Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike share tips for attending conferences. They discuss things to do before, during, and after a conference in order to get the most out of the event.
Items mentioned in this episode:
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.
Rob: And I’m Rob.
Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. How are you doing this week, Rob?
Rob: Doing alright. I was just thinking, the subset 389 man, we have 11 more episodes until episode 400.
Mike: That’s insane.
Rob: What kind of cray-cray celebration are we going to do for 400?
Mike: Or what sort of group therapy are we going to have for the people who listen to 400?
Rob: I hope that there is no one out there who’s listened to all 400. That would be catastrophic.
Mike: We should have Sherry come on and just do a group therapy session for Episode 400. I think that’d be prudent.
Rob: I agree. If we just said 30 minutes per episode, that gives us 200 hours, which is 8.33 days straight. Whereas if you stayed up, you could hear the entire journey of this eight years and eight days, wouldn’t that be crazy?
Mike: Yeah. I don’t know if anyone would even attempt that.
Rob: It wouldn’t just be crazy, it would be clinical, you should get committed for trying to do something like that.
Mike: Yeah, definitely, definitely.
Rob: But we do have 595 worldwide iTunes reviews. You know what I’m going to ask you, the listener, to do? Get is to 600. Seriously. In the next couple of days, this comes out on a Tuesday, I would love that by Friday of this week, we’re over 600 reviews. Some of our recent reviews include awesome show, highly recommended from [00:01:52], he says, “Rob and Mike are truly two of the best in the biz at expertly extracting those bits of gold listeners are looking for.” We really appreciate reviews of course, and it does help us spread the word, keep us motivated to do it. Right now, we are accepting five star reviews, five stars reviews only, and look forward to seeing that number tick over to 600 well before our episode count/ticks over the 400. How about you, what’s going on?
Mike: I’m still doing a lot of stuff to prepare for MicroConf but last night I drove into Downtown Boston, into Cambridge and went to Wistia. They had a panel of people discussing how to use video and your marketing efforts, and different ways to use to it, different parts of the funnel that you can address to it. It was very interesting, it was nice to get some perspective from people who are actively doing it a lot as opposed to just reading around certain things. I wouldn’t say that it was a course, but it was definitely a crash briefing on things to pay attention to and edge cases that you might run into. It was cool to meet everybody there as well.
Rob: Oh, that is fun. That’s always nice to get out and go to events like that. I really enjoy those, as long as there’s at least some cool people to meet or some type of cool presentation that’s given out that provides value and gets me thinking about things. I do enjoy hitting up a local event just to see who’s in town in my field every once in a while.
Mike: I did get some laughs when people asked me why it was that I came in for that. I said, “I haven’t left the house all weekend. Figured it was about time.”
Rob: Yeah, totally. Alright, what are we talking about today?
Mike: In preparation for MicroConf, I thought it’d be a good idea to go through some pro tips for attending conferences and I know that we’re probably going to give some advice about attending MicroConf specifically but there’s also a lot of general advice in terms of how to approach going to a conference. This isn’t something that I think we’ve talked about specifically before. We’ve touched on it in a couple of episodes here and there but we never really just sat down and gone through what sorts of things should you do in preparation for going to a conference. Whether it’s a business conference, or a developer conference, or marketing, or what have you. I thought it’d be good to go through that stuff and give our own take on it since we do run a conference.
Rob: Cool. Let’s dive in.
Mike: Some of this is loosely based on an article from Justin Jackson, he specifically talked about MicroConf. We’ll link that up in the show notes. I did want to call that out before we get started into this. The first thing that came to mind when I was putting together this list was making a point to look up what the weather is in advance and plan accordingly. I just think that I remember last year at MicroConf where it was late at night on I forgot how far into the conference we were but we were standing outside and it was freezing. It was not something I had actually thought about doing because I was like, oh, it’s Vegas, it’s a desert, it’s going to be generally warm and I hadn’t realized how much earlier in the year it was and how much of a cold wave was going through the country at that time, I did not dress accordingly for it.
I think that that’s the thing that I would say is pay attention to what the temperature is and actually go look at it, don’t just assume that it’s 70 degrees and it’s sunny because it may not be.
Rob: Yeah. That’s a good point. Especially the desert gets really cold at night. I’m just looking at the forecast for the next week in Vegas and highs are all 80s and 90s but the lows get down 61 and when it’s 61 and it’s dark and there’s no sun and the wind’s blowing, it’s pretty dang cold. Have some type of long sleeve because often aside from just my collared shirts, I don’t tend to think about bringing a long sleeve shirt to Vegas, but of course, in this case, you’re going to want some type of light jacket or windbreaker or something.
Mike: And also because it’s a desert, you have to pay attention a little bit to the climate because it does get cold and because it’s a desert and so dry, you have to bring ChapStick or lip balm or something like that. It’s something that I just happen to keep it in my jacket at all times anyways so I never have to think about it, but if you’re not the type of person who travels a lot or just keeps it around, it’s definitely worth thinking about stuff like that.
Rob: Yup. What I used to do is I used to get to Vegas and then my lips would get all red and chapped and then I would start applying it, and my lips look like Ronald McDonald’s lips because they were red and then they were all glossy. What I do now is bring it with me, from the moment I hit the ground, I start applying it, and that’s worked for the past three or four years. I also drink a ton of water. I bring my water bottle and pretty much a refillable one. From the time I hit the ground, I’m just chugging water constantly.
Mike: The other thing is that there’s also the opposite problem sometimes where if you go someplace and you don’t have gloves, for example, when we went over to FemtoConf in Germany. It was cold enough that it started to snow in certain cases. It’s like you have to just bring the things that you need for that type of weather. Even if you don’t think that you’re going to be outside very much, make sure that you have those things available and consider them before you even walk out the door. I’d say the bulk of the first third of this particular podcast is going to be to all the things that you should do before the conference, before you even get on the plane to go there.
Rob: Another thing you want to think about is spend time in advance to consider your goals for the conference. Think about if there are specific people that you want to meet. You can research attendees, you can look at the speakers, and make it a point that you introduce yourself or try to catch a meal with somebody. Think about the types of relationships you want to establish. Who can you help and who can help you now or in the future because that’s one way to make a conference so much more valuable is to be really deliberate about who you are going to hang around with and who you’re going to surround yourself with while you’re at the conference.
Of course there’s always serendipity, especially at a really focused conference where everyone is doing interesting things. Almost everybody you meet is going to be a fun conversation. But I’ve got to get more value myself out of conferences when I look at the speaker list, look at the attendee list and really pi point who it is that I want to talk to and about what.
Tacking onto that, also I think of two other things, one, are there any questions that you want answered? Are they questions you want to just ask a bunch of people, do you want to ask a specific person, do you want to ask knowledgeable people? I know that Harry and Ted from Moraware Software do a really good job at this. They come each year to MicroConf with a question that they are thinking through, and they get a bunch of knowledgeable opinions on it and I’ve heard it helped shape their decision making.
And then finally, are there any topics that you really are interested in discussing, even though it’s not a question you have but something that you think is going to be relevant to attendees.
Mike: Or if you just want to use somebody as a sounding board because you have a particular thought in mind about hey, there’s a problem that I have, or some sort of challenge that I’m facing. I’d like some external opinions on it. If you’re working at home, or at a remote office, or remote office environment where you go to work and you sit down and you don’t really talk to any co-workers all day except over Slack or email or anything like that, it can be very isolating and you don’t get the benefit of having brainstorm sessions or a lot of external input into your thoughts and thought processes. It’s very helpful to have those topics in mind and written down so that you consider them in advance instead of, “Hey, I want to get other perspectives on this,” and then take them to the conference and hash it out with people, just to hear what they have to say.
Another thing to do is to do some pre conference networking and try to find out who’s going to be there. If there is a conference coordinator that is putting things together, whether they have an online community or something like that that they’re building, or a Slack chat. Anything along those lines, it gives you a sense of who else is going to be at the conference. Try to find out who’s going to be there and reach out in advance of the conference to people that you really want to spend some time and meet.
Whether they are new people that you want to introduce yourselves to, or you’re searching for people who are experts in this particular field or situation, you can always go out to that list or that community and ask them like, “Hey, can we schedule breakfast or lunch or chat for a few minutes?” Even if you just want to put your name on the radar so that they’re actively looking for you and if you happen to be in a conversation, they say, “Oh, I remember I got an email from you or a message from you and you wanted to talk about X.” Just being able to put your name directly in front of them with a message that says, “Hey, I wanted to talk to you about this. I’d love to chat about this for X minutes or whatever.” That will help you establish some of those relationships.
Rob: Another thing is to research local travel and potential scams or things that could trip you up. A few years ago, Vegas didn’t allow Lyft and Uber into the airport. I think before that, they didn’t have Lyft and Uber, they didn’t allow it within city limits. And then they eventually allowed in the airport, and now, it’s everywhere. You can take a Lift at the airport. But before then, it was either a shuttle, or you can just grab a cab, and it’s so close to the airport, it was not worth doing a shuttle because it took a lot longer. It’s things like that that can save you a lot of time and a bit of money.
And then another thing is, talking about potential scams or whatever, before we went to Portugal last year, I was reading through the Lonely Planet and they said pick pocketing is really big there. That just made me more aware to have everything zipped up. And then you had mentioned that the cabbies that drives south out of the airport, they go this long way around right on the freeway, it’s a much longer fare because it’s almost right next to the airport.
Mike: Yeah. That was a classy scam several years ago before Lyft and Uber came around because what would happen is that people would get into a cab and the cab would say, “Do you want to take the highway to the hotel or do you want to go north?” They wouldn’t really give you a clear indication that the highway is actually south out of the airport, then you have to go all the way around. They would really just basically scam you because they could.
I remember that specifically happened to Andrew Warner because he wasn’t paying attention back in 2011 and he was telling me about it afterwards. I was like, “You totally got scammed by them.” Which sucks but at the same time, you wouldn’t know that unless you actively looked for that, either behavior or things to watch out for.
Rob: Another thing to do is to install or update the conference app before you leave. Often, conferences will issue a new app each year or you can update it and get the updated content and that’s certainly something that you can think about. You can obviously do that on site too, but I know that before I leave, I’m downloading a bunch of shows for the plane, I’m downloading any new games or anything to play on the plane but that’s less about for the conference and more just about the travel.
Mike: Yeah. But I think it’s important to make sure that if you have a bunch of updates to your apps, or your phone, or your laptop that you get those things taken care of before you hit the road so that you’re not trying download stuff over wifi because you don’t always have a lot of control over what gets downloaded when or what’s updated first or you may not even have a lot of bandwidth to work with. Like oh, I suddenly need to install this app so that I know where to go next, and then all this other stuff is in the way and taking precedence then you have to wait a heck of a lot more time to get it done.
Another thing to make sure you have taken care of is your passport and travel documents of any kind. Make sure that they’re up to date before you leave. I have heard of people who’ve forgotten to get that stuff taken care of before they go for a big trip that they’ve been planning or they planned three months, six months in advance, and they didn’t think about that, and then suddenly the night before or the day of, they realize oh, this stuff is out of date and it’s going to take three weeks to get it taken care of and I can’t go. Be mindful of those types of things as well. Because there’s literally nothing you can do at that point. You can’t argue with TSA agents, for example, if you’re trying to go to another country.
Rob: Yeah, that’s brutal. I’ve heard of few friends who’ve had that where their passport expired or even if it expires within six months or something, and when you’re travelling, it’s pretty crazy. That would be a serious bummer to have to cancel a trip or miss a conference because of that.
