Episode 155 | Six Key Takeaways from MicroConf Europe 2013
- Community & Relationships
- Email (both drip and lifecycle)
- Staying emotionally healthy and keeping your family intact
- Hyper-automation (how many tools Peldi uses)
- Paid acquisition
[00:00] Rob: In this episode of Startups for the Rest of Us, Mike and I are going to be talking about our takeaways from on MicroConf Europe 2013. This is Startups for the Rest of Us: Episode 155.
[00:18] 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.
[00:27] Mike: And I’m Mike.
[00:28] Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Mike?
[00:32] Mike: Well MicroConf Europe is over. I had a great time. I think a lot of the attendees did as well but what’s your takeaways?
[00:38] Rob: My takeaways are get to bed early because you came in at 3 AM one night and 2 AM the next. Boy there’s a lot of good takeaways about concierge services and email and staying emotionally and relationally healthy. I think before we get into that, that was a little overview of MicroConf Europe. This is our first year European conference. We’ve done MicroConf three times in Las Vegas but here we did it in Prague in the Czech Republic. We had 120 attendees and speakers from 27 different countries.
[01:05] If you’re listening and you’re interested in more detail about what went on at MicroConf Europe we have a page set up, it’s microconfeuroperecap.com and special thanks to Christoph Engelhardt. He has attended a couple of MicroConfs now and he takes super in depth notes. And microconfeuroperecap.com basically just redirects to a page on his blog where he as painstakingly taken detailed notes about every talk at MicroConf Europe so thanks again to him.
[01:36] Mike: One of the interesting things we did this year at MicroConf was we added a lot more tear downs and we actually modified a little bit of Peldi was here so he’s a big UI expert. He did what we called a UI teardown which was really kind of nice. It was more or less looking at the user experience and making sure that when somebody goes to an application versus the website that they are able to look through, understand what sorts of mistakes that they might make. And really for the enveloper of the products, make sure that they have an understanding of what things they can do to encourage the user statistic around and kind of move them through the application without overwhelming them or confusing them.
[02:14] Rob: Right. If you haven’t heard of tear downs or wonder what they are, it’s basically one of our speakers who tends to be an expert in a certain thing, so Patrick McKenzie is an example expert in copy writing and conversion optimization and so he would stand up in front of the stage and for about 20-30 minutes people could call out their own marketing website. And some of them are just landing pages, some are full Saas or mobile marketing websites and then he would give his thoughts.
[02:40] He would ask questions about it. He asked questions about the product and try to reword things in the way that he thought would work better for that audience. He basically just would go through it and give feedback. So in the past we’ve done one a day at MicroConf and this time we did two kind of shorter ones and we had Dave Collins from software promotions, Mike you did one, Patrick McKenzie did one and then as you said Peldi did some UX teardowns which were cool. He just sprung that on us.
[03:09] I asked him to do teardowns and then he said he’d like to do UX teardowns because he is a UX guy. Peldi’s again behind Balsamiq which is mockup software and he understands a lot about usability. And so it was the first public demonstration of Audit Shark. So we only had one volunteer for UX tear down. So to fill time I volunteered Audit Shark. One of my key points in the conference was show of hands, who wants to see a UX teardown of Audit Shark and there was a ton of people raised their hand. It was really cool. They really wanted to see it. People are curious.
[03:42] Mike: Yeah. That was kind of neat. And it was funny because I think that part of the reason we only got one volunteer was because nobody want to be responsible for the rest of the group not seeing Audit Shark.
[03:52] Rob: Yeah. How did it feel to have it up there to have Peldi talking about it and then to have 120 eyes on with still early software?
[04:01] Mike: I felt fine with it. I mean there’s a lot of things that I know that are still going into it so he was talking about how he got a little confused. He wasn’t quite sure what to do. And as I said there’s this overly that’s going into it that will walk people through the application because that’s an area that during on boarding right now I am walking people through the application. But because all that’s a little bit unclear I don’t want to have to do that forever so I’m doing it manually now and individually but I don’t want to have to do that forever and long term I just can’t. So in order to scale it up that’s how I’m addressing the situation but Peldi obviously noticed that right away.
