Episode 169 | Getting Testimonials, Getting Inspired and Competing on Price
[00:00] Mike: In this episode, Rob and I are going to be talking about getting testimonials, getting inspired and competing on price. This is Startups for the Rest of Us: Episode 169.
[00:16] 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 Mike.
[00:25] Mike: And I’m Rob.
[00:26] Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week Rob?
[00:30] Rob: The word is don’t focus on more than one thing at a time. So I have a lot of apps. I have a portfolio of both training courses and the conference we run and the podcasts but I don’t tend to focus on more than one time. The exception is when MicroConf is coming up and I’m working on a single app. But for some reason I’m finding myself doing four things at once right now and it is nuts like it is really hard to keep up. I am either dropping the ball on things or I find myself staying up ‘til 1 in the morning just trying to keep ahead of the flow of tasks and emails and approval and stuff.
[01:08] Initially it was just supposed to be Drip this whole year. 2014 was going to be Drip and then planning to do two MicroConfs, one in Vegas, one in Europe. HitTail snuck in there because Google made exchanges not provided about 3 or 4 months ago and so now I’m trying to do a bunch of work on that and get the code written there and get things fixed up. And then we decided to do basically a revamp of the Micropreneur Academy. This has lead me down a path of doing too many things and so that’s kind of my thing for this quarter is to get out from under this and get back to a more sane working schedule because taking on too much is really just not fun.
[01:45] Mike: I totally know what you mean. I’m kind of in the same boat. Some of those things that I’m doing overlap because I’m obviously also involved in MicroConf and with the academy prelaunch and then there’s Audit Shark on my side of things plus I’ve got some consulting work that I’ve got going on right now. And you’re right. It’s an absolute nightmare. And I wonder how much of it has to do with the fact that don’t happen in December that you would normally except to happen, they kind of get dumped into January.
[02:08] Rob: Yeah. I’m wondering that too. If it’s the time of year and if it will be gone in a few weeks. Since none of these things, I guess only one of my mine – hopefully HitTail is going to be fixed here in the next week or two and if that’s the case then I cross one off my list and things will ease up but aside from that, or things on your list, you expect them go away soon or are they going to be around until April?
[02:29] Mike: I think most of them will go away soon. Maybe it just feels more like I didn’t necessarily work on them as much in December. I kind of was aware of some of them but I just didn’t necessarily put any effort or thought towards them because I had other things going on. I think that they’ll start to go away in the next couple of weeks but it’s just hard to juggle it all right now is really the issue.
[02:48] Rob: Right. So word on the street is you lost a “bet.” What we bet, and I put bet in quotes because we didn’t actually put anything on it but I think you owe me baby sushi and steak dinner. So the bet was about MicroConf and last year we had sold out the early bird tickets in about 50 hours or so and this year we were doing the over under was 24 hours, it turns out it sold out – Twitter was saying 15 minutes. I calculated 26 minutes when I was looking at my stuff that was coming in. it was definitely somewhere under an hour, a lot faster than we had thought.
[03:22] Now we did two launches right? We did a launch inside the academy first. We sold out a block of tickets and then we sold the rest of them to the early bird list but it went fast. And you had mentioned there were some folks that were basically saying they were refreshing their browser just watching the number tick down.
[03:36] Mike: Because I clicked the button to make the tickets go live and I could’ve scheduled it but I wanted to actually just sit there and do it so that I know when it took effect. It was three minutes in and there were 30 tickets gone and 10 minutes in there were 50 that were gone and that’s from the public availability. But they do get locked for about 15 minutes so it’s hard to say exactly when they were purchased versus when somebody went in and kind of claimed it because there were tickets that would pop back out. And I did catch some of those. About after 20 minutes, that stopped happening.
[04:05] Rob: There was also discussion mostly on Twitter about well, you get a larger venue and grow the conference or you should raise your prices and we’ve talked through all of those things. None of that is news to us. I think the end result is that we will probably bump the price up again next year. We did not do that this year. Odds are go little, we’re trying not to make it unaffordable. We want new entrepreneurs, new founders to be able to come. We also want experienced folks. I find that mix is a positive thing for everybody.