Another thing to think about is figure out, potentially even rehearse your answers to common questions like what are you working on, what do you do, what company are you with, what are you hoping to get out of the conference. Just think about that stuff in advance so that it couldn’t come as a shock, you’re going to get asked the same thing over and over.
And, think about what questions you want to ask of people. Often times, I will try not to ask the same questions that everyone else does. Typically, I want to get to what are you working on, what’s really interesting you right now. I’ll often ask people what books they are reading or listening to to try to get more ideas, or what their favorite podcast is. Just because people like to talk about themselves and share their knowledge, and if it’s something new that I haven’t heard, that’s good. I totally want to add it to my content queue if you will. That’s a perfect place to do it because I’m surrounded by people that are similar to us, they’re one of us in essence.
Mike: The opposite of that is also true. Make sure that you have some ways to gracefully exit a conversation whether it’s hey, I need to go get a drink, or use a restroom, or you need to go take a phone call, or make a phone call to somebody, to call your spouse or significant other, or you just see somebody else that you really wanted to meet and you need to step out of the conversation and go talk to them.
This is more about protecting your time and making sure that you get the most out of the time that you are there. Because sometimes there’s a conversation going on and it’s not like you don’t like the people that you’re talking to or you don’t appreciate the things that they have to say but you have other things and other priorities that you need to pay attention to and your time is one of them. Because your time at that event is very limited and it will be over before you know it.
Rob: That’s a big deal. Don’t get cornered and get stuck talking to someone that you don’t have anything in common or the person is just talking too much and it really isn’t providing value. Like you said, you only have a limited amount of time. It’s not all about take, take, take. It’s about giving some value as well. But there are just some conversations that are mutually awesome and you know that’s going somewhere and you know that it’s valuable. Other ones, they just wander and you realize this is just mindless and I don’t really want to do this. Really be mindful and figure out how you’re going to gracefully exit those kinds of conversations.
Mike: Now we’re finished talking about the things that you should do before the conference, let’s talk about the stuff that you should pay attention to at the conference. You already mentioned this, the number one thing I think is to stay hydrated and there’s a corollary there which is to also get enough sleep. But with the hydration, if it’s the type of conference where you’re going to be talking a lot, you’re going to find yourself dehydrated. Make sure that you are drinking enough water to get you through the days.
There are certain environments, like a desert in Las Vegas, that’s going to amplify that. It’s going to make you even more dehydrated, so does alcohol. You have to be careful about that stuff because it’s very easy to go to a conference in Vegas and I’ve had this happen to myself where I didn’t drink anything alcoholic, it was just water, I didn’t drink enough water though. I woke up the next day and I felt hungover even though I hadn’t had anything to drink. That’s just going to impact the rest of your day. You do have to pay attention to how much water you’re drinking.
Rob: Big time. It’s easier said than done to say get enough sleep, but I have really found that I enjoy conferences more when I am at least getting seven hours of sleep and I can feel rested getting into it, otherwise I’m sitting in a ballroom for seven to eight hours, and I’m tired and not listening. You’re not getting a ton of value from things anymore.
It’s easy to hang out especially when you’re at a conference with friends, and colleagues, and relationships that you’ve built and you only see them once or twice a year. I think that making a graceful exit at midnight and getting your solid eight hours. That’s something that we’ve done past couple of years with MicroConf is we moved the start times of all the conferences to 10:00AM, and I actually think that was a really good idea because we’ve gotten positive feedback about it, about how people have time to get breakfast together, especially people who are on later time zones, Central or Eastern time zone. But it also just allows if you do stay up late, it’s just gives you that a little bit more leeway. You could feasibly wake up at 9:00AM and still have a nice breakfast and get to the conference on time.
Mike: What do you mean feasibly? I think we do that, don’t we?
Rob: That is what I do. I was trying not to be too overt about it, but yes. I’m not embarrassed to say, even though I should be on Central time, 9:00AM is like 11:00AM for me. I think last year, I had to set my alarm for 8:30AM and 8:45AM both days. All four days of the conference just to make sure that I didn’t sleep through it.
Mike: One thing that I found to be a little bit less valuable over time is taking notes at a conference. I used to be the type of person who go to a conference and I would take pages and pages of notes. What I realized overtime was that I was writing down stuff but not necessarily paying attention to how important it was or whether it was new to me. I’d have these pages of notes and a lot of it turned out to be irrelevant, but I was writing it down just because I felt like I should because the speaker had said something or commented on it.
I was trying to create almost a transcript of what they were talking about and the reality is if you already know that stuff, don’t bother writing it down. Only write down the stuff that is new, or that you find insightful, or if an idea pops into your head and you find that it’s going to be actionable. Those are the things that you need to write down because you will probably forget them later on. But the stuff that you already know, there’s no need to write that stuff down.
In addition, there’s usually other people who are taking notes or there may even be an official note taker for the conference, a lot of speaker make their slides available for after their talks, definitely write down the URLs for those, or get them from the conference afterwards if they’re collecting them and just distributing them. But don’t feel compelled to write down every little thing that the speakers say. Just write down the stuff that’s important.
Rob: Another thing to consider is to think about asking questions during speaker Q&A. It’s a valuable opportunity to get interesting feedback. Obviously, be respectful of time and whether an answer to your question is generally applicable to other people. You can always follow up with the speaker when they’re off stage.
I do think that part of the beauty of a conference is everybody is in the same room. One way to bring value is to ask interesting questions. That gives you an excuse to then follow up later if you ask a question a speaker answers in general and you can come up and say, “Hey, I actually have this specific thing I want to talk to you about.” But if it is generally applicable, it can be helpful to the whole audience. I think that’s good to give back to community in that way.
Mike: A really nice way to stand out in the minds of the speakers who are presumably leaders in the community is to thank them directly if you found what they were talking about helpful. I would obviously encourage people to put feedback into the conference surveys but I think that for most speakers, it’s really helpful for them and gratifying to hear that somebody got a lot out of their talk. Definitely make it a point to thank them and if you have follow up questions, don’t hesitate to ask them after the talk, especially in situations where if you have a question that you think you might want to ask during the Q&A session but you realized that that question is so very specific to your business, or your particular problem, then save that for a later conversation when you’re not going to be using other people’s time to hear an answer to a question that just has no bearing or relevance on them.
Rob: Another thing to do is to make sure that you are social. It’s easy to go and lock yourself in your hotel room and watch this week’s episode of Walking Dead instead of hanging out. If it’s a good conference, the hallway track is worth almost as much as or more than the actual speaker track.
With that said, I will say know your limits. Get out and meet people. There comes a point where that’s demising returns and you can become so tired or so over stimulated or overwhelmed that you’re no longer having fun and you’re no longer really getting that much value.
I think there’s a balance to be struck here. I do notice that as I get older, and as I go to more conferences, I’m still quite social but I don’t do the 4:00AM nights like the early MicroConfs. Maybe that’s just a factor of sleep but I definitely get my fill of conversation earlier than I did maybe seven or eight years ago.
Mike: Moving on to the last section of this is after the conference is over, take some time to follow up with the people that you met. Whether you exchanged business cards or contact information.
It was funny last night, when I was at the Wistia event, there were a lot of people there who would ask me for business cards, I’m like, “I don’t have business cards.” Certain conferences you go to, that’s the expectation and then there are certain ones where it really isn’t. But if you are exchanging contact information with people because you want to talk to them later, or follow up on a business opportunity, or ask them more questions, definitely make sure that you follow up with them and help maintain those relationships that you started with them and you can maintain those relationships over time. Don’t feel that you can just let those lapse because I think if you let more than a couple of weeks go by once a conference is over, and you’ve met somebody, I think it starts to become more awkward to reintroduce yourself to the person and you feel weird about reaching out to them. The earlier you do that after the conference is over the better.
Rob: Another thing to do after the conference is review your notes to see if you need to fill in any gaps. That’s a great thing to do on the plane. I’m assuming you’re going to take notes locally, you probably have no internet, it’s a great time to sit and think back, are there any takeaways or any people that I met or any things that I want to take away that aren’t in these notes? Because I like my notes to capture the entire event and really be able to refer back to them and refresh everything that came out of it because it can spark new information later when you view it through different eyes if you look at it 6 months or 12 months from now. Be sure that your notes are buttoned up and they don’t have to be super professional, but at least in a format that you feel like you can interpret them in 6-12 months.
Mike: Another thing I’d highly recommend, and this comes from the stance of an event coordinator but make sure that you fill out the conference surveys. I say this not just because it’s a nice thing to do but a conference is not going to get any better if you don’t provide them with helpful feedback or at least with a good sense of where their conference did well and where they didn’t. If you don’t give them an idea of where they stand, then it’s very difficult for them to make decisions that will help improve things moving forward.
Rob: And then finally, I think it’s helpful to reflect, especially if this is the first or second conference you’ve gone to. Reflect on your time there and make a few notes about what you feel worked really well and things that you regret that you did or didn’t do. Let’s just be honest in Vegas, there’s a lot to regret that you did. Use the list. Honestly, use the list to improve your ROI on conferences in the future. Without reflecting and looking at your process figuring out what worked and what didn’t, it’s hard to improve upon that in the future.
Mike: I don’t think that the things that you regret doing or not doing are limited to just being in Vegas. One thing that comes to mind is there has been conferences where I’ve gone to where I stayed up way too late involved in a conversation that really was not of any value to me. I ended up being extremely tired the next day, for no good reason. I felt like I’ll stay up because of the people here and you really have no obligation to other people to stay involved in a conversation if there are other things that you could or should be doing like going to bed and getting some sleep.
Rob: Yep. I’ve done that. I’ve stayed up too late, I have done the wasn’t social enough, didn’t meet enough people, wasn’t deliberate enough about picking up the people in advance that I wanted to meet, a lot of things in this list, I have certainly made those mistakes. With that, go to your next conference, enjoy it, and get the most value that you can, we hope to see you at this MicroConf happening next week or MicroConf in the future. If you have a question for us, you can call it into our voicemail number at 1-888-801-96-90 or you can email to us at questions@startupsfortherestofus.com. As I like to say, voicemails go to the top of the queue.
Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 388 | GDPR, Why You Should Strive For High Prices, and More Listener Questions
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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike continue their discussion on GDPR and get additional insight from a listener. They also talk about why to strive for higher price points.
Items mentioned in this episode:
Episode 387 | Before You Run Any Facebook Ads, Listen to This
Show Notes
In this episode of Startups For The Rest Of Us, Mike interviews Mojca Mars, a Facebook Ads expert, about what things you need to do before you even begin running Facebook ads. Some of the topics discussed include lead magnets, custom audiences, email sequences and more.
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.
Mojca: I’m Mojca.
Mike: We’re here to share our experiences to help you avoid the same mistakes we’ve made. How are you doing this week?
Mojca: I’m doing very well this week.
Mike: You just got back from an extended vacation, didn’t you?
Mojca: Oh, yeah. I did. It was actually a seven-day vacation. I wish it was a little bit longer but the good thing about it is that I turned off everything. I turned off my phone, I wasn’t on my laptop, and I was completely offline, aside from my Kindle, but that was about it and it felt amazing.
Mike: I used to own a cottage up in the Adirondack Mountains up in upstate New York and it did not have electricity or running water. I noticed that when I went up there–because I just couldn’t charge my phone or anything, I just left it off–just the feeling of being that far disconnected. You couldn’t even hear the refrigerator hum because there was not a refrigerator. It was just very relaxing. I don’t know if you found something with like turning off your phone for that long.
