.
[27:02]Rob: Another common pitfall that we have listed here is employee burnout. I have to be honest I’ve never encountered this. And I don’t know if it’s the culture of the company here or it’s just the folks who I’ve hired specifically but I haven’t had anyone kind of work themselves into the ground. Do you think this is a common pitfall?
[27:19]Mike: I think it’s a common for the founder of the company.
[27:21]Rob: Ahhh. Got it.
[27:23]Mike: Yes, I don’t know that it’s so much for the people who are, you know the contractors, especially for contractors I’ll say. Because with contractors I think the issue is, like, they’re getting paid however much they’re getting paid for however many hours. So, you know generally speaking how many hours they’re working because you’re paying them for that. So, if they work 30 hours a week at $20 an hour you’re going to pay $600 for the week. And if you start paying $800 or $900 a week for that person then it’s pretty clear that they are working a lot. But I think that if you’re not tracking their hours for whatever reason. And they’re not tracking them. Then it becomes much easier to kind of to go into the… down the road of burnout without being aware of it. And I think that that’s a…that’s the biggest part of that is that if you’re not aware that burnout could become an issue.
[28:07] You could get to a point where it’s just too late. It’s become a problem and it’s too late to do anything about it. You need to basically need to send them on vacation for a while. It’s more of a problem for the business owner than it is for the people working in the business.
[28:21] The next pitfall is accounting and HR problems. When you are hiring people across state lines or in other countries there’s all these different problems that come to mind like, how do you pay them? for one. How do you account for any sort of benefits? You know, how do you give them time off? And I think the general consensus between at least you and me for these types of situations is go as long as you possibly can using people as contractors. Because then you are able to avoid those things. And you’re going to be paying them as a contractor you’re going to be paying them hourly. Such that they can go out and take care of that stuff themselves. There’s two different things that happen there. One is that you don’t have to worry about what sort of health plan you’re going to be using to cover everybody in all different states and different countries and things like that. And the other thing is that they get to choose whatever it is that they want.
[29:07] Using something like Odesk really helps out with that because they also handle things like 1099 forms. So what I’ve had to do every year is whenever I’m working with contractors if I pay them more than $600 a year. Then I have to issue them what is called a 1099 form. In the US that’s just a standard form that notifies them and the IRS that this is how much you paid them. And let’s the IRS know that they should be expecting tax money from that revenue. I don’t know what it’s like in other countries with that regard but if you’re using Odesk. Odesk takes care of all that stuff for you.
[29:39]Rob: Another common pitfall is people doing their own thing. Either not following instructions, not doing good work or doing other work during the time that they are billing you for. I mean, this is just a matter of keeping an eye out and like we said earlier, it’s like trusting your people. And watching what they’re up to, looking at their productivity and stuff. And if you do find out that stuff isn’t working out then it starts with a one on one conversation of you raising the issue. And if it doesn’t clean itself up really fast. This is where letting someone go that you don’t have a relationship with, right? If you’ve know and worked with them for a couple of years and you know and trust them and something is going awry. Then in my opinion, it’s up to you to dig deeper and figure that out. But if it’s someone that you just started working with, you are 2 or 3 weeks in and you know things are kind of going awry. I’ll give someone one chance and have a really good talk with them. Solid talk explaining exactly what’s going on and what my expectations are and if it doesn’t clean up after that I consider it a lost cause at that point. I don’t have the time to teach someone that they need to be productive or that they need to not be doing someone else’s work while they’re billing my company for it.
[30:41] Mike: I think sometimes it’s very hard for people who are starting a new business, I’ll say, come to grips with because a lot of times you feel like, “Awww. I went through all this effort and time to vet this developer or vet this new employee and I’ve done all this extra work to essentially integrate them into the processes that run the business. And you don’t want to spend all that time and essentially walk away with nothing out of it.” You really want to be able to get that person to be productive. But, as you’ve said, I mean, I really like your approach with it. To just say “Okay. I’ll have one talk with them.” But after that but if it doesn’t straighten itself out, you kind of have to pull the plug. Because otherwise you’re going to be back in that situation in six months or 9 months later or even maybe three weeks later. And you don’t want to have to keep going through that. You’re much better off finding somebody else who’s a good fit. Who is going to be able to provide you with what you need without the micromanagement oversight that you’re going to have to apparently provide in that situation.
[31:38]And along with that is that, as I said, there’s this sunk cost that you have in hiring these people. And you have to remember that there are always more people out there who are just as good. You can find somebody else, who’s just as good, if you are willing to put the effort in and look for them. Because you already found somebody like that once, what’s to say that you can’t find somebody else like that again.
[31:57] Rob: Yeah, I agree. It’s not easy to find good people but the times where I have hung onto people. Or given them too many chances. What in retrospect was too many chances. I’ve always regretted and as soon as I have let them go and found someone new who is what I needed, it’s like a smack to the forehead. And why didn’t I do this months ago. Every time it works out to that. So, yes there are still costs in hiring and training to bring someone else onboard but if you really work with them and things aren’t working out then there’s no other choice here. Right? Just the same if you’re working on site with someone. There’s some costs in that. You’ve gotta let them go, find someone new. It’s time to do it.
[32:34] So to recap the 5 main points we touched on with distributed team collaborations for startups was: 1) Why to consider hiring a remote team. 2) Common Objections. 3) How to Hire 4) How to collaborate effectively and 5) Common Pitfalls.
[32:50] If you have question for us, call our voice mail number at 888-801-9690 or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for startups or by RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 192 | How to Make Your SaaS App More Contagious
Show Notes
- Principle 1: Social Currency
- Principle 2: Public
- Principle 3: Practical Value
- Principle 4: Stories
Transcript
[00:00]Rob: In this episode of Startups For the Rest of Us, Mike and I discuss how to make your SaaS app more contagious. This is Startups for the Rest of Us, episode 189.
[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 built you first product or your just thinking about it. I’m Rob.
[00:25] Mike: And I’m Mike,
[00:26] Rob: We are here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week sir?
[00:30] Mike: I apparently have lost $7,000.
[00:32] Rob: Really?!
[00:33] Mike: I received a check for $7,000 in the mail. And I put it someplace because I had to go away for the weekend and then I got back and forgot about it. I’ve been looking around for it. Because I was trying to make sure all of my books and stuff were straightened out because it was the end of the month. I can’t find this check.
[00:48] Rob: So, you either… you going to have to reissue it or something?
[00:50] Mike: It’s frustrating because I have a system to take this into account. I usually put all that stuff into this little blue box for all my business stuff. But it’s just like, I got it. I was on my way out the door for like a long weekend. I think it was like a Thursday afternoon. I’m like “I’ll take care of this when I get back.” And I didn’t do it.
[01:09] Rob: Yeah, that’s a bummer. You know the the thing that’s saved me from losing checks recently is my bank finally started doing their deposits through their iPhone app. And so now almost everytime, unless I am in a rush out the door, when a check comes I open it right then. I endorse the back. I flip it. I take two pictures of it using the my banks app. And it is electronically deposited. And that keeps me from having to put it in my wallet or put it in some envelope and then bring it to the ATM next time I go. It saves me a lot of time.
