Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about GDPR, preparing to be acquired, and technical debt. With the regulations of GDPR coming into effect, the guys discuss how it will affect small businesses and what you should do. Also an in depth discussion on things to have in order before you get acquired.
Items mentioned in this episode:
- Mike’s Indie Hackers Article
- Mike’s Interview on Product People
- Sherry Walling Interview on Mixergy
- FemtoConf Recap
Welcome to Startups For The Rest Of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching and growing software products whether you built your first product or you’re just thinking about it. I’m Rob.
Mike: And I’m Mike.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. What is our word this week, sir?
Mike: Why is it in Zencastr it says Chronomustard?
Rob: Chronomustard, that’s my name this week. I think that’s gonna confuse our editor. I’m trying a new thing, creativity. I’m trying to enter a different name each week just to see if I can make you laugh.
Mike: They usually do make me laugh, I appreciate that.
Rob: For sure. What’s going on this week?
Mike: I did a demo yesterday for a customer who’s looking at switching over from a competitor and they have a bunch of different users for the product that are in the competitor. When I went through and was doing the demo, afterwards he’s just like, “Wow this is way more advanced than what we’re currently using.” I’m just thinking to myself, “Is that a good thing or a bad thing?” Apparently it was a good thing.
They were looking through and signing up for it. Next week they’re gonna reach internally. Hopefully they’ll turn into a fairly large customer for Bluetick.
Rob: It’s always good to get off a demo and get that feeling that you’re gonna be making more money, it’s always worth it.
Mike: What was really interesting to me was just the fact that they had said how advanced it was in relation to this competitor because the impression that I get from their website and all the things that it seems like it does is that it’s probably more advanced than Bluetick but I got the distinct feeling that that was not the case.
I knew that they were having problems with it but I wasn’t clear until the phone call and exactly what those problems were and how they were dealing with them and what they were looking to do.
Rob: That’s awesome, man. Do you have any avenue if you sign this guys up that you’re able to find more customers like them?
Mike: I do but I think it’s gonna be more word of mouth relationship than anything else. This one came through a personal relationship so it’s not as if they came in through a marketing channel or anything like that. I knew who the person was and contact them and went from there.
Rob: You could also think about going to build with your Datanyze. Since they are using this competitor pulling down the list to people who are using the competitor doing the cold email thing, we talked a little bit about that last week. It’s obviously time consuming but that can be an interesting avenue if you do know that you are better than a specific competitor.
Mike: I don’t know how well BuiltWith would identify that because it’s through email so there’s no really a lot of onsite stuff that’s gonna tell me who’s using that unless they have a JavaScript which I don’t have that so nobody will be able to use BuiltWith to reverse engine but maybe they do, I’d have to go take a look though.
Rob: Probably be worth a few minutes. You have been busy, man. I was pleased to see an article on Indie Hackers, Starting and Growing a Conference for Internet Entrepreneurs, got quite a few upvotes. You said you spent several hours doing this, it’s one of the most in depth Indie Hackers Q and A I had seen.
Mike: I spent a lot of time on that, probably close to a day and a half to two days. I threw in the word because I was curious since how long it actually was, it came in at 6000 words.
Rob: It’s like a book chapter or two. It has screenshots and everything, you did a really good job. If folks are interested in hearing about the history of MicroConf, what it was like starting it, how it runs today. There’s just a ton of insight stuff, although some of it is projected revenue, I think you gave this year. Some years don’t include MicroConf Europe, it’s not all exact but there are graphs and everything that I think that Indie Hackers folks put together.
Mike: They took the attendance numbers and extrapolated with the revenue was from those numbers. It’s off a little bit but it’s not really that big deal, it’s more of the trajectory, I think, that’s important to see.
Rob: It doesn’t include sponsorships and all which are big chunk. It’s fun for me to read because I could be like, “Oh yeah.” I was nodding along like, “I remember that. I can’t believe Mike remembers this.” You are pulling stuff out, all the anecdotes that I had long forgotten.
Mike: Some of the things I had to go back. I looked through my email to see when it was that we first started talking about MicroConf and I traced it back to the exact day which I don’t know if we talked about. We had a name for it before then and we were talking about it separately and just calling it a conference or we had the name and we picked it on the day and went from there.
I don’t remember how long we talked about it before we decided to register the domain name and start looking forward or if it was just like spare the moment thing.
Rob: I remember being very spur of the moment. It just made sense, it was like, “Why don’t we just do that?” That’s cool. There’s a lot of engagement, a lot of really good comments and in depth discussion going on and 36 upvotes, I get the feeling that’s quite a few for most articles. Anyways, if you’re interested in hearing that story, we’ll link it up in the show notes but you can obviously go to indiehackers.com and give it a search. You also went on Justin Jackson’s podcast, MegaMaker. It was a couple weeks ago.
Mike: I think that was last week as well. We recorded it and then it went live either later that day or the very next day. It was all about MicroConf itself and what Starter Edition was about. We’ve announced that Justin Jackson is going to be emcee for Starter Edition.
We did that last year, Starter Edition as well, with Jordan Gal from CartHook. He was the emcee for that, we basically turned over the reins to him and let him run the show at Starter Edition which was really cool because it’s nice to be able to sit back a little bit and enjoy the conference a little bit more. I don’t know how you feel about that but it’s nice to let somebody else take the reins for a little while.
Rob: That was something that Zander, our conference coordinator, encouraged us to do because since Growth and Starter are back to back, we’d be solo energy by the fourth day of trying to emcee and run the conference that I think he knew that it would just wouldn’t come off as well as it could. Jordan certainly knocked it out the park as the emcee that was really, really good and to give them their style up there on stage is fun.
You know, with Starter, Justin is such a good fit for it because that is really the crowd that he is talking to everyday and interacting with so he knows that crowd perhaps these days, you know better than I do in all honesty. It was years ago that I was really knee deep in all of the transitioning from developer to marketer and talking about all that stuff. He just has his finger on the pulse of that. I think he’s a good fit to emcee. This year he’s also doing a talk which is cool.
Mike: How about you, what have you been up to?
Rob: I’ve just been working, kicking back a little bit. I have a spring break coming in a week or two. We are heading down to Florida, starting to warm up in Minneapolis but still in the 30s and we wanna get some sun. It’s an easy flight down to Miami and we rented up Big Ol’ Airbnb off of 80 and we’re looking forward to that.
I was enjoying, I don’t know if you’ve heard it but Sherry was on Mixergy. It’s actually her second time on Mixergy. Her first time, it was when she interviewed Andrew Warner and put it on ZenFounder and he simulcast that basically onto Mixergy. But this time it’s called Keeping Your Feet Together As A Founder and it’s Andrew Warner interviewing Sherry about the book and about the stuff she’s doing in the entrepreneurial communities. It’s really a pretty intense interview but it’s really good. Have you had the chance to listen to it?
Mike: I have not, no. I don’t get a chance to listen to Mixergy too often. I’m actually about two months behind on most of my podcast at the moment anyway.
Rob: I listen to select Mixergy interviews just because there’s a lot of them and they are long but this is one that obviously I jumped on, I just wanted to hear the content. It’s a good one, we’ll link it up in the show notes but you can obviously search for Sherry Walling Mixergy and find that in Google.
Mike: Awesome. What are we talking about today?
Rob: We’re gonna answer a bunch of listener questions and see how many we get through. It was cool, we were down to one listener question. When we announced it on the show, I think we’re up to 12 or 15 now and so we can hammer through. I feel like this cadence every other week answering these questions has become something that I’ve enjoyed and I’ve gotten positive feedback about it.
Voicemails are even better because it shows people that there are all these different people with different businesses listening to the show. You and I know we have tens of thousands of listeners but as a listener, you don’t know that. It would be hard to know or understand your fellow listeners and your fellow entrepreneurs doing it. I have enjoyed this and I think we’ll keep doing it as long as the questions keep coming in.
Our first question today is for me, it’s actually from a guy, Louis. He said, “The question I have is what would Rob wished he had prepared in advance in going through the process of selling Drip? Imagine there might be things like intellectual property who may have purchased the use with his own name but now need to be transferred to the company, manuals and processes, bank issues such as PayPal not being able to transfer, etc. The list could be endless, maybe a good topic for a book.”
I’ve actually thought about this. There are two thing I wanted to say here. The first is I’m gonna make an announcement but not really an announcement, Mike, I haven’t even told you this. I’ve started writing what I think may become a book. That’s the exact right response. I don’t know if it will yet. My goal for this year is not to tackle any big new projects.
There’s a lot to tell, there’s a lot of story that has happened since the last book I wrote. Maybe it’ll just be about Drip and the trials and tribulations, the last year of personal finance hell and being unable to fund the business and then the year of the acquisition and then the year of moving. As I started thinking about it, I was like, “Isn’t this interesting enough? Will anyone care?”
I sat down with a notebook and I just wrote out what were the most stressful parts of my life both personally and professionally since 2011 in essence. The list was crazy long. Each of them just shaped into this narrative and they link together in this very interesting way. Even if I were to write about acquiring HitTail and not use it in the book, it’s still […] for me to write about the process of growing it and then selling it. There’s a bunch of stress that went along with that sale.
I started just thinking about all the stuff that happened growing Drip. I made this big list, when I looked at it I feel like it’s interesting enough, at least worth sitting down and hacking some stuff out. I had like three pages of just bulleted list. About a week and a half ago, I just sat down one evening, I started doing it on a weekend. It’s kind of writing itself because it’s a narrative. I’m pulling out actionable things but I’m trying to get the grit of what it was actually like.
I have emails, I have Voxers, I have all this, I have my MicroConf talk from last year talking about the sale and my thought process, I started to listen to that and transcribing pieces of it. It’s cool in this day and age, all the digital elements that we have because I can’t remember exact dates but Gmail sure doesn’t forget. It remembers the exact date of this email that I sent to Derrick about this topic.
I’ve literally just been doing it on the side almost as a journal but trying to be very honest about everything, trying not to sugarcoat things. I’m about 7000 words in and it has just poured out of me, it’s all out of order, I just picked the next thing on the list that I think, “Man, I really wanna write about that today,” and I’m cranking it out.
I don’t know if it will be a book, I don’t know if I will ever release it but it’s something that I think could have the potential to be that. It’s always funny, when I got this question I started thinking, “Maybe that should be a piece of this.” Because I don’t just want it to be a narrative, I actually want it to be in typical or a podcast style and MicroConf style. I want it to have lessons that people can take away.
Whether they’re acquired or not, even just the growing part of it, the mistakes that they can avoid that I made or smart decisions that we made that I feel like people can learn from.
Mike: There are two pieces of that because there are people who would read that just because they know who you are or they’ve seen you speak and they just want the inside baseballs so to speak. They’re interested in the story, I totally hear what you’re saying about having the lessons but I think you could do both where you’ve got the story itself and then after each chapter or after each section you have a list of things that you personally pull out and be like, “Here are the lessons that you could take away from this, here’s the story piece of it and then here’s the lessons that go with each of these.”
Some of them may not have any lessons at all, it’s just something happened and you got lucky or unlucky and you just had to deal with the consequences or fallout. There may not have been anything that you could do about it. Maybe that’s the lessons, you can’t plan for everything but I think that it’s still going to be interesting to a lot of people.
Rob: I appreciate that. I kind of think of it as I think of any MicroConf talk I’ve ever given or at least the best talks that I’ve given tend to be a story, like a hero’s journey and then pulling out super actionable tactical things. That’s how I’m envisioning it. I’ve read only a couple books like that, I like it because it’s different, it’s not just a narrative. I want them to be not obvious takeaways, it’s not like work hard and persevere and you will make it. It’s not stupid stuff like that.
I realized that I think I’m telling myself that I don’t know if it’ll be a book so that I don’t feel in pressure or anxiety. I don’t want to feel forced to write it, I don’t want the writing to feel forced. I’m telling myself no one will ever read this because I wanna tell the story honestly, because there’s obviously a lot that went on that no one else knows that was very internal, that was between Derrick and I or between Clay and I or whatever.
Eventually, I’m sure I’ll have to edit some of that out but I’m trying to get it all out and then evaluate, is this worth doing? Maybe it’s an ebook or maybe it’s a series of blog posts that I’ll release or maybe it’s an audiobook, I don’t even know. It’s an interesting project. Hopefully it’ll turn into something.
Mike: Man, if it doesn’t, you did it for yourself and that’s not a big deal either. There’s something to be said for just doing things for yourself once in a while.
Rob: Exactly. That’s what I said, it’s like what’s the worst that can happen, I should just write this out. If nothing else, my kids can read it someday or something.
Mike: All of these aside and back to the question, are there any top level things that you can take away that you wish you had done that were probably a major things that you either overlooked or hadn’t thought about upfront that needed to be transferred or you wish you had done?
Rob: The prep work that I think everyone should do that you don’t think about is it’s far more mental prep work than anything else. I listened to the book Built to Sell three or four times, I listened to Finish Big multiple times, I did a lot of journaling, I did a lot of thinking. You have to know what your deal breakers are, you have to know probably what your drop dead price is. There’s a bunch of stuff that you need to think about and that it the prep work that I would focus on. I’ll just put that out there, first and foremost spend more time doing that.
The examples that the guy brought up, the guy who answered the question, most of these were not an issue. He brought up intellectual property, I had already transferred all of that into an LLC. If I hadn’t done that, it would’ve been disastrous, it would’ve been a huge pain in the ass.
One big thing that I do think you need to think about as you’re building your companies to have a clean IP, meaning that all of your contractors who touch your code, all of your employees who touch your code, you need to have them sign in their employee agreement, it should say, “Everything I do, the company owns.” I had that, I had only missed one contractor. I went back and asked him nicely, we still have a good relationship and everything was fine.
Had I not had that, it would’ve been really tough because when we went through the acquisition, they needed that. This funded company is not going to pay a premium for my startup if there are IP holes that someone could come back later and sue them or ask for ownership with the code or whatever. It’s not something you think about when you’re two, four or five person startup but it’s something that you should definitely have.
I signed to the same employee agreement, and Derrick signed, even us cofounders. We had to have agreements that basically Drip, the S Corp that owned everything own everything, that Derrick and I couldn’t walk away with that. That’s one thing I would think about.
The guy mentioned manuals and processes, that was not an issue because we were an eight person team and they’re acquiring the team. They weren’t looking to automate everything. I think if the team was walking away, yes they would want manuals and processes to hand off to the next team but there was zero questions about that. There were more questions about what our vacation policy and HR staff and employment agreements looks like than anything like that.
In terms of bank issues, they didn’t acquire the company, if you think about it. They acquired all the assets of the company and that’s typically how it’s done because they don’t want any of the liabilities. They left an S Corp that Derrick and I still own the same amount that we’ve always owned, they just bought all the internal assets of it including the code and the goodwill and the recurring revenue and employment agreements and all that stuff.
As a result, the corp still owns the bank account, they didn’t acquire any of that stuff. Thankfully we never had to setup a PayPal account or anything like that. Same thing with domain names, we just transferred them over. They were all in the GoDaddy account and we transferred them over to their GoDaddy account.