Mojca: Yeah. I was at the beach actually and it felt so good not having my phone and not checking my notifications every two seconds. My brain started to breathe again.
Mike: Yeah. It’s almost like having a giant reset button for your brain.
Mojca: Oh, yeah. It was so good.
Mike: That’s awesome. Today I wanna have you on the show because you are a Facebook Ads Expert and you’re also an Author, a Public Speaker. You spoke in a Double Your Freelancing Conference, you spoke in a FemtoConf, you spoke in a MicroConf Europe this past year, and you’re also speaking at MicroConf in Vegas this coming Spring in about five or six weeks.
I wanted to have you on the show and have you talk a little bit about Facebook Ads because it’s something that we get asked about but I wouldn’t say that we have nearly the level of knowledge that you do so I think that you could definitely shed some light on the topic for us and for the listeners.
Mojca: Yeah. I would love to do that. Yeah.
Mike: Aside from the Facebook Ads Expert, Author, Public Speaker like leave anything out that was a major.
Mojca: Not really, just maybe an interesting story that I actually got fired from my first job.
Mike: Oh.
Mojca: Yeah. That’s how I got into the business of Facebook Ads.
Mike: I was gonna say I hope it wasn’t a Facebook Ads job that you got fired from.
Mojca: It wasn’t a Facebook Ads job, I was a copywriter at an advertising agency. It was similar but not the same. But the thing is that I started to notice that all of our clients were asking about social media—Facebook—and our agency, they weren’t interested in that. We started to drift apart and they fired me. That’s how I got into the business.
Mike: You kind of fell into it, it wasn’t like you actively sought it out and decided, “Hey, I’m gonna do this.”
Mojca: I was thinking about it for a while. I was always saying, “I’m gradually going to make that transfer or that change and gradually go from being employed to working for myself.” But then I got fired and I said, “Okay, this is my chance.”
Mike: Not everything kind of goes exactly as planned anyway. I think there’s a lot of people who listen to this show who’ve kind of just fallen into whatever it is that they got into. I don’t think that that’s necessarily uncommon but it’s interesting that you took that opportunity or took that—I don’t wanna say low point in your career—but like that native experience and turned it around into a greatly positive one.
Mojca: Exactly, yeah. Looking back now, that kick-in-the-butt was the best thing that happened to me.
Mike: Awesome. I wanted to talk to you today specifically about setting up a foundation for how you’re going to run Facebook Ads. We’ve talked a little bit about this before the show about what is it that people need to know, what common mistakes they make. I wanted to walk through what you feel is the foundational things that people need to put into place before they even start running Facebook Ads because I think it’s very easy to get wrapped up in all the things that you need to do in order to set up a Facebook Ads account but not think about the fundamental framework or structures that you need to have in place to actually manage an advertising campaign using those tools that they provided. I wanted to talk through those and just figure out what exactly it is that people need to do first.
Mojca: Yeah. You are totally right about that. I think that when a person decides to use or to start experimenting with Facebook advertising, they all just say, “Okay, I have a product to sell, what can I do now? How can I sell this product with Facebook?” But they don’t think about the other things that you need to have updated or you need to have ready to go when you start advertising.
Mike: Right. I think the first one that you had thrown out there was a lead magnet. I think this is something that most people—myself included—kind of put at the end of the list. But we’re gonna talk about that first because it’s almost like the most important thing that the have to have in place.
Mojca: Oh yeah, absolutely. I think it’s the most underestimated marketing asset when it comes to your Facebook advertising.
Mike: Let’s talk about the lead magnet itself. When you’re creating these Facebook Ads, what forms can a lead magnet take? What sorts of things should you be advertising to people in order to move them through that sales funnel using a Facebook Ad?
Mojca: Yeah. It should be something that’s very valuable and just easy to consume so you don’t want a very long ebook, let’s say, that you offer for free. You want it to be like a snackable PDF, a cheat sheet, or maybe, let’s say, a chapter of your ebook, let’s say just a free chapter, a couple of pages, something that’s easily consumable. Once they download it, they can browse through it very quickly and get the sense of your business, of your expertise, of what do you do, and so on.
Also, one good lead magnet is, for example, an email course or a webinar. Webinars do really, really well with Facebook Ads. If you, let’s say, sell services or a software and you can have a webinar on that topic explaining something your software does, or not your software but maybe just talking about your expertise and what your software, some problem that it solves, that’s a very good start. Having a webinar on that topic is a great start.
Mike: There’s two things that I kind of wanna unpack that you just said. The first one was like a full book is not a good idea. Why is that? It seems to me like the more value you’re giving them upfront, isn’t that better?
Mojca: With a lead magnet, you want that lead magnet to be very snackable. Usually, we advertise the lead magnet to someone that has visited our webpage for the first time. We want to offer them something for free but we don’t want to overwhelm them with different possibilities and we want them to get that value. Let’s say you had someone does visit your webpage and soon after, he or she sees a Facebook Ad for your lead magnet. If it’s the ebook, they won’t go through that ebook, they won’t read it through if it’s a 50 page long ebook because they don’t know you at the moment. They will download it but that lead is not going to be very qualified so you want to offer a very snackable asset like a PDF so they would go through it and they will be interested in seeing more of that.
Mike: I got it. That’s like actually a very subtle difference, I think because like an ebook for example, they might download it and according to Facebook would be a conversion but later on I guess moving them through your sales funnel, they’re gonna end up to be a poor converting prospect because they just didn’t read it.
Mojca: Exactly. I think that’s one of the aspects that a lot of marketers are forgetting about so you don’t want to just collect leads, you want to get quality leads, someone that you can convert at the end.
Mike: Excellent. It’s not even just like how much value you are supplying to them, it is the appropriate amount of value at the stage of the relationship that you’re in.
Mojca: Exactly. That’s a perfect description.
Mike: Perfect. The other thing that you said was that email courses and webinars do really well. Could you unpack that a little bit? Why is it that those do so well?
Mojca: For webinars specifically, it let’s you connect with your target audience in a totally different way. They see your face, they get to know you personally, so to speak. That’s a good connection to establish with your target audience. You want them to connect with you on a personal level because they would be easier to convert.
I’ve done this for such a long time so I have a ton of webinars and I do them very regularly. I see that change in my target audience. Once I started doing webinars, I started collecting a lot more leads because people were drawn to me and were drawn to my personality and my content and they wanted to get advice from me. That really helped with all of the other marketing aspects. The people that came to my webinars came to another webinar that I had later on and they just stuck to it. That was a really big difference, just connecting with them on a totally different level.
Mike: Does that impact the initial conversion rate or you’re really referring to the total conversion rate from first touch to end when you’re hopefully making a sale? Obviously, those two things are different but it goes back to what I just asked about delivering the appropriate amount of value based on the stage of the relationship. Is it localized or is it really like a global improvement?
Mojca: It works both ways. People are really easy to convert and come to webinars. When they see an ad for a webinar, they usually sign up very quickly and they also come to the webinar. That conversion is really, really easy.
The people that come to the webinars are more likely to purchase. That happened to me time and time again. People that actually attended and came to my webinars, they were so easy to convert at the end because we had a totally different relationship than someone that just downloaded a lead magnet and read through it and that was it.
Mike: Awesome. I think it absolutely has a much bigger factor associated with that. Anything with either advertising or demos. I found that demos for example convert really, really well just because there’s that one on one interaction, but I think even in a webinar, you can get a good sense from somebody whether or not they are selling snake oil versus actually committed to solving whatever the problem happens to be.
Mojca: That’s a good point. I worked with a lot of software companies and demos, they work amazing. We frequently have webinars that are just pretty much live demos and people sign up to that and people convert at the end. At the end of a demo, we offer let’s say, a free trial or a special price for the software and they convert really, really well.
Mike: Now that you’ve got an idea for lead magnet or you’ve gotten one developed, how do you go about promoting that on Facebook? Because that obviously lead the next step like you have to have that asset first and then once you have that, then you have to promote it whether it’s through retargeting audience or to a completely new audience. How do you go about putting it in front of people and finding the right people to do it?
Mojca: You have two different objectives that you can use when it comes to advertising lead magnet. There’s this thing called a Lead Ad, Facebook calls it a Lead Ad. It’s basically a type of ad that lets a user download your lead magnets, PDF preferably, in just a couple of clicks. Facebook collects your email and basically kind of passes it on to you.
The other objective that you can use is more like a traditional ad that is called website conversions. You can choose whatever feels good for you. Lead Ads are very easy to set up so you don’t even need a landing page, you just need that lead magnet and Facebook will take care of the rest.
On the other hand, you have the traditional ads called website conversions. Per my experience, website conversions, when it comes to Lead Ads, tend to work a little bit better although you still need a landing page. The set up takes a little bit longer but it converts a lot better and the leads are more qualified. But anyone listening to this podcast, I do recommend experimenting with both objectives and see what works for you and what type of leads you get from each of these objectives.
Mike: I understand in general why it’s best practice to experiment with those things. But what sorts of things have you seen when you go through and start doing the experimentation? Because you’ve said that the website conversions tend to work better even though the Facebook Lead Ads are easier to set up. What have you seen as a direct result of the experiments?
Mojca: With traditional ads, with website conversions, the cost per lead was a bit higher but the quality of those leads was definitely better than the leads that we collected through Lead Ads. Maybe that has something to do with just how easy it is to collect leads with Lead Ads so a lot of people just collect those two buttons and download the lead magnet and you have their email. Just people really going to the landing page where you have your lead magnet described for example, that’s a bit harder to do. I think, that’s where most quality leads come from.
Mike: Now that we’ve kind of gotten through the lead magnet itself and talk a little bit about how to promote them inside of Facebook, the next step is taking a look at the email sequences that you need to setup because obviously, once somebody has downloaded the lead magnet, you want to be able to email them. Obviously, your Facebook is gathering their email address. Then the next step is to put them in some sort of email campaign. What sorts of things should people pay attention to there?
Mojca: When it comes to email sequences, I think that like you said, this is definitely one of the things that you do need to have set up before you start advertising because once a person downloads the lead magnet, you want to do something with that lead, not just have it on your email list and that’s it.
Usually, I recommend doing five to seven emails long email sequences that talk about a specific topic that has something to do with the product or a software or a service that you’re going to pitch at the end. Each email sequence that you write has to have some sort of an outcome. You want to reach or you want to achieve a goal at the end. You definitely want to pitch that goal or to pitch something at the end whether that is an ebook, a service, a software.
Mike: Somebody just came to mind as you were talking about pitching the product or service in that email sequence, one thing that I was wondering about was going back to the lead magnets, will a good lead magnet be a video versus a webinar or a demo? Because it almost seems like that’s a way to automate that piece of it without actually being there.
I’ve seen a lot of webinar like automated webinar things and they tend to look very scammy. I’m curious to know whether just like a video hosted it like YouTube, or Wistia, or Vimeo or anything like that. Is that a decent lead magnet or not?
Mojca: I have a love-hate relationship with automated webinars. Like you said, they do look scammy and people recognize that and people tend to move away from that kind of content. What I would recommend is, like you said video demos that aren’t kind of gift wrapped into, “Wow, this is a live demo that we’re doing and everyone knows that it’s not a live demo.” Maybe just say, unpack that into, “This is a video demo that has been pre-recorded, etc., etc.” If you pack it like that and offer video content as a lead magnet, that’s definitely a very good way to go about it especially because video consumption is on the rise and people are watching videos regularly so just doing that is definitely a great way to go.