[01:38] Mike: It’s just frustrating. It throws off your entire day. That’s the problem.
[01:40] Rob: Oh, totally. Yeah, because your thinking about it. And you keep thinking maybe it’s in my car. And so you go out and do that. It’s distracting, right?
[01:47] Mike: Yes, yes.
[01:48] Rob: By the way, How has it been not consulting for the past week or so?
[01:52] Mike: It has been very very nice. [Laughter]
[01:54] Rob: I bet it has. Yeah.
[01:55]Mike: My wife has opened up her own fitness studio. So it frees up a lot of time for her to do that and I find that I’m kind of splicing my work in between when she’s going out. So it’s like I’ll be watching the kids and she’ll come back . And I’ll go back and do a lot more work. And what I’ve found is that I’ve actually gotten a lot more time to concentrate on myself , in terms of like going to the gym and eating healthy and doing all those other things. It has helped me become more productive too. It’s a nice side benefit that I didn’t quite expect.
[02:23] I expected, oh well, I’ll get a lot more productivity out of working these extra hours. And the reality is that I am actually working less but I’m getting more done during the time I am working because I’m so much more productive. At certain times of the day I am concentrating on going to the gym and I’m listening to podcasts and things like that. And I come back and I plow through work for a couple of hours. But that couple of hours is way more productive than it would have ever been previously when I was just trying to, you know, just work 9-5 on my stuff.
[02:49] Rob: Right, right. I guess you’re just not wasting your good glucose on other things. You’re able to focus it on the things that really matter to you. That’s cool.
[02:57] So couple things for me. We’re moving HitTail to new servers. We’ve already rewritten it in Rails. Only took a couple of months. One developer and we’re just about beyond that now. But we… its code complete and we’ve already started kind of setting up the database migration. We have new servers and stuff. But I am excited about this to not be the technical guy. The reason I’m doing this, you know back in the day, people kept saying “Are you gonna rewrite it? Are you gonna rewrite it?” and I never wanted to there’s no reason to. But it’s gotten to the point now I have three Rails devs working for me.
[03:28] And HitTail is written in classic ASP and.net and so I’m the guy who always has to go in and make code changes. Which means they just don’t get done very quickly. They don’t get done very well because I’m in a hurry all the time because it’s not my primary focus. So, I’m just excited to be able to step away from this and just be able to, you know, when feature requests come through, it’s not a matter of me putting a day aside to try to code something up, but now I can delegate it to a developer.
[03:51] Mike: Yeah, whenever you’re the bottleneck like that it’s hard. Is there a wish or desire that you could read it or figure it out the architecture well enough to be able just go in and make changes yourself if you really had to. I mean, like I have some people who are working for me who are doing stuff. And I have no idea how any of it works so, like literally I’m hamstrung to the point that if I wanted to go make some of the changes I couldn’t. But the reality is like it would take me 5 or 10 times longer to do than it would to just say “Hey can you do this.” Even waiting for them two or three or four days to make those changes
[04:23] Rob: Yup, I have hit that point as well. That’s something I’m I’m okay with this point, Right? Because I’ve hired a couple of employees and I feel good working with them and they’re doing a job and so I know that the team has kind of enough cross-pollination that the architectures are now the same between Drip and HitTail or very very similar and there’s enough knowledge between everybody that even if …The danger is always if you have one developer and he or she leaves that what are you going to do? Right? But I have three guys now who have reasonable knowledge of both apps. So, it’s also nice that I can move people back and forth based on what we’re focusing on. So I basically had one guy dedicated to HitTail for the past couple of months and the other two on Drip. Kinda looking forward to getting standardized. And we’ve learned a bunch of best practices with Drip. Like, how to host on EC2, bunch of the infrastructure stuff and we’re basically just replicating that entire process, you know, and the structure of that with HitTail. So I’m looking forward to that.
[05:14] I think we’re going to do kind of a dry run early next week of the actual migration. We’re going to move the whole database and then do a bunch of testing, but not do a switch over and so it’ll probably be within about…I’d say about two weeks for me getting HitTail moved.
[05:27] Mike: Very cool.
[05:28] Rob: The other thing I had was I read a couple other books that I wanted to mention. One is called Hooked. And it’s about how to make your app or your game or you’re whatever you’r ebuilding more like addictive. Kind of how to keep people coming back and using it and if you hear about this book I liked it reasonably well. What I didn’t like is almost all the examples were were consumer stuff. It is all about viral videos. It was about iPhone app games. It was about stuff like that and I really had a tough time trying to apply it to our space.
[06:02] Instead of reading Hooked, I would recommend reading a book called Contagious. And that’s more about why things catch on and how to make your things more viral. And that’s actually what we’re…That’s what the whole outline is pulled from Contagious. Unless you are doing B2C stuff I would stay away from Hooked. The other book that I just read is called The Hard Thing About Hard Things. It’s written by Ben Horowitz, who is, you know, a venture capital fund Andreessen Horowitz. This was a gut wrenching tale of him basically growing a company, having it almost go bankrupt multiple times. Not having funding and then selling. It’s it’s a crazy crazy tale about his perseverance. I recommended if you just want to get into the dirt. It is a dark book because you feel his pain, like I actually got sad at several points. I got really tied into his story. So it’s gut wrenching. It’s not a feel good tale by any means but it definitely teaches you a lot about perhaps what it take to succeed at that level. And have a multi billion dollar exit.
[06:57] And frankly, I want no part of it. I’ve always thought that anyways. But in listening to this book…Yup. I wouldn’t of wanted to do that. I wouldn’t have wanted to put myself , my family, my friends just put your body mentally and physically through that ordeals, but it is definitely an interesting story about a big venture capital raise and exit.
[07:14] Yup, So today as I mentioned before we’re going to talk about how to make your SaaS app more contagious. And I pulled this from a book called Contagious: Why Things Catch On and it’s written by Jonah Berger. Mr. Berger is a marketing professor at Wharton. And he spent the last decade studying why things spread through word of mouth and social transmission.
[07:32] So, in his book he outlines six principles that he’s found in his studies, in his research that drive things to become contagious. He looks at consumer products, policy initiative , work place rumors, YouTube videos, there’s a couple B2B things. It’s really not a focus of it. But what I hope to do today is that in our examples of these principles of ways to apply it to more like B2B software, B2B SaaS and even some info products.
[07:58]The book is actionable if you make the effort to apply it to your product. We’re not going to discuss all six of his principles because two of them I was not able to apply to our space. I do recommend the book. But let’s dive into this first principle.
[08:10] The first principle he brings up is social currency. And what he says is that people share things because of social currency. They basically want to share things that make them look good. They’re three steps to increasing the social currency of something, so of a YouTube video or of your SaaS app and when you increase the social currency of something. That means when someone passes that along they get more benefit out of it for recommending it to someone else.
