Show Notes
In this episode of Startups For The Rest Of Us, Mike interviews Jordan Gal, Cofounder of CartHook, about his lessons learned from doing demos for customers. Jordan gives a background on CartHook as well as the journey from one-on-one demos to the possibilities of scaling the sales process.
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Transcript
Mike [00:00]: In this episode of Startups for the Rest of Us, I’m going to be talking to Jordan Gal of CartHook about lessons learnt from requiring demos for new customers. Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at building, launching and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.
Jordan [00:24]: And I’m Jordan.
Mike [00:25]: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. How you doing this week Jordan?
Jordan [00:29]: I’m doing well. I just want to be able to say the word ‘episode’ like Rob does, like super fast episode. I’m doing well. You caught me at a busy, hectic, fun kind of week and I’m excited to talk about this. This is the topic of conversation internally for us also.
Mike [00:45]: I just want to give the listeners a brief introduction to you. You are the co-founder of CartHook. You’ve also spoken at Micro Conf; you are the co-host of the Bootstrapped Web. What else am I missing? There’s got to be other things
Jordan [00:57]: It’s mostly dad and sleeping. I’ve got three kids under five years old plus all the business stuff.
Mike [01:03]: So more dad and less sleeping is what you’re saying?
Jordan [01:05]: Yeah and I’ve gone into the bad habit of staying up late working because I do demos all day. I have four demos today and that squeezes out the ability to get work done so I end up doing it at night, which isn’t sustainable but it’s working right now.
Mike [01:18]: I did one this morning, so I know how you’re feeling about that. Before we get into this, I think that we should probably start at the beginning with CartHook and why don’t you give the listeners a brief background on exactly what CartHook is and what it does so that as we get into this discussion about whether or not you should evaluate whether or not you’re going to require demos for new customers or not that people have at least a background to work from.
Jordan [01:43]: Sure. I’ll give the very quick history and what led us to where we are now and how that fits into demos. We started the company with a cart abandonment product for e-commerce stores. What that means is we capture the email address of visitors to the checkout page on the e-commerce store that’s using our product and then once we capture that email address of the customer, if they don’t complete the purchase within 60 minutes, we then consider it abandoned and we start sending them a three part email campaign designed to bring them back to the e-commerce store to finish the purchase. A lot of us have received these types of emails in the past. What we do is enable small medium merchants to do it. That’s where the company started off. We worked on that for about a year, maybe a little more, and then we uncovered an idea for another product that we decided to tackle and the product that we’ve been working on is a check-out product and what it does is it replaces the check-out process of Shopify stores. Shopify is an amazing platform but their checkout process is very rigid and you can’t customize it and so forth. What we do is give a customizable, one page checkout and it also enables something called post-purchase up sales which are very hot in the e-commerce industry right now. That’s what we’re doing and the way we led into demos is because a new product, you don’t know what the on-boarding should look like, you need feedback, you want to talk to as many people as possible. That’s how we got into the demo thing to begin with for the new product.
Mike [03:11]: Got it. Just for the listeners’ background, Shopify is essentially an e-commerce platform where people can sell their stuff and I’ll use that phrase very broadly. But there’s a bunch of different platforms out there where people can basically create an online store and Shopify is one of the platforms that people can use. You’ve really focused specifically on this platform.
Jordan [03:31]: Yes, they’re super hot in this space. They just IPOed; they have an amazing developer eco-system. They have become the default choice for merchants selling physical products online. That’s where we play.
Mike [03:46]: Okay. Let’s dive into a little bit around the idea of these demos. Previously with CartHook, you just had one product before and were you requiring a demo for that or no?
Jordan [03:56]: No. We had a demo page so if someone didn’t want to sign up on their own, they could request a demo and we would get that pretty rarely; either people who really wanted to be hands on and ask questions or larger companies that were used to that process. But 95% of our sign-ups just came through self-serve sign-up, on-boarding, that sort of thing.
Mike [04:18]: Okay.
Jordan [04:18]: That was for the original product. The new product, what really happened, we worked on this product for a while with a lot of early users and then we opened up sign-ups and we got flooded. We had like 100 sign-ups in 10 days and we were not ready for it and totally messed it up and most of them left because the product wasn’t ready and we weren’t ready, the on-boarding wasn’t there so we said, “How do we slow down the rate of sign-ups while also getting a better feel for what our customers want, what we’re doing right, what we’re doing wrong?” We said we are going to do two things; we’re going to raise the price and we were going to require demos. It definitely slowed things down. The interesting thing is the other effects it had like it didn’t change demand very much. That’s how we got into-we used one on one demos specifically as a mechanism to slow things down and to learn more.
Mike [05:14]: That seems a little counter intuitive, where you would want to slow things down. You think of startup like, Oh they want to move as quickly as possible but you’re going in the opposite direction and I think it might be beneficial to explore exactly why that is. You’re talking about things, exploring, you’re going sideways and people leaving. What sort of things-I don’t want to point out specific people or anything like that. But really what types of things go sideways when you have too many people coming in?
Jordan [05:39]: It’s just the nature of our product that we had to learn about. It’s a fact we had to face. This product that we took on is [?] and not simple and we have a team. Then it was four people. Now it’s five. We bit off a lot. What that meant is that the product was going to take a while. You’re always like, “Oh, yeah, you’ll have an MVP up in three months,” and it’s not usually three months and this is a complex product. We just had to face the fact that it was going to take longer to get the product to a place where we could take on a lot of sign-ups successfully. We didn’t want to ruin our reputation. We didn’t want just let people in, the product wouldn’t be ready and they would just leave. It’s hard to get a second chance with people. We just thought strategically, okay, we don’t really have a choice. I’d love to go as fast as possible. I’m the one guy in the marketing side and everyone else is on the tech side. It has caused a lot of frustrations in terms of, “Guys, we need to go faster,” but it’s almost like they had to pull me into the tech side and educate me a little bit about what was happening and once I learned more about it, I understood, “Okay, this is not the time to rush; this is the time to be patient,” which was painful but it was necessary.
Mike [06:55]: It’s really about slowing down the number of people that are coming in more or less because you don’t want to burn the relationships of those people and leave a bad taste in their mouths when they sign up and maybe something doesn’t work or it doesn’t do everything that they want because down the road your hope is eventually you would get them as a customer. But if you don’t have the features in place that they really desperately need right now, they’re just never going to convert because then they’ll look at your product in a negative life basically forever. You only have that one chance.
Jordan [07:21]: Right and it goes against everything that I want or would give advice on. It’s just that the nature of the product is that so many things have to be perfect. It’s not like this core feature that we offer works. The other things, not so much but people still get value out of it. To get value out of a checkout product, so many things have to be perfect because if you mess anything up on a checkout page, people don’t convert and we’re going up against Shopify’s checkout page. Their alternative is to do nothing and Shopify is this $5 billion behemoth and their checkout page is amazing. We have to compete with that. It was just going to take a while to get page-load perfect, Facebook tracking perfect, credit card perfect, PayPal perfect. If you mess any of those things up, the person wasn’t going to get the core value. We had to deal with that fact.
Mike [08:10]: All those things you just mentioned, those are technical aspects of the product itself. What about the sale and marketing side of things? If you build in a product yourself, one of the things that come to mind is that if you are a developer, you look at the techs [?] and you say, “Hey, I just want to work on these stuff because I know how to do that,” and it makes it easier for you to do it. There’s this whole other world to you as a developer that all the marketing and sales stuff, you’ve got no idea. A lot of people will put it off and I’ve certainly succumbed to that as well in the past. The reality is that when you get into that position, there is a lot to do on both sides of it and if you’re just one person, it’s hard to juggle both of those. But you’ve already got a team in place. You’ve got four or five people there and you’re apparently having trouble dealing with stuff on the tech side, not because the team isn’t good. It’s just there’s so much stuff to do that needs to be perfect. On the marketing side, that is also the case in many respects. You’ve got all these things that need to be prefect in terms of your learning page, contact marketing, SCO, there’s all these stuff that goes with it that makes that difficult as well. If you have a really tiny team, if it’s only one or two people, juggling both of those at the same time, it just makes it astronomically difficult.
Jordan [09:21]: It’s been difficult.
Mike [09:22]: Okay.
Jordan [09:24]: Yap, you’re 100% right. Again a lot of these, if I look back objectively, a lot of these is going against what I would think is the right thing. It’s just that we’re just making the best decisions given the information that we have. It’s been a team effort for months of I get a demo, I get a customer, I pass it off, I learn a lot, I take that knowledge, I transfer it over to the tech team, they work with the customer, then they give me feedback. It’s been this knowledge transfer back and forth but the raw material for that process is users but not too many, right? If we had 10 sign-ups a day, it would be a mess. We wouldn’t learn nearly as much. We would just be dealing and putting out fires. But if you passing out one new sign-up a day, all of a sudden it’s more manageable and you learn a lot more. We also learn about who the right customers were for us. We’ve had one customer that just has done really well the whole time. That gives us this north star of like, all right, they are getting amazing value out of the product. They’re making a lot more money. They keep spending more on ads. They keep making more money. Their business is growing, they’re hiring and we are like, “We know we can do it.” That’s the thing that kept us going when we were like, “Jesus, this maybe just too hard.” The demo is the initial part of the process. It’s like, “Okay, talk to someone, figure it out and then put them into the tech side,” and then we learn back and forth from one another.
Mike [10:53]: That learning process actually helps you short circuit a lot of the other problems that you might run into where, with sales and marketing, sometimes you put a learning page out there or even just the homepage of your site, you’re not sure which of the benefits that you should highlight because you haven’t talked to enough people. You start guessing then you’re shooting in the dark and this short circuits that whole problem because you’re talking to those people, you’re making notes, you’re getting more direct contact with these people and you’re getting the marketing lingo in their terms that they would use versus the things that you know because you’ve researched the problem extensively and you have your own terminology for it. By gathering that stuff, you are helping to not have to shoot in the dark and not make guesses and then wait two, four even twelve weeks to see if it made any difference in the number of sign-ups and trials coming in.
Jordan [11:44]: Yeah. It got to the point where we didn’t update our marketing site on purpose. Our marketing site talked about version one of the product where it didn’t even work inside the Shopify store. It only worked as a bridge between your learning page and your Shopify store. If that sounds confusing, you’re not alone. It was impossible to describe accurately. We had our marketing site talk about that version, the first version of the product that only worked with the learning page. We didn’t even change the marketing site till about two months after we had started working directly inside the Shopify store because we knew just stating that was going to drive demand so much higher that we just avoided it. We just said, “No, we’re getting a few demos a day. We don’t need more. Let’s just leave it alone.” I would never recommend that to someone. It sounds ridiculous. Here’s another sin to admit to. We don’t really do any marketing or advertising. It’s literally a build-it-and-they-will-come scenario only in this situation I’m 100% convinced it’s right because the demand for the product is so high. We’re not even doing content. We just don’t talk. We say nothing. Just word of mouth out there and a few Facebook posts and that sort of thing is enough to drive a few demos a day and we just left it like that, up until a week ago.
Mike [13:05]: If you’re getting enough to keep you busy and move things along at the right pace, it’s perfectly okay to do that. When you make a mistake of saying, “If I make the product perfect, everything will work out,” but you don’t also have the accompanying number of sign-ups, I think that’s when people get into trouble.
Jordan [13:24]: Right. If you’re not talking to anyone and you’re guessing that you have the perfect product, that’s dangerous. If you’re talking to 15, 20 people every single week and they’re telling you, “Wow, this is exactly what I’ve been looking for,” then it gives you the confidence to say, “All right, let’s just get this right and then when we make the big reveal, it will work.”
Mike [13:42]: Right. I just want to make that clear to the listener that building the perfect product is not the solution if you don’t also have the accompanying number of people that are coming through your sales funnel. If you have that mentality and your sales funnel is empty and you’re not talking to anybody, then that’s the problem. It’s not about the product being perfect. It won’t matter. You need to talk to people. You need to have that marketing stuff in place. Going back to the marketing side of things a little bit, you said that you really don’t talk about a lot of things on the website, at least some of the advance features and the other stuff around the new product, how do you go about qualifying people in advance of the demo? I think there’s a certain amount of information that you need to gather from people and you don’t want to just give a demo to anybody. That’s a mistake because you’re going to end up with those people who give you an email address and you’ve got nothing to go on and you have no idea whether you’re just completely wasting your time or not. What sorts of things do you guys do?
Jordan [14:35]: At first I was happy to talk to anyone. If you read something about the product and you want to talk about it, let’s talk. As things progressed, you start to see that as, “Okay, this is a complete waste of time so let’s start adding a little bit.” On our site, if you go to carthook.com/checkout, you go to the pricing section and it has a few tiers and each tier has the same call to action. It’s just ‘schedule a demo’. When you click on that, you go over to carthook.com/demo. That’s just a really simple form that asks you for a few pieces of information; name, email, phone number is optional, your website address and then we’re just real straightforward. Our pricing is based on revenue and so this form is based on revenue. It just says, “What is your monthly revenue.” We just ask people how much you make. How seriously should I take this meeting? It’s real straightforward because we have two products; we ask which product are you interested in, the funnel product or the cart abandonment product? Almost everyone says funnel of both. That’s what starts off our process. We haven’t wired up into Slack. When we see something come in and it’s the highest here is over 100K a month, that’s just exciting. When it’s under 10K, we just look at it and say, “Okay, opportunity to talk to someone but not as exciting.” The one lesson I have learnt is that, that is far from perfect. Some of our biggest customers came in and identified themselves as less than 10K because the site was new, technically less that 10K but these people are very experienced with big budgets. It’s a little dangerous but we don’t do a survey or form. What we really wanted to do with this was slow things down but not put up too much friction. It’s just a form, you fill that form out, I get an email. After you fill the form out, the page changes and you can see a calendar link to grab a time on my calendar. If you don’t grab it there, then I’ll go to the email that comes in and I have a save-reply and I say, “Hey, nice to meet you. Here’s my calendar link, grab a time.” That’s how we start the process.