Mike: I was just trying to think about how to combine the two things without actually being present because automated things, if people are working on product themselves, it will be in present for webinar is not always the easiest thing in the world. Video’s kind of the next best but you’re absolutely right. Everytime I go to one of those automated webinars where they tried to pitch you do something live, it really comes across the wrong way just because you’re using that.
Mojca: Yeah. I think it has an impact on your brand as well. People will look at you in a different way once you do that. Like I said, if I do any demos or anything like that, I pack it in a different way. I don’t say, “Yeah, this is the live demo that we’re doing.” Everyone knows that it’s not. But I just pack it, “Here’s a video con, here’s a video over demo.” I’m not trying to say that it’s live or anything. I’d want to kind of communicate that integrity.
Mike: Okay. Kind of going back to the email sequences, you said pitch your products or your service at the end. Did you mean by the end of the entire series or was there something specific, should your goal for the entire email sequence of five to seven emails be the same at the end of each email or is it wise to kind of divide it up and have different mini goals or something like that along the way? I’m not sure how to get too complicated with it, that’s really what I’m saying.
Mojca: Yeah. I don’t wanna get too complicated with it as well. I think it depends on how well structured your funnels are. Some people have the same goals for every email sequences and some people have mini goals. Some people have two different funnels and two different email sequences for two different target audiences so it all depends on what setup you have.
If you’re just starting out, I do recommend just making it easy on yourself and just have one goal. As your business gets more structured, you can definitely work your way down and just kind of create different funnels and work your way from there.
Mike: I think that’s the best advice; don’t create more complexity just for the sake of creating complexity.
Mojca: Yeah. I did that, I did that once and I regret it.
Mike: I think we all do.
Mojca: My Drip is going crazy with the different funnels and it’s just too complicated and whenever I login, I just get so stressed. It’s my own downfall too.
Mike: Now that we’ve got the lead magnet in place, we’ve got the email sequence set up, what’s the next step? It seems to me like you need to dive into Facebook at some point along the way if you’re gonna get into this Facebook Ads. What’s the first step in setting up Facebook Ads?
Mojca: The absolute first step that you should do is implement a Facebook Pixel to your webpage so you can retarget anyone that visits your webpage. You want to do that as soon as possible so you are collecting all of that data before you launch your first campaign. That is one step that a lot of people just forget to take once they are ready to implement their first campaign they’re like, “Woah, how am I going to retarget people?” The first thing, the absolute first thing is to implement a Facebook Pixel to your webpage and it’s a two minute task so it shouldn’t take you too long and it just has a lot of benefits to it.
Mike: You can just install this on your website even if you are not running the Facebook Ads, you can always just put it there and then go off like create the lead magnet and then email sequence and then come back to this.
Mojca: Oh yeah, absolutely. You can do it right away and maybe come back to it after two months. You don’t need to be creating the campaign immediately after you implement your Facebook Pixel. Actually, the preferred way is not to launch a campaign, especially not a retargeting campaign, immediately after implementing a Facebook Pixel.
Mike: Why is that?
Mojca: The most effective campaign to start with is a retargeted campaign where you are retargeting for example people that are visiting your web page so people that already know what you do. Without a Facebook Pixel implemented to your site and without all of that data collected, you won’t be able to retarget people so you would be stuck with interest targeting and targeting based on different interests and behaviors which is a good approach but definitely not as effective as retargeting.
Mike: Got it. Once you’ve got the Facebook Pixel in place, is there anything especially need to pay attention to when you’re implementing the Facebook Pixel or is it just like you install this one little snippet and everything takes care of itself?
Mojca: You install this one little snippet but you have to install it in the right place.
Mike: Oh, okay.
Mojca: Yeah.
Mike: You really have to follow their guidelines of exactly where it needs to go?
Mojca: Yeah. You need to put it in the head section of your webpage. A lot of businesses do a mistake and implement it into a body section. For example, that Facebook Pixel triggers just on their homepage, not on their whole webpage. Just be careful where you implement it. Facebook has really clear instructions on how to do that. It’s really, really easy. You just have to implement it once in the head section and you’re good to go.
Mike: Awesome. Now that we’ve got the Facebook Pixel in place, what’s the next step? How do you get started setting up who’s gonna get targeted? Assuming the Facebook has been there a little while–should you start with retargeting? Is there a different approach that you should use?
Mojca: If you have your Facebook Pixel implemented for a while, let’s say for a month and it has collected a lot of data from your website visitors, you definitely want to implement a custom audience. Custom audiences is a fancy word of you uploading your email list or just connecting your Facebook Pixel to custom audiences and just build up your retargeted audience, so to speak. That’s definitely the first thing that you should do because custom audiences take a little while to properly populate, it doesn’t take a day but it does take an hour so you want to take care of that before you launch your first campaign.
Mike: This is one of the situations were even though you wanna get it done right away, you wanna be able to allocate that hour to go over and get this taken care of, it could very well take you two, three, five hours, depending on how long it takes Facebook to process things and put things together for you.
Mojca: Yeah. You can actually, as soon as you implement a Facebook Pixel, you can actually create your first custom audience of just retargeted audience of your website visitors, you can create it immediately. Even if you come back after a month, that audience will still grow and regularly update day after day. You don’t need to wait for a month and then create a custom audience but you can do it right away and just wait for it to populate properly even if it takes a month.
Mike: Got it. You uploaded, you set up this custom audience, you recommend getting started with the retargeting audience first.
Mojca: Yeah. Correct.
Mike: After that, now you’ve got this retargeting audience set up, now what?
Mojca: Now, what you wanna do is because you want to start retargeting and you want to start retargeting people with a lead magnet, you need to let Facebook know somehow what a conversion is.
Setting up a custom conversions is the right thing to do as a next step. You have a custom conversions tab in your Facebook Ads Manager. Basically what you need to set up is you need to let Facebook know what your Thank You page is. For example for this lead magnet, this is the Thank You page and you connect Facebook to that Thank You page. Anytime someone lands on that Thank You page, the Facebook Pixel gets triggered and Facebook recognizes that as a conversion.
When you set up custom conversions, you will be able to optimize for those conversions. For example, you will create a campaign that’s called website conversions and you’ll say, “Okay, I want this website conversion.” Facebook will optimize everything properly. When someone downloads or converts, Facebook will analyze that person and then target similar people to that person because they are able to optimize based on conversions because you created that custom conversions in the first place.
Mike: Now, I know that you can go in there and you override that and just say, “I’m gonna manage this based on behaviors or interests or things like that.” Is that something that you would recommend people do or do you generally recommend that people just let Facebook analyze that data itself? Because I think the concern that people have—myself included—is that what an incentive does Facebook have to make them convert for you because the more that they put those advertisements out, the more clicks that they get even if it doesn’t necessarily convert. It kind of makes you pay more. It’s almost like not in their best interest to drive the greatest returns on that. What kinds of things do you have to comment on about that?
Mojca: When it comes to retargeting people, especially if I work with smaller audiences, I tend not to narrow down based on interests or behaviors, it will impact the results if I narrow it down especially if an audience is already really, really small. If an audience is a little bit bigger, I do experiment with narrowing that down. That said, as you said, Facebook has its own ways of analyzing who to show your ad to. Based on my experience, that works really, really well. I mean, not only would generate a lot of leads for a very effective price, those leads are actually of good quality as well.
That said, if you do work with interest targeting and if you’re using interest targeting as your targeting approach, or behavioral targeting for that matter, you do want to narrow it down based on different behaviors so you don’t want to, for example, target two million people and let Facebook do its job because they won’t attract the most quality audience, to be honest.
Mike: I guess one of the ballpark ranges of, in terms of size, when should you decide to start tweaking based on behaviors or interests and things like that versus when should you just let Facebook do its job. Is there guidelines around like different sizes?
Mojca: If you have, let’s say, a retargeted audience of 100,000 people, I would definitely start playing with narrowing that down.
Mike: Got it. Anything less than that, maybe you could probably make a judgement call around 50k or so but less than that is fine just let them retarget.
Mojca: Yeah, yeah, yeah. It really depends on the service that you’re offering of yourself or whatever. It’s not really the size of the audience but the ballpark figure would be around 100,000 people. You can start playing around with it with a little smaller audience, like you said 50k. That said, what I do recommend is just keeping your eye on that campaign in case you noticed that, “Okay, that approach definitely isn’t working.”
Mike: Okay. Again, all of this stuff that we’ve talked about just in the past couple of minutes is really for a custom audience built around retargeting?
Mojca: Correct. Yeah. Because like I said, retargeting is the best way to start with Facebook Ads.
Mike: Okay. Now that the we’ve got the custom audience based on that retargeting campaign, we’ve got the custom conversion set up for our Thank You page, is there anything else that we really need to pay attention to or does that really put us in a good position to start optimizing from there?
Mojca: That definitely puts you in a good position. You will have all the assets in place to successfully launch your first campaign with Facebook Ads.
Mike: The other one that I’ve heard people talk about in addition to retargeting audiences is look alike audiences. Can you talk a little bit about specifically what those are and how those play into people that you’re retargeting from your website?
Mojca: For sure. Look alike audiences are basically cold audiences that are created on top of some data that Facebook has or basically the data that you provide to Facebook. For example, let’s say you have collected a lot of data on your website visitors, you have 1,000 website visitors connected to your Facebook Ad account. But you do want to experiment with cold audiences but you’re not sure what interests to use, what behavioral targeting to do, you’re not exactly sure how to go about that. But you do know that your website visitors are very qualified.
What you can do is create a lookalike audience based on your website visitors. What Facebook will do is they will analyze your website visitors and they will analyze their behaviors, their interests, their demographic data, where are they coming from, how old are they, and they will create a brand new audience based on that information. A lookalike audience is an audience to feel that, don’t know who you are, it’s a cold audience but it’s built upon, for example, website visitors. It’s built up on a custom audience.
Mike: Got it. They work together not necessarily directly opposing from one and each other.
Mojca: Yeah. Correct, correct.
Mike: Okay. Once you’ve got all of these fundamentals in place, at this point you obviously can go and you need to start optimizing things but I think the other approach that I can think of here is to go back and start almost like creating a sequence where people are moving through a sales funnel. Does that really not makes sense in this case where you’re moving them from one Facebook conversion to the next? Is it the point to really just get their contact information or email address and put them on your newsletter?
Mojca: Creating different funnels definitely makes a lot of sense but I also wanna come back to what we previously talked about. You don’t want to make things too complicated for yourself. If you already have a funnel that starts let’s say with the lead magnet and then with the demo and then gradually ends up with a pitch, you definitely want to implement that to your Facebook Ads. But if you don’t have that funnel already developed, you want to make things as easy for yourself as possible and maybe just use one lead magnet. Once they go through an email sequence and at the end kind of connect Facebook to your email sequence again and start pitching them when they enter the pitch sequence in your email sequence as well.
Mike: Got it. That makes a lot of sense. One of the things I did before this episode is I went on on Twitter and asked people if they had any questions for you. I’m gonna go through a couple of questions here and just kind of rapid fire through them and let you kind of answer them.
The first one is from Jamie Laurence. He said, “Is it morally wrong to use Facebook Ads? It feeds the money machine and makes us culpable in data collection.” I think what he’s really referring to is the new information kind of coming out about like how much data Facebook is actually collecting on people, which I think people knew but I don’t think they had ever looked at it before, had a way to look at it.
Mojca: Yeah. I think that’s a fantastic question and it’s definitely something that we need to be talking about. I talk about it with my clients, I talk about it with my students, I talk about it with everyone that wants to talk about it. I wouldn’t exactly say that it makes us culpable because the data collection that we’ve seen was a different one, it was a misuse of data, it was a criminal offense. It’s not similar to the data collection or targeting options that you see on Facebook. There are different nuances to it. That said, what I do think is that you have to decide on your own.