[08:36] And so these three steps which are kind of principles on their own but we will group them under here because he does, the first one is to find inner remark ability. The way I like to think about this is What is your purple cow? How can you find the purple cow for your app or your idea? And to throw out just one example of a B2B app that people are talking about one is BareMetrics. Right? BareMetrics.io. It’s Josh Pickford’s app that hooks into Stripe. And gives you a really nice kind of a SaaS dashboard. Something people talking about with BareMetrics, like it’s a B2B app. What could be remarkable about this? Well he has two things right off the bat that people are sharing.
[09:14] One is if you go to demo.baremetrics.io that is Josh’s live revenue data for his app. For BareMetrics. And so you can watch his app grow over time. You can see what his lifetime value is, his churn, his retention, his monthly revenue per user all that stuff. The other thing he did is he got Buffer, who many of you have heard of, to also to put their metrics live. So I am pretty sure that’s buffer.baremetrics.io. So, these two things, while not baked into his app, obviously when people see this. People sharing it on the Internet. And then you click through on a Tweet. It’s remarkable, right? This is a purple cow. This is a shocking thing. You say “Wow! These guys are totally sharing everything about their business.” And it has resulted in more traffic, more customers for BareMetrics.
[09:59] Mike: I think that part of that has to do with transparency, as well. And I don’t think that the inner remarkablility is a direct translation to, Oh that means you have to go out and be transparent. Just being transparent is one example of finding something that is remarkable about your application. Because you look at a lot of SaaS apps out there and it’s very difficult to get this kind of information from them. And that’s what makes this information that they’re displaying very remarkable. When you’ve got Buffer and Bare Metrics showing their own data, most people don’t show that. Most people don’t get a sense of that. They just see what they see on TechCrunch and all these other websites where they just send out a blast of “Oh this great company made tons of money!” And you don’t see all the stuff leading up to it. And this gives you that. This gives you that sense of, kind of, what’s going on today, what things looked like previously and how things are, kind of, shaping up to be in the future.
[10:53] And that is just not something you get a lot and I think that’s where the idea of the purple cow comes in and because you don’t see it. But I think that being remarkably transparent is one of those ways.
[11:02] Rob: Yeah, I would agree. I think another example I could bring up is with Drip. When we launched it, I thought there was marketability but it turns out people didn’t think it was that interesting. There was no sharing going on. How is it different from other apps? Well, it is similar to MailChimp but at that time it was similar to MailChimp but you could put kind of a widget on the front end of it. And then we tracked goals and we did all this stuff. But we did stuff that you could cobble together if you really wanted to using other tools. And so there was really nothing remarkable about it.
[11:30] What I found is that within the last month as we finished building the rules engine. Right, the email automation, behavioral email people have started talking about that. I’m seeing it on Twitter. I’m getting emails and saying “Hey! I saw what Brennan Dunn is doing.” or, you know, what another customer is doing with Drip now. I saw a screencast about what the rules do. And right away, that baked right into the product, we found something that people are remarking about. It is in a sense a purple cow. And I think that I can refine that a little more especially with improved marketing and encouragement for people to share. But at this point, that’s an example of an app that really didn’t have inter remarkability but by building some features and going towards a into a newer space. I’m pretty sure we’ve now achieved that. And that that’s going to be our push moving forward.
[12:12] The second step into improving your social currency is to leverage game mechanics. And this is essentially encouraging competition among your users or customers and encouraging people to reach goals. And this is often called gamification. And so a decent example of this of more of a B2C model is Stack Overflow. Right? One of the things that they did really well, that Jeff Attwood executed really well, was having people compete for these badges and answer more questions and get more points and that kind of stuff.
[12:41] I think another example is, that you could do, is to have your customers compare their results. Right? Maybe in an aggregated way or in an anonymous way. But have customers, have a leader board of like who has the highest conversion rate from their campaigns. And obviously people could opt in or opt out of this. But people take pride in, like, being on a leader board. And what would be interesting is if it was anonymous at first but then as people got into it and if you asked people, “Hey, do you want to not be anonymous and we’ll actually give you a link back, right.” So that people know what you’re doing. And the people with the highest conversion rate of their email campaign or the highest number of hits from their SEO campaign or whatever it is your app does. That getting people to kind of compete against each other with definitely will bring people together and hopefully get folks talking about it.
[13:27] Mike: Yeah. That’s definitely one way to do it. It’s something that I actually started out trying to do within AuditShark. And realized that I actually needed a lot more data and a lot more customers in order to be able to pull it off. And I think that’s one of those traps that you have to be at least a little bit cautious of because if you’re trying to do this and you’ve only got a handful of customers in there or one customer is very large in relation to the others. Then what you can have is that all of your statistics get completely get thrown out of whack when that one customer does something different. Or something fails in a dramatic fashion with regards to the stats. So you have to be a little bit careful when you’re doing that. But I think that there are definitely ways that it could work. I don’t think that it is a strategy that you can try pulling off on day one. It’s something you have to do down the road a little bit.
[14:13] Rob: I agree. Yup, you definitely need a little bit of critical mass if you’re going to aggregate stuff from your customers.
[14:18] So the third and final step to increasing the social currency of your app is to make people feel like insiders. And there’s a bunch of ways to do this with B2B apps. One way is to have a members only area and members only information. And training, whether it’s videos or blog posts or something that you’re giving them that you do not release to the public and that you value. And you let them know how valuable that is. The idea here is to actually perhaps an info product that you would essentially sell but you give it away to people on the inside. So, that’s one way that I am actually heading towards with Drip is to up the level of training, but not charge for it. Right. Just let Drip customers use it.
[15:00] Another way that I’ve seen work, and Mike, you and I have experienced this first hand is to only let in X number of people into your app per month. Now we do that with the Micropreneur Academy, Micropreneur.com. And the reason we started doing it was more because we wanted to bring in cohorts of people and we didn’t want 50 people or 100 people coming in all at once. Because we just couldn’t manage the onboarding. But what we found is by collecting emails upfront and not just having it open all the time that both the upfront conversion rate increased the people who did sign up. And people got more value out of the academy because they were more serious about it when they got in. They were able to focus the time. And people stuck around longer. They got more value out of it.
[15:39] Borrowed from that in a conversation I had with Nathan Berry about Convert Kit a couple of months ago. He took that and now he’s doing a similar thing with Convert Kit. So he…It’s a SaaS app. Right? It’s like a landing page and email marketing SaaS app. He’s doing the same thing. So you can’t just sign up for that anymore. You have to sign up for an email list. And then he does a launch. And he only lets a certain number of people in. And he provides a lot of education and makes you feel like an insider.
[16:01] Mike: Yeah, and I think the surprising that you and I found was that our conversion rate for that was something like four times what it was if we opened it up. We ended up fielding and still probably field a lot of support questions about, “Hey, why can I just sign up anytime? I want to sign up now.”And we’ve run the numbers. We ran it for several months and found that the sign up rate and the retention rate was roughly 4x what it was if we just left it open at all times. So there’s some significant advantages to being able to limit the number of people who are coming in. You know, part of it is helping them as well. It’s not just about the revenue. It’s about making sure that what you’re distributing is actually being used. Because if they can sign up for it at any time. They’re going to come back some other time. They’re going to say “Well, I can put this off.” And you want them to sign up for this now. You want them to get the value out of it as soon as possible. And that’s one of the ways that can do that.
