Episode 30 | Business Implications of Web Based vs. Desktop Software
- Intel X25M Solid State Drive(SSD)
- Patrick McKenzie
- Wedding Toolbox
- Joel Spolsky
- Recurring Billing Solutions
- Rob’s book – Start Small, Stay Small: A Developers Guide to Launching a Startup
- Micropreneur Academy
[00:00] Mike: This is Startups for the Rest of Us: Episode 30.
[00:12] Mike: Welcome to Startups for the Rest of Us, the podcast that helps developers be awesome at launching software products, whether you’ve built your first product or are just thinking about it. I’m Mike.
[00:19] Rob: And I’m Rob.
[00:20] Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s going on this week, Rob?
[00:25] Rob: Actually quite a bit for me. You know I’ve had a fairly quiet past four months. My son’s almost four months old. This week, I don’t know, I started making some decisions that I think are going to impact what I’m doing for the next six to 12 months.
[00:39] And one of the things I did that I was pretty pleased with is I bought a new group of websites. I was going to say I bought a new website, but it’s actually eight websites. And it’s in a new area that I’ve never really experimented with. They’re researched content websites and they have AdSense on them.
[00:57] I don’t want to say they’re AdSense websites, because a lot of people have kind of a bad view of what those are. You know, just poor quality websites. But the reason I liked these and the reason I bought them is because they’re heavily researched and they actually have quite a bit of unique aggregated information that you can’t find elsewhere.
[01:14] So it’s pretty cool. It was an interesting deal. It was just under 12 times monthly earnings. And monthly earnings are on the way up, and I already see a few opportunities for some pretty easy improvement, both with the ad placement and doing some SEO to improve traffic. So I’m stoked about that. The money’s in Escrow right now. I’ve just got the couple of domains, and I’m working on getting the sites moved to my servers.
[01:37] Mike: Very cool.
[01:38] Rob: Yeah, so I’m excited about that. It’s always neat…You know, I think I said in the last podcast that just launching another website like I already have sounds really boring to me. So I don’t know if I’ll do a zillion AdSense websites, but I just kinda wanted to do this group and get an idea of what it takes and how to optimize it. And then, of course, I’ll get bored of it. I’ll keep around, right, because they are no work, but I don’t know if I’ll do a lot more of them or not down the line. How about you?
[02:02] Mike: That’s cool. So I think a couple weeks ago I had mentioned that I was looking at doing some potential hardware upgrades to my desktop. I was looking at the range of options that I had for upgrading my machine and moving everything over to Windows 7. And I could have gone anywhere from just reinstalling on the exact same hardware I had all the way up to spending, probably, $3,000, $4,000 on upgrades.
[02:25] The conclusion I came to was instead of going that route and blowing a ton of money on a brand new, state of the art processor and, you know, a new video card, a new motherboard, RAM, everything else that goes with it, the only upgrade that I actually did was I installed an SSD drive on my desktop. And I already have one on my laptop.
[02:47] My laptop’s one of the old style 1600×1200 resolution monitors, so I’m very happy with it and will be hanging onto it for a while. Just the addition of that SSD drive really gave the laptop a completely new life.
[03:00] So what I did was I went out and I bought one of the Intel X25M drives. You know, one of those solid state drives from Intel. It’s very fast. [xx 3:08] really highly. And obviously, it’s got Intel’s name behind it and they’ve been doing it for a while, and they know what they’re doing. So the performance is definitely there. I was able to install Windows in about 10-15 minutes.
[03:21] Rob: That’s insane.
[03:22] Mike: I installed Visual Studio 2010 and it took about 10 minutes. [laughs]
[03:26] Rob: That’s crazy! I need to get one of those, man!
[03:29] Mike: It was ridiculous how fast it was. I mean I rebuilt my entire machine from scratch, and it took me about probably three hours or so. And I didn’t copy over all my data. I’ve still got my XP machine and I’ve got my Windows 7 machine kind of running side by side for a while. Because when I went out and I bought hardware before, I basically bought exact copies of my computer.
