Episode 35 | More Questions Answered

Show Notes


[00:00] Rob: Esta es Startups for the Rest of Us: Episodio 35.

[00:03] [music]

[00:13] Rob: Welcome to Startups for the Rest of Us. A podcast that helps developers be awesome at launching software products, whether you’ve built your first product, or you’re just thinking about it. I’m Rob.

[00:21] Mike: And I’m Miguel.

[00:22] Rob: [laughs] And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Miguel?

[00:28] Mike: Not much. Just trying to learn Spanish again.

[00:29] Rob: [laughs] Again. Yeah, my wife and I toured a Spanish/English immersion school this morning. I’m thinking about sending my son there next year, and 90% of the instruction in kindergarten is in Spanish.

[00:41] I know in L.A. Spanish speakers are the majority now, and I think in California we’re on trajectory to be there pretty soon. So it’s a very good skill for a kid to have and, man, they become fluent within a year or two of being in that school. So anyways that inspired…

[00:55] Mike: Really?

[00:56] Rob: Yeah. When you’re that young your mind is so elastic. It’s insane what they retain. So what’s going on in terms of your business stuff?

[01:04] Mike: Well, I think a while back I had commented that I was moving my websites from one server to another, and I got into a discussion with Manuel Lemos in the comments of Episode 29.

[01:15] Back and forth throughout the discussion he came up with a bunch of great resources that he posted links to in the comments for people who want to know more details about how DNS really works.

[01:25] I glossed over a lot of the details when I was talking about moving my website in Episode 29. Because a lot of the things that I would have to deal with, I just either didn’t have to deal with them or didn’t want to deal with them, and so I basically glossed over a lot of those details.

[01:39] But if you’re unfamiliar with how the guts of DNS works, he posted some links. I already checked out the websites and some of the URL’s that he posted, and they’re actually very good. So if you’re interested in how DNS really works under the covers, definitely check out those links. They’re in Episode 29, and I’ll post a link to this in the show notes.

[01:59] Rob: So I have something I want to bring up. We passed a milestone. You know every podcast counts their listeners differently. You and I have talked a lot about this.

[02:07] So you and I have traditionally looked at FeedBurner, just because it’s a consistent measure. It counts RSS subscribers that come through Google Reader and iTunes, and obviously it’s relatively accurate. It goes wacko sometimes, but overall if you take a one-week moving average you get a pretty stable number.

[02:25] And like we were celebrating, we just crossed the 1000 subscriber mark within the last week or two. Now there’s a weird caveat here, because so many pod casts look at downloads. They look at download numbers.

[02:38] Some people will download an episode directly, or they’ll play it using that JavaScript widget on the website. There are just a lot of different ways people can get access to it. So RSS subscribers doesn’t actually, it’s probably a little low.

[02:49] But I guess the reason you and I look at it so much is, one, because it’s just such a consistent number and it’s easy to get access to. And, two, it tells us how many people really are committed to our show essentially. How many people are committed enough that they’ve either subscribed in an RSS reader or through ITunes?

[03:07] But you did some digging through our server logs, and you came up with some download numbers. This was kind of a surprise to me, because we had never looked at them or even talked about them. So what did you find in there?

[03:18] Mike: What I did was I went back to a specific episode on November 16th, and I took a look at just the downloads for that episode and in the first 18 hours after that went live. And what I found was, we had 1,892 downloads in those first 18 hours, and then the following 24 hours, we had another 1,263.

[03:41] So total that was about 3,000 downloads over the course of 36 hours. So about, I guess doing the math here, that’s almost 100 per hour, which is pretty interesting to see that kind of numbers.

[03:53] But the one thing you have to remember is that when you start looking at those, you also have to figure out which ones are full downloads and which ones are not. Because obviously somebody can start downloading something, and it could be just a drive by hit.

[04:05] I found this when I was selling downloadable software and shareware a while back. That if you have something out there and you are checking the number of downloads, you have to be very careful about what you constitute as being a download and what you don’t.

[04:18] Because just because that URL is hit, does not mean that the person downloaded all 10 million bytes or however many are in that full download. And for an application if they didn’t get all the bytes, they didn’t get your program. And there is no way that they are going to be installing that because they didn’t get it all.