[16:51] Rob:To recap that. That was all a single principle, which is increasing the social currency of your app. Increasing the likelihood that people will want to share it. And those three steps were: find inter remarkablility, just like finding your purple cow; leveraging game mechanics and making people feel like insiders.
[17:06] The second principle we’ll look at today is Public. And the idea here is, can people see when others are using your app? Is it observable? People want to follow a crowd, in general. There’s a lot to say for social proof. And so some of the examples he lists, which again B2C examples, he talks about the white earbuds that Apple released with their iPod. Now the Beats by Dre headphones. It’s obvious when someone’s wearing those because they have the flat sides and they have the big B on them. What about your app is observable by the public?
[17:38] Here’s some examples in the B2B space. Someone’s using Olark. You know they are because it says powered by Olark at the bottom. Someone’s using Drip. It says powered by Drip at the bottom. Now both of those apps allow you to upgrade to a certain plan and hide that but most people don’t. That right there is a nice viral loop. And a nice way to see if a lot of people are using it. So if you have any type of UI widget that people are installing on their site you’re in a good spot. Even if you don’t, I’ve seen apps that allow people to put badges on their sites. An example could be AuditShark. That someone could say protected by AuditShark in the footer of their site. If AuditShark had gone into the SaaS space and really going after SaaS users that could be something that much like a Verisign Certificate of security and that kind of thing. I think that AuditShark could be prime for that.
[18:24] Mike: I actually have that code written. [Laughter]
[18:25] Rob: Do you? That’s Awesome!
[18:27] Mike: It’s something that we basically put together in sort of like a little java script. It appears in the bottom right corner of the screen in the browser that you can enable on your website. And you could put that in there and it would pop up and say “This server is protected by AuditShark.” You’re absolutely right, there are a lot of other examples as well, if you have a customer facing website for support software for example, there’s companies like UserVoice. Where you can sign up and you get an account and you have a custom URL, for example, and customers can go there. And they see that that is that companies URL. So it’s not just widgets on your website, it’s also software that your customers might interact with as part of a support function or something like that.
[19:06] Rob: Sure. And even imagine if you’re sending emails on your customers behalf. So let’s say you’re a MailChimp, even like Rueben with BidSketch, where he sends out proposal emails. At a certain plan level and it wouldn’t be your top plans but maybe it would be your bottom plans that includes a tiny thing in the footer that says, powered by BidSketch. This proposal powered by BidSketch. And MailChimp does have that, right? And I think, in their free tier one of the things is that you have to have this powered by MailChimp thing in the footer. It’s the same way Hotmail grew virally in the late 90’s was having a powered by Hotmail thing and I think it was under your signature or something. So, there’s a lot of ways where, especially these days if you’re sending things or having any interaction with your customers.
[19:45] There’s ways to get in front of them and ways to do it elegantly. Yes, you can go too far with this. So you have to use your judgment. In my opinion you should have a plan or kind of a step up where people can definitely opt out of this. Right. To where it’s truly totally white label. But what I’ve found is that most people don’t mind. And that they’re frankly, if you do the job and you’re actually helping them out, people don’t mind helping you out a little bit. Right. They don’t mind allowing you to have that little tag line. And if that means that you’re going to be able to stick around. That you are going to be able to grow as an app and that they will be able to use you longer.
[20:17] Mike: I that, for example, FreshBooks whenever you send out invoices, that people can login and see their invoices using FreshBooks website. And it’s clear that you are using FreshBooks software. I think a lot of other accounting software does that as well. I think Zero does it. You’ll see their logo in there and like the invoice and things like that. But again, as you said, you can pay to have that stuff removed. I think Basecamp when they send out emails, they come from the Basecamp domain. They don’t come from your own domain. Basecamp has made the effort such that you can reply to those emails and things go right back into Basecamp. Which is great. But it also allows them to kind of expand the reach and let people know hey “This person is using Basecamp.”
[20:56] Rob: So that was principle number 2, and it was observablility, Can people see when others are using your app?
The 3rd principle of the 4 we’ll cover today is practical value. And what I love about this one is, since he talks so much about B2C a lot of the examples he gives are like viral videos they aren’t practically valuable. Right. They don’t have utility. They don’t provide useful information. For us, if we’re talking specifically about the B2B space it’s a piece of cake right. Because we typically do sell on value. We save someone money. We make them money or we save them time.
[21:27] And so, what he says here is if your product or whatever you want to go viral has useful information, basically do as much as you can to highlight how valuable it actually is. And I think the best example of this I can think of in the B2B marketing space is to include benefits on your homepage. Right. It is to have a powerful headline, that calls out exactly what you do. What your app does for people. And then talk about how much money it saves them. Or how much time it’ going to saves them. And really focus on the value that it’s going to provide.
[22:00] Mike: Yeah. I mean, this is just the basic value proposition for any given piece of software that’s going to take somebody an extra 15 or 20 minutes to put together a proposal or something like that and they have to do 10 of them. Then you’re saving them presumably, an extra 150 to 200 minutes a month. And how much is that worth of their time. And if you can put it in relation to the value of their time then you’ve got a solid mechanism for selling that piece of software. And again as you said, it’s a lot easier to sell to businesses than it is to consumers. Consumers are very much about I’ll spend my time to do it versus businesses where it’s worth it for them to spend the money to get things done faster.
[22:37] Rob: One other tidbit that I noted down, that someone has done a study, and he quotes it and he says, that if you’re giving someone a discount on something. Whether it’s signing up for annual or going moving up to higher plans so they get more for something. He said that if your product costs less the $100 and you’re giving them a discount, then use percentage. Meaning how large of a percentage discount they are getting. And if your product costs more than $100 then use the absolute dollar amount of the discount that you’re getting.
[23:06] Mike: That is interesting. I mean was there a specific amount of improvement over one versus the other. I assume there was some sort of A/B Test right?
[23:14] Rob: I think it was more of a research study with consumers. So it wasn’t like on a webpage. It had to do with getting real live people in an office and doing stuff. I don’t think there was a percentage improvement that he mentioned but my guess is if you went to look at the study we could figure it out.
[23:27] Alright, and our 4th principle we look at today are stories. The idea here is that people remember stories. And an example of this and how you can do it in B2B marketing is not to aggregate data, to give percentages, to give dollar amounts, while that does work in certain cases you also need to couch that with stories of customer successes. That’s why case studies often work better than aggregate stats. Aggregate stats can give people an idea, an order of magnitude, but to really impact them and get them to remember and to potentially share telling stories. It’s a winner. I would actually recommend it. He had a good chapter on this in this book, but it pales in comparison to the entire book called, Made To Stick by Dan and Chip Heath. And that for me, that’s the seminal work on a way to describe ideas using stories in a way that gets people to remember them and in effect share them.