[03:52] So I actually had three different computers that were running identical hardware, that if anything ever went wrong on any of them, I could just pop the hard drives from one and stick them in the other one. And because I’m running RAID on everything, then if a hard drive failed I could just put another one it. Barring any sort of catastrophe, I’m not going to lose my environment, which is, as you know, one of the more painful things to set up.
[04:15] Rob: Right, especially if you are working for consulting rates, every hour that goes by is a huge amount of money. So that actually sounds like a reasonable approach.
[04:22] Mike: I’ve talked to people who worked at trading desks on Wall Street. I was talking to them and trying to convince them, “Oh, you can buy into this imaging technology that if a machine fails you can have the thing up and running in about 10 or 15 minutes.” And they said, “No, we don’t do that. And the reason we don’t do it is because if somebody is down for even a minute, that’s millions of dollars that we just lost.”
[04:45] So what they do is they actually have a rack of spare computers, that if a machine goes down, they just put a new one in. And they actually have a KVM switch to just toggle between them so that they don’t lose anything.
[04:56] Rob: Yeah, I can see that.
[04:57] Mike: Which is crazy, but that’s what they do. And the funny part is, for them to buy a brand new state of the art machine for $3,000, that’s cost effective for them to do it that way.
[05:06] Rob: That’s cool. I’m always fascinated by those extreme applications; the extreme…
[05:12] Mike: Edge case scenarios?
[05:13] Rob: Yeah, edge case scenarios. That’s exactly, yeah, that require something just standing like that. Like you said, three grand on a machine and buying 10 of them is way cheaper than them being down for a few minutes.
[05:25] Mike: Right. So yeah, I got my new machine, and I actually have it hooked up to my brand new 30 inch monitor, and things are good.
[05:32] Rob: Sounds good.
[05:33] Mike: The funny part is I still have my 20 inch monitor, so I put a 20 inch monitor on one side and a 20 inch monitor on the other, and I have, I don’t know, what is that? Like 70 inches of…[laughs]
[05:42] Rob: Diagonal inches of monitor. Good grief. Dude, you’re going to develop Melanoma or something! Do you get a suntan just sitting in front of your monitor?
[05:51] Mike: Yeah, somebody on Twitter commented that I was going to get radiation poisoning or something like that.
[05:55] Rob: Yeah. I know with the old CRT’s they actually did give off quite a bit of radiation, compared to like an LCD. And so the people who had three or four monitors were cautioned to be careful. But I think with LCDs it’s actually a lot less power consumption.
[06:09] Mike: Yeah.
[06:09] Rob: Yeah, if you don’t want to much with the computer, you can get a USB2 to DVI converter. You know what I’m saying, where you just plug it in? That’s what I have on my laptop. I basically have a laptop, I have two 22 inch monitors. So one of them just pops right off the VGA, and then the other one I needed to get…you know, you obviously can’t install a card in a laptop, so I just got a USB to DVI converter. And there were some USB to dual DVI converters, if you just wanted to slap that in. And it works great with Windows 7, just plug and play.
[06:43] Mike: Yeah. Lenovo actually has docking stations where they will install a video card, or at least allow you to install a video card into the docking station, and then using the BUS that the laptop plugs into, into the docking station, it gives you extra monitors, because it plugs into those video cards.
[07:00] Rob: Yeah. That’s cool.
[07:02] Mike: But they require like a Half-Life video card, and you have to be a little careful.
[07:05] Rob: Well hey, I actually have one other piece of news. I sold the 1,000th copy of my book this month.
[07:10] Mike: Oh, cool!
[07:10] Rob: Or last month, I should say, in October. Yeah, yeah, it was pretty crazy. I don’t know that I expected to sell that many copies from the start! Maybe I should have had higher expectations. But just knowing how small of a niche I targeted—developers and startups and all that, I just figured, you know, didn’t really know what it would bring in. So yeah, hit the 1,000th.
[07:29] And then actually had one of the best sales days of all time today because Patrick McKenzie wrote a blog post and then linked to my talk, my BoS talk, and talked about the book, because he tried some things with my talk and had success with it. So that was pretty cool. And then, of course, it went to number one on Hacker News, [laughs] so it sent a bunch of traffic to it.
[07:48] I was almost going to deactivate email from PayPal and Amazon Payments today I was getting so many emails from things, so that was kinda cool. You know you don’t have anything to complain about when you’re complaining about receiving too many payment emails.