[04:33] In terms of growing numbers, we definitely don’t want to grow past the point where it feels intimate and so that’s where we haven’t increased the numbers but demand has obviously increased. With that said, we are talking with the hotel about getting just few, maybe another 10, 15 seats in the room that would allow us to basically start to dig into the wait list. I think we’re approaching triple digits on our waitlist in November right now. So if we could get even a handful of tickets and lots of more folks, I think that would be a good thing.
[05:00] Mike: So we have a follow-up question from one of our previous podcast in episode 167 where we were talking about masterminds and it’s from Andrew Connell and he asked what’s your take on having your cofounder in the same mastermind group that you’re in?
[05:13] Rob: I would lean towards not because the idea behind a mastermind is that you can say almost anything about your business, about your employees, about cofounders, kind of a 360 view and that’s your place that’s very safe that you can come and you don’t have to feel guarded about something. I think if there was ever an issue with your cofounder that you couldn’t bring up in your mastermind, that who is it that you go to with that issue? You kind of cut off that avenue.
[05:45] I guess the odds of that happening are not something super likely to happen but I lean on the side of caution on these things so my gut feeling would be that I would want to be in different masterminds. I also think splitting you up will bring in more – if you’re in two different masterminds, it will just bring in more points of view. Because think about it, we said a mastermind should be between 2 and 4 people and so if it’s two of you guys in there for the same company, at most, you’re going to get 1 or 2 other opinions. Whereas if you split up, you’re just going to have more variety of possible solutions.
[06:16] Mike: The standpoint that I took it from was I wouldn’t want to be in the same mastermind group as a cofounder just because your stories are going to be very, very similar. They’re going to be just like the discussions you have any other time and you’re really not getting an external point of view from your cofounder in that mastermind group. So if you split up and you each go to your own mastermind group, then you can essentially distill the ideas from those and when you talk to each other, then it gives you that much more insight into your business or that many more ideas that come from outside that you may not necessarily have gotten if you were both in the same mastermind group. But that question was left on the comments section of that podcast episode. So just wanted to say thanks Andrew.
[06:57] So that’s kind of outside the realm of the questions that we’re going to be answering. The rest of these questions came in through our firstname.lastname@example.org. If you have a question, you can send it into that email address and our next question comes from Gifford Hanes. He says hi Rob and Mike. First I love the podcast. It’s the highlight of my week. I read start small, stay small and was a member of the academy. I‘m working on a product for pet sitters. My question’s about the early phase of the product. And let me give you some quick background. I came up with the idea because my wife does operations and is a sitter for a pet sitting company. I saw a lot of inefficiencies in her workflow and she was getting frustrated.
[07:32] Then I looked around at the web for competitors and only two seem to be Saas based. From there, I did an ad words campaign and got a few sign ups of people to stay informed on the products development. I plan on calling some more prospects and talking to them about the features they need and the pain they feel in their business. My question is should I focus more on marketing the site or the product right now? I have a simple page with launch rock for the signup and landing page and this is where I point the traffic for the ad words campaign. Your thoughts and opinions on this would be greatly appreciated. Thanks, Guildford.
[08:00] Rob: You should focus on vetting and validating this idea. I would not write line of code, not write a line of HTML, not write – well maybe I’d write along a copy. That’s what I’d start thinking about and I would definitely start talking to more prospects either on the phone or via email whatever works for them I guess is going to be more phone conversations. And I would do that early vetting that we talked about, get that list of 10 who are stoked to pay whatever price it is you’re asking, I’m assuming since it’s Saas its going to be 19, 39, 49, 99 somewhere in that range per month and you got to figure out that price point through these conversations and get 10 of them who are super excited that you’re going to be building this for them.
[08:41] Then, once that’s done, and that can easily take 6 weeks to do because you’re not – probably not going to be doing full time, it’s hard to get a hold of people. You need callbacks, I mean there’s so much stuff that you run into. Once that is done and even as you’re going through it you can consider – I would think about starting to write some copy, write some bullet points of features, even just in a text document based on the conversations you’re having and based on the paying points that you’re solving, try to focus it down to a single paying point for that big headline and then think about the other things that you’re adding and hearing from this folks.
