Episode 25.5 | Business of Software 2010
- Seth Godin
- Dharmesh Shah – OnStartups
- Jason Cohen – A Smart Bear
- Bill Bither – Atalasoft
- Eric Ries – The Lean Startup
- ‘Peldi’ Guilizzoni – Balsamiq
- Rob Walling – Software by Rob
- Eric Sink
- Dan Bricklin, inventor of VisiCalc. Currently runs Software Garden
- Joel Spolsky
[00:00] Mike: So today we’re live at the Business of Software Conference recording this podcast, which is really funny, because we’re recording a live podcast, but it’s pre-recorded, so you’re obviously not listening to it while we do this! [laughs]
[00:12] Rob: And the other weird thing is Mike and I are sitting right next to each other, and you’d think that somehow we could just record into the same machine, but we would need a mixer—other hardware. So we are actually sitting two feet away from each other and we have connected via Skype and actually recording on his laptop. I’m talking in my iPhone because I forgot my headset.
[00:31] Mike: You sound terrible, by the way.
[00:32]Rob: Oh, thanks. Thanks. I gave my talk this morning…Well, I guess I should step back a little bit. The day before I left California it was 100 degrees, very nice. Dry heat, of course, as Mike likes to hear me see. And then get to Boston, it’s 55 degrees and it’s raining like crazy. And so sure enough, the voice goes. I just got some kind of cold or something. And because you’re kinda yelling over people because there’s 100 people in a room all the time.
[00:55] Yeah, so then I had this voice for my talk this morning, which I was a little concerned about. But it turned out everything went fine.
[01:04] Mike: Cool. So what we’re going to do today is we’re actually calling this episode 25.5, or 25 and a half, because we usually record a couple of episodes in advance, and we’ve decided that we’re just going to squeeze this one in.
[01:16] It’ s going to be a lot more off the cuff. We’re probably not going to do much editing. And so please forgive us for that, but we’ll just blame Rob. [laughs]
[01:23] Rob: Indeed. We always do that, so…that’s a good plan. Well cool. Do we want to just kinda talk through a few of the speakers?
[01:29] Mike: Sure!
[01:29] Rob: They had some really good talks. So the keynote yesterday was Seth Godin, and he had an hour talk. I always…I dunno. I always wind up feeling really motivated after listening to Seth. He just makes so much sense.
[01:41] I do have one hang-up, of course. I don’t know what the heck to do after hearing him. Like, I’m really excited, but I don’t know what to do! You know, what are my action points? So I almost feel like I need to discuss it with someone and be like, “What does that mean to me? How does that change what I do?”
[01:56] Mike: I think that’s interesting, just because this is the first time that I’ve heard him speak in person. I’ve heard him a couple of podcasts, but I’ve never seen him in person. I have very strong recollections, and as you said, I don’t know what to do. [laughs]
[02:09] Rob: Yeah. I mean he’s a fantastic presenter and a smart guy. You know what’s neat? I didn’t realize he had a background in software. I knew he had started a few web companies, but like he started some downloadable software stuff in the ‘80s. And so he really does have a decent knowledge of what we do. It wasn’t just some marketing guy coming to talk about our stuff.
[02:28] Mike: That was surprising to me as well. I didn’t realize he had any experience with programming either. I thought he was just a “brilliant marketer” and that was…not necessarily the end of it, but I almost felt like he was a writer, a marketer first as opposed to having that development background and ideas and everything.
[02:45] Rob: Yeah, like the entrepreneurship. So one of the things he said that I’ve heard some people kind of murmuring about is, Seth Said, in essence, if you can spec something, if you can write it down, then outsource it. And that you don’t need great developers, is what he kind of said.
[03:02] And he was implying that he hired six people for Squidoo. And, you know, it gets a lot of traffic for only having six employees. And he said, “Yeah, anything that we can spec, people can do cheaper elsewhere. And so the stuff that my employees do is complicated. And so it’s stuff that you have to be really good to do.”
[03:19] I guess it wasn’t necessarily saying don’t hire great programmers, but at one point he said that exact phrase, like you don’t need great programmers to put out good enough software. And I kinda heard some murmurs about that and people saying, “Well that’s not what Joel said,” you know? Is that what you took away from talk or did I make it up?