[08:00] Mike: Mm-hmm. Yeah, that’s rough. [laughs]
[08:02] Rob: [laughs] Rough life, huh?
[08:04] Mike: Yep.
[08:07] Mike: So today we’re going to talk about the business implications of web-based versus desktop software. So essentially what we’re going to do is compare, from a business standpoint, some of the differences between building a SaaS application or building a downloadable application.
[08:25] And I think these are a lot different than if you look at the technical considerations behind those, because the technical considerations are obviously a lot different than the business considerations. In terms of technical considerations, you have to think about the platform, you have to think about the delivery model, and the specifics of how you’re building the environment. You have to worry about scalability a little bit more if you have a web based offering. You have to figure out, “OK, well if I need to scale beyond one machine or two machines, how am I going to do that?”
[08:52] And with the business implications, there’s a lot of other things that you have to think about, and not one of them is technically related. There’s just no technical problems behind it. And it’s all about how you run your business, how you handle payments, and barriers to entry and things like that. So with that said, I think we’ll get into the topic.
[09:15] So the first one to talk about is tech support. With a hosted application, you really don’t ever have to worry about whether somebody is using the latest version of your software. If you have a hosted application, they’re always using the latest version. You fix some bugs or you tweak some things, you push it out live to your website and people are automatically using the latest version.
[09:37] The downside is that it’s entirely possible that they’re actually using an out of date browser of some kind which barely works; IE6 comes to mind. You do have to keep in mind that there are different types of tech support issues that you are going to have to deal with. And again, this is kind of peripherally related to the technical issues, but the tech support problems that you are going to have are just slightly different.
[10:03] Rob: Yeah, I think in general, given my experience, DotNetInvoice is actually a downloadable…it’s not desktop software, but it’s a downloadable app that people install on their Windows web server. So I would say it’s more akin to the desktop software moniker we have in the title here.
[10:17] And then Wedding Toolbox is web-based software. Most of the entrepreneurs I work with have Software as a Service stuff. And I am wholeheartedly a Software as a Service guy. Unless there is a real need for desktop apps or for you to build a desktop version, gosh, the web-based version is so much better for all of these reasons that we’re going to look at. I know we’ll also look at kind of some negatives to using the web-based stuff, but tech support is the big one. And we see it every day with DotNetInvoice.
[10:49] The biggest issue we have with support is that people’s servers are screwed up or they don’t know what they’re doing. And so we wind up holding people’s hands to teach them to install. I mean it’s a super dead simple .NET web app. You FTP it up. It’s X-Copy. That’s it. Nothing. You create a database. You modify Web Config. Like, that’s the whole installation process.
[11:09] And people get these crazy errors because they have just these bizarre server setups that are these things where they have nested virtual directories, and Web Config’s piling up six deep, and they’re just a mess, basically. And if you have even a reasonably setup server, you’re fine.
[11:26] Problem is, when they have a problem, they email us and they’re like, “Your software is not installing correctly.” And, of course, since they paid 300 bucks for it, we want to help them, because they will just return it if it doesn’t install.
[11:38] So this has taught me that selling downloadable software comes with quite a bit of tech support headache. Even if you write really good software and non-buggy stuff, and you fix your bugs, you’re still going to run into issues with support.
[11:52] Rob: So the next implication we’re going to talk about is pricing model. With web-based software…and just for the record, if you don’t know what SaaS means, it’s Software as a Service. So with SaaS applications, it’s very easy to charge a subscription fee, right? This is the norm. This is what people expect. Far less common to charge a monthly fee for desktop software.
[12:14] There are big implications to that. Essentially, with desktop or downloadable software, you start from zero every month. So even if you have a lot of traffic and your conversion rate is OK, you really do start from zero revenue each month, and that’s a huge, huge difference than having this revenue base that is paying you money.
[12:30] Again, I’ve mentioned this example before, but with DotNetInvoice specifically, when the recession hit in kind of August/September 2008, we lost 80%,90% of our sales for several months. And we have had months where we’ve made zero sales. We’ve actually had zero dollars in revenue aside from support revenue, which is just crazy. You couldn’t run a business on that. It’s lucky that both my business partner and I have other income, because if we were relying on that, I could really see it turning your business upside down.
