Episode 173 | Hiring Sales Consultants, Scaling Offline Acquisition and Keeping Data Safe in the Cloud
- Small is Beautiful Conference. June 4 & 5 in Glasgow, Scotland
- Brennan Dunn’s podcast – Episode 13: Establishing a work-life balance with Sherry Walling
- Book recommendations: Pitch Anything, The Year Without Pants (both are also available on Audible)
[00:00] Rob: In this episode of Startups for the Rest of Us, Rob and I are going to be talking about hiring sales consultants, scaling offline acquisition and keeping data safe in the cloud. This is Startups for the Rest of Us: Episode 173.
[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 Mike.
[00:25] Rob: And I’m Rob.
[00:27] Mike: 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: I have a couple updates. I’ve just accepted a little speaking gig in Glasgow, Scotland in June and so if you’re near anywhere near Glasgow there’s a conference called Small is Beautiful that is looking at kind of staying small, the bootstrapping ethic and it’s not just going to be software people. It’s a lot of makers and even crafts people and like selling on Etsy and that kind of stuff. So it’s June 4 and 5. It’s pretty inexpensive. Its 199 pounds. If you’re interested in coming, we’d love to hangout. I’m going to be there for a few days. So smallisb.com.
[01:04] Then the other thing is I want to call out Brennan Dunn’s podcast, its Business of Freelancing. Episode 13 had my wife as a guest and it’s called establishing a work life balance with Sherry Walling. So if you are interested in hearing more about work-life balance which I think all of us probably need, you’ll hear it there. and then Sherry is also just been confirmed as a speaker for MicroConf Vegas and she’s going to do basically a one hour session on that kind of stuff, on mindset on anxiety, depression, checkout the podcast episode 13. We’ll link it up in the show notes and then hopefully if you’re come to MicroConf, you can hear more about it there.
[01:41] Mike: I feel absolutely awful. I’ve been sick for probably four days now. I was all set to buckle down and actually get a lot of work done this week because I have a down week. So I mean we’ve talked about it before on this podcast where it’s some of the beauty of having people that you have working for you is even if you decided to take time off or you get sick, they’re going to continue working and one of the disadvantages of doing everything yourself or doing specific things that have to be done by you is if you’re not doing them, they’re just not going to get done. This week I’ve basically been in bed as much as I possibly can just because I felt so awful and a lot of the stuff that I planned on getting done this week has just not gotten done.
[02:21] Rob: Yeah. But like you said, it’s good to have folks that keep the machine running whether it’s you being on vacation or being laid up in bed. It’s nice to not be doing everything yourself. So I have a couple book recommendations. I’ve listened to a few audio books in the past couple months and each of these are kind of applicable to a different scenario.
[02:39] The first one is called Pitch Anything. It’s a really well written book. Specifically if you’re going to be doing in person either negotiations or sales or pitching, stuff like that, it’s fascinating about the dynamics of how to take the frame of a meeting and how great stories in there and just a great way of thinking about how to come into a room with other people and to take control of the situation if you need to, or to give it up if you need to.
[03:08] The next book is called The Year Without Pants. It’s by Scott Berkun. I read pretty much all the books that Scott has written. This one is about working for WordPress but frankly its working for Automatic which is kind of the parent company of WordPress. He worked for a year. There’s not a ton of actionable stuff. I think folks kind of in our circles will have heard a lot because a lot of it is about remote teams and working remotely and it is a lot of storytelling project management building software I mean that’s kind of cool thing.
[03:37] But with all that said there are some interesting characters in there. It’s definitely a nice story, Scott toes a good job of communicating it. So if you like stories like the Hatch of Twitter, startup stories of Amazon and that kind of stuff, The Year Without Pants is a good one to add to your collection.
[03:54] Mike: Scott talked at the Business Of Software and there were a couple of really good things that I took away from your sock which was kind of largely based on his book one of which was the way that Automatic hires new employees is they essentially give them a starter project and they always bring them on as a consultant first and one of the things that they do is they say here’s access to the repository where you can get all the source code and everything and here’s access to our internal IRC chat. And here’s you project. And that’s it.