Mike [16:37]: It’s interesting that you use the monthly revenue as the qualifier for that. You’re probably much further along than I am just because you’ve got the two different products that you’re working with but I actually look for a lot more information than you do. I’ve got like a full blown form where when somebody comes to the Blue Tick website, they can enter in their email address for early access and it’s all I had asked them for initially. Once they do that, it takes them to a survey page that says, “Hey, great. Now we’d like some more information from you,” and ask where they heard about it, what do they find most appealing, how do they think it would help them, their top questions. I ask them to describe what their current follow-up process is because one of the things that I want to make sure is do they have one in place right now because if they don’t, I’m going to be doing way too much hand-holding and I’m going to be educating them. If you go to the mass market with a product, then, sure, educating people on how to do that is fine but what I’m really looking for is those people who are well qualified, who are going to essentially be more self-sufficient. Do you find that there are certain types of questions that you’re asked during a demo that help you narrow down whether or not somebody is well qualified for your product that would be very difficult to ask on a form?
Jordan [17:49]: I think it depends on your goal. If you only want to talk to people who are well qualified, I would use a form. In our case, we don’t want to only talk to a very specific segment. We just wanted to slow it down. We just wanted to put a barrier in place as opposed to you put up a higher barrier. You’re saying, “No, I really only want to talk to you if you’re right for me,” which sounds like the right approach when the product is earlier on. For us, it’s a little later on the product but we just wanted to slow it down. You can play with how much you ask how much time commitment you’re asking. Not only are you getting the information from that form but the person who filled out your form spent 10 to 15 minutes on that form. They’re motivated. When you have a conversation with them, it’s in that context, “All right, this is a real opportunity.” For us we didn’t want that. We wanted higher numbers but slow. What I do is I save those questions for the actual demo. After someone schedules something on [?] does its thing. It sends out a reminder on the day before and an hour before. In addition to that what I found works is if I go in and manually send them an email 15 minutes before. I just look at my calendar for the day, I set my iPhone and I set alarms for 15 minutes before each appointment a, so that I don’t forget and b it tells me, “Hey, send that email.” I go to Gmail, just super manual because you can tell that it’s manual. I have a ‘save-reply’ so it takes me 10 seconds to do. It says, “Hey, look forward to speaking with you in about 15 minutes. Here is the link to join the call.” After you do that, you can also join the audio,” because good lord did I have trouble the first week or two of like, “No, no, no click on the freaking phone button or call in the number.” Yeah, you have to be good at anticipating that. One of the tricky things is the way you see it-for me I use ‘join me’ which I like a lot-the way you see the ‘join me’ experience is different from the way your customers. You need to test that out yourself to make sure you know what it looks like on their end so you can actually be like, “You know that field where it says ‘your name’? Type in your name and hit knock the button that says ‘knock’ and I will let you in.” I have that in the email.
Mike [19:56]: This is really about identifying what those friction points all along through that is. That’s an entire sales funnel anyway. Getting people to your website getting them through the process of paying you, signing up, on-boarded, demos and all that stuff, there’s all these little touch points or friction points that, as you said, with your checkout products, if everything is not perfect or at least the five or six things are not perfect, then they’re going to leave, churn out or not going to end up paying you. This is the exact same thing though. There’s all these little things like ‘click on the knock button’. That’s not something that’s obvious but after you do it several times, going through this process with the demo, you see those things and you say, “How can I knock out that barrier? How can I eliminate that so that people don’t run into it or when they do, they know what to do? ”
Jordan [20:43]: I had some funny experiences. We love Zoom. We use Zoom internally for our daily standup calls. Our team is fully distributed in New York, Slovenia, here in Portland. We use Zoom and I love it. People are like, “I use Zoom for Demos.” I said, “Cool, I’m dropping ‘join me’ and use Zoom because I love it.” I had the most awkward week of my life because I couldn’t get-Zoom had this bug where you couldn’t disable video from coming on automatically. I have a demo and I send someone to Zoom link and all of a sudden, their camera were turned on and they weren’t expecting it. These days, not everyone works in office. You’re in your house with your cat on your lap and the video comes on and the initial touch point of the demo with me was you be like, “Oh__ my camera.” Oh, excuse me. That was a paid for experience. I had to go back to ‘join me’. I found that, that email 15 minutes before makes the show-up rate go through the roof. When we start the demo, I started off with one question that’s probably my biggest lesson learnt of the entire demo process was to open up the right question at first. That question I’ll give it verbatim, “Before we jump into the product and features and all that, why don’t you tell me about what you’re trying to accomplish and why you decided to spend half an hour of your time with me today.”
Mike [22:03]: That’s awesome.
Jordan [22:04]: Give that because I found that I would start going into the products. We have two main features. You can build two types of funnel and they’re for two different types of customer. I would just start showing them and I would just not know what they were actually trying to do. When I ask that question, first it just gets the conversation rolling more in a consultative way or like you’re talking about your business with another business owner. I’m not like a sales person that’s giving you a demo of a product I’m trying to sell you. It laid that context down to begin with. And then it told me how to tell the presentation, which main feature should I talk about first? How patient or impatient is this person on the phone? How fast are they talking? It gives you an idea of how to handle the conversation to begin with.
Mike [22:53]: I love the way that you phrase that question. It’s much better than the direction that I go so I will totally steal that.
Jordan [22:58]: It’s almost self- deprecating.
Mike [22:59]: It is, yes.
Jordan [23:00]: Like, “All the product features,” whatever, whatever. What about you? What are you trying to accomplish?
Mike [23:05]: Right. That also gives you an idea of what sorts of things you can go through in the demo and completely leave out because they were irrelevant. You can cut out 10, 15, 20 minutes out of a demo if you don’t have to go over a bunch of things that are just unrelated to what they’re doing. The other question I like to ask when I’m doing a demo is what other things have you tried? What that does is it gives you an idea of the pain points that they’ve had using other products and why those things didn’t work out and you can talk specifically to, “Well, you won’t have that problem because we do this,” or, “This is how we address that. Oh, you said you had that product? This is what we ‘do and this is how you would get around it or avoid that type of situation.
Jordan [23:43]: Yeah, I think that’s great. That sometimes comes up as a result of that initial question but it would be good to address. I think we don’t –I don’t do this much because I know there aren’t alternatives. There’s one alternative. I almost just focus on how will you drive in traffic? Where are you pushing traffic to? What kind of advertising you’re using and that sort of thing. People just tell me. They tell you exactly why like what’s the main feature that caused them to contact you. I’m interested in on click up sales. They just say that and you’re like, “Okay, this person is interested in this feature or someone else will say, “I just want my checkout page to look like the rest of my site and it’s like, “Okay, design focus person.” This just helps you do things right and focus on the right things.
Mike [24:29]: Something that you mentioned earlier was about the fact that if somebody does not sign up for a meeting with you right away after they have gone through and submitted the request for demo, you reach out to them. It’s interesting that you mention that because I automated that piece of it so in my sales funnel when they go through, they enter in the survey, I have it sent out to Google Spreadsheet, where I look it and basically decide whether it’s qualified or unqualified. There’s a drop-down column that I can use, just tag it as qualified or unqualified. If it’s qualified, then what it will do is it will populate it into Blue Tick. It will make some tag adjustments inside Drip and do some other things and it will invite them to a demo using a custom calendar link and it injects using [?] string variables. That gets sent through Blue Tick and if they do not sign up for a calendar link within a certain timeframe, it automatically sends them another one and it will send several follow-ups. It’s interesting to see that most of the people that end up coming to the demo don’t respond necessarily to that first email that gets sent that says, “Hey, you didn’t fill out the survey,” or, “You didn’t sign up for this yet, are you still interested?” It usually takes the second or the third. It’s interesting to notice that those reminders help. You were talking about sending an email 15 minutes in advance of the meeting. Those are the types of things that really help move people forward. You don’t think of them as a business owner initially but those reminders or those touch points help. What other places have you found that that’s true as well?
Jordan [25:56]: What’s been really helpful and I keep manual still and look, a lot of these is you look at the ideal and then you say, “Should we go for that ideal and spend the time to achieve that ideal in terms of process?” For us we are so jammed on the product side that I just tell the guys, “Don’t worry about making this process perfect. We’re not going to do demos this way forever. Just keep it ghetto and yeah, we’re losing some people but it’s better off.” Even you can acknowledge what it should be and what it isn’t, there’s a difference. That difference is acceptable depending on the situation. One of the things that I do manually that’s a touch point in the process that way is the most important touch point. We require demo, we also hide the registration link. You can’t sign up for our product unless you-some people find it somehow.
Mike [26:44]: There’s always people who do that.
Jordan [26:46]: Always, amazing. Those people churn out and like, “I told you, man.” You come in, you start asking questions and like, “We would have talked about this on the demo.” What I do, at the end of the conversation, is we have a talk about pricing. We make sure we’re on the same page so there aren’t any weird surprised because our product isn’t cheap and then I say, “Okay, what I’m going to do when we hang up is I’m going to send you an email with the registration link.” Depending on the way the meeting goes, if the person is super excited, I’m like, “Awesome, sign up, I’ll get you the email right now. I’ll look for it, pin me on intercom once you’re inside the app. Let’s do this.” If it’s less certain, regardless of how uncertain it is. I just say, I’m going to send you the email with the registration link so you have it in your inbox for whenever you’re ready and then when we hang up I go and I have another saved reply that says, “So great to meet you today, really excited to get you started. Here’s the link to register, let me know if there’s any help that we can give you in getting set up.” Again, it’s another manual email touch point after the conversation that’s tailored if we had a really good conversation, if they are a big potential customer, I will change that email up a little bit to address the specific conversation that we had. It’s another touch point after the demo instead of just hoping that they sign up. It’s, “Here’s the link, something personal, super manual,” and I make sure not to reply to the chain of emails we had before that; totally new, subject line is ‘CartHook Sign up link’. That way if they are ever searching for it in their inbox three weeks from now, it’s easier to find.
Mike [28:17]: One of the things that I think is a real advantage of doing that is it allows you to essentially ask for the sale right there on the call and get a solid yes or no and then be able to have a conversation about that. Before we go into that a little bit, I do want to ask you a question because you aid you had a discussion about pricing with them but don’t you list the pricing on your website?
Jordan [28:38]: We do but to assume that everyone looks at it, things about it, internalizes it and brings it into the conversation, I found is a bad assumption. I used to think that but then they kept being like, “All right, so how much is it?” And then I would say, “Okay, so clearly you didn’t look that hard,” and I would get pushback. Yeah, it needs to be part of the conversation. I know, technically, you’re supposed to do it as early as possible. I think in our current stage, if I hired a salesperson to take over for me, I would probably tell them to ask that question earlier on. The way I’ve done it is to focus on the product and get a lot of feedback on it and assume that they looked at the pricing and at the end confirm. I know I’m doing it ideally but I try to make sure it’s injected to the conversation and a lot of that comes from that initial form that they fill out showing how much they make. If I see over 100K a month, I know I’m going to have explain our pricing because our pricing is 300 bucks a months for up to 50K, 500 bucks a month for up to 100K and then over 100K is custom pricing. I know already in the back of my head that’ I’m ready for that conversation.
Mike [29:48]: It’s interesting that- you and I have taken different approaches on this, where you list your pricing there but if you go to Blue Tick’s website, it won’t tell you what the pricing is. You have to ask. That’s one of the questions that when people fill out my survey, that’s one of the, I’ll say, the tops five questions that people are asking; how much does it cost? We get into that conversation and it’s not really a big deal or anything but you do have to have that conversation. I think you’re right about the fact that some people just don’t look at the pricing. They see the product and they sign up for it or they end up in your sales funnel because of something else and you don’t realize that they may never have even hit your website or they just landed on that demo page and that was it. That’s’ their only interaction with it.
Jordan [30:29]: Yeah, it depends on the situation. We wanted to make sure we did give the pricing. That was part of our qualifier. If we didn’t have the pricing, I don’t know what would happen. If we could get more form people or a lot of people who self-select out of the process just don’t request a demo because they think it’s too expensive.
Mike [30:49]: It depends a lot on your own pricing. Your pricing is significantly higher than mine is but mine is also per user. It could obviously swing the other way. If you had 50 or 100 people that you wanted to put on there. There is a generalization that people will make about a product based on the pricing itself and whether they feel like they fit into that or they can afford it. I look at $300 to $500 a month and I’m like, “I’m not paying for that for a shopping cart.”
Jordan [31:16]: That has been a healthy challenge. When someone asks you that on the phone, it forces you into this position of, “I need to justify this properly.” If you’re full of it, it’s going to sound like you’re full of it. You have to believe that your pricing is right. We have only one competitor that does the same thing we do and they are $37 a month. We get the awkward question of, “So I just- I’m not saying anything bad about your software but just help me understand why you’re 10 to 20 times more expensive.”
Mike [31:49]: I’d go with the analogy of have you ever bought something at Walmart and then bough something similar-like a blender at Walmart and then bought a blender at any other distributor ever?
Jordan [31:49]: Right. You need a really good response to that and being forced to do that while on the phone while someone is looking at your screen, it forced a good answer to come out.
Mike [32:10]: How does the on-boarding come into play because there’s obviously an on-boarding discussion that you have to have to have with people. If people are willing to sign up or want to sign up right at that point, obviously you’re sending them the links and stuff. What about on-boarding? Do you talk about on-boarding sessions with them? How do you pitch that to them? Is that an up-sell or is that included as part of the cost?
Jordan [32:31]: At the end of the conversation, along with the sense I say about when we hang up the phone, I’m going to send you the registration link, the next sense that comes out is, “If you look at my screen right now, that little thing on the bottom right hand corner, that’s intercom chat. That’s where you can talk to us. That goes to me and the tech team. If you ever need anything, we’re right there for you. That’s how you’ll get the quickest response.” That puts people at ease a little and then the difficult lesson I had to learn was I need to hand off. I’m doing three or four demos a day and what would happen is those users, I would follow them into the on-boarding. Once they got into the app, they had the relationship with me. They say, “Hey, Jordan I need help on X.” I needed to stop doing that because I want getting any work done besides doing demos and talking to people on intercom. I had to be like, “Sign up and Ben out CTO will be here for you. Our tech team will be able to help you. I’m always here for you if you need anything.” There was a hand off of the baton of once you go into this product, I’m not your man. That had a very interesting effect actually. What it did is it created this social status thing where they were like, “Oh, that’s the founder I like can’t talk to him. He’s like out of reach. We did the demo but he’s too important for me to ask these support questions,” which is not true but you kind of want it to be true in their minds.