[04:34] Same thing goes for an MP3 file, but probably not quite as much because people can download 80% or 90% of it and still get most of what you’re saying. But chances are good that they’re probably going to come back and say, “Hey I want to grab the whole thing so that I have all of it.”

[04:49] What I found was that we had probably between 600 and 800 full downloads on November 16th alone. So basically out of the total of 3,000 or so, you can probably knock off about anywhere from 60% to 80% of whichever number you’re looking at to actually get the number of full downloads.

[05:09] Rob: Really? So even with 1,000 RSS subscribers. Say we have 1000 RSS subscribers, you’re saying in the first about 36-ish hours, we probably only had about 600 to 800 full downloads? Am I hearing that correctly?

[05:23] Mike: Right.

[05:24] Rob: Even though there were 3,000 URL hits to the MP3?

[05:27] Mike: Yep. So basically three to five times as many hits to that page as there were full downloads. And some of the downloads were anywhere from a couple hundred K all the way up to 70% or 80% of the actual full size of that MP3.

[05:44] Rob: Well that’s kind of depressing, because when you had said the 3,000 number I didn’t really read any further.

[05:49] [laughter]

[05:50] Rob: I was kind of like, “Oh that’s totally cool, 3,000 people.” I guess that’s a little sobering. It’s not, I mean, it’s not that bad. When you think about it, if you think, “Wow 1,000 people are listening to what we’re saying, or 800 people in the first 36 hours.”

[06:02] Now that’s assuming everybody’s listening to it as well. Isn’t that another metric of how many people download it, and it just never gets listened to?

[06:10] Mike: Or how many people download it, and then share it with other people that they know and they put it on a web site?

[06:15]Because if you start looking at different segments of the population across the planet, there are certain geographic locations where it is common practice to download MP3s or podcasts, just download them once and then share them extensively throughout that area.

[06:33] Because getting those files from overseas takes forever or it costs a lot of money. So what they’ll do is they’ll download it once, and then they’ll share it across the local networks.

[06:42] Rob: You are a glass half full kind of person aren’t you?

[06:44] [laughter]

[06:45] Rob: I’m sitting here talking about how people listen to none of it or half of it, and you’re like, “Yep then they share with 10 of their friends.”

[06:52] All right well cool. I have two other quick things, and then we can dive into the content. One is I’ve continued to be fascinated with these AdSense websites that I purchased.

[07:04] I mentioned a few weeks ago, or a few shows, ago that I bought a block of eight AdSense websites, and they make around $300 to $350 a month. So I think they were making around $300 when I bought them, and I’ve improved them a little bit since then.

[07:18] But my goal obviously is to just get them up in rankings a little bit. And I’m playing around. I mean it’s more of an experiment than anything. The income’s nice, but I’m always amazed at how much I am able to learn from non-software product marketing. You know?

[07:32] You and I, we talk in the Academy about doing affiliate marketing and the value of that. Most developers don’t want to do that, because for them it’s all about building the product, writing the code. That’s the fun part.

[07:42] But it’s incredible the amount of stuff you can learn just by forgetting about writing the product and marketing someone else’s, and in this case even just doing AdSense stuff.

[07:53] Like I’m already looking at ways to automate some of the steps that I’m doing on a weekly basis. There’s obviously no work to do with an AdSense site. But I’m trying to actually improve them, create more content for them, keep the quality high, do some other stuff. And so I’m looking at ways to automate that.

[08:07] I’ve been messing around with ad placements, seeing how that impacts it, and doing click testing with Crazy Egg, doing split testing.

[08:15] It really is cool. I recommend, I think if you have any inkling of wanting to do online marketing even if it’s your product ultimately, there’s a lot to be learned from either having just a content website with AdSense – as long as you use it right, you know as long as you muck around with it – or doing some affiliate marketing.

[08:34] Affiliate marketing has a bad name; some people are scammy. But there’s a whole other segment of it that are legitimate people, and if you choose to be legitimate you’ll be legitimate.

[08:43] So I wanted to toss that in because I think we could probably do a whole show on that actually. It’s kind of a neat idea, and I’d like to explore that at some point.

[08:51] Mike: You mean specifically doing affiliate marketing or AdSense sites?

