Episode 103 | Nurturing Leads in Your Funnel, Planning for Growth and How to Buy a Website
- Planet Money Episode 412: How to fix the Patent Mess
- Sign up today for MicroConf 2013
- Liam Cavanagh – Microsoft
- Copy Hackers
[00:00] Rob: In this episode of Startups for the Rest of Us we’re going to be talking about nurturing leads in your funnel, planning for growth and how to buy a website. This is Startups for the Rest of Us: Episode 103.
[00:20] 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.
[00:29] Mike: And I’m Mike.
[00:30] Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. I have just had two cups of coffee. So this is going to be an energized show. But I killed the 90 minutes earlier this morning troubleshooting a server configuration issue on HitTail. And when I was younger I was in a few bands play guitar and sing and stuff and I learned that the best art comes out of like intense emotion. And so what I did is I channeled my anger over this server configuration issue and I wrote a poem. It’s called An Ode to Microsoft Security Patches. “Dear, Microsoft. Please stop resetting the permissions on my Windows temp. This is exactly why people talk about your Operating System with such contempt. Your security patches broke my app again. I hope I don’t ever have to go through this crap again. The worst part is that the patch was applied weeks ago and now, up crops this error to spoil my work flow. A miniscule change to a single webpage costs 90 of my precious work minutes to go up in a blaze. In retrospect, my biggest mistake was not assuming that the error message had been written to be intentionally opaque. The end.”
[01:40] Mike: Bravo.
[01:41] Rob: Oh, the poem was like 3 minutes.
[01:43] Mike: Oh, really?
[01:43] Rob: Seriously, off the top of my head, yeah.
[001:45] Mike: Wow.
[01:45] Rob: No, I used to — I used to write songs. So like rhyming stuff is not — was not a big deal. So yeah, I know the 90 minutes was focused on being very angry at a Microsoft Security Patch that resets permissions on a directory every time it runs and [Laughter] and like every six months we run in to this same issue and I finally documented it to the point where I’m not going to lose two hours next time. But that’s frustrating.
[02:07] Mike: Yeah, it’s interesting because that’s one of the things that is little known to people is that when Microsoft is running their patches, they have a tendency to reset permissions. They use some — I’m pretty sure they use some sort of like kernel level stuff that goes in and allows it to change permissions no matter what so that the patch can be successfully applied but it doesn’t necessarily revert those permissions to whatever they were before but that’s something that we — in selling the security and compliance software to people in the past, I’ve pointed it out as like, “Look, permissions can get reset and here’s one of the ways that they can get reset and that’s what this compliance product can help you find out and determine whether those things will change or not and give you notification.” So I highly recommend that you go to AuditShark.com –
[02:49] Rob: [Laughter] Sorry.
[02:49] Mike: … to sign for the free trial.”
[02:51] Rob: Awesome. I will go to that right now [Laughter]. It would have paid for itself this month for sure.
[02:56] Mike: And it will let you know several weeks ago that that it happened.
[02:58] Rob: Yup, very good. So I heard you had dinner with our Podcast Editor last night.
[03:04] Mike: Yeah, I did. It’s a good time. We ended up going up to some place in Manhattan. I forget exactly what the place was called. We were just talking and she had mentioned to me that she’s gotten so good at editing the podcast that when she pulls it up in Audacity, you know how there’s all the graph of exactly what it is that you’re saying. It just shows you like the wave –
[03:21] Rob: Wave –
[03:21] Mike: … of thing?
[03:22] Rob: Uh huh.
[03:23] Mike: She can tell just by eyeballing it where one of us is saying either “Mmm” or “You know.”
[03:28] Rob: That’s awesome, yeah.
[03:29] Mike: And she also said that if she — she would never survive the Podcast Drinking Game if she had to use the non-edited version.
[03:35] Rob: Oh, yeah, that’s — that’s brutal. I don’t think people realize how [Laughter] poorly you and I actually speak before the editor goes through and edits like the same where I worry. She’s edited the, what, 90 something of the episodes, right? I think we only edited the first 5 or 10.
[03:49] Mike: Yeah, she’s done –
[03:49] Rob: That’s so out of –
[03:50] Mike: She’s done a lot of them.
