Episode 66 | Six Reasons it’s Hard to Ship a Product (and How Mike is Going to Overcome Each One)

Show Notes

Transcript

[00:01] Rob:  This is Startups for the Rest of Us, Episode 66.

[00:03] music

[00:12] Rob:  Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Rob.

[00:21] Mike:  And I’m Mike.

[00:22] Rob:  And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s going on this week, Mike?

[00:27] Mike:  Well, I’m in L.A. this week and it’s raining.

[00:30] Rob:  Yeah.  That’s the first rain of the year for us. Gosh, my last couple of weeks have been busy as usual. I think I announced that last time that I finally got the new HitTail design live and it’s been — actually, it’s two weeks to the day since it’s been live.  So I’ve started the marketing engine.  I’ve been on a couple of podcasts.  I went on TechZing like I mentioned last week and definitely noticing the impact of asking for credit cards before the trial rather than before you could just sign up. And then at the end, we’d e-mail you begging for you to — please continue and sign up for PayPal.

[01:03] So it’s cut the number of trials in half but in my experience and from the experience of all the guys who I’ve talked to — this is gonna be totally worth it in two weeks when all the 30-day trials run out because it has just a dramatic impact on the number of people who convert.

[01:17] Mike:  Cool.

[01:17] Rob:  So yeah.

[01:18] Mike:  That’s awesome.

[01:19] Rob:  Yeah, I’m excited. It’s fun to just be able to — after all the work that I did on it to finally put it out and get  — I’ve gotten quite a lot of positive feedback actually on the design and that’s pleasing.  It’s good to work hard on something and then have folks like it.  I did get one e-mail, just one — I mean, seriously I probably received 50 e-mails of people and tweets and said that site looks great, love the design.  I got one today and it was a woman and she’s like, I can’t use your site.  It hurts my eyes, like all the colors and all that.  And I’m like, I don’t know. Maybe she has a weird monitor. I mean, it’s like kind of a muted blue. It’s not like I’m gonna redesign the site based on that one person’s feedback.

[01:54] But I did wanna — I do wanna point one thing out. I have billing code, like a billing cron job. It runs every day and charges the people who are due to be billed and that is totally not ready. So I have like 16 days left, yeah. I’m pulling it — I mean, talk about going lean. I really don’t have — I mean, I have obviously the credit card numbers, they’re stored on stripe and I have this little token I can use to charge it and that’s in my database. So I have a countdown. I have a reminder in my calendar to tell me like — it basically says, by this day, the billing engine should be done, is what the reminder is.

[02:25] Mike:  Yeah, four days left to complete your code in order to charge people money.

[02:27] Rob:  Seriously, yup. If you miss this, you will regret it. Yeah, yeah.

[02:33] Mike:  So, hey, last week I was going through and I kind of switched over and started looking at more at the marketing side of AuditShark and I went into Google Analytics and I was poking around and I noticed they’ve made a significant number of updates but the two specifically that caught my eyes were if you’re going to [Inaudible] and then visitors flow it gives you a graphical view of exactly where people go on their websites.

[02:58] So basically what percentage of people come from different countries and then it shows like a bar that is larger or smaller based on the number of people that are going from that country into a specific page.  And then out of that page, they show you this like red arrow that kind of goes out of the right hand side of it and then straight down if they’re basically dropping off your site. And then it continues like above that.  It continues to the right and goes to one of several different places that are kind of vertically laid out. And it shows you where you’re losing people or where they’re going on your site.

[03:34] So for example, on my site, if I go to look for AuditShark over the past month. Of the people that come in from the United States, the vast majority of them, 48% of them from the United States goes straight to the homepage and then the other 52% go to various other pages that are on there. So they’re basically — they’re hitting other landing pages. And then from there, it shows me that I’m getting 30% that dropped off.  But of the rest of them, almost 37% are going to my features page. And then from the features page, 19% of them are going to the Buy Now page.

[04:12] Rob:  Got it. Yeah, I’m looking at it right now. That actually is pretty fascinating. I’ve never seen a [Inaudible] room like this. This is pretty cool. People should check this out. Go on to the new Google Analytics interface and audience and visitors flow. Definitely helpful to have a graphical thing. I wonder why they — oh, they just break it up by country by default. You could actually –

[04:29] Mike:  Yes.

[04:30] Rob:  — break it up by a bunch of other stuff if you want.

[04:33] Mike:  Yeah, that was just the default view but it was — I found it very interesting how they actually show you the dropout rate at the end of every single page and then at the end of each additional interaction with your website.

[04:44] Rob:  That’s neat.

[04:45] Mike:  The other thing that I found in here was if you go down on their content and then In-Page Analytics and it shows you like over on the right-hand side, if you click on the — there’s a color bubbles button. It’s the middle button of the three.  And it will show you actually what your web page looks like.

[05:02] Rob:  Yup.

[05:02] Mike:  It will show you percentages of what people are looking at on your site. So like — what percentage of people click through on specific things. And what I thought was really interesting was at the very bottom it shows kind of like an orange slider that says, approximately 14% of clicks are below this line. And as you scroll down, it shows you the number of additional clicks that are below that line.

[05:26] Rob:  Right. So it shows you the below — the fold numbers. See, they’ve had something similar to this in the old interface but it wasn’t quite as fancy. You couldn’t scroll it like that. I think what I discovered with the old one and it looks like it might be similar, it’s not — when you do Crazy Egg and it’s in an actual heat map of where they clicked on the page, like you can see whether they clicked that. This is not like that.

[05:47] Mike:  Right.

[05:48] Rob:  I think the more you look around, like I have a logo in my upper left of HitTail and I’m looking at it right now in the [Inaudible] view and that goes to the home page and that says 12% of people went there. And then I also have the home link in the upper right. It goes to the same URL and it says 12%. And I bet that those were not actually clicked. It just says where the next path was from this.

[06:08] Mike:  Yes.

[06:09] Rob:  And they don’t know which one was clicked. So they just put the number there. That makes sense. It’s much less accurate in Crazy Egg but at least, it does give you — they’re kind of superimposing their data on to a visual view even if it’s not completely accurate.

[06:22] Mike:  Yeah. But I just thought it was interesting — if you don’t use Crazy Egg or you just can’t afford it or something like that. I mean, this gives you a much better view of it — of the data than I thing it did for.

[06:34] Rob:  Oh, absolutely. It’s way more visual.

[06:36] Mike:  So I just thought I’d point that out.

[06:37] music

[06:41] Rob:  So, hey, today our main segment is called Six Reasons it’s Hard to Ship a Product (and How Mike is Going to Overcome Each One). This episode is actually by popular demand. And when I say by popular, it’s basically Ted. Ted requested it. But we got some good comments on Episode 64. Basically, you mentioned doing — you’re going back to your forum software or something and Sandy posted a comment.

[07:07] She said, “This is a friendly comment. Why are you working on your forum software when you still don’t have a paying customer for AuditShark? Focus. Get this thing out the door. I’m basically hearing the same old stuff. You don’t know people are gonna actually use your software. We are rooting for AuditShark, but we need a deadline for you to commit to. How about a public commitment to a deadline?” So that’s what Sandy said.

[07:26] And then Ted Pitts from Moraware Software said, “I agree with Sandy. Here’s a topic for next week’s episode” — and we had already recorded next week’s. But his title is “Ten Reasons Why it’s Hard to Ship a Product and What Mike’s Going to do to Overcome Each One.” You addressed them in the comments but then basically e-mailed me and you’re like, “We need to do this.”