[08:54] Rob: I’d probably talk more about maybe first steps someone could take without building a product. Kind of just say how can I, you know if someone wrote in and said, “How can I learn, take a small step? Maybe I only have two hours a week or one hour a week, and I just want to do something.”

[09:09] It’s like maybe we could have some suggestions for someone. I think we might want to think about putting together an episode about that.

[09:16] Mike: OK yeah. Let me add that to the list of upcoming episodes.

[09:20] Rob: The last thing I wanted to mention is Episode 31 talked about five ways to monetize your product. I got an email from the CEO of InfluAds. I actually run InfluAds on my blog, because they’re such a niche ad network and they actually provide targeted, high-quality, very small display ads.

[09:41] He emailed me and he’s like, “Hey you should have mentioned us.” So I wanted to give him a shout-out. InfluAds is kind of a cool idea, I think. It’s InfluAds.com and they have these different little niche networks.

[09:52] The idea is that, A, they provide more value to your audience and, B, they provide more money to you because they’re more relevant and it’s not spammy ads and it’s more relevant than say AdSense or something.

[10:04] And it’s a tiny little ad block, which I really like, and it’s attractive. I’m not trying to be a sales pitch person, but that’s the reason that I’ve gone with them is that I can have this little, I think it’s 150×125 block on my site. And I can make quite a bit more than I would make from AdSense.

[10:20] So they have a “Startups & Entrepreneurs” network. They have “Design & UX.” They have “Work & Productivity” and they have “Web Development.” So I wanted to throw that out as other possibilities for monetizing your website.

[10:33] [music]

[10:36] Rob: So this week we are continuing last episode’s theme, and we’re looking at answering more questions. We just continue to get an onslaught of questions. I’m really pleased with how many questions are coming through both the phone line and, I think, more through the emails. Let’s jump in.

[10:53] Mike: So what’s the first one?

[10:54] Rob: The first one is an urgent message. It’s about an internet intellectual property issue and it reads:

[11:00] “If you are not in charge of this, please transfer this urgent email to your CEO.” [laughs]

[11:04] “Dear CEO, We are a leading Internet consulting organization in Asia. We have something urgent to confirm with you.

[11:09] “We received a formal application from a company called blah-blah-blah who tried to apply for micropreneur as an internet mark and following domain names from our organization: micropreneur.asia, micropreneur. cn.”

[11:20] And it goes on to list 12 different extensions. I think they’re all Asian TLDs.

[11:26] “In addition, we hereby declare the timeline for this issue is seven work days.” [laughs]

[11:30] It’s just this big sales pitch stuff. So what do you think? What do you think we do with this? [laughs]

[11:36] Mike: Well I would say that we probably trash it, because I actually got one of these for my Moon River Software domain. At first I was actually paranoid and said, “Oh my God! What’s going on here? Who’s trying to do this?”

[11:48] Then after about three minutes I calmed down and started doing a little bit of digging, and I realized that it’s basically just a scam. It’s a scam to try and convince you that you need to get these domains, and if you don’t then somebody else will and they’ll have access to them.

[12:04] And the grand total for actually buying those if you dig into it is something like $600 or $700. It’s ridiculous the amount of money that they’re trying to get from you for these handful of domain names that, quite realistically, nobody’s ever going to rank for. Because how are they going to drive the sheer number of links that they would need to those websites in order to usurp your traffic?

[12:27] Now the one thing I did think about was, “OK is somebody trying to put on a façade of being my company and possibly try to scam my own customers?” But after looking at it a little bit, I figured it was probably a lot more trouble than it’s worth for the size of the customers that I have.

[12:43] Rob: Yeah I wanted to bring this one up, because you had emailed me when you originally got it. This was four or five months ago. Then within a couple months I got one, I think either for my blog or for my Numa Group website, a consulting website I used to run. Then we got this micropreneur one within the last month.

[13:00] I just thought it was too funny, so I imagine some listeners out there are experiencing a similar thing. So don’t be afraid listeners. Don’t pay $600 for this. [laughs]

[13:09] Hey is the $600 because of the domains? Is that what you’d pay through GoDaddy as well? Is it just these are just expensive domains?

[13:16] Mike: Yes. They are expensive, and there are a lot of them.

[13:18] Rob: OK.