[04:23] They don’t get code walkthroughs they don’t get anything and it’s basically up to the person who is being hired to go out and find everything that they need to do because that’s part of the culture there. You get things done or you’re not going to succeed. And I thought that applies relay well to a lot of the things that we’ve talked about in the past where you have a starter project that you bring people on to kind of vet them as a person who may or may not work out for your team and then based on how well they perform and the types of things that they do and how they interact with the other team members, that’s kind of how you decide to give them I’ll say an escalated project or do more with them.
[05:01] Rob: Yeah, exactly. That was one of the things that I took away from the book. There are a few other tid bits as well in addition to the fun story line of just seeing how the year pans out and kind of the insecurities of Scott, returning to work after basically being an author and a speaker for several years and wondering can I really hack it with kind of the new development culture that’s going on.
[05:23] Mike: Today we’re going to be taking some time to answer some listener questions and the first one comes from Alex. He says good morning Rob and Mike. I’d like to get your expert opinion on something. I just built an online B to B product for a particular industry. I have one customer ready to go live. The product is ready to be introduced to a wider audience. Offline marketing will work better for this product in the industry. I’m employed full time and I don’t have any sales experience. I was thinking about hiring independent sales consultants to resellers on commission but I’m not sure where to start. I can probably find people with background in the industry on LinkedIn but how do I make sure they won’t start approaching the same leads?
[05:57] I know it’s a pretty common thing to assign sales people to geographic regions to make sure that they won’t step on each other’s toes but in the beginning if I only have 1 or 2 sales agents, I don’t want to restrict them to a geographic area. I want them to start selling aggressively nationwide especially if they already have industry contacts all over. I don’t think I can just make independent sales agents or resellers to start using a centralized CRM and put their leads there. Want to know what your thoughts were on this. Thanks, Alex.
[06:23] Rob: I kind of feel like he’s putting the cart before the horse here. Alex, you’re worried about people having overlapping geographic regions when you only have one customer at this point. You said you’re not really a person with any sales experience. In my opinion, the CEO or the founder has to be the first sales person and so there’s a couple questions that I don’t feel are answered in this email.
[06:47] The first is is your product actually saleable yet? Does it solve a pain point? having one customer isn’t enough to convince me of that until you have personally sold maybe 10 and gotten them signed up, that’s when you’re going to know A) what the objections are when you’re trying to sell it, B) where your product maybe lacks features and where you need to invest more time in development because it’s not as if you finished the product and you’re never going to have to write a line of code these days. This stuff, it’s never done especially for a SaaS product.
[07:22] So I think that you need to spend quite a bit more time upfront getting more people on boarded and getting more people to say yes so that you have a better idea of what tat sales process involves because then you can take that and bring it to maybe someone you find in LinkedIn or craigslist, wherever you’re going to look and you’re going to have a much better idea if they’re going to be capable of doing this. Because just like when your non-technical hiring developers is really hard, if you don’t have a sales experience, hiring a sales person is pretty hard because you don’t know – you’re going to go with the guy who feels most salesy, the schmooze guy and he very well may not be the right person. He or she may not be the right person to sell your software.
[08:02] I’m dubious about the whole idea of trying to – you’re basically trying to outsource all of your sales effort and as far as I know, I have seen people tried this, I’ve never seen it work especially when it’s full commission because why shouldn’t that sales person just go take a salary gig somewhere, a commissioned sales job with someone who’s more proven. I guess what would really be the benefit why should they work with you?
[08:22] Because if you’re offering the same thing that some large company is, then the other people are going to go with a large company and only the people who can’t hack it there or who basically aren’t very good at sales are going to be the ones that you’re going to be able to convince to come work for you. I really question this thought of trying to just outsource sales from day 1 until you have a better handle on what that sales process looks like and have done it yourself multiple times and have enough experience that you can then vet someone who you’re hiring to do it.
[08:51] Mike: I agree with everything that Rob just said and in an addition, you’re worrying about problems that you don’t even have yet. So you’re worrying about trying to keep the sales reps from stepping on each other’s toes and in my experience, that doesn’t tend to happen a lot unless you have people who are located almost on top of each other. I think that if you’re finding these people on LinkedIn, chances are really good you’re not going to find five people all in the Boston area to go sell your product.