When you do Facebook advertising, the truth to it all is that you will be investing in Facebook. You will be investing in that business funnel, you will be investing in data collection as well. If you feel fine with that, by all means, just continue advertising and just use Facebook advertising as it is intended for you to use it. If not, just not don’t do Facebook anymore, don’t do Facebook advertisements anymore.
To be honest, I did have a couple of clients that left for that specific reason. With the upcoming news, they just decided that they don’t want to invest on Facebook Ads anymore, they don’t want to support that and I support their decision. I know where they’re coming from so I’m fine with it. That said, I do think people will still advertise on Facebook. But coming back to the idea, what I do recommend is just using Facebook advertising as it was intended for you to use it.
Mike: Yeah. I saw an interesting–it was a meme but it was a picture about the US government going in and starting to look at Facebook and how they’d announce that they were gonna do an investigation. On the page itself where they said they were investigating them, it said, it had a Share this through Facebook link.
Mojca: They probably had a Facebook Pixel implemented to their page as well.
Mike. I’m sure that they did.
Moving on, Jeremy asked, “Can Facebook Ads be visual rather than text based? My product is visual and I’d rather show it to people than tell them about it.”
Mojca: Oh, yeah, absolutely. I do support any visual based ads. What I do recommend is—I’m not sure about the product that he was referring to—if you have an opportunity to use video to show off your product, by all means, do that. It’s a similar approach that ecommerce businesses have been using all that time. They are really, really visual based, they have a lot of images or videos of their product. If you have a product that’s similar to that, you can, by all means, go ahead and use the same approach. Like I said, coming back, I do recommend using video in that case, it brings the best results.
Mike: With the video, this kind of goes into how you structure your Facebook Ads, maybe we touched on that for a couple of minutes, but obviously, there’s lots of different ways that you could advertise on Facebook. One of them is to have a video and you could also have like long form copy, short form copy. Could you just kind of touch very briefly on each of those and what your experience has been with them because I don’t necessarily think that we’ve talked about the specifics of what you’re going to put in your ad once it’s out there.
Mojca: Yeah, for sure. First of all, referring to long form copy, what I recently discovered through multiple A/B tests that I’ve done with all of my clients is that long form copy works really, really well, especially if you are advertising a software or a service business, long form copy tends to work really, really well.
Videos as well, along with long form copy. For example, if I’m working with a client that is trying to promote their software, we use long form copy so it’s a very long sales page like copy along with a video of them. It tends to work really well. But for other businesses, I have a couple of ecommerce companies that I worked with this as well, we don’t use long form copy but what we do use is a lot of images of their products.
But if you have a software company, if you offer services, what I do recommend is A/B testing with copy. Launch an ad, one ad with short copy, same visual, one ad using a short copy, one ad using a long copy. I’m definitely taking a bet on that and I think that long form copy will prevail on that case.
Mike: Awesome. The next question comes from Ed and he asked, “Will Facebook tracking effectiveness drop as more people use ad blockers?”
Mojca: Yeah. I love that question. They have been actually saying this for years now. For years, my clients have been coming to me saying, “More and more people are using ad blockers, is effectiveness going to drop?” Actually, we haven’t seen a bigger drop since I started talking about this with my clients two years ago. I think maybe that that drop is gradual, but to be honest, right now I would say that it’s not going to affect Facebook advertising as we might think that it’s going to affect it.
Mike: Our next question comes from [Kelso] and he says, “Do you have any case studies that you can point us to for successful ad campaigns? The second question he says, “How deep should you go with segmentation?” Do you have a couple of things we could link up on the show notes?
Mojca: I’m actually working on them but you will be able to find them on my webpage, definitely.
Mike: Awesome.
Mojca: A couple of results, with Facebook we’ve seen—I’ve worked with an ecommerce company—and we’ve seen up to 400% ROI. That was actually a standard especially when we did retargeting, we had 400% ROI. Or for example working with software companies, one software company in particular, we were paying $20 for an acquisition where lifetime value of a customer was $500 or right now I’m working with another software company and we are paying $50 for a conversion and they’re paying on Google $500 for the same conversions. It’s been incredibly effective.
But as far as segmentation goes, I definitely recommend as much segmentation as possible. That said, you always need to be careful of potential reach, you can segment all you want but if, let’s say, a specific custom audience that you really segmented out, the potential reach is only 20 people, that will not be effective. Be careful of that.
Also you need to keep in mind that the more segmentation that you have, the more work you’ll have with your Facebook Ad campaigns so you really need to decide if you want to do that or not. Segmentation is incredibly effective when it comes to Facebook Ads, like I said, it’s a tricky thing to do especially if you’re working with a bit smaller audiences, but if you have a lot of data collected already, by all means, segment as much as you want, I really recommend it.
Mike: This kind of brings me to a couple of questions. I kind of specifically had like when you are looking at what your ad spend is gonna be and what your minimum reach are, are there kind of guidelines that you would follow? Say make sure that you’re spending at least this much on a daily or weekly basis and make sure that your reach is at least this because otherwise, it’s probably not worth your time. Is there some quick calculation you could do based on “performance metrics” or average conversions kind of going through those Facebook Ads to figure out like if its 20,000 people, you have to have a conversion rate of at least 10% in order for it to be worth it if your cost per good sold is X. Is there anything like that that you can go and point to?
Mojca: Everyone asked me about that and that’s a very, very hard question to answer because for example, I’ve worked with multiple software businesses and they are so different when it comes to conversion rate and ROIs. With each and every customer, and with each and every client, I have to figure out a way of how to properly measure that and how to properly determine how big of an investment we need in order for our Facebook Ads to be effective. If you’re starting with Facebook Ads right now, if you haven’t done this before, I do recommend starting it slow. Don’t say, “Oh well, we have a well established business and we can spend $10,000 a day on Facebook Ads. Let’s just do that.”
Even if right now you have a lot of assets that you can promote, you have the money to do that, I definitely recommend starting slow with investing $50 a day or $100 a day and just kind of seeing what do you can do with that money and establishing where the ROI is coming from and what you need to do and what kind of cost per lead magnet download you can get for that kind of money. Just filling your way through that and then investing more and more once you get the hang of it.
If you do have a small business, so to speak, for example you’re just starting out, you just launched your new product, it hasn’t generated any revenue yet but you do want to experiment with lead generation with Facebook advertising, I recommend starting with $10-$20 a day and just seeing how that goes.
Facebook offers a lot of different tracking options, you can really track your ROI, you can input for example for each lead or for each conversion, you can connect that conversion to a specific value and Facebook will track ROI. It all comes down to your setup and so on.
Mike: Thanks. That’s extremely helpful because I think that the ballpark numbers that people have, people just don’t even really know where to start in terms of how much to spend, I mean is it $5, $10, $20. I think that the guideline of $10-$20 a day, at least to start of with especially if you’re just starting out and you just have a new business or product that you’re pushing out there, it sounds totally reasonable and I think within the reach of most people. We hear people talk about like you just mentioned, $10,000 a day, some products are just not even gonna make that in a year. It’s just not realistic.
Mojca: Yeah, yeah.
Mike: I think the last question I had was how do you go about managing or documenting your custom audiences and the custom conversions because one thing that I find, especially when it gets into like marketing automation side of things, you tend to lose track of stuff over time even if you’re working on it right now, it’s very easy to forget all the specifics of it and a week or five weeks or two months down the road. How do you go about tracking those things in a way that’s going to be easy for you to come back to later?
Mojca: Yeah. I absolutely know what you’re talking about because you have different campaigns within Facebook, you have different custom conversions, different custom audiences, just a ton of different things that you need to be tracking off and you need to have a higher level approach and just a higher level view on.
First of all, what I would emphasize is to properly name your custom conversion so you don’t get lost in, for example, lead number one or lead number two, you want to name them properly. Kind of the formula that I use on Facebook when it comes to custom conversions is I describe that custom audience as much as possible. For example, if you’re using a retargeted audience, I use website visitors 180 days landing page or website visitors 180 days this blog post. I use very specific names that I always know what this is when I come in Facebook.
Same for custom conversions and I document everything in Google Docs or Spreadsheets. I also document a lot of my custom conversions especially audiences and basecamps so I have documents for each client, for different audiences, it piles up, I tell you. Just using Spreadsheets, I think that is kind of the best way to go about it just to keep track of everything and for you not to get lost in the amount of data and different audiences and custom conversions and every other assets.
Mike: Awesome. I think that’s probably a pretty good place for us to wrap up. Is there anything that you wanna add or leave the listeners with?
Mojca: Maybe just giving one advice. I know that the Facebook might look very overwhelming. When you decide that you want to start advertising, you come on Facebook and you open up your Facebook Ads Manager and there are a ton of different options that you can choose from, don’t be afraid, it’s all very manageable. Facebook is really trying to simplify the process of advertising. Just like I said, start slow, invest a couple of bucks in launching your first campaign and see where that takes you and I promise that it will be worth it.
Mike: Awesome. If people have questions for you or they wanna follow up and kind of check into what you’re working on or if they wanna have you manage their Facebook Ads, where can they find you?
Mojca: Yeah. I would love for them to write me, I have my email so mojca@superspicymedia.com. I would be more than happy to answer any questions or hesitation or to just help them with setting up their first campaign. Send me an email at mojca@superspicymedia.com or if you’re interested in my blog posts and videos that I publish, services, you can find me on superspicymedia.com and you’ll find everything there.
Mike: I also see a link here for the facebookadsacademy.com?
Mojca: Oh, correct, yeah. I have the Facebook Ads Academy. If you’re just starting out with advertising and you need someone to pretty much hold your hand and help you with launching your first campaign or if you already launched the campaign and you have a question of how to set things up or what does this mean or what do these results mean, Facebook Ads Academy is definitely a great way to start. It’s basically a community of small business owners, we just help each other out when it comes to Facebook advertising, give each other advice, comment on specific visuals or copy.
Mike: I could say from experience that looking through the Facebook Ads Manager right next to somebody else who’s supposedly using the exact same thing, sometimes the interfaces can be very different from one to the next. I remember you telling me over FemtoConf that the ads manager, they’re running like a couple dozen of them at the same time basically A/B testing between them. Your interface could very well be different from somebody else’s.
Mojca: Yeah. I actually heard that they’re running hundreds of different Facebook Ads Manager. You might have a Facebook Ads Manager version that I do not have. I used to remember FemtoConf, I think they were like three different versions of Facebook Ads but it’s just that we were working with.
Mike: Yeah. They were like six or seven people in the room which makes that even scary.
Mojca: Yeah, it was crazy.
Mike: I think that about wraps us up for the day. Mojca, thank you very much for coming on the show. I really appreciate you having you.
Mojca: Thank you so much for having me.
Mike: We will see you at MicroConf in about five weeks or so too.
Mojca: Yeah. I’m so excited. This is going to be my first time in Vegas.
Mike: Awesome. You will be there straight through Growth Edition through Start Edition.
Mojca: Oh yeah.
Mike: If anyone is there, feel free to stop by and say hi.
Mojca: Yup.
Mike: If you have a question for us, you can call it into our voicemail number at 1-888-801-96-90 or you can email to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening and we’ll see you next time.
Episode 386 | Balancing Feature Development with Marketing, the Cost of Technical Debt, and More Listener Questions
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike answer a number of listener questions. The topics include balancing development and marketing, overcoming hesitations about partnering, and the costs of technical debt.