[03:52] Rob: It’s a lot of us to listen to in slow motion.
[03:53] Mike: [Laughter]
[03:55] Rob: Very cool.
[03:56] Mike: Also speaking with the Podcast Drinking Game, Will Samuels wrote in to say that, “You should have to drink whenever Mike says essentially.”
[04:03] Rob: I’ll agree to that.
[04:04] Mike: All right.
[04:04] Rob: I also noticed a few other ticks that you and I have and I’m not going to say them on the show because once I notice them it started irritating me whenever we do it. So there’s an episode of Planet Money which is one of my favorite podcasts. It’s an NPR podcast and it just came out today. It’s episode 412. It’s called How to Fix the Patent Mess and they interviewed a Stanford professor who’s written a book on Software Patents and the mess that it is and he has some proposals for how to fix it. Awesome episode like first — I think it’s the most — he has written an entire book on the subject and this podcast was the most comprehensive view I’ve seen of actually trying to fix this and one of the amazing things that he had said is I think he talks to someone at Google and Motorola and there’s kind of just this number out there and is that the estimated number of patents that if you were to build the smart phone that you’d be infringing upon is 250,000 patents.
[04:58] Mike: That’s insane.
[04:59] Rob: Yeah, and then they run through a bunch of the patents that are even worse. You know, you and I brought up some of them but there are some that are so broad like VO — like Voice Over IP is patented streaming of anything over the internet, anything, like any type of media file is patented by someone. You and I’ve just talked about one-click ordering and that kind of stuff but these are way worse like these are true innovation stifling patents that had been granted. Anyways, if you’re interested in hearing more about that, check out episode 412 of Planet Money.
[05:28] Mike: I wonder sometimes if companies like Google and Microsoft and IBM and Apple aren’t just stock piling some of these patents in order to help keep them away from like the legal trolls.
[05:39] Rob: Oh, they absolutely are. You know, that’s why Google bought Motorola. I mean it’s pretty much widely known to be a patent defense operation like they spent billions. I don’t remember what they paid for, 4 or 5 billion? And it’s widely known, widely expected that that’s why they did it was to get their — that huge cache of patents. Money is not going towards innovation.
[06:00] Mike: No, right.
[06:01] Rob: In fact, it’s not going towards paying people to build things. It’s not going towards R&D. It’s going towards having these documents sitting in a basement somewhere, in a vault so that they have it as defense.
[06:10] Mike: Well, somebody gets that money eventually. It’s got to go somewhere. It’s not like they pay this money and then it just disappears in to a black hole, you know, it’s a financial system.
[06:19] Rob: It goes to lawyers.
[06:20] Mike: So I do have an announcement that I wanted to make. You and I have started talking about MicroConf 2013. So if anyone is interested in actually going to MicroConf, then you’ll have to go to www.microconf.com. Sign up for the e-mail list and you’ll be on the first round of notifications for that. We do expect to sell out. So unless you’re on that list, you may not actually be able to get a ticket and then the other thing is that if anyone is interested in or knows of companies who would like to be a sponsor for MicroConf, just go ahead and drop me an e-mail or use the firstname.lastname@example.org. I’ll follow up with you on the details.
[06:57] Rob: I’ve been making a bunch of tweaks along with my small team of bandits to HitTail and we went from a 30-day trial down to a 21-day trial. I went in and mime some data and figured out that most people get enough hits within the first 21 days to make it where they can decide whether or not to continue with the service. And to be honest, we’re testing stuff now. We’re starting to mock with pricing and some other things and it’s just painful to wait 30 days to find out if your experiment is working because then you — you shut it off and you have another 30 days of either good or bad that’s going with it. You can’t really turn the ship fast enough when it’s 30 days. I’d love to get down to 14-day trial but I don’t think I’ll be able to. Anyways, for those out there who do have longer trials — when I first acquired HitTail, it was a 60-day trial and I went down to 30 without too much issue. But if you have a trial longer than 21 or 14, I would highly recommend trying to get as low as possible just allows you a lot more flexibility.
[07:51] Mike: Was that about the time you were “struggling” to make premium work?
[07:55] Rob: Indeed, it was to quote the Wall Street Journal –
[07:58] Mike: Yes.