[09:18] In addition to that, there’s a lot of things that Rob said which you definitely need to pay attention to which are along the lines of the fact is you don’t have a proven sales methodology yet. So my concern would be that you’re going to start attracting the drags of the barrel of the sales reps who are willing to do just about anything that it takes in order to land the sale and those things may not necessarily jive with how you want to run the company, they may not even be true. I mean you may end up with people who are buying a product that the sales reps made all these promises about and the products just isn’t going to be able to deliver.
[09:51] Going back to the book that Rob talked about earlier, the Pitch Anything book, you pick up a copy of that, pickup a couple different books on how to do sales and do it yourself. You have to do this yourself at least a couple of times. You can’t just outsource things that you don’t like if you don’t understand them because they’re inevitably going to be things that slip through the cracks and you’re not going to know how to handle them because you’ve never done it before. So Alex thanks for the question.
[10:15] Our next email comes in from Carl Sutherman and he says hi Rob and Mike. I really enjoy listening to your podcast. You’ve given me so many things that are valuable for me while starting up Ingredient Matcher. You’ve been talking so much about mastermind groups that I’d really like to have one. So I started this meet up group in Stockholm and we’ll link to this in the show notes. But it’s at meetup.com/stockholm-micropreneur so if anyone out there listening is in Stockholm or a nearby vicinity, definitely go checkout that meet up group, I think they were going to be putting something together to kind of help people coordinate between different meet up groups and different people getting together at different places of the world.
[10:49] We don’t have anything setup just yet but that is something that we are working on, so kind of stay tuned, listen to the podcast, check the podcast website at startupsfortherestofus.com wherein we put together a mailing list out there in a little while people are going to be able to get more information about not just those meet-ups but some other things that we’re working on in terms of the micropreneur community. So thanks Carl.
[11:08] Our next email comes from Andrew and he says hi guys, just wondering if you have any recommendations regarding organizing your emails such as creating tasks from email etc. I seem to recall that you talked about this one in your podcast but I can’t remember which one it was. Thanks. Andrew.
[11:21] Rob: The best way that I found is to use Trello and then you get an email address that’s unique to a specific Trello board and from the Gmail, if I want to add something I can just forward it even from my phone is where I typically do this and I’ll just forward things off to that address. I have it as my Trello contact in Gmail and then it appears on top of my Trello board and the next time I can go and reorder it and work on it. It’s not ideal. As I’ve said in the past, I think that having a way to reorder emails within Gmail and then add additional tasks so that it really does become a to-do list in your inbox, that’s how I would prefer to do it but this way of kind of the emails into Trello is the best approach I’ve found this far.
[12:02] Mike: I think part of the answer to this question depends on what tools you’re comfortable with using and what tools you already use so I use a combination of half a dozen things. So I use pipe drive, I use Trello, I use Evernote and then I also use Fogbugs and I also have a pivotal tracker account. So depending on what you’re doing is going to dictate what you do with those inbound emails. Rob has a great idea there with setting up the different email aliases. You can do the same thing with Basecamp, that’s another tool that I use. And all those things, it depends a lot on your specific workflow of how you work.
[12:34] I think the one thing I would probably mention is that as you’re getting these things into your mailbox that need to be taken care of what I would do is I would pull them out of your mailbox, put them in that other location whether it’s another tool, there’s Trello, Basecamp or what have you and then get rid from it from your mailbox so that way you use your mailbox as things that you’re working on right this second that you need to kind of actively deal with and anything that doesn’t need to be there, just archive it or delete it or get rid of it. I use Gmail. I know that Rob does as well. But the search capabilities there are phenomenal. So being able to pull up your email from several years ago is very easy to do. So Andrew, hopefully that helps.
[13:13]Our next question comes in from Igor and he says hi Mike and Rob. I’m a graduate student and long time listener from Helsinki, Finland. I’m interested in applying the problem or pain identification process to find an idea for a B to B Saas app but I’d like to know your opinion on an issue I’ve been researching heavily for a long time. Here’s my question, can you really scale customer acquisition for an online app with an offline market or a vertical niche as its target audience. Examples would be a small hotel or hostel owners or photographers. A few sources say it’s not feasible since you would need to do some form of high touch selling but that wouldn’t be justified by the low price points that SMB’s are comfortable with.