[07:44] The six reasons — I couldn’t think of ten reasons so I came up with them and then I’m gonna kind of throw them out and maybe you and I are gonna talk through them. That’s the thing, though. It’s like people will cut you slack. I mean, it’s hard to be publicly accountable like this, right? I don’t think –

[07:58] Mike:  Well, I agree with that.

[07:59] Rob:  I don’t think that anyone is sitting here and pointing fingers. I think we all do this stuff and so I genuinely believe — like I’m glad Sandy put it that way. She’s like, focus, like we are rooting for AuditShark so let’s make this thing work, you know. It’s funny, I have so many questions. I’m hoping they’ll come up during this. So maybe I’ll just dive in to the first one and make sure that we cover them. So the first reason it’s hard to ship a product is that it’s easy to lose momentum.

[08:23] Mike:  Understatement of the year.

[08:25] Rob:  Yeah. I mean, it’s easy to just kind of wander off, right? It’s like we talk so much about the four to six month rule of like, if you don’t get it out four to six months, it’s really, really hard to launch. And like we talked about a couple of episodes ago, I think it’s been two years for you?

[08:40] Mike:  Well, sort of three really.

[08:41] Rob:  Has it, really? Oh, yeah, because you were doing it long before you announced it on the podcast. So that’s just an insane amount of time, dude, to develop a product.  So what can you do? Like what are you gonna do? Have you lost momentum? I’ll admit. Like it seems to me that you talking about going back to get your forum software developed or rethinking AuditShark and how you’re gonna market it or some features or whatever got me thinking like, well, I think Mike might be not wanting to finish this. Do you feel that way? And how are you not gonna do that?

[09:11] Mike:  I’ll be honest. I mean, December was rough. I mean, I got to the point where I was putting in such an insane amount of time. I had the self-imposed mental deadline where I said I have to finish this to the point where it is usable by the end of the year. And I did that. But to do it, I had to put in an insane amount of time. I was putting in extra time at the weekends, during the week, before work, after work. It was just mentally jarring. It is a lot of mental effort and energy to get it done.

[09:38] And once I got it to the point where I was able to say, yeah, this is done. This is working and somebody could use it and it would be useful for them. That kind of made me back off a little bit to kind of take a break but at the same time, I basically shifted from putting my mental focus on the codes, to putting my mental focus more towards the marketing side of things.

[10:01] I mean, I think I mentioned that I have gone — I walked into four banks in my town and said here’s what I’ve been working on. I’d like to show it to you. And of the four, the one that I had thought was the — probably the biggest prospect, basically looked at it and said, “This sounds great and all. It’s interesting, what you’ve done. But what I really need is this.” And it’s an off shoot of what AuditShark can do and wasn’t really necessarily the main focus of what I was trying to build. I mean, what they meant when they said compliance was really more like vulnerability management and identification.

[10:34] I think when I was initially building this and talking to them last year about it, it was more of a difference in terminology and just not getting on the same page. So there’s obviously some disconnect between me and some of the people that I’ve been talking to. That said, I still believe there’s a solid market for this. I just think that in that particular case, I was taught — we just weren’t using the same language.

[10:57] Rob:  I mean, how many banks have you sat down with?  Not just got into, but like sat down with and actually talk to someone or show them screenshots or demos or just something to where you genuinely think that they have some interest in this.

[11:10] Mike:  For banks specifically, it’s been these four banks.

[11:13] Rob:  Have you gone to the other three then and clarified if they feel the same way?

[11:19] Mike:  You have to keep in mind that the whole idea of going after banks was just an idea. And it’s not to say that — I mean, AuditShark can apply to a number of different market verticals. So for example, I decided to go after banks because I looked at them and said, okay, according to some of the statistics that I found, 70% of the money that’s tied up in banks is attributed to ten banks. Which means that there are 8,490 other banks that are probably [Inaudible] size of about three to five, maybe eight, something like that. So I was looking at it from a perspective of where is the market that I could probably get in to.

[11:56] Now, AuditShark can be used in any situation where you have either a compliance initiative so that’s either regulatory or self-imposed audits that you need to do that tends to be in either the health industry, retail, where you have PCI, or public campaigns where you have Sarbanes-Oxley, those types of places. But I looked at all of them and said I think banks is the most realistic to go after.

[12:19] Rob:  Right. And so you built — you talked to the banks and you built the product based on presumably what they had said they wanted or what you thought they wanted. And I was asking like, did you go back to the other three and confirm that they were the same or different than that first bank? Did they also use the language differently than you thought? Or –

[12:41] Mike:  No, I don’t think so. They had similar language and they — one of them just had no idea. They didn’t even have an IT department. So I basically disqualify them from being a customer but I did talk to them in general about the types of problems they run into, where they get their solutions from, who they talk to for their solutions. And one of the big things that I found through talking to these banks is that they generally rely on an outside consulting company to come in and help point them in the right direction.

[13:09] The other thing I found is that there’s a specific organization that they have come in and do audits on them. They have like a third party auditor usually come in once a year and that’s scheduled. And then they have — it’s like — I think it’s NCUA. It’s basically the national council that governs the banking industry. So they could come in and they send in their auditors once a year. And that’s generally not an announced time. They don’t know that it’s coming. But basically, they come in, they do an audit and then they say, these are the things that we think you should fix.

[13:41] And the bank that I was talking about that I thought was going to be probably the best fit, basically the auditor came in and said, in terms of compliance, we’re looking for you to use vulnerability scanner. So between last year when I had spoken with them and this year, that’s when the auditor came in and said, this is exactly what we’re looking for in terms of having a compliance tool in place. And it was more for a vulnerability scanner than it was for configuration management.

[14:09] Rob:  Right. Okay. The second one is that it’s easy to think the product is the most important thing. I think that the product is actually a lot less important than figuring out which market you’re gonna cater to. And I felt like the whole time we’ve been talking about AuditShark for 18 months, two years, you really have been saying we can do a lot of things but banks, like pretty much banks.

[14:28] I mean, that’s what I’m going after, that’s who I’ve talked to, this is gonna serve them well, it solves their problem, that’s gonna be the product market fit. I’m gonna go after that kind of stuff. Is that still the case? And if it’s not, that’s crazy. That you’re here about to launch and then you’re gonna shift because I do feel like you’ve been maybe hinting at that.

[14:47] Mike:  I have concerns. And I think that it’s justified to have concerns regardless whether you believe you’re going in the right direction or not. I don’t think it’s an issue of whether or not the product can do it. It’s more a question of, can I really get to that market.  And the way that I need to and as short a time frame as I need to get to them in order to get things off the ground.

[15:10] Rob:  It’s like the sales — the sales cycles are really long and the sales cycles are really high touched.

[15:13] Mike:  Right.

[15:14] Rob:  Exactly. It could take six to nine months to actually –

[15:16] Mike:  I don’t think it’ll take that long. I really don’t because –

[15:20] Rob:  By three to six — let’s say it’s three to six months. I mean, it’s not gonna be shorter than that, right? I mean, it takes me — the sales cycle on DotNetInvoice — it’s six to twelve weeks, I would say is the best estimate. So that’s a month and half to three months. That’s 300 bucks. You know what I’m saying for DotNetInvoice. I just got to imagine that there’s gonna be more.

[15:36] Mike:  But it’s DotNetInvoice — something that they can download and just try out.

[15:41] Rob:  So, no, they can’t just download — are you saying can they download just in EXE and tool around with it for free?

[15:46] Mike:  Yeah.

[15:47] Rob:  No.

[15:47] Mike:  Yeah?