Items mentioned in this episode:
Welcome to Startups for the Rest of Us–the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Rob.
Mike: I have the plague.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. You were sick all weekend?
Mike: Yeah. My eldest son got sick the last Wednesday, I think it was. It was like Wednesday and Thursday and we sent him back to school on Friday. Then my wife got sick between Friday and Saturday and then I got sick between Saturday and Sunday. It’s been a rough week to say the least.
Rob: Yeah. That’s brutal. Being sick just tears you up, means you can’t get anything done, especially when you don’t have vacation time, you don’t have to paid time off and you’re trying to drive a business forward, it’s like every hour is precious.
Mike: Yeah. Fortunately for us, it was kind of over the weekend but still we’re recording now, we don’t usually record till Thursday but today’s Monday and after this podcast episode, I’m probably gonna go to bed.
Rob: Right, right. Yeah. Today, we’re actually continuing kind of a continuation of last week’s episode. I had picked out several questions last week that you and I were gonna go through and answer and we only got through a couple of them because the GDPR conversation was so extensive. I think that was a good thing. I think we went in depth and gave ideas and feedback but it meant that we had this big block of unanswered questions and I wanted to keep going with them.
Now we have a few voicemails and some others today. But before we do that, I want to tell you, I know I haven’t talked about Drip features in a while but I’m pretty excited about this upcoming feature. We’ve been working on it for–I’m trying to think–it’s gotta have to be about four months now so it’s one of the larger features we’ve embarked on but it’s a visual email builder.
Mike: Oh, nice. What’s that involve?
Rob: A lot of stuff. Yeah, you can imagine not only the frontend which is obviously a lot of dynamic stuff, a lot of Javascript and pointing and clicking and moving things around the screen but then taking something that is essentially JSON and translating into the table-based email render to HTML is a challenge.
We found some AltSize and trade secret workarounds that we found, we’ve really done a lot of research and I think I’ve done a good job with it. But what I’ve heard from folks who have built visual email builders is building the visual portion of it is one project and it will takes six months or nine months, depending on how many […] we have on it and how good they are. Then just doing the table-based rendering and getting all of that to work and working all the clients is at whole separate project. It can take as long as building the actual visual builder. This is why a lot of upstart ESPs don’t build them because the time investment is so extensive.
Mike: When you say rendering the stuff and the clients–I understand what you mean by the differences between them–but when you go back to the visual email builder, what advantages does that have over what Drip does now?
Rob: Right. Today, Drip just has a nice little WYSIWYG text editor and I’m still gonna use that. I never use visual email builders because I like the personal interaction or it just feels more like you’re getting a plain-text email when you send using our standard plain-text template. This is how I’ve always recommended doing it. I believe the conversation rates are higher when you do that.
However, there are a few industries where they have done tests–so they’ve done tests across many industries in terms of visual email with a lot of images and table-based layout, two columns and this and that versus just something that kind of looks like a plain-text email, much like we send out to a MicroConf list, or I send out to my blogs Software by Rob list, they tend to be more personal. It’s from Rob Walling, Founder, it looks like he’s actually typing it to you. But there are few industries—ecommerce is one and travel is another—where having back these more exotic layouts and emails can and will convert better.
Since we do have a large ecommerce contingent and since we’ve been focusing on commerce-based businesses, people who are selling things, we have found a time to break ground on a visual builder. It allows you to do the things where you see the fancy, neat template, you can just insert your images and have that layout. It’s not something I’m gonna recommend for everybody but there are instances and match your converts better.
Mike: Got it. Kind of like if you go over to MailChimp for example, they’ve got like 30 or 50 different templates you can choose from and okay, that makes sense.
Rob: Exactly.
Mike: That makes sense.
Rob: Right. We won’t have 30 or 50 templates to start with but obviously that’s a direction that you’ll wind up going and it’s become table stakes. Again, in certain industries if you’re doing ecommerce and you’re working with companies using let’s say a platform like Shopify, BigCommerce, or WooCommerce, or if they have their own custom solution for ecommerce, they tend to want to send emails with a lot of images and not just to frustrate top to bottom flow where it’s image-text, image-text, you wanna have things that just look nicer than that.
Mike: Yeah. Things that come to mind for that are things like Amazon, Newegg, or ThinkGeek, all those, it’s exactly the same. I totally get what you’re saying where that’s going, but it totally makes sense.
Rob: Yup. The reason I’m excited about it is because I feel much like we did with workflows, we went back to the first principles and said, “What did everyone else do wrong? What do we hate about builders? How can we do this differently?” It isn’t just look at what everyone did and copy the best features, just like we’re doing things that are different than anyone else. There are obviously gonna be commonalities. There’s stuff on the left that you’re text and your image block and your divider and whatever, then there’s the email on the right. That’s common stuff but there’s certain paradigms that we use that I think are superior and gonna make for a better user experience.
The team has been working hard on it and everytime I see it down the road, I’m like, “Man, this is super cool, actually. I wanna use this even though I don’t really…” Like I said, I don’t use other visual builders as a rule when I’m writing my emails because I’ve always liked the more plain-text feel.
Mike: Awesome. Let’s dive right into the episode and they’ve got a couple of questions outlined here. Let’s get started on this.
Rob: For sure. Our first one is a voicemail and it’s about how to balance feature development and marketing specifically for an IOS app. But let’s hear the question and we can figure out what form we wanna answer it.
Steven: Hi Mike and Rob. This is Steven Johnson with […] Plus, an iOS and Mac app for hikers. My website is […]studios.com. I have a question about how you work […] user feedback. I’ve been getting a lot of feedback about my app on the Apple Watch, it’s still like I’m missing out on some opportunities as well as on just keeping up with where the market’s going.
However, right now I’ve really been prioritizing a lot of marketing efforts, working on conversion rates, lowering churn, […] partnerships with business development and […] by knowing […] you talk a lot about having more marketing always speeds out features and I completely agree with that. I’m just trying to figure out how do I kind of balance these two priorities and knowing how to balance user requests that come in, especially one that feel like the market’s making changes and I feel like am I missing out on something, maybe I am and maybe I’m not, but I know that there’s opportunities that I’m not capturing with my marketing, I know there’s conversion opportunities as well as churn that I need to work on. I’m just curious about your thoughts on that. Thanks for the show. Love what you guys do. Thanks.
Mike: I think this is an interesting question mainly because it’s an iOS and Mac app but there’s also the recurring annual subscription from productivity. I think the prices–there is a free plan–but then they range from $20 a year up to $80 a year which is of around what, $5-$8 a month, something along those lines. I think that the challenge here is identifying why that churn happens. Is it legitimately because people are churning out and they’re no longer using it or is it just they find that the app doesn’t help them nearly as much as they thought it would? I think it’d be easy to assume that, “Oh, you should be doing this.” Or, “You should be implementing that feature.” But I think I might dive a little bit more into the churn itself and start ask a lot more detailed questions about why the people aren’t using that.
My concerns/fear here would be that what you’re offering people is conceptually what they want but either the implementation itself is not really what they’re looking for or it doesn’t really quite match up with what the value proposition they were sold on is and it could turn out to be that somebody tries one app and they think that it’s gonna work and once they get out of the field and they’re using it, it sort of works or does most of what they want but it’s not quite enough so they just decide to switch and use something else. Maybe look at your performance metrics or your usability metrics to see like are people actually using it after three or four months in or is it that they’ve paid for and it was a low enough price point that they said, “Well, I paid $50 for this and it’s not a big deal so I’ll just try this other thing over here for another $50.”
As I said, the fear/concern that I would have is something that people use and it may just not be able to deliver on the promise. It’s not to say that you can never deliver on that promise. The fear that I have is it even possible to do what it is that they really want. I don’t know the answer to that, you have to ask people to find out. But as you said, the other component is like do you invest more on the marketing side and try and ramp it up or do you drill in and start trying to fix those things and add more features?
I think the first place to start to find out why people are churning out and what the fundamental issue is there and from there look back and say is it important enough for you to fix? The reason I say that is because there’s a question for road map and what is the most important to you, not roadmap, runway is more it than anything else, are you able to make ends meet with the app the way it is or are you chewing through runway and sort of losing money on it as you’re going along? In that case, you need to lean more towards scaling things up and then fixing things versus being able to make ends meet on a regular basis and you don’t have to worry about it as much. At that point, you can dig in and start fixing things in the app. That’s probably the place that I would start. Rob, I’m sure you have some thoughts on this as well.
Rob: Yeah. This is the age-old question. I think it’s a really good one to think about. I think in general, as developers, we think features are the answer, and in general, they are not. Not to say, all at all times because in certain markets, in certain niches, it really will make a big difference like Drip launching workflows was game changing for us, it doubled our month over month growth. It can happen.
But so many of the little features that are constantly being requested, if you have thousands of users you’re gonna get 50 or 100 feature requests a month and most of them you need to not build. Not only to keep the product simple enough that it doesn’t become bloated, but because you just don’t have the time to build them all. The caller is so much closer to his business than we are so it’s hard for me to make a recommendation to him, but my recommendation in general would be stir away from the mindset that I just need this one more feature to do this thing, unless everyone’s requesting it.
There comes a certain point where 10% of your feature requests are for the exact same feature. At that point, that’s when we break down–in the early days, we build a lot more now, we have a team of 18 developers or whatever, but in the early days when we were super cash and resource trapped, it was pretty much no by default and yes to these highly focused things that we knew were gonna move the needle. That’s how I balance it.
I think that the caller’s approach to doing joint ventures and focusing on marketing is genius. That’s exactly what I would be doing because the more marketing you do, assuming it’s effective, the more revenue you get, and that revenue will allow you to then hire a contractor in essence or perhaps the first time employee, how ever you wanna work it. But hire a developer that you can supervise because that will then, I should take one step back first, first person I would hire is a part-time VA to handle all your support, if you’re still handling that, because that will free up.
Then start thinking about hiring someone to write the code and this is the part that developers always struggle with because no one “is going to write the code as well as I do.” However, if you can free up 12-30 hours of your time in a week and features are still moving forward and you have some budget to pay someone, it can be game changing for your business and that frees you up to focus on really moving the needle.
I think marketing in the early days is such a big deal because you need to get the revenue to allow yourself to start stepping away from certain roles that while you may enjoy doing them are probably in the early days are less effective and what more if the needle is matched.
Thanks for the question. I hope that was helpful. Our next question is about overcoming hesitations about partnerships to move the business forward.
Joshua: Hi Mike and Rob. This is Joshua from [Perspexa Labs]. First, thanks so much to this podcast. Every episode is invaluable. My question is this, how do I overcome my hesitancy of partnering with someone to move the business forward?
For context, I run a B2B SaaS company that offers monthly subs in the range of 100-350 a month, and we’ve plateaued about $2,500 in MRR I co-founded the business with an office colleague but I just realized circumstances he really isn’t able to participate materially in the business anymore and our product is solid at this point but I know we need to move the needle and sell the marketing in a big way. Try as I might, I just can’t seem to crack that nut.
I know that finding the right person to bring onboard will probably do wonders and turn us into a vital business but on a do-it-yourself-er and I just have trouble, one, convince myself that I ought to do this, and two, coming up with the vital way to achieve it. Any advice for effectively a solopreneur who doesn’t wanna be stuck in a half business for forever? Thanks so much for the both of you. Everyone, go leave a review to this podcast on iTunes. Thanks guys. Bye.