[04:36] There were some other things that he had that were actually really good feedback. So for example on the page where it lists your account information, at the top there’s information about how to cancel your account. He’s like no, no put that way at the bottom that’s the least important thing. You don’t want that highlighted to people. Honestly, it just never crossed my mind. That’s like that’s a really good point. So I put it way down at the bottom and kind of out of the way a little bit. So if somebody wants to cancel they still can.
[05:04] And I took several other notes about things that need to change or move around a little bit because he pointed out some places in the UI where there are certain menu options that look a little bit redundant and I can understand how those things look redundant, they’re not but that’s obviously not the fault of the person who’s looking at the application. It’s my fault for not labeling them better and coming up with a better way to present them.
[05:24] Rob: Right. Very good. One other thing that was a highlight for me and it was meeting Dan and Ian from Lifestyle Business Podcast or Tropical MBA as it’s now called. We have never met those guys and I hang out with Ian one night and then had diner and discussions with Dan and Ian two other nights. It’s so cool to kind of know people remotely, to listen to their podcast. Dan’s been on our podcast. I’ve been on his and it just – when you sit down with someone in there, they’re just like they are on air and they’re super smart and they’re getting stuff done and we have the four of us just sat and talk because we have so much in common in terms of audience and what we’re trying to do and kind of mission and all that stuff. And so that was absolutely one of the other highlights for me is the hallway track. That was my hallway track this time was hanging out with those guys.
[06:14] Mike: I totally agree. As you mentioned the hallway track it was funny because in talking to different people about the conference and trying to get feedback and they’re like oh, I love being able to talk to all these other people and not that the conference isn’t good and speaker’s good because people don’t want to hurt our feelings about saying that talking to other people is where a lot of the value of the conference is. And I don’t take offense in that in any way, shape or form because I totally agree that is where a lot of the value of MicroConf is it’s not just the speakers, it’s not just some of the content. It is meeting the people who are doing the same things that you are and that’s where a lot of the value of the conference is as well.
[06:54] Rob: Yeah. I think that leads right into our first takeaway which is all about community and or relationships. And one of the key goals of the conference we stood up at the very beginning and introduced ourselves and then we said we want you to take way at least three action items that you can implement in the next week and we want you to takeaway three relationships. And not relationships like oh hello, my name is Rob what’s yours? But relationships like I’m going to keep in touch with you.
[07:19] Because when kind of the fire and the excitement and the motivation that you take away from MicroConf fades which it will over the next several weeks or several months you need someone there to kind of reignite that or to keep you going and whether that means finding a mastermind group which many people came up to me and said they had found people in their country or neighboring country that they were going to start a mastermind group with or whether it just means staying in touch and be email and kind of keeping each other accountable, I think honestly that is at least as valuable if not more than the actual speaker tack. Having the speakers is just an excuse for us all to get together in the hallway. I think Ted Pitt said that the first MicroConf and it holds true every time.
[08:02] Mike: Yeah. I agree. I mean I had a lot of people came up to me and said they had also already scheduled mastermind groups as well and I had some people asking me how I run the mastermind group that I’m in. You have your own mastermind groups and I have one that I’m in. I think that yours and mine are pretty similar because I got a lot of feedback from you about how to put things together and how it should generally work. But yeah, there’s a lot of people who just – some people just never even heard of a mastermind group or what it is or what it does so we talked about that a little bit. What are some of the values, just kind of how to run and how to work it and what sort of benefits you really get out of it.
[08:36] Rob: Yeah, one of the first things within the first half hour of the conference, somebody came up and said its great meeting the other attendees but I want to know who’s here, like can I get an attendee list and I’d love to know who’s here for my country? Because like I said we have 27contires and people naturally do want to find other folks. I mean there were people here from the same city, there were several people from Stockholm, several people from Prague who didn’t know each other and one of them laughed said yeah it took two Americans to fly halfway across the world to bring me and someone who lives like a mile from me together even though we have this common bond. So that type of thing is powerful and that’s the other thing that outlasts just a list of tactics that you get from talks.
[09:17] Mike: Yeah and that being one of them come up to me afterwards and said kind of the same thing but he ran into somebody that he went to high school with and hadn’t seen in 20 years and they live in the same city now which is hundreds of miles away from where they grew up. They landed right next to each other and had no idea and you’re right. It really took us flying across the ocean to kind of bring them together again and now they’re putting together a mastermind group.