[15:48] Rob:  But why does that matter? To me, it’s more about the price, right? Because a $10,000 product can have a longer sales cycle than a $50 product. And it has to do with the customer because a bank is gonna be slower moving than — a lot of my guys are single web developers or small web development firms or small cellphone companies. So they’re gonna be much — I imagine faster moving than banks. So I think banks would be slower in both points.

[16:13] Mike:  I don’t know. And talking to the banks that I have, it didn’t seem to me like the price was really an issue. It was more — the questions I really got were more around the security of the data and what sort of things I’ve done to secure it. You know, is it SAS 70 compliant, for example. That was the number one question I got.

[16:32] Rob:  Is it?

[16:33] Mike:  Yes, to my knowledge it is.

[16:35] Rob:  Okay.

[16:36] Mike:  Because basically, that involves a lot of things around auditability of the physical infrastructure and making sure that those machines are, you know, wherever that data’s being stored is safe.

[16:47] Rob:  Right.

[16:48] Mike:  And honestly, SAS 70 wasn’t necessarily a requirement. It was more of a question of like, is this in a colocation facility where somebody could just walk in, any customer of the colofacility can walk in and do something? Or is it basically locked down? And I know for a fact that it’s all locked down.

[17:05] Rob:  Right. But we’ve gotten a little off track because we were talking about, are you gonna do banks? And you said you don’t know and I think I threw out kind of a — is it because it’s a long sales cycle and a high touch sales cycle? I think that’s where we were.

[17:19] Mike:  The original reason that I chose banks was because I felt like it was probably the most realistic place where I could go with AuditShark in order to get in to the market and get a start. And over the past six to eight months or so in talking with various people, I’ve started to wonder if that’s a mistake.

[17:41] Now, that doesn’t mean that I’m not gonna do it. It doesn’t mean that I’m gonna just completely go off in another direction without even trying it. I still think the best thing for me to do is follow through with that, whether I believe it’s gonna work or not. I mean, I really think I need to put the best foot forward and try to do it because that’s been my original fault all along. Because I think the worst thing I could probably do at this point is say, no, I don’t think this is gonna work. I’m gonna go in a different direction without even really giving it a fair shot.

[18:07] Rob:  I don’t know. I could see both sides of it. I think that if it really is a bad decision and you have deemed that it is not the way to go then I don’t think you should stick with it just because you’ve been saying it for a year or two. But with that said, I also think that if you genuinely believe that this does — if it has problem-solution fit with banks and you have been talking to them, I am concerned you might be giving up too early on it.

[18:29] Mike:  And I would say it’s a toss-up. I don’t have any definitive data or definitive answers from anybody that says, this is just not gonna work, especially from our prospective customer.

[18:39] Rob:  I don’t think you’re gonna get definitive data. I mean, we’re on the startup scenario.

[18:42] Mike:  I have been pushing forward with this. I mean, I have gone out and I’ve started looking to say, okay, well, how can I actually get to do — to the banks? Because in order for me to do AdWords, AdWords is just completely off the table. I mean –

[18:55] Rob:  Yeah.

[18:56] Mike:  — there’s absolutely no way. I mean, we were talking $30 to $40 per click. That’s just not gonna happen. I mean, especially for a customer that I’m only gonna get $300 or $400 a month from. It’s just not cost effective in order for me to be able to do that. Now beyond that, what I’ve started looking at was either buy in a mailing list so I could — I checked it out. Within a 50-mile radius of me, there are roughly 1,400 banks that I could buy their addresses for 12 cents each. I think it was $170 to buy 1,500 mailing addresses. So I could then send them postcards. Yeah, I basically have drawn up some leads. And that’s pretty cheap.

[19:35] Rob:  That isn’t very expensive, you’re right. So it’s gonna be 12 cents apiece to buy them. Oh, so that’s 170. Yeah, and then you have them postage and you have design work, and you have whatever else you want. But Harry Hollander from Moraware, one of the things he said that had success with really early on was just almost — it was like a semi-personalized letter. It wasn’t a postcard because postcards look like marketing and banks get that crap all the time.

[19:53] But if you actually address and do a full envelope, postage is more expensive, it’s a little more put together time whether you hire a local student to do it or do it yourself. But you actually put them in envelopes and do a first class stamp and address it to the president, the banker, whoever you’re trying to get to. Yeah, it’s so much more likely to — to get it and then letter is — I mean, it’s printed out and it’s probably signed by you, because you can do that. You may not do all 1,500. Maybe you only start by doing a hundred or 200 or whatever. But –

[20:20] Mike:  But as you buy those things, if you buy 50, it cost you less than twice as much to buy a hundred. It scales. I mean, as you buy more, it costs less and less to buy each one.

[20:29] Rob:  I feel like until you’ve done that, until you really start to hit this hard, because all that’s gonna do is generate leads, right? If you send it out to all 1,500 or if you sent it out to 500 or whatever, you’re not gonna get 500 calls. You’re gonna get a handful of calls maybe, right? Like five. But then at least you have five people who are genuinely interested, assuming you’ve described it well, who are genuinely interested in this thing. And if you can close one of them, then you have your — you have your first bank customer, for crying out loud, which I think is what — that’s just gonna be so critical, right? And even that customer’s gonna take so much time for you to get set up. You’re gonna learn a bunch while you do it so –

[21:06] Mike:  Right. I mean, I’m already learning quite a bit because earlier today, I installed my first Beta customer. So they had about 60 machines and –

[21:13] Rob:  Is it a bank?

[21:14] Mike:  No, it’s not a bank. It’s a reseller. So they’re interested in potentially becoming a reseller for they have an established customer base. And people who would be interested in this sort of thing but it’s more or less like they kind of want to take a look at it and see more or less what it’s all about. So I went through a couple of installation pains with them, found that — had they followed the instructions, it would have worked the first time but I had to walk them through a little bit more and found that just didn’t use administrator credentials on one place where they needed them. It was documented, they just didn’t read it.

[21:44] Rob:  Okay, so that’s cool. So you have first Beta but it’s not — it’s tough. That’s more of a technical Beta, not a customer Beta. That’s what I want to see.

[21:51] Mike:  Yeah.

[21:52] Rob:  You wanna see you getting into an actual bank environment and have a –

[21:56] Mike:  That’s true although I said that I finished the code back in December and it is functional. There are certain things that I found that going through just the course of this little tiny Beta just in the past 8 hours or so, there are certain things that just — that are apparently not working. And I don’t specifically know why because I don’t have the visibility into as far into the product as I need.

[22:18] Rob:  Right.

[22:19] Mike:  I don’t know what’s wrong. And these things would come up whether I install the Beta customer or somebody who will eventually become a paying customer. I prefer to find it on my own without a potentially paying customer, but it’s got to come up eventually and it’s got to get fixed. So –

[22:32] Rob:  Sure. You talked to the one bank and they told you that they need something different. So they’re probably off your prospect list right now.

[22:41] Mike:  They are tabled for the time being.

[22:43] Rob:  It seems like finding out if other banks feel that way — like you may have missed the mark with the product.

[22:48] Mike:   It’s possible, yeah.

[22:49] Rob:  Right? That you’ve actually built the product that you thought — I forgot we have our six reasons to start to launch a product. One of them is that it’s easy to build something that you think people need but that customers aren’t willing to pay for. I’ll put it this way. You haven’t convinced me based on what you’ve told me that you’ve built something that banks actually need. What can you do to get that data? Like is it talking to these other three banks that you’ve talked to? It does seem like talking to the customers — before you write another line of code or install another Beta anywhere, it seems like you got to figure out if you’ve built something that they need.

[23:21] Mike:  I think in a general case, I would probably agree but because AuditShark has the capability to do so many other things, I don’t think that it materially matters. And let me explain that a little bit.