Rob: Joshua was kind enough to also send us an email with a bit more background and he said, “The main product outreach is at [perspexalabs.com], we’ve got a core group of customers and service businesses like pest control and electricity and we’ll soon be getting into healthcare providers because our revenue is only $2,500 a month with margins of around 70%. It’s not enough yet to pay salaries. I’m guessing that bringing someone onboard will probably need to be an equity arrangement which I’d be fine with.
With regards to my own efforts to sales and marketing I’ve gone to the Traction book and tried several different approaches including online ads, cold-calls, cold-email outreach and attended a very targeted trade show. That really hasn’t generated fruit as nearly all of our current customers are referrals from other customers. Unmentioned to my question bills are related issue, should I let my current co-founder remain in the business? I’d really like him to be here if we can get into healthcare because of his connections, but I know this isn’t the first priority anymore.” What do you think, Mike? It’s a tough one.
Mike: Yeah. I think you can almost divide this into two entirely different things. One of which is what to do about the co-founder and then the other is how do you move the business forward when you’ve got $2,500 a month and not enough money to do a lot and you’ve also obviously got the co-founder onboard and I don’t know what the relationship there is in specifically call that out.
Rob: It sounds like it’s still amicable and he’d like to keep him on if they were to go into healthcare but not if they don’t. You don’t know if they vested so the first thing is that you should have done four year vesting probably so that your co-founder wouldn’t own the entire percentage that they had. Because if they decide to leave, that will go back into the pool to get the next person.
Mike: I think, with regards to what to do about the co-founder, that’s probably the first thing to do. It sounds like you wanna keep them on but the question is how much is he going to be able to contribute. As Rob said, the vesting schedule maybe he owns 25% because he’s stuck around a year, 50% because he’s stuck around for 2 years. That seems to me like the first thing to look at and try and figure out and if he has to walk away because he’s just not involved, that doesn’t mean he still doesn’t own a certain percentage of the business anymore and can’t contribute under the […] capacity or something along those lines. That’s something I think you have to work out with your co-founder and sit down and have an honest conversation about what him stepping away from the business really means for the business and for the relationship between you guys.
Then once you’ve figured that out, the next question to tackle is what do you do about the business itself. I think you didn’t specify what your own personal situation is or whether you’re taking money from the business and living off of it. But with the $2,500 a month, it sounds to me like because you’re a do-it-yourself-er, it might be a viable strategy to go out and find a business coach who can walk you through a bunch of different things and that does a couple of things.
One, is it avoids handing equity over to somebody else, and two, it still allows you to do those things yourself and you get that personalized assistance from somebody else and a sounding board from somebody who’s vested in the business because you are paying them to give you ideas and take a hard look at what it is that you’re doing and how effective those things are but you’re still doing those things yourself and you still don’t necessarily hand over control to a third party or a co-founder or another partner in the business and avoid some of those other issues that maybe you’re struggling with right now.
I don’t think that it’s wise to introduce too many changes all at once. That could be a nice bridge scenario where you are involving somebody else but you’re not handing over the reins to somebody else in a co-founder capacity while you’re having your current co-founder step away from the business a little bit. That’s probably where I’d start looking and see if that makes sense to you.
Rob: Yeah. I think you’re right, there are two separate issues here, it’s existing co-founder and then pulling on a new partner. I think given that the business you have to de-risk the business a small amount that bringing on a new partner, you could obviously give equity without giving an enormous amount. It wouldn’t need to be a third of the equity or something. It depends on your aspirations and think where the business is headed and who you can find but I’m thinking in the 10%-20% range given where you are. If you were gonna go raise funding and you’re gonna go try to find like a COO or something or a CTO, they get 5%, but you’re in a little bit different situation because it doesn’t sound like you’re gonna get so big so fast, that that’s gonna be warranted. As a result you have to bump that equity to 10% or 15% or whatever. But at this point, in my opinion wouldn’t just be an even split.
I think the hard part is finding that person and vetting them and it’s like a marriage because you guys are gonna have shared ownership of things and breaking that up later can be like a divorce. I think getting over your hesitation is one thing, but I think the harder thing is to find someone who is good enough or who’s gonna work with your style, who’s willing to be in the trenches with you, who I think it really wants to stick around and is able to work because it sounds like this is gonna be nights and weekends, people are not cut out for that in general, most people just think they wanna do it and then a month or two months and they just flick out or they just decide not to do it.
I think finding someone who meets all this criteria is really hard but I think if you can, then what I would look at doing is definitely have kind of a trial period, maybe 90 days, just to say how things feel, I would definitely have four year vesting on that with the one year cliff, meaning they don’t get any shares until they’ve been around for a year. I think that’s how I would approach it and I would look to be meeting people in person so I would be going to the MicroConfs and the businesses software and these conferences where there are folks who could potentially be in that pool for you separately regarding your current co-founder. I think you just need to make the choice sooner rather than later whether they’re going to healthcare. If you’re gonna go onto it and he wants to stay around, you wanna keep him around, that’s great, and if you’re not, then I think the decision is made there.
I know it’s not always that crystal clear but it does, given that information you’ve provided, seem perhaps how I would perceive. Thanks for the question, hope that was helpful.
The next question is about technical debt. Mike, does technical debt really come back to bite you?
Mike: Oh, yeah. No question on that.
Rob: Alright. The subject line of the email is actually, “Have technical debt decisions been easy to pay down later or did they really come back to bite you?” He says, “Love the show, listened for the past year, really love the practical advice. I’m looking for your technical perspective about what matters in the early days of getting a site running while keeping customers happy with mission critical data, building a data heavy B2B SaaS startup.
The frontend is in Angular, the backend is in Rails, intermediate self-taught developers, new things I haven’t done before can sometimes take a week or two to figure out. I’m making early technical debt tradeoffs hosting using Heroku versus AWS, database PostgreSQL versus Aurora, and the other miscellaneous things relating to data structures.
I’m not looking for technical help but the question is more geared to your experience of how much this stuff matters up front and really needs to be solved to get functional versus it’s not too hard to change it later. Theoretically important but won’t kill you so pick the simpler thing even if you know you’ll need it to change it after launch. Am I wasting a lot of time by taking the shortcut now and having to pull the app apart later to move it around when I have real customers using it in production?”
Mike, this is not gonna be as long as GDPR, I promise, but I feel like we have a lot to say on this, so go. Just start rolling with this. What do you think?
Mike: Yeah. Do we have like beeps cued up immediately for all the profanity that’s about to be dropped on this?
Rob: Yeah. Technical debt, it’s a *.
Mike: Yes, it is, yes, it is. I think looking back on this particular piece of it, some of the things that he had brought up, the things like hosting and the database selection and the data structures that you’re using on a backend, some of those can be really hard to change later on, versely impossible. In some cases, you’re looking at a complete rewrite.
You at least have to have enough technical knowledge to make those decisions in a way that is not going to completely kill the app later on or force you to do an absolute rewrite from the ground up. That said, I do know people who have done complete rewrites after they’ve gotten to a point where they’ve gotten customers onboard and it basically delays things, you may have to take three, six, nine months of accepting the fact that you’re just not gonna make any progress on the features in order to fix that fundamental positions that will bust it.
Then, there’s kind of a second level which is where you’re trying to make decisions about how do you structure the data or how do you create the database in such a way that it makes easy to do certain queries or provide a solid error handling, error returns to the API for example. I think in those cases, you can mitigate them to some extent by using dependency injection and creating these interfaces that sit in front of it and if you need to rewrite one, then you can, you’re almost swapping out an entire layer of the application for another in a very specific way.
I’ll give an example with Bluetick, like the backend storage system for storing emails has been rewritten four times. It’s because at first it was like let’s just get something working and then it was trying to optimize for local storage and then the next level was things are not working in local storage because there’s so much data coming in at all times like I just can’t scale that much on one machine and then I kind of move everything into the cloud and into the Azure tables in no sequel storage. Then the fourth rewrite was essentially making that more scalable and optimized.
Each level on the way like there was some level of rewrite but because it was essentially being able to flip a switch and say instead of using this set of data structures, you can do those on a per user basis or on small sub-segments of the users and not affect others. I would definitely do some research on dependency injection.
The other nice by-product of them is that it helps with writing unit test to be able to make sure that those things that are working from one version of your rewrite to the next in that particular component or module. Beyond that, there’s always gonna be things that you run into where you think that one way is a good way to solve a technical challenge and you turn around and find that it just wasn’t, you get down in the weed sometimes and you realize that you made a really, really big mistake and the only way to resolve that at that point is to rewrite it and there’s nothing you can do at that point.
The only way to have mitigated those four types of problems is to run into them and then realize after the fact that it was a mistake. It’s really hard to generalize from one application or problem space to the next and say like, “Oh, you should never do it this way. You should always do it this way.” Those things don’t apply. Each problem space has its own unique way of storing data or things that need to be surfaced to the user and you don’t always know what those are until afterwards. Sometimes, you just make the best decision that you have and you find out later that it was wrong, there’s nothing you can do.
Rob: Yeah. I would just say in general, technical debt is underrated in the startup space. I think people think that it’s not a big deal and it’s a way bigger deal than most people do because if you aren’t technical, it’s hard to understand why you can’t just quickly rewrite a piece or quickly change a decision you made later. These metaphors don’t always work but it’s akin to building a building and then needing to go back and replace the concrete foundation because you poured it incorrectly. You literally have to jack the building up and it’s just painstaking and agonizing to replace that and that’s what code is. You’re building things on top of each other.
I think of it like a 4×4 matrix where there’s basically two binary things. One is I know that this is a shortcut and I’m gonna take it anyways versus I don’t know this is a shortcut like I accidentally introduced technical debt. I think that’s the switch you’re talking about.
Then I think the other one is it’s easy to undo later versus it’s a complete fiasco to undo it. You can imagine that 4×4 matrix and we’ll go through all of those matching up but obviously any decision you make on purpose to introduce technical debt, you need to explore and thought experiment like how hard is this to undo later. If it’s hard, then don’t do it.
There were a lot of decisions Derrick and I made in the early days that were very slow, they caused Drip development to be very slow in the early days and it was pretty agonizing when we were bleeding cash and we couldn’t get the features out the door to keep people from churning because it was a very specific feature set that people wanted, and it was taking us months to build them and it was because Derrick wanted to build them very carefully with extensive unit test and he wanna do it right and he had to refactor the database twice in the first year of the app, because the app went from a very simple thing to very complicated thing.
It was agonizing but it was the right decision, because now, it would be catastrophic right now, we would probably have to have rewritten major parts of Drip. I don’t know if it would have impacted the acquisition or if it just would have been post acquisition or what it would have been but it would have been really hard and between he and I, we figured out a good sense of what was gonna be hard to change later–things that are easier to change later like you said where you can just build an interface and then swap it out later. Obviously those are the ones that you can maybe take shortcuts on.
But I think some people take shortcuts on like not running unit test, some people make cold-quality shortcuts where they just start hacking things together and later on, everything’s buggy because you took a shortcut and you didn’t build that right in the first place. In general, I have seen no less than half a dozen or maybe closer to a dozen companies get to the point where they’re between 10k and 50k MRR, they’re growing fast and they have to rewrite their entire codebase. I’ve seen some that have done it more than ones.
It is so painful to spend six months of standing still while your competition gains on you because you took shortcuts in the early days. Now, you’re just hanging out, waiting to build more features until your codebase can be completely rewritten. I would say proceed with caution, obviously, you’re always gonna have some level of technical debt, but be very deliberate about those choices because I think it’s easy to be in such a hurry to get to the point where you have more revenue and this is certainly a tradeoff because in the early, early days, when you just trying to get to $5,000 or $10,000 revenue, you’re gonna have to make some trade offs but try to take shortcuts on things that are easy to change later. That’s how I think about it.