[09:40] Rob: Second takeaway that I think you and I both realized it was a theme, and that’s the neat part about these conferences is we come together and there’s no theme. We don’t tell the speakers specifically what to talk about and a theme always emerges. And this year it seemed like something that a number of speakers touched on and talked about moving into is the idea of concierge. This is in terms of getting someone on boarded with a new application and the idea of concierge is you do a lot for them. I would say you do it all for them. In some cases you will.
[10:16] But it’s basically having a non-scalable somewhat manual labor intensive front end in order to get someone to the point where they’re getting value out of your application. So one example is with Drip we offer a free concierge service where – Drip is email marketing software and if you have blog posts or an eBook and you provide us with access to that, we will build your five day mini course out of that content.
[11:02] Mike: Yeah. I mean one of the things that I looked at – and when people are setting up Audit Shark for example in order to get any value out of the software at all they have to install the agent and if they don’t do that then they’re just not going to renew, they’re not going to pay for it because they aren’t getting any value out of it. It’s clearly not working for them. And I think there’s a lot of applications where you can look at that kind of thing and say okay, how can I create an outreach program to people who’ve signed up but are clearly not using the product yet?
[11:27] Because even for a web based Saas app you can tell if somebody is engaged with the product or not and reach out to them and try and figure out what is it that’s holding them back? And in my case for Audit Shark if they haven’t installed the agent or they didn’t take time to do it, I can say hey I can do this for you or I can go through some of these results kind of do some hand holding as you said. Maybe it scales, maybe it doesn’t but if you’re in the early phase that could really help give you a kick start.
[11:54] Rob: Absolutely and you know I recall saying a few episodes ago that I think this is a trend that we’re going to be seeing. It’s not only this concierge during on boarding but its software plus services. It’s Audit Shark finding that your server has security issues and then offering to actually manually remediate those for you, plan that’s included with your normal subscription is that you get instructions on how to remediate them and then for an additional charge you can come in and fix that for them.
[12:25] And same thing with Drip, we have the free version if you have content and if you don’t have any content we do have a $1,000 package where we have a professional email copywriter, write yours from scratch, interviews you and does the whole deal from scratch. And so this is the way to go up market. It’s the way to have a little bit higher price points to provide more value and rise above the den of competition. There’s so much competition in so many of these SaaS niches now because everybody’s kind of moving into the space that kicking it up a notch using some type of non-scalable thing is the way that I think you can stand out and actually build a successful business really quickly.
[13:02] Mike: I think another topic that really came up was leveraging email and obviously Drip kind of falls into that category but life cycle emails and outreach program to people who are not actively engaged in your products to kind of help bring them on board any sort of in-app emails where if based on what customers are dong or not doing you reach out them, try and help them along, give them more information or just reach out to them and say hey, I noticed that you’re not using this. Would you like to – do you need some help? What can I do for you?
[13:32] And because they’re already signed on it’s more or less an effort to cut your churn at that point as well. It’s not cold calling. Its they obviously signed up for the service and I think that you’d get a much better response in many of those cases especially if the product is going to provide value for them.
[13:47] Rob: Yeah. There’s so many touch points along the way where you can provide a prospect or customer with information, with something valuable, education that keeps them kind of engaged or involved with your product. I think Patrick McKenzie summarized it well in his talk. He basically said there’s Drip emails and there’s live cycle emails. I think of it like Drip emails are marketing. Right? It’s prospect stuff. So that’s before someone has signed up for a trial.
[14:17] As soon as someone signs up for a trial, it turns into live cycle emails and that’s where you’re educating more about your product, how to use it, how to get setup, how to get on boarded, answering specific questions they have about it. You’re still educating them but it’s not nearly as much as in the Drip sequence. And then once they become a customer, you can follow-up with lifecycle emails after that so it’s kind of three separate phases of email sending. I mean we had 9 speakers and I think 4 or 5 touched on email, some more heavily than others.