[09:14] And to be honest, I think that updating your landing page which is great, it’s simple. Just updating that with a headline and one or two bullet points at most is going to be good for the time being.
[09:25] Mike: I tend to agree with you. I think the one thing that people tend to overlook is what sorts of ideas that they’re actually trying to – I’ll say validate. And when you start looking at say the lean startup methodology whereas build an MVP and kind of iterate from there, the thing that I think most people tend to heavily overlook is that an MVP is really not necessarily like a minimum viable product for your product itself. It’s you’re trying to figure out the least amount of work that you can do to validate what your assumptions are and currently your assumptions are people will pay for this. And the question really is what proof do you have of that? What is the smallest thing that you can do? What’s the least amount of effort that you can put into it to validate it? And that’s exactly what Rob put forth. It’s like that’s what you should be working on. That’s what you should try and validate. Will people pay for this?
[10:11] And you can kind of look to see what the other people are doing. Are there competitors in this space? And if there are competitors, that’s great. I mean it kind of validates that people are willing to pay for it but what it doesn’t validate is are you able to connect with these people and get in front of them and in front of enough of them so that they will pay you. And that’s really the part that you’re trying to solve.
[10:31] Rob: Right. And I think in general, I am a proponent of doing copywriting and building a marketing site before you build a product because it helps you think through the benefits and the points that you’re actually going to want to communicate. And so it helps you realize what the most important parts of the app are so then as you go to build it, you know what to invest the most time in. And with this, I would consider doing the same. Like once you vetted it and you have figured out that short list, sit down and either write a short or long form sales letter or sit down and try to put together that homepage, that Saas homepage with the screen shot and the benefits and the headline and that kind of stuff.
[11:08] Once you have just that singe page built, even if you go and buy a $10 themed forest template and put it together using that, that can work for you for quite some time. And if someone asks, if you’re on a phone call and they’re asking tell me more about this product or I’d like to see something of it, you say well it’s not finished but we do have this detailed description of it. And you can give them a URL to that, a link to that and it starts to give people an idea that it is something tangible. So I think that even before I really broke around with code, I consider doing that. That’s actually what I did with Drip. I really had the whole marketing side flushed out with most the copy written. It was really as the developer just started, the very early stages of code.
[11:47] I did have to change that later on because things did change as we developed it and I started on boarding people but that’s the process that I went through and I found that to be pretty helpful. It’s the whole market first. Right? It’s the marketing and market first approach rather than focusing on the product which we kind of all know that we can build.
[12:04] Mike: There are plenty of products out there that have all these features that very, very few people use yet they’re still there because nobody wants to delete them. And then if you go to competitor’s product, you’re going to end up copying all these features and you got no idea whether or not people are using them. That is the other side of the value of doing the marketing first is that you get to figure out from your perspective customers what it is that they’re finding valuable and you just implement those things as opposed to wasting your time doing things that nobody looks at and nobody uses. So Guildford, thanks for the question. Our next question comes in to us from Ryan Higgins and he sent us an mp3 of his question and here it is.
[12:39] Ryan: Hi guys, happy 2014. I am at a point now in my online endeavors where I’m making more money online than I am in my day to day work which is exciting and I’m hoping to leave my job sometime this year. My problem is that I for whatever reason have lost motivation. I don’t know how this happened or where it really comes from. It should be in an exciting time for me but I’m finding I don’t feel very inspired. And my question to you is how would you guys get into the zone? What are some of the strategies that you follow when you feel uninspired or demotivated? Thanks very much and have great year.
[13:16] Rob: Yeah. This is a good question and I think it takes two forms in my head. 1) They’re kind of these lolls that you’ll go through and if a dip or a lol or a lack of inspiration is lasting a month or six weeks and you find you can get out of it, I think that’s natural. I see those times where I’m just less motivated to crank and get a bunch of stuff done. Other times where I’m more motivated at the higher end of the curve. During those times, what I do is try to just attack the problem. You focus on the actual issue of just getting inspired for the next three hours.