[08:48] Mike: Cool. Where did you get that idea from? Did you pull it from WP Engine was doing or did you talk to Patrick McKenzie about it? Because I know Patrick’s got a course that he recently launched on E-mail Lifecycle Management. And I’ve actually been checking it out recently and it’s — it’s actually very, very good. It’s got –
[09:03] Rob: Yup.
[09:03] Mike: … a lot of great information in that.
[09:05] Rob: Yeah, I know it is good course. No, I mean I’ve done this forever. Remember my talk from BOS? It was all about this. It was all about putting an e-mail follow up sequence on your site and it was at investigation of the impact some of the stuff. So we’ve done this on DotNetInvoice for years. I do it on Apprentice Lineman Jobs. It’s been on my list since I first acquired HitTail. I just didn’t have the bandwidth to do it and –
[09:25] Mike: Great –
[09:25] Rob: … yes, I’ve also checked out Patrick’s course. It’s — he gave me access to it. It’s very detailed, a lot of good info there.
[09:32] Mike: Cool. Yeah, about the other thing I have as I talk to Liam Cavanagh from Microsoft about data synchronization techniques and I spent about an hour, hour and a half on the phone with him just talking about how to go about it, what I’m doing today, what sort of things I should be careful of in the future or whether or not the Microsoft Sync Framework is right for synchronizing data between the databases and based on the discussion I feel like basically on the right track but there are some of the fine points that I need to iron out. So I’m still working on that but, you know, he definitely helped me along. So if anyone wants to follow up with Liam, he said he’s more than happy to talk to people about data synchronization.
[10:12] Mike: So today, we’re going to start taking some more listener questions. And the first question comes in from Austin Rehorn [Phonetic] and Austin says, “Hi, Mike and Rob. I’m a long time listener of the show. I look forward to it every week. I took the advice from your show and took my product to market last month. I’ve received a ton of interests but nurturing and converting leads has been a struggle. My question pertains to marketing automation. You guys have spoken to the subject before but Rob has been talking a lot lately about lead conversion ideas he has for HitTail and I’d like to know what tools you’re using. I’m a HitTail customer. I love the product. I’ve signed up for the SEO e-mail campaign and I would like to know what you use to send this out each day. Keep up the amazing work, guys and a belated congrats on your hundredth episode. Thanks, Austin.”
[10:49] Rob: What timing, I just mentioned the long tail SEO course and Austin mentioned that. When I think about lead nurturing like he’s talking about, I actually think of two separate groups of people and then there’s a third that is after they buy and those are kind of your customers in the first several months and retaining them. But the first two segments are people who visit your site and have not yet signed up for trial. And then people who have signed up for your trial and typically obviously that’s between 14 and 30-day trial you want to keep it there. Both of those groups should receive an e-mail follow up sequence. With the first group who just visits your site to try to have a nice looking form somewhere that that pitches them on some valuable thing that they get by giving you their e-mail address and then you send them an e-mail or five over the next several weeks and you educate them. You don’t sell to them very hard. If you look through the HitTail e-mail sequence it is much, much more education. Probably 80, 90% education and then there’s a short pitch for HitTail and like the third e-mail and onward. But the first two almost have no mention or links to the HitTail pricing stuff.
[11:54] And the other thing is when someone signs up for a trial, most apps I know don’t follow up with me very well. They typically say, “All right, here’s the trial stuff.” And then right before I get billed they might say you’re about to be billed. And again, at HitTail we have a very detailed. It’s actually a — it is a lead nurturing system that depending on how many suggestions you’ve received, what you’ve done in the app, different kind of stuff, we look at your account and we send you a different e-mail at various days during your trial sequence. Now, that kind of stinks when I moved from 30-day to a 21-day trial because I really do have to rework that, you know, I did a bunch of that last night. In general for the front end kind of just prospects that are just visiting your website, we use MailChimp at this point but I have to admit, one of my top ideas if I do wind up branching out and building a new app is to build something that helps with this problem because I don’t think there is actually a good one-stop shop that can do this kind of thing. And so I’d say MailChimp is probably the best there is right now but keep your ears peeled on the podcast if you’re interested in seeing something similar to this.