The only other thing I could think of as I was going through this list that I think would be interesting to think about it they ask for, this is typical, the standard due diligence stuff, all corporate documentation, your articles of incorporation, every single amendment you’ve ever made to them, everything. Have that all in one place because going out and finding it and scanning it is a pain in the ass.
Having record keeping doesn’t seem like a big deal when you’re a three person startup or when you’re a solo founder. But if you’re ever planning being acquired, you probably want all of this stuff somewhere so it doesn’t take you weeks to put these docs together.
The next thing is having really solid books, basically having income statements for every month. For me it was literally just a Google Doc with revenue, expenses and that kind of stuff. I also had Xero, the accounting software that they could look at. When they were asking for high level numbers, top line revenue and that kind of stuff, I was sending them Google Docs.
They’re gonna ask every single service you use, what’s every SaaS app that you pay for? Hopefully they’re all on a credit card, you could just go to credit card, that’s what I did and just started listing those out. Copies of leases and every contract you’ve ever signed for every service. Transferring the Stripe account did happen because all the subscriptions were in there.
That’s the high level overview, I think it’s something that I hadn’t thought about. When there’s a technology transfer, you think more about, “Boy, the tech has to be good and has to be automated and you want processes in place.” When it’s a company acquisition, it can be different. When people bought HitTail just as a product, they didn’t ask for articles of incorporation because they weren’t buying the team, it wasn’t a strategic acquisition. Those are my high level thoughts.
Mike: I hadn’t realized that they did not acquire the entire company itself and they were just acquiring the assets from the company. That’s the way that my wife had purchased the fitness studio that was in town. She didn’t acquire the business, she acquired the assets of the business.
I was very clear to her about just because the records of the business were obviously a little screwy and the person who own the business before couldn’t really explain certain things and was a little cagey about certain pieces of it where I’m just like, “Do not acquire the business.” Because let’s say she’s got a car, for example, that is owned by the business, if you acquire the business, you’re also acquiring the debts that go with it and any liens or anything else that goes with it. You will be on the hook for those things. If you don’t know about it, it doesn’t matter, you still have acquired them which may suck.
Rob: If you buy the company, you acquire the assets and all liabilities. That’s why almost without exception, anyone who knows what they’re doing, when they buy a “company” they’re just buying the assets of the business, that’s the standard. When Facebook bought Instagram, you can bet, their lawyers did not buy the Instagram LLC or C Corp. They bought just the assets of it.
As a result, you have to then list out what all the assets are which is interesting because you have to list out your code and the database and this, it’s just a big long list of stuff.
Mike: With my wife, there was a tax bill that ended up coming in. It was sent to her and she’s like, “No, this isn’t me because I didn’t acquire the business.” There was stuff that came up afterwards that had she’d acquired it, she would’ve been stuck with it and there is nothing she would’ve been able to do.
The other thing I find interesting is that when I worked for Pedestal Software and they got acquired by Altiris, the Altiris acquisition team came in and they handed us, all the employees, these documents that we had to sign that were basically more or less a copy of what our previous agreement with Pedestal had been for all the IP rights and signing them over to Pedestal but it was their version of it.
We’d already signed all the stuff but they said, “Yes that’s fine and everything looks good but you also have to sign these.” I think maybe there are updated ways of covering additional holes or something like that, I’m not sure.
Rob: I guess our agreements were perhaps good enough for their lawyers, they probably looked at them and said, “This covers everything.” Because it was recent, it was within the last year or something and everyone had signed. I broke everything out, Numa Group which is my umbrella LLC that owns a bunch of stuff, it owned Drip until maybe 9 or 10 months before it was acquired.
I was already in the process of ripping it out of Numa Group because that was when Derrick was taking some equity in the company and he essentially became cofounder. I was already in that process which was painful and agonizing and took five months and more money than it should have. Drip was already in an S Corp. I was very, very thankful for that because if it did not, then it would’ve been a fiasco to try it doing during the negotiation and the acquisition process.
When that all happened, I basically fired all of us from Numa Group, we all got new jobs with Drip, S Corp, Drip Incorporated. We all signed agreements at that point again even though some of us already signed up with Numa Group. Then, essentially when Leadpages acquired us, we all got fired from Drip Incorporated and all got new employment agreements with Leadpages.
I think they probably had some IP stuff in their employment agreement as well which is fine because then anything you do for them they own but they didn’t have a specific additional stuff we had to sign.
Mike: I wonder if it maybe it was because Altiris was a public company and they had additional things that they had to cover themselves, I don’t know.
Rob: I can see that, it makes sense. Thanks for the question, guy. I hope that was helpful. Our next question is actually not a question, it’s some kudos for us and it’s a voicemail.
“I just listened to episode 838 with the questions. It was great to have that interactive […] podcast, I just wanna give you guys some feedback, a long time listener. My name is Chris. I really enjoyed the episode, just hearing those questions and getting some more of your perspectives and your background and experience. […]. Take care, guys. Thank you again. Keep up the good work.”
Awesome. Thanks for calling, Chris. I wanted to play that because it’s good to hear feedback and folk’s opinion. He said episode 838 but I think he meant 383 which was just another one of these Q and A episodes. I specifically mentioned in that one that I like doing them more often and that I like getting voicemails because it shows it has the interaction. Thanks for that, man. I’m always happy to hear from folks.
Our next question is from Mr. Andrew Connell about GDPR. “Hey Rob and Mike, this is Andrew Connell from Voitanos, that’s voitanos.io. I do online training and I do it for everybody around the world or developers around the world. With the coming effectiveness of the GDPR for data privacy and personal privacy data at Europe, I’m curious if you guys can comment a little bit, of course not being lawyers, I’m not a lawyer either. I just think about what kinds of things developers really need to be paying attention to? What kinds of things you need to be careful of?
I’m asking these guys because it’s also very much in the way of how we’ve all be listeners of your show worked on doing email based marketing and collecting email addresses and potentially phone numbers and other information about users. What kinds of things you need to think about, I’ve seen things about privacy statements that you need to have on your site, how you’re collecting the data, what talent is being used, how you’re protecting it, all those kinds of things.
I’m just curious, what things do you really need to be paying attention to? There’s probably the gold standard but also what’s the standard that you can do where you’re at least defensible. Maybe you’re collecting data and the user finds out, they decided they no longer wanna be tracked by you. Can you just go back to them and say, ‘Yes I track you by your email address. Here’s all the information I have about you. If you want me to delete you, I can delete you.’ I’m just curious, do you guys have some comment there or maybe even have somebody who is a lawyer who can jump on the show and maybe comment? Thanks a lot. I love the show. See you guys in Vegas.”
The riveting conversation topic of GDPR.
Mike:Oh, joy.
Rob: Everyone is thinking about it so it’s important, it’s just such a fiasco. I’m gonna use the word stupid a lot in this conversation insight. Big parts of it, I think, are really dumb. There’s a 250 page doc or whatever and Brandon, our senior director product, went through the entire thing.
The end result is gonna wind up being something like we have to rewrite a bunch of internal policies and we’re gonna add a checkbox to a form for our users. That’s very similar to what MailChimp is doing and Active Campaign, all the ESPs. I’ll stop there and circle back because I’ve been talking a lot this episode. I know that you saw a talk at FemtoConf about it and I’m sure you have other thoughts on this.
Again couching it that we aren’t lawyers, we are not giving personal advice to anyone and certainly don’t have an exhaustive understanding of this but this is just our general thoughts on what we feel like folks might wanna do for GDPR.
Mike: The talk that I saw on FemtoConf, there’s a linkable posted in the show notes from Aleth, she’s the one who gave the talk. There’s a link to an overview of her talk as a recap from Christoph. He runs FemtoConf with Benedikt. You can go out there, there’s an overview of it but I’ll say it glosses over certain details that she talked about specifically.
With GDPR, the thing that you really have to make sure that you’re aware of is that if you touched the data in any way, shape or form, you’re on the hook for it. You have to make sure that you are both protecting it and if you are able to personally identify somebody, that you are complying to those GDPR policies.
If you have metadata about somebody, like custom fields or something like that, that’s not considered personally identifiable information but there are certain pieces that are. For example, an email address would be personally identifiable, an IP address would be personally identifiable, first name, last name, address, those kinds of things.
You tag somebody, that’s not considered personally identifiable but you have to spell it out in your privacy policy what you are doing with those types of things. Are you adding those types of things?
Rob: How is an IP address personally identifiable? That’s stupid. It’s not personally identifiable because IP address, a, can change constantly, b, you could have a single IP address for 100 people at a company, there’s so many ways that that’s not. I will stop.
Mike: You just have to be careful about what it is that you’re doing with that data. A couple of big things that I’ve seen that you have to really pay attention to if you’re selling stuff is that one, people have to be able to request a copy of all of the data that is associated with them.
If you’re running a SaaS app and it’s collecting the information, let’s say it’s Drip ESP, your customers are gathering information based on that email address, the person who owns that email address has to be able to come in and say, “Show me everything that you collected about me.” You have to provide them with the mechanism to give them that data dump. I’ve seen this recently, Facebook is doing this, Twitter is doing this.
You can go and you can request a download of all the information that Facebook has on you, the same thing with Twitter, you can get a download of it. I haven’t done that with mine yet but my understanding is that it is absurd and I’ve seen the amount that Facebook has on you, for example. There’s obviously backlash in the news right now about the amount of data and how personal it can be in certain cases. That’s something you have to pay attention to when you’re trying to comply to these, you need to give that to somebody.
Rob: Here’s what I would say, if you’re a developer, you don’t have to have an automated way. They can email you and you can go run a sequel query. I would not go and build something consul or anything especially it’s a small company. You know that you can do stuff agile and just do it when it happens, do it just in time, whatever.
They can also request that you have to delete everything, then at that point, the first time, it’s gonna be a pain in the butt but you’re gonna write that sequel query to delete it out, it probably gonna break something then you’re gonna fix it and then the next time you’ll have the same query. That’s how I would think about it. If you’re Facebook, that’s not gonna work because it’s not scalable. The odds of you getting a request when you have 1000 users or 5000 users, it’s pretty low.
Mike: The downside of that, though—I was just about to mention that—with deleting the information because you do have to comply to the right to be forgotten clauses.
Rob: Which is the stupidest thing I’ve ever heard.
Mike: I think you said it in the middle of the other comment as well, we’ll say it’s three. The right to be forgotten says that somebody can say, “Completely forget about me.” The problem I have with this is that where do you draw the line for that? I know that there’s a timeline that you have in which you can say, “We’ll get this taken care of.” You have a certain amount of time or this 14 days or 30 days to get rid of the data.
The question I have in my mind is that yes, I understand that that applies to backups but does that mean you have to go into your backups or you are only allowed to basically hold 30 days worth of backups? For the sake of arguments, say that it’s 30 days, is that all you’re allowed to maintain because that seems scary.
Rob: That’s why this is insane. It’s a legislation, it’s government getting involved in something that technically is a bad choice for a company or a bad choice for a business. We know as IT people, as developers, as professionals, as DBAs, you wanna have weekly backups or monthly backups for literally years probably. It’s not so you can hoard and use a bunch of information, it’s so if stuff goes sideways at some point and you realized you have this big error, you always go back, it’s a safety mechanism.
Mike: The other thing that bugs me about this is the right to be forgotten. I get the intent and I understand it but let’s say that somebody comes to you and says, “Rob, I want Drip to forget about Mike Taber.” What happens in three days if my contact information makes it back into Drip? How do you prevent my information from going back into the system without knowing who I am and keeping track of that? That’s a total chicken and egg problem.
Rob: None of that, as far as we’ve seen, is in GDPR. That isn’t addressed. The example is you say you want the right to be forgotten, you sign up for Rob Walling’s newsletter and you, Mike Taber, say, “I want to be pulled out of there.” You’re pulled out. What if you’re in 10 of our other customer’s accounts, are you only forgotten out of that one account? Are you forgotten out of everyone? It’s not specified.
Like you said, what if you then go to sign up to a new newsletter tomorrow and XYZ person is also hosting on Drip. There are so many edgy cases. The problem is every version is gonna be this much of a pain in the ass. If they do V2 in a year, think of how many personal hours and how many dollars have been pissed away by companies that would otherwise have been productive building products, doing interesting things, creating jobs.
Marketing alone on the Drip team which is not a huge app, we’ve wasted hundreds of hours and thousands, if not tens of thousands, on legal fees just having our lawyer’s advice and stuff. That sucks, that’s money that could’ve actually been productive and instead it’s sitting here dealing with what essentially is legislation.
Another issue I have is that in the US, they often will pass things, they’ll pass laws like this but they will exempt small businesses. If you’re 25 employees or less, you don’t have to comply to certain things. They do that because they don’t wanna put an undo burden on small companies because small companies are the ones that don’t have the budget, that don’t have the analysis council and that don’t have the bandwidth to handle a 250 page doc that’s completely opaque and everyone is confused about and freaking out. I think there should be an exception.
Isn’t this really meant to be for Google and Facebook and Apple and Fortune 1000 or Fortune 5000 Companies. How much do they care about these tiny little 3 person, 5 person, 10 person companies. They’re just trying to run a business, they’re just trying to make a living. That’s where I think they overlooked having some kind of exemption for small businesses.
Mike: There are certain pieces of it that are exempt; there’s the security officer, a dedicated security officer. Stuff like that, I believe is exempt. If you’re a small business below a certain size, you don’t have to have that. But the reality, at the end of the day is if you’re a single owner, that’s you anyway. It almost doesn’t matter. I totally agree, they’ve overreached is really what it comes down to. It doesn’t makes sense for much smaller businesses to try and have to comply to that.
Rob: Again, you and I agree, we understand the spirit of what they are trying to do. I don’t disagree with any of that, I disagree with the amount of burden that they’re placing on all the small businesses. Everyone is talking about this right now. It’s a waste of everyone’s time. When I say everyone, in our circles, in the startup circles. Yes, Facebook should worry about it but it’s so much wasted bandwidth.
Mike: The other thing that I saw that was interesting was when you spell out in your privacy policy what data you have that you’re collecting and what you’re using it for, you also have to give the person the ability to opt out of individual pieces of it which to me seems absurd. I don’t know why you would allow that.
Rob: I have not come across that, I don’t know about that. That’s an interesting piece.
Mike: Let me give you an example, if on your website you have Google Analytics, a Facebook Pixel, and a Drip Widget for example, somebody can come and say, “I don’t want you to track me using Facebook Pixels but the other things are okay, just not that.”
Rob: I had a guy who read all 250 pages of it and that is not on our list. I would look to see if perhaps there’s an exemption or there’s something in there that says you can otherwise not do that because, again, I haven’t heard anyone else talk about that.
Mike: The thing is there’s a piece that revolves whether or not you’re a data processor or a data controller. That’s the part that revolves on it. You mentioned earlier that there’s a question in your mind about whether or not if somebody is asked to be forgotten, is it just for that one account or is it for all them? My understanding is it’s all of them.