[23:32] Rob:  Yeah, you got to explain that, man.

[23:34] Mike:  I will. The issue that I see is that AuditShark can be positioned in a number of different ways. So let me just throw out some of the different ways that AuditShark could be positioned and it could accomplish those things and do its job and do it well. The issue is there are gonna be a few things under the covers that would need to be technically toggled — not a huge amount of work but obviously a little bit of work. And then the bigger problem would be overhauling the marketing behind it.

[24:02] Now one problem space was obviously the one that it’s currently kind of set up for is for doing system configuration management and auditing configurations in some machines. Second one, as the original bank that I talked about, they were looking for a vulnerability scanner. Somebody pointed me to — I think it was one of our listeners actually sent me a private e-mail saying, “Hey, I actually run a vulnerability database. If you wanna chat about it sometime, let’s chat.”

[24:29] My assumption was it was more let’s just kind of feed me information about how vulnerabilities are identified and what sort of data they have available. Maybe it’s stuff that I could leverage, maybe it’s stuff that I could actually automate and create scripts and stuff that would import their data and create a set of vulnerability rules that I could plug into it. So that becomes, you know, kind of a second potential market. It would be a vulnerability scanner.

[24:58] A third one that I’ve looked at in the past was the potential for using it to audit WordPress installation because there’s millions of WordPress installations out there. Would people be willing to pay for a product that goes on to their machines and [Inaudible] those machines to see is this thing locked down the way it should be? Are there potentially holes in here that I don’t know about? Because most people who are running WordPress don’t necessarily want to know or want to care about any of the security concerns that go with it.

[25:28] Now, I’m not saying that WordPress in insecure because I don’t think that it is but there are certainly opportunities and potential for a machine to become misconfigured in a way that allows people to run scripts and things against your site which will basically compromise it. It’s not a something specific from WordPress, it’s more of a direct result of something’s not working, let me toggle a bunch of things and then when I’m done, hopefully it works and you don’t go back and change those things that you had modified and you inadvertently start opening the holes. And that was part of some research I did a couple of months ago about WordPress security. I did some stuff on my blog and I talked about it a little bit on the podcast. A fourth possibility –

[26:11] Rob:  Hey, hold on. Let me stop you. We could probably come up with a dozen but it — does it matter? This goes back to the number two thing I said where it’s easy to think the product is the most important thing. You’ve listed off — your product is very versatile. Like, no, I totally don’t argue with that. It’s almost like if I built a general proposium essence that this thing could manage websites for banks, manage websites for accountants — you know, manage websites for all these different things. But as a one person shop, you have to pick.

[26:37] Mike:  But that’s my point about all of these, is that I have to decide which of those places I’m going after. And you’re right, it’s easy to think that the product is the most important thing, and I totally agree that it’s not. My point of saying all of these with having all of these different ways that the product could go is that it has nothing to do with the products. It’s about the marketing and whether there’s a market for a product that does that thing.

[27:01] Rob:  Exactly. And I think that’s what I’m getting at, is that for the last two years, you’ve been saying banks — like banks at the market. I mean, it just seems like we talk about starting marketing early. Start marketing the day you start coding, start building SEOs, start building a mailing list, start — you build the product to serve that particular market because if your product is too general, I mean, we know it just isn’t as good as if you built it with a specificity in mind of what an actual customer is telling you to build.

[27:28] And so if you think that it’s still banks for now, right? You said you wanna put your best foot forward and you do wanna try banks then all that other stuff you just listed, the other options are irrelevant right now. They may be relevant in six months. If this doesn’t pan out, and it — you know, you’re like this is not gonna work. Like, I’ve built a product that banks can’t use or I can’t handle the sales cycles, for whatever reason like — then you can go back to the drawing board. But I don’t feel like you’ve done this one to death yet. Like you don’t have enough data. Like what is your next step? Your next step I think — but you can correct me. I think it should be you got to talk to these other three banks or new banks and figure out if you built something they can use and that they’re gonna be willing to pay for. Does that seem reasonable?

[28:13] Mike:  Well, it is. I mean, that’s what I plan on doing. But I don’t think that it’s unreasonable to consider other options as well or something else that could be added on. I’ve built the DBA in auditing tool, a compliance tool, and I talked to the first customer. They said, “We were really looking for more of vulnerability management tool.” And he did qualify this and he said, “But if you could combine compliance and vulnerability management into the same tool,” he said, “that would be extremely valuable to me.”

[28:44] Rob:  All right. Number four is, it’s easy to think beyond your present reality. What I mean by that is it’s easy to just — to think too big. Or, it’s easy to think six months down the line, it could be this. Or six months down the line I might need to do this. And that’s kind of what you’re saying. And I feel like your present reality that has nothing to do with that stuff. If you wanna do the banks and you believe that that really is something you want to hit hard and prove or disprove over the next 30 days or 60 days, then do that. I don’t feel like you wanna kind of cloud your head. It just feels like it gets you scattered and going in a bunch of different directions. It’s easy to dream too big or just thinking too many directions at once.

[29:21] Mike:  But that’s kind of why I’ve always talked specifically about going in the direction of banks. I built a general purpose tool. And I’m under no illusions that it can be used for a lot of other things. That’s why I built it as a more of a general purpose tool. I mean, there’s an underlying scripting language or so. All these stuff under the covers that can make it do virtually anything. If it’s programmatically possible on a machine, my software can do it. I think what you’re getting at is more or less don’t think beyond what your current problem is and that current problem is getting paying customers for the target market you’re at.

[29:56] Rob:  That would be my like professional opinion right now. If you wanna get this thing out there, like someone needs — you need to have a paying customer because otherwise the product is gonna stay too general.

[30:05] Mike:  Right.

[30:06] Rob:  I truly believe if you find a paying customer and you get in there, that you are gonna find that it’s gonna become a much less general tool very quickly that you’re gonna add a bazillion very specific things that are specific to banks, you’re gonna need to add features, you’re gonna need to make some changes. And you may be able to do it with a scripting language or not but I still think there’s a lot of work to be done to make it specific to banks and specific to anyone. I still think there’s work to be done. I don’t believe that it’s so general that it’s just perfect for all these markets at once.

[30:36] Mike:  I agree with that. I would say you’re probably mischaracterizing that a little bit. And I think that’s probably because you haven’t seen it. You’re right. Like for example, for me to go after WordPress security — it’s really not built for that right now in terms of the UI for the end user. Vulnerability management and compliance management, there’s very, very little difference between the two of them in terms of what I would need to display to the user. They actually overlap probably a lot more than you might otherwise expect.

[31:05] Rob:  Right.

[31:06] Mike:  But the marketing is obviously a lot different. And I don’t think that it is wise for me to try and do both at the same time.

[31:13] Rob:  Right. My number five here is that it’s hard to ask customers what they want before you have a product, A, its awkward and B –  especially if it’s a perspective customer you’re walking into a bank and you’re like, hey, I have a piece of paper with a screenshot. That just takes guts to do, number one. And number two, it’s often hard to actually communicate the idea. Do you think that 18 months ago, that if you had — do you think that there was something you could have done back then to be more certain about what you’re building and that they would need it?

[31:42] Mike:  I think if I had scratched out screenshots and showed them instead of talking to them about it, I think that that probably would have helped. Because I had ideas in my head of what it was gonna do and what it was supposed to be. And the things that — going back to that bank where they said they wanted a vulnerability scanner, they didn’t use the word vulnerability scanner, I did. Because they didn’t know what it was called.

[32:06] Rob:  I mean, let’s be clear here. I’m not trying to say, oh, you did something wrong. I’m trying to say what can we, you and I, and the entire audience learn from this? Like that’s the whole point of this.