[13:51] How do I get in a rhythm and break out of just my lack of desire to do the work and really the three things that I found that have helped me do that are 1) to drink a bit of caffeine. I’m pretty measured in the amount of caffeine I drink. The more caffeine you drink, the more focused you’ll be until you get jittery and can’t work. That is clinically proven. I think used in the right quantities and not abused, can be really helpful and it’s something that I definitely use in my times of low motivation.
[14:17] The other thing I do is I will meet and work with other friends. I’ll meet at a coffee shop or meet at an office, have them come up for my house and work there. Sometimes I find that helps with motivation. I also find that music is going to be your pick. For me, late at night, and the headphones is really loud. There’d be punk music and there’ll be metal, that, or almost always puts me in that zone and it can get me through those little lolls. And then the pomodoro technique I also like which is where you set a timer for 25 minutes and you do a sprint, you get as much done as you can and you typically, you can often pick a single task and limit it to 25 units, even if you think it’s going to take logger. When the timer goes off, you stop, you stretch, you get up or five minutes, you walk around and then after that five minutes you do another 25 minute sprint.
[14:59] Each of those is a mechanism for getting over that. It’s that little onetime thing. It’s kind of like imagine yourself as a car and if your car has a flat tire, you’re really just trying to patch it. That’s what this approach is. The next thing is if you have a longer term broader sense of really being uninspired and that’s when maybe – imagine your whole car like the frame is bent and you can’t just patch a tire. There’s really a deeper thing going on there and that’s where it takes I would say talking with trust friends, a mastermind group, asking yourself a lot of questions about what is giving me life and what is not, I think its Saint Peter – someone has a prayer called examine and its basically this thing you ask yourself what has given me life over the last week? What has not given me life? Some people do it over an entire year and take notes.
[15:46] It can shift the way that you approach your work and it can shift the work that you want to do. So if you find yourself being uninspired specifically with your product, then maybe it’s just the product. If you find yourself uninspired of work, it’s probably something else going on that is the leaking into your work. This has been in my experience kind of the two levels of uninspiration that I’ve encountered in my career.
[16:08] Mike: I really do think there are the two different levels and the shorter term stuff you can definitely – I’ll say lie to yourself in some ways to help make your brain do things that you wouldn’t otherwise think you should and the pomodoro technique is just one. I’m kind of partial to that one. And there’s a bunch of phone apps that you can use to basically help you manage that process. And I really like the ones that will show you kind of a graph of exactly how many you’ve done in any given day so that way you can try to match or beat what you did the day before.
[16:36] So at that point, it becomes something of a game not necessarily to do the work but to play the game. And in order to play the game, you have to do the work. So in some ways you’re tricking your brain into making the numbers and the timer go up and down but at the same time, as a byproduct of that, you’re getting worked on. So what that does is long term, it helps you get things moving along towards your goal and hopefully that helps break you out of the rut that you’re in over time.
[17:03] If this is the type of thing that’s been going on for a long time, it could be medical issue, it could be any number of things. One thing I’ll point out is that since this question came in recently, If you’re anywhere in the northern hemisphere, this is a bad time of year. There’s a lot of seasonal depression that goes around and it can be very easy to especially lose steam at the end of the year just because the holiday season and now its January and it’s like I’ve got all these work to do and I don’t know how I’m going to get it done and you look at just a sheer amount of stuff that you have to do and it’s so disheartening you don’t want to do any of it and so you’re now feeling unmotivated, so some of the techniques that Rob talked about can help get you through those, those are the types of things that I would think about.
[17:43] Rob: Yeah. I had a real tough time I did two New England winters when I lived in New Haven in Boston. I had a real tough time in the winter and I felt myself have a pretty sever lack of motivation and I had to buy the – there’s the happy lights, you know, to get your skin having the vitamin D, just had a tough time at the cold and being inside all the time. I think overall, what’s helped me the most during my entrepreneurial career is having these masterminds. That’s the one that most consistently has impacted my motivation and has given me that air space that I can talk about this in a way that I know I won’t be judged.