[12:58] Mike: Yeah, I think that’s what most people forget, is when you’re charging whatever it is for your software, you do start from zero every month. That’s the biggest downfall to downloadable software.
[13:10] Wasn’t it Joel Spolsky who said that if he had to do things over again today for FogBugz, they wouldn’t even be a version that they could sell and you could install on your own servers, it would just be completely Software as a Service?
[13:21] Rob: He did. It was a podcast. I don’t remember at all what it was. But yeah, he did. He basically said he would probably not do a downloadable version; that there is quite a bit of support involved.
[13:31] Mike: And that kinda falls back to the very first thing we talked about, which was tech support. I mean you’re going to have different problems, and the scale of the problems that you have if you are doing any sort of cross-platform application, you are going to have to deal with those.
[13:48] Mike: The next business implication of web-based version desktop software is the type of payment methods. Now, when you sell software outright, any sort of desktop or server software, and you’re selling it per copy, you are basically getting a payment upfront, and that’s kind of the end of the…I don’t want to say the end of the relationship between you and your customer, but that’s as far as the payment goes. And if they’re not happy with it, you can give them a refund or not.
[14:17] The difference between that and a SaaS application is that you basically have to deal with a lot more pain points when it comes to allowing customers to make payments or taking payments from your customers. You have to worry about things like prorating a payment or making decisions around whether or not you’re going to prorate payments.
[14:39] You’ll have to deal with things like refunds probably a lot more often than you would if you were just selling the product outright. Because a lot of people, hopefully, they’ll think that they’re waiting until the last possible day to cancel their subscription for something, and then they’ll go over, and they’ll go over by a day or two days, or sometimes even a week, and then say, “Oh, I meant to cancel.” And then you have to start making judgment calls about whether or not you are going to give them a refund for that month. And you also have to think about are you going to bill them after they’ve used your software for the month or are you going to do it beforehand?
[15:10] So these are all things that you need to think about, and they’re all related to how you handle payments and how you manage the subscriptions themselves. And the best bet, from what I’ve seen, is to simply get started initially using an off the shelf solutions like PayPal or something like that.
[15:27] And the unfortunate part is that that model doesn’t really scale very well. It’s very difficult to change payment providers once you have started down the path of accepting subscription payments from somebody, because most of them don’t allow you to simply port, for example, credit card information from one payment provider to another. They don’t allow you to do that for obvious security reasons. But it just makes it difficult for you to completely switch from one payment provider to another.
[15:55] Rob: Yeah, I think the advent of all these recurring billing solutions, like Recurly, and Chargify, and CheddarGetter, and Spree.ly, I think there’s like two or three others I’m missing, but they all kinda do the same thing. They’re basically almost a wrapper around PayPal or around Authorize.net, or around any type of merchant account and gateway that you can get. And they help make it a lot easier to setup subscriptions and create them using a rest API from your app.
[16:25] So I think with the advent of those it’s gotten a little easier, but it’s still cumbersome. There’s no doubt about it, there’s a huge difference between adding a PayPal “Buy Now” button or an E-Junkie “Buy Now” button. They are just stupid simple to get going and you can sell your downloadable software right away. Whereas a SaaS app, it’s always going to be more complicated. And as you said, the easy solution of using PayPal may be easy to get started, but it really does create a headache for you down the line.
[16:50] So I actually don’t have any definite advice here. What I have done in the past is I do start with PayPal, use PayPal subscriptions, although they’re not ideal. It’s the quickest way to get started and not worry about spending two days coding up your subscription infrastructure. And then, if things start to take hold and you know the app is working, then it’s time to go back and reinvest.
[17:10] You will manage multiple payment providers at once, right, because you have the new one, and you get all that in place, and that’s your super scalable infrastructure. Maybe you do Chargify on top of PayPal, or maybe you just write a custom one on top of another API and then just keep your PayPal stuff on the side and not add new customers to it.
[17:28] But yeah, there are definite concerns there, definite complexities with SaaS application building.