[24:21] Mike: There’s a lot of examples of this kind of thing going on but I’ve also seen through various blogs and Twitter websites where they talk about doing conversion optimization and they point out that if you call out specific numbers so instead of saying save $700 say save $684.35 because that’s a very real number. Somebody can look at that number and you know that it is not made up. It wasn’t just pulled out of the air. And you can probably relate that back to a customer who saved exactly that amount of money using your software. Yeah you’re absolutely right using those testimonials but being able to point to those specific instances as opposed to kind of aggregate because people I think a tendency to look at those aggregate numbers and say well I don’t believe that. And the reason I don’t believe it is because you see in all kinds of marketing material especially on TV. You look at something like Weight Watchers.
[25:15] And they’ll pull out all of these statistics. Oh you know, so and so dropped X number of pounds. They almost never say on average people lose X pounds. They always pull out specific people and use testimonials to drive people to sign up for their service because it is more believable. It’s more relatable than this mass of people that you have no way to identify yourself with.
[17:13] Rob: Right and we see this in Presidential campaigns too right or any type of political campaign, where they will name some stats. It’s the epidemic of the “you know, Joe the plumber here. Here’s his story.” And whoever , who did this and that and they actually go into this whole story. That’s why they do that is to personalize it. You see it with charities trying to raise money. They can say a million people a month die in this country. But it’s when they actually start following a single story that you become engaged. Another way where I’ve seen this play out is in podcasts. There are podcasts that are mostly about the tips, trick and tactics. And then there are some that are mostly about the stories of the founders or of the people who are doing the podcast. And then there are some that are a mix. My favorites personally are the ones that are a mix. And here’s why. Because if it’s all stories and kind of just bouncing from one thing to the next it’s harder for me to justify spending a lot of time listening to it. And if it’s all tips, tricks and tactics then I don’t necessarily engage or feel empathy for the people or really get into their story. I don’t want to hear it every week and sometimes I’ll skip it if it’s not on a topic I want. But when it’s a mix and I feel both for the people and for the stuff they’re sharing that’s when I’m really into it. Like, Bootstrapped with Kids is actually a really good example of that because they do both. They share tips and tactics and even if I already know them I still want to hear what they’re up to that week. Frankly, this happened with us early on. I think the first 15 or 20 episodes of this show was much more about the tips and tactics. And we started engaging the audience and we started growing once we started sharing stuff that we were actually doing, sharing our experiences. And now people will certainly listen to it for the tactics but I bet there’s a lot of people who are listening to hear what’s next with us. To hear what we’re up to next. What we’re working on and how things are going in our stories.
[27:16] Mike: Yeah, I have definitely talked to people who have said that is why they listen. I mean they do get a lot of value out of the discussions of the different things that we’re talking about but a lot of them listen just for the weekly updates and stuff in the beginning. I’ve heard from some people that just say they listen just to see how long we’re going to run the podcast. Because it’s kind of amazing to them that we push out a podcast every single week like clockwork
[27:38] Rob: So to recap our 4 principles are: Social Currency, Observability, which is, Can people see when others are using your app? 3rd principle is Practical Value and the 4th principle is Stories. And again, the book title is Contagious: Why Things Catch On.
[27:52] Mike: If you have a question for us you can call it into our voicemail number at 1-888-801-9690 or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Out of Control by MoOt, used under creative commands. You can subscribe to us in iTunes, by searching for startups or by 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 191 | Brian Tracy’s ABCDE Method For Setting Better Priorities
Show Notes
- Eat That Frog by Brian Tracy
Transcript
[00:00] Mike Taber: In this episode of Startups For the Rest of Us, Rob and I are going to be talking about the ABCDE method for setting better priorities, this is Startups For the Rest of Us episode 191.
[00:08] Music
[00:16] Mike: Welcome to Startups For the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome in launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.
[00:23] Rob Walling: I am Rob.
[00:24] Mike: And we are here to share experiences to help you to avoid the same mistakes we’ve made, what the word this week Rob?
[00:28] Rob: You know we have another success story, Mathew Paulson wrote in and he said I started listening to Startups For the Rest of Us shortly after it started in 2010, using the advice and strategies mentioned on your show, I have been able to build 3 profitable software businesses including an investment research software business called Analyst Ratings Network, a press release distribution service and a piece of fund-raising software for animals, shelters and human societies. I am on track to have my first 7-figure year and I have just finished writing a book about the lessons I learned from building these businesses, the book is called 40 Rules For Internet Business Success it will be out on July 21st, you can learn more better at 40rulesbook.com, thank you for your continued inspiration to the bootstrapped startup community.
[01:07] Mike: Wow that awesome.
[01:08] Rob: I love to hear stories of people who are even in the small way are impacted by what we are doing, it helps them build their business, and then they go onto build really cool stuff and then go on to teach others as well.
[01:17] Mike: Yeah certainly so my wife and I are starting to really follow through on cutting the cord cable and this past week we called up Verizon, and just dumped our cable itself, we kept our internet and phone but just cutting the cable alone cut more than a $100 a month, so we still have Neflix and Hulu Plus and Amazon Prime, that was the second night after we cancelled cable, and we are sitting there, just kind of looking at each other, and it is like well we could go watch a movie, but I am tired let’s go to bed.
[01:42] Rob: Yeah you don’t just flip the fun and watch like HDTV or other kind of mindless shows.
[01:46] Mike: Yeah we just went to bed and got more sleep instead.
[01:50] Rob: You know we first cut the cord like 7 or 8 years ago, and it was a big leap then because there was no Hulu Plus, no Amazon Prime, it really was just Neflix but we still had DVD’s you know, so we watched a lot of movies, it was a sacrifice at first, but especially these days I think it’s something that unless you need live sports pretty much everything else including like the Super Bowl, you know like Academy Awards ceremony and that kind of stuff tends to be streamed online now, and so you really don’t miss out on too much, and I found the same thing as you, I don’t spend very much time watching TV I watch a lot of shows, like probably 4 or 5 shows I follow but aside from that I don’t sit down and watch TV, so I really only watch like let’s say 4 or 5 hours a week total and I never watch commercials, so it’s actually not that much time that I spent in front of the TV. Speaking of that I had a recommendation for a show, have you watched Silicon Valley, it’s on HBO.
[02:44] Mike: I have not.
[02:45] Rob: Obviously you either got to have HBO Go or you know some other way to obtain it, the first episode was in full on YouTube. It’s interesting you know, it’s fun to kind of see people poking fun into the space, and Mike Judge who did Office Space is the creator and I think that he wrote the first few episodes. It’s worth checking out. It’s pretty vulgar and if you can tolerate that kind of stuff, then it’s a good show.
[03:03] Mike: So you say you don’t watch commercials, how do you deal with that when you are watching Hulu Plus?