[13:39] For example, Jason Lemkin writes that customer acquisition cost have to be almost 0 if one target’s very small business. But I’m curious whether things would be different if the target business have relatively few decision makers and the app is an aspirin type product. This way even if one on wood sales calls would be necessary, the number of sales per rep or founder might be higher than the traditional 8-10 closed deals per month estimate for enterprise great products. Thanks and really looking forward to hearing your perspective.
[14:15] Rob: I think you’ve stumbled upon a big catch 22 of trying to sell to offline audiences who are also price sensitive because if that’s the case then it is really, really hard to scale up customer acquisition. But it’s if they’re either online and price sensitive or they’re offline and not price sensitive where this can obviously work. And I would make one correction Igor mentions. Photographers and photographers are actually online. I know a number of people who make a lot of money selling software and services and other things to photographers and the marketing is solely done online. I haven’t done this and I don’t know anyone who has truly done an offline product and done offline sales on a low price point product but the mass just not going to work out.
[15:03] The thing that I’ve noticed, if you’re going to have to do high touch sales and make in person sales calls, I think your minimum price point has to be low four figures if it’s a one time sale and it has to be low three figures if it’s a monthly recurring product. And that would be my rule of thumb. If you think you’re going to be able to charge $29 a month that actually have in person feeling going around selling the economics of that just don’t work out. But the question of can one scale customer acquisition for an online app in an offline market, the answer to that is absolutely its once you get the low price point piece integrated, that becomes a real problem.
[15:41] Now, with all that said, Gail Goodman from constant contact did a talk at business and software a couple years ago and their price point is $39 a month and they did scale at offline but they did it in kind of clever way and they also had funding. They had a ton of money to kind of back it up. They got sales reps out holding meetings and training sessions and marketing of meeting up groups and all kinds of stuff and this massive infrastructure for that.
[15:04] You as an individual without funding are going to have a real tough time doing if not being able not to do it at all frankly. I think in general to answer your question is probably not unless you already have an in or you can always do outbound marketing that’s not in person so of small hotels or hostels, you can do lead gen using things like direct mail or one on one outbound email, that kind of stuff. But all that’s kind of require experimentation to see if it works in the niche.
[16:33] Mike: The question itself is yes it can definitely be done. Of course the follow-up question to that is well how much money do you have to actually make this happen because if you don’t have the money to make it happen and I think you brought up an excellent point with constant contact is they were funded so they had the money to be able to do that kind of thing and they were doing it early on when it was – I would say probably more cost effective to do it that way because they could probably do combination of offline and online marketing to help acquire some of their customers and back then, Google AdWords was still very early on. Online advertising was dirt cheap and the cost of acquisition for those customers was probably economical at that time especially for the online market.
[17:15] But in going offline, its labor intensive. You got to be able to schedule things. You have to be able to get enough people there to any given meeting so that you are able to close enough deals that is worth the time and labor investment. And that really takes funding. You have to have some sort of either revenue or cash on hand or something in order to be able to make ends meet while you’re doing that because it’s going to be a long slow slog in order to get those people and to achieve any sort of critical mess and I don’t know as you can do it without some sort of funding. So Igor, thanks for the question.
[17:50] Our next one comes from Carl and he says hi guys, what’s up? I love the show. I run a small SaaS business called clinic metrics and I launched it this year. I need an accountant. Question for you is it important for your accountant to be local? If you have a referral I’d love one. If not, how did you find yours? Thanks.
[18:08] Rob: This depends on two things. 1) Are you comfortable with your accountant not being local and 2) is your accountant able to work with remote people and if the answer to both of those is yes, then I don’t think you need your accountant to be local. I have had remote accountants for several years. Currently I have one who is local but if I moved away I probably would not switch but he happens to be really good at email and he’s a little bit of a techy-guy. Same thing with my bookkeeper, he lives across the country. All we’ve done is a video Skype or two, everything else is via email.
[18:34] Now but if you’re working with an old school accountant who is all paper and pencil and wants to talk on the phone and meet in person every time then obviously you’re not going to want to hire them. These days, I think you can find both accountants and bookkeepers who should be able to work remote without an issue. An in fact, that opens you up to basically being able to find the best person for the job rather than trying to find the best person for the job within your city.