[17:36] Rob: Our next business implication is resale value of your product. It’s common to be able to resell a business or a software product at a higher sales multiple if you have a subscription base. And this makes sense, right, because you don’t have that starting from zero every month. You are going to just tend to have more consistent revenue, and anyone who’s going to buy a business is going to know that.
[17:58] So if you have customers paying a recurring service fee, bottom line, you are going to get better multiples. I could easily see getting one and a half times more, maybe even two times more for a SaaS based application than has very consistent billing and not a lot of support needed, as compared to a desktop app or a downloadable app.
[18:18] Mike: Right. And I think that’s partially because there’s a lot less things to screw up. I mean if you’ve already got a system in place for accepting those subscription payments from people, and you’ve already got the sales engine that’s moving, it’s very easy to keep it moving. It’s a lot harder to drive it into the ground accidentally.
[18:36] Whereas if you acquire a new product and you mess up something in the database or something along those lines, I mean you completely nix all of your sales and you may not find out for a much longer period of time than if you had recurring customers who are always coming to your website. If you make the database unavailable, they’re going to complain, because they’re paying a subscription fee.
[19:00] Mike: The next one we want to talk about is the barrier to entry. Now, the pricing of a web-based application is generally quite a bit lower, but it doesn’t mean that, as the case, that it’s necessarily easier to sell to a customer.
[19:12] Many customers don’t necessarily like the SaaS model because it’s a never-ending fee. There’s no possibility of them buying software and then, as long as it works for them, never paying for an upgrade if they don’t feel like the features are compelling. And that’s a very different mindset that you have to take into account when you’re deciding whether to do a piece of web-based software or a desktop application.
[19:39] So you just have to keep those in mind when you’re making those decisions, because it’s very easy for customers to cut licenses to software that they’re not using if you have a SaaS app. But at the same time, there are people out there who really just do not like SaaS apps. And the reason is because they don’t like continuing to pay for something when they don’t necessarily see the additional features. They’d rather just buy it up front because they have the cash, and it’s easier for them to spend $200 or $300 up front as opposed to continuing to pay maybe $30 a month forever.
[20:12] Rob: Yeah, I think there are actually certain categories of apps where a recurring payment structure doesn’t work very well. Let’s say you had something online that was something that someone needs one time, like manipulating a PDF document.
[20:27] I guess having a web-based version would be the best so you don’t have to try to help someone download and install software. But yeah, the recurring business model, it just doesn’t apply very well there. I think that’s what you’re saying, is that the barrier to entry probably has to be commensurate with the level of benefit someone is going to get long term from a subscription service.
[20:49] Mike: So the last one that we want to talk about is revenue accounting. And accounting is something of a messy thing that you have to deal with as part of owning a business. But there’s a very big difference between how you are supposed to be accounting for revenue in a business when you have a SaaS application versus when you have a downloadable application.
[21:10] Let me kind of set the scenario for you. Let’s say you have two different applications. Product A is a SaaS application and product B is a downloadable application. And product B costs $120. And a customer comes to your website, they buy it, and they pay you $120. And in return you offer 12 months of support.
[21:28] And product A is a SaaS application, but it is $10 a month. And over the course of a year it’s still $120. But in terms of your revenue accounting, what you’re supposed to do is you’re supposed to essentially refer revenue from the downloadable software package for the time period during which you actually deliver the services associated with it.
[21:52] So you owe them 12 months of service, and support, and upgrades and stuff like that, but you’re taking the revenue all up front. You’re essentially taking money from a customer for things you have not yet delivered on and will not deliver on for some X period of time.
[22:09] Whereas with a SaaS application, they’re paying you on a monthly basis for services that you are delivering at that point in time. So it’s a very subtle difference between the two, but you have to kinda keep that stuff in mind, because you really are supposed to be deferring how you account for that revenue up until you’re supposed to be.
[22:30] And logistically, it certainly makes a lot of sense and is helpful to your bottom line to take that money up front, because then you’ve got this $120 cash injection right up front and you can use that to plow into the company and build the product up and do more things that you would not otherwise have with a mere $10.
[22:50] So it is something that you need to keep in mind, that there’s a huge difference in how you account for revenue between a web-based application and a desktop application.