They could go to Facebook, you don’t have control over but they could go to Facebook and say, “Opt me out of everything, don’t track me. Forget me completely.” That has a trickle down effect on you running Drip because if you guys use the Facebook Pixel to track people, then you can’t track me, for example. Facebook essentially blocked it. Again it goes back to how do you keep track of that unless you know who the person is to not track them.
Rob: To be honest, I asked someone who I know is familiar with GDPR and had spent some time looking at it. He runs a small business, less than 10 employees. I was saying, “What are you actually gonna do here?” He said he is gonna handle things as they come in in terms of the request, in terms of deleting and in terms of giving a report of what they know.
He is seriously considering not creating all the documents because they basically say you have to have these 10 policies or 12 policies, all this internal documentation you’re supposed to have, processes to do this. He was going to say that his company is compliant with the spirit of GDPR and we’ll live up to the request but they do not have all of those policies in place.
It was like some verbiage of we believe in the spirit of it, we will comply as needed type of thing with the thought in mind that he’s not in Europe so he’s not European business so it would be very unlikely that the EU is gonna reach across the pond and come and try to take some little 10 person company out. Like I was saying, this is really more intended, my understanding is more intended for these larger companies.
That’s the balance, is being practical about it and not putting your head in the sand and not doing anything but understanding some basic fundamentals which is what we’ve talked about here. If folks are opting in to hear from you or receive marketing, there’s supposed to be a specific checkbox that says you agree to the privacy policy and our terms of service or whatever which again I think is idiotic because they already know that.
A checkbox and them checking a checkbox is gonna make a difference, it’s like agreeing to a ULA, user license agreement with Apple, no one reads those things. You’re gonna put a checkbox with the link and it’s just gonna become this route thing that everyone does. It’s not gonna change anything but that is what it says technically. Consider if you’re asking for keeping your customer’s customers data somewhere, it gets more complicated.
In Andrew’s case, he runs online training. He has an online training, video training, people can sign in. He’s not collecting his customer’s customers data so it’s very much more simplified. I would consider a just in time or a simplified approach if I were in his shoes. How about you, Mike? You wanna talk about how every aspect of your business is not gonna comply and open yourself up towards the EU?
Mike: That’s the interesting thing is that for businesses that are not based in Europe, they don’t have the jurisdiction to force you to do any of that anyway. There’s literally nothing that they can do, they can’t sue you and say, “You are not complying to this.”
Rob: They could sue you in US court, they could. The EU could file a sue in Massachusetts court. You would have to fight it out, you would have to settle or you would have to fight. The odds of that happening, though, for you are almost non existent.
Mike: The thing is there’s a difference between them filing suit versus them having jurisdiction over. The sucky part would be you’re gonna have to comply to it just to make that lawsuit go away or you’re gonna have to fight it which you’ll win if you fight but you’re gonna incur a ton of legal fees over the course of doing that because they don’t have the jurisdiction and that’s what the court would rule.
I certainly wouldn’t recommend trying to fight it yourself and be your own lawyer there. I’m sure that somebody probably is skilled enough to be able to do that but I wouldn’t wanna be that person, I wouldn’t wanna risk it.
Rob: Here’s another option I heard someone throw out. They said EU customers are less than 10% of my business, I’m gonna reject, not allow EU customers anymore because I don’t have the bandwidth to do it. That’s what someone told me, that was really interesting. That’s a super bummer but at some point you have to throw your hands up and you gotta do IP detection or you just ask, “Are you in the EU, yes or no?” If they say yes, during the signup, you just say, “Sorry we can’t support you through the GDPR.” It’s pretty fascinating, I hope it does not come to that but I can imagine some businesses that’s just going to be easier and simpler to do that.
Mike: I’ve heard some people tried to, I think it came up at MicroConf Europe this past year about the legislation. There is someone there I met who was basically basing his higher business idea off of the idea that there were going to be US based businesses who aren’t going to comply to GDPR and they were gonna say. “You can use our service and you will be compliant.” I disagree that that’s a great business idea because all they have to do is comply and then suddenly your whole business value proposition goes off the window.
Rob: Obviously it’s complicated but I do think there’s a pragmatic way to approach this. As with any legislation, it will iron itself out, it will be more understood. You can watch companies like MailChimp or Drip Leadpages or whatever, GitHub, or Slack and watch how they handle it and then evaluate, “Do I need to do some other things?” You can also read that 250 pages doc and try to sort it out.
I don’t think it’s as bad as people make it out, I’m hoping it’s not gonna be that way. I do think if you’re in the EU, there is definitely more of a cause for concern if you’re running a business. Thanks for the question, Andrew. I think that was super helpful and a timely topic to discuss.
Mike: I think with that question, we’ll wrap things up for the day. If you have a question for us, you can call it into our voicemail number at 1-888-801-9690 or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups. Visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 384 | Bluetick Marketing Plan Teardown
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about the Bluetick marketing plan. Mike breaks down his plan in three categories, one-time, ongoing, and long-term. The two go back and forth on the most effective strategies for each category.
Items mentioned in this episode:
- Bluetick
- FemtoConf
- Price Intelligently
- Product Hunt
- CSS Gallery List
- LeadFuze
- Whitetail Software
- Zapier
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: I’m Rob.
Mike: We’re here to share our experiences to help you avoid the same mistakes we’ve made. How are you doing this week, Rob?
Rob: I’m doing alright. I was just looking through our 584 worldwide iTunes reviews. We’re approaching 600 people, 16 more and we’ll be crossing that 600 mark, which is quite a milestone. Some recent reviews, there’s one here form just last week, from […] and he says, “Great podcast, been listening for years.” One from Mr. Man Man from the UK, he says, “Full of great practical advice. Discovered the show recently and now a regular listener. Extremely valuable advice for anyone who wants to build tech products.” Limons from the US says, “Every episode is invaluable. Somehow Mike and Rob ensure that every episode has at least one and usually a ton of valuable info. I love the presentation style and how much they pack in. I don’t think anyone just started tech business without listening to this podcast.” Thank you very much for those.
You can log into iTunes, or Stitcher, or Downcast, or Overcast, and leave a five-star review without even typing in all those crazy technical words and phrases and sentences. Just hit the five star button and it will go a long way towards helping us stay motivated to record the podcast. Also, helps us grow our audience which convinces us to keep doing every week, to ship every Tuesday, as they say.
How about you? What have you been up to aside from-so you lost power. People know I did a solo episode last week. How was that with no power and no water?
Mike: Oh, that sucks. It was about a day or so that we lost power. We lost it, I think, at around 10:00 o’clock or 11:00 o’clock at night and then we didn’t get power back until probably 6:00 or 7:00 the next day.
Rob: It’s tough.
Mike: Yeah, it sucks. The real hard part is that with no running water either because we have a well and the water comes up through the well with the electricity that powers the pump. We actually have some giant jugs of water that we keep downstairs just in case we do lose power or something happens with our water because we’ve had issues with our pump as well. You lose your pump and you can’t have any running water which is surprising, you use it a lot but you never ever think about of what would happen if I didn’t have water today or what would happen if I don’t have electricity today. It’s just inconvenient to say the least.
Rob: Right. I’m glad you’re back. You went to Germany recently.
Mike: Yup. Went to FemtoConf which was pretty awesome. I had a great time. There were probably about 40-50 people there. There were some issues with a few people getting into FemtoConf just because they were flying in from the Eastern US. Of course the snow storm came through and hit the New England area so some people were delayed, some people just didn’t get there at all. Travel for a few people was kind of a mess. Fortunately, I flew out on Thursday and got there and kind of recovered, no real major issues with jet lag. But I really like the feel of it.
It was a lot like MicroConf when it was much, much smaller. Just much smaller groups, intimate conversations very much like MicroConf. The feel of it and the vibe was very reminiscent of that, I’d say in the very, very early days of MicroConf 2011-2012 when you didn’t necessarily know everybody or you’re just kind of getting introduced to what other people’s businesses were. There were a couple of talks on the first day. Then the next day Sherry gave a small workshop. Then we split off into a couple other ones where Alex Yumashev from JitBit did one on kind of like engineering growth hacking that you could do. Then Mojca Mars gave one on Facebook Ads which I went to that one. She went through and basically set everybody up with their Facebook Ads account, walked them through exactly how to get things started, and kind of helped them figure out what it was that they needed to do moving forward.
Rob: That sounds super cool. There was just one or two talks a day?
Mike: On Saturday there was four talks and then on Sunday there was Sherry’s workshop in the morning, and then there were two other workshops after that. Thomas Smale from FE International was supposed to be there, so there was supposed to be two workshops, and followed by another two workshops. It kind of run simultaneously in different rooms but because Thomas couldn’t make it, Sherry ended up doing one for everybody, and then the other two were split. First speaker on Saturday was Claire Suellentrop who’s also going to be speaking at MicroConf in a couple of months.
Actually, what’s that? Six weeks away right now? Claire spoke first and then it was followed by Aleth, she spoke about GDPR, and then I spoke about email follow-ups, and then Patrick Campbell, he was one of the people who was delayed, he spoke about modifying your pricing and how to figure out what an ideal pricing model should be for your business, and then using it as one of the biggest growth leverage in your business. I think I got a lot out of that talk because I’m kind of right in the middle of evaluating pricing and figuring out what to do with it, and how to pitch it to people.
But he also pointed out the fact that SaaS has gotten substantially more competitive over the past several years. He had graphs and charts to show the number of competitors, the people that started five years ago had versus people who started two years ago versus people who started last year. It was just fascinating the amount of data that he had on that based on all the stuff that they do for Price Intelligently.
Rob: Yep. His talks are always super valuable and have a lot of data. It sounds like a lot of fun, man. Sherry was there, obviously. Told me about it and said she enjoyed it as well and said there was a ton of overlap with the MicroConf crowd. I think she said most people go to one of the MicroConfs which is fun. It’s fun to get together in almost a more mastermind-y arrangement. I know it’s not that small but I bet you kind of know everybody and know what they’re up to and you can literally talk to everyone at the conference.
Mke: Yeah. If you don’t know them before you get there then it’s easy to at least have those conversations and get to know them by the end of it.
Rob: For sure. Cool. What are we talking about today?
Mike: Well, I had asked a few people what they wanted to hear on the podcast. One of the biggest things that came out of it was what is going to be the initial marketing plan for Bluetick now that the new website is up and running. I wanted to talk about that and kind of just go back and forth, and giving I guess a high level indication of what I’m going to be doing. And then you and I can talk about either specifics of it or vet some ideas around or even just tear some of these ideas apart, and say, “Look, don’t do this,” because more than happy to hear some of the advice that you have to share.
Rob: For sure. I know I had shared with you at one point the Drip marketing game plan and the HitTail one actually. The HitTail is a little bit out of date but did you look through that, at all, to populate this list you have?
Mike: Some of those things are pulled from there. I haven’t gone back to either those in a while. I probably should do that at this point. Most of what I’ve been doing lately has been really focused on either MicroConf or getting the new website up and running and now that that’s in place and things are settling down a little bit with MicroConf, I can go back and take a look at those. But some of these things are pulled from that.
Rob: Yeah, that makes sense. One thing I would consider before we dive in, you have it broken down into two categories, kind of, “I’m gonna do these things now,” and then my longer term things. Maybe you do them over as you get time or as you get budget. Something I would think about is to even have one before now or to split the now into two buckets is to have one-time things and on-going things. One of your bullets here is product listing sites, like product on beta list, and I would even go so far as to say all the CSS Galleries.
There’s 50 different things; there’s getapp.com, there’s Capterra, there’s AppStorm, there’s this whole list that you can put together. Those are truly gonna be one-time things. I think it might help your mental model of like, “Okay, gonna do those once. Gonna get the heat of traffic.” Even podcast store is kind of a one-time thing. You’re not gonna do that for a year whereas webinars, joint webinars, and that kind of stuff I think is more on-going. Does it help for you to think about it like that?
Mike: Yes. In Teamwork I have a project that’s specifically called Bluetick Marketing that just has lists and lists of things there. I’m looking at it now there’s probably 20 different lists in here and there’s about 162 different to-do items in there. One of them is specifically one-time marketing tasks. Things like going into the Chrome Web Store and looking to see if there’s anything that can be leveraged there, submit into the Google Apps Marketplace. The products listing sites, inside of that various accounts are different places, and documented certain processes, etc. Mostly just one-time things that I need to do it once or is it’s a task that needs to be done but the output of that could then be leveraged over and over again.
Rob: Okay, that makes sense. What I’ve done is update the list a little bit and I just kind of threw some things that’s called one-time and then we have on-going, and then a later list. Will that work for you?
Mike: Yeah.
Rob: Let’s see. Let’s dive in.
Mike: You wanna go straight into the now sort of things?
Rob: Yeah. Let’s talk about the one-time things because I think that these are things that I have all of my marketing plans. But specifically, I’m gonna keep talking about HitTail and Drip because that’s when I formalized this and put it into a doc. I really thought through where are the places that I can get a bump now that I’ve launched. It’s like the website’s live, every time I try to get written up on Venturebeat, and Techcrunch, and ReadWrite web, and GigaOM when it existed, all these things. It never worked but at least I tried it. I was trying to get some type of buzz.
Then there are the ones that are easier or guaranteed. It’s like startupli.st and BetaList, and makeuseof.com, all the things we just talked about, like Producton and that kind of stuff. You’re almost guaranteed to get a listing even though it might take a while to do. I think if you ever venture back, maybe those little-oh, and CSS Galleries is the other one. If your site is good enough and is a custom-design, I realize yours is probably more templatized, but always got a lot of traffic with HitTail and Drip from the CSS Galleries.
Did it convert amazingly well? No. But did it to convert to some trials for almost zero effort because in essence I would have a VA or I think I may have even hired a service at one point because there are like a hundred different CSS Galleries. I think there was someone who productized it and I paid $99 and submitted some info and they submitted it to all of them. To me, that’s a great zero time $99 investment because if you get one or two trials, depending on your price point, that pays it off.
That’s how I always entered it. I think if you ever venture back then need to make a bazillion dollars then maybe these kind of little initial approaches could be a waste of focus or a waste of time but I think given that every trial counts for you, I think those things are important to do. Chrome Web Store is the other one you said in the Google Apps Marketplace. I had zero look with the Chrome Web Store. What’s the difference between the Chrome Web Store and the Google Apps Marketplace?
Mike: I’ll be honest, I don’t know. I’d have to go and take a look at that. I think the Chrome Web Store was specifically for Chrome plugins. At one point, I had on my list of things to put into Bluetick like a small Chrome extension. Obviously, it never materialized. It’s not that it’s not a road map, it’s just I didn’t get there. I don’t know if that’s even viable or something that I could do because they may just say, “No, you have to have an actual Chrome extension to be able to put that in here.”
Rob: Yeah, that’s what it is. While you were talking, I went to the Google Apps Marketplace. It’s now called the G Suite Marketplace. If you integrate essentially into the G Suite, it also looks like you can just integrate with Gmail as well. Since you do that and neither Drip nor HitTail did, I never submitted to the Google Apps Marketplace. That would an interesting distributing channel.