[12:55] In terms of the free trial e-mails, if you can just do a simple follow up sequence also through MailChimp, they have the auto-responder and follow up area but if you need to actually look at your data or see actions people perform and then send them different e-mails, you’ll either have the customer code at or have to use the more expensive system. There is a system called Infusionsoft that’s a few hundred dollars a month and I think Ash Maurya is working on one as well. It’s called USERcycle and it does a similar thing. It’s for this process although — you know what, I think his is for that third segment that I didn’t talk about which is customer. Once they purchase, it’s about retention and it’s about messaging people who haven’t done this or who have done this, you know, sort of specific action kind of like looking at their customer happiness index and e-mailing them based on that. I think the bottom line is especially if you’re still at early phase of your product, you probably don’t have enough customers to really worry about retention yet and I think you’re just going to want to go the easy route and look at MailChimp to begin with.
[13:49] Mike: One of the other things that he mentioned in his question was “What sort of tools you use?” And I know you mentioned MailChimp but MailChimp is typically use for sending out mass e-mails or scheduled e-mails. What about when you had mentioned that you’re analyzing how many keywords they get and then sending e-mails directly to them based on input data I’ll say from your product. So how do you go about sending out those e-mails?
[14:11] Rob: Yup and that’s like a console app that looks at the user’s data and then send it through Postmark which we have mentioned numerous times on the show but it’s basically service that helps with deliverability and it helps you get inside and do, you know, what e-mails are bouncing and it shows every e-mail that you send out of your system basically so you can track what’s going on and both you and I are a hard core proponents of Postmark and I use them. I send thousands of e-mails through them every month.
[14:37] Mike: Now do you track the — I know that in Postmark it will take a look at the bounce backs and stuff and you can look at those. Do you have anything programmatically tied back to your application to identify those or is it just you kind of eyeball it once in while?
[14:51] Rob: I eyeball it once a while. Luckily Postmark will not send to something that’s bounce in the past and so you know, one of the signs of kind of a bad spammy mailing list is if you don’t keep your list clean. If you don’t keep it pruned and so if you keep sending e-mails to the same address and they keep bouncing, your list will actually — you’ll start getting spam marks from web host and AOL and HotMail and big e-mail handlers, they will notice that you’re just sending a bunch of junky e-mail and so a Postmark helps you not do that. So even — even if I do have a big list of prospects and half of them are bouncing – that never happens but if that were the case, Postmark won’t send those e-mails. It keeps track of it for you. It’s pretty cool. There’s a small percentage that bounce back and stuff. It’s not worth — at this point it’s not worth removing them from the database or anything like that because if they’re in a trial and it’s bouncing, the odds are that they’re probably not going to become customers and if they’re a prospect and it’s bouncing, the odds are they’re not going to sign up for a trial. So I don’t go through and prune those out now because, you know, Postmark does a good enough job but yeah, I think if I was at 10X scale to where am now, then I would do like you said and probably monitor something and pull them out of the database.
[16:00] Mike: Okay, so the bottom line to answer your question, Aus, most of this is custom tools that have been set up but uses online services like MailChimp and Postmark to send those e-mails out to people and follow up with them.
[16:12] Rob: That’s right and by far the most time intensive part is writing the e-mails and thinking them through and crafting them and thinking what do they want to hear at a certain date. Four days end of the trial what should they be thinking, what should they receive, that’s the harder part. Finding MailChimp or having some code that has a big case statement that decides when to send what, that didn’t take that long to be honest.
[16:33] Mike: Now, do you take in and I’ve kind of considered this in the past but I’ve never actually been down this road but would you take in to account what days of the week those e-mail get sent?
[16:41] Rob: I don’t.
[16:42] Mike: Yeah. It’s one of those interesting things when you’re writing blog post and stuff like that. You kind of consider that when you’re going to post it base on when you think you’re going to be able to get the most views and in terms of deliverability, you want to make sure the people are going to actually see it and probably read it but it can be hard to schedule some of those things.
[16:59] Rob: I agree. I’ve seen a setting and I don’t remember if it was in MailChimp but it was some mail management program I was using and it said, you set up a follow up sequence or an auto responder sequence and then you could stay only deliver on week days and it will bump people forward it back, you know, one day to get them to a week day. So it’s kind of an interesting feature. I don’t know if that’s in MailChimp but if it’s not, certainly something that I would use because people are going to tend to open B-to-B emails much more often during the week, basically during the work week.