[18:14] And I know that other people will understand because they’ve probably been through it before or they know that they will go through it at some point and just being able to discuss it and have some folks help give feedback, even in terms of like well, let’s set one goal for the next two weeks. I’m uninspired but let me just try to achieve a minor thing. That kind of thing is stuff that can feasibly get you back on track.
[18:36] Mike: So Ryan, thanks for the question. The next one comes from Cal Damansky and he says hi Rob, quick question for today. When you’re running a few products, how big of a problem was collecting sensible testimonials from your clients and customers? I find myself in a heck of a lot of email exchanges about getting them since I started working with international companies and I was interested if you had a solution.
[18:56] Rob: The easiest way I found to get testimonials is any time someone emails you with a compliment. Right? So if someone says wow your support was amazing or wow I just love this product or you’ve done such a great job so far on this contract if you’re a consultant and I don’t always do it but if I happen to need testimonials I will just reply and say thanks I really appreciate that. It would help me a lot, would you mind if I just quoted you, link to your website the next time we update our testimonials or something like that? If they say yes, then I copy them to a Google doc with product name and testimonials and I pretty much always have kind of a cash of testimonials that way. And I find it, I almost never get into an email thread so I’m not sure if there is something else going here. Mike, have you had trouble getting testimonials and find yourself in email exchanges?
[19:41] Mike: I think the issue is really – I mean he specifically points out international companies and when you talk about international companies, the tendency and certainly not the rule, but the tendency is for those international companies to be large and they have rules in place that say they tend to be public companies. They tend to have rules in place to say what you can and can’t say publicly on behalf of the company and that I think is probably where this is coming from because if you go to a public company and you do any sort of work for them and then say hey, can I have a testimonial? They’ll probably give you a patent answer of no, they would have to go through their legal department because otherwise you’ve got a public company that’s endorsing some small firm. And that I think is the challenge that he’s running into. I could be wrong on those things.
[20:22] Rob: If you’ve gotten email exchanges and it’s a similar problem that each of them is saying like well, we can only give it if you have a specific testimonial for them, we’ll then create the testimonial for them or if they need a legal release in order to do it, then draft one up and have it ready for everybody or something like that. I don’t have any specifics beyond that because I haven’t experienced this kind of thing trying to get testimonials. I’ve gotten testimonials from large Fortune 500 or Fortune 1000 companies and didn’t have an issue with it or perhaps that was an exception.
[20:50] Mike: I wonder if having just a very generic form that you put together to have somebody fill out would be sufficient or just those email exchanges hey, can I use this in a testimonial? I think that Rob’s suggestion of using any sort of compliments that you get and just say hey can I quote you on that in a testimonial on my website? I think that is probably the way to go. Thanks for the question.
[21:10] Our next question comes from Jim and he says hi guys, love the podcast. It’s still number 1 in my pod catcher app. You espouse and rightly so the method of finding your market first then building a product to suit that. Sadly I wasn’t listening to this podcast before I spent two years building my first Saas app which is called solopracticemanager.com. I built it on some suggestions and encouragement from several people in my primary target market life coaches. Since listening to these podcast, I’ve basically gotten my MVP done and have stopped any have stopped any new development work in favor of marketing and growing the user base.
[21:40] But I’m nervous that I’m not going to find a good market for this. I’ve been doing keyword research and coming up pretty much dry as far as popular keywords. I can even buy ad words for which is what I’d like to validate it first given the start of organic search traffic. Rob, since you’ve bought a bunch of existing apps, do you have any suggestions on ways to market a product that already exists? Thanks for your time. Jim.
[21:57] Rob: I have a few thoughts on this. I think the first thing I see when I come to this site is solopracticemanager.com looks like it’s built for freelancers or just kind of for everyone. It looks like a horizontal document management product and that doesn’t jive with the – I get the feeling it was niched towards life coaches. That’s a decision that I think you’re going to want to make even if it’s just your first crack at it like yes, this is for life coaches then the headline should be document management for life coaches or saves life coaches 20% or $500 a month or something right? You got to figure out what the value is for them and then gear the whole marketing approach towards it as well as all the features you’re building.