On the Chrome Web Store I did get a minimum Drip and HitTail in and it had zero traction. But I’m not saying it’s not worth the time but it didn’t do anything. It’s pretty crowded in there now. It’s kind of like the iOS app store I think about, in the early days it was a lot easier to get found. I know that PipeDrive said that a lot of their early growth came from the Chrome Web Store but that was a different time. It was five years ago or whatever. It’s one of those things where you have to create some images and you have to create some XML and you have to submit it and it will take you probably half a day to do. You gotta wait if you wanna do that or not. It depends on what else you have going on.
I would probably lean towards doing it just because it is one more distribution channel and you could get lucky but I think it’s not as high priority as pitching podcasts as an example, because that’s gonna have a really high success rate for you.
Mike: Right. The other thing that comes to mind is going through the process of putting out on all those products listing sites. It contributes to long tail SEO as well.
Rob: Yeah, that’s right.
Mike: It contributes to your page authority and Google will see all those lengths coming in and just building those backlinks is kind of important.
Rob: Yup, I would agree with that.
Mike: You said CSS Galleries, fill me in on this because this is something that hadn’t even crossed my mind.
Rob: The only reason that they even came on my radar is when I acquired HitTail–no, it wasn’t HitTail. It was a different site. It was a productized service I had. It was called CMS Themer, CMS Themer at the time.
Mike: I remember that.
Rob: Yeah. It had a really nice design and it would get quite a bit traffic from CSS Galleries. The interesting thing is CMS Themer was really targeting designers and so that traffic converted very well. I’ve just always made it part of the marketing plan. Obviously, it doesn’t convert nearly as well when it’s an app like HitTail or Drip, but again, this posted a link into our docket. It’s cssgallerylist.com. For $60, they submit to hundreds of galleries. For $60 and almost no time it’s worth it for the backlinks, it’s worth it even if the traffic doesn’t convert, it’s just another channel to get out there. Again, the last time I did this was five years ago, there maybe a better resource than this cssgallerylist.com but I do know that I used these guys and it saved me a lot of time.
Mike: Yeah, for sure.
Rob: This is not something that’s gonna grow your business overnight or be some huge game-changing thing but it’s just all these little parts of the snowball that you’re kind of turn the pack on and then seeing which ones get you any kind of traction.
Mike: Right. I think the important thing to keep in mind when going through this stuff is that every little bit helps and you don’t always know that any one link is going to contribute anything but if it gets one person over and the ROI on that is gonna be almost no way to calculate that but you may get three people over and one person converts. It’s not a 33% conversion rate for that obviously but that can help.
Rob: That’s right. Have you considered how you could do an ‘ask me anything’ on Reddit or you could do a Show HN where you say, “Hey, here’s this business. It doing…” whatever the revenue is, or I don’t know if you can be vague about that or not, but I don’t know how you wanna handle it. Then basically say, “I’ve grown it to this. Give me your feedback,” or whatever. Have you thought about that? I don’t know if that’s worthwhile or if that’s just a big waste of time.
Mike: I have. I’m in a couple of Facebook groups. That was suggested to me a couple of months ago via somebody that said, “Hey, you should do an ‘ask me anything’ on Reddit.” I put it on my list but it wasn’t something that kind of rose, I’ll say, close to the top of things that I thought were, not necessarily game changers, but in terms of weighted priority, I didn’t feel it was something that would help out a lot.
Rob: It’s tough. If you’re marketing directly towards developers, then it would make more sense.
Mike: Right. If it was something like ‘ask me anything’ on growthhackers.com for example, that’d be a totally different story. That’s something that I probably should add to the list to be honest.
Rob: Oh, I think you should, yep.
Mike: Anything else in terms of one-time activities that come to mind that’s not on this list?
Rob: I was just trying to think about that. On startups.com, answers that are on Startups used to be kind of a place but I don’t even think that exist anymore. The bummer about Quora is that it’s really not a one-time thing. What I would do with a one-time thing is set-up, subscribe to some topics, there’s probably a cold email, or even just email. You want email sales, you want the email sales channels not the email marketing channel because email marketing tends to be bulk email and that’s not what you’re doing.
I would subscribe to categories or topics that fit your thing so that you’re notified when questions are asked because you wanna be an early answer. You don’t wanna go on a bunch of old Quora threads and add your answer because those threads already have a bunch of up votes and you’re not likely to be the answer that shows for everybody because that’s really what you want. I did that in the early days of Drip. It’s a bit time-consuming but what I found was the questions that come through tend to be so far into your wheelhouse, that they’re really easy to answer.
Even if I type a couple of paragraphs, it just flowed out. I didn’t have to research because it was things like, “What are approximate open right rights? What’s a good open right for a list?” It’s like, “Well, I actually know what the range is. Here, I’ll talk it through.” It’s gonna be stuff that these questions for me would be tough to answer because I’m not knee-deep in this warm email engagement the way you are. Anyways, I would consider as the one-time part of that just subscribing and seeing how it shapes out.
Mike: Yeah,that’s interesting being able to rattle off some of those numbers right off the top of your head. Because it’s part of my talk that I did for FemtoConf. I looked specifically into that and looked across 70,000 emails that had been sent out through Bluetick and looked to see what the open rates were and what the response rates were across those, and then I cross-sectioned them and got the average, the best case, worst case, across everybody’s accounts. It was interesting what the numbers came out to be and then asking the audience I said, “Hey, here is a number, what do you think is this in terms of the open rate?” It was about, I’d say a third of the audience got it right which means that two-thirds did not which indicates that these numbers are, I’ll say, a little bit obscure or opaque and not everybody knows that they are.
Rob: Yeah, that makes sense.
Mike: I think a couple of other things that come onto this list is, I don’t know if they’re one-time or you would classify them as one-time, but like a podcast tour, for example. I feel like it’s something that you can do it once when you start and then if you’re going to try and do it again you have to have something compelling to follow-up with, I’ll say.
Rob: I do think of a podcast tour as a one-time thing but it’s not as one-time as say CSS Gallery submission, but it’s gonna move the needle more than them. CSS Gallery and the BetaList and all that stuff. I just posted a link to whitetailsoftware.com and Robert Graham had that pre launch email list building directories. We can include that in the show notes but I think you have 50 or 100 that he had his VA submit to, so that’ll help as well. But all that to say, podcast tour is gonna take several months because you’re gonna email and get scheduled, and by the time it comes out, it’ll be months down the line.
I think the big thing, the advice that I would give when doing a podcast tour is it would be easy for you to just go on a bunch of entrepreneur podcasts and say, “Look, I launched a product. I’m building this SaaS product.” You’ll convert some of those, it’ll be a low conversion rate. The audience who’s gonna convert the best for you is gonna be folks doing sales. It’s gonna be folks both doing cold outreach and then doing the warm nurturing that Bluetick allows you to do, this stuff that comes right out of your inbox and looks very personable. It’s not bulk email like MailChimp or Drip but it’s the one-on-one connecting whether it’s cold or warm. Who’s doing that, right? This is BDRs and salespeople. I know some of those are also founders but I don’t think that’s gonna be your market.
I think initially, you can get SaaS founders, and you can get our audience, and the MicroConf audience, and not crew. It’s good to talk about it here. I’m not saying you shouldn’t go on Mixergy and talk about it but compared to the size of that audience, the conversion rate is gonna be pretty small. The podcast that I would target that I think are gonna be your low-hanging fruit, is to go on podcast that are talking about sales, and talking about tech sales, selling SaaS apps is probably the B2B sales approach.
You can come on not to tell the story of your product but you can pitch it as, “Look, I’m an expert in this because I’m in it day-to-day and I’m seeing dozens or hundreds of customers who use our product and I’m seeing the patterns. I’m seeing the successes and how they’re doing it well. I see the failures and the mistakes people are making.” Does that make sense? I would definitely go after that space rather than focus on the founder and entrepreneur space.
Mike: Yeah, it totally makes sense. That was actually my hesitation, I’ll say, of doing that because I didn’t think that approaching those, the startups community would be something that will really resonate. Like you said, I’ll get some sales out of it but it’s not gonna be a high-converting channel for me.
Rob: Yeah, in all honesty, I will probably do both but I would start with the sales folks, the sales podcast. We both know at least a dozen people who have podcasts that I’m sure you could come on and talk about some aspect of your business. Try to vary it because we have this small community and so if you go on all the podcast of our friends and talk about the same thing on every podcast, everybody hears it, there’s only so many people in it. I will try to suggest different topics, different aspects. If you could talk about the launch on one, you could talk about the stress on another, you could talk about marketing approaches on another.
I do think that is still worthwhile because it’s easy for you to do because you’re used to doing podcasts and it’s 30-45 minutes of your time once it’s booked. It’s not actually that much of a time investment to be in the earbuds of likely several thousands or tens of thousands of people, but as I said, I do think I would start with trying to assess out what are kind of some B2B sales podcast that I can get on?
Mike: The interesting thing about that is there’s two different ways that I could approach that particular problem of going out to the people who are running those podcast. One of them is send directly into Bluetick and let Bluetick follow up with those people. The other one is that there’s a company I’ve stumbled across that will take kind of what your requirements are for appearing on podcast and will go out through the different network of podcasts that they have contact with, and essentially pitch you to them. I’ve mixed feelings on doing that, to be perfectly honest, but at the same time, there’s a time component that it’s gonna suck up some of my time to do it myself but in many ways, it comes across better if I do it myself.
Rob: Yeah. That’s hard. There is a balance because we get a lot of pitches on this show and on Zen Founder. If it’s not the person pitching themselves, I tend to delete them, that’s just a thing. I do glance through them but I don’t think we’ve ever had anyone on the show who wasn’t pitching themselves. When I had an executive assistant who is doing stuff back in the Drip days, when I was still running the business, she could email people as me, look straight out of my inbox, and so you could develop the pitch and have someone else send it as you. But it just depends on what you wanna do. I don’t know but I don’t have a good answer for that.
Mike: But again, at that point, I could just put it through directly into Bluetick and have Bluetick send out the email.
Rob: That’s true. Ta-da. That’s cool.
Mike: It’s interesting because occasionally, when I’ll email people whether they contacted me to ask me something about Bluetick, occasionally they’ll have heard the podcast and they’ll ask in their email as to whether or not it was sent from me personally or whether Bluetick sent it. I’m just, “If you can’t tell, doesn’t that speak to what the product does?”
Rob: Right. Does it matter? Yeah, that’s funny.
Mike: Does it matter?
Rob: We’ve talked at length here about the one-time upfront things. You have nice list of the things that you plan to do on an on-going basis, why don’t we look at a few of those?
Mike: Sure. The things that pop-up high on my priority list-actually, you know what, now that I’m looking through this, one of the other things that is on the on-going list should probably be moved over into one-time is the public Zapier integration.
Rob: Oh, yeah.
Mike: I’ve got a private integration right now but I’ve not taken it public and that’s something that I’ve been asked about a couple of times by Zapier. I just haven’t done it yet to be perfectly honest. There’s a lot of edge cases that either are not handled well or I know that there’s other changes that need to be made and I’d rather make those changes before I open it up than have to fix a bunch of other stuff. Because there’s some things that I do some manual data manipulation just to make sure that things are working right for certain customers. I need to put a more permanent solution in place for those.
That’s something that after going through the process, I believe they put it out through their mailing list. I forget what their mailing list is but it’s something like 1 million people or something like that, something ridiculously large. The conversion rate is not gonna be high but it’s more about driving awareness than it is about converting people at that point.
Rob: Yeah, you’re just trying to get the word out so people have heard of you at this point. One other one-time thing that I would do, it’s not a marketing approach, but I would set up Google alerts for relevant terms that you wanna monitor like company names of competitors, try to hear about like articles I think are relevant or conversations that are relevant, you have to use your judgment there but I do think getting something setup so that your kind of participating or at least aware of what’s going on in your space is helpful.
Mike: Yeah. I have a couple of them set up right now but it’s mainly for Bluetick. What I find is I’m getting a lot of emails about dog conversations that are happening.
Rob: Yeah, I could see that.
Mike: I guess if we’re gonna jump right into the ongoing stuff or the short term things that I was looking at, the first on my list is webinars.
Rob: Yep. Are you planning, because right below that you have JV webinars.
Mike: Right. I wouldn’t say I lumped them together but I think the general process is going to be similar for them whereas with the webinars, there’s joint webinars and there’s just the regular webinars. The regular ones are ones that I was probably gonna promote to my own email list and then maybe do one on a regular basis or promote it on a Tuesday every other week or something like that. And then with the joint webinars those would be much more scheduled where I’m leveraging other people’s audiences and contacting influencers and see if they’re interested in having me come and talk specifically to their audience about how Bluetick can solve a particular problem for them. I see it almost like the podcast tour but with a little bit more, I’ll say, pinpoint accuracy or a little bit more focused specifically on those people because I don’t wanna go pitch somebody and say, “Hey, can I just do a joint webinar with you?” But not actually have something that’s gonna be valuable to offer to their audience.
Rob: Right. I would the joint webinars before I try to do internal webinars because it is such a nice way to reach out beyond your own audience. Just through doing webinars to your own list, you’re gonna one and then you’re not gonna fill anymore, you know what I mean, until you get more people either using your product or on your email list. We tried early on with Drip to just run Facebook ads, get people to opt into a webinar, and we’re gonna try to run one every week, and we just couldn’t get people to show up at a price that was worth it for us.
Again, not saying it’s not possible but it’s an entire funnel that you have to develop. It’s gonna take you quite a bit of time and money to do whereas the JV webinars is a low-hanging fruit for you, because JV webinars is about who you know. You do have a good network of people who I think you could contact and have access to their audience right away, basically for free, without running all the ads and developing a funnel. It’s just conversations. I’d definitely prioritize the joint webinars above do your own.
Mike: How would you structure any sort of special offers for those people going to a joint webinar? There’s a lot of discussion and I’ve thought about this myself. I was like, do I wanna offer a discount or I wanna give additional services or special templates like, “Hey, you can only get this here because you’re coming to this particular person’s webinar.” My concern is really putting a lot of extra effort into something that-at the end of the webinar, it may turn out to be nothing. I may not get very many sign-ups out of it or I may get a lot but I don’t know. It’s hard to predict how much time and effort to make things custom for that person’s audience. You know what I mean?
Rob: Yeah, I do. I would lean heavily towards some type of bonus and it’s time-limited. You say, “Hey, free to sign up in the next two or three days, then you get this extra thing.” whether it’s a discount or the thing that you billed. Discounts are the lazy way to do it. It’s like the zero time way but it chews through your money. If you have no time, absolutely no time, then yeah, give people a discount, but discounts are not exciting. They’re not as exciting as like, “Get this complete email series,” even if it’s only three or four emails, my guess is, you can crank that out just using copy+paste from what you’re using already or from what you’re recommending to people and just edit it for their specific niche.