Mike [33:54]: You want to be able to redirect the work efforts or the task that they’re giving you because somebody’s got to deal with them.
Jordan [34:01]: Right. You have to make sure not to put down the tech site. I would always say our CTO, Ben. I’m positioning him like, “This is someone serious that you can talk to as a business owner also. Don’t treat this person as some random technical support that works for sales for us and some call center. No, no, no, you’re lucky to work with our team and we’re going to take good care of you,” which goes along with the higher pricing promise.
Mike [34:31]: Inside of Blue Tick there’s a link where people can click on it, literally says ‘support’ on it and then it takes them over to the helpdesk. It’s hosted helpdesk and there’s a place where they can submit something and all the tickets come directly to me but it almost doesn’t matter. I’d rather than go there-
Jordan [34:46]: It’s a process.
Mike [34:47]: Yeah, it’s all about process. I cover that as part of the demo because as you said, people want to feel comfortable that they’re being taken care of. I tell them, “Look, don’t hit me up on Skype, don’t send me directly an email. Send it to support@bluetick.io. You’ll get taken care of.
Jordan [35:02]: I like that. I’m going to take that because people hit me up on Facebook, Slack, Skype, Email, all over the place. I like that.
Mike [35:11]: I think there is a couple of different ways you can position that. One is that, for example Skype, I am almost never on Skype. The only time I’m on Skype is if I’m there to make a call and record podcasts. There might, very well, be a week between calls if somebody tries to hit me up on Skype. If it’s a support request, this could be a few days or it could easily be a few days. I’ve had several situations where that happens and I’m like, “You’ve got to email me like add support here,” and then I’ll get you taken care of.
Jordan [35:38]: That’s a good lesson for that.
Mike [35:39]: It is.
Jordan [35:40]: It’s tricky. Facebook is a full-blown sales channel. My Facebook Messenger is a full-blown sales channel.
Mike [35:47]: The other thing that It allows you to do is to use that as essentially a repository for information for when you bring on new people to help out with support and then they get to see what kinds of things have been asked before, whether or not it make sense to make a helpdesk article out of stuff. There’s a lot of advantages to that but making sure that they know where to go to get help is also an important part of that demo process.
Jordan [36:10]: Yeah, I like that. I’m going to regret that a lot because we have so much in intercom and intercom search is horrific. It’s just terrible. When we hire someone for customer support that we’re talking about doing in the next few weeks, they’ll have everything there but it will be impossible to find. It will be a lot more painful.
Mike [36:29]: That almost sounds like a product on its own, like intercom search but I think you’ll get run out of business at some point.
Jordan [36:36]: Yeah, eventually we’ll get it right.
Mike [36:39]: We’ve talked a lot about some of the different advantages of going with a sales model where you’re forcing people through a demo first. Is there a point where you have in mind right now, where in the future you’re going to switch over or do you know that at some point in the future you’re going to go in the direction of, “Look, let’s kind of stop these one to one demos,” or is there a hybrid approach that you’re thinking of where people who are well qualified, above a certain point, you’ll do demos for them but below that, you want it to be more self-serve? How do you envision that working out for you in the future? What sorts of data points have you pulled in to make those decisions?
Jordan [37:14]: That is the single, hottest topic of conversation internally in our Slack. What do we do to transition out of one on one demos? What we have found is that there is no one way to do it. You can be as creative as you want. We’ve come up with a hundred different ways to do it. There is going from requiring a demo to completely self-serve. That’s like going all the way. Between where we are right now and doing that, there’s this huge range of creative solutions. I’ll tell you some of the things that we’re considering. We thought about A, just experimenting with opening up completely, not requiring a demo. We always require a credit card but not requiring a demo and just letting people in and then doing that and at the same time me taking the time that I’m spending on demos right now and spend it on creating on-boarding videos, documentation, helpdesk stuff, knowledge stuff. That’s one way to do it. We talked about allowing for sign-up but then as soon as you log in, you get a welcome screen with effectively a 10 to 15 minute demo of the product. We’ve talked about doing that and requiring the person watches it before they can go forward. We’ve talked about letting people sign up. Having more on-boarding videos but not letting them launch. Taking the bottleneck and moving it from the signup process to the launch process. Our product requires one line of code added to their Shopify Store. In the process, they give us access to their Shopify Store, we go in and we add one line of code. We looking at them and say, “Maybe that’s actually an opportunity to slow things down, if and when we want.” Maybe we just let people sign up, let them on-board, let them set up but don’t let the launch and have them do launch appointments instead of demo appointments. Someone on our team can do a quick 15 minute call, “Hey, is the checklist, looks like you’re good. Do you have any questions before you go? Let me take a look at your account. You’re good to go, cool.” We’re still only launching [?] three a day instead of just 10 people a day signing up and just asking a million questions and not knowing what to do and launching before they’re ready and so forth. We’ve also considered keeping the demo requirement but doing a one-to-many approach. We’ve talked about daily webinars, which would still be more efficient than doing four individual appointments a day. We’ve talked about a weekly webinar on Wednesdays. This isn’t like a webinar to sell a product. It’s really like a demo webinar, it’s, “Here is the product,” for 20 minutes and then another half hour of Q and A. We’ve also talked about doing that but doing it recorded. We’ve talked about putting it in between so when you sign up, you just put your email address in there you can watch a recording and then you can have a learning page using called [?] pages. You could have the video and then only have the button pop-up to register after X number of minutes. I could do a 10 minute video and the button doesn’t show up to actually register until X number of minutes. It’s like-
Mike [40:17]: That seems really sneaky.
Jordan [40:20]: It’s like okay, take the email upfront but there is no right way. We can do whatever we want and what we always say, internally, is, it’s all reversible. What’s the worse that happens? We just go back to demos. What’s the worst? It’s time to open up and see what happens. If it’s an absolute mess, we go back to doing one on one demos.
Mike [40:39]: It’s interesting the way that you put that in terms of moving where you’re putting that bottleneck or that artificial throttle line to make sure that people are doing the right things. Initially or at least right now, you’ve got that bottleneck right in front of where they can sign up. They can’t sign up unless they go through the demo. You’ve talked a lot about moving that further in so they can sign up but they can’t really use it. There’s other ways that you can think about that as well, in terms of if you allow people to sign up without a credit card, for example, but as soon as they go to do something where it’s going to create value for them, that’s when you require a credit card. That’s another place that you could presumably put a bottleneck.
Jordan [41:18]:-which is exactly what we do with our other product.
Mike [41:22]: But I think all that boils down to what is it that you’re trying to do and why. It has to be whatever makes sense for your product and customers and making sure that you’re not putting negative stress on the business in certain ways, whether it’s on the servers that are running or on your support staff or you as a founder trying to answer those support calls or on the sales demo process. There’s lots of things that go into that. It’s interesting the way that you put that in terms of all the different decisions that you have ahead of you to figure out like where is the next best place to try this?
Jordan [41:57]: Yeah, we’ve probably run ourselves a little crazy for about a week on it. Now it’s just-now every time I get a new demo request, I just say, “Time I should be working on something else.”
Mike [42:09]: We can probably do an entire episode on the pros and cons of having the bottlenecks in different places but I think we’re a little short on time at this point. Any parting words for the listeners?
Jordan [42:20]: The only thing I’d say as a parting is to ignore what other people tell you to do. There’s this unbelievably impactful tweet I saw recently and all it was ‘stop telling me what to do’. If you read all these headlines and blog posts it’s like, “Do this for this action, then you get this result and like-,” all these advice but in reality, you don’t have to take any of it. You just do whatever is right for your situation. There’s no such things as, “I’m doing it wrong just because I’m not doing it the way [?] does it.” It sounds a little stupid for us to slow down, people signing up for 300 bucks a month but that’s what makes sense for us. My parting words would be just do whatever is right for you, not what you think you’re supposed to be doing given your industry or space or whatever.
Mike [43:08]: Excellent advice there. If people want to follow up with you after the podcast, where can they find you?
Jordan [43:13]: I’m on Twitter @Jordangal and Jordan@carthook.com, if you want to email me and hopefully see you at Micro Conf in a few weeks, depending on when this episode gets published. I’m looking forward to Micro Conf.
Mike [43:25]: And you’re also based out of Portland, Oregon, right?
Jordan [43:28]: I am, Portland, Oregon. There’s a good, strong, contingent here of web businesses here, a lot of people that go to Micro Conf. Yes, it’s a strong community, really cool people. Everyone’s supper open to get in-touch with everyone. If you are in the Portland area, definitely get in touch.
Mike [43:43]: Excellent. Well, Jordan, thanks a lot for coming on and if you have a question for us you can call it into our voicemail number at 1-8-8-8-8-0-1-9-6-9-0 or you can e-mail it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from ‘We’re Out of Control’ by MoOt, used under creative comments. Subscribe to us on iTunes by searching for startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 345 | How to Get Your Emails Delivered to the Gmail Primary Tab
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike review their progress on their 2017 goals thus far, and discuss an article about how to get your emails delivered in the Gmail primary tab.
Items mentioned in this episode:
Transcript
Rob: In this episode of Startups For the Rest of Us, Mike and I review our 2017 goals to see our progress so far through about the first half of the year. We also talk about how to get your emails delivered to the Gmail primary tab. This is Startups For The Rest of Us episode 345.
Welcome to Startups For The Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Rob.
Mike: I’m Mike.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week Sir?
Mike: Well, I’m really close to finishing my two-step signup process. Unfortunately I’ve spent most of the last three to four days doing nothing but refactoring unit tests.
Rob: That is a bummer. Yeah, it’s good to have in the long run, a bummer to do right now.
Mike: Yeah. Although they have saved me in several places where I definitely would have not uncovered the problems that came up because of it. It’s just painful refactoring certain pieces of it, generating new data, and having that all thrown in there, but it’s working
Rob: Yeah. That’s what they’re for man, is to alert you to something, edge case that you missed. That’s how I always think about it. If they fail and you have to refactor, you’re thinking to yourself, “All right, why is this failing? Why am I rewriting this?” Having to rewrite a bunch of your test, that’s due to the big change you made to your data model, is that right?
Mike: That’s part of it. Some of the refactoring was just to make it easier to write the unit test in the long term so that I can add a bunch more data in there and use somewhat generated data. But of course when you’re generating data, you have to massage the stuff that’s being generated in such a way that it actually matches what would be in the system to begin with.
For example, I’m using something called autofixture which just generates data for you based on the types. For a string, it’ll just throw a goo it in there. Unfortunately that doesn’t work for an email address. There’s always places where the data itself, the data generation needs to be fixed so that it generates something that’s a little bit more accurate. And then there’s places where it’s only expecting two characters for the country code and it generates 30 or something like that. That stuff needs to be fixed so that when it goes to throw into the database, it will actually not fail and then afterwards then my unit test will succeed. Stuff like that.
Rob: There it is. It sounds like so much fun.
Mike: Oh yes, very much so.
Rob: That was sarcasm in case you didn’t detect it. For me, I’m actually hopping on a plane in about eight or nine hours and flying to Stockholm, Sweden for Brennan Dunn’s Double Your Freelance Europe Conference. Both Sherry and I are speaking. Since we’re doing that, we’ve taken this opportunity to leave the children at home. We’re going to hang out at the conference for a couple days. I think it’s three or four days actually. And then we’ll wind up staying in Stockholm just for an extra couple days to see the city. We’ve been there once before but it was only for about a day or a day and a half and really interested in digging in. There’s so much cool stuff there.
Mike: Are you coming back?
Rob: I am coming back. Without the kids, you could imagine Sherry and I will be asking ourselves that question every day.
Mike: “Do we really want to come home?”
Rob: Come home? Yeah, definitely.
Mike: We can push this off.
Rob: We’ll call home and be like, “We got snowed in.” “It’s the middle of the summer.” Yeah, looking forward to that and also to getting back. It’s fun to go away but I’m actually in the middle of working on a lot of interesting things. We’re pushing a lot of features right now to production, we’re just really hitting our stride, have a good shipping velocity. When you enjoy what you do, it’s also hard to step away from it for a few days but I think it will be good. I think I’ll come back refreshed. I’m looking forward to get back in the saddle.
The first thing I want to talk through today is something we mentioned last week. It’s that you and I in December of each year, we set out a few goals for ourselves, typically three or four each. In the past, we tend to just revisit them the following December and we say we succeeded or failed or whatever.
It was interesting, we’re about three months into this year and you’ve suggested that we just revisit them. It makes sense to do it again now because we’re almost halfway through the year in another week or so, week or two, we’ll be halfway through the year. I thought we could quickly step through as a precursor to the main topic and just run through these goals again and report on our massive successes or immense failures that we’re currently experiencing.
Mike: Great.
Rob: Yeah I know, fun. Why don’t you kick us off.
Mike: My first one was to log at least 100 days of exercise this year. The past two months or so have been pretty rough just because my shoulders screwed up. I’ve only logged 20 so far this year.
Rob: Oh, wow.
Mike: Yes. I should be up closer to 50. I’m pretty far behind at this point. I knew I’d be behind just because of what was going on. The doctor put me on some medications. It was 1,000 mg of Naproxen for two weeks, which is above what the normal dosage would actually be. I think if you go over the counter, I think they only recommend 600 mg or something like that per day, but she has me on two 500 mg tablets twice a day.
That actually helped quite a bit. It was mostly I think inflammation in my shoulder right now. Now I’m getting to the point where I can move it around a little bit. I’m doing some physical therapy to help just give me some flexibility and range of motion back. It doesn’t hurt as much as it did before but I still have to be a little careful of it, because I just don’t want to have a major regression or anything like that.