[22:34] If life coach is not the market you want to go into, figure out which one you want to do. But staying horizontal like this and trying to apply it to everyone, as a first time bootstrap and entrepreneur, not the best approach in my opinion. I guess Jim’s question actually said you bought a bunch of existing apps. Do you have suggestions on ways to market a product that already exists, almost all the apps I bought were not already successful. They were all apps that were built and had a tight vertical niche typically and that I then had to make successful and the way I did that was through applying marketing approaches pretty systematically through each of them and growing them. And that’s why I was able to buy them for such little money because the technology itself is not worth very much. It has real value once you actually have revenue and paying customers and all that. Most of my apps were not successful when I bought them.
[23:18] With this app the first thing I would do is to figure out who is going to really, really need it and who it’s going to save a ton of time or a ton of money or a ton of pain from. That’s really your job at this point. Keyword research, it’s definitely one signal but there’s so many other ways to approach this. Like if you decide to focus on life coaches, you can find and target life coaches demographically using Facebook ads as an example. Whereas you’re looking at Google ad words then it’s always intent driven. Right?
[23:45] It’s what did someone type in? What did they intend to do right now? Are they looking for life coach document management software? The odds of that having many searches are very, very low and I can understand why you aren’t seeing a lot of volume. So think in terms of a demographic that has buying capabilities and it has its paying point. And so again, if you focus on life coaches, my next step would be to start emailing and or cold calling a bunch of life coaches and talking to them about the solution and just ask and say I’m not selling anything. I’m a software developer. I’m an entrepreneur and here’s what I built so far. Does this help you? And listen to their feedback. And then say okay, consider scrapping this whole thing.
[24:24] If everybody says no, but they say but, I really have this pain or problem with managing client appointments and invoicing or something like that, well then perhaps this wasn’t the right choice for life coaches, and then you have to evaluate do I try to pivot this document management thing into a different niche or would I prefer to stick with the life coaches because certainly if you have more of a knowledge of that market space or you have several friends in that space, that might make sense to stay with and dissolve a different paying point. And those are the two major approaches I would look at.
[24:54] Mike: Rob’s really hit the nail in the head here with identifying who this is for. I mean based on the name alone, to me, it seems like it should for dentists or massage therapists or something along those lines. And maybe it’s just because of the word practice and it makes me think of some sort of medical field. To me, a life coach does not indicate a practice. I look at it and even if you’re driving traffic to this, I don’t see how it would help me out. I don’t even see if I were a life coach or even if I were a dentist, I don’t see how this would help me because the headline itself says I spent more time managing documents than seeing clients. And it’s really focused on the problem itself as opposed to presenting itself as a solution to that particular problem.
[25:37] So talk to these people, as Rob said, figure out who it is your target market is and then adjust your marketing messages to basically tell them that you solved that problem and whatever that problem is that you’ve identified and discussing it with them, tweak your marketing messages to tell them I solved this problem with this particular product and here’s why you should sign up and use that to essentially help you gather new users. So Jim thanks for the question.
[26:02] Our next question comes in through Luigi and he says I work in a company that operates in the energy sector and quality of INC Engineer. Over the years I have developed applications for the AutoCAD environment better known as AutoCAD add-in applications in order to automate the engineering process. I didn’t invent the wheel since a lot of the software is already out there but the software is quite expensive and its not available for other CAD platforms such as BricsCAD further more there’s a lot of headroom for improvement by adding other features.
[26:29] Since the applications I’ve developed have had a lot of success in my company with several instillations of various kinds, I’m well aware of the fact that there are tens of thousands of other CAD users around the world. I’m seriously considering leaving my full time job to develop professional packages and launching them thus beginning my startup activity. I was wondering if offer my software at a lower price and including special features that other software doesn’t would be a good way to sell my software. In addition, the possibility of going more vertical with my software and other CAD software applications that don’t have that functionality might be a good idea. What are your thoughts? Thanks in advance.