If you talk to a bunch of freelancers then it’s like, “Here’s the way they follow-up and do it for freelancers.” A lot of it is gonna be the same as any other sequence you have but you’re just gonna tweak a few things. I’m guessing, in about half an hour you could probably crank something like that out. You don’t even need to do that in advance of the webinar because if you don’t get sign-ups then you just don’t build it. But if you get sign-ups using that coupon code then you just manually reach out to people because it’s not like you’re gonna get 500 sign-ups. You’re gonna get 10, or 20, or 30. It’s gonna be a small amount. You can just hit people up and distribute that to them. I’m thinking of something like that. It’s high value for someone signing-up but it’s pretty low effort for you to create.
Mike: Yeah, that makes sense. I think right now when you go and sign up, I was probably gonna pull this off as things progress, but when you go and sign up right now, there’s kind of an offer there that basically says I’ll create an email sequence for you based on whatever scenario you describe and that will be your first sequence. It’s kind of concierge onboarding but I’ll say it’s probably not very well described in the website right now but it is something that I just offer to people as they come to sign up.
Rob: Yeah. If you get 30 sign-ups at a time that’s gonna get tough. I think you’re gonna have to stop doing that because it’s too time-intensive. You have to back off as you start getting more sign-ups.
Mike: Right.
Rob: What else? You have direct follow-ups with the following; invite to demos, you have current mailing list, prior prospects which I think is good, and personal LinkedIn contacts.
Mike: Yep. I have a couple of different spreadsheets based on when I was doing early validation. Some people said, “Hey, now is not a good time. Maybe later on when you’re further along.” And then there’s people who have come in and I’ve done a demo with them and things just didn’t work out for whatever reason, or they sign-up but they never followed through or they used it for a little bit, and then they said, “Yeah, this isn’t working out for me.” I’ve got this pool of people that I can go to that fit into that criteria, that I can put them into a Bluetick sequence, for example, and invite them to come back and check it out or go to a demo or something like.
But in addition to that, I also have the mailing list that is in the Drip account which I have been putting on the website where there’s an email course that you can go through. It’s like a 5-day course which I’m in the process of copy+pasting all the content all of that to make it a slightly longer course. But those people that I can go to directly, I can take them out of Drip and then plug them into Bluetick, and individually follow up with each of them. I could do that based on lead score for example and just sort them by lead score and then add them in in that order and say, “These are the people that I’m gonna approach first versus these are all the people who are probably, I’ll say, less interested, but still on the list.”
Rob: Yeah. I think that’s a good idea to kind of approach. I was definitely gonna say anybody who’s cancelled in the past, if the product’s a lot better than when they’ve tried it, you definitely wanna contact them. Prospect who haven’t converted, people who’ve been paywalled because they don’t wanna give their credit card, now is the time when you’re doing this to just circle back and clean all that out.
The personal LinkedIn contacts, you gotta use your judgement there, you don’t wanna come off as… I’ve never done that but if you know someone who really should value out of it and you do a very soft pitch like, “Hey, just to let you know I just launched this. I thought it might be helpful.” Not anything that’s forceful like, “Jump on a call. Jump on a call.” Then, I think, it’s halfway reasonable.
Mike: Yeah. I wasn’t planning on doing that. What I was gonna do was go through my LinkedIn contacts and just look. Obviously, I’m gonna hand pick which ones i’m gonna contact and which ones I’m not. I’ve got people who I know are software developers or they’re engineering managers, or something like. They’re really not a good fit for it but that doesn’t mean that I can’t go to them and say, “Hey, I just wanted to check in with you and see how are things going, and let you know I just recently launched this. If you know of anyone who could use this, I’d love an introduction just to kind of help me out.” I’m leveraging my personal relationships at that point.
Rob: I could see doing that. I just added a couple things to the list. Actually, you have retargeting on there, mostly Facebook. I think it says Facebook primarily, I think that’s a really good idea to get set up whether you use perfect audience, you have the display networks like Google and stuff already, you just tick Facebook and it gets probably a material but I think you should get that set up pretty quick. That’d be probably towards the top of my list. Do you already have the pixel installed?
Mike: Yep.
Rob: Okay, good.
Mike: yeah, I’ve had that in pixel installed for a while. But then, the reality there is, I’ve put it under ongoing because there’s a one-time piece of setting it up and there is the follow on activities where you go in and you analyze how much traffic you’ve brought in, do you have a critical mass yet, what kind of advertisements you’re doing. It’s kind of two different components to that but I do find that even with my two-step process for the sign-up, you put in your email address and password, and it takes you over to a credit card page, and there’s people who don’t fill that out.
Obviously, those people, I wanna follow up with anyway but I also wanna make sure that people who come to the iste and then go over there but never even fill out that first page, I still wanna be able to retarget those people to bring them back. Because obviously, they were interested enough to go look at the signup page but they didn’t actually sign up.
Rob: I think in the interest of time here because we’re running pretty long today. I think you should consider-paid acquisition I have written here, it’s a tough one. It all depends on if you have budget and if you have time to sit there and test a bunch of stuff, so something to consider, maybe it goes on your later list but it’s definitely if you can get it to work, it’s really, really good. Cold email outreach, you have the tool to do it, nice to use your own tool. You can go to something like LeadFuze and get a list of people, and start doing the outreach yourself, or you can hire someone to the outreach for you.
We had mixed results when we did Drip but it definitely drove enough trials that have made it worth spending. We were spending money on it at that time and it definitely had positive ROI for us. Integration Marketing which is you just think of all the top 10 integrations that you would wanna have and think about trying to get either in their director. If it’s Stripe or Basecamp, they’re probably not gonna co-promote with you because they’re so big but they have these integration directories. Or if they’re a little bit smaller, if they’re a startup, they’ll probably have a list and are willing to email out and promote you. That requires dev time, of course, so it has to be worth your while.
But that was something we did 30 something integrations with Drip and it makes a lot of sense with a tool like Drip because it it a hub of data and so we integrated with a bunch of shopping carts and all types of marketing tools. That both helped our customers but it also really helped to start to get traction and kind of be everywhere in their early days. I think those are the other three I would throw out that you may wanna do sooner rather than later.
Mike: Yeah. I’ve already been asked by people about integrating directly into Bluetick using the API and I’ve kind of pushed off mainly because I know that there are parts of the API that are still changing, so I haven’t really structured it in a way that says, “Hey, this is available for you to use and it’s pretty solid versus these other pieces where you shouldn’t touch it.” I had a conversation with somebody at FemtoConf where they said they actually have three different versions of their API published. One of them was for them internally, and then there’s another one that’s a public API, and then they have special endpoint specifically for Zapier. It’s interesting they split theirs out and I think it makes a lot of sense as well. It’s just a matter of rearranging some things a little bit to allow people to do that and say, “Hey, this area is solid. This area is off-limits or don’t touch them.”
Rob: Yep, that makes sense. Anything else that you wanna pull out of here? Either in ongoing? It looks like you have a couple more and then you have some stuff for later?
Mike: Yup. The one idea that have come to mind that somebody had mentioned to me at FemtoConf was the idea of having Bluetick offered as sort of a managed service for x thousand dollars a month. Then they’ll send all of their contacts over into Bluetick and then, it’s my responsibility to make sure that things are running smoothly for them so that they don’t have to go in and manage anything which, if you set up a lot of the automation and stuff, you don’t have to worry about that, but there’s also ongoing tweaking, A/B testing, or making sure that, “Are these numbers any reasonable ballpark of what they should be?” If you’re getting a low open rate, for example, how would you necessarily know unless you’re looking at all the other data. I have access to that but other people don’t. Those are the things that I can provide a lot of additional value for customers but they don’t necessarily have access to it on their own if they just signed up.
Rob: Yeah. That makes sense. There’s a risk with managed services because they can just suck up a bunch of your time and also the revenue is not worth nearly what a SaaS revenue is in terms of a multiple-whether you’re gonna raise funding or whether you’re gonna sell or whatever. If you have a bunch of consulting revenue, it’s worth like 1X, 1X the revenue versus actual recurring revenue, it’s a different story. I shouldn’t say recurring. It’s higher margin revenue where if it’s software it has 70% or 80% margin. If it’s consulting it has what, 10%, 20%, 30% margin. It’s something that I would consider in the early days but it just matters what cash position you’re in. I think you would do it for the cash and not really for the long term prospect of the company because I don’t think you wanna grow a big kind of productized service long term.
Mike: No, I agree. The way I was gonna structure it was like, “Hey, here’s a managed service that if you wanna subscribe to you can,” and it’s either a three-month or a six-month contract, and then that’s it. If I decide to continue offering it then they can continue paying me for it but if I decide that we’re not gonna do this anymore, then things are kind of pushed back. It wouldn’t be something that you can just go to the website and buy off the shelf but it’d be limited three to six months contract or something like that. You’re right, it would absolutely be for improving cash flow for example, but it would also put a solid number on, “Hey, what is this particular customer going to be worth to me in the next three months or in the next six months.” Does that make sense?
Rob: Yeah, I think it’s interesting. Certainly trying it with one customer is not gonna hurt much. That’s the thing, is to see how much-if it’s valuable to them, if it’s workable for you, and obviously if you do it for 10 or 20 people, you’re getting yourself in pretty deep but you don’t have to do that. You can just dip your toe and then figure it out.
Mike: Yeah. I was gonna do it for probably one to five. The other nice thing that I thought that would deliver to me is the ability to work hand-in-hand with those customers and see what exactly what it was that they’re trying to do as opposed to, “Hey, here sign up to Bluetick,” and then after that, I don’t really have a ton of visibility into their business or exactly what challenges they’re trying to solve. I know generally what they’re trying to do but I don’t get that insight or I don’t have calls with them to really see on a weekly basis like, “Hey, what are you really trying to get out with this?” I think that those insights would actually help me build a better product longer term.
Rob: One of the thing I see on your later list that I like, that I don’t think we’ve covered, is you have this library of email templates, lead gen, and you use this as a lead gen to acquire email addresses? I think that’s intriguing both for the SEO and you can always run ads to it, you could retarget to it and you’re basically giving something away. I think that’s gonna take a ton of time for you to set-up. It’s a little more complicated than it sound but I’m glad you have it on your later list so at least, in a few months, once you get some of these other ones done, you can move into that, and start thinking about how to shape that up.
Mike: Right. The other nice, I’ll say, by-product of doing that is that, I could create those inside of Bluetick as a library where you can when you create your account, you can just select from a bunch of them, kind of a similar to the way that Drip has those pre-made blueprints for different situations, this would be exactly that. Like, “What situations have I run into with different customers that they’re trying to get a response or get the customer to take an action? What sorts of things work? What sorts of things don’t? What sorts of approaches do you wanna try?” You can almost categorize them. It’s like, “This is extremely aggressive versus to do the exact same thing to get somebody to a call. This one is much more laid back and hands off, and it depends on the situation whether it’s cold email versus a warm email with somebody who’ve had three or four conversations with us.” Which one you would use?
Rob: Cool. Well this was a good run. Thanks for bringing this on the show. I had fun talking about it. I’m guessing we’ve provided quite a bit of value for the folks who are thinking about this kind of stuff.
If you have question for us, call our voicemail at 1-888-801-9690 or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups. Visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 383 | Considering Monetizing SaaS with Ads, Should a WP Plugin Company Consider SaaS, and More Listener Questions
Show Notes
In this episode of Startups For The Rest Of Us, Rob flies solo and answers a number of listener questions. The topics include monetizing SaaS with ads, should a WP plugin company consider SaaS and more.
Items mentioned in this episode:
- ZenFounder
Startup Blueprint: 7 Skills For Founders, Builders & Leaders
Start Small, Stay Small: A Developer’s Guide to Launching a Startup
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, and Mike has no power for the past day or two. He has no internet, and I think a storm came through and knocked out a bunch of power. He won’t have it back he said at the earliest til midnight tonight. I jump into a car with my son, my 11 year old. We are heading to Lake Geneva, Wisconsin for Gary Con in about two hours. There was no overlap.
Mike emailed me and let me know he wasn’t able to make it and so my goal was to find a guest this morning. I emailed three or four people short notice and no one is able to show up. Here I am, we ship every week, every Tuesday morning an episode comes out.
I dug into our listener question bag and we were down to one listener question last week, we’re up to eight or nine this week, which is great. I enjoy these episodes when we answer listener questions. We’ve been doing them a lot more lately. What I’ve noticed is it feels like there’s a lot more listener participation and it also feels like we’re keeping up with topics that are not just coming out of our heads.
These are really questions and topics that you, the listener, are thinking about. It feels like I enjoy these episodes because I feel like they’re as relevant as we can be to the moment of what you’re thinking about and what you’re launching as a listener base. We are here to share our experiences, to hope you avoid the same mistakes we’ve made. Also, to weigh in on questions that you have as you’re growing, building, launching your startup.
Let’s dive into our first question. It’s from [Dylan Dee 00:02:10] and it’s about whether he can use advertising as a SaaS revenue model. He says, “My company is Dunwich Technologies, it’s a healthcare focused consultancy. We’re developing a SaaS app to help patients better understand their confusing medical bills. I see the value in one off uses, doesn’t feel like an app that could garner much daily activity or many daily active users. It’s more like an every so often use. This coupled with not wanting to charge for the app leaves me with few revenue options. Would medical/pharma ads on this app be the only or the best way to monetize it in your opinion?”
My opinion is this will not work at all. Because if you don’t have a lot of daily actives, then ad based revenue models are gonna bring in pennies for you. I would be shocked if you have people logging in once a month or once every other month. Let’s say you had 100,00 people using the app and they only log in once a month, you’re gonna make hundreds of dollar. It is catastrophically low, the ad rates are just very low these days. You look at a company like Facebook or Twitter, Google, and the only reason that ads work for them is because they have so many people constantly using the app.
If you’re going direct to consumer and you don’t think you can charge for it or don’t want to charge for it, I would think of this as more of a lead gen thing. Can it generate leads? Can you build up a free customer based and generate leads for your consultancy? Or, can it generate leads for another SaaS app that you may want to charge for, or a video course–I’m just throwing things out.
Obviously, you may not want to create a video course, you get the idea. If you’re gonna build something that truly is freemium but there is no ‘mium’ to it, there’s no premium aspect because you’re not gonna upsell. But actually, that is another thing you can think about is to launch this. See what happens, see if there’s any uptick. If you get 10,000 free users in there asking for more things, you could then consider going freemium and having a paid tier on top of this. Even if it does just a $5 or $10 a month thing.
It’s really hard to do B2C SaaS, it’s not done very often. If you look at even Dropbox, they are trying to pivot into the enterprise because that’s where more money is and the lower churn and all the stuff. Box.net kind of beat them to the punch on that. I think that Dropbox was conceived as a B2C company but if they really want to maximize the valuation frankly, they want to get into the enterprise because enterprise customers have higher lifetime values. And if you look at the stock market in public or even the private markets, companies serving mid market and enterprise, and even SMBs are valued higher than the same amount of revenue serving consumers because that revenue tends to be more volatile.
All that to say, I don’t think you have any chance of making any money that’s gonna move the needle using an advertising model. I would say if you’re gonna build it, if you really want to, give the thing away, see what happens, see if it becomes lead gen. If nobody uses it, then that’s fine too. At least you took your shot.