[13:19] [music]

[13:22] Rob: Let’s move to the next one. It is regarding Visual Website Optimizer. This is from Paul Yoder, and he says, “Here’s an article that I would love for you guys to discuss on your podcast.” We’ll include a link to it in the show notes, but it’s basically at visualwebsiteoptimizer.com and it’s on their blog.

[13:38] What the article says, the article title is, “Signups increased by 60% after removing the signup form.” Essentially the blog post shows a before and after of a split test, or I guess you would say an A and a B of a split test.

[13:52] The author talks about how the person at this company, Vendio, that they had followed best practices. They set up a landing page. It has an opt-in form on the left-hand side. Then it has a bunch of copy and bullet points and images on the right-hand side explaining what you’re opting in for.

[14:09] Then they basically just did a B test, a split test, and they removed that opt-in form. So all they have now is the image and the bullet points, and then a “signup now” button and that takes you to a form.

[14:21] So the hypothesis of the blog post is there’s no way this is going to be any better, because you’re actually adding a step to the process. So it’s going to decrease conversions.

[14:30] But when they tested it, they got 60% more conversions by removing the form and just putting a button there that says, “Signup now,” instead of actually having the form on the same page.

[14:41] So that’s the gist. That’s the setup, and discuss. Ready? Go!

[14:46] Mike: [laughs] Well I think a question I would have is: What was the original metric that they were working off of? Was that off of people just coming to the site?

[14:56] Because the other thing that you can look at is if somebody comes to the site, and it can just be a drive by. It could be a robot, for all you know. You have no idea what the quality of that initial hit is.

[15:09] Then from there, if you’re basing… Let’s say that you’ve got 10,000 coming to that site, and 30 or 40 or even 50% of those are just from a search engine that’s crawling your site, it means absolutely nothing. Those numbers don’t mean anything.

[15:23] Then if somebody clicks on “signup now” or if there’s any sort of JavaScript there to help filter those things out, somebody gets to that second page and actually fills it out. You can play with these numbers a lot.

[15:34] I think that if there were more information here, I’d probably be able to give better idea of it. I guess if I were looking at just those pages alone, that A test does look to me like it’s a little bit busy.

[15:46] And they also repeat themselves in a couple of different places. So for example it says, “100% free,” in two different places. One just says, “100% free.” And then in smaller text someplace else it says, “100% free online stores.”

[16:00] I think that the design overall of the second one is better. But I still have to say I question some of the metrics that they used, because I just don’t see what they all mean. And then they obviously don’t tell you exactly what the numbers are behind any of them. So there are a lot of ways that you can spin the information that they supposedly gleaned from this test.

[16:18] Rob: Well but you mentioned if there are some drive by hits or search engines or stuff, but wouldn’t that even out?

[16:23] I mean if you’re running a true split test, and you’re running it using Visual Website Optimizer – this is their blog so I’m assuming they used it to run the test; I think it actually says that up above – then obviously even if 50% of your traffic is garbage, that 50% is very likely going to be split in half and each sent to each page.

[16:43] You know what I’m saying? And then you’ll get the other half of good traffic. So it should even out, right? It shouldn’t matter how much of your traffic is garbage.

[16:50] Mike: I’ll initially agree with you, but I think that there are cases where that’s probably not true. Because I know that there are ways that this doesn’t work out, and I just can’t remember the mathematical, not equations, but…

[17:03] Rob: Well there are equations. There’s some pretty intense stuff to make this – What do they call it? – statistically significant. And there are crazy equations that I never bother with because Google Website Optimizer and Visual Website Optimizer handle it for you.

[17:15] So that’s why I’m saying I don’t know that I question the metrics here as much as you mentioned, just because I think that they probably handled it reasonably well.

[17:23] I’m sure Visual Website Optimizer, if it’s on their blog, that they have the back end view of it. So they probably have a decent idea that it was valid and such. Certainly something like this could be games, but that’s not my first instinct when I see this.

[17:36] Mike: What’s your first instinct?

[17:38] Rob: Actually my first instinct when I saw the A, which is where the form is on the left-hand side and the visual stuff’s on the right, I thought two things.

[17:47] One, I thought, “Why is the form on the left-hand side? I don’t know what I’m opting into.” Right? Because you read left to right, because it’s in English. The form should be on the right-hand side, because I’m naturally going to scan. My eye tracking is going to start in the upper left, and it’s going to scan down. You know they do these eye-tracking studies.