[17:29] Mike: Very cool. So thanks for the question, Austin. Hopefully, that helps you out.
[17:36] Mike: And our next question comes from Michael and he says, “Hi, I started my first company when I was 17 and I’m now just past 30 but I have not yet launched any online business. I’d love to hear your thoughts on which strategy to choose when launching several niche sites for the same product. As a couple of examples to set the scenario, books on gardening, you could have a site with gardening about blogging and then you could target people who are looking for gardening or gardening tips. And then the second niche would be startups and entrepreneurs blogging about experiences, hurdles, et cetera. For second example, using products for jigsaw puzzles, the first niche could be nature and wildlife themed jigsaw puzzles. The second could be large puzzles and third would be boudoirs themed jigsaw puzzles. As you’ve recommended many times before, marketing to a niche is much easier. You get better SEO and better conversion if you target specific people.
[18:24] However, one of the advantages and drawbacks with using the single site with sections for each niche versus launching multiple sites, large bookstores like Amazon and Barnes & Noble obviously have one book site with multiple sections and this is probably the best way to go of if you’re big but my separate niche sites be better if you’re small or is a hybrid approach better? The answer is probably it depends but I think a discussion on what it depends on would be interesting to hear. Thanks for great show. Best regards, Michael.”
[18:48] Rob: So I think this would have been easier to answer three weeks ago and the reason is three weeks ago Google launched their new update and it’s called EMD Update. And it basically took exact match domains and dialed them way down in how important they are for your site rankings but more specifically, they said they dialed them down for sites that don’t have a lot of authority. So they kind of implied that if you do — if you do have a site with a lot of links and it’s obviously an authority site, then your exact match domain may still help you a lot but if you have a site with very few valuable links and it just seems like you’re kind of a small niche content site, a thin content site and you happen to be ranking purely on that domain, sites were just disappearing off the first 20 pages of Google because of this. They may not be kicked out and they’re not been penalized. They’re essentially just reworking the algorithm.
[19:40] So three weeks ago, I would have said do many niche sites because you’re going to want to get a nature, you know, naturethemejigsawpuzzles.com and wildlifejigsawpuzzles.com and largejigsawpuzzles.com and go that route. But then you have five or ten sites, depending on how many launch that you have to build links to promote, build up the page rank, build up the link juice and I think these days, I question if exact match domain benefit is still were doing that. So I would probably test it these days because since things are changing so fast, I would consider getting naturejigsawpuzzles.com but I would also get jigsawpuzzles.com or obviously, you can’t get that domain but you know, a different domain, put all the puzzles on it because then you’ll have one place to focus building links. You can create a lot of content there and if someone comes, you can always do up sells and cross sells pretty easily. But then I think if your Nature or Jigsaw Puzzles one then more niche site took off, then I think maybe you’d want to, you know, lean towards that approach.
[20:38] But my guess is these days, it would be better if you did have related products on a single website. No, I don’t think this holds for software products, right? If you have three or four different software products that aren’t highly related, I don’t think you should just create a company website and have them all there because there’s a certain amount of selling that has to go in to selling a software product and having your sales website trying to sell four different products, it’s just a mess because people come and there’s no single call to action, they’re kind of waiting through all your products and trying to figure out what you’re doing, whereas with jigsaw puzzles it less that, right? Actually having a selection of jigsaw puzzles is much more of a benefit than when you have software and you know, trying to sell four or five different things that actually, you know, tends to confuse people more.
[21:20] Mike: I guess my thoughts are probably pretty similar to yours. It definitely for jigsaw puzzles I would probably lean towards having a different website for each of those themes I’ll say. And then you can also cross sell them to in to different products like you can have basically a cookie cutter set up for all of your website. So let’s say you have five or ten different niches for different types of jigsaw puzzles, they can be virtually identical except on each of those sites, a single theme is emphasize and then you can say, “Oh and we also have all of these other ones.” And then in that way regardless of which of those sites they come across, they still see everything but you’re allowed to essentially cross sell the other type of jigsaw puzzles because they’re going to be on that site and they’re going to click around and they’re going to look through from all of the different jigsaw puzzles that are themed wildlife or nature or whatever. But they’ll say, you know, you can have the section of these other jigsaw puzzles or other themes and people are going to browse through those. And you can kind of get that residual traffic without people having to actually go back in to Google and leave your site to find another one that has for example large puzzles.