[03:07] Rob: That to be honest that’s the one place where we watch it and it’s driving me nuts now, and I think I am going to cancel my Hulu Plus subscription, and if I want to watch something that’s on Hulu Plus I am going to buy it. I prefer to pay two bucks for an episode rather than watch, what is now like almost as many commercials as that are on now like in a network. What it started up is like 2 or 3 commercials for a 22-minute show and now it’s like 2 or 3 commercials per break, and then you have 3 or 4 breaks, it’s pretty ridiculous.
[03:33] I have been reading a lot of books lately, I am a big Audible fan and with that the, you know there were 13 hours of travel to and from Scotland and being in the airports and stuff, I just had a lot of audio time in the past month or so. So I want to run through a few of them and kind of give recommendations and my thoughts on them, there are related to just startups and then entrepreneurship in general. First is called Predictable Revenue, and it’s written by a guy or one of the guys who built the sales pipeline or the sales force at salesforce.com, and it’s an interesting book. I found that I got a little bit out of the first couple of chapters, but overall it’s about scaling a sales organization, so if you are not going to be scaling a sales organization, I would not recommend this book.
[04:12] He does have something early on and he hints at cold calling 2.0, and he talks about it and you are all intrigued and he really builds it up, and then when he gets to it, it’s cold emailing, it is getting a list of people and cold emailing them with a certain technique and I am like oh that was a big let down, I imagined that they maybe partially responsible for all the cold emails I get pitching me different products now, it’s not spam technically right it’s not stuff that it is getting spam, but it is people sending it through like YesWare and Tout app and that kind of a stuff, overall probably for our audience not really worth reading.
[04:41] Two that I think would be interesting to our audience, one is called Hatching Twitter, I think I mentioned it in our previous broadcast and a very, very good story of the beginnings of Twitter, and just all the chaos, the soap opera that went along with that. The other one that I just listened to is called Things A Little Bird Told Me, and this is Biz Stone, he is one of the co-founders of Twitter, it’s kind of his story, it’s a life story, and so his early stories aren’t as interesting as you know once he starts doing tech stuff, but he does a good job of kind of taking lessons away from different parts of his life, and linking them into his startup success.
[05:13] Rob: I have a lot of respect for Biz, he just seems to be, seems to be a hardworking legitimate guy, he didn’t stab much people in the back, I guess I have respect for him, so Things A Little Bird Told To Me is good, but I definitely would recommend you add it to you Audible list. The last one I will talk about is another one that I would recommend, and when it started off it is called Contagious, when it started off, I was thinking you know this is just like every other book about virality, and it’s going to focus solely on B2C stuff, and it’s all about viral videos, and it’s about the blend tech, you know will blend videos and it’s about that kind of stuff and to be honest it did have a lot of B2C leanings, but what I found is that he lays out five discrete steps, that makes something contagious, but what I liked about it is that, just listening to it I almost turned it off but once I started taking each of the points he talked about, when I started specifically applying it to Drip. It really started making a difference, and I actually was able to take a bunch of notes from it, like actual action steps, that I am going to either think about with Drip, or that I am going to implement on Drip and it’s ways to make it something that is easier for people to talk about and makes it more interesting for people who are using it, so I think if you have a product and you can apply this to it even if you are not in a B2C niche. I think Contagious is good for you. I think if you don’t have a product, and you are still kind of looking to launch or pre-launch or whatever I don’t think it’s going to necessarily give you a lot of value.
[06:34] Mike: I think that’s one of the big problems I have with a lot of business type books, it’s very difficult to find ones where you can get actionable stuff that comes out.
[06:43] Rob: I know when I read business books I really try to stick to specific niches that actually relate to us, because most books are like for the Fortune 500 VP of sales, and when you start reading you are like this does nothing to do with what I am doing.
[06:57] Mike: Yeah it’s just not relevant in any way, shape or form.
[06:59] Rob: Yeah exactly.
[07:01] Mike : But I think the only other thing I have is my wife finally opened up her own fitness studio in town, so I have been helping her through all of the “essential but unimportant aspects of setting up her business”….
[07:11] Rob: What are those?
[07:12] Mike: Well those are the things like filing the paperwork, and making sure that you get a checking account and things like that, you know it’s like the stuff that you need to do but doesn’t actually do anything for your business.
[07:20] Rob: Yeah so how come she gave that to you?
[07:22] Mike: It’s not that she gave it to me, she was asking for my advice on how to do different things and how to structure different stuff, and since I have done some of the stuff before, it makes it easy to…I’m east to access, I guess.
[07:31] Rob: Sure, sure.
[07:33] Mike: So just because I have gone through it a bunch of different times for several different businesses, you know I went down to the bank with her to help her out and just to help her ask like the right questions, and then in terms of the business paperwork going to the county clerk she actually did all that stuff, I didn’t, but then in terms of getting her lease straightened out you know I gave her some advice on that, and I think that the beneficial thing is that now that I am home all the time, it’s actually kind of allowed her to get herself in a position where she can open up a studio, because before when I was on the road all the time, it’s hard for her to have a studio because my schedules in flux which means that she can’t have a set schedule for her fitness studio. So having both of us at home is actually is going to be quite a bit more beneficial that I had probably thought it was in the past.
[08:13] Rob: Yeah sure that’s kind of a side effect I wouldn’t have thought about but it totally makes sense. Nice to mean it’s extra income that you wouldn’t have had. It’s pretty cool, congratulations.
[08:20]Music
[08:25] Mike: I guess we’ll piggyback a little bit on the book recommendations that you had, but this episode is kind of a summary of a method that I had picked up from Chapter 6 of a book called Eat That Frog, 21 Ways to Stop Procrastinating, Improve Your Organizational Skills and Get More Done in Less Time, the book is by Brian Tracy. And this episode is just gonna to be one chapter the book, there is another 20 interesting ideas that are in there which if you are struggling with time management or procrastination or anything like that, you know there is a lot of different things in there that could certainly help you out, but I primarily picked it up because I have been looking at a lot of different things on time management and getting more things done faster, and this was definitely a way to do that.
[09:01] Mike: So the specific techniques that we are going to talk about today is I have actually used a variation of it for quite some time, but it was really interesting to see a much more formalized structure of this mechanism, so I have kind of restructured a little bit of how I am handling it. But the basics of it is that what Brian Tracy lays out is that the Step 1 is to write out your to do list, so you lay down every single thing that it is, that you have to, you know anything where you can list them out, I actually use Trello for my variation of this strategy, and then once you’ve done that, Step 2 is to assign each item to a specific category, so the categories are labeled A, B,C,D, and E and we will go through each of them.
[09:39] Mike: The first one is A, A stands for Very important, it’s something that you absolutely must do and if you don’t do it, there are serious negative consequences, if you don’t do it, so examples of that would be, if you don’t pay your bills when it’s due in 2 or 3 days, it’s like that’s something that you really have to do, and if you don’t do it, like a mortgage payment for example then something like that, although it is not business related it is I will say life related, and because of that it falls into your to do list, so you have to pay the mortgage and it’s got to get done and it’s got to get done very, very quickly and if you don’t do it, then you are going to get into smack with late fees, and then on top of that it could end up on your credit report, if you don’t do it for long enough.