Rob: Oh, totally. Yeah, that’s a bummer. Have you thought about bike riding or swimming or something? Something that won’t put impact on it?
Mike: I didn’t even have the range of motion. I literally couldn’t lift my arm up above shoulder level before, so swimming would be difficult. Although we just opened our pool this past week so I might be doing it anyway.
Rob: Yeah, yeah. That’s a bummer, man. I felt the same way a few weeks ago when I got strep throat. I was basically out of commision physically for about a week and a half or two weeks. During that time I also didn’t exercise.
I have a similar goal to you and it’s two days of exercise per week. For the first three months of the year when it was still cold here, I was almost getting it, man. I think we reported about that in March. I was definitely getting one day a week, some weeks I would get two days, and others it just wasn’t happening. It’s hard when it’s five below or five above zero to do that even indoor stuff, just wasn’t shaking out.
Since the sun came out and it started to get warm in March, I’ve been very consistent. In fact, I’ve been probably up at three days a week. Because with the sun like this, I mentioned last week that there’s bike trails from my house. It’s about a 25 to 30 minute ride to work. Every office day, which is three days a week, I’m riding to and from work. It’s almost 50 minutes of riding. I need to look to see how much that is, five miles or something to get there, four to five miles. It’s decent, it’s not a huge ride but someone like me who really just needs to not be completely sedentary, I’m definitely ahead of where I normally am and feeling pretty good about this goal.
At least through September, October, and then we’ll have to see what I can do during the close of the year through December 31st. As it gets cold, I know that that will negatively impact my ability to do it.
Mike: And your motivation.
Rob: Yeah, right, both.
Mike: Yup. Yeah, I’ve definitely got some catching up to do on this. It is something that I still want to keep on track as a goal. It’s not like I want to throw this aside and walk away or anything like that. I still think that getting to 100 is still doable but I’m definitely going to have to double up my efforts a little bit.
Rob: Totally. How about your second goal which is making Bluetick profitable, including your time? Where do you think you are there?
Mike: Well, I’m not as far along as I would like to be but I still think that it’s doable by the end of the year. I’m at over $1,000 a month in revenue which I hit a little while ago, I think last month or the month before. It’s still going up. Slowly onboarding people and looking at ways to get more people on it faster. That has to do with the two-step sign up process.
Once that’s done, I’m probably going to spend at least a week or two just working on the marketing side, getting a lot of the marketing copy, and getting some videos built that illustrate how the product works and what it can do so that I don’t have to explain it individually to each person. I feel like that’s the bottleneck right now. It’s just me having to explain everything. The product itself works pretty well. That’s nice to see. I’m not afraid of it falling over and breaking if I add a bunch of people to it but I would still be concerned about adding 200 people or something like that.
Rob: Sure, but you can go slow. Yeah, it’s nice to say you’re not concerned about falling over and breaking because I remember a time, I don’t know how many months ago it was, where you were concerned about that.
Mike: Yeah. I’m definitely past that at this point. Just because the level of unit tests and just the infrastructure behind it, watching the logs, watching all the stuff that’s going on, and how much synchronization is happening between the mailboxes and stuff, I’m not seeing anything where I’m like, “Oh my god, this thing is going to fall over and die at any given time.”
Rob: Yeah, that’s cool. My second goal was to not start any new projects. It was to run the three MicroConfs, continue the two podcasts, and then working on Drip obviously, and to take a break from the chaos of launching new things. The only exception is I maybe second author on Sherry’s book, ZenFounder Guide to Staying Sane. I forgot what the title is.
So far so good. I haven’t launched anything new, I do have hobbies, I’m tooling around with investing and stuff like that, doing a lot of reading but I’m actually on track to do nothing which was the goal. Sherry is working hard on her book right now. I’m weighing in a little bit here and there which has been fun. It’s been nice to have the time to do that. How about you on your third?
Mike: My third previously was to blog every two weeks or so but I canned that about three months ago.
Rob: Yeah. Didn’t we dismiss this funnel together?
Mike: Yeah, we did.
Rob: I was like, “Why are you planning to do that?”
Mike: Yup.
Rob: It’s like Bluetick’s smart board is what it comes down to. Cool.
My third goal was to do one to three angel investments this year and I did one. I was actually a follow on round and it’s for more of a brick and mortar business in California. The first round, I was not even really an angel investor. I literally invested less than $1,000. But this round I bought a bigger chunk. I feel good about that. They have some growth in there. They’re going to start franchising which is a good model, I think, for them.
I think that’s been about it. One to three angel investments per year I think is probably my pace for now. So far, so good. I have evaluated several other opportunities and nothing has been a fit for what I want to do and has the valuation that’s in a range that make sense for me but that’s been a nice little fun side thing to do.
Mike: Do you have anything in the near horizon that you’re keeping an eye on, that you’re looking at? Or is it just completely, I don’t want to say completely empty, nothing right now that you’re looking at actively to evaluate and pursue, and you’re just looking at stuff as it comes up?
Rob: Yeah. There’s nothing in the pipeline right now. Stuff comes and goes. Someone approached me in MicroConf, we had a conversation, we exchanged the numbers, and talked about stuff. He wasn’t quite far enough along where I think it make sense for me to do it. Another one, there were a couple others where, I think I’ve mentioned this, it’s like when you’re raising at a $10 million or someone who’s at a $30 million evaluation, it’s not even angel investing anymore.
My little check doesn’t even make sense, even if you 10X it. I make a little bit of money but you have to get to $100 million or $300 million in revenue, or at least in valuation I guess, that’s not my game. My game is to invest in real businesses that are going to make money. If there’s an exit, that’s fine but I don’t want that to be the exit strategy.
You look at businesses, a lot of my recent investments, you look at Churn Buster, you look at CartHook, and you look at LeadFuze, these are business that could be as they grow that can be wildly profitable and don’t need this massive valuation or a bazillion users. They’re profitable today if they weren’t growing type thing and just reinvesting back in.
Those are the types of things that I’m looking for, and at reasonable valuations. If I’d invested at any of those at high valuation, it doesn’t make sense, you have so little of the company that you can never get it back even if they do become wildly profitable. If you make only a few thousand bucks a year back and you wrote a check for $25,000 or $50,000, it just takes too long to get paid back. That’s where it is.
I had a fourth one, it was my honourable mention. I was pretty vague about it. I basically said there’s this list of features in Drip that I want to get launched this year. I have them listed in this doc and we’ve launched one of them, we’re working on the second, and I have a third that we haven’t started yet. I actually think we’re on pace to hit all three of these by the end of the year. It’ll make a lot more sense when at the end of the year I can look back and point to these features.
I guess one of them is sharable workflows. We went live so it was not a secret at this point. I just don’t like to project a road map. There’s competitors and there’s all kinds of reasons not to do that.
Sharable workflows, which means you can take a workflow out of your account. You could put it in another one of your accounts with one click or you could share it with people, you could post it on your blog and people could import it into their Drip account. It’s also nice for internal education. It’s like we’re cranking out. We’re going to be cranking on a big library of them where you can just one click import a webinar funnel, this funnel into that funnel. It just makes a lot of sense to do that.
Mike: Cool. There’s something else you guys just launched recently, snippets.
Rob: Yeah. What’d you think about that global snippets? Yeah.
Mike: It caught my eye because I have snippets inside of Bluetick. I’m like, “Oh, I haven’t launched that. You bastard stole it.”
Rob: Oh, funny. Oh man, yeah. We’ve been working on this for a while and had it in the hopper probably four or five months ago but really buckled down on it last couple of months. Snippets are cool, man. People can use them as email signatures or they can use them as a webinar call to action, or even some people who advertise in there have a little ad unit in their newsletter could stick it in there. It’s just a piece of HTML or an image or something that you can change once and it changes it everywhere.
Mike: Got it, yeah. I basically had the same thing, but it was literally called snippets. You could just drop it anywhere. It includes the liquid tags and it can do whatever you want.
Rob: Yeah, yeah. That’s cool. There’s only one, as far as I know there’s only one competitor of ours that has anything similar to snippets. They did it plain text only so you can’t do any HTML, you can’t embed images, you have such little flexibility. We really wanted to do it, I don’t know, the right way I think and this is the way you should build this.
Mike: Am I that competitor? You’re stealing my Dropbox stuff.
Rob: No. You’re not, man.
Mike: Just kidding.
Rob: Is yours text only?
Mike: No.
Rob: Yeah. Okay, haha. No, I don’t get to. You’re in sales automation.
Mike: Yeah, yeah.
Rob: We’re in email marketing.
Mike: Yup.
Rob: Cool. Let’s dig into this article. It’s on chamaileon.io, it’s the blog. It is actually a guest post from Zoran Orack who is an email marketing consultant. He ran a bunch of tests about factors that affect primary tab placement versus promotional tab placement in Gmail.
If you’re not familiar with the Gmail multi-inbox, which I personally do not use because it makes me feel like I have three inboxes I have to check all the time, Gmail auto-sorts your email into the important, promotional, and notifications. Is that right? Is the third one notifications?
Mike: I think it’s social.
Rob: Social, thank you. Social is like Twitter, Facebook, and whatever, Instagram, all these notifications you get. I’m guessing GitHub stuff probably goes in there. Again, since I don’t use them, I’m not actually that familiar.
The curse of a lot of email marketers is if you do things, I won’t say incorrectly, but if you don’t do things smart, you can wind up in the promotions tab and a lot of people completely ignore their promotions tab. It’s where they get a lot of emails from Groupon, or from people trying to market to them. It’s not spam obviously but some people consider it when they look through and they think, “Oh this is one step above spam.” If you want to build a relationship with an audience, especially if it’s a one on one blogging relationship where you’re giving advice as a person, you want your stuff to wind up in the inbox.
There’s an argument here to be made. Let’s say you’re an ecommerce website, you’re keeping in touch, you probably should wind up, it’s probably right that you wind up in the promotions tab. Trying to game the system and use these tips to get into the primary inbox I would actually say is not a good idea if you really are just selling with your email.
Mike: I think a big point about this is really just making sure that you don’t end up in a place where people are much more likely to overlook the emails from you because you’re clearly sending them for a reason and you want them to be read. It’s not like you want these emails to go off into the ether and have nothing happen with them. If they’re not being read, if they end up in that promotions tab, and a lot of people are ignoring them, or they have much lower open rates because they’re on that promotions tab, that doesn’t do your business any good.
Again, these tests are all about at least letting you know how you can stay out of the promotions tab and what sorts of things influence that. I don’t think that any of this stuff is foolproof nor will it ever change. I think that’s one of the key points to keep in mind here is that even if you do all the right things, you could still end up in the promotions tab just because of the nature of the algorithms on the back end. All the stuff that goes into the search ranking factors, you really can’t see those. Some of this stuff is just trial and error and you may end up there anyway.
Rob: Yup. Those are all good points to make. Your open rates will be substantially less if you are on the promotions tab, just the way it works out. Some people never check their promotions tab, other people just clear it out, skim through it.
The author of this email says that Gmail is the most popular client right now. When I do a search, Litmus has the 1.29 billion opens tracked. They said it was in May of 2017, so just a month ago. They say the Apple iPhone has 31%, the Apple iPhone client has 31% of market. Then Gmail is second, and then Apple iPad, and Apple Mail.
I know that maybe the less consumer emails that are sent, let’s take for example all the emails that Drip sent last month, the majority of them are opened in Gmail. Take it for what’s it worth, Gmail is either the most popular or one of the top. Promotion versus inbox is also a big issue. In fact, emails that arrive in the primary inbox actually send a notification if people have those active on their phone and emails that arrive in the promotion tab do not.
Mike: Alright, let’s dive right in.
Rob: Cool. The author talks about how if you search Google for how to get into the inbox, there’s all the same tips. It’s like don’t sell, authenticate your domain with DKIM and SPF, greet recipients by name, have no more than one link in the email, don’t include pictures, don’t use RSS campaigns, don’t use heavy HTML, all this stuff.
What he wanted to do is just run a few tests and see if he could trigger the promotions tab. The first thing he tested, and this comes back to everything I’ve been saying for years Mike, is that heavy HTML email, it’s going to go into the promotions tab and that’s what they do. This guy, he goes into Mail Chimp, he creates a very simple HTML email, and it’s got an image but it’s definitely HTML. There’s no qualms that this is text, a text email and it’s got the share buttons at the bottom, it’s got a bunch of stuff.
All it says is let’s see in which tab this ends up. It’s got a picture of what looks like some dessert. And then cheers, and he puts his name, and it goes right in the promotions tab. This is not a sales email, he doesn’t mention products, he doesn’t have any links in the email aside from the view this in a browser, the Facebook share link at the bottom.
This is it. You’re going to hit. If you use heavy HTML and a lot of design, you are much more likely to wind up in the promotions tab. You can still use HTML, but use HTML that looks like plain text, and that is the default template in Drip. That’s why we did that is we know that it’s A) a more personal experience, and B) it’s more likely to get to where you want it to go.
Mike: He’s got screenshots in the article. If you look at the screenshots, it’s very clearly a newsletter email. CSS styles are definitely embedded into the email, there’s Twitter and Facebook links at the bottom. I’m sure there’s an unsubscribe link if they sent it through MailChimp. It’s all centered, you can very clearly see that it was sent from some sort of newsletter. Just that stuff alone, even the one without the image, it still looks like it was a newsletter of some kind. As you said like that, heavy HTML, it seems to me like just styling your emails as if it was a newsletter, that’s going to throw it into the promotions tab.
Rob: Yup. And then, he was concerned maybe it was just the image so he took the image out, leaves the rest of the heavy HTML, still goes into the promotions tab.
Again, you mentioned this could change over time, this is just one person’s test, this is not definitive by any stretch but this is what we’ve seen too. We send a lot of email every month and this is in line with my experience across tens of thousands of people sending it through our system.