[18:03] So they’re starting it with the form. And what the form is it’s kind of a big sea of text boxes. There are five text boxes there and two check boxes. So it’s a big form, and I bet their bounce rate was ridiculous. Because they ask for a user name, password, confirm password, email, confirm email.

[18:21] Now number one, get rid of the confirm email. Number two, get rid of the user name and use the email. So right there you can cut it down to three form fields. The check boxes, yeah, you may need to leave those in. But then I would move that to the right-hand side. So I think there’s a placement issue first of all, and then I think the form is just too darn big.

[18:40] Adding the extra step to get people through, I don’t know that that’s, I think the blogger actually says, “This is a best practice.” It is a so-called best practice, of embedding the signup form. I’m not so sure that’s the case.

[18:54] I think it’s a best practice if you’re signup form is not visually scary. If it doesn’t make people want to run away. But when you have a big form, you see this all the time.

[19:05] I think if you have a big form, it is a best practice not just to have a signup now button, but on that first page you get one piece of information from them. So you’d say, “What’s your email?” That’s all you ask for. It says “signup now” and it just asks for email. It’s like, “Oh I’ll totally enter an email.”

[19:22] Or often it’s like a house search and it will just ask for a zip code. And you click on it, and then it takes you to the next page and that actually now has seven form fields that they want from you.

[19:32] But what they did was they got you to commit a little bit. They got you to express some interest, and now that you’ve done that they can show you a little more information. They’re trickling it to you. And that can help improve conversion rates.

[19:43] So I would argue that that process I just outlined is actually the best practice, not really what they were saying in the blog.

[19:48] Mike: Yeah when I first took a look at this, my very first inclination whenever I see these things that have some pretty outrageous claims like “60% increase in conversions,” the first thing I look at is, “OK well how are you getting to that number?”

[20:01] Rob: Right.

[20:02] Mike: And looking through this page, I don’t see a lot of actual info about the numbers. They could put 160% in here, and it would make no difference because they don’t actually show you any of the numbers.

[20:14] So it’s hard to understand how they actually got to that. So that’s the very first thing that I question. So I look at it more from that, “Where is the marketing department lying standpoint? [laughs]

[20:25] Rob: Yeah. No and that makes sense to scrutinize the numbers, and it certainly could be a little of both.

[20:30] [music]

[20:33] Rob: The next email is titled, “Direct versus email.” This is from Randy Zeitman, and he is president of the Philadelphia Web Design Company.

[20:42] He says, “Very good web podcast. Most everyone I’ve found are amateurish braggadocios or just plain inept. I’ve left this comment iTunes. My question is direct or email? I’m starting one of several local Philly web directories for specific white collar service professionals.”

[21:01] So I’m assuming he’s starting a web directory for lawyers and doctors and accountants, stuff like that.

[21:06] “As I’m positioning as smaller, local and personal – as I do with my website design service which dovetails into the directory subscription offering – at present I feel a direct mail old-school approach would best reinforce my trust message, albeit each message will perhaps cost 75 cents. Do you agree? And are there certain categories/models where direct mail is always the best avenue? Thank you, Randy.”

[21:32] Mike: It’s a hard question. Email is obviously a lot cheaper, but regardless of whether you’re doing direct or email, you still have to get the information of the people that you’re going to be contacting.

[21:44] I think that if you’re going to do direct, then you really need to probably do some A/B testing or split tests and figure out what sort of things work better, what designs work better.

[21:56] You don’t want to spend a ton of money and blast out this newsletter to, I don’t know, 1,000 different people spending 75 cents a piece on them or maybe 10,000 to bump up the cost of it a little bit, and find out that it just doesn’t work for you or that people don’t respond to that particular ad.

[22:15] So I think you would definitely want to spend a little bit more time designing it if you were doing a direct mail versus an email. But I think in either case, you’re still going to have the problem to get over, which I think is probably harder to figure out. Where do you get those mailing addresses, or where do you get those email addresses from?

[22:34] I think for the one that he’s going after, I think either one could work. But email seems a lot less personal, but then again so does direct. There’s no contact there. It almost seems to me like he’d be better served offering that to his current customer base as opposed to just blasting out a subscription message.