[03:33] Mike: No, you said it exactly right. And I found that interesting as well, because you are right. There were kind of murmurs that went through the crowd when he said that. I don’t think he meant it as a slight against Joel. It’s just that leading into another talk that was from Jason Cohen, one of the things that I took away from his talk was that, you know, you’ll hear different advice from different people. And although it worked for each of them, it may or may not work for you.
[03:56] And it’s great that Joel was able to hire the “best programmers”. And obviously, Seth feels that he doesn’t need to and he makes it work, and Joel makes it work. And the best part about that is that it just…it further illustrates that there is no one right way to do anything.
[04:13] There’s a lot of things that you can do and there’s a lot of things that you can try. And it’s quite possible that all of them could work, depending on the exact situation that you’re in. So you almost just have to try different things and see what works for you. And part of it’s going to be based on your personality or the relationship with the people that you’re working with.
[04:28] Rob: Yeah, I really enjoyed Jason Cohen’s talk. It was all about filtering all of the advice we get from books and blogs and in person. And basically, he told some great anecdotes about how he read advice, he tried it, and it didn’t work for him. And then he tried the exact opposite and, essentially, it worked. And he said what this means is it doesn’t matter what you do. None of these factors had a real play in the success of some other pivot point.
[04:55] He basically was, like, when you receive advice from 37 Signals and it’s opposite of what Joel says, it’s because they are in different mindsets, like B2B versus B2C, rich or king; there’s all these kind of yin and yang’s that I thought was really interesting. So that was cool.
[05:10] Mike: Yeah. I mean that was certainly an eye opening way that he put that. Dependent on whether you’re selling B2B software, B2C, and couple with whether or not you want to be rich or do you want to be king.
[05:23] And he had great examples for each of those different quadrants on the graph. It was just very eye-opening to see something like that put in that way.
[05:31] Rob: I agree. And to think, when someone gives me advice, think if I’m B2C and I want to be king, then you probably don’t want to listen to someone who’s B2B and wants to be rich and wants to sell their company. So yeah, that was neat.
[05:46] And, let’s see. Dharmesh Shah spoke yesterday from OnStartups.com. Actually, I also really enjoyed his talk. I don’t want to sound like a broken record here saying I really enjoyed them, but there were some fantastic talks.
[05:59] Actually, I feel like I liked the talks more this year than I did last year. But Dharmesh basically….We went through lessons learned that are not obvious from his company HubSpot over the past couple years. And he went into some detailed stuff about this thing called CHI, which is a Customer Happiness Index.
[06:16] Mike: Yeah, Customer Happiness Index. I found that really…that was just amazing, the metrics that they keep on it. I mean, because what they do is they basically have got all these measurements and metrics that they’re taking from customers, and they’re looking at past customers and new customers, and they can almost tell you when a customer is going to cancel, when they’re unhappy.
[06:34] And what they do is they’re proactive about that, and they basically identify the customers who they think are unhappy and call them and say, “We think you’re unhappy. How can we change this?” That just blows me away! I mean that’s amazing that a company is that proactive about that sort of thing.
[06:51] Rob: Yeah. You know, you base it on metrics and you have a lot of…Well, he said there’s seven MBA’s or something there, and there’s developers as well, so they know how to manage the data. But that was just one example. He had like six where it was like, “Oh, man. I totally need to do that.”
[07:08] Rob: We heard Paul Kenny talk this morning about sales. Actually, I only caught part of it because I was busy preparing for my talk. I got more out of it than I thought I would. I don’t do in-person sales or even phone sales, but I still…I kinda learned about the process. It was eye-opening. What did you think, Mike? You have more, you know, kind of insight into that world.
[07:27] Mike: Yeah, the talk by Paul Kenny was a little bit different than how I deal with sales, but the basic concepts and ideas were the same. I mean I was listening to his talk and thinking to myself, “Man, I almost feel like I’m a sales guy trapped in a developer’s body!”
[07:40] Rob: An interesting thought.
[07:41] Mike: I mean because I’m very experienced in that I know how to talk to people, and I can. And as Jason Cohen said, he felt that he was the best sales rep for his company because he knew the product inside and out. He knew the space. He knew the problems himself that the customers were experiencing.
[07:58] And when you get a sales rep in there who can speak directly to those problems, they basically make the best sales person. And it just kind of makes me realize that, in my business moving forward, I’m probably going to be the best sales rep. And I’ve actually heard that from Bill Bither from Atalasoft. I was talking to him and he said his developers, the people he’s taken who were developers and changed them into marketers or sales reps, he’s like, “Those guys are my top-notch sales guys. I mean, because they can talk to the developers, because they basically sell a toolkit for .NET developers.”