Then he goes with light HTML email. He doesn’t have DKIM and SPF authentication which is where you sign it with your own domain. He just goes with, again, it looks like plain text, it is actually HTML, similar to the Drip default template. I’m sure you can get these templates in Mail Chimp as well. Sure enough, I think it’s the exact same text, and it is the exact same text but it looks more like plain text. It winds up in the inbox.
The only link in there is an unsubscribe link because it was through Mail Chimp. It has the Mail Chimp image at the bottom, the share link there, and that’s it. That’s the simplest way to get in the primary tab.
Then he wanted to run another test and he added more formatting, he added several bullets, he added a hyperlink that just said click here for more info, and he started pitching. He says, “The best product everyone enjoys just got better. Here’s some features that you like, features you beg for.” He’s being silly with it but he definitely is pitching a product. He even includes a price in the email and he had a sale-sy subject line. There it is, he still made it into the primary tab.
Mike: I do wonder how much of an impact it has that he’s sending the same email to himself multiple times. I wonder if there’s anything in the algorithms that look at how much email you have received and have opened from a particular source. I’d be curious to know whether that has any sort of impact.
My feeling is that in looking at emails that I’ve received or that I have sent, the more that something has been opened, the more likely it is to appear in certain places inside your email, or the more likely it’s going to not be classified as spam. Because obviously, there’s learning algorithms behind it. I don’t know how across the board those are or if they are localized to just your account based on what you open or what you tend to open.
Rob: Yeah. I agree with you. What you’ll see is when we get to the end, he’s continued to send the same way and he trips one filter and it goes to promotions, even after he sent all these emails. It helps disprove that thought.
My theory on this, again this is based on seeing a lot of email get sent, is that doing just a few emails isn’t going to give you the positive reputation if someone opens a few of your emails. If you’re sending mass emails, Google knows if you’re sending 10,000 or 20,000 or 30,000, I believe. I think that if you have low engagement with those, that they do start to see that as a signal that your stuff is lower quality or that people aren’t engaging. By engagement I mean opens and clicks.
I don’t know, the author of this article is sending five, six, seven emails which is what he did with minor variations over the course of a few hours. I just don’t think there’s enough data there that Google would really, really engage with it. Obviously there’s a chance that they could say, “Well, if it’s from this sender and you’ve opened their email in the past, then it’s more likely to go to the inbox.” That would be intuitive. But again, he trips a filter here in a couple examples that we’ll get to, and it goes right to promotions. That almost dispels that. It almost makes me think that Google needed more data in order for their machine learning to form an opinion on it.
The next step. He had plain text that was formatted, he included a price, and a link, and it was still in the inbox. So then he decided to add images, he added two images, he left everything pretty much the same, still went into the primary inbox.
Mike: He removed the price though.
Rob: He removed the price. That’s right, he removed the price, he added images, went into the inbox, and this is where he trips it. With the image and the plain text, he added a price, and then it went into promotions. It’s really interesting.
Once you’re going with the plain text look, remember, again, it’s an HTML email, it’s just not heavily formatted, you’re in the safe zone. You can add images, you can add formatting, you can add links, you can add bullets, doesn’t matter. At least again in this example, it didn’t seem to have an impact but he added an image and a price, and that seemed to send him in. That’s pretty interesting.
Mike: Yeah. That’s what I would almost expect from something like that though. You get a newsletter from a retailer or something like that, it’s probably going to have an image or a picture of what it is that they’re trying to pitch you, and a price associated with it. Intuitively, that makes a lot of sense that that would have triggered it.
Rob: Right. Again, this is the promotions tab. The whole point is it’s people trying to sell you stuff. If there’s a price in an image, that lends itself to doing that. I don’t think there is two if statements in Google’s algorithm that says, “If image and price, then promotions.” It’s a big ass machine learning algorithm. That’s how they work. There’s some bayesian filtering going on and I think that’s what it’s picking up.
One of the last test he runs, I guess it’s the last test, is he’s trying to refute the RSS to email thing. People had said if it’s RSS to email then it’s going to go straight to promotions. He does an RSS to what looks like a plain text email. Again, it’s html. Of course, it doesn’t set off the filter. It goes straight to the inbox, which would make sense.
I’m not a fan of RSS to email because I think it’s not a very personal way to engage with your list but I don’t think that Google really cares that much about it. Since a lot of RSS email is bloggers anyways, that’s often not promotional content. You’re not selling stuff. You’re often giving valuable information, writing an article, offering advice. You can debate whether that’s promotional or not but personally if I’m subscribed to someone’s’ list, of Brennan Dunn’s writing or Ruben from Bit Sketcher, Hiten, I want that in my primary. That’s important to me. I’m not subscribed to a bunch of list that I don’t want. If I was, I would unsubscribe from them.
Mike: Yeah. I’d be curious for that specific example, the RSS, if you were to also add in the images and the price of any kind or multiple prices if it would trigger, it seems like it should.
Rob: Ah, it should, yeah. I bet images would be fine.
Mike: Yeah. I think you’re right. I think the images would be fine. I think possibly a price might be fine but I wonder if they take into account like how close it is to a link as well. I don’t know. That was something I noticed about the emails. The price was not necessarily right next to the link.
Rob: Yeah. Or the image. It’s not like it was clustered together like it was a product. It just happened to be in the same email.
Again, we will link this up in the show notes if you do want to see the screenshots and the emails. It’s a fun little romp through and it does confirm a lot of what we’re seeing in the space as well.
Mike: I think that one of the directions that all the stuff leads to is just providing value from the emails that you’re sending to people so that you don’t end up in the promotions tab. You can sell to some extent but you have to be delivering value to people in order to get them to engage with your emails to begin with. If you’re not doing that, then it’s a promotion. Chances are it’s going to get chucked out with all the rest of the advertisements.
Rob: Yeah. Another thing to think about is each of these things is a signal. Although he says you can get into the inbox without SPF, DKIM, the SPF, DKIM is not a bad thing to set up. It is going to be in general a positive signal to someone like Google.
I also think this is where people don’t prune their list enough. I think this is one of my soap boxes is if your open rates are less than 10% on your list, you need to prune that thing, because Google is smart and so are the other inbox providers. They’re starting to catch onto this stuff. If they see you have a mass mailing and very few people are engaging with it, they are going to start to putting you in spam or in promotions.
In my opinion, you should have open rates above 20% but there’s a grey area there between 10% and 20%. That’s where pruning can help with engagement and therefore help get you out of some of these sticky situations that you can wind up in if you’ve kind of not been cleaning your list.
Mike: I think that about wraps us up for the day. If you have a question for us, you can call into our voicemail at 1-888-801-9690 or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us on iTunes by searching for Startups and visit startupsfortherestofus.com for the full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 344 | 9 Summertime Productivity Tactics
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about 9 summertime productivity tactics. As summer gets into full swing and the weather gets nicer, these tactics will help you stay productive all summer long.
Items mentioned in this episode:
Transcript
Mike: In this episode of Startups For the Rest of Us, Rob and I are going to be talking about nine summertime productivity tactics. This is Startups For the Rest of Us episode 344.
Welcome to Startups For the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.
Rob: And I’m Rob.
Mike: We’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s going on this week, Rob?
Rob: Well, you remember how I was sick last week, over the weekend, I don’t know if it became or developed or if it always was but I basically got strep throat again. I have never had it in my life and then I have had it twice in the past eight months. Both of the times, it has been our six year old’s class, we get an email that’s like strep throats going through our class. My six year old is like a carrier. He doesn’t get it but then I wound up with it both times.
I was wrecked over the weekend, sleeping. Basically, in and out of consciousness and Sherry on Sunday morning was like, “Dude, you have to go to urgent care.” Both times I’m like, “Ugh, it’s such a waste of time. I’m not that sick.” She’s like, “You’re a wreck.” Sure enough I go in and did a test. 10 minutes later, they’re like, “You have strep.”
Mike: That sucks.
Rob: But the good news when you have it is that they give you antibiotics and it fixes you up right away. Within six or seven hours of taking the first pill, I felt quite a bit better and then the next day, you’re up at 60%, 70%. The day after, you’re 80%. It’s a much faster recovery if you can use the antibiotics. That was that. It was a bummer. Half speed this week because of it.
Mike: If you’d only gone in like three or four days in advance.
Rob: I know. When I still felt fine, when I just had a head cold.
Mike: It could be worse. At least you’re starting to get over it now.
Rob: I know. I do feel better and I’m really enjoying the summer. I think it is because we live now in a place that has more broader seasons or more noticeable seasons, but I just don’t remember having this kind of euphoric feeling of like, “I want to be outside all the time.” Right now, I’m actually not sitting in my office. I’m sitting out on a deck overlooking the street, the trees, the breeze, and stuff. I just didn’t used to do that as much because year round in California, you can be outside but there’s just so much going on right now.
It’s an interesting thing. I feel like I’m working a little bit less and I want to work a little bit less but during the time that I’m working, I’m hyper productive, hammered out. Honestly, it felt like a day or a day and a half worth of work the other day in four or five hours. I was just that full race car speed and all the stuff poured out of me. I had this to do list that I expected to take literally multiple days and I just hammered everything out. I think it’s part of this vitamin D and being able to easier exercise and all that.
Mike: One of the things that contributes to that or could contribute to that is the fact that like you said, when you lived in California, it’s almost summer time the year round and our brains act as a difference engine where we are able to notice stark changes but if there’s gradual changes, we don’t notice them nearly as much. That’s probably a contributing factor to how you’re seeing things different in Minnesota versus California.
Rob: For sure. How about you, what’s going on?
Mike: I think last week I talked about how it was probably going to take me at least a week or two to get my self-signup process and I’m probably about halfway done after working about a week on it.
Rob: Why does that take so long? It doesn’t seem like it should be that complicated.
Mike: You wouldn’t think. The issue is that a subscription inside the software was originally tied to a user. What it would do is it would create the subscription first and then create the user. It was just because the way things were built early on and because I’m decoupling that where you have to create the user account first like there’s no backend subscription that it’s tied to. All these other things break because of that. I’m going through it.
I’m kind of hacking things together. There are a lot of things that I’m overlooking and making this blanket assumption that just says, “Look, if you don’t have a subscription ID, then you really don’t have an account. You’re just not going to be able to login,” which makes complete sense. It’s just that there’s that decoupling right now that a ton of code had to change to make that work. Just because database constraints and things like that.
Rob: Got it. You’re not just building a time flow. You are refactoring your data model and then building that. Is that correct?
Mike: Yeah.
Rob: That makes sense. We went through a couple of these really early on with Drip and I remember Derek spending like a month and a half twice, at two different times basically trying to decouple things in the data model because we, together, had just made the wrong choice early on. If you’re doing that, that makes sense but I would separate that in your head like, “Alright, this is a necessary refactor,” because that’s going to make everything better long term if you decouple the subscriptions from users. It’s going to give you more flexibility.
We can talk offline. It would be probably boring to talk about it in the podcast but just how we architect it in Drip where you can have a bunch of different users and subscription is the master and then there are accounts which are a separate thing. That’s what’s in the drop down list in the upper right and how they’re all many, many in essence and I guess given us a maximum flexibility to allow agencies to have the flexibility to do what they want and individuals for it not to be too complicated and that stuff.
I’m assuming that’s the direction you’re headed. As long as you have it on the back end, as long as your table structure supports that, you don’t even have to build the code to do it yet but obviously changing the data model later is really time consuming. That’s what you want to do.
Mike: All the stuff and the data model, that’s exactly what I’m dealing with right now. I knew in the longer term that it would be an issue but I kept pushing it off and pushing it off. Now, I have to bite the bullet and just say, “Alright, I got to do something about it.” There are hundreds and hundreds of places where the subscription ID is referenced directly on the user account. It shouldn’t be there. It never should have gone there but I don’t want to go through and make all those changes now because one, it’s time consuming and two, it’s going to be risky, to be honest. I’m pushing some of those things off and refactoring some things and just making that assumption that, “Hey, you have to have a subscription ID in order to log in.”
Rob: And hopefully writing a lot of unit tests.
Mike: I’m definitely adding unit tests to this one.
Rob: Cool. What are we talking about today?
Mike: With the onset of summer, I’m sitting here next to a giant window that looks out into my backyard and I’ve noticed that the day has gotten progressively nicer and nicer. Even in New England, sometimes it just rains right up until early summer. In fact, it was still raining pretty continuously for the last couple of weeks so earlier this week it started to clear up so I’m looking out the window thinking to myself, I’d really like to be outside right now.
I thought it would be nice to go through some summer productivity tactics that people can keep in mind. I realize this is only applicable to probably half of the world because people on the other hemisphere are going into winter at this point but at the same time, these types of tactics you’re going to apply as you’re going into summer whether that’s now or in six months.
Rob: Sounds good. We have nine summertime productivity tactics. Let’s dive in.
Mike: The first one is time box your day. Essentially what this is is putting a hard stop on the end of your day so that you know that at some point, you’ve looked at the clock and you know what that time that’s going to be, that’s the end of your work day. This is I think especially important for people who work from home or out of a home office and have a lot of more flexibility and can find themselves in a situation where they’re working extended hours because they really want to get something done.
The idea here is really just put that hard stop on the end of your day. I think this is a general tip that is a good practice to follow but I think it’s more important in the summer time especially when you’re looking out the window and there’s this draw to go outside just because it’s nice out and you really don’t want to be spending the time in front of your computer.
Rob: I think it’s important to do this and I think if you have flexibility with your schedule, that cuts both ways. It’s as much of a curse as it is a blessing. Probably the best way I found to approach it is to think of the day in three chunks, three four to six hour chunks. There’s your morning, there’s your afternoon, early evening, and then there is your evening or late night.
I don’t like to work three of those in a row. You can work up to two in a row. To be honest, when I was younger, when I was in my 20s, I was a momentum player. I would love to do these long, 15 hour sometimes longer work days and then take the next day off. I don’t so much enjoy that anymore and you have to be doing some pretty specific tasks in order to do that. I used to be able to write code like that for an extended period of time but you can’t be creative for that long. You just don’t have the juices.