[10:18] Rob: Right and I think another example probably dealing with business is like paying your taxes, or getting deliverable to a client, or getting someone who is trying to use your App to the next step of onboarding, if you are doing kind of intensive high touch sales type of stuff, I realize that one could be bumped to B where it’s just important, but I would say if you are going to be losing revenue or having to pay a penalty or something then that would stand in A, like A is revenue driving stuff, but I would say that probably in A marketing tasks would not go there, not unless they are super time critical, like it’s a Black Friday, promotion and it has to go on that day, and it’s Wednesday of that week, and then your Black Friday email drafting would go into very important, but if it’s not time sensitive if it’s just like drafting copy for a new ad or trying to run a new campaign or exploring stuff I would say that would go on lower priority stuff.
[11:11] Mike: That’s right. So as you are kind of alluded to B stands for Important, it’s something you should do, it’s not as important as your A task. But you know there is relatively minor consequences for not completing it today, you know as you said some of the marketing tasks if you don’t finish rewriting your webpage today, then you can always come back to it tomorrow and it’s not that big a deal. Sure, you know it’s going to get pushed out and there are things that it would be nice to have it done today, but it’s not so critical, it’s not time sensitive in most cases, but as you said if there are times where, you know you’ve got a deadline of some kind. Let’s say that there is marketing materials that you’ve got to get out for a press release, because it’s coinciding with a launch event, sure those things will fall into an A task, but otherwise if you don’t have a lot of things that are kind of coming in together all at once, they would probably fall into the B category.
[11:58] Rob: Yeah this is where the majority of my tasks fall, as a kind of day to day marketing startups and doing conferences, and doing the Podcast and all that stuff. I think the stuff moves into the A point, where A it is going to cost me money, B it is going to make me money, and I am going to lose that if I don’t do it, or C it’s a deadline like you and I are going to be recording the podcast at 2:00 o’clock and it’s 1:00 o’clock and I need to outline it. Right? So then it’s very important because otherwise I am really, basically have like a hard deadline that I really can’t push off, so I think B is kind of where the bulk of my stuff that I ever do is where I want to prioritizing it, and I to be honest I don’t use A, B, C, D, E, I don’t like but I really like the idea of it right now, based on your previous mention I just have two Trello boards one is my to do A, and then I have to do B, and A is not critical important stuff. It’s kind of everything I am working on and then B is stuff that I want to do long-term or that it is less important and I rarely get to my B, but I like the idea, you know once we get down to D and E and people hear about those, I think I am going to be adding those to my Trello boards as well.
[13:03] Mike: One of the things you kind of mentioned was that you know a lot of the stuff that you work on kind of falls into the B category, what I found is that things kind of move from one category into the next based on how close you are to the deadline. So for example something might start out as a B task and then it moves into an A Task as the deadline gets closer because you push it off, because you got other things that are kind of more important, but then that deadline comes up and you move it from B to A because you’ve got to work on it now because you are not going to have time later on.
[13:32] Rob: And you know I think this is why early stage startups are so hard, because there isn’t so much that has such a strict deadline, and there isn’t so much that is going to make you money, or cost you money when you pre-launch, and you are just trying to get to launch. Right? So it’s hard to prioritize because everything kind of falls into B, and then you need to go with your gut of what’s going to have the most impact, either to your motivation or to getting you closer to launch, and that’s where I do think it’s tricky and there is a lot of judgment calls, and to what task should you step to next.
[14:06] Mike: Yeah, and I think a lot of those things you know for example things like the billing code, that’s something that typically you would say, “oh well I have got to get this done and it’s pretty important”, but at the same time until you start getting customers the billing code just doesn’t matter, so the reality is you could almost push that into the C category which stands for things that are nice to do but are not as important as A or B, and there is no negative consequences for not completing it, so if I don’t do the billing code today, and I don’t have any customers it really doesn’t matter. If I don’t do the billing code for 3 months, and I have 5 or 10 customers, the reality is that it probably still doesn’t matter that much. It’s only when going through the billing process is so cumbersome that it’s actually costing you a lot of time and effort to do it. That’s when it should probably progress into a B or an A task, because you want to be able to scale but that becomes a limiting factor in your business. So if it’s a time crunch or some kind or if it’s becoming a limitation on your business and how quickly you can move and how many things you can get done that’s kind of in my mind, when it can move from C to B to A and then there is things where you just completely miss the deadline, and it completely goes from A to okay well why am I going to even bother doing this.
[15:17] Rob: Yeah we were at somewhere between 12 and 15 essentially paying customers with Drip before I had billing code rolled, and I was just doing manual billing, I had a bunch of calendar reminders that would pop up every 30 days, and I would bill a person for the next month and it wasn’t even that time consuming. I did it myself, I didn’t even delegate it to anyone. And that was my MVP for my billing engine was me sitting there clicking a button and entering a dollar amount, billing code definitely fell into C at that point. What else I think is interesting is how this applies to your email inbox as well, and I know emails are a form of to dos, but you know I have been traveling a lot over the past couple of years and when I leave for 2, 3, 4 weeks and I don’t answer anything except for an A email during that time, I find that a lot of the C emails disappear by the time I get back, and what I mean by that it’s still in my inbox they are irrelevant and I never needed to respond, either the person figures the stuff out, or it just wasn’t really that important. Whereas if I am sitting here in my office and I am checking email every couple of hours. I feel the need to respond to those but when you are on vacation, it’s like an excuse to maybe not even on vacation just traveling right, it’s kind of an excuse to not have to answer those, and I actually think that’s better for your time management overall, and I think it forces you into the time constraint of you know what if I could only work 1 hour a day, which was something I did all of October last year, and you know what it wasn’t actually that bad, we launched to 600 people because Drip wasn’t live yet, we launched to 600 people in October, and everything was in place to handle that, and there were no major fallouts not only with that launch but all the other businesses and all the other things that I am working on, it all turned out okay, so they really do have this kind of false sense I think of needing to work 8 hours a day or more on things, having more time really doesn’t make you necessarily more efficient, and if you choose which things to put in your A’s and B’s and you can ignore the others I really think that you can get more power out of the hours a day that you do work.
[17:13] Mike: People use going on vacation as an excuse to not replying to emails. I was listening to the Tim Farris Podcast, it’s called the Tim Farris Show, he had a guest on, I think it was the episode where we had Neil Strauss on, who is the author of The Game, and he was asking Neil what his thoughts were on email, and how he gets things done, and one of the things that came out of it, was that he does not even actually have internet access, so he can’t check his email during most of the day, he has this software installed that it’s aimed at keeping your kids safe, and making sure that they can only access the internet while you are around. Well he has it in place but his wife has the password, and it only opens up during two hours of the day, so he literally cannot check his email or do anything online unless his wife is there, to put in the password for him during these two hours of the day, so he is kind of taking it to an extreme level.