Our next question is an audio question. It’s about a WordPress Plugin company, whether they should offer a SaaS offering.
“Hey Rob and Mike. I love the show. My name is Kyle, thanks for taking my question. I work for a small WordPress Plugin company. We’re pretty well established and doing just fine, but looking to grow and take on some new exciting project. I have some ideas that I wanted to get your input on.
Basically, I want to see if introducing a small SaaS offering might make sense for our business? Obviously, we distribute our WordPress Plugin, that’s our business right now. Our customers are mostly in ecommerce but I was in the interest of helping our customers succeed and solve real problems that they have. Also becoming as indispensable to them as we can be while at the same time introducing new streams of revenue for our business.
I was wondering if maybe we should consider adding a SaaS offering which we make available only initially to our existing users. Not something that we market to our broad audience, but something that we just silently roll out to users of our plugins already. I’m thinking this could be something very simple, some tool like helping them with their email delivery or file storage, data backups, staging environments, remote site management, reporting businesses sites, something like that, I don’t know. We can make a simple tool, put it in front of existing users and say, ‘Click here to take advantage of this extra monthly tool.’
My questions are, how do you feel about the idea of creating some simple, light MVP simple SaaS product? Initially making it only available to current users of our plugin. Do you have any opinions about the type of SaaS product which would be the best for us to choose if so? Something simple yet still useful to our customers for mostly running ecommerce sites. Thanks so much and I look forward to meeting both of you this year at Micro Conf, thanks.”
This is a great question. I think a lot of WordPress Plugin vendors probably think about this because the appeal of having monthly recurring revenue versus the potential spikiness of WordPress Plugin in the one time sales, it’s appealing. SaaS and subscription revenue is the golden ticket that everyone is looking for.
I would say that just to start with, a, I think this is a great idea. I’m all for it. I think if you wanted to tip toe into it, you should definitely do it. I would say that when I talk to folks who do WordPress or do one time sales, they’re always talking about launching a SaaS. When I talk to people who have SaaS apps, so many of them are jealous of these one time sale products because those product price points tend to be higher.
You might sell a WordPress Plugin for $40 to $200 and you get that nice pop right off the bat. If you sell one customer, you make $200 that month. Whereas if you have a lightweight SaaS, you might make $10 that month from the customer and you gotta keep them around and you’re constantly working to do that to retain them. I know that with DotNetInvoice, which was an invoicing software I owned years ago, it was $300 for the product, for a developer to buy it and use it.
We only sold 8-15 copies a month. You think about that, you think about let’s just say 10, you think about making 10 new SaaS sign ups that stick around and become customers and that is catastrophic. Unless you’re very, very expensive, in the enterprise. But just the normal, let’s say you’re $20, $30, $40 a month, that’s slow growth. It’s gonna be agonizing. Whereas if we sold 10 of DotNetInvoice, it was $3,000 a month. At the time, I was looking to make a car payment or make a house payment and I was doing consulting. This was just a little side project that I didn’t spend a ton of time on. That dollar amount and getting all the lifetime value upfront from your customers, there is some appeal to that.
I would say don’t look that [inaudible 00:09:17]. Do realize that the couple beauties of WordPress are that you do get all the lifetime value upfront and that you have that built-in distribution channel of the WordPress repo, and that also ranks high in Google which then can bring people to your WordPress page and get that free download. With all that said, when I talked to a lot of WordPress folks who have plugins, are making some money, they are always thinking of how to get into SaaS, and I don’t think that’s a bad thing. A, I think it’s great. SaaS is more complicated, it levels you up. There’s more to learn, it is that recurring revenue that you’re looking for.
Number one, I think yes, you should give this a shot. Number two, I think you have an advantage because you already have paying customers. I have no idea about this business if you have a thousand people who’ve purchased it or if you have ten thousand, but that is a great built in audience right there to start a SaaS from.
I’ve talked on the podcast and at MicroCon a couple of years ago about what I believe are the only four true competitive advantages in SaaS. It’s who you know, it’s your network. It’s who knows you, it’s your audience, that includes customers. And it’s being early to a space and being a growth hacker, someone who knows how to think through methodically and really grow anything.
This is a case where you already have an existing audience of customers, you do have an advantage over someone starting from scratch. You have customers who probably trust you and like you. If you build something with them in mind, you should be able to have a pretty good strat to your business.
In addition, you probably have a bunch of free users and I know they won’t convert as well but that should be a number that’s 10 or even 100 times the number of people who’ve actually paid you and so you do have some reach there. That’s the plus side.
The negative side is you building a SaaS is gonna take a lot more time than building a WordPress Plugin in general. There’s so much more, there’s the hosting and the infrastructure and uptime and all the stuff that you don’t have to deal with. It is gonna be a big learning experience. I wouldn’t want you to think just because you’ve built software, you’ve built products and you’ve sold it, you definitely have learned a lot but SaaS is going to be that next level up in terms of complexity.
In my opinion, if I were you, especially in the ecommerce space, I would start talking to my customers, you already have them. You can have a few ideas and I think in a perfect world you might have three of four ideas that you start running by customers and saying which one of these would you absolutely, no doubt, would sign up for tomorrow. Take that short list and run it by, I’m sure you know a bunch of them personally, and then start emailing a hundred of your customers at a time even if you don’t know them and being just like, “Hey we’re considering branching into this, would you buy it?” I think you’re gonna get pretty good feedback form that pretty quickly.
That’s how I would approach it, I think, asking my opinion, you’ve asked my opinion about what kind of app you should build, I have no idea because I don’t know. I don’t know your customer base or what you’re currently serving. I think that the best WordPress to SaaS progressions are things like Opt-In Monster where it was just a WordPress Plugin and then they just launched basically the same thing as the SaaS app. It was subscription, they already had the features that they knew that was killer, they had experience in it. They literally just turned the WordPress Plugin into a recurring subscription.
If you’re not on WordPress, you can still use it but you pay the monthly. Craig Hewitt is doing this with his WordPress Plugin Seriously Simple Hosting, and then it’s Castos now. Moving from this WordPress space and just building a SaaS out of it, I think that’s a good way to go because you already have experience with that. You already have inbound interest, folks finding you through the WordPress repo so you do have that traffic source and distribution channel.
Again, I think if you want to get in this and get into the recurring game, I think it’s a good idea and I do think you have some advantages given your current business. Thanks for the question.
Our next question is from Alex Baxter. He says, “Love the podcast, big fan. I’m attempting to bootstrap a startup in the job site space.” A job website, a two-sided marketplace. “As I begin to look for companies to post jobs to the site, would you suggest allowing companies to post jobs for free to get the initial supply of jobs up for candidates to view then worry about monthly fees later, or trying to charge from the get go? I’m leaning towards free but I wanted your thoughts.”
The reason I like this question is because it’s the classic two sided marketplace. Whenever I talk to anyone about a two-sided marketplace, I say basically the same thing. You’re gonna have to figure out which side you need to get first. In this case, you’re not gonna have any job seekers come to the site if it has no jobs. You have to get the jobs up first.
Yes, I would beg, borrow, and steal to get jobs on this site. I’ve seen new job sites launched and they’ll go and scrape Monster, Indeed, Hot Jobs and all these other things in order to populate their jobs and start form there and then spin out. I’m not saying you should or shouldn’t do that but it’s a way to think about it. There are jobs postings out there that you would be able to populate on your site and it’s additional distribution for them.
In terms of offering for free to employers, I probably would, because you have no traffic. You really can’t charge them because you have no job seekers yet. In my opinion, it’s probably a, “Hey, this is going to be free for the first three months or six months or until we have 10,000 uniques a month, or until every job receives 50 views per month.” There’s something that just needs to trigger that they need to start paying you. Because you don’t want to get a bunch of your best employers and just be like, “Yep, this side is free to post,” because that’s not a business perpetually.
You have to take an approach that long term you’re not comping your best customers. That’s why it kills me, I‘ve seen people pretty often do this with SaaS where they get this launch list or they get 5 or 10 interested customers and they say, “Yeah, for your feedback, I’m just going to comp you lifetime.” I think to myself no, these are your first 10 people. You can give them a discount, you can comp them for six months, give a discount for the first year. You can do that because they are giving you effort but also providing them a ton of value with the software.
If they’re willing to sit and work for beta software with you, then they probably have a pain point that you’re also helping with. Don’t do that would be my advice. Don’t cut that revenue off at the knees, especially in the early days when you need it most.
For this, I would definitely consider just cold outbound outreach. I’m guessing this is probably a vertical and you probably know all the companies in that vertical and that would be cold emails, cold phone calls to basically just start with like, “Hey, I see jobs on your site. Can I repost these here? Do you give me permission?”
Technically, I got to be honest, I don’t know if you even need permission legally. Whether it’s an ethical thing. You’re providing them with more distribution, you’re republishing jobs, but do they have a copyright to the job posting? They may. You may want to check with them first. You’re gonna have to talk to a lawyer, just do your research on that, but that’s what I would do is if they already have jobs posted in their own site, I would look to just be like I will do this for free for the first three months since we’re getting started up and I will just pull all your jobs in, are you cool with that? Try to make it as easy as possible. I would either a scraper, an importer, hire a VA, I would do something that is able to pull in those jobs so these folks are not having to do the work and it’s just a simple and easy yes.
And then, your results are gonna make or break whether they want to pay you. That’s a cool and a stressful situation to be in. I think back to I believe it was TripAdvisor in their early days. Their big game is building all these SEO pages. They’ll have a destination and then they’ll have all the rankings and then they get all the search engine traffic. They were trying to monetize and they went to cut deals with travel ticketers, airlines, hotels, all of this stuff. They basically said, “Buzz off, we don‘t care.”
TripAdvisor already had a bunch of traffic, they turned on this [inaudible 00:17:22] to some of these ticketers, and I don’t know if it was airlines or hotels or just people selling tickets but whatever it is, people selling the things that they were talking about on TripAdvisor. They turned on this [inaudible 00:17:33] and just started sending a bunch of traffic, they didn’t charge for it and they didn’t get a kickback, they didn’t get a commission, but then they turned it off after two to four weeks. At that point, the people selling tickets said, “Wait a minute, what did you just do?” They said, “We turned the traffic off.” They said, “What do we need to do to get that turned back on?” That’s your conversation.
That’s where you start. You said, “Well, we’re gonna charge you. You need to give us a cut of the ticket sales.” That’s what you’re going to be, that’s the situation you’re gonna be in here is thinking about if you get these job for free for three months and no one applies to your site, they’re not gonna pay you. But if they get fantastic talent, it doesn’t need to be a lot, I’ve used a few job sites where I only got three or four applicants but they were all top notch because it was just a really small niche and I continued using them after that. Very good question, I appreciate that Alex and I hope it helps.
Our next question comes from Robert Andrews. He says, “I’m a long time tech journalist and editor turned content consultant. I’ve written a book it’s called Startup Blueprint: Seven Skills For Founders, Leaders and Builders. It was a bit of an experiment in discovering those skills, distilling them and frankly trying to make my first product. Think it turned out great. I have some good reviews but I’d love to get feedback particularly on the marketing strategy. After spending so long witting the book, I did almost nothing to get it in people’s hands. It’s the proverbial tree which no one heard falling in the forest.
My current approach is to offer a free sample chapter in return for an email triggering email sequence and weekly insights from the book as well as links to purchase,” which I think is a great idea. “Built out the campaign in Drip, put the sign up form on the site, but it has no traffic. I thought of driving sign-ups with Facebook and LinkedIn lead ads but I’m not sure these can be cost effective enough to market product like a book. Any thoughts? Appreciate it.”
This is a good question. I think, as Robert alluded to, this is somewhat of a common thing. Authors don’t tend to think about the marketing side of it. If you were to do this “right”, then you would be doing pre launch. You’d build a prelaunch list. If you listen to ZenFounder, you heard Sherry and I talking about our book for the past six months when we started writing it. You can even go so far–when Brennan Dunn works on a project, he’s actively sharing pieces of it on Twitter, on his blog, to his email list, and just build anticipation over time. That’s what I did when I wrote my first book back in 2010. I was sharing pieces of it getting feedback and that’s really the way to do it because it engages people and then by the time you get there it’s a no brainer for someone to buy it.
If you haven’t done that, then, yeah you are starting from a cold start and especially in this space, there’s so many people with the startup message and the entrepreneurial message. It is hard to stand out. I think Facebook and LinkedIn ads I do not believe will work just because of the cost. Typically, you need LTV of 150 and up to work but you know what? This is the learning experience.
You’ve said it, I totally, personally, would run some Facebook and LinkedIn ads just to see what it feels like. Maybe your conversion rate on a book because it’s so cheap will be way higher than the software that I’ve tried to sell using Facebook and LinkedIn ads. There’s a chance it will work, you can find a small subset of people or some some audience that will be willing to buy it. Even if you only breakeven, part of this is just getting the reach out there. Because every customer who buys from you, now they’re part of your audience. You have their email address and I think that’s a great way to do it.
I think another way is of course, I’ve talked about this a lot, is a podcast tour. If you have no name or no reach, then it is just gonna be cold emails to podcasts, you’re going to have to figure out what the story is because it’s not, “I just wrote a book. Can I come and talk about it on your show?” Because you’re gonna get zero yeses for that. You have to figure out what the angle is for that particular show and why that show’s audience would really want to hear about one of the concepts from your book. If you have any type of network in this space obviously, then that’s where you want to start.
And then of course public speaking, if you do any of that. If you get invited, you can often ask the organizers to buy a copy of your book for everybody at the conference, both Sherry and I have done that and it’s worked out really well. It gets it in more people’s hands, you give them a discount of course. But then you get up there and people get to here you and then you have a video that gets on YouTube or Vimeo and then you can promote that. There’s all these angles.
But I find selling a book a lot different than selling software because it’s so much more about your credibility, it’s about the person who wrote it, and it’s also about the message as well but it’s much less about the utility than software. Software has to solve a problem right away. People will churn out of it immediately. But a book can be an impulse purchase and it’s just about throwing a wide net and finding a lot of people who could potentially be interested. Like I said, it’s an impulse purchase. I will often hear about a book, and just as I’m hearing the podcast, jump into Audible and buy it because my Audible credits were so dang cheap.
I’m on the annual plan and I buy a bazillion books a year, very much an impulse purchase for a lot of people, especially if it’s a $20, $25 book. But the advice I would give is figure out how you’re gonna couch or position your book so that it’s different than everything else. Because when I hear the title, which again is Startup Blueprint: Seven Skills For Founders, Leaders and Builders, it sounds like a lot of other books, it sounds somewhat generic, it’s not super inspiring to me, personally. I probably wouldn’t buy it based in the title alone. You’re gonna have to figure out how do I further differentiate it from all the other books that are talking about the same topics.
An example is my first book came out 2010, it’s called Start Small, Stay Small: A Developer’s Guide to Launching a Startup. I had a couple of advantages. I had an audience of a bunch of developers who a lot were into products. I called it Start Small, Stay Small which was interesting title for a startup book because no one ever talks about staying small. It was like that’s curious. I really niched it down; A Developer’s Guide to Launching a Startup. I actually got a bunch of people telling me, “This isn’t just for developers, anyone can use this.” I said, “I know, but I really wanted, if you were a developer, to just basically be a no brainer purchase for you.” That’s what happened, and the book has done very well.