Nowadays, I think I can work any two in a row and then I need to take the third off. If I work afternoon, evening, I’ll take the morning off. I don’t do that as much anymore now that we have more of a normal schedule. But you get the idea here. I think that time boxing your work day and getting the maximum productivity out of let’s say the four to eight hours that you’re going to work in a row, which is what I recommend, I know a lot of founders who work for four to six hours a day and get a ton done.
I think if you actually think about what your day looks like, if you’re sitting at your desk for eight or nine hours, if you’re really hammering it, you could probably get all that done if you didn’t have any distractions and minimal interruptions and you just went full force with the music and the caffeine and just went in the zone for a good solid four hours. You can get as much done as you can in a full day of screwing around. Time boxing is something I definitely believe in.
Mike: The second one on this list which probably should have been first was to keep what’s working. Really what that means is don’t throw away all the productivity tactics and hacks that you’ve put together over past the six months to a year because it’s summer time. If you got those to the point where they were working for you, whether that’s getting up early, or taking a break at 11:00AM for an hour, or taking an early lunch, things like that, if you find that those particular things are working for you and have worked for you, don’t just immediately throw them away because it’s summer time.
There are situations where really readjusting your schedule and doing a complete overhaul on it are warranted but I wouldn’t say that going into summer is one of those things. You can play around with things, experiment a little bit, but I wouldn’t make such a drastic change unless there were some major reasons for doing that. Like you’ve got into a car accident and you’re on crutches for a while or something like that. You don’t have that with the summer time coming.
Rob: The third tactic is to take outdoor breaks. Maybe you’re eating lunch outside, maybe go for a walk before or after lunch or an early afternoon when you start to get tired. Early afternoon, it’s a tough spot coming back into work. You can use this time to think about hard problems while enjoying the weather and getting some vitamin D.
To give an example of this, this morning, I was sitting outside. I was drinking coffee. I was thinking about stuff. I did a little bit of email. I responded to everybody’s Slack messages and then I had a hard problem that I wanted to think through so I hopped on my bike and I rode around this lake that’s right near us. It’s called Lake Harriet. Literally, from the time I jumped on the bike until the time I got back into the garage, it was like 20 minutes, maybe 25 minutes but it was a perfect amount of time for me to think through this issue and it was very much like when you have major epiphanies when you’re in the shower, when you’re doing dishes. Bike riding is the same for me.
It could be walking. It could be running. It could be whatever but just being outside for those few moments really kicked my day off in the right fashion. By the time it was 10:00AM, I was highly motivated to come back and just hammer out a bunch of stuff that I had to get done.
Mike: I remember when I used to work at a pedestal software. One of the things that we would do, the guys that I’ve worked with on my part of the engineering team, we basically take a walk around. There is this interloop inside the office campus that we’re at and every day after lunch, we would just take a couple of laps around that and just talk about some of the different things we were working on and it was really nice and motivational to have that time not just to get the outdoor time but also to talk about the things that we were working on. It was almost like a mini meeting but we were getting that a little bit more of a creative spark by being outdoors.
The fourth tactic is to change your working hours. Some companies refer to this as summer hours but I think that there are a lot of different variations that you can put on to this tactic. The first variation is two four day work weeks. You can take Wednesdays off or Fridays off. Most companies will take a half day on Friday but you can also do other things. You could say, “We’re going to do six hour work days instead of eight hour work days.” And then you do that every single day of the week.
Or you can shift your schedule a little bit and get up and start working at 6:00AM and you can be done by 3:00PM or 4:00PM or just start later and end earlier. There are a lot of different ways to play around with the schedule but just shifting your schedule a little bit to give yourself more time during the summer to enjoy the summer, all that’s going to be very helpful and beneficial for your motivation.
Rob: If you’re in control of your schedule, if you’re founder, you have flexibility, now is the time to do it. Now is the time to take that extra day off to shorten your days. You’re not going to regret it. I guess that’s what I’ll say. It always sounds scary to think about changing your work schedule and that you’re not going to get as much done or you’re competitor is going to catch you or whatever, it’s pretty unlikely.
You can always change. Try it for two weeks, maybe a month, somewhere in that range and just commit to doing it even if it feels weird, even if you don’t love it, commit to doing that and then figure out if you actually are enjoying the summer more.
The thing is you need to figure out something to do with that time. The hard thing is if you work for four or six hours and you say, “Alright, I’m not going to work.” You have to now go ride a bike. You have to start playing the guitar. You have to go paddle boarding. You have to fill that time with something. Otherwise, we all naturally will revert back to working. Fill it with a hobby or exercise or something so that work doesn’t constantly pull you back to the laptop every time you see it.
Mike: There are other things to keep in mind when you’re doing that is that that time is really spent rejuvenating your mind and mental energy. It’s not as if you are at a dead stop at that point. It’s like you’re really recharging your batteries. This analogy came to me the other day where if you’re doing a cross country trip and you need to maintain an average of 50 miles an hour, if you stop for four hours, your average speed at that point is zero. But the reality is you are allowing yourself to be able to move faster in the work context when you take those breaks.
If you do those in the middle of the day, you’re going to be able to move faster and make better progress while you’re working versus having your progress decrease over time throughout the course of the day so that by the end of it, you’re only operating at 10% or 20%, when if you took a break in the middle, you’d probably be able to get yourself back up to 70% or 80%. It’s really just a balancing act and being able to rejuvenate yourself as part of that time that you’re taking off.
The fifth summer productivity tactic is to schedule your vacation time. I think this is something that most people will probably have done quite a bit of by now. Like we plan our family vacation probably six months in advance so around January or February time frame but these are the types of things that allow you to get out of the office for an extended period of time. It’s not just the weekend or a couple of days in the middle of the week. Usually, you want to take several days off in a row in addition to the weekend. We try to take at least a week off. If we can do more, we will, but it really depends on what other things are going on.
Now that my wife owns a business and I own my own business, it makes the scheduling a little bit more difficult just because of all the different things that are going on. You really want to be able to take these times and schedule those vacations with everybody so that everybody can just enjoy the time off.
Rob: Our sixth tactic is to learn something new. This goes along with what I said earlier about learning to fill this extra time that you’re going to eek out of your day. Learning something new obviously can be motivational, so consider spending some time this summer learning a new skill that you can put to a good use during the summer. Later on learn to play the guitar and then you could play now on the outdoor patio and the during the winter when everyone is sad and it’s dark and cold, you can sit inside and play. Or again, pick up paddle boarding or get a bike.
About a year ago, when we moved into Minneapolis, we’re near some lakes, Sherry bought two stand up paddle boards and within a couple weeks of us getting here, I’ve actually quite literally picked up the guitar again. I used to play all the time. I was in a couple of bands years ago. I’ve been picking it up lately and just learning new songs. It’s been fun.
I actually got a road bike. I’ve had a comfort bike for a long time but these things are so heavy and I’ve been riding back and forth because there’s bike trails basically from my house to work. It’s about a 25 or 30 minute ride. My big comfort bike was so heavy that it’s taken like 45 minutes because I just couldn’t get the big ol’ steel frame going fast enough.
Sure enough I talked to Anne on the Drip team. She’s big time into cycling. She gave me some recommendations. I got a really nice road bike off Amazon for $550. I say it’s really nice. For me, it’s really nice. It’s an entry level road bike but this thing is awesome. It’s super light and it feels like a kind of a neat little new hobby to be able to ride this bike around.
That’s what I’m saying. Like this morning, I actually don’t like exercise. It’s not something I enjoy. I’m not into it. People say, “My day is a wreck without exercise.” Mine is not so I have to force myself to do it. I used to play sports in college and what I liked about that is it forced me to exercise basically. I loved being around the team and I love the competition. I didn’t actually love the physical exertion. It’s just not something that I naturally need.
Having a bike around or this lake or just some outlet has been this excuse for me to get outside, move around, get the endorphins pumping and staying in some kind of shape. Of course summer is the time to do that right after several months of being indoors during the winter.
Mike: Instead of taking 40 minutes to get to work, it only takes you 38 because you’re old, right?
Rob: Yeah, exactly. Nice one. No, I get there in about 25 on a good day and 30 if I’m taking it easy. It works out nicely. Given that the ride is about 25. My drive to work is like 16, 17 minutes with no traffic but on the drive home, it’s 25 to 30 with traffic so it’s essentially equal but I get the exercise out of it so it’s pretty fun.
Mike: The seventh tactic on our list is to schedule fun time. This could be specifically summer fun time or something that you dedicate time to on a regular basis. One of the things that I enjoyed doing lately is there is a local meet up where they play board games. I’ll go there on Friday nights but during the summer, you have a lot more options so whether that’s riding your bike.
We have a pool as well so our kids love going swimming in the pool pretty much all year long. Right now, it’s kind of cold. It’s probably mid 60’s right now, pretty close to 70 I think in terms of the pool water. But as the summer marches on, it’s just going to get warmer and we have a pool cover. It’s going to be nice to be able to go out there and just hang out by the pool for a little while. We typically have friends over on the weekends, most weekends I’d say, but there are also times where they’ll just come over in the middle of the week because it’s summer vacation so the kids don’t have school. They just come over and do their thing. It’s nice to be able to sit there and just take the time in and enjoy the nice weather outside. That is essentially scheduled fun time at that point.
Rob: I think doing something at least once a week is a good way to think about it and a good way to map it out. In the past couple of weeks, some things that I’ve done is during my work day the other afternoon, on one of the work from home days, I went to this super cool coffee shop. I got some iced coffee. Normally, my afternoons are not as productive as my mornings but this afternoon, it was. It’s that new environment where it inspires creativity or there is something about the chaos of being in a new place and of course getting lightly caffeinated in the afternoon was great.
We have been going to, there are these outdoor concerts at the Lake Harriet band shell here near our house. There’s like five nights a week of different bands. There are cover bands. There was a Beatles cover band. There are drum circles and all kinds of stuff so we’ve been riding over there. It’s about a five, seven minute bike ride so we’ve been taking the kids after school. We’ve been swimming in the lake, that kind of stuff.
It’s like having one or two of those a week to look forward to as a family. We’re also doing Monday night is family movie night and we’re watching movies about historical things of like people doing hard things, overcoming hard things. We watch Hidden Figures, about the African American women in NASA, we watched Apollo 13, that kind of stuff. People struggling. It’s like lessons for the kids but it’s also good films that we want to see.
Getting some stuff, this is also good to do in winter, to be honest. We were doing some of these things especially the indoor things in winter just to have something to look forward to each week but it’s definitely time to up your fun game.
The eighth tactic is to revisit your annual goals. We’re getting close to the midway point of the year and you want to revisit them now so that in September, you don’t have to cram six months of work into three or four months. In fact Mike, you and I should maybe, just at the beginning of next episode, do a little touch base about where we stand with the goals that we set forth last December.
Mike: Sure.
Rob: This is a good time to do it and you’ll either find yourself well ahead of schedule or you will remind yourself that you are not actually exercising twice a week or that you’re way ahead. It’s always good to reflect on these every couple of months and summer is a good time to do it.
Mike: Yeah, I’m definitely a little bit behind on my exercise schedule but part of it is due to my shoulder being out of commission for the past six months.
Rob: Mike, Mike, Mike, oh man.
Mike: I know. I’ll get there. I’m not too far behind but it could be worse. Anyway, back to our list, number nine is to allow for cheat days. Essentially what you’re doing with a cheat day is giving yourself permission to just throw in the towel on any given day for whatever reason you feel like and just walk away and do anything that you want at that point. Really, the idea here is setting up those rules in advance so that you don’t feel guilty about taking that time off.
If you’ve already given yourself permission to take time off whenever you feel like it because something came up that you just want to go do, whether that’s just going to see a movie in the middle of the day or going out running for example, if you have like a nature trail nearby, you want to go run through the woods or if there’s a hiking trail, you can do that as well. Go to a pool. Go to a basketball court, anything along those lines.
The bottom line here is just giving yourself that ability to do those types of things in the middle of the day and just call it quits on the day without feeling guilty about it. That’s a huge piece of this.
Rob: Is the gist of this episode that we’re telling people not to work during the summer?
Mike: I don’t want to say that. I don’t want to go that far. I think that looking around, what I’ve seen historically over the past couple of years is that business for people like you and me, it feels like it ramps down a little bit during the summer time. It doesn’t seem like things are picking up. It’s not like the beginning of the year or after summer time where things are really picking up and the pace is hectic. It feels to me like this schedule seems to be much more dialed back in the middle of July for example.
Same thing happens for a lot of businesses, second or third week of December. The businesses, they don’t do a lot, at least not our types of businesses. The demands are a lot less pressing and you can take it easy. I think that it’s a good time to recharge your batteries and not put the pedal to the metal because you don’t have to. There’s no real driving force to make you do it. Everybody needs a little bit of time off.
Rob: It’s interesting that the advice of only working let’s say six hour days, I actually think that for a lot of people, that would be better year round. That you would actually get more done with more focus time if you time box your day, if you got out and did some exercises instead of sitting in front of your computer for another hour clicking around on social media or doing whatever you’re doing when you’re getting distracted. This is stuff that can apply if used well. It can apply and actually improve your productivity in a counter intuitive way, meaning working shorter days. I believe you can actually get more done because you can be so focused about it.
That about wraps us up for today. If you have a question for us, call our voicemail at 888-801-9690 or you can 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 on iTunes by searching for startups and visit startupsfortherestofus.com for the full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 343 | Growing from $1k to $5k MRR, Projecting SaaS Revenue Growth, Refining Your Sales Process, and More Listener Questions
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about growing from $1k to $5k MRR, projecting SaaS revenue growth, refining your sales process, and more listener questions.
Items mentioned in this episode:
Transcript
Rob: In this episode of Startups for the Rest of Us, Mike and I talk about growing from $1,000 to $5,000 of MRR, projecting SaaS revenue growth, refining your sales process, and more listener questions. This is Startups for the Rest of Us episode 343.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products whether you built your first product or you’re just thinking about it. I’m Rob.