Mike: I think one of the biggest places to make that trade off is that when you’re looking at unit tests, I’m not saying you write unit tests for everything because I certainly don’t think that that has a ton of value for a startup but I do think that there’s value in having like continuous integration server of some kind or a build system put in place so that later on you don’t have to figure out, “Okay, how am I gonna deploy my app?” You want that to be a systematic thing where you can literally just click a button and it runs through everything and is able to deploy the app.
But with that comes at least some level of unit tests or a mechanism for running those, and even if you don’t write a ton of unit tests, as bugs come in, you should be adding those unit tests to make sure that if a bug comes in and it breaks something that you had a unit test in there so that later on, as you’re making other changes, it doesn’t break that again.
Like I said, I don’t think you should write unit tests for everything, but I do think that as those bugs come in you should be writing them to make sure that once you fix a particular problem that you don’t have to refix it 3, 4, 5, 10 different times moving forward because it just keeps coming up.
Rob: Thanks for the question. I hope that was helpful.
Next question is from Jay Pablo Fernandez and he says, “I just finished going through all my newsletter subscribers and I noticed there are a few industries that are well-represented such as education, health, IT and government. When it comes to my product, they all use it in the same way. The feature set they made is pretty much the same. I wouldn’t say they are verticals in the SaaS way of thinking. I can sell to all of them or I can focus on one industry. Are there any advantages to either approach?”
Mike: I think this is a tough question, as you said you don’t wanna paint yourself into a corner and make people think that you don’t serve their industry. I think what I would do in this case sn focus on the specific problem that you solve and then maybe have different case studies for each of those industries and even segment your list a little bit so that when you talk to them, when you’re sending out newsletters or you’re sending out articles to them, maybe you’ll only send an article that highlights a case study for the electric and gas industry to those people who were subscribers that fit into that bucket. It seems to me like that would probably be an appropriate way to go, but at the same time there’s value to be had to for saying, “Hey, this also works in other industries because there’s gonna be some crossover between them.”
Let’s say that you have a case study on the nuclear power plant industry, if it’s safe enough for them to use, pure application, then whatever other industry they happen to be in, they would probably translate that and say, “Oh, well, if these guys are using it, then surely it’s passed master and I could use it as well.” I would think about it in terms of just trying to make sure that you’re covering enough of each of them but not focusing so hard on any of them that it makes people think that, “Oh, this is not for me.”
Rob: I think I might try to run an experiment. He has this list and he has these four sectors, four verticals, and I would consider trying to do physically exploratory calls, I don’t know if you wanna call it customer development or even just sales calls, if the product’s already there, across all of them, and figure out that you wanna validate your assumption that they use it in the same way with the same feature set. Because I find that a little bit hard to believe, just having run the apps that I’ve run, different industries tend to want slightly different feature sets and have a slightly to just enough it settle but by the time you really get and they start using it, it becomes a pain-in-the-butt to have four different industries or wanting something just slightly, “Oh, just tweak this one thing, oh, can I just have a setting to do this? But we have a permission in the reporting thing.” It’s just enough that there will be a difference. I guess it’s what I’m guessing.
If you have the time to do this upfront and just have a bunch of phone calls with these folks and try to do the demos and try to figure out is it truly gonna be something that they all can use, then that’s fine. But I do think you’re gonna find differences in payment terms, like you said sales cycle because government’s gonna take forever to come through, maybe in your early days since you’re trying to get ahead of funding running out or whatever, you go after the ones that close quickest, which I don’t know if that’d be IT, education, sure it seems like it’s gonna take a long time too, so focus on the one that are gonna close the quickest and get the early value in order to keep around long enough to focus on all four.
But I would try to answer that question, there’s still a question in my mind of is the product actually gonna serve all four? If that’s the case and you can work your entire list and work all four of them at once and try to get as many customers paying you on day one, then that’s what I would do. Right now, you’re just trying to get revenue and see how people use the app and if they’re gonna get value out of the app and there are across four different industries, then you’re gonna learn more about all four and maybe later you decide to focus down on one industry.
I do think that there are some advantages focusing on one industry in terms of how your marketing can really speak to people so you’re gonna close more deals probably, how you are sales conversation can focus on them, how your features set can focus, and how word of mouth would be such a big component of it. Assuming that people in your industry hang out at conferences, or hang out online, word of mouth if you just become the defacto in in the industry and in a vertical then you can land and expand words like, “Alright, we are the go-to for this task in the IT space. Now we’re gonna start adding on these other verticals.”
That’s the other way to approach it. It’s just a pick one based on your information so far, your best guess, and then later on, a year or two down the line, once you own a big chunk of this, you’ll expand into the others but I feel like you don’t have enough information to do either approach right now and I would try to close as many deals as I could, see if they actually will all use it and then try to make the decision once you have a little more information.
For our final question of the day, we have a question from Ed Freyfogle. He was a MicroConf Europe speaker this year. He says, “Hey, guys. Long time listener, first time asker. One target audience of my SaaS service is academic researchers. They are not the best customers as typically they’re low budget and they only need this service for a project or semester. Nevertheless their niche seems to like my service. Often they ask for academic discounts. My pricing is already very affordable and I offer discounts for annual purchases. Still, I can’t help but wonder if I might be able to grow this niche by offering an academic discount.
Alternatively, I have also thought about selling to universities and offering them a bulk rate. But so far I’ve always been busy with other things so I haven’t acted on this idea. I’m wondering if you guys have any advice on academic discounts in general, how to ensure they are not abused by other customers and selling to universities. Thanks for the great show, I learn a lot.”
This is a tough question. I like the fact that he’s thinking pretty strategically about it. I think that if you haven’t had the time to try to sell to the universities and offer them a bulk rate, if you haven’t made the time, it’s probably not that important. That’s where I found like this is right. It’s like you go toward the money’s coming in and your biggest fires are. I’m guessing that unless you are to hire someone to handle that that it’s not gonna make it to the top of your to-do list anytime soon.
I tend to think about discounts in two ways. There is academic and then there’s non-profit discounts. I don’t know if you have a non-profit discount as well, that’s something that I would consider modelling it after and there you just ask for proof of their non-profit status which can totally be abused. I think with DotNetInvoice we had profit one and it was maybe 1 in 20 or 1 in 30 who ask for it and show the stock seemed a little bit like, “You signed up with this just to get the discount.”
In terms of academic stuff, it depends on what volume you have coming in, it’s like if it really isn’t education it’s 1 in 50 people ask for it. You can always have an unpublished academic discount and you just need to get proof from them, I don’t know it’s a student ID or if it’s a professor ID, what it is, but it’s gonna be a process, it’s fairly lightweight. I personally don’t see a huge drawback to doing it. I’m curious when people email and ask for academic discounts and you say no, how many sales do you think you loose? Is it worth even doing any of this effort to get those sales?
Your pricing is already reasonable, if you offered another 20%, 30%, 40% off for academic discounts and that’s probably the range, I would think, although I haven’t done any research about this, but mentally it would be in that range. Is that worth it if you have to go through validation of some type of ID, I don’t know, there’s some trade offs here.
If the volume is high enough that you’re asking this question, I would probably just do an experiment where the next time I got an email about it, I would say, “Yes, we have a 25% discount, but you have to prove you’re a student or you’re faculty.” See where it goes from there and handle it as a one off to start and then I don’t know if it has support people or not, but if you distract them to do that and then tally up in a Google Spreadsheet how often it gets asked and which sales come through, you can start getting at least a little bit of data about it.
Those are my initial thoughts without a ton of experience, to back that up, it’s more of the got feel, so much of entrepreneurship is making enough as you go along. It’s just figuring out what’s the priority and making the best judgment call based on the information you have. What do you think, Mike? You have other thoughts?
Mike: I’ve looked at the academic discounts in the past. You just do a quick search for academic discounts for software and you’ll find that they can be upwards of 85% which is extremely high especially for something like a SaaS, I mean. Is the money that you’re getting even enough to offset the cost of you actually doing business for that person? I don’t know the answer to that. I think you need to figure out what that is.
Rob: Yeah. I know that Microsoft and Adobe and those guys discount because they’ve been pirated so much. Too often students who don’t have the money and they do these huge discounts. When you’re a SaaS app, especially when you’re Bootstrap like this and cash is important, there’s no chance I would offer a discount that large.
Mike: Yeah. I mean I think that part of the reason that those types of companies offer discounts that are high is one, it’s downloadable software so they don’t have to worry about their own cost, and two, they’re really just trying to make sure that there’s some form of legitimacy for the software that you’re using and giving that high of a discount helps them to get market penetration so that Microsoft has 90% market penetration on the best app for Office and Windows.
I agree, I wouldn’t go that high, but it’s not to say that you couldn’t have a discount for students versus a discount for academic researchers/the university itself. Because if somebody’s using it for a class, then they’re probably not going to be able to pay nearly as much as the person who’s doing it for the university and offering it on behalf of the class itself. I might think about that, but I do agree with Rob that you probably want to go through and run at least some tests to find out like what is it that people are using it for.
Something else to consider is that if somebody is purchasing it on behalf of the classroom because they’re teaching it, what’s the value of having those people in the class know about your product and then they leave and graduate and go out and do things in the workforce and having them know, “Hey, I can come over to opencagedata.com and buy this stuff off-the-shelf and we use it in our classroom so it has a lot of legitimacy.” There’s probably some value in that, I don’t know what that level is because I mean if you go through like an engineering degree, chances are good you’ll probably use Autocad some place along the way. When you get out into the industry like you first thought is, “Oh, I need to create some 3D models of something. Where’s the copy of Autocad?” There’s a student discount that you can get but once you get out in that at the real world, your company has to pay for it.
Having those people go to their bosses and say, “Hey, I use this data over here from opencagedata.com. We should buy a license for that.” There’s value there. I don’t know what that is but I definitely think there’s some value there. I would look into it, I don’t know how much time and effort I would spend on it because the return on that is probably gonna be wild. It’s gonna be a couple of years.
Rob: Yeah. Those are good points. I like your idea of not making an academic discount but making it a student discount. It’s an interesting thing because students really don’t have the money whereas if a university is buying it for a class, they do have some budget, and he’s right, his prices are reasonable like a university should be able to afford it.
Mike: Even with like a student. A student could probably get away with a free trial or even like the extra small plan that they have there for like a class or project or something like that but the university, if it’s for a class, and they’re buying it on behalf of the students for a class, I’ll offer them a 30% discount if you’re a student and you just want to use it for yourself, maybe it’s a 60% discount. I don’t know, but if you separate them, I think that there’s a way of targeting those people in that way that says, “Oh, we give individual students 60% and for universities we give them 30%.” It shows that you’re doing both. It shows you’re helping out on both sides.
Rob: It’s a question of whether or not the volume of incoming request warrant spending the time to figure all this out. If the answer is no, we have reasonable prices and we aren’t able to support any of these because you don’t have the bandwidth. It’s less about money and it’s more about Bootstrap startup with not a lot of time and just having yet another program to maintain and then we have to get a fax of your idea or an email with a screenshot and then check that off that it’s approved and then they just want more process that you have to wait if that’s gonna be worth it for in order to make another few discounted sales.
Mike: Thanks for the question, Ed. I think that about wraps us up for the day. If you have a question for us, you can call it into our voicemail number at 1-888-801-96-90 or you can email to us at questions@startupsfortherestofus.com.
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