[18:05] Rob: I heard that too and what I really loved about it was his quote he said “It’s amazing how quickly you can get through email when you know you only have 60 minutes to do it.” And that’s it, you force that you put an artificial constraint on it, and you will crank through things, things that you would take 3 hours to do, you can get done in 60 minutes, if you just hustle through it.
[18:23] Mike: So we’ve talked about A, B and C tasks so far, let’s talk about the D task, the D in this system stands for delegate, and these are the tasks that you can assign to somebody else who can do that job instead of you. And you know we are kind of big proponents on the show about doing a lot of outsourcing and taking things off your plate, recording screen casts, and setting up standard operating documents and procedures, and handing those things off to other people. But really if you are taking a look at your task, there is a lot of things that if you are looking through your task, before you even get started, and you are going to find that there is a ton of stuff on there, that you just cannot possibly finish all of it in any given day, and in fact most of it is going to take you a very long time, and I think one of the big fallacies or myths that I kind of got caught by very early on was that all if once I scale to a certain amount of revenue and have enough people working for me, I will have enough time to get all of this stuff done, I will never be in a situation where my to do list will outstrip my ability to actually get stuffed done because I got to hand these things off to people where I can get all the stuff that’s not important off my plate.
[19:25] But reality is that, you can’t I mean there is only so much that you can do no matter what. In order to get a lot of these things done, you are going to have to delegate it, you are going to have to outsource it to some people, and whether that’s accounting stuff or whether its’ programming or marketing or you know you can bring other people in to do some of that stuff for you, but the key is to be able to concretely identify what it is that you can outsource and what you can’t.
[19:50] Rob: What I like about the system is, he is basically having you decide if it’s a D right when you come up with a task, and so you are kind of doing it in bulk, what I do is I just this A and B list. I put everything in A that I am working on, and when I get to a task, I ask myself can I delegate it, can I eliminate this task, that means that I am processing each one individually and I don’t think it is efficient as what he has.
[20:13] Mike: You know what I found out is that I tend to forget that stuff so like if I am going through my to do list I will get to something, and I just immediately think, okay I got to get this done and it doesn’t necessarily occur to me that oh insert this if statement and say hey can I delegate this, and if not, you know then do it but otherwise if I can then figure out how to delegate. I tend to get into the mode of getting things done and going through that list and I don’t stop to think at the beginning of each one to you know see if I can delegate it.
[20:41] Rob: Right. Yeah, I think I have gotten into a habit, a pretty good habit of, every task that I get, every email I get and everything in my to do list that the first question I ask is can I delegate it, and it’s taking a while to get into that habit. There are two points this week one was I emailed you about it actually the audio player inside the Micropreneur Academy started having problems and our audio files were fine, but if you played it in the browser, it was all chunky and I went around tried to figure out what it was, turns out there is a new version of it that works in new browsers, we had to update 89 pages because of the way it is a WordPress thing, and it’s an individual post. So my first thought was “Boy! I am sure not going to go through it and update 89 pages,” even though it was a little bit of a technical thing where you had to update some java script and make a couple of changes but instead of going through and doing it, which probably would have taken me who knows maybe 20 minutes, maybe 30 minutes it wasn’t be another world instead of doing that I recorded a screen cast really quick, and poof it was just gone like magic right I mean I got it and emailed back 6 hours later whatever and Andy had taken care of it, and there was another point where someone emailed and they wanted an invoice for a MicroConf Europe ticket they purchased, and again how long does that take, you know it takes 5 minutes maybe to get a Word format up and we have a template already and you enter some info but instead shot off an email, and just had replied directly to that guy I don’t need to see this again you know, and both of those are small examples of delegation. They are not things that are going to save me, hours a week, but by combining a bunch of those together and considering I get 10 things a week like that come up, it actually does save me hours a week.
[22:13] Mike: Yeah the bottom-line there is that all of those different things that you delegate they add up. I mean even if you are only saving 5 or 10 minutes for 5 or 6 different tasks, I mean if you just saved yourself half an hour out of the day, you know that’s a significant chunk of the day, that you just freed up to do other things. So let’s move onto E, E stands for Eliminate, if at any time if it’s ever possible to just eliminate something, because it’s not important, go ahead and do it, if it’s something that you deem to be qualified for elimination, then chances are that it’s just not good enough for you to do. I mean it’s not even worth your time to go through the effort of delegating it to somebody just to get it done.
[22:52] Rob: I feel like in my system I do this before I add stuff to the to do list at all, I have a pretty itchy trigger finger, so when new tasks come up I will just fire them off to my Trello board via email, but before I do that I have a pretty heavy filter like do I actually need to do this, so I rarely go through my to do list and eliminate things, I feel like I eliminate them in advance, right and I don’t actually put them on the to do list.
[23:16] Mike: I think one of the more interesting examples of where you could use this, this E step is if you are brainstorming with people on your team and you just, you know when you are brainstorming stuff you don’t want to throw anything away, you just want to throw ideas out there, write them down and get them out, and then discuss them after the fact. So I think that’s very key part of the process where you can brainstorm just throw the stuff on paper and instead of eliminating it before you add it to the to do list, you do it afterwards kind of that batching process. Another place where that might come up is the customer suggestions that come in that are just so off the wall, those are places where I could see it being used as well.
[23:52] Rob: Yeah I do have a list in Trello which is obviously a collection of the little Trello cards and it’s just called future, and it’s stuff that I think we want to do, but it’s some bigger picture projects that haven’t been flushed out into individual steps. And I would definitely want to track it, it’s not something should be eliminated it can’t be delegated yet, it will probably be delegated to maybe multiple people or it’s a pretty in depth spec that’s needed to give to a developer, and it’s stuff that’s not critical to get done now, but it’s kind of like a future marketing idea that needs some coding or an E-book written or something like that, so I do have a future board and I think that will probably fit into my I guess that’s like my C, but realistically I think that might be a combination of C and D for me.
[24:35] Mike: So we will just quickly recap on the ABCDE method: A stands for Very Important, and it’s things that you have to do, B stands for Important and something that you should do, C is something that is nice to do, D stands for delegate and E stands for eliminate, so if you are interested in hearing more about this particular book, again this is just chapter 6 of Eat That Frog, there is 20 other time management and organization management skills that you can learn through the book, it’s only $9 on Amazon. It’s a very, very short book but if you want to speed through it even faster which you can do is you can skip to the end of each chapter, and at the very end of each chapter there is probably 2 or 3 paragraphs, where it just summarizes the content of the chapter itself, and you can get a very quick overview of some of the different things are that they are talking about in depth, and if there is anything that you don’t understand, you can just flip back through the chapter and read it a little bit more, but the book itself I think is only about a 120 pages or so, it’s pretty short.
[25:29] Rob: If you’ve listened to this episode and you have a question for us, you can email us at questions@startsupsfortherestofus.com, we also have a voice mail number, it’s 888-801-9690, you can subscribe to us in iTunes by searching for startups or by RSS at StartupsFortheRestofUs.com where we also include a full transcript of each episode, our theme music is an excerpt from We’re Out of Control by MoOt and it is used under Creative Commons. Thanks for listening, see you next time.