[32:13] Mike:  Oh, yeah, that’s definitely something that could have been done better. I mean, I –

[32:17] Rob:  Yeah. It sounds like visually having something more visual than just being able to discuss it. It could have helped. That makes –

[32:22] Mike:  And the issues that I had at that time was that I had a working product but it was all command line based. I mean, you basically run it from a DOS prompt.

[32:30] Rob:  Right.

[32:31] Mike:  So there was no interface to show them that would have given them any good indication of how the thing actually worked. It just wasn’t gonna happen. Now, what would have solved that was for me to just go into Balsamiq Mockups and actually start showing them that stuff but what I did was I built that stuff out and built the product from that. I didn’t necessarily show it to them though because I had the conversation with them and then I went and started designing the UI for it. I did it a little bit out of order.

[32:59] Rob:  Right. Okay. The last reason it’s hard to ship a product is that there are a handful of danger zones that make it easy for you to wander, procrastinate or think about changing direction. I actually did a blog post about this a while ago and I think it was called the — I called it the three startup danger zones. I think there are more than three.

[33:15] Mike:  What were the three that you listed?

[33:17] Rob:  I’m pretty sure I listed when you’re looking for the idea that is the biggest analysis paralysis I’ve ever seen, is people just spending six months and going through idea after idea after idea and never actually committing to anything and overanalyzing.

[33:29] The second one is basically in the middle of development. Like if you have a six month development thing then like three to four months, it’s just brutal. Because you’ve been just working nights and weekends for that many months but you’re not close enough to the finish line to actually see anything and so I see a lot of half-finished projects that just get abandoned.

[33:50] And then the third point I pointed out was right after launch because basically at launching it can get a little bit of promotion, you might get a few customers and then most people think that, hey, I’m gonna get that TechCrunch link or you know, people are just gonna flock to the product and then two weeks after launch, your traffic is like five people a day and you know, someone doesn’t know how to do ongoing marketing. And so that’s when they throw in the towel. That’s actually when a lot of stuff ends up going up on Flippa or just being sold in general, right? It’s after that first month or two and there’s this big low and it’s like you spent six months or two years, you know, whatever — building an app and there’s these danger point. So I feel like you might want –

[34:27] Mike:  I would say that it was really the middle to near end of December where I got to that point where I finished the codes that it’s usable, and I just said, I need a break. It’s been probably three weeks or so — three or four weeks. And I’ll be honest. I haven’t touched hardly any code on AuditShark. I’ve been thinking about doing some stuff with the website. I played around with the Twitter Bootstrap a little bit, more with marketing in mind than anything else. I mean, I think somebody commented to me that I shouldn’t be working on wasting time. Well, I was using it more for design ideas for, you know, could I use these to lay out — that’s kind of the underlying framework for laying out a marketing website. Well, I use it for other things.

[35:09] Rob:  Right. I mean, I think — you know, you said you haven’t touched AuditShark code in a month. I don’t think that’s a bad thing at this point, man. Because I don’t think you have that confirmation yet. Like, you know, I’ve come back to this a few times. It’s like I think that until you’ve talked to customers that has to be your next thing before designing a website or doing anything else. If you really do wanna go down that bank road, I’m not convinced that you’ve built something the banks need yet, you know?

[35:32] Mike:  And I could see how you’d think that because I have no proof.

[35:34] Rob:  Not even proof but even if you told me –

[35:36] Mike:  I don’t have any paying customers, yeah. I have no paying customers.

[35:38] Rob:  But even if you said I talked to these banks and they’ve seen the screenshots and they’re like — they don’t even have to write you a check, Mike. If you showed it to them and you did a full demo and they’re like, yes, absolutely, we’ll buy that, you know, we can’t do it till next year, or we can’t do it in six months. At least there would be some validation there.

[35:52] Mike:  Right.

[35:53] Rob:  And then I think, yeah, obviously, the next step after that would then be the — you know, someone writing you a check but maybe you decided to bail on this bank thing. But it’s like you want to make a decision. Honestly, I would hate to see AuditShark but you failed it kind of for a month. I would hate to see it go away. And then for you to just kind of not want to not get back to it and leave it at this that would be terrible.

[36:12] Mike:  No, I agree. And the thing is like the past couple of weeks have actually been pretty good for me because they kind of gotten my mind off of it a little bit. And they’ve really made me step back and start to analyze what decisions I need to make next.

[36:27] One of the hard parts about being an entrepreneur I think is that you don’t have a road map. You don’t have a set of instructions that says these are the 25 things that you need to do and then you’ll be successful. It’s like you’ve got an empty slate and you’ve got to figure it out. I’m at one of those points where I just have to say, okay, what is the next step? I will write it down and then that’s what I have to do. And that’s kind of the point that I’m at. I mean, I got to the point where December, I was a little bit burned out. You know, I needed a break from it. I’ve basically taken a break from it. And now, it’s time to start going back to it and I might fly down from here from Boston.

[37:01] I basically had a major revelation about what — how I need to essentially structure my marketing campaign. Because there’s been questions that — and talking to people I’ve said, these are the things that AuditShark can do and this is why it’s useful. The light just kind of goes on for me like, oh, I get it. That makes sense, exactly what you said. I understand why I would want this and you know, how it can solve my problems. None of that’s on my website. Not a single line of it. I mean, like why is none of this on my website? Like, because I’m an idiot, because I haven’t done it yet. I don’t think I would have thought of those two or three weeks ago.

[37:34] Rob:  Right. Because you had to get away from it, yeah.

[37:37] Mike:  I think I’m at the point where I’m ready to get back into it and really ready to start looking at that marketing side of things again and figure out how am I gonna get in and reach these customers because one of the problems that I have is that I’m on the road a lot and I do a lot of consulting and in order for me to actually physically go talk to a customer, I have to take a week off which if you’re a consulting company, I mean, that’s kind of hard. I mean, you –

[38:00] Rob:  That’s a lot of money.

[38:01] Mike:  Yeah, it is. For somebody who may not even want to talk to you. That’s the problem I’m dealing with and that’s probably part of why I’ve looked at some of these other options because a lot of them — it’s less offline sales. Like I don’t need to go into somebody’s office and say, hey, would you like to look at this product that can help audit work best for you? Or, hey, would you like to look at this vulnerability scanner? I mean, people know that vulnerability scanners exist and they look for them online. Audit and compliance is a little bit different. I think that it’s much higher touched –

[38:29] Rob:  Absolutely.

[38:30] Mike:  — and that’s part of the problem that I’ve had with it. And that’s part of why my mind has strayed I think a little bit.

[38:36] Rob:  You’re actually thinking now about how this thing might actually have to be sold and that might be beyond what you can muster.

[38:41] Mike:  Right, right. I have no doubt that it can solve a problem. I have no doubt that people would buy it. It’s a doubt about whether or not I have the time to actually go talk to the customers and can I pull that off.

[38:54] Rob:  I still have doubts about those first two, honestly. You said you have no doubt that it can solve a problem and you have no doubt that people will buy it. And I still have doubts that you’ve found a problem that it solves. Like you haven’t found a customer who actually has said this solves my problem and you haven’t found someone who says they’ll buy it. So until those first two are solved, I don’t know. Well, I guess if you know that you’re not gonna be able to sell into banks and it’s not worth pursuing, but that’s a shame because I think you’ve been thinking about it like that. Well, I have, certainly for two years.

[39:25] Mike:  The reason I know that it does solve a problem and that it can be sold into banks it’s because I know of banks that have taken what I’ll call competitive products that do largely the same thing that AuditShark does and have thrown them out because they’re too complicated and too expensive.