[22:27] I think that that would definitely help you in that case but I think, you know, what Rob is exactly right for software products. It’s a lot more difficult to cross sell those types of things when those products aren’t as well related. Most of the examples that Michel gave were for, you know, for either books or jigsaw puzzles, most of those are things that are easily repeatable and you basically put it a different skin on it whereas with software, that’s really not the case. I mean HitTail doesn’t come in red, green and blue, for example. I mean it just doesn’t really matter. It’s not material to the function of the product and it’s difficult to replicate that type of software in a new package.
[23:06] Rob: Yeah, I think with certain types are goods. Having a broad selection is actually a benefit and jigsaw puzzles is one of those things and books is another and like we both said with software having a wide selection of software is probably — if you’re a small operator, it’s not actually that beneficial. It tends to be more confusing and overwhelming to a consumer who’s trying to parse through to figure out “Does this software really do what I wanted to?” Whereas if someone like for jigsaw puzzles they’re just like, “Oh, it has a picture of Angry Birds. So I’m going to get that.”
[23:32] Mike: So Michael, I hope that — I hope that answer your question.
[23:37] Mike: Our next e-mail comes from Jessie and he says, “Hi, guys. First off, I want to thank you for putting out the show every week and sharing your experiences. I’ve got a lot of insight as a listener and I appreciate the down to earth approach that you guys have. My question is that if you want to go and launch a niche info product for programmers. I had some success and now I’m working on the second info product that we marketed to the same audience and the content would be of interest to the same audience. I’d really like to build a brand, offer more products, start doing training, et cetera. Should I put the different products on their own websites with separate domain names and hope that my name on the covers enough to deliver everything together or shall I offer everything under one store front with the brand name and show my repertoire that way. I really appreciate your thoughts on this one. Thanks, Jessie.”
[24:14] Rob: So a similar question here but given that he specifies that the info products and he wants to just kind of start a line of products that are marketed to the same audience and the content would be of interest to the same audience. I would probably approach this one with a single website and I would have a featured product, biggest daylight right off, you know, on the top in the header when people arrive above the fold, that whole thing is your new product. “We just launched this. Look at that. Here’s our call to action. Please buy,” that’s the whole deal. And then down below mentioning your other products or on a separate page, you know, your other products page, you mentioned all the stuff you put out last year or you know, six months ago or whatever. So, you do have a catalog of your products there and you can do cross sells, up sells, even down sells if you want.
[24:59] It’s not — you’re not trying to sell eight things at once. You really are trying to focus on your newest thing but certainly each product does have its own product page so that if someone decides that they like, they can tweet that individually. That individual product page could be go up on Hacker News if it got popular or whatever. So you’re almost kind of building six or eight little individual sales pages for each product but your home page is really promoting one product at a time with just cursory mentions of your products in case someone wants to kind of sift through and look at your back catalog.
[25:29] Mike: I think I agree with most of what Rob said I would definitely lean towards having a single domain name and then somehow shifting people who have come to buy that one book in to possibly getting them to buy the other one as a bundle or you know, having a couple of different bundles there if you start releasing more then two or three or four different products. And those bundles could obviously all be on the same website under the same brand and the brand can help you sell more of those books or info products and by bundling them together, you can get people to pay for all of them as opposed to paying for just one or two of them.
[26:06] I think I remember hearing that one of the best things that the author at Copy Hackers have ever done was to essentially split the book in to several different books and then charge for each of them individually. That’s another option for you is to take the existing work that you have now and you know, separate it out a little bit to I’ll say generate more content and then maybe bump the price down a little bit, maybe from $30 to $20 but have two or three or four different copies of it that people can buy. “And oh, by the way, you can — if you want to buy the entire bundle, you can buy it for $40.” And what that allows you to do is it allows you to raise the total price that people are paying but on a per module basis. The cost is less.