[08:29] Well, naturally, a developer is going to make a great sales rep for that because you’re selling to other developers and you’re going to be able to talk to them if somebody says, “Well what happens when this sort of thing throws an exception?” A sales rep is going to sit there and look at them like a deer in the headlights. Whereas a developer who is also a sales rep is going to be able to rattle those answers off and be able to do it.
[08:48] So I think it’s more just a matter of getting over your fear of doing sales. And as long as you can find a process that works for you, then you will do extremely well at it.
[08:58] Rob: That was actually kind of enlightening, because I know Jason Cohen and he had said…I mean he had said, “I’m a geek. I’m a programmer. And I’m not outgoing and I’m kinda introspective and a lot of stuff.” And he said, “But I had no problem selling my software because it was so good.” Like, he knew it was good. And he knew they needed it.
[09:14] And that was really eye-opening. It’s like, “Oh.” Like, having confidence in your software, I mean we all know our…you know, we’re building apps that provide value to people. If that’s all I need to do…And I think that’s what Paul Kenny was saying. He’s like, “It’s not forcing stuff down people’s throats.” He’s like, “If your app really does help them and you’re not trying to put one over on them or force them to buy something they don’t want, it’s easy, because you’re just talking to people.” You know, you’re talking to people and you’re actually going to be helping them out. And if you really believe that, then you can be a good salesperson and a developer at the same time.
[09:42] Mike: [laughs] Although, how much time you have for actually doing it and writing code is a little debatable.
[09:46] Rob: Yep. No, I agree.
[09:48] Mike: As the owner of your business, I mean what you’re really trying to do is you’re trying to manage all of the different things that are going on. I mean if you’re trying to do absolutely everything…And I guess that probably applies a lot more to companies that build up a little bit, have multiple employees.
[10:04] But if you’re trying to do absolutely everything and stay on top of everything as well as you would, you know, you’re not going to do as well. I mean even Rob doesn’t do everything himself. I mean he outsources a lot of things. He basically writes down the process and does those sorts of things and then outsources those things to other people.
[10:20] And he basically acts as a manager; you know, the ship’s captain, so to speak. And that’s what you have to do, whether you’ve got a one person gig, or a 50, or, in Dharmesh’s case, like 180.
[10:34] Rob: Let’s see, another talk from yesterday was Eric Reese, and he talked about Lean Startup Methodology. I had heard all about it. I mean it was basically just an overview of it. And so I’ve heard him on podcasts before. I was a little disappointed there wasn’t kind of new info. But I think he probably played to the audience, which was probably a smart move. I don’t think everyone’s heard about it.
[10:51] There was a little grumbling in the audience, because it’s kind of that next…he’s kind of pushing things forward, I think. And I don’t know if we’ll all get there eventually. I guess time will tell.
[10:59] The Lean Startup Methodology really makes people uncomfortable. It makes me uncomfortable to think about this constant deployment where you just check-in a change and it goes through QA automated and it goes out to the server. It kinda gives us developers the willies a little bit.
[11:14] I think that if you go for lean startup, you can’t go 80%. I feel like you have to go all the way or else it’s not going to work. What was your take on it?
[11:21] Mike: Yeah, I mean that’s an interesting thought, though. I mean he kinda negated that in his talk, in that unless you are all the way with it, unless you are willing to commit 100%, things are going to start to fall through the cracks.
[11:33] And it seems to me like that’s a huge investment. And apparently, the numbers are paying off for them. So it almost makes me question my own believes. Because obviously, there is stuff that you’ve done before and stuff that I’ve done before, and we’re like, “Well I’m pretty sure I know how this is going to turn out, but I’m going to test it anyway.”
[11:49] And you test it and you are just surprised. I mean things are different. Things are not what you expected. So I don’t know. I would give it a shot, to be perfectly honest. And I may very well for my product that is coming out in 8-12 weeks. [laughs]
[12:02] Rob: 8-12 weeks, baby! Yeah, I think Agile Development was similar to this for me, even seven years ago. I mean when it came out, I was like, “There is no way that can work,” just because, I don’t know, I was a consultant and it actually wouldn’t have worked very well for the models that we were exploring.
[12:17] But now, kind of in retrospect, the more you see people do Agile Development, it’s like, “Oh yeah! This makes perfect sense, right? I mean, why weren’t we doing this all along?” And I wonder if Lean Startup will eventually be kind of how we all do our startups.