[23:03] Rob: So for our listener question today, we have a call from one of our listener’s, and here it is.
[23:09] Startup Guy: Hey guys, this is Startup Guy again, yourROI.com. I have some more feedback. Some of the things that would be easier for people to retain who aren’t in the car, you know, require more repetition for those of us who are listening while commuting. And that gets to my point to Rob about pitching your book more. You probably would never expect a listener to ask you to pitch your book more, but first of all, you guys have the podcast, so you can do whatever you want. In fact, actually, I’ve forgotten the name of your book, so I can’t even go buy it.
[23:41] I think you mentioned in one of the podcasts that it has more hands-on, how-to and some details about some of these things, you know, dives deeper into issues, and that would be an opportunity as you’re maybe going kind of midway deep into a topic to mention your book again and do some promotion that’s tasteful but yet repetitive enough so that us commuters can remember it and go buy it.
[24:05] Again, that’s my feedback. Hopefully it is of some value, and thanks again for all your guy’s efforts.
[24:12] Rob: So this actually surprised me. Startup Guy called in and said he would actually like to hear more about the book, which I guess it shouldn’t be surprising, because there are some podcasts that I listen to, and people talk about projects they’re working on. And frankly, I get curious to hear more details about this stuff.
[24:26] So today we’re going to just take a couple of minutes and Mike and I are going to talk through a bit of my book, kind of what’s in here and the point of it. Like, what would you get…Let’s say you buy the book. It’s $19 at StartupBook.net. You go there, you buy the book, what do you get that you’re not going to get from one of our blogs or from this podcast?
[24:43] I think the biggest thing is that it goes in depth. It’s a 200 page book, so you can spend so much more time in writing that you can’t do on a podcast. I think the other benefit of having a book is just the formatting that you can kinda skip around and figure out what you need to know and what you don’t need to know, and that always is a nice advantage.
[25:05] And then the last thing is screenshots. Frankly, there’s a lot of examples and screenshots that show things that we talk about. It makes it easier to understand visually.
[25:14] So the book is seven chapters. It kinda goes in order. The first chapter talks about the chasm between developer and entrepreneur, and it’s basically saying, “You’re a developer and there’s this huge leap you have to make to become an entrepreneur.”
[25:28] Some people are already almost there, but some people are still on the cliff side of the developer. And there’s a lot of mental leaps and mindset shifts that have to be accomplished before you start thinking like an entrepreneur.
[25:41] When I use the word “mindset”, I always cringe just a little bit, but I really stick to kind of some practical stuff—roadblocks you’re going to face, some stuff we’ve actually talked about on the podcast. But again, more depth and more material.
[25:53] And then from there, chapter two looks at why niches are the name of the game. This is all our philosophy of how to get this stuff done, but it goes heavy into detail about real specific reasons of why you should go niche if you are going to be a one or two person startup, and why you should not try to build a horizontal product or go after a vertical niche. And then it shows you how to do that very specifically, with detailed numbers, and tools, and links, and kind of step by step how to get that accomplished.
[26:20] And then from there, the next couple of chapters, they look at building your product, whether you want to outsource it or not, and building the sales website, whether you want to outsource that or not, as well as a pretty simple technique for getting a good sales website up.
[26:32] After that, it’s startup marketing from kind of a one or two person startup’s perspective. So it’s not a lot of the stuff you see about social media and Facebook and Twitter, but it’s much more practical, kind of rubber meeting the road type of stuff, where, you know, how are you going to get actual people to come? How are you going to get your conversion rates increased? And again, it’s not hand-wavy stuff, it’s very detailed and specific.
[26:56] And then the last couple of chapters cover virtual assistance and outsourcing, which we’ve talked about here at length. But it does talk about some very specific strategies for hiring and vetting virtual assistants.
[27:07] And the last chapter is about growing it or starting over. And it kinda discusses the advantages of keeping a product and making it really big or putting it on the side and either selling it or keeping it and starting new ones.
[27:21] So as I said, it’s a 200 page book. It’s available in paperback for $19 plus a couple bucks shipping. You can also get it in PDF and e-Pub. And that’s all available at StartupBook.net. Or you can buy it on Amazon as well. And the title is “Start Small, Stay Small: A Developer’s Guide to Launching a Startup”. And if you go on Amazon, you can get it in paperback or in Kindle format.