I’m trying to think what the most recent numbers are, it’s probably sold maybe 12,000 copies at between $20 and $35 a piece. Some of that’s been on Amazon, but yeah, hundreds of thousands of dollars literally I’ve made from that book. That was never the intent but it definitely did very well and I think part of that was because I had this small audience. This was before Micro Conf, it was I believe before the podcast or maybe right at the same time as the podcast was coming out. It was before a lot of this stuff.
I was really just a blogger and a guy who was making a full time living off of these small products and that was about it. It wasn’t like I had the reach or the network or anything that I have today and yet this book just kept selling. I think it also helped, it was a good book. It was well written, I put everything I had into it. I was super prescriptive and super detailed. It wasn’t like it was just a pure marketing thing, there was also a virtuous cycle of word of mouth that helped it continue to spread and sell over the years.
Good question, Robert, I appreciate it. I hope those thoughts are helpful.
I think that wraps this show. If you have a question for us, call our voicemail at 888-801-9690. You can also email an mp3 file or any type of audio file really to us at questions@stratupsfortherestofus.com, audio questions go to the top of the stack almost always, answer those first, but we do of course accept text questions as well via email. Theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening, we’ll see you next time.
Episode 382 | Fixing Onboarding, Marketing a Low LTV Product, and More Listener Questions
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike answer a number of listener questions, topics include fixing onboarding, marketing a low LTV product, and the legality of cold email.
Items mentioned in this episode:
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.
-: And I’m Rob, I guess. And I’m not Mike.
Rob: That’s what Sherry said when she was on the show, “And I’m not Mike.” What’s going on this week, man?
Mike: I just pushed the new Bluetick website live this week. That’s finally out there, they were out, I think, Monday night. Just been making some minor tweaks here and there just to get the images all straightened out and smooth out some other rough edges.
My main focus was just getting the design itself in place and then the copy along with the new updated theme because it’s all built on WordPress. Now that that’s stuff’s in place, I actually have to leave in four or five hours to go to FemtoConf and then once I get back, then I’ll probably finish off the rest of the little minor things that need to be taken care of and just make sure all my plugins are installed and all the analytics are working and then from there just start marketing.
Rob: The site looks great, it looks really nice. It’s like ten times better than what you had up there. All the way from the look, to the images, to just the verbiage and then what you have there. Bravo on that. Can I give you two small critiques? I’m sure these are behind on your list. You have a testimonial on the home page which I think is great.
Mike: Actually those are gonna be swapped out.
Rob: Cool, you got multiple, but put big old quotes around it. There’s something about seeing quotes around it. I know there’s Justin’s face there and then there’s a testimonial to the right of it but without the quotes, it’s like there’s just something there. I really like to call out large quotes because then people know the guy is saying that. It’s a little thing that I see in a lot of sites but I think there’s some impact.
Mike: Yeah, I’ll definitely do that. What’s the next one?
Rob: The other one is, you know what, this one isn’t actually a critique. You have one sentence description at the bottom of the page in the footer about Bluetick and it says, “Bluetick relieves the soul deadening drudgery of email follow up for founders, overworked sales executives, and anyone who’s ever lost a perfectly good lead to the email blackhole.” That’s a really well-written thing. Why does it say FIP? What’s FIP mean?
Mike: I don’t know, actually I think that’s gotta be RIP.
Rob: There’s just a little typo there. I don’t love your logo because it took me a while to figure out what it is but it looks like it’s a dog eating an envelope or carrying an envelope, is that right?
Mike: Yeah, it’s carrying an envelope.
Rob: I’m sure it looks better when it’s big but given the size on your site right now. Listeners, you should go to bluetick.io and check all this out and see if you agree with me or what else we can figure out. I’m sure changing your logo is like priority 942 on your list right now.
Mike: Yeah. The only reason I even had the logo done was because before it was just text and I wanted to have something up there so that people could associate the logo with the text itself because there’s familiarity that people get with certain text fonts especially when they go with a particular logo but I’m gonna be using that logo inside of some of the emails and stuff that are being sent out. I just want that familiarity to at least be there.
It wasn’t necessarily important, it was just like okay, if I’m doing a step up, the previous logo was literally a stock image that was just black and white of a dog’s face and it was just not very relevant, I’ll say.
Rob: I would think if you could somehow simplify just the dog’s face, turn it into a line drawing or something. Again, I realized it’s hard because you can’t do it yourself, you’re gonna have to hire somebody. I don’t think this is a deal breaker, I don’t think people are not gonna sign up for the app because of that. It’s just something that every time I come to the site I notice it and I’m like it’s a little busy.
Mike: This is gonna turn into a website tear down episode.
Rob: It’s gonna be the whole episode. These are very minor things. There are no typos on the page, the copy is good, personal touch at scale for all your follow up emails, that’s your headline. It’s really well-written. Obviously you could split test against something but nothing comes to mind as like boy, this copy is really jacked up or anything. It looks good.
The only two, again these are minor things, your Drip widget popped up on me after maybe 5 to 10 seconds. I was in the middle of reading your headline or the subheading and the thing popped up. I would probably push that out to 30 seconds, you have quite a bit of [inaudible 00:05:05] on the page, maybe even 45 seconds. Just give people a bit of time to read a little more.
Last thing is, your title tag on your home page, it says, “Home-Bluetick.” I know you’re not doubling down on SEO right now but really, Google has probably indexed you already. You may wanna start that with something, I don’t know what keyword you’re gonna be targeting or keywords but whether it’s email follow up or whatever generic phrase you would love to rank number one in Google, at least have that somewhere in there, probably towards the front.
Again, I wouldn’t keyword stuff but Home-Bluetick isn’t gonna get you much. You don’t want people to find you for the word home. People are gonna find you for the word Bluetick. Neither those really need to be there, although I’d probably still have Bluetick in there somewhere. That’s about it, man.
Mike: All of those are great suggestions. Some of them, like you said, the typo, I knew that I had to get to that but I just hadn’t gotten to it. I feel like extending out the Drip widget a little bit so that it gives people more time. All the title tags and stuff like that, I have not even looked at any of those yet. That’s on the list of things to do when I get back.
Rob: You have some art on the tour page, that’s very cartooning. Those look really cool, I like the feel of that. It’s very professional feel.
Mike: The designer who did the website, he came up with those illustrations. We went back and forth on a couple of different design ideas that he had and those are the ones that came out of it.
Rob: Very cool, man. Good luck. I’m interested to hear how it impacts conversions and all that kind of stuff.
Mike: The main focus of doing all of this stuff was just to give the website a much better feel to it so that when somebody either came to the website itself or was directed to it because of a referral, it doesn’t look like something that they would’ve just clicked the back button and said, “No, I’m not even gonna give this a chance.” I did hear that as feedback from people where I recommend it to so and so they told me that if I had not recommended it to them, they wouldn’t have even given a second thought.
It’s really to just overcome that as a primary objection. I can do a demo for somebody or a webinar and I could sell them on it and say, “Yes, this is what the product does.” By showing them inside the product and what it can do for them and solve their problems, yes it’s fine. But a completely cold lead who comes to the website has no idea and they’re not gonna give it a chance, that’s really what it is. The bar for something like a SaaS product is much higher than something that the old website could even overcome.
Rob: The bar is much higher than it was five or ten years ago as well. I think you made a good call here. Doubling down on this, you’re at the point where you’re starting to scale getting more trials coming through the websites, now is the time to do that. If you spent much time on this when you’re in customer development, it would’ve been a waste of time. I think it was a good use of time and money.
I wanted to talk a little bit about MicroConf, it’s coming up in April, Starter Edition. We still have tickets left and we have some really good speakers this year. We have Mary Pullen who’s talking about her first year of SaaS bootstrapping. We have Alli Blum talking about copywriting and onboarding emails, she’s been on the show. You’re speaking, Justin Jackson, Ben Orenstein, Courtland Allen from Indie Hackers, Mojca Mars about Facebook Ads, really solid lineup this year.
If you’re at all interested in hanging out with 100-250 folks who are all the way from idea to making a full time living from their business, head over to microconf.com, click on Starter and the tickets are relatively inexpensive compared to most conferences and we do still have some left. We’d love to see you there.
The other thing is I’m driving to Lake Geneva, Wisconsin next Thursday or I guess it’s two days after this will air to attend Gary Con, have you heard of that?
Mike: I have not. Is that related to Gary Gygax?
Rob: Yes, Gary Gygax was the creator of Dungeons and Dragons. He died in I think it was 2010, 2012. Basically friends and family just got together and played a bunch of games. It’s like there’s table top games, there’s card games, and RPGs and miniatures and the war games and all that kind of stuff. It was like 20 or 30 people the first year and they jokingly called it Gary Con in his honor. The next year, they sold a few tickets and they had 100 people and it just turned into this thing.
I went last year, it’s kinda neat being in the midwest. I’ve never gone because I was never gonna fly from California out to Lake Geneva, Wisconsin but being in the midwest, it’s like a four or five hour drive. Last year I was kinda nervous about going, my son and I, we obviously love and play these games but we’re not sophisticated gamers, we’re just playing for fun and there are about 1200 people there. It was a blast, man. It was so much fun.
People are really nice and welcoming. I’d come up with my ten year old son and I was like, “Hey, we’ve never played this.” They’re like, “No problem, we have a character for you, here’s how you do it.” They were just super helpful. Anyways, I’m really looking forward to that. If anybody happens to listen to this and be there, please drop me a line. We’d love to connect with you but if not, I’ll certainly report back about the nerdery that’s gonna take place in Lake Geneva next week.
Mike: That’s awesome. I’ve been to a couple of gaming conventions like that, there was one in Buffalo, New York that I went to. It’s probably 10 or 12 years ago. It’s interesting because there was a guy there who had a role playing game that he was trying to launch and trying to get funding for but he was also still doing play testing for it. There was a room of 25 of us, he basically threw us into this game. I think the game was called monoxide amazon or something like that.
The idea was you’re in this world where you just basically have to run away from everything, everything is out to kill you. Half the people died in 10 or 15 minutes or something like that. It was like an hour long session but out of all of us, I think there were only five or six of us that made it out alive.
Rob: That’s cool. That’s the neat part. Last year the same thing happened, there were several people there who were trying to get their games on Kickstarter or going to put them on but they were doing play testing. My son actually played that Tower Defense game board game that he enjoyed a lot. The convention itself, it is four days.
We’re only going for three days of it but it’s not just some eight hour session, we’ll probably game as much as we can, eight to twelve hours a day, we’ve already signed up for tables in advance and then we’re also wandering around. There’s so much cool stuff to buy too, it’s really bad. I need to limit my spending but I get overwhelmed how much cool stuff people bring. It’s a great time to buy dice and miniatures and all kinds of geeky stuff.
Mike: Cool. What are we talking about this week?
Rob: We have a few listener questions. Actually, by the end of this episode, we will have zero listener questions in the cue. I don’t know if it’s woohoo or not. We’re gonna have to come up with some content next week. If you do have questions for us, please, email them to us at questions@startupsfortherestofus.com or certainly call our voicemail number which we read at the end of every show.
Our first question is from Tim Win. He has a couple questions in the same email. His first question, he says, “I was wondering, for a B2B Saas targeting specific niche market, what will be a good amount of traffic I should try to generate to get meaningful feedback?” Aside from it depends, do you have thoughts on this? Because it does depend, that’s a very general answer. Let’s weigh it on, I may have some thoughts.
Mike: I think when you ask a question like this, what you’re really trying to get out is the amount of feedback that I’m getting good enough in relation to what other people would get or are you getting the feedback that you need to make a decision. I think that’s how I would approach it to figure out whether or not you’re getting enough traffic.
You have to decide on what your KPI for that website is and how you’re going to be gathering information from people. Let’s say that you use Hotjar and you put a poll on your website and you get 100 or 500 people to it and you get 3 people to answer the poll, that’s not a good percentage but 3 people out of 500 visitors is not going to help you in any way, shape, or form. Even just adding once answer is gonna skew things in such a direction that it’s just not helpful.
I think I would look at it in terms of how much feedback you’re getting versus how many people are visiting. Also, recognize that when you’re looking at the traffic stats for a particular website, it’s very easy to misinterpret bots coming to the website to just crawl it versus actual visitors who were there for purpose or came from a particular search term or were directed from an email or another website.
Rob: If you’re using Google Analytics, though, I don’t think it picks up bots, I’m pretty sure it does not, it’s only if you look at raw server logs, just a caveat in there.
Mike: But it is hard to tell when you’re looking at that because you do see on the server logs, you’ll get 20 or 30 visits a day. I’m not convinced that Google accurately filters out all the robots that it’s supposed to.
Rob: Really? Because it’s JavaScript. Typically a bot is like a crawler, it’s a Python Script that’s just doing something. It shouldn’t “execute” JavaScript. You need to execute JavaScript to have Google Analytics track you. I know that Google’s crawler does execute some JavaScript, there are stuff, it’s possible but my guess is that most bots are not executing the Google Analytics.
I’m guessing they would exclude it if they could. They’re pretty smart about that. The point is if you’re not using Google Analytics and you’re using your logs, they could be in there.
Mike: That’s true. With this particular question, what you’re really trying to get out is what is the information that you’re trying to retrieve from people and what feedback is it that you want. Do you want conversations? Do you want them to comment on something? Do you want to get them on a phone call? What is the KPI that you’re trying to push people towards? Are they doing it?
I don’t think it’s a matter of trying to measure the actual traffic itself because, I think, bear minimum, you probably need at least 500 visitors a month, anything below that you’re just really not gonna be able to make a meaningful business out of it.
The other thing to consider is the fact that not every B2B SaaS product needs to have traffic coming to its website if that’s not your primary source or primary channel for marketing the product. If you’re doing outbound cold emails, for example, or if you’re sending postcards in the mail to people or you’re doing cold calling, none of those things involve people coming back to your website so there’s an implicit assumption here that the traffic that’s coming to the website is based on SEO or content marketing or something along those lines.
I would just be hesitant to say that there’s 100% correlation between website traffic versus being able to get that meaningful feedback because if you are doing cold calling, for example, you can get on a call with somebody and you can ask them questions and talk to them, get the information you need and they never hit your website at all. That’s something to keep in mind.
Rob: I think that’s probably the first point that I would make. I think that that’s something to keep in mind, is it’s not about necessarily driving a bunch of traffic to a form or to an opt-in. It depends on your business idea but boy, if you have no audience and no reach, I would probably start with some type of outbound, cold email, or maybe some ads going to a landing page or something.
There’s just no better way to get feedback because that’s his questions, it’s not how do I build a meaningful business, it’s how do I get meaningful feedback. The way you do that is you ask for it. It tends to have to be outbound. I would hang on with this concentric circle marketing I was talking about.
I would talk to my friends and colleagues and then their friends and colleagues and then their audience and then eventually you get to the cold audiences but I would start in the center with the people that you know if you truly are going for feedback.