[12:33] Mike: So we also heard Peldi talk earlier today. That was pretty interesting. It was definitely…you could sense the honesty. And that was the nice part about it. I mean he was talking a lot about his various fears, whether it was actually just launching the company itself, or even talking in front of us.
[12:48] I mean he told us flat out. He said, “I’m afraid to be here.” And it was just very interesting to see that perspective from somebody who a lot of us look up to. But at the same time, he’s a little bit….you know, I don’t want to say insecure, really, but he’s kinda fearful of what people think. Is he going to screw up? Is he going to do well? And it’s important to most people that they do well. So what was your take on the talk?
[13:12] Rob: Yeah, I liked it. I had heard some of it. He’s talked about it at other talks, and I’ve seen videos of it. But it’s always refreshing. I mean he’s a funny guys, which, of course, makes the talk really interesting. His content was good.
[13:24] I mean I don’t know that I took anything away from it that I’m going to go home and implement, but it’s always fun. He was inspiring. Absolutely.
[13:31] Mike: I like that he was a Steven Martin fan. [laughs]
[13:33] Rob: Yeah, that was cool. Yeah, he showed a couple videos. I actually just listened to Steve Martin’s book. It’s his memoirs. It’s called “Born Standing Up”. And I got a lot out of it. It was a lot about the creative process and trial and error.
[13:48] Mike: And then your talk earlier? Were you scared? Did you cry like a schoolgirl? [laughs]
[13:55] Rob: Like a school girl. I was surprised at how nervous I was last night. I had trouble sleeping, which I don’t typically do. Like, I’m typically pretty even keeled about this stuff. But I had a real tough time going to bed.
[14:05] Yeah, I certainly felt good. I felt relaxed once I got up there and started talking. My talk was quite a bit different than everyone else’s. Basically, I went into heavy detail. I think it was well received. I’ve gotten compliments. I don’t know. Mike, you were in the audience. You would have a better idea. Be honest.
[14:21] Mike: I think you were going to cry like a schoolgirl. [laughs]
[14:24] Rob: Wait a minute!
[14:25] Mike: No, I thought it was actually very good, and I’m not just saying that. I think that what was really beneficial to the audience was that you have hard numbers to back it up. I mean when you start talking about marketing, and how to do things on your website, and how to please customers and get them to come back and get them to buy, there’s always these very fluffy things that people kind of say, fluffy ideas that people have. They’re like, “Oh, you should try this or you should try that.”
[14:51] And you actually had hard, concrete numbers to back things up. You were able to say, “Look, if you look at the number of people who come to your site and buy something and they buy the first time they go there versus the number of people who come back to your website and buy on the second, or third, of fifth visit back to your site, the conversion rate is exponentially higher. Not just a little bit higher, exponentially higher.”
[15:15] I mean that right there was eye-opening. You said numbers out there anywhere from 450%-1600% for return visitors to buy versus those first-timers. So the goal from your talk was to get those people to come back to your site. That’s the goal of your website, especially for those higher priced products.
[15:34] And it’s not to sell them on your first visit. Your goal is to get them to come back and continue coming back. And it was great to see that you had numbers. Developers like math, like ones and zeros ,and 10’s and 20’s, and 50’s and 100’s. [laughs] But was just very inspirational and nice to see that you had the numbers to back it up. It wasn’t just marketing fluff.
[15:54] Rob: Cool. Well, good. That was my intent. I knew going into this that with guys like Seth Godin, and Peldi, and some others that they’re great speakers, but they tend to talk about high level stuff that’s really inspirational. And I basically took the opposite tact of that and just drilled way down in and gave some actionable advice. So it seems like it was received well, and I’m pretty happy with how it came off.
[16:16] We’re looking forward to Eric Sink this afternoon. And then tomorrow morning, Dan Bricklin. You know Dan Bricklin did VisiCalc for the Apple; he was one of the early developers. And then Derek Sivers, and, of course, Joel Spolsky wraps up the conference.
[16:33] Mike: So that pretty much wraps it up for this episode. I think it’s going to get loud in here as people start to go to the Breakout Session. So I apologize for the lack of formatting on this particular episode, but it is sort of live and first time for this one. If you remember from our first couple of episodes, they were a little choppy, I’ll say.
[16:51] Thanks for listening and we’ll see you next time in Episode 26.