[27:03] So I think what you’re basically asking is you work in developing AutoCAD add-ins and there’s other CAD applications out there that also have kind of a plug-in infrastructure and what your real question is can you build the plug-in that basically are already built or can you take those and go into other CAD applications and essentially add them into those other application and make that successful? I would say that you probably can. The other question I think is a little bit more concerning to me which is should you be dropping your price on those to be competing with other plug-in manufacturers? I would say probably not. I would use their pricing as a basis for comparison but I don’t know as I would start taking your price and just tanking it in order to start landing business that you might not otherwise get.
[27:50] Because if these companies are already paying tens and thousands of dollars for CAD applications, they clearly have the budget for paying for some of these add-ins especially if there are other vendors out there that are making money from their plug-in. I see it as very similar to the WordPress community where you got all these plug-in or you can go buy plug-in for WordPress and just add them into your website and the website will do glorious things at that point. And you’re kind of in the same situation. You want to sell these plug-ins.
[28:15] But the real question I think is can you get in front of them? Do you have the ability to market your software in such a way that it’s going to be seen by them? I think that price is much less of a consideration than whether or not you’re going to be visible to them and be seen as legitimate in their eyes. And I think that if you drop your price too low you’re going to be seen as an illegitimate competitor to some of these other products even especially if you are better than they are.
[28:40] Rob: Yup. I would echo what Mike says. Eric Sink where he said if I were to build some type of niched down version of Microsoft office or even just word, he said Microsoft’s selling it for $100. Your intuition will be well Microsoft certainly does more than mine. Mine’s a niche so I’m going to sell for $35 and he said go the other direction. Go 10 times that if you build a niche version of excel, sell it for $1,000 when Microsoft sells it’s for $100. So I would do a similar type of thing. I’m not saying necessarily 10x the price but I would say go for the premium route because it’s going to set you apart and that the way to build a larger business rather than trying to discount.
[29:16] The other thing I’ll add is that I love add-ins as a stair step product approach. Add-ins to WordPress, to Drupal, , add-ins to CAD, any of this stuff where you have an existing ecosystem is such a nice way to get that initial bump because if there are folks using CAD, the odds are that they run into problems with a need expansion. And so if there’s a CAD directory of their add-ons and you get listed in that thing, you have that nice channel of traffic.
[29:41] Also, if people are going in and they’re searching for AutoCAD fix this problem or AutoCAD had this feature and yours does that, you need to rank for those things because those types of intention driven queries, getting in front of them will result in very high conversion rates because you’re solving such a desperate focused paying point for people. I wouldn’t expect this to be some huge business that you’d be able to figure on but it’s that great business to get out there, you learn your marketing chops. You learn how to write productions software, how to sell it and really stair step this up into the future ideas that get bigger along the way.
[30:15] Mike: So Luigi, we hope that helps and thanks for the question. Our next one comes from Nadias. He says hi Mike and Rob. My question is regarding building a web business around a community of X and I know this idea is geared for much more specific niche market for the sake of a question. Let’s say it involves building a site for artists to show their work. Aside from artists friends I know personally I’d be starting this community with zero users. My question is is it a good idea to go out on the web and gather established artists work and create a profile for them, then invite them via email to let them see how their work would look in the community site and how it would benefit their work or business? I’d give them the ability to join the community or delete their profile if they didn’t want to be part of it. Is this approach too invasive or is it a good way to get initial users engaged with a brand new community? I hope my question’s clear enough and thanks in advance.
[31:00] P.S. just out of curiosity, I’d love to know what you guys have to say about building a business that requires a community to function. I’d imagine that the community site takes a lot more ramp up time to get going and product revenue because you need a healthy number of users to bring in income.
[31:12] Rob: I think his P.S. is really the most important question. Building community sites is super, super hard. And anyone who’s actually done it, there are not that many that are actually that successful. And even the ones that are successful like the old school forums that picked a niche early and got it in before everyone else did, those forums have trouble monetizing. The ad rates are really low, the CPM’s they can charge are low. So community sites are a real challenge. You probably have a clear monetization path of selling prints or selling t-shirts or whatever it is. Even then, it’s tough to just take a cut. When you’re bootstrapped, taking a cut of transactions whether it’s a market – did you say a market place or whether its community is a really long way to go. There’s definitely a much more of a long haul than someone just paying you for it.