[14:50] But I know for one, some things I took away was my Drip and my live cycle emails are set and locked and loaded on my apps but I noticed some things Patrick McKenzie was doing specifically with some language in a couple of his. It’s awesome because he’s like yeah, take these emails and just like search and replace with your app name. So I think I’m going to take a couple of those and change some of the verbiage in mind to kind of soften in the blow specifically like when credit card fail, there’s some really good verbiage of like don’t worry we’re not the bank or your cellphone company. We’re not going to screw you. You didn’t do anything wrong but if you can log in and update your credit card, it’s a very courteous nice email and I like the way he approached that.
[15:31] Mike: Yeah. It was more of a gentle nudge of hey we’re going to delete all your data or whatever. But I do like that only was there that gentle nudge hey we’re not the credit card company but the other thing that I like that he did was he said you can put language in there that says we’re going to pause your account which is a lot different than saying we’re going to cancel your account. Because pause indicates that it’s a lot more gentle in terms of the language but it is non-conformational and I think that’s just a phenomenal way to put us we’re going to pause your account versus we’re going to cancel or stop you account.
[16:07] Rob: Another takeaway that it seemed to resonate with a lot of the attendees was my wife’s talk on staying emotionally and relationally healthy while launching your startup. As some background, my wife’s a clinical psychologist and she is cofounder of the Walling Family as I said in her intro. She works with a lot folks who have trauma and anxiety and that kind of stuff in her clinical practice not specifically with software people that are startup founders but she’s just been around enough to know what goes into launching a business. Her talk was – several people came up and said that was the talk that stood up for them because it was so different than anything they’ve heard at any conference in the past.
[016:50] Mike: Yeah. I really liked her talk as well. The thing that really struck was that she gave very specific strategies of how to do different things in your life and how to recognize when things are going wrong and how the specific tactics that you can use to deal with those things. It’s one thing to just talk about those things but it’s another to provide a roadmap for what those solutions look like and how it can work out for you. It wasn’t just that the talk was good but it’s just she took it to another level by giving you all the information that you needed to not only recognize the problem but to deal with it as well. I think that was really the part that stuck out for me.
[17:27] Rob: I definitely appreciated that. She knows the audience well enough to know there needed to be some actionable takeaways. I also liked that she integrate research studies. She integrated studies that none of us would read but they’re basically more academic psychological studies of founders of businesses, entrepreneurs, how much stress that puts on people. And there was that interesting stat of entrepreneurs suffer a more from anxiety. Entrepreneurs and their partners suffer a more from anxiety but they have a lot less depression.
[18:03] The difference is running a business can be stressful but it also tends to fulfill you more. It was saying that folks who have 9 to 5’s tend to be less fulfilled and depression tends to be more of an issue. So she focused more on how to deal with anxiety, how to recognize that in yourself what to do to combat it and really gave some tactical things about that.
[18:24] Mike: Another talk that was really interesting was when Peldi got up there and discussed all the different tools that he uses in Balsamiq and how he runs the company. It was just mind boggling to see how many different tools they use and what they use for different things is really like they went out there and they really did the research and figured out which tools were going to work best for them which worked best of tools that they trusted to stay around for the long haul. And then integrated them into their business and just the sheer number of tools was just astounding.
[18:56] Rob: Yeah, when Peldi started talking and I had seen his slides before hand I thought good god how many tools do you use you know? I was almost like why do you use so many tools? But what I realized is that they have 16 employees and they have 200,000 customers and the only way that a company that small – because he’s trying to keep it intentionally small right? He doesn’t want to grow big. I mean you could be at 30 people and supporting 200,000 customers easily. He wants to keep the team small so he is going to great lengths to implement all kinds of tools that bridge that gap and allow him to not grow a big company because as far as I understand his goal’s always been to have fewer employees. He really wanted to be a solopreneur to be honest. So to be at 16 and then have tools bridging the rest of that gap is a really interesting way to look at it.
[19:45] Mike: Yeah and I think that does a couple of different things. One is it makes your company just in general more profitable because you got more customers per employee and so that allows you to do a lot more things for the employees in your company but allows a little bit more I’d say flexibly which in terms of being able to choose the things that are right for your business versus being forced to hire because you have no other choice.
[20:10] There were a couple of things that came up that were not necessarily primary things but individual takeaways that people took from different talks and one of the things that several people said to me after the fact it stood out to them was the idea that when you’re doing paid acquisition you don’t want to pay more than about a third of what the lifetime value of a customer is.