[22:56] Rob: Yeah. Well I think you’ve brought up a couple good points. I think it is a hard question to answer. So I think that’s the first advice, is to run a small test – maybe a 1,000 emails and 500 mailings or something like that – and compare the results.

[23:11] The other thing to think about is I’m wondering what his price point is. Because if his directory cost is, let’s say it’s $100 a year. And that may be way low. Maybe it’s $1,000 a year.

[23:22] I would hope it wouldn’t be less than $100 a year only because if you’re going after white-collar professionals, they should be willing and able to pay for it. And if it’s less than $100 a year, there’s no chance that you’re going to have a conversion rate with direct mail that’s going to pay for 75 cents per mailing.

[23:40] But let’s say his price is $100 a year, then you look at the mailings. I can’t even imagine what the conversion rate on a direct mail piece like that is. I would guess it’s somewhere between .1% and .5%, just to throw out a number. So at .1%, that means you are at one in 1,000. And at .5%, you are at one in 200.

[24:02] So 200 mailings at 75 cents a piece is going to cost $150. So you need to make, if you’re at .5% – which I think to me that sounds like a very high conversion rate on direct mail, especially to white-collar offices, dentist offices, doctors, lawyers.

[24:17] I bet they receive a lot of “junk mail” which is what these postcards are going to be seen as, and I would imagine .5% is a lot higher than you’re going to get. So I think that’s a big factor here, is to look at your price point, and try to guesstimate conversion rate upfront, and figure out if it’s at all feasible, at all profitable.

[24:36] Now the other thing to keep in mind is if it is a directory and it actually provides value, your lifetime value of that customer may be more than one year. So you can’t just look at the first year like I did.

[24:46] Mike: Yeah I was just going to mention that. If the customer sticks around for two years or three years or something like that, then that’s $300 from that one customer as opposed to $100.

[24:55] Rob: Right and you’ll only know that once you’re way down the line. But that’s one factor, I think, to keep in mind. I think the other thing is outbound email is kind of a tough way to go. I don’t know how to do that anymore, if you can do that without it being considered spam. I don’t even know what to recommend on that one.

[25:12] To me it does seem like mail is certainly… I think less people are doing direct mail these days. At least I get less direct mail than I used to. I don’t know if white-collar offices do. But it’s way more expensive to do it that way. But yeah I would agree that it might be a little more prestigious.

[25:28] Although if you’re looking at a price point of more than $100, let’s say you’re talking $200 for a listing or $500 for a listing, at that point, I think it might be worth sitting down and doing some cold calling, which is something I never recommend.

[25:43] But in this case, if you’re looking at email and snail mail and cold calling, I think cold calling would actually get you the highest conversion rate of those three.

[25:51] Mike: And although it costs more, it’s probably more effective.

[25:54] Rob: Yep. But again you can’t justify that at $100 price point. I do think it needs to be a more expensive offering in order to do that. So maybe that’s something again, Randy, for you to think about is: If you’re not at that price point, do you need to get there, or can you get there in order to justify maybe a higher converting marketing approach like cold calling or something?

[26:12] So I don’t know. I hope that helps. I realize it’s not a clear-cut answer, but it’s a tough question.

[26:17] Mike: Yeah I think it’s just that there are some details that we don’t necessarily know. The whole realm of doing email versus direct mail, the problem is that you really don’t know what the answer is until after you’ve done it.

[26:28] That’s a terrible way to try and do business and figure out is this a market that you should go after. Because it’s going to cost you money to find out, and you’re basically gambling.

[26:38] Rob: Yep and I think the key is, and I’ve seen people do this successfully, is to start with a very small sample size. Because obviously you’re going to be buying a list from someone, whether it’s an email list or a mailing list, a snail mail list.

[26:49] You’re going to need to start with very small samples. Email lists, 500 or 1,000. Mailing lists, snail mail, I said 500. You may even want to start with 100 or 200, depending on how low you can go.

[26:59] Because like Mike said, you don’t just want to do a mailing of 5,000 and find out that it doesn’t work, because then you’ve eaten, what, $4,000 or something? That’s not good.

[27:07] Mike: I think the biggest cost that most people will look at right away is the fact that if you’re going to start doing this type of testing, how much time is it going to take you to do that testing, and wouldn’t it just be more cost effective to scale up?