Mike: And I’m Mike.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, sir?
Mike: I’m hoping that in another week or two, I’ll have my completed self sign up process in place. It’s been rather painful to rework those pieces of code just because it’s core to somebody signing up so it has to work properly. I’ve found places where if the signup process previously had failed, at some point along the way, it left a bunch of orphan data and I’m like oh God. And then you start over and then it leaves all these things in the database and I’m just like, “Alright, I got to start refactoring some of that stuff.” The cleanup is kind of a pain in the neck but things are progressing pretty well at this point. I’m hoping to have that cleaned off of my plate in the next week or two.
Rob: That’s nice. One thing that we do, we have a two step sign up process for trial. If they do the first step but don’t enter their credit card, we cookie them. If they come back, we just present them with the credit card. We don’t want to make them do the first step again.
Mike: That’s sort of what I’m looking for right now but I’m looking for ways to create the account and have it as a placeholder without also creating a subscription inside the system. That’s the part that’s hanging me up a little bit. I’m trying to figure out exactly how to do that. The cookie idea is interesting but at the same time, I don’t necessarily want to leave their credentials sitting there in a cookie or someplace either.
Rob: Oh yeah, no. We store it in the database and then cookie them with an account ID or at least a user ID. We wouldn’t store that in a cookie. It’s just an idea. It’s a nice elegant way. Some people will come back and be like, “I can’t believe it. I didn’t have to enter my stuff again to get in.” It’s like a usability thing for people who get stuck in the middle with the credit card and then come back a few hours later and see that it’s already there at the credit card screen.
Mike: Yeah, that’s exactly what I’m looking for. I’m looking at trying to get around because like I said, data structures don’t really support that just yet.
Rob: Got it. That’s a bummer. For me, you probably hear, I’m sick this week. I’ve been working but I just kind of feel hazy and everything is just taking longer to get done. I hate being sick a lot because I feel like I have a bunch of work to do. I got things to do. Who’s got time to be sick these days?
Mike: My son was sick this past week so he was out for one or two days at school.
Rob: That’s crazy. We went to California last weekend for Memorial Day and pretty much my whole family got, it’s just a head cold, we all got it. I don’t know. We had it within the first day we were there so I feel like we caught it before we left. I don’t think you catch it on the plane and then the next day you wake up. I think there’s a longer incubation period for most colds so the timing was kind of bizarre but it seems to be hitting each of us in its own way right now. But the show must go on. Am I right?
Mike: Yes.
Rob: Every week. Every Tuesday morning, we get this podcast out. Apologies in advance if my voice grates on people, I am heavily using the mute button to cough while you’re talking right now.
Mike: What are we talking about this week?
Rob: We have a nice backlog of listener questions once again and so I wanted to run through some of those. Actually, there are a couple that really aren’t questions. They’re just comments and accolades for us. This first one is a voice mail about growing from $1,000 to $5,000 of MRR.
Bryan: [Voice mail] Hey Rob and Mike, Bryan Fleming from Detroit City here. I just wanted to call and say thank you so much for the podcast you guys put out. Being here in Detroit, you just don’t talk to anybody who’s doing the SaaS stuff. It is so goddamn hard.
I’ll tell you what guys. A year ago, I was listening to your podcast, struggling along my SaaS business, doing about $1,000 a month. I listened to an episode where you guys were talking about how to know if your business is viable and sketching out your lifetime customer value on a napkin. I did that and it’s like a lightbulb went off. I moved to a yearly re-bill. I increased my prices and here I am a year later, my business went from $1,000 a month to $5,000 a month. I know you guys have seen ones that have grown better but I’m pretty proud of it.
Again, it’s all from listening to your guys’s episode, that was one in particular. I appreciate everything you guys do like I said. You’re the first one I go to on my podcast, really looking forward to it every week. Keep up the great work guys and when I do have a question, I’m going to call back in and hit you up on it. Take care. Bye.
Mike: That’s good to hear. It’s always nice to hear from listeners who listen to an episode and that are able to act on that advice or the commentary that we give and be able to take things to the next level and really move their businesses forward. I really appreciate hearing that from you, Ryan.
Rob: Yeah, that’s awesome. That’s really why we do it. The fact that anyone ever gets value out of anything you and I say, Mike, it’s just a miracle at this point. Our next question is about how to project revenue growth? It’s from a friend of the show, Craig Hewitt. He’s the founder of Podcast Motor at podcastmotor.com.
He says, “Hey guys, after launching my first SaaS product last week, I’m wondering what realistic ranges for growth scaling are. Heard Mike talking about doubling Bluetick revenue from $1,000 to $2,000 in a month on the last episode, it seems like a great goal but is that kind of expectation realistic? Does the same growth curve slope apply at scale? For instance, did Drip see 100% growth months after you were doing mid five digits a month? Be interested to hear your thoughts.”
Mike: For mine, I looked back over the revenue numbers for Bluetick after I started officially selling it to people. There were a couple of months where I did 100% month over month growth but it was not common. It was like I would get 100% one month and then I would double it and then the month after that, I get like 50% or we just stay even in terms of growth.
There is this exponential curve that you end up getting. Depending on which numbers you’re specifically looking at, whether it is growth from one month to the next versus your total size, those are two entirely different things. What I was looking to do was originally, I was saying, “Okay, I want to go from $1,000 to $2,000.” But even a couple of days later, I looked to that and said, “You know what? That’s actually not very realistic.” Because in my mind it was like, “Oh, I’ll be doubling my customer base.” But the reality is that doubling the customer base is not realistic because it took me x months to get there.
What would more realistic is if I were to say, “Look, I want to double the number of customers that I got last month.” That jump is probably too large. If it takes you four months to get to 20 customers, you’re probably not going to be able to add 20 customers in the next month barring some major marketing strategy that you do or a big launch or something like that. That’s not what I had planned. I realized a couple of days later that that was not going to be a realistic goal.
Paul Graham has some advice about the growth rates for Y Combinator start-ups. They’re looking for 5% to 7% growth per week and he says if you can hit 10% a week, you’re doing exceptionally well. If you can only manage 1%, that’s a sign you haven’t yet figured out what you’re doing.
In the early days, I think it’s a lot easier to get those higher percentage growth numbers just because adding 1 person if you’ve got 10, then that’s a 10% growth rate but once you get to 100, adding one is only 1%. Again, you have to look at both the total size that you’re trying to grow and then back track a little bit and look to see how long it has taken you to get there in order to be able to start projecting forward and establish more realistic goals.
Rob: Yeah, there is kind of early stage growth where you’re just scrapping for every individual customer and it can be a little harder to project at that point. But if you have a nice source of folks that you can bring in almost by hand where you have that 300 person launch list or something and you’re kind of individually choosing people out of that, then you kind of get a feel for how many you can logically bring in in a month.
Once you’re past that, let’s say you’ve launched and you start marketing. You have content marketing. You have Facebook ads. You have SEO. You just have all the channels. You’ll start to see that the numbers just pan out. Depending on the number of unique visitors you get to your site, what percent convert to trial or a customer and you can just look at those numbers and that will allow you to start projecting how in a month, two months, three months and then you’ll be able to see which levers you need to pull in order to increase that. This is where it becomes easier to project but harder to make a dent because adding one, two, three customers doesn’t make a dent when you’re going $5,000 a month MRR.
Now, to really dig in on Craig’s question. He’s asking, “Can you have 100% growth once you’re already doing $50,000 a month?” The answer is not typically. That’s not really a sustainable growth pattern. Don’t think of it in terms of percentages. Think of it in terms of flat dollar amounts.
In the early days, I would shoot for if you can get into four figures of monthly MRR growth, you’re doing okay. Early days is like sub 10,000 or 15,000 of monthly recurring revenue. If you can grow at $1,000 or $2,000 a month during that time, I don’t think of it as a percentage. I just think of it as getting the $1,000 or $2,000.
If you can get to that and make it sustainable so that it’s a flywheel in essence that grows at $1,000 to $2,000 a month, that’s a pretty decent start. If you look out a year, then you think, “Wow, I’m going to have grown $12,000 to $24,000 MRR.” And then what you do is you look at how do I know get to $4,000 or $5,000 MRR and then how do we get to $10,000 MRR growth.
The sooner you can get there, your growth will be huge at first. Let’s say you get to $20,000 MRR and you’re growing at $5,000 a month, man, you have a 25% growth rate. But then next month, you’re going to have a 22% growth rate. And then the month after, if your growth stays flat, you’re going to be at 18%. It’s going to get smaller each month but if you’re still growing at $5,000 MRR, that’s actually a pretty damn good bootstrap business. The percentages start having less of an impact at that point or I should say less meaning because if you continue to grow at $5,000 MRR every month, that’s a good business.
At a certain point, your churn will make it so that your $5,000 MRR growth will get smaller and smaller over time. That’s really a whole separate conversation. That’s when you hit a plateau and there was an episode we recorded probably 100 episodes ago with Reuben Gomes about how to see plateaus coming and how to get over them.
I guess what I’d encourage you to do, Craig, when you’re thinking about this is think about it in terms of absolute dollar amount. People say percentages because A, it sounds impressive or B, they want to not give absolute revenue numbers in public. When I used to talk about Drip’s revenue growth on the podcast, I didn’t want to say we’re growing at $5,000 or $10,000 a month so I use the percentage instead.
But realistically, the absolute dollar amount especially for a bootstrapper in my opinion is what counts because that dollar amount is what allows you to hire people, it’s what allows you to buy Facebook ads, it’s what allows you to run the business whereas percentages really have just such a smaller meaning. You do hear about Y Combinator start-ups or even some bootstrap start-ups that get really good traction.
Growing 20% to 40% a month for a while is totally doable. It’s hard work and you really need to catch a flier. It’s a Cinderella situation but it is possible for the time being but growing 100% month over month for more than just a few months is unheard of. I think you would literally need to be like an Uber or something to be seeing growth like that. I hope that helps, Craig. Thanks for the question.
Our next question is from Chris from vendorregistry.com. He says, “I’ve been thoroughly enjoying your new podcast. I heard you were looking for some questions. Vendor Registry’s SaaS platform and marketplace streamlines the $250 billion dollar local government purchasing market by standardizing and centralizing traditionally paper intensive workflows. Since we have so much green field ahead of us, coming up with new ideas takes only 10% of our time. The other 90% is spent debating which ideas to execute first. Ideally, we stop debating. We let the market decide through AB testing however, implementing AB testing requires money for the tools dab time to build out two versions of everything and enough users to generate actionable data. All of which are in short supply. How do you recommend we get started with AB testing given the resource constraints?”
Mike: I think the resource constraints that you mentioned are probably the place to start because you’ve talked about how there’s a couple of different places where you have these resource constraints. There’s time, there’s money, and then there’s the low numbers of users. I think the low number of users is the thing to really focus on just because it’s really difficult to do AB testing if you don’t have a large number of people that you can put through a particular part of your sales funnel and get the results that you need in a short enough time span.
If you’re running an AB test and it takes you 12 months to get a result, there are two problems to that. The first one is that it takes you 12 months to iterate and do any sort of testing to move you to the next level. The second part of that is that because it’s such a large time span, those results are probably not really statistically relevant anyway.
Even if you go through those calculations and you think to yourself, “Oh, well yeah, this is statistically relevant.” It’s probably not just because of the seasonality of that stuff. It may be statistical over the course of another year but it’s not helpful. That’s the root problem. It’s just not helpful for your business to figure out really what’s going on. I would not really look at AB testing at all.
I would probably look at other areas of your business and try and find places where you can really drive the business forward whether that’s content marketing or advertising. You could try various different advertising channels. You could try face to face meetings.
For this particular industry, it seems to me like it’s very much relationship driven and yes, there are certain lists and stuff that you can get on but having relationships with people who can recommend your services, that’s really what tends to drive business in a larger enterprise environment which is kind of what the Vendor Registry falls under.
Rob: I’m not sure how much I have to add to that other than it doesn’t sound like split testing is the way to go for you. You just need a lot of traffic to do it and it does take a lot of time. It’s easier to split test things like headlines, pricing page. I would not build out two versions of anything.
I think this is much more about talking to customers, potential customers and getting a small sample size but getting real feedback, whether that’s in person at conferences, or trade shows, or Skype calls, or emails, or whatever it takes. That’s going to be a faster and more effective way to try to figure out what to build next.
This is the conundrum of being a good product person. It’s figuring out what to build next. I think there’s a big element that your vision of what it should do is a big part of gut feeling based on your experience in the space. You take a method of landscape. Part of that in my opinion should not be the over riding part is talking to customers and getting ideas and getting a sense of where the market wants you to head.
I don’t think split testing is the way to go. You think about how we decide on what’s the next feature to build in Drip. We don’t build two different features and split test them. We make the decision. It’s based on a bunch of factors that we combine and have honed over the past couple of years. Thanks for the question. I hope that was helpful.
Our next question is from a listener who asked to remain anonymous. He says he’s been following the podcast for a few years, can’t get enough of it. He’s a self funded a B2B SaaS startup for about two years. He says, “I have dozens of potential customer interviews and have been quite involved in helping beta users and testing the product myself. It touches on a sensitive business process that impacts other processes so potential customers are on a certain level of configuration and they are very afraid of bugs. I’ve had a few bad experiences with some beta users who keep asking for improvements and never sign up for the product. To be fair, the app has had some bugs here and there as we were in a hurry to push new features. We may have gone too far in the opposite direction asking customers to sign up first a statement of work contract before doing any implementation. It is really slowing the intake of new customers even if they are enthusiastic after we show them the demo. Now that we can slow down on new features, I’m hesitating on the priority to pursue. I have a number of things we’re looking at. Do you think we should remove any barriers from the sales process for the time being, focus on removing all bugs, and send the message that the app will have to be used mostly as is or do you think we should make Screencasts, write tutorials, etc. to let users start on their own? I’m hesitant to do this because based on their objectives and on their existing processes, they will have to use the app in different ways. For what it’s worth, the cheapest pricing tier is $300 a month and the medium tier is $900 a month.” What do you think, Mike?