[20:29] And there’s a couple of different reasons for that but I think the one that resonated with some people was the idea that if you’re doing all the heavy lifting and handwork of building a product and building an application you don’t want to be spending and giving away 30% of the sales to somebody who’s really just doing advertising for it. You’re doing all the handwork and basically they’re reaping all the rewards for it. And that I think struck with a bunch of different people and like I said several people came up to me afterwards.
[20:57] Rob: What I like about that kind of the whole discussion about having these – the kind of rules of thumb, they’re like lose metrics, well they’re always debatable. I’ve heard a fair number of times I started work with – trying to get customers at less than a third lifetime value and it makes sense to me, it works for my business and that’s kind of the rule that I use now. But Andy Brice have never heard that but he’s done a lot of paid acquisition. And so someone asked him do you agree with that? And he said you know, I’ve never heard that but that feels about right. And that’s when I realized like a certain point when you’ve been doing something for 8 years and you really know the ins and outs of it like right on the spot he just has intuition about it because he knows it so well.
[21:42] It was kind of cool to see people who have had experience with these things generally agree on something and again maybe he would say it’s 40% or its 30% but its right in that range we can kind of all agree. I feel like that’s valuable as if you’ve never paid acquisition that it gives you a decent realm to shoot for and to know if your way off when you start and 10 years ago no one had this rule of thumb. I’ve never heard it so you just have no idea where you should land as you’re advertising.
[22:08] Mike: Now that you mentioned it, it was Andy Brice I remember hearing him exactly say that. He said that the reason he said that it felt right was because it felt wrong to give away more than 30% of the sale to somebody for doing virtually nothing. And it almost feeds into an affiliate marketing where you have affiliates and he’s got affiliates for his product but the issue is when you’re doing affiliate sales for example, how much do you give them and there’s recommendations all across the board like 20% 30% and he said that the reason it feels wrong is because you’re giving away more than 30% and you’ve done all the hard work. And all they doing is throwing up advertisements for that stuff.
[22:46] And even if you look at the Apple Store, Apple takes 30% of the sale on a lot of different things and if you view it from that standpoint, 30% feels about right then that’s not necessarily a bad deal but especially if they’re giving you a decent size channel.
[23:00] Rob: I think one other them that came up a couple of times which is always interesting at MicroConf because we have at MicroConf we have a mix of people who really do want to stay as a one person software company and then we have folks who are branching in to hiring few employees. But Peldi was 16 employees. Dan and Ian from Lifestyle Business Podcast, they did a really good talk on hiring. And the theme that overlapped both of them was if you’re going to hire you have to have some type of operating dock. They call it an SOD, Standard Operating Dock or SOP Standard Operating Procedure.
[23:35] I mean even Peldi, he said he played it fast and loose for years and didn’t want to have “processes” in place. He hit a point where right around between 10 and 12 employees he just couldn’t go on any longer trying to do everything verbally and he had to start putting stuff in writing and so we got good solid insight from both the way Peldi has approached it and the way Dan and Ian have approached it. Dan and Ian have taken it to another level. I mean it’s like the core of their business and it sounds like the completely reinvented their business when they kind of stumbled on this.
[24:08] But it was neat to see that these two different businesses came across at almost at very, very similar the way that they’ve approached it. And so that’s another thing where I like that it’s kind of a rule of thumb now right? It’s like you got two people who stumbled upon it separately and it’s amazing how similar their approach is to documenting this stuff for their employees and not only for on boarding but just for anytime someone wants to refer to how to do internal email within the company or how to respond to someone about support on Twitter, it’s all documented in their knowledge base.
[24:42] Mike: Yeah. And it’s not just the two different companies came up with it. It’s the two radically different companies came up with them. I mean Dan and Ian do not run a software company. They primarily make physical products and then you’ve got Balsamiq which makes a software produce and the overlap between the businesses at also the core competency is just radically different but they have the same type of problem and they came to the same type of solution so I thought that was kind of an interesting piece of it as well.
[25:12] Another talk that I think resonated with a bunch of people was Adi’s talk when he was putting together public beta and I don’t know how public he’s been with the previous startup that he tried before public beta but there was another one where he felt like he didn’t necessarily do a lot of customer validation. And they had this giant email list and it ended up converting it about half a percent. And with the thousands of emails that they have, half a percent it just doesn’t even remotely make a business.