[18:54] The way that I have found mien with the accountant I found based on a referral just talking to some local entrepreneurs figuring out who is startup friendly who knows SaaS, who knows software that kind of stuff and then went and talked to a couple of those people. But if you’re going to do your books specifically through Xero, I would actually recommend that you go to Xero’s website and there is like a Xero providers area where there’s a bunch of certified providers and that’s where I found my bookkeeper was through them.
[19:21] And so it sounds to me like you may want a bookkeeper rather than an accountant because a bookkeeper’s going to do it on a monthly basis and then the accountant would file the tax at the end of the year. I think you may want to start with a bookkeeper that’s probably going to save you more time on a recurring basis and for that I would definitely go to Xero and look through those certified folks and just pick one that you think looks good and you can give them a shot.
[19:43] Mike: There is a difference between a bookkeeper and an accountant. The accountant just files your taxes at the end of the year. At least that’s what I use mine for and then I have a bookkeeper who balances the budget, pays all the bills and then make sure that all the financial stuff is in order at the end of the year for the CPA. And I did that for two reasons. One is because a bookkeeper is significantly cheaper than having an accountant do it and then the second reason is you essentially have a double check at the end of the year because you’ve got your bookkeeper doing all the books and then at the end of the year your accountant kind of goes over everything to make sure that nothing’s been done that’s too far out of whack and is able to kind of point you in different directions wherein mistakes might have been made.
[20:21] So those are the differences between them but as Rob said I mean if you’re going to be using Xero which Carl had mentioned that in the PS is Xero does have a dedicated section where you can hire bookkeeper who are familiar with Xero. That said, Xero is not that complicated. My bookkeeper actually picked it up and was able to learn how to use Xero because she was familiar with other things. She started out with QuickBooks. She’s used less accounting for one of my business and she’s also familiar with outright. So between those things the basic concepts are fundamentally the same it’s just a matter of how do you do the specific things that she wants to do.
[20:56] And with Xero they have tons and tons of video tutorials. So just about anything that you need to know how to do, there’s portably a video for it. So you can go in there and worst case scenario, just contact their support and ask them questions.
[21:07] Rob: Yeah. I wasn’t saying that you should go to Xero certified because those people know Xero better than anyone else. It’s just a nice pool of reasonably competent bookers to start with. I think you can also go Odesk or eLance and these other places where I have looked for bookkeepers there as well but the Xero pool just seemed to be pretty competent people. I talked to a couple of them and anyone of them would’ve worked for me.
[21:32] Mike: So our next question comes in from Elliot Sykes. He left us a voicemail. Here it is.
[21:38] Eliot: Hi Rob. Hi Mike. My name’s Eliot Sykes and I’d like to pick your collective brain about guest blogging. In the last week or so, Matt Cutts announced that guest blogging is a promotional tool. it’s on Google’s spam team hit list. Given this, what’s your advice to people thinking about guest blogging as one of the ways to make their projects. And does this change anything for the way you’re going to handle guest blogs on your own site? I’d love to her your thoughts on this and thanks for continuing to make such a great show week after week. Bye.
[22:07] Rob: Yeah. Thanks for the call Elliot. It’s nice to hear from you after seeing your name online over these years. So Matt Cutts who is the Google spam team’s leader talked about guest blogging. Now he also talked about infographic six months ago and basically they’re going to go after anything that they see people overdoing and exploiting. So I think that question of how I’m going to handle it is until I see backlash, I’m going to continue doing what I’m doing because I’m not doing spam and guest posting and I’m not doing spammy infographic.
[22:41] I think that when you get to the point where you’re just doing them at high volume and it’s obvious there’s no social sharing is an indicator they’re probably going to look at, there’s going to be these signals that make these things look legitimate and signals that make things – it’s usually the lack of signal that makes these things look less legitimate and more spammy. So it’s always hard to tell to see how they’re just going to tune the algorithm.
[23:04] I’m not that worried about. I think if it was my number one way of getting the word out then yes, I’d be seriously looking at what I’m doing because let’s say you had 50 guests posts out there on a bunch of blogs, that might be a problem but I don’t think its just surely the number of them. I think it’s going to be these patterns that they recognize and so I think if you really are handcrafting good quality blogs whether your blog posts, whether you’re doing it yourself or you’re hiring someone to do it and you really are dealing one on one with reputable blogs that actually have an audience and things are actually being shared and you’re actually publishing them on these reputable blogs, I really don’t see how they can crack down on that.