In the early days of Drip, yes, I threw up a landing page and put some copy on there. The only reason I did that was because I was going on podcasts and people were asking me about it and I wanted somewhere to send people.
Eventually, once I knew what we were gonna build, I started doing some ads to it and I did build a list from there but that was not the way I got meaningful feedback. The way I got meaningful feedback was a bunch of warm emails to people within my network asking them, would you use this tool? Here’s a screenshot, what do you think? And then started building momentum there. I think that’s the way to think about this.
If you wanna build an actual sustainable business and you’re asking about how much traffic, DotNetInvoice, which depended on the month but between $2000 and $4000 a month, pretty consistent, sometimes it got to 5000. That site had 1000 to 1500 uniques for years. It was just a really high converting site and it was in a vertical. That’s what he’s asking about here.
He’s like, it’s a B2B SaaS, it’s in a vertical niche. You don’t need that much but you are gonna top out at some point and just stop growing. DotNetInvoice was $300 one-time purchase. Keep that in mind as well.
With 1500 people coming to your site, if you think about, let’s just throw out a 1% conversion rate to trial, you’re gonna get 15 people into trial funnel, that’s with credit card upfront. Let’s say you close 50% of those to customers which is likely, then you’re gonna have seven or eight new customer a month.
You have to ask yourself, if you charge $1000 a month, that’s probably pretty good. If you’re charging $10 a month, that’s not very good. You have to think about your price point and just think about the numbers that I threw out there and you can do backwards math and figure out how many people you need to send to figure out how fast you wanna grow.
Tom’s second question was that he seems to be getting free trial sign ups but once users get into his onboarding which is like a getting started wizard, he seems to lose them. It’s only three steps, it’s nothing too complicated, just adding their location, product service they provide, and setting a payment processor so they can take payments from their customer.
“Some seem to get to this part and never log in. Any idea why? It’s driving me crazy.” What would you do if you were in his shoes, Mike?
Mike: I was gonna say there’s no way for us to really answer why that is. I think that if I were in his shoes and I was having this particular problem, I would email those people individually who never got past that point and see if you can help them, either just walk them through it or ask them questions about what their experience was. Your best case scenario is to get them onto a call to walk them through it and do a personalized onboarding session and then watch them as they go through it so you could just use Zoom to watch over their shoulder as they go through.
The nice thing about doing that is if you do it for them, then they see it but if you let them do it because they don’t know exactly what they’re doing, they’re going to click on stuff that they shouldn’t and you’re gonna be able to recognize that and say, “Why did that person click there?” You can ask them literally on the call, “Why did you click on that? What was it that made you think that you were supposed to click on that?”
Maybe they’re getting confused about the UI, maybe they just don’t have time to log in so they never set up their account.
I think there are other questions I would also ask about like do they come into the site and get there or do they just never come in? If they’ve gone through the signup, does it take them directly over to this three-step process or do they have to get an email and then they click on the email and then they come back into the application. How is that sequence of events set up and what’s the flow look like for the end user?
It could very well be that some people, depending on their browser for example. I’ve run into this with Bluetick in certain situations where some browsers, on occasion, do not work and it had to do with a race condition inside the JavaScript code. Some things work fine and then other ones didn’t. I didn’t know that because I wasn’t monitoring exactly what browsers people were using.
Like I said, because it was a race condition, it sometimes happened but not always. You really just need to talk to them and watch over their shoulder to watch them go through that and ask those questions to find out what it is that you’re doing. If they already got through that first step, they signed up, you have their email address or at least presumably you should. Contact them and follow up with them until you get an answer as to why they didn’t go through that next step.
Maybe they realized at that point that it was going to be more to set up than they thought it was. At that point, you have to evaluate, do I put this process in place? Do I need them to do those three things all at once? Could I spread it out? Are there ways to interject that as part of them using the product without forcing them through that concrete step all upfront? Let’s say that the location, for example, could you pull that from their credit card information?
Rob: Like their IP.
Mike: Yeah, that too. It depends on how accurate you need it to be. Like time zone, you could probably pull from somebody’s browser. If you need the address, could you pull it from their credit card? That depends on whether or not you’re taking credit card upfront which sounds like it’s not because it’s free trial. Those are the places I would start.
Rob: I think that’s spot on. The one other thing I would consider is taking away self-service signup and just putting a request demo button. When they hit that, they can just book right in Calendly and set something up. If you really wanna do this well and this is what you’re focused on, the requested demo button, you could respond to that within minutes.
If you’re relatively low traffic and you really are just hacking away all day right now, try to get back to people within ten minutes of them clicking that and just get them on the phone, do a Zoom meeting and do a screen share and walk them through. It’s essentially what you said, Mike, but I’m just saying you take away the self-service signup portion.
I think that right now it’s gonna be about talking to customer sounds like you’re still in the early days. You could throw Hotjar on there and do screen recordings, you could throw Crazy Egg in there and do heat maps, you can do all that stuff but you’re never gonna find out why, you’re just gonna see what is happening. The why is obtained through having a conversation with them. I would be more hands on these early days, you don’t have to do that forever. I think you’ll certainly find out that it’s pretty valuable for your learning, for accelerating your learning in these early days.
The last question was for you, Mike. He says, “I was listening to one of the podcasts, Mike was saying bluetick.io was having usability issues he had to fix. Are you able to get into detail? Just curious as to what some of them are.” I recall you talking about one usability issue, interested in talking about that?
Mike: Sure. The main usability issue that I have addressed towards the past six months or so, they had to do with onboarding. When somebody signs up for Bluetick, one of the first things that you have to do is you have to set up your mailbox and you have to add in your username and password. If you’re using Gmail, there’s all these different settings that you have to connect. You have to have IMAPS or hostname, username, password, port number, the encryption level. You also have to have the exact same information for your SMTP server because it may not be the same.
Initially, I had a set up page where you had to set up your mailbox and there were probably a dozen different settings. What I would do is I would personalize onboarding for each person, walk them through it, watch the backend because not everybody knows what ports they’re using for their mail server. Some people are technical, some people are not, so I walk through it with them.
I got to a point where I knew that certain types of mail servers were very common, you’re using Gmail or Google Apps. I could guess what those are because it’s always gonna be imap.gmail.com and then also smtp.gmail.com but your username and password are gonna be different.
I could basically filter out a bunch of those and I was able to shorten down the page itself but in addition to that, there were still problems because if you a have two factor authentication set up or you don’t, you either have to enable less secure apps or you have to enable two factor authentication and you also have to make sure that IMAP is enabled.
Overtime, I whittled down the number of things that somebody had to do to get their mailbox set up. At some point, I transitioned to the point where if you are using Google Apps or G Suite, as I call it now, you can just click through and go through the OAuth authentication. That basically takes care of everything for you, you’re just putting your username and password in Google, click the button and boom, everything is taken care of for you.
There’s very much a progression where I slowly pulled myself out of the setup process. On day one, I didn’t necessarily know what everybody needed and I didn’t have everything coded. I pushed myself into the process to make sure that it got done.
Rob: I think that’s a great way to do it. We had several integrations in Drip that were a pain in the butt to set up. You had to go and install a WebHook and do all this and that. We’ve been going back as we’ve grown and scaled and making them all OAuth if the provider allows OAuth. We always call it V1. V1 integration was just to plugin and then V2 is to add OAuth and V3 was to make the triggers native. There were all these things and we just have the verbiage or the language that we all knew on the dev team.
You have been in your early days, it’s customer development time. You could’ve spent another three weeks in the early days making it super simple but you didn’t need to because you’re walking people through it. I guess this is technically a usability issue but it’s like a deliberate decision to move faster and then circle back and iterate. I think that’s something that people should keep in mind as you’re building your app. It doesn’t need to be the best all the time, you gotta do your best.
Do you want your code to have not a lot of croft and not have technical debt? I wouldn’t skimp on that. But when you’re moving fast, I think making a first past through and having the usability in some areas be not as ideal as maybe you’d like and you know that and you plan to come back, I think that’s a pretty good approach.
Mike: The other thing that I use specifically in this particular case which people might find useful is that I made this decision for this piece of it specifically because it was a setup piece. I knew that it was something that most customers are only ever going to do once and once it’s done, that’s the end of it. Even if it takes me 30 minutes or 45 minutes on a call to set somebody up and get that stuff connected properly, it doesn’t matter because it won’t have to be done again.
Obviously I don’t wanna be on a call with every single person for 45 minutes just to get them set up and then after that try to do some level of onboarding and customer development. If I can get that stuff taken care of later on, I basically just kicked it down the road because it was that one-time set up and it wasn’t gonna have to be done again. You can use that as a deciding factor as to where you’re going to spend your time.
I see a lot of other vendors doing this where if certain things are painful, you tend to find those things in places where the customer doesn’t have to do it very often. The one example that comes to mind is Oracle installer which for 10 to 15 years was busted. It was fundamentally broken on Windows, you literally could not install Oracle without it failing and then having to go in and fix stuff. They finally fixed it in 2012 or something like that. But for a long time, it did not work at all.
Rob: I remember that, that was crazy.
Our next question is about cold email, it’s from Greg Ristow from utheory.com. He says, “I love the show, I’ve got a startup music theory learning site which is just now at $1500 per month in revenue with very little marketing.” Congratulations, by the way. That’s a nice market to hit.
“Starting to think about email marketing strategies for reaching college music theory faculty, and high school music teachers. I’m wondering about the legality of gathering names and emails from school websites. When I look around the web, I get conflicting information on how CAN-SPAM applies.” That’s a law in the US about not spamming people. “I know in my own day job as a college music faculty member, I regularly get emails from companies who pulled my email from my school’s website. Any advice?”
Mike, I know you have a lot of thoughts on this. I’d say give a short answer and then a longer answer.
Mike: The shorter answer is that it is legal to go to somebody’s website and pull the email addresses. At that point, depending on how you email them, that’s where the piece of CAN-SPAM falls into place. It’s not about whether or not you pull the emails from the website or whether you gather their contact information, it’s really about what you do with it after the fact.
Underneath the umbrella of the CAN-SPAM Act, there’s basically three different types of emails that are sent out. There’s commercial emails, there’s transactional emails or relationship emails, and then there’s other. I’ll talk about those in a minute but most of what CAN-SPAM basically says is don’t lie to people or forge header information when you’re sending emails and try to hide what it is that you’re trying to do.
For example your from email address should actually be you or your business. Who it’s to should be that person, don’t be forging emails to people like if I were to send an email to you and I forged the header information and said that it was Bill Gates, then it starts to fall under the CAN-SPAM laws. Lying about those things, not specifying that something’s an advertisement, or line about what the subject is.
Let’s say that you say that it’s about your recent payment, and then in the body of the email you’re saying it’s a Viagra commercial or advertisement. That right there is a violation of CAN-SPAM because you’ve not said that it’s an advertisement and you’ve also lied in the subject line.
Not telling people how to opt out of future emails, that’s another one and then honoring the opt outs. A lot of those things are typically handled by an email service provider. Those are the things that you don’t typically have to worry about.
Going back to the three different categories of email that are defined here, there’s the commercial intent which basically is an advertisement of some kind. That’s really where the pieces of the CAN-SPAM Act are that you need to pay attention to. If you’re advertising a product or a service and you’re promoting it and sending emails to these people, it’s very clear that you’re trying to get them to sign up for a service, that is a commercial intent email.
If it’s a transactional email, that essentially is exemplified by things like somebody comes to your website, buy something, and then you send them a receipt. Emailing them the receipt, that’s a transactional email because they did something and then they received based on what they did.
The third one is other. This is where you get into a very, very grey area because all three of these things are all about the primary purpose of the message. What is it that that email was intended to do and what are the contents of it. If I send somebody an email that is completely unsolicited and it’s got links for them to buy my service or to come into my website and look at the product to learn more because I’m essentially pitching it to them and saying, “Hey, would you like to learn more about this? Here’s the website.” That is more of a commercial content.
If I email somebody and I say, “Hey, I’d like to talk to you about X because I’m exploring this idea.” Or, “I have a product and I’m doing some customer development.” That is not commercial because you’re not actively selling them something, there’s not an advertisement in it. It’s also not transactional. What happens is those types of emails fall under other.
I will put a blanket categorization here that says I’m not a lawyer. Just take some of this with a little bit of interpretation and a grain of salt because this isn’t legal advice. But my reading of all of these things is that that commercial content, the transactional and other, you can essentially leverage those three. Depending on what it is that you’re putting in the email, a lot of times, you can force it to fall underneath the other category which essentially says that it doesn’t need to follow these CAN-SPAM laws and regulations.
Rob: I think the TLDR on that. Again, we’re not lawyers, we can’t give legal advice but it is generally accepted practice that, yes, people do scrape emails from websites, whether they gather them by hand or whether they have a VA to do it or whether they write a script to do it. It is legal to cold email people even for commercial purposes, I receive them all the time.
I may morally or ethically consider them spam and certain people do and they say, “You’re spamming me.” Based on the legal definition, that’s not. I would give you the advice, don’t use a bulk email program, you’ll get shut down. Script that list and then import it into Drip or MailChimp or anywhere, we’ll block your account because people will mark them as spam, there’s gonna be bounces, people are not gonna open them, they’re just gonna have low engagement. Those cold emails should not be in a tool like Drip or MailChimp, they should be in a tool more like Yesware or Bluetick.
Mike: That’s correct. The interesting thing there is that the reason Drip and AWeber and MailChimp and all those others are stopping people from sending those types of emails and stopping them from importing the list and blasting them out is because what happens is that people on the receiving end of it, if they don’t like the message, they can mark it as spam. That’s not a legal definition that it was spammed, it was that that person classified as spam. What happens is that then negatively impacts the provider.
In that case, they’re protecting not only themselves but also all of the other customers that they have. Let’s say that I imported a thousand emails into Drip and I basically blast something out and then a lot of them started getting marked as spam, I am then thereby impacting the rest of Drip’s customer which obviously is a no, no. I would expect them to shut me down.
Versus if you send it out through Yesware or Bluetick or all these other things. What happens in those cases is if somebody reports to the spam, it actually goes against your own domain as opposed to somebody else’s. From my standpoint, if you’re gonna bash your own domain and you really are spamming people, and it is classified as spam, then you’re negatively affecting your own domains, not mine, not any other customers. At that point it doesn’t impact me as much.
The email service providers, the reason they’re doing it is not for legal reasons, it’s to essentially protect their current customer base and the send rates and deliverability of everything else that they’re doing.
Rob: That’s right because they shared IPs and shared sending domains. We are at time, sir. At the start of the show I said we’d get through all the questions but we did not, we have one question for future episodes. We will revisit that at some point. You wanna wrap us up for today?
Mike: Was that a deliberate lengthening of the episode to make sure that we had the one left or no?
Rob: No it wasn’t, I figured we would get to all of them, we didn’t have that many questions but obviously some of the answers were more in depth and we just ran a little long today.
Mike: If you have questions for us, you can call it into number at 1-888-801-9690 or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups. Visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.