[27:42] So basically, the book is kind of a preview of the Micropreneur Academy, which Mike and I have also not pitched. We’re developers; we don’t want to sit here and preach salesy stuff to you guys. We want to provide you valuable content like hopefully we’ve done for the past 30 episodes.
[28:00] But it does seem like it might be time to talk a little bit about the Academy in more detail. Yeah, there’s a coupon at the front of the book and at the back of the book with a special URL you can go to. And you essentially, you get the first month’s worth of content from the Academy, you get that at no charge. So you start, on your first day, you have access to the first two months of content.
[28:20] So just to be clear, you don’t actually get 30 days of the Academy for free, you just get more content when you start out. You have more access to that.
[28:28] And the book is essentially, like I said, it’s a preview of what’s in the Academy. So there’s some overlap with the first month’s worth of content. So if you read the book cover to cover and then you get in the Academy, the first month is probably, maybe 50% or 60% of that material is also covered in the book. It’s not identical, but it’s the same general stuff.
[28:50] And then once you get to month two and beyond, there’s very, very low overlap. I think there’s just a couple lessons that overlap.
[28:56] So I’ve been yammering on for a little bit. Mike, do you want to take over and give people an idea of what’s in the Academy and how it works?
[29:03] Mike: Sure. So the Academy is essential a 12 month program that Rob and I put together that will guide someone through the process of picking a niche market that they want to address, or if they already have a product, finding out if it actually has a viable market, and walking through the process of doing everything that needs to be done to effectively market and sell the product online.
[29:26] The first eight months worth of content are all lessons. There’s about between 75 and 80 different lessons. And each of those lessons goes really in depth on specifics. And it’s not fluff, it’s very detailed. It tells you exactly the things that we have used in the past and what we have found that has worked. Every single lesson has PDF, has HTML, and MP3 available for it.
[29:52] And a lot of the lessons also have a screencast associated with them. I think one of them has like 12-15 different video screencasts in it?
[30:00] Rob: Yeah, like for AdWords setup and Facebook pay-per-click stuff. I mean, there are just things that are so much more easily shown on an actual screencast. So yeah, there’s a total…I mean, gosh, I don’t know, maybe 10 hours, 15 hours of screencasts? There’s well over 90-100 hours of audio. There’s a crap load of content in the thing.
[30:20] Mike: Right. And most of that is all in the first eight months. And the next four months of material, what we basically did is we stepped back from the lessons themselves and created some very in-depth case studies. And some of the case studies are on things that Rob has done, some of them are things on stuff that I’ve done, and a few of them are from various entrepreneurs from around the world who have done different things and have had some very specific problems that we wanted to look at. And then there’s a few case studies in there from Academy members.
[30:49] With the Academy membership, there is a set of forums that you can go in and you can discuss the things that are going on with your product, ask questions, get feedback from people in more of a private environment. That is extremely helpful to be able to do that, because typically, there are questions that you want to ask of somebody who’s a little bit more experienced, and you don’t usually have a good way of doing that. You can’t just openly ask for feedback on certain things on your website, because you don’t want to portray that to your customers. So you can do those sorts of things in the Academy forums.
[31:21] In addition, there’s one-on-one mentoring discounts, there’s a lot of different Academy discounts and perks on almost a dozen things, such as SEOmoz, Clicktail, WooThemes, JumpBox, Mail Chimp, and various other things that you can get Academy discounts on.
[31:38] Rob: I don’t know, I think that’s a pretty good representation. I guess the couple things I’ll say is that the difference between the Academy and a blog is night and day. When you read blogs, you get a lot of generalizations. You can only spend so much time on a blog post. And then a book kinda takes it to the next level. Like, my book gets more detailed, there’s more how-to. But even a book has limitations because it’s the printed word. And the Academy is like the next step up.
[32:06] It shows. I mean there’s a lot of content there. It is more expensive. The Academy is not free. And I think one thing that has really occurred to me is there are actually a lot of benefits to charging for admission. One thing is that you and I, as well as most of the Academy members, are way more willing to divulge information in this private setting than I would ever do on the open web.