[23:45] How did they not just crack down on kind of all links everywhere. I think what they’re going after is the people when they have 1,000 guest blog posts and a lot of them are on these really crappy almost link farms. There’s basically these link blogs where people can pay to guest post on and surely if you’re doing that, I would avoid it. But again if you’re doing kind of the handcrafted approach to it, my gut feeling is that’s going to be okay for the foreseeable future. And just like I said with infographic they talk about crack and done on that, I don’t know if that ever happened because I haven’t seen anyone that’s really gotten hit by that but I also typically see people doing pretty non-spammy infographics as well.
[24:23] Mike: I think that anytime Google issues one of these statements and the collective internet freaks out when this kind of stuff comes out because they’re like oh my god we can’t do this anymore. What are we going to do for our marketing? And if you go back and you actually look at Matt Cutts blog, he says flat out on there “there are still many good reasons to do some guest blogging. Those reasons existed way before Google and they’ll continue into the future and there are absolutely fantastic high quality guest bloggers out there. I’ve changed the title of this post to make it clear that I’m talking about guest blogging for search engine optimization purposes. I’m also not talking about multi-author blogs. High quality multi-author blogs like Boing Boing have been around since the beginning of the web and they can be compelling, wonderful and useful.
[25:07] I just want to highlight that a bunch of low quality or spam sites have launched on to guest blogging as their link building strategy and we see a lot more spammy attempts to do guest blogging. Because of that, I’d recommend skepticism or at least caution when someone reaches out and offers you a guest blog article.”
[25:21] So based on that, it’s not that they’re looking at this and saying guest blogging is bad and that’s just very black and white. What they’re really doing is they’re really coming out and saying look, if you’re doing these things where you are essentially spamming the internet with content, we will find out about it and we will shut you down. It’s not that they’re going after the people who are doing legitimately for exposure, branding or increasing their community size, that’s not what they’re after. They’re after the people who are trying to exploit the system and that’s really the way that Google has always been. They’ve always been going after those people who are trying to exploit the rules and the loopholes and I don’t think this is any different than it has been in the past. So Eliot I hope that clarifies a few things on what Matt Cutts’ announcement means.
[26:01] Our last question comes in from Zack and he says thanks for your wonderful podcast which is full of pragmatic gems. I’m now working to start a SaaS app. I’ve spoken to a business owner about my idea and he questioned how I can ensure that his company’s data is safe in the cloud and that no one has access to it. He’s worried about leaking his company’s strategic information to others. He’s more comfortable installing my app on his server rather than storing the data in the cloud. How should I go about convincing him?
[26:26] Rob: My first thought is don’t convince him. He’s probably not a good fit for SaaS apps and that there are a ton of other people out there who if you truly do solve a pain point for them, are going to be fine putting their data in the cloud. Second thought is if you go to 10 other potential customers and they all have the same objection, then you really are going to need to figure out how to get around it or you’re in a bad market right now and you need to find a market that is more willing to go online or you need to kind of wait these guys out because over time everyone is going to move to the cloud. I think it’s inevitable and it’s just a matter of do you have kind of the time and the money to wait them out so that they are willing to go to the clod. Or you’re going to have to convince each one of them to do it and are you willing to do that?
[27:11] I think convincing some if their data is in a cloud frankly I would probably Google this exact topic and look what are the three elements of it there’s going to be security of data from a technical perspective. There’s going to securing the data at the server side, securing it from hackers, there’s a bunch of stuff like that and I think that it’s probably not something you’re going to get in a two minute podcast answer but it’s going to be something that you’re going to have to research. I think his inclination, he’d rather install it on his own server than storing the data in the cloud. I would encourage you that if you want to start a Saas app not even to entertain that idea in the least these days trying build an installable version of your web app is frankly more trouble than it’s worth unless you’re in a specific niche where you’re going to need that specifically.
[27:53] If you do need that, then you need to make a choice and it’s like are you going to be downloadable web and syllabus software or you’re going to be SaaS but as single founder which I’m assuming you are, I would not try to do both.