[39:42] Rob:  Right.

[39:43] Mike:  And unfortunately, I can’t go talk to them because I’m contractually barred from doing so. So that’s part of the issue. The ones that I know explicitly about, I just can’t go talk to them or I’ll get sued.

[39:55] music

[39:58] Rob:  To someone listening to this, what we’re doing here — like what Mike is doing here is really, really hard. If you’ve never done this, especially — even just having this conversation in private is tough. This is not something easy to sit and discuss through because these are hard issues and then do it on the podcast, dude, I totally respect you.

[40:15] Mike:  As I saw an e-mail, I’m gonna go cry myself to sleep.

[40:17] Rob:  Yeah, exactly. I personally, dude, I want to thank you for doing this and agreeing to kind of talk about this stuff. I mean, we’ve done it now, three episodes maybe, four episodes where we’ve kind of talked about some hard topics. You don’t have to do this. You know, you could totally say like I don’t need your public accountability. Like you don’t have to and so I appreciate it. And I imagine listeners do too because I think we all learn from it. And I like what Sandy said. She said some other stuff but she was basically like we are rooting for you. You know, we’re rooting for AuditShark. And I think that’s pretty cool.

[40:46] Mike:  Yeah, I’ll be honest. I think if people weren’t asking questions, I probably really wouldn’t talk about it. Realistically, the major reason that I talk about it is because people are asking me about it and they want to know. If people weren’t asking, I probably wouldn’t talk nearly as much about it as I do.

[41:01] Rob:  Right. And we didn’t until — I mean, six months ago we didn’t talk nearly this in-depth about it. And it was because it wasn’t done and because people weren’t asking the questions. So my hope is that in two weeks that you have a better idea. It does sound to me like if you’re not gonna do — go after banks, that’s gonna take a big mental shift for me personally. Because I really have thought of AuditShark as this thing you’re building for banks and I know it can do all these other stuff. But if you make the switch, I need it to be clean and I need you to figure out what’s next. Yeah, try to figure out what I hope you have — I guess have some more data.

[41:40] Mike:  I need more data. And I need a solid idea of how I’m going to start reaching out to — or not even start reaching out, how I’m going to get in touch with people who are going to give me yes or no answers on some of the stuff.

[41:53] Rob:  Yeah, that’s for sale. Even if it’s a verbal yes and like, you don’t have a physical check, it’s like who’s gonna be your first sale.

[41:59] Mike:  Like I said, I mean a lot of it is just the issue of it is a general purpose tool and it’s got to be built — the marketing has got to be aimed at somebody.

[42:07] Rob:  Yup.

[42:08] Mike:  That’s really what it’s come down to. So my next steps over the next couple of weeks, I’ve got some tasks I’ve got to knock out and one of which is a website redesign where it gives me a little bit not more control but makes it easier for me to kind of map out the paths that I want people to go on through my website. I’ve got to work on the actual text that’s on the website. It’s there but I can see just from the Google Analytics stuff that I was looking at, I mean, a lot of people go to the features and then a lot of people go to Buy Now.

[42:38] And then from Buy Now, they just drop out. I mean I’ve got a Sign Up page there. And it looks to me like people are just kind of dropping off from that Sign Up page which is ugly to be perfectly honest. But the fact that I’m getting so many people to go through that path from homepage to features to Buy Now, I like that but it makes me wonder the thing that none of these tools are ever gonna tell you is why.

[43:02] Rob:  Yup. It does seem to me like you need to find out who’s coming to your website because if you already have traffic coming through organic search and you decide that you do, in fact, wanna target those people because it’s easier to do it online then you need to find out who they are and what value prompt they’re looking for because if you can then switch positioning to sell to them. To me, before you redesign your website, it’s like you have to talk to somebody who needs it. You know what I’m saying?

[43:24] Mike:  Right.

[43:25] Rob:  I imagine people out there have questions or comments and so they can call in to our voicemail number.

[43:31] Mike:  It’s 1-888-801-9690, or if you feel more e-mail inclined, then you can just e-mail it to questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under creative comments. If you enjoyed this podcast, please consider writing a review in iTunes by searching for startups. You can subscribe to this podcast in iTunes or via RSS at startupsfortherestofus.com. A full transcript of this podcast is also available at our website. Thanks for listening. We’ll see you next time.

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26 Responses to “Episode 66 | Six Reasons it’s Hard to Ship a Product (and How Mike is Going to Overcome Each One)”

  1. Really appreciate the hard questions and honest answers!

  2. Thanks for the podcast.

    It is really painful to hear about what Mike has to go through with AuditShark.

    I don’t know too much about banks and how AuditShark could help them, but here is my 2 cents and sorry to be straight:

    It just feels to me that Mike probably need to move on and focus on the main product/service. I feel AuditShark is a side-line business that’s just taking too much time and energy, and returning almost nothing.

    So, why not cut the loss and just move on?

    I know it is very hard but it seems to me Mike either needs to go all in or just bail out.

  3. This had to be one of the most painful podcasts I’ve ever heard. There’s no polite way to say this so I’ll just say it with the hope that you understand that I don’t intend for it to come across with malice (it’s just been very frustrating to listen to the past few months of the podcast).

    Thinking back to episode one, I’m not sure why Mike is on a podcast about startups other than as a cautionary tale. Rob seems to be a guy who is just far enough ahead of me that I can always pickup something useful or he’ll cause me to stop and think about whether or not I’m going in the right direction. Podcast Mike (real Mike may be very different) is the anti-pattern for startups; big dreams coupled with excuses and justifications for everything that isn’t right.

    One of my partners displays this behavior and it is the most frustrating thing to deal with. It is almost impossible to have a rational discussion about anything because of the excuses and justifications for anything that might remotely be called a failure. I have never managed to get him to understand that no matter what you tell me, you should never lie to yourself.

    If you’ve lost your mojo by now then you should give up and sell the code or find a partner. If I try to imagine myself in your situation, it’ll be hard to be motivated to fight through the difficult sales and marketing process for the next year or two if you’re already at burnout.

  4. Starting a product/business is really hard. Starting one alone is harder. Starting one alone with high-touch sales is a tremendous challenge. Doing it all part time is brutal.

    Big props for putting yourself out there Mike. I think focusing on finding your market and initial customers is key.

    Rob: Great job sticking it to Mike. I’ve been listening enough to know it’s not your normal MO.

    This is probably my favorite podcast you guys have done. Truth is beauty.

  5. Jian, I’m sure it’s painful to listen to. Probably almost as much as it is to talk about sometimes, given the sheer number of things that I CAN’T talk about publicly. It’s been really difficult to balance the discussion between what will be interesting, and keeping out what isn’t going to make any sense.

    However I think I stated a long time ago that AuditShark is not a small endeavor. It was never intended to be and this goes back to some of the things I can’t talk about.

    I have no intentions of abandoning AuditShark anytime soon. Being a little burned out and needing to take a breather in no way means I don’t want to continue. It simply means I need a breather.

    Thanks Robert. Putting myself out there like this isn’t easy. But nobody ever said that this was going to be easy. And you’re right. It has been brutal. I see things getting better over the course of this year.

  6. Hey guys,

    Great podcast and while you can definitely hear Mike squirm, but it’s one that we can all relate to.

    Mike, I think already have your target market. You’ve been focussing on banks for ages and yet you’ve only talked to 4 banks. You need to just pick up the phone and talk to someone. I wouldn’t even send a letter (or postcard) until you’re familiar enough so you can word it appropriately using their terminology.

    I’d also remove (or replace) your buy page so that it says it’s a finished product and people need to ring you. People are going to google you and it doesn’t communicate that you’re finished.