[26:46] Rob: I think you also get the benefit and that you’re going to do a bunch of promotion for this first product and if it sold well, you’re going to have just residual traffic coming in from all the links that you’ve built and from people talking about it. And so if in a month you launch a brand new product and you put that above the fold, then people — and it is related to that audience, then people are naturally going to be stumbling upon it and you’re not going to start from zero visitors each time if you were to create a different website for each product. And since you’re not going after a long tail SEO it sounds like, I mean you’re not really going for that big wide birth approach where you launch ten or twenty different sites and try to just focus on keywords, I feel like the single site approach is definitely a way to go since your products are so interrelated.
[27:27] Mike: So Jessie, I hope that helps to answer your question. Our next question comes in from Matthew and Matthew says, “Hi, Mike and Rob. I was curious to know what your thoughts are about general liability policies for SaaS companies. My company analystratings.net does reporting on financial news. There’s always a possibility that we could script a report and have a company get mad at us and file suit. How do you go about getting liability policies and what would you look for when dropping?” Matthew, I think that the things to recognize when you’re looking at these liability policies is that what you should probably be doing is talking to an insurance broker because an insurance broker can walk you through exactly the types of questions that you have and what the most likely scenarios are for that.
[28:07] The other thing I would do is I would probably leverage disclaimers pretty much on every single thing that you send and I’ve seen them in all sorts of things like all the investments that I’ve done over the years. There is — on every single one of them there’s a disclaimer that says, “We are not responsible for typographical errors.” And basically when you go to an insurance broker and you start working with them, they’re going to put together especially in the case of like professional liability or general liability policies, they’re going to put together a price quote that is directly related to your business, what you do and how you operate. And they will typically ask you some very detailed questions about exactly what you do and how you do it and whether or not you have disclaimers for that kind of stuff. And if you don’t, you can say yes and then change everything so that you do respond positively to that question. That’s probably what I would do but I’m not a lawyer. I’m not an insurance broker. Definitely go talk to insurance brokers and a good insurance broker will actually bid your insurance plan how to multiple insurance companies so that you can get a comparable rate quote from multiple companies because what one company will provide you for insurance, the pricing maybe almost the same but the actual specifics of what they cover could be radically different. So you really have to pick through them pretty well and understand what your risks are and where you’re vulnerable to being sued and what the insurance companies are going to pick up if you are sued.
[29:33] Rob: A lot of the questions that come to the podcast I answer them with it depends on your risk tolerance and I think this is another one that falls in to that bucket. But it does sound like analystratings.net does have perhaps a little more risk than some typical SaaS ideas. So if it’s in the back of your mind you are worried about getting sued and you are worried about not having some kind of I guess, you know, right it’d be Arizona Missions Insurance or something like that, I would absolutely do what Mike said and talk to a broker. I don’t think you’re going to need to pay that much to get several hundred thousands dollars in coverage. Again, it all depends on your comfort level of how much you think you could potentially lose in a suit but if you have to pay 500 or a thousand dollars a year to get several hundred grand worth of a business coverage, if that’s worth it and that helps you sleep at night, then absolutely. That’s something I would move forward with.
[30:25] Mike: So Matthew, hopefully, that helps to answer your question. Our next question comes to us from Graham and he says, “Hi, Rob and Mike. I’m a huge fan of your podcast and blogs since I discovered them a few months ago and I’ve been plowing through the archives everyday during my hamster wheel commute. I’m a software developer/project manager and totally connected with your comparison of salary employment and consults with the hamster wheel. From your episode 15, you mentioned a number of things to consider as well as places to find apps for sale. As this podcast is two years old now, I’m just wondering if the same techniques and sites were the best places to find apps for sale. I’m just getting my feet wet in the space and learning that as I’m searching for a SaaS app or a website and the $500 a month range of revenue, I’ve been looking around for a while now but my search has been empty so far. Thank a lot, Graham.”
[31:08] Rob: For starters, I do think what we said in episode 15 still holds. Certainly there have been some updates since then but in general, the approaches are still the same. I think it has gotten more competitive. There are a lot of more people talking about this kind of approach now than they were two or three years ago. You know, we were I’d say a bit ahead of the game in talking about this kind of thing. So just because it’s more competitive though doesn’t mean there — there’s still hasn’t money to be made. Now, most people give up on, you know, Flippa or any other type of website buying approach because, number one, there aren’t flexible enough. Meaning that you have to be able to — if you find a good deal, even if you aren’t super excited about X niche, if it’s a good deal and it’s something that fits your moral and ethical compass, then you need to be able to pull the trigger because that maybe the best deal you see for the next three, four, five or six months and I definitely had to look long and hard to find every good deal that I found.