[28:03] Rob: I think when you run into these types of people, you almost have to dig a little bit to find out what the underlying issue is is really that they’re not comfortable putting their data in a cloud or is it that they’re not really aware of the dangers that they currently face or do they just not want to pay monthly subscription fee for it. So definitely hammer those out but at the end of the day if they’re not necessarily educated about the risk that they face today, I mean what’s to prevent one of their employees who on their way out going to the file server grabbing everything and then just emailing it out to everybody.
[28:34] Do they have software in place to stop that? Do they have technical controls? Are they actively checking for that kind of thing? My guess is to answer all those question is no they don’t. So realistically, they face that today. He’s using it as a way to essentially skirt the issue and in some way say no so you need to kind of dig a little bit and find out is that really the problem for him? Is he really actually concerned about it or is there something else and he’s just throwing that up as kind of a smoke screen to say I’m not really interested in doing that because all my other software is all in my servers.
[29:09] Rob: Yeah, I would agree with that sentiment. I could also see let’s say you provide him with a ton of information and these are the standards of sales force and of the big Fortune 500 SaaS businesses and this is what everybody does and you can show him all the proof that you do exactly that and you have all these audits in place. You have all this checking that it’s still not going to convince him. So it’s kind of a decision you have to make for yourself and figure out if you really do want to convince this one individual or if you want to move on and find someone who’s maybe more open to SaaS software.
[29:39] Mike: I think my advice in this particular case would be move on and find somebody else because you’re essentially looking for the path of least resistance to success. You don’t want to make things harder for yourself than they have to be and trying to convince somebody who’s not real keen on the idea to begin with is probably not in your best interest. You’re better off finding people who experience that pain and who are comfortable with putting their data in the cloud and leveraging those people is kind of your beach head into the market in order to expand and get other customers on board.
[30:09] And then in the future when you’re better established, you have money coming in and revenue, you can start dedicating time more towards educating people about why their data is going to be safe in the cloud with you versus trying to convince person after person that it may not necessarily be the best fit for your software.
[30:26] The second question that Zack has is have you ever seen any non-US company successfully operate SaaS businesses as targeting US customers? I’m based in Singapore and planned to offer my SaaS app to US customers. So in terms of non-US companies, one that comes to mind is Xero. It’s the accounting software which we briefly touched on earlier in this episode. It’s Xero. I actually have two different business with all my accounting and financial information into here. So it depends on the person or depends on the person you’re marketing to and what sorts of data that they’re putting in there.
[30:59] Now with mine, I’m putting in financial information and they’re able to pull my accounts and see how much money I have and how much I owe but it doesn’t necessarily have the ability to issue checks on my behalf for example. It’s not like it’s banking. It’s not like they have the ability right now to send the money out of my accounts. Now, it is sensitive data theoretically but I’m comfortable enough with all the things they’ve done they are probably keeping it securely. But again that’s a mentality thing, it’s not necessarily going to apply across the board. You’re really going to have to find the customers who are comfortable with that sort of arrangement and I think at that point it doesn’t necessarily matter where you are based rather are you offering a good service that’s valuable that people are going to subscribe to and be interested in.
[31:43] Rob: I think some other companies that are overseas that do a really good job are Atlassian, Balsamic is in Italy and they have a lot of customers all around the world. Campaign Monitor is in Australia. 99designs not a SaaS app is also in Australia and there are quite a few. So big commerce is another one. I think that this is less of an issue than you might think. I think especially if you don’t call it out prominently, we are the Singapore based SaaS app, I mean you can have it on your about page for sure but when I go to look for SaaS, I’m much less concerned.
[32:17] Unless you’re dealing with Fortune 500 companies that are going to move slowly and have a bunch of objections anyway, I think you’re going to be okay with being located overseas. I think that’s becoming less and less important over time. And you can even look at Patrick McKenzie doing appointment reminder from Japan. He has a lot of US based customers.
[32:34] Mike: So Zack I hope that answers both of your questions.
[32:36] Rob: If you have question for us, you can call it in to our voice mail number at 1-888-801-9690 or email it to us at firstname.lastname@example.org. You can find a full transcript of this episode at startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for startups or via RSS. Thanks for listening. We’ll see you next time.