    We’re all gunning for you. I think you have a market, but it sounds like you’re missing the numbers and the education component at the moment.

  7. Hang in there, Mike. You’ve got a lot of people out here pulling for you. All the best.

  8. Great episode.

    As I listened to this episode I kept waiting for the moment when the two of you kept saying the point arrival is your first paying customer. This is a *BETA* product and no more. Mike said on the episode that the product doesn’t even work for a reseller who has it installed. A paying customer at this point would be asking too much.

    What has worked for me in situations like this is simply give the product away. Go into those 3 banks you already contacted and offer the product for free in exchange for helping you tweak the product to fit them better and help you work out the bugs, as well as getting a customer at the same time. Future customers don’t have to know this client or clients didn’t actually give you money.

    Yes, this takes time but you are spending time now trying to get a paying customer and failing.

    Another approach is offer it for free but tell the bank you will add features to their exact specifications for a fee. This way they get what they want/need but it only costs them a fraction of what it would cost if they had it done in-house. Now you have product that one bank uses and it should fit others.

    I hope this helps. It just sounds like you have it in you head that a customer has to pay to be of value to your business.

    I will see you both at MicroConf.

  9. Great podcast guys.

    I am just glad it’s Mike taking those tough questions in public and not me.
    It is painful to listen to because all the questions that Rob is asking are questions I need to ask myself and I don’t know if I have any good answers to some of them.

    Thanks for keeping us honest.

  10. First Robert’s comment: I realize you are just being honest, but I don’t see how this is constructive? Is it possible that your particular style just happens to align more with Rob than Mike? To say the Mike doesn’t belong on this podcast is simply not correct.

    Rob and Mike: This was by far the best podcast you’ve released. Yes, it was painful, but it was also raw – honest – emotional – and real. I felt like you guys opened the door and let me overhear an an otherwise private conversation.

    Rob, that was the most direct I’ve ever heard you. You didn’t let anything go, and you challenged where it was needed. It’s easy to say “oh, okay, that makes sense”, but you didn’t. You even stopped Mike in the middle of his answers if you didn’t like what you heard. Well done.

    Mike, that took guts. I’m still floored by what I just heard. I wished you had let your guard down 100% though. Sometimes when you were put into a corner, you’d revert to “tech-speak” and fail to answer the question. I’m so rooting for AuditShark, but here’s the thing…I’ve listened to ever one of your podcasts, and I STILL don’t fully understand what it does. Now, I work as both a Forensic Biologist & VB.Net programmer for the government. You are by far a better developer than I, and banking auditing is probably a bit different than forensic auditing, but I know enough about both that I SHOULD understand what it does…and I don’t. Is it possible that the people you’ve talked to at the banks don’t get it either?

    The parts I do understand I find intriguing. The idea of taking this information, centralizing it, and allowing banks to measure their compliance against the community is a great idea. But if I ran into a banker tomorrow, and wanted to tell him about this amazing AuditShark, I have no idea what I’d say.

    Again, I’m really rooting for you. Go have one of those cold home-made beers, think this through, and then go kick some ass.

  11. Lee- I undertand how my comments could be viewed as not constructive. I probably should have written a little more to make intent more clear.

    Failure is awful. I really dislike the popular theme in the startup community that failure is some kind of rite of passage or badge of honor. It’s not. If you fail it’s probably your fault- in my case failure has been almost exclusively my fault. Failure doesn’t make you less of a person but nor does it automatically mean that you’ve learned anything. This should be a low point for Mike that causes him to reflect upon what made him ignore obvious signs that things were going sideways and why he ignored the prodding of his friend and cohost. Atta-boys and “we’re rooting fo you” comments that lessen the blow are unproductive and, to me, patronizing. (I do understand the intent of the posters is very different)

    My comments, while harsh, are meant to describe how Mike came across in the podcast for the past month or two. It wasn’t clear in this episode that Mike fully accepted his situation and how he got there. I wish him well and if my description of reality (as I see it) causes him to stop and reflect a little more then I think harsh comments will be a net benefit for him.

  12. Mike: that took guts. Props.

    I have a specific question: in this podcast and in many others you say things like, “thinking about marketing,” which are pretty vague. You even said that you have conversations with people in which a light bulb goes off, but the description isn’t on the website…and that’s the most specific you’ve gotten from a marketing point of view. The only real specific thing you’ve done is to talk to banks, and even that you haven’t said what you’ve asked them, who in the bank you spoke to, etc.

    I’d like you to be more concrete on the podcast to say what specifically you have done on that front. What you have tried, what you’re thinking about trying, etc. To me it feels undeveloped, but that feeling comes mostly from lack of info! For example, when Rob suggested that you photoshop up some mock screenshots and shop it around…why not do that? What else has been tried? What makes that a good or bad idea for you?

    Maybe it’s that you really have been heads down coding, but if there is more going on marketing-wise it would be great to hear about it.

  13. Robert – I agree with you. It’s a hell of a lot easier to say “Atta-boy” than to offer the Simon Cowell criticism which is so often required.

    Rob – I’m glad you’ve finally found your Simon Cowell, but this should have come a lot earlier.

    Mike – I’m STILL thinking about your situation with AuditShark. You seem very confident that this product is going to solve some serious pain points for people. I don’t doubt you’re correct, but like Rob, I’m not convinced yet.

    Maybe you’re just way too close to this thing Mike? What if you found someone who understands your market, is a hustler, and could get out there and sell this thing from a user’s point of view? It’s often easier to see – and explain – the benefits of something when you’re NOT the developer.

    And speaking of benefits. I was looking at your Features-Page, I don’t see any benefits! I run a small bank – what benefit do I get from using AuditShark?
    1. Save thousands of dollars by…
    2. Never waste time on another audit again…
    3. Increase business by giving confidence to investors and clients…
    4. Get started in minutes…
    5. Easy as hell to use…
    6. Makes you better than the competition…
    7. Identify issues now, not when it’s too late…

  14. Lee, no offense taken. I think I haven’t described what it does enough because I assume that most customers I’m talking to know what it is. So that’s my fault really.

    Since you’re not my target market, let me put this problem in its simplest form with an example. Imagine you are an auditor who does consulting. Your job is to come into an organization, look at how things are set up, and verify that they are in compliance with specific, technical settings and regulations. Things like:

    1) You must have passwords which are 10+ characters long.
    2) The Windows Messenger Service is not running.
    3) There are no local accounts which are administrators on the local computers that you don’t know about.
    4) You are aware of all non-administrative shares on each computer.
    5) Permissions on the C: drive are set in a specific way.
    … etc.

    The list can go on for hundreds of checks, depending on industry, customer, customer size, and specific regulations. Download this for an example benchmark: http://benchmarks.cisecurity.org/en-us/?route=downloads.show.single.windows7.110

    Let’s say there are 200 settings to check. Your customer has 200 computers. Throw it in Excel and you have 200×200=40,000 possible data points.

    How are you going to get those data points to measure their compliance?
    1) Manually. 40k checks x 1 minute=16 weeks.
    2) You ask them. Yes, because customers always tell the truth and are reliable.
    3) You spot check. Error prone.
    4) You have your own tool. Open market opportunity, but smaller.
    5) You use the customer tools. Open market opportunity, but more ongoing revenue.

    Hopefully that clarifies what the product does.

    I know I need more clarity on my market. Right now I don’t have it. I know the problem the product solves. The question is: Who is willing to pay for the problem to be solved?

    To date, I’ve thought it was the people being audited and went in that direction. If they had a solution in place, they could pay the auditors less money to dig around because they’d already have verifiable results. Over the past few weeks, I’ve started learning that’s probably not the case.