[27:20] That’s probably not necessarily true, because if you spend, let’s say you spend 50 or 100 hours trying to figure out what’s the best way to do it. And you have to monetize your time somehow, so let’s say it costs you $5,000 to do that. And you’ve tested it on maybe four or five different segments of a couple hundred people in each of those segments.

[27:40] Then what you do is then you scale up, after you’ve figured out what works the best and what actually has the best conversion rate.

[27:47] Or if after running the numbers you realize that if you scaled it up to 10,000, it still wouldn’t work, or you need to adjust your price point or something along those lines. So those tests are critical to figuring out whether you scale this up or you just abandon it entirely.

[28:01] Rob: Absolutely. I think that’s very important, and I don’t think it would take anywhere near 50 or 100 hours to test this via snail mail.

[28:07] I think that basically you go to a print designer. You say, “I want three different postcards designed for this, or three different mailings.” You just design them all up front, all at once, or maybe you do two, or maybe you do four. And boom, you just split those and send them out to 100 people each or 200 people each, and you go from there.

[28:24] So your effort, it is frontloaded, but designing two postcards instead of one really isn’t that much more. Your marketing and your copyrighting are going to be similar. Maybe you’ll have different images and different placements and different calls to action. So I agree with you. I think it’s a minimal upfront investment for a potentially large gain down the line.

[28:43] [music]

[28:46] Rob: The next one, and I think it will be the last one we do for this episode, the next one is about handling support requests, and it’s from Paul Yoder. Is this the second question this episode?

[28:57] Mike: It is.

[28:58] Rob: It says, “Hi Mike and Rob. I’m interested in hearing a podcast episode on how you guys handle support requests you receive from your customers. Thanks for the great podcasts.”

[29:05] Mike: I think it’s a little short answer probably for an entire podcast episode, so we’ll just answer it in this one with questions.

[29:11] Rob: Yeah exactly.

[29:12] Mike: Most of the support requests that I get are basically from email. I mean there are people out there who do offer phone support, but I restrict mine basically to email.

[29:22] If there’s a support request that gets to the point where I feel that it’s warranted to go to the phone because it would take me a lot less time to explain that or maybe do a WebEx or screen sharing or something along those lines, then I’ll certainly do that.

[29:37] But I don’t offer phone support as a tier one support, and I also make it clear to people that, “Hey you’ll get a response within about 24 to 48 hours. You’re not going to get a turnaround time of five minutes.

[29:47] Most of the support that I have, it gets channeled through FogBugz, so it makes it very quick and easy to handle all of those different support requests.

[29:56] It also makes it easy for me to manage different projects or products that I have support for, and categorize them and track them and figure out what sort of things are causing me the most headaches.

[30:07] Sometimes I’ll outsource that stuff. I have an internal wiki that I use. I have a VA who will answer some questions on my behalf. But depending on what the question is, those things just get forwarded back over to me if it gets too complicated or it doesn’t really match the script of the typical questions.

[30:25] Rob: Yeah I think you and I are set up pretty similarly. I use FogBugz as my main point of contact for most of my products. There are some that just go through email and go directly to a VA Gmail account that a VA or two answer in response to.

[30:44] But those are not super critical stuff. The questions that are surrounding products that are more software based, those do come through FogBugz just because they tend to be more complex and they’re not just one reply, and I like to be able to assign them around.

[30:58] The other thing regarding the phone is I used to provide support for DotNetInvoice, and I did it personally. This is probably three years ago, and I just had my phone number up there. It was an 800 number; it was from kall8.com. I could say between 9:00 and 5:00 send it to my cell phone, and then all the other times go to voicemail.

[31:16] It was horrendous. [laughs] It was a horrendous experience. A, I hated the interruptions. I got interrupted a lot. And, B, I couldn’t believe how much time I wasted walking people through very basic situations.

[31:29] The simple things you can find online if you did a search, people would pick up the phone and call me and expect me to walk them through installing Visual Studio or some completely lame thing that is really not up to me to support essentially. We write invoicing software, but you need to have your environment in check before you call.

[31:48] It’s why I don’t do phone support anymore, and I don’t recommend people do it. We do have an 800 number. We offer certainly sales and presales over the phone.