[25:39] And they spent a fair amount of money building that up and so we decided that for his next thing that he was going to try and do, he was going to do a lot of customer validation and take credit cards. And in some ways, he talked about the internal struggles that he had and taking those credit cards because he knew that he didn’t really have a product yet. The interesting thing that I talked to Adi about this afterwards and said I’ve done something similar, in his case he went through and he went back to those people where he’d taken a credit card and said hey, here’s the real story. I don’t have a product but here’s what we’re working on and I’ll work with you to make sure that we’ve got it.
[26:12] In my case I did that and of those people who I’ve gone back to and had actually paid for it, not a single one of them follow through later and paid for the product that I built afterwards. So he and I talked about that a little bit and it was just – it’s kind of bizarre. I think the theory that we kind of came up with, because I couldn’t get a response from these people at all but the theory that we came up with is because my product was more in the enterprise space that people probably went, got the corporate credit card, got approval from their boss, signed up for it and then when it wasn’t available they had to go their boss and say yeah, I’m sorry I made a mistake and they didn’t want to give it a second chance after that. So it might’ve been to save face on their part.
[26:54] Rob: What I liked about Adi’s talk is he was just really open about it. He actually said that they wanted to take money upfront. They want to get credit card information because he wanted that idea to be more validated. You and I talked about this a number of times. Now Adi was not taking money to fund it. Let’s be clear. He was taking money to validate it. He wanted a bigger commitment from people that they really actually wanted this thing that he was building. He wasn’t doing it so that he could take the money and go build something because he had the money to go build something.
[27:25] Now in the end I guess he wind up – the content’s pretty expensive to build and he didn’t build the content. He instead did forums, got people in, started building community. He basically said himself we promised one thing and we took credit cards and then we let people in for a different thing and we gave them the chance to opt-out at that point and that’s there were a few people who were upset at that but he had kind of switched it up a little bit.
[27:48] But that he gave people a full chance to opt-out and most people did not. It was a very small amount that decided not to. Actually maybe it was 5% so it was still a small amount and he said that was what he needed to feel confident in the idea and it was actually validated and so he would actually do it again.
[28:05] Mike: Yeah. He said even if the opt-out rate had been significantly higher, it wouldn’t matter because the opt-in rate was still significantly higher. That’s what he was looking at, what’s the opt-in rate after? They really know what’s going on, how many of them were willing to stick around or was it just they were kind of interested but not necessarily fully invested in the idea and that having that credit card is really what differentiates whether you’re truly interested or not. And it’s not the only thing you can use but it’s certainly a major indictor.
[28:36] Rob: I think those are the major things that I took away. I have a big list much longer than we can fit in the podcast for our fourth MicroConf I think it was a success, our first one in Europe. There always a lot of work but they’re a lot of fun. I feel like it provided a lot of value for people so I feel good that we decided to do this. I know when we first started we didn’t know if we would sell it out. There always all the doubts and stuff but I’m glad that we did it.
[29:01] Mike: Yeah and I think the tone was definitely set well especially early on and the expectations were set and we did a really good job of making sure that the experience that you get at MicroConf Europe is going to largely mirror what you get in MicroConf Vegas and that was a major goal for us I think. It was to make sure that you get the same type of experience and obviously the speakers and hallway tracks are going to be a little bit different from one another. But knowing that you’re going to get the same level of quality, the same level of experience, what we really wanted to make sure that we didn’t do was say, have people come and then realize that they’re getting a significantly different experience in MicroConf Europe versus the one that we held in Vegas. I think we were really successful at that.
[29:41] Rob: Yeah I think that since we’re done this multiple times that you and I have gotten better at hosting, connecting people, emceeing, you kind of get better at running a conference. You just learn those rules of thumb that make things get better. The question that I got the most at the end of the conference was are you doing it again next year in Europe? I think we are. I mean we haven’t decided 100% but my guess is I don’t see any reason why we wouldn’t. So if you missed out and you’re interested in hearing about MicroConf Europe 2014 head on to microconfeurope.com enter your email address on the upper right and that will put you on the early bird list. We do tend to sell out fairly quick on these conferences so if it’s something you’re thinking about it would likely be fall of 2014 somewhere in central Europe.
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