    Rob, the marketing stuff you’re referring to feels underdeveloped because it is. I’ve been focusing on solving the problem, not how to market the solution, or even who to market the solution to. That’s an error on my part and I have nobody to blame but myself. I’ve been thinking a lot, and doing little. Another error on my part.

    But the fact is that people are willing to pay for this problem to be solved. (judging from personal experience and by the companies doing this stuff who have been acquired to the tune of a billion dollars in the past decade)

    Who pays for it you ask? I don’t know specifically but I’m working to find out, which is why I’m at the crossroads that I’m at now. I thought it would be IT directors at small banks, but didn’t do enough research at the time. It just sounded like a good idea.

    1) Wasn’t it a mistake to not do that first? Yep.
    2) Shouldn’t you have done that before writing any code? Yep.
    3) Don’t you have concerns? Yep.
    4) Aren’t you afraid of failure? Yep.
    5) Aren’t you making a ton of mistakes here? Yep.
    6) Why didn’t you do any of this marketing leg-work earlier?

    Well, I did. And unfortunately, I got sidetracked early on, ignored it and went in another direction because I thought there was a bigger and potentially more consistent market for it.

    Dumb. I know. But that’s what happened so I have to live with that mistake. Fortunately, I’m fairly confident that it’s not going to torpedo the entire product.

    If there are more questions or anything needs clarification, I think I’ll have to resort to blog posts. This reply was just too long for a standard comment. :)

  15. Thanks for the clarification! As you develop the market, keep us posted!!

    I wonder if you could do something like Secunia…have you seen their product? It doesn’t solve the same compliance problem that you’re identifying, but it’s in the same technical family.

  16. Yep. AuditShark can do the same basic things as Secunia. You might need to do a bit of legwork to classify the results that you get at the end, but it’s easy enough to build the rules that actually do what Secunia does.

  17. Just looked at Secunia…

    Mike, I think you either need to pivot OR get yourself a co-founder and grow.

    The more I think about it, I can’t see a bank, or a big retail chain relying on a single micropreneur for something as critical as vulnerability management.

    Just say you decided to offload AuditShark in 5 years, I don’t think they’d be happy giving the random person who bought it, the keys to their systems.

  18. Thanks for the example Mike.

    So if I own a bank, and I have no choice but to be compliant on all these requirement, then I must have some system in place. Correct me if I’m wrong, but I remember you mentioning that the majority of small banks just contract this sort of thing out.

    If that’s the environment you’re walking into, I can see why this would be a difficult sell. No matter how awesome AuditShark might be, what you’re proposing I do it ditch my contract and take this on internally. Even if you’re cheaper and bring all these benefits, I still like the idea of contracting it out and having it off my desk. And I don’t really understand all this compliance stuff, these guys do, so I’m going to pay extra to not have to think about it. Out of sight, out of mind.

    What about the contract guys? Would they not be interested in this? They understand the bank compliance industry inside out, they get IT, and they will see the benefits.

    I’m not a banking guy, so this is all just me thinking out loud here.

  19. Adam, I said it could do it and probably without anything in the way of modifications. But honestly, it would be foolish of me to go after that market right now. It’s not a road I want to go down today because of the sheer amount of work to build those vulnerability checks. I considered morphing it into a vulnerability scanner, but that’s a lot more work than what I’m up against now.

    The people I’ve spoken with haven’t had any kind of questions about what the future ownership holds for the product, but I can see the concern. It’s not one I had thought of, but it implies that it wasn’t successful as a product. Which also implies I don’t have many customers. So I could just deal with them individually.

    Lee, I’m just a little bit ahead of you, but you’re right. It has been a somewhat difficult sell so far, primarily because they pay someone else for the scans. I’ve come to realize that at some point in the past year, somehow I was derailed from my starting target market which I’d already partially validated.

    I’d spoken with a consultant/auditor a while back and he said there were no good tools for him to use for auditing his clients. I described something to him, he said that was what he needed, so I started building it. Somewhere along the way, I lost sight of that and mentally shifted to targeting small banks and companies, which was something I’d never actually validated.

    I’ve spoken with two consultants so far this week and both said they liked what they saw and heard from me. Both also said the price point was great and that they were willing to pay for it. Their clients don’t care what tools they use, so long as the job gets done. I’m still solving the exact same problem as before. I’m just selling to a different customer.

    I want to spend some time talking more to their cohorts, which is what I should have done more of with small banks to begin with, but I’m pretty sure I have my pivot. Basically if I get 6-10 consultants telling me the same thing, then this would just be getting me back to the original road I started on, but with data firmly in hand that I always knew was out there.

  20. I agree, this was a tough podcast. Thanks guys.

    It seems that after 2-3 years, and STILL no product or even being ACTUALLY close to getting it out the door (note the “actually”), with ZERO customers, it might be a good moment to let it go.

    Mike: Dragging this out longer than necessary just because it’s a public failure is a bad idea. This failure just means you are one startup closer to your next hit. Failure is part of life, maybe even a good part. It’s necessary to learn and grow, and everyone can learn from this. I’m sure every one of the podcast listeners have participated in a failed startup. Its not a biggy.

    To be totally honest I also agree with the first Robert’s comment. Mike!! You have to stop excusing yourself! I swear hearing your excuses EVERY podcast is painful man!! It seems that Rob provides the most valuable material for the podcast, is leading edge with ideas and experience while you (Mike) just mention what when wrong, or what’s missing to launch, or the problem you had and what you are planning to do. I know you’re just as capable, but it seems AuditShark is like quicksand you can’t get out of.

    I believe it’s a good moment to take a few days and think ahead. Learn from this. Start something fresh. Start a new project and have a minimum viable product out in 3 months.

    Rob: Thanks for the honesty. Want to be my accountability partner?

  21. I disagree Sandy.

    Mike has a product and doesn’t know if he has a market. That’s different than having a product and *knowing* there isn’t a market.

    Yes, he should have done this sooner, but why does this mean he shouldn’t do it now?
    Doesn’t he at least have to find this out before throwing away 2-3 years?

    What if he hits it hard and finds customers. Sure he went about it backwards, but if it works in the end, then who cares? And if it doesn’t, at least he can walk away knowing that there is no market and take the lessons learned onto the next project.

    As for lessons learnt – Mike, I think that whatever your next project might be, you should take an oath to not write a single line of code until you have customers waving their credit cards at you.

  22. Yeah, but he’s lost all momentum. Dragging a failing project out is just as bad as starting one with no market.

    I would say Mike needs to set a deadline, which if I remember from the podcast he does not do. If not, this will just go on forever, and really make the podcast lose all value. Listeners are learning nothing from hearing Mike except how not to do things.

  23. Mike,
    I’m glad I’m going to be at MicroConf just so I can shake your hand for having the guts to do this episode. Given that it gave ME a knot in my gut, I can’t imagine how you felt.
    And well done to Rob for asking the tough questions and doing it without being a douche!

  24. See you in April :-)

  25. This was an amazing episode. Mike you are so lucky that you have someone like Rob to push you like this. Most solo entrepreneurs will never have someone to hold them accountable like that. Going through an introspective process like that will only help.

    Thank you for sharing your story and being so open and honest of what you’re going through. The startup game is not easy and its nice for others in the trenches to hear that they are not alone slogging it out and through these problems.

  26. Still a great episode. I am amazed that the two of you could dance that long without having this conversation(years?). Seems like you lost this honesty without a cofounder, but if you have people to hold you accountable (mentor?) then you can check some of your assumptions. That right there is very valuable.