[31:57] I would never start a community site. I tried to do it once and it was a tremendous amount of work and didn’t pan out. That’s not a reason not do it. It’s the hundreds of others that I’ve seen that have also failed and how few of them actually make it. So there’s a lot of talk about how in the early days Reddit was just hacking their front page because it was all the dudes inside Reddit were doing fake folks just to make it look like people are there because until you have people there, it’s a ghost town. And getting over that initial hump, I would say if you really want to do it seriously, then go start either a blog or a mailing list or something and start creating content or writing original content and build up that mailing list.
[32:32] And when that mailing list hits 1,000 people who are devoted and ravenous fans of yours, then go instruct this site. Then, bring them in because then you’re going to have that community. But until you do that, I mean starting from scratches are a really, really tough way to go. So that’s your PS. The other question was pulling someone’s heart off their site and building their profile, if you did that to me, I would be pretty surprised. I would probably be taken aback and not appreciative of but I think artists are really sensitive about their work being stolen and even though you give them the ability to delete it and all that stuff, this basically public facing web page where you have taken their art without permission, my opinion is that if you do get a little bit of momentum and you want to start doing this is that you do a pitch and say hey, here’s our community. Here’s what your profile could look like. Here’s my profiles and stuff.
[33:17] So you put up your profile with the art and said would you allow us to do this for free to grab your art, build our profile for free and then you can look at it and you tell me or you can delete it at that point or you can just have a look at it so at least you get their permission out front and you have much more opt in rather than more of a opt out approach.
[33:36] Mike: Yeah. With regards to the two questions I agree with Rob. Building a community site from the ground up is pretty difficult. There are a lot of different hacks that you can do to help grow a community site and just one of them as Rob said, guys over at Reddit were uploading the stuff that they were posting just to make it look like there was more activity. The illusion of activity is going to help. I remember I started a web based game back in ’99 or 2000 and I grew it to a reasonably successful size of people using it. I think the first 40 or 50 people that site on looked at I and I’ll say it was sort of a ghost town but I’d say probably a quarter of those accounts that were logged in at first, they were all mine. I mean it was basically just interacting with people as 10 different accounts to make it seem like there were more people playing the game than they really were.
[34:24] And eventually got to the point where I didn’t have to do that because there were hundreds of people playing it and they were logging in every single day. So you get to a certain point where it will avalanche into a more successful venture but I think Rob’s approach of gaining a mailing list and gaining a following and trying to get people all in one place so then you can say hey I’ve created this site where we’re going to have a community. Then you start seeding that community. You’ve picked people out of the mailing list who you’ve had interactions with. You talk to them individually and say hey I’m going to invite 15 or 20 people in here and you basically have them use it for a little while and then later on down the road, then you start inviting people in.
[35:02] So that way, when people will go to log in on day 1, the place isn’t empty. There’s a bunch of posts already there and you’ve kind of seeded the community with people who are going to be interacting there. So those are a couple of different hacks that you can use. In terms of going out and gathering established artist’s work, I would not do that. I agree with Rob. I think what you’re going to find is people are extremely sensitive about their work and artists in particular I think are exactly that way and you may very well come across the people who are much more organic and they sell the experience with what it is that they do.
[35:35] So for example musicians, if you’ve ever looked at the history of the band Phish for example, they’re very successful. They’re probably one of the single most successful bands that you’ll find that has very, very organic roots but they don’t sell albums. They don’t sell their music. They sell the experience of coming to their concerts which is why their concerts sell out. So unless you find those types of people, you’re probably not going to have very much success with it because they’re going to look at it as if you’ve just gathered up all their stuff and you’re going to profit from it in some way, shape or form by displaying it somewhere else and they’re just going to be pissed off.
[36:11] I think that it’s going to leave a very bad taste in their mouth. I think that if you were to ask the upfront and say hey, can I do this for you? And then I will show it to you and if you don’t like it, you can delete it. That’s probably a better approach but I think that’s still going to be a very labor intensive endeavor. So we hope that helps and thanks for the question.
[36:26] Rob: If you have question for us, call our voice mail number at 1-888-801-9690 or email 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 us 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 and we’ll see you next time.