[32:02] So I think that’s the first thing to remember is that it’s not going to be something you go out and the first week you’re going to find some great deal and slam dunk and going to be able to require something. So it will literally take months of education and it’s not like it’s full time but, you know, you kind of have to make it a side gig to do this to spend your time educating yourself on the process. The next thing I’d recommend is checking out an e-book written by a Micropreneur Academy member name Dave Rodenbaugh and you can find that at websitebuyersguide.net and basically, he goes through all the detail, approach that he used. He’s bought a number of websites successfully. He sold a number successfully. He’s really knows what he’s doing when it comes to buying and selling stuff. And he had asked me maybe a year ago if I was going to write a guide like that and I said I just don’t have the time and so he went out and did it. I wrote the forward to it and I highly recommend it. It’s the best guide I know about making decisions, doing due diligence, executing the sale, all that kind of stuff. It’s very in-depth. If you really want to get in to it that — I think it’s — I don’t even know. It’s 30 or 40 bucks but it’s going to save you a lot of time in sifting through listings and that kind of stuff.
[32:02] The third thing to remember is in my opinion the best deals are made off of Flippa and you may hear about an app on Flippa but then you wind up contacting them after the auction ends and it doesn’t sell and negotiating a private sale. Or you may just hear about them through other means. You just make it known to people that you’re out there buying apps and they contact you and there’s kinds of these back channels and when you’re the only buyer, you’re always going to get the best deal what that last approach certainly takes more time and effort. In my experience has landed me, you know, kind of the biggest and best and the highest quality sites that have — that turned out the best for me.
[33:42] Mike: And along those lines, one of the things that you can do is you can start taking a look at different niches that you want to go after and if there’s a product that you have in mind and you start doing your due diligence on that to make sure there is a market for that products and you start finding competitors but they’re not very good in terms of their SEO marketing and maybe their product is okay but they’re just not marketing it very well, you can go ahead and, you know, just directly post them and say, “Hey, I would like to buy your app. Are you open to having a discussion about this?” And in some cases, that’s a good way to go as well because then you’re bypassing Flippa. You don’t have to sit there and sift through a bunch of listings. You’ve kind of already done your due diligence in Google AdWords or various other tools to find out whether or not there is enough traffic to make something like that worth it and you can figure out is this a decent product that I can essentially just buy out right or is it something where it’s going to take some time and effort for the marketing to kick in but the product itself is solid. It’s just they’re — they’re just not doing marketing very well because they’ve got a developing background and that’s on their brain.
[34:47] So if you can identify places like that where it’s something you are already interested in and maybe it isn’t listed on Flippa, maybe the people don’t know that they have an option to sell it, definitely approach them because it’s very possible that they’re looking to get out from that particular product because they don’t see it going anywhere.
[35:06] Rob: Also keep in mind that looking for a SaaS app is a challenge because most sites that are sold are just websites. They’re not SaaS apps. So you’re going to be looking for a needle in a haystack and looking in a range of $500 a month is the lower end and that means you’re going to have more competition if one does come up for sale. It’s kind of like in real estate, if you’re looking for a single family home to buy or to rent out or maybe a duplex, there’s a lot of people in that market. But as soon as you get above four units, you start buying five and six-unit apartment buildings, you have the money or the backing to do that, suddenly you have a lot less competition. So we’ll understand if you don’t have the means to do that right now, that’s fine but keep that in mind down the line. If you can put together any type of financing, partner up with someone who has that kind of money. You can definitely open up to a less competitive and larger market.
[35:55] Mike: If you have a question for us, you can call our voicemail number at 1-888-801-9690 or you can e-mail it to us at email@example.com. Our theme music is an excerpt from ‘“We’re Outta Control” by MoOt, used under Creative Commons. You can subscribe to this podcast in iTunes by searching for startups or via RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening. We’ll see you next time.