Frankly, I don’t think we need to stay within this. He said should I do this or that? I’m not sure that either of those is the right choice. I don’t think we need to stay within the boundaries he’s laid out.
Mike: I think this is an interesting question. The problem here is I think that you’re unsure of how to proceed and it partly depends on where your revenue is and I think at those price points, you’re probably at a point where if you’ve been working on it for a couple of years, my guess is that it’s probably profitable.
I think that given that, you probably want to put yourself in a position where the app is making enough money that you can pour additional money from the business back into it and reinvest those profits to build not just the business but also go back and address some of the quality issues or the bugs and stuff that are in there. That’s just going to take more resources, more engineering time, and to get that stuff, you need money. I would probably focus on anything that is going to be bringing in revenue.
It doesn’t seem to me like that’s doing screencast and tutorials. Those are things that are helpful for users but they’re not necessary to get somebody in the door as a paying customer. You can deal with a lot of issues like that that come up on an ad hoc basis or during on boarding sessions. There are ways to get around that without actually having to do the work.
Basically, do whatever that needs to be done in order to drive those sales through, if people need personal demos or hand holding during a personal walkthrough or something like that. You can use those as well. The price points, my guess is you’re probably talking to people directly for most of your sales especially if you’re going to do any sort of annual contract or anything like that. Those are the places where I would focus and then once you have that money coming in the door, then turn around and start deciding where that money should be allocated to help build the product in the right direction.
For people who are coming in, I think the interesting piece about that was that flip flopping back and forth between, “Oh, there’s some bugs. We should get them taken care of.” Versus going to the other extreme because people aren’t actually signing up for it after you go in and address the issues that they brought up. What I’ve been doing is telling people, “Look, if you sign up, then I will look at that as kind of a higher priority.”
I typically track feature request during a demo and I’ll write down some of these name or tag it on a bug in an open case inside my bug tracker and put the person’s name on it. But if they don’t sign up, automatically, it becomes a lower priority to me because it’s not a paying customer. They didn’t sign up for it. But if I get enough of those onto a particular case, then I can probably justify spending time and effort because then it looks to me like it’s impacting sales.
It doesn’t sound like you are tracking any of that information right now. You’re really just micro focused at the individual person who you’re looking to onboard. I’ll back off from that a little bit and try take more of a macro view to it and say is this a big enough problem that we should deal with it or is this something that we can just log and come back to in the future?
Rob: My sense is it sounds like you have a couple of issues. If you have bugs in the app right now, that’s the first thing you need to take care of. I would put the brakes on everything and fix those because if you get a reputation in this space, and it sounds like it might even be a small space where people know each other and are talking, if you get the reputation of being buggy, that doesn’t go away. It’s like your credit score. Once you jack that score, it is really, really hard, if not impossible to get that back. That would be the first priority of all this stuff that I would basically buckle down.
It’s kind of like having performance problems. It’s like we halt almost all feature development if we find that we’re running into performance problem because you just can’t let that stuff go. It’s only gonna get worse and it’s going to tarnish your reputation. As that’s in process, it sounds like you had folks who ask for improvements and never sign up. By improvements, if you mean bug fixes, then that’s fine. I would do that.
But if they’re asking for more features, something that I would do in the early days of Drip, is if someone asks for a feature, I would say, “Is this the one thing that you need us to implement to be able to use Drip?” If they said, “Yes.” Then I said, “Great. Sign up for a trial and we will have this implemented by the time your trial expires. If we don’t, I will comp your account until this feature is built.” We don’t do that anymore. Tens of thousands of users, you can’t. But in the early days, when we were scrappy, that’s the kind of stuff I was doing to try to get.
If someone had a list of 10,000 or 15,000 people, it’s going to pay us a couple of hundred bucks a month. That was a big deal and it sounds like for you, it’s totally worth doing. It’s interesting. I don’t know about a statement of work contract or any of that stuff. That to me, feel a little cumbersome and a lot of overhead but just having them sign up, put a credit card on file, is a step and you’ll find that some people will balk and they don’t sign up and that’s fine. That’s fine. They were never going to sign up. The ones who do are committed to it and then you implement their features. I just found that that’s a good way to do it.
Given your price point, personally, unless you have a lot of inbound interest, I would personally be hand holding and doing very much one on one sales. The fact that between $300 and $900, I’m assuming you have a higher end tier, your monthly average revenue per user is going to be let’s just say $400 or $500, $600 range. That’s a nice chunk of change. That is definitely worth your time or someone you hire’s time to handle, focus and get them started.
I would not tend to go towards the self on boarding at this point just because of the price point and the value. I think that the value the customers bring to your business is worth the time to spend especially in these early days, to do the learning and to handle everybody into the app. I hope that helps.
Our next question is actually not a question. It’s a compliment for us and the podcast. It’s from Alex Summerfield. He says, “I’ve been listening to your podcasts for about three years. I remember when I first listened to the episodes, just thinking about it, part of your intro really fit for me. I tried a couple of ideas but they never took off. After switching a couple of jobs and getting too busy to work on side projects, I finally got sick of my job and started consulting and working on a startup on the side. I listened to your latest episode and heard that just thinking about it part, and it finally hit me that I’m no longer just thinking about it, I’m actually doing it. I just want to say thank you for the impact you’ve had on my life. All the advices helped and I really enjoy hearing the updates on your businesses.”
Mike: Thanks for the compliment, Alex. I do think that it’s really hard to get started and I think a lot of it has to do with barriers that we encounter as we’re going up in the social environments that we either come out of or immerse in on a daily basis. Breaking away from the things that the people around you are doing is just really challenging, to be honest.
If you don’t interact with the people who are starting their own businesses, or entrepreneurs, or even doing software on their own, it could be very difficult to break the mould and people look at you funny and say what is it that you’re doing because you’re the oddball at that point. You’re weird. It’s nice to hear from someone like you who’s gone out there and actually started working on side products with the intent to move forward and start your own thing.
Rob: A couple more questions. Our next one is from Rob. He says, “I’m part of an early stage bootstraps startups company in the UK with two other co founders. We are between three to six months from launching a product and having any revenue. One of my co founders is pushing for job titles/corporate roles to be assigned like CEO, CTO, etc. Is it important to allocate corporate titles/roles? Is it best to get this sorted early in the life of a company or is it just a distraction?”
Mike, as you think through this, I think corporate titles versus corporate roles is two totally different questions so maybe we can tackle each of those individually.
Mike: I was going to mention that because when you’re doing customer development, it seems to me like CEO and CTO, when you’re talking to a prospective customer, you may think that that sounds impressive but for the most part, especially if you’re early on, you don’t even have a product yet, those titles, I feel like they detract from whatever it is that you’re trying to do because they say, “Oh, you’re the CEO of this company that really has nothing.” And you’re asking people for help. Versus if you are the CEO of a company that has a full blown product and it’s been in the market for three or four years, that has weight behind it.
That early on, I would just say founder or co founder. I wouldn’t even worry about those corporate titles when you’re talking to customers or prospective customers. They’re basically meaningless at that point. In terms of roles though, that’s what people tend to think about when they think of titles like, “Oh, the CEO does this. The CTO does this.” Really, internally, that’s where that matters but externally, it doesn’t.
You want to have a clear expectation of each other and what it is that you’re expected to do inside of the business. And then externally to your clients and customers, I would just say you’re a founder or co founder. I wouldn’t go into what it is your actual title is because it really doesn’t matter. But internally, you do need to be clear on what is your responsibility versus what your co founder’s responsibility is so that each of you know what they’re supposed to working on and when they should be getting guidance and input from the other person into the things that they’re doing.
Rob: I don’t have much to add to that. I think that’s a very good summation of it. There are certain things that are distractions. I found that using the phrase co founder is really helpful especially in the early days when folks know that you’re still being scrappy and doing customer development.
Last question for the day is about sending promotional emails to existing customers. It comes from Bruce. He says, “Thanks for the great show. I have a simple software product I’ve been selling online for several years. My customers all need to provide their email addresses so I can send their payment confirmation and so I can authenticate them when they log in to use my product. I don’t state on my signup page anything about what types of communications the new customer should expect to receive from me when they provide their email. I’m releasing some improvements and new features. Some of these improvements will benefit existing customer with no additional payment. Some new features I intend to sell to existing customers as add ons. Is it okay to email my customers to tell them about the new features? They haven’t given explicit consent to receive email from me. I noticed that whenever I send a SaaS part because I’ve received a lot of emails providers even though I don’t recall opting in to any mailing list. If you guys think it’s ethical, legal, or wise to send emails to my existing customers, would you recommend I add an opt in checkbox or some small print stating the customer is going to expect to receive occasional information/promotional emails and only send only send emails to customers who opt in or have had the chance to read the small print? Thanks in advance for your advice on this. This app is called countingdownto.com.”
I like the way he phrases it. There are legal implications and then there’s ethical. That seems a little strong but your own moral compass is how it feels. What are your thoughts on this, Mike?
Mike: I think we have to provide the standard podcast disclaimer that we’re not lawyers and you can’t rely on us for legal advice, especially given that this business is based in Canada so laws there are different than they are here in the US. Given that, my thoughts on this are that if somebody is signing up for your SaaS product, there are a couple of different types of emails that you could send to them.
When they purchase it and then you send them a receipt, that’s what’s considered to be a transactional email. They purchase something from you, you send them a receipt. That’s completely legit. You are almost expected to send that email and that does not fall under any sort of spam laws that I’m aware of. When you get past that and you start talking about newsletters, and product updates, and things like that, that’s where it gets into the gray area which I think that you’re a little concerned about.
If you’re running a SaaS, it seems to me like you almost have to have people on a newsletter of some kind or a product updates email list of some kind. That said, I would default to adding them to it but I would explicitly give them the ability to opt out at any time. Even if they are an ongoing customer, you might want to segment that list a little bit to give them a profile page that says only email me about product updates and include me in my newsletters. Two different options and then you segment your list based on those two things.
That way, if somebody wants completely out, and they only want the receipts from you, you can still send those email receipts to them. But if they also want to receive your newsletter and the product updates, you’re still going to be sending those to them. Again, just segmenting between those two types of people or if there are other segments that you want to include in that, I would do that but I would opt them in by default and them let them choose otherwise if they want to. That’s probably the way that I would approach it for that.
But again, there are obviously legal implications as well. As to what Rob said about the moral implications of it regarding your moral compass, if you sign up for a SaaS, you expect to get email and told like, “Hey, this is how this product can provide additional value.” I think what you’re probably seeing is when you sign up for new products, people are sending you a lot of onboarding emails. I think that those fall into that grey fuzzy area where a SaaS vendor could easily overwhelm you with a lot of email to the point that you start to consider it spam more than anything else, especially if you decided to not use the product.
There is a difference between those emails that are being sent as onboarding emails where you don’t have the opportunity to opt out because some vendors will send those and you can’t opt out. That’s part of their on boarding process. Depending on whether you allow them to opt out or not, that factors into it.
Rob: Yeah. In the US, CAN-SPAM says if you have a commerce relationship or customer relationship with someone that you can send emails to them related to the business transaction and I think otherwise, there’s always this grey area. It’s like if you read the verbiage exactly, you could interpret it one way or the other. But in general, you do see SaaS apps. If you sign up, they don’t explicitly make you opt in and they send email and people are not being investigated by FTC or FCC or whoever would investigate that. I think the precedent is that this is generally considered a legal thing.
Like Mike said, your moral compass is going to vary. There are people who will say, “Oh, I should explicitly opt in for every single email you’re going to send me.” People get so far into the protection of your email address and your inbox and that no one should ever email you and then on the other end of the spectrum, there are spammers. You gotta ask yourself what’s it worth. There’s some business value to you.
People genuinely do generally really want to hear about feature updates, specifically feature updates to the app. Absolutely! Who doesn’t want to hear that? It’s pretty rare that people unsubscribe. Like Mike said, you should give them the opportunity to do that. Even if you’re sending things that are up sells, my guess is that’s going to be pretty valuable information for people because if it’s an up sell, it’s likely going to have some value that a good chunk of your list is going to at least be interested in and interested in hearing about.
Everything you’ve mentioned in terms of content, it’s not like suddenly you’re taking customers and just starting sending random blog posts with some content. These are really applicable to what they’ve signed up for and what they’re paying you money for. I don’t personally have any kind of issue with you doing that. It sounds like you’re not going to be overly promotional based on how careful you’re thinking about this, which some people don’t do.
Anyways, that’s my take on it as well. It sounds like Mike and I are pretty much in line on this. I think that’s the general consensus of the industry and where it’s at today.
Mike: Yeah. Coincidentally, it’s the first that we’re recording on and I’m getting ready to send out an email to the people who are current subscribers for Bluetick to tell them like, “Here’s the list of all the different updates that have been added over the past four to six weeks that you might be interested in hearing about or maybe you didn’t know about this feature or this was something that was requested by a couple of people.” Just to let them know because there’s a difference between features that a specific person requested and you can let them know when those things go in but you still have to let the rest of the customers know that that new feature has been added. Otherwise, they won’t know anything about it.
I’ve seen a couple of support requests come in and say, “Hey, is it possible for us to be able to do this?” I’m like, “Yup. I actually just added it a week ago and I haven’t gotten around sending out basically the product updates over the past month.” I do think that it’s a good practice to get into. Just be sending those out especially if you’re running a SaaS where it’s regularly changing and the expectations of the customers are that over time, that SaaS app is going to get better.
That matters a lot more I think in the early stages than when you’ve got a late stage SaaS where it’s like you’re not really adding a lot of features. You’re adding scalability and things like that. But if you’re adding features at a very fast pace, it’s probably best to email them on a monthly basis and say, “Hey, here’s all the new things that are going in that you’re getting essentially for free just for being a paying customer.
With that, I think that wraps us up for the day. If you have a question for us, feel free to call it into our voicemail number at 1-888-801-9690 or you can email it to us at questions@startupsfortherestofus.com.
Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening and we’ll see you next time.