[32:27] So like, I given conversion rates, actual conversion rates for my products, revenue data; like all kinds of stuff. And several of the other Academy members do as well. And we can only do that because we charge admission and it’s like this private membership.
[32:39] Another thing is it actually leads to better relationships and it reduces the troll factor. I mean we’re in control of who’s on the forums. Luckily we’ve never had an issue, but it would be really easy to kind of moderate that. Someone’s not going to pay money to come and be part of a community and then be a jerk. Whereas if this was on open forum, the discourse would be totally different.
[32:59] So while it’s not free, certainly we think we offer more value than the price we charge.
[33:05] Mike: Right. And to get into that, the price for the Micropreneur Academy is $47 a month. And we do have some special offers for people who want to buy a perpetual lifetime membership upfront, or if you get into it a little ways and you decide you want to, instead of paying that monthly fee every month, you can just essentially buy it out, for example.
[33:25] There’s a ton of benefits to being part of a community that has people who are like-minded attitudes towards building products and trying to get them off the ground and, quite frankly, be successful with their products.
[33:38] Rob: Yeah. You know, I originally launched the Academy because it was something that I wanted. It was something that I personally would have paid for myself. And Mike joined shortly after the launch, and it was the same thing. He was so excited to come onboard, because he was like, “Yeah, where was this when I was struggling for the last eight years?” And that’s the same thing I had said.
[33:57] So that’s really what we try to create. We are heavily involved in the forums. Mike or I replies to almost every forum thread, if not every forum thread, that’s posted in there. And I know both you and I also do reply to emails when people send them. So being part of the Academy is not just…you don’t just kinda sign in and get a bunch of content. It’s very interactive.
[34:18] And frankly, while you and I provide, I hope, good advice and good guidance, there’s some crazy knowledgeable people, other members of the Academy, who also offer suggestions that I would just never have thought of, who just have different experiences. It’s a good community.
[34:33] Mike: The one thing I did forget to mention is that we try to have a monthly conference call. And it’s not usually every single month. It’s usually anywhere between every three weeks and five weeks. But generally, within that timeframe, we usually have a conference call which is essentially an open call for anyone who wants to bring up a topic of conversation or have some questions answered and get on the phone and just kinda chat about them.
[34:57] Rob: Yeah. And what I like about that, I think what you and I both like is that the line is just open. Like, we don’t mute the question side. So everyone just get’s on and it’s like a conversation. And Mike and I, we do most of the talking, but we don’t necessarily have to. Other people jump in. And we’ll take questions on the forums before the call and we’ll answer them, but then people have follow-ups right there live on the call, and it’s cool. It’s really neat to get a group of folks together on a call every month.
[35:24] And then we record it as an MP3 and you can view and listen to all the previous ones. I think we have 11 or 12 of them now kind of in the backlog once you sign in.
[35:32] I think that wraps it up. Certainly, if you have questions, feel free to email us. The URL’s for those were StartupBook.net, and that was my book, and then Micropreneur.com.
[35:43] One other thing I should mention is if you buy the book, you can sign up for the Academy right away and get inside. If you don’t buy the book, you have to be let in as part of a group. Essentially, we take kind of a new class or a new cohort of members all at once around the end of each month. And there’s a number of reasons we do that. It actually makes the experience much better for the members coming in. We’re able to provide more support and all that stuff.
[36:08] So if you come to Micropreneur.com, you enter your email, and then we just let you know the next time we’re opening the doors.
[36:13] Mike: And the URL will be in the show notes. So if you go to Startupsfortherestofus.com you’ll see it there as well.
[36:20] Rob: If you have a question or comment, call it into our voicemail number. It’s 888-801-9690. Or you can email it to us at firstname.lastname@example.org.
[36:30] If you enjoyed this podcast, please consider writing a review in iTunes by searching for “Startups”. You can subscribe to us in iTunes or via RSS at www.startupsfortherestofus.com.
[36:40] Our theme music is an excerpt from “We’re Outta Control” by MoOt, used under Creative Commons.
[36:45] A full transcript of this podcast is available on our website: startupsfortherestofus.com. We’ll see you next time.