[31:57] And then every once in a while an issue will come through and it’s obvious that it’s going to be easier for us to get in contact with them over the phone, and we do that. But it’s pretty rare these days, and I’ve found that it’s a lot more efficient on both ends frankly.

[32:11] Mike: Yeah I used to offer phone support for my consulting business, and you’re absolutely right. The distractions and the disruptions of the things that you’re working on, especially when you’re working on code and you really need to be concentrating, those just kill your productivity. It’s just awful.

[32:27] Rob: Yeah and it’s terrible when you have consulting clients, because you really can’t tell them to go away, right? Because they tend to be paying a huge chunk of your monthly revenue.

[32:35] I only had two or three clients at any given time. So if a client would call me, you kind of have to pick up, or you at least have to call them back in a reasonable amount of time, even if they’re pestering you.

[32:44] Someone calls your four or five times in a day, well if they’re writing you a $10,000 check at the end of each month, you kind of need to get back to them, or you need to decide that you’re going to fire them at some point.

[32:53] But with a product, if you have something you’re charging $20 a month for or a one-time $300 fee, there’s more leeway there. It’s not that you can, you certainly can’t abuse customers. It’s nothing like that.

[33:04] But it’s just that you have the option to say, “You know what? I can’t help you with this. If you don’t have the basic stuff, you can either hire us to do it, or we can recommend someone who could do it for you, or we can provide a refund.” You just have more options with that when you own a product.

[33:17] Mike: I think the whole thing boils down to price point. As you said, at $300 for a product it really wasn’t worth it. But if somebody’s giving you $10,000 in a month, it’s a little different story.

[33:27] Rob: Right.

[33:28] [music]

[33:31] Mike: So if you have a question or comment, you can call it in to our voicemail number at 1-888-801-9690, and don’t be shy about calling. Or you can email it in mp3 or text format to questions@startupsfortherestofus.com.

[33:43] If you enjoyed this podcast, please consider writing a review on iTunes by searching for “Startups.” You can subscribe to this podcast in iTunes or via RSS at startupsfortherestofus.com.

[33:52] Our theme music is an excerpt from “We’re Outta Control” by MoOt, used under Creative Commons.

[33:57] A full transcript of this podcast is available at our website, startupsfortherestofus.com. We’ll see you next time.

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9 Responses to “Episode 35 | More Questions Answered”

  1. Thanks for the DNS blog post mention.

    BTW, can you comment on how are Influads doing compared with AdSense in terms of revenue?

  2. I think it’s doing better than AdSense would, but I don’t have hard numbers since I haven’t put AdSense on my website to compare. AdSense tends to be intrusive (IMO) and have low CTRs with technical audiences, so I don’t think I’ll be running the experiment anytime soon.

  3. Nice about the presentation in Spanish but it’s “Éste es el Episodio 35 de Startups for the Rest of Us” with accent in the first E.

  4. I’m really interested in understanding various aspects of marketing so a show or segment on affiliate marketing and/or AdSense sites would be great. BTW, could you post some links to the AdSense sites. I have a vague notion of what one might look like, but all the images in my head are negative.

    Keep up the great work on the show. It really is the best show for software entrepreneurs. Please keep your software product businesses as the prime drivers of the show. I know you have the Micropreneur Academy but you don’t use it as the primary example of how to start a business. I’ve found other shows that focus on their service for showing people how to be entrepreneurs. They tend to become recursive and I have trouble extracting value unless I want to start a service showing others how to be entrepreneurs.

    • >> BTW, could you post some links to the AdSense sites

      I don’t think I’m going to do that for now. They are in tiny, non-competitive niches and as soon as I post a link I’ll have 5 competitors. I know I can out-SEO them, but it will cost me time and money to do so…so for now I’m going to keep the exact sites under wraps.

      >>Keep up the great work on the show. It really is the best show for software entrepreneurs.


  5. >> I don’t think I’m going to do that for now.

    Shows just how ignorant I am. I didn’t even know not to ask.

  6. No problem at all. I feel the same way when I hear podcasters talk about their apps but don’t provide URLs.

    I definitely understand the curiosity.

  7. Regarding completed downloads, I listen with the website widget and I always skip the wrap up at the end.