Episode 98 | Eight Sentiments That Do Not Bode Well For Your Startup
The eight sentiments:
- “This product idea is awesome. Now off to the basement to build it; see you in 6 months!”
- “I haven’t even finished the features I want to build yet and potential customers are already asking me to build X.” Translation: “I’m sticking to my product idea no matter what my potential customers tell me.”
- “I’m halfway done with this idea…but that shiny new one over there seems so much better.”
- “I plan to quite my job 60 days after I launch.”
- “It would take me as much time to explain this task to someone else, so I’ll just do it myself.”
- “I don’t want to bother with all that click through and conversion rate nonsense…I’ll just build a great product.” Translation: “Build a better mousetrap is not a good strategy”
- “My idea is pretty hard to explain, do you have 20 minutes to spare?”
- “I don’t want to talk publicly about my idea because someone might steal it.”
[00:00] Mike: This is Startups For The Rest Of Us episode 98.
[00:12] Mike: Welcome to Startups For The Rest Of Us, the podcast to help developers, designers and entrepreneurs be awesome at launching software products. Whether you’ve built your first product or you’re just thinking about it. I’m Mike.
[00:19] Rob: And I’m Rob.
[00:20] Mike: We are here to share our experiences to avoid the same mistakes we’ve made. How are you doing this week Rob?
[00:24] Rob: I’m doing pretty well; I’m back off of 48 hours of being completely off the line. We went to the central coast to California around Big Sur area and went camping car camping with my two kids and then my brother and kids five kids, brother and his wife.
[00:41] Mike: What is car camping?
[00:43] Rob: You go to a camp site you pull your car in and then you park within a walk of that like there is technically a picnic table, fire pit setup and you setup a tent and you just have kind of this little camp spot there and it’s frankly before we had kids we always back packed right, you do a four mile hike up the hills seven mile hike up to some hill to a lake. But when you have a two and a six year old that’s just not as conducive.
[01:05] Mike: I see, yeah I’m outdoorsy in that I like drinking on patios.
[01:10] Rob: Yeah I know totally. It’s good to get out in nature and all that but it’s tough men, it’s tough with kids and trying to get all the, you know , it’s 40 something degrees at night and so I kept worrying that the kids were going to be too cold and had to lug air mattresses. Normally again I would sleep on, you know, a little mat. It was fun made smores, did some hiking and saw some waterfalls. But I was totally gone with no, you know it’s weird, I’ve gone places with just my phone for several days at a time and you can just email and make sure no kind of no emergencies came through but men I was off the grid for a couple of days. From Sunday until Tuesday and frankly it was pretty refreshing.
[01:45] Mike: Really? I find it disconcerting when my cell phone just doesn’t work at all.
[01:49] Rob: Well here is the thing; it was disconcerting for about the first day. Because it’s like wow I need to check where we are where is the map? Oh you can’t map and then maybe someone mentions something oh yeah that movie I want to find out who it is. I go to look it up at Google and it’s like duh you can’t do that. But then I felt like I slowly started to adjust like adjust out of that. Actually the fast pace of life kind of goes away. I started feeling like just more calm. In that sense I would rather be away for a longer period because I think if I’d hang out for maybe a week offline, I would have gotten more used to it but it’s hard for me to get into work when I come back. Essentially I had five days off right? Do you find you have that issue when you come back?
[02:24] Mike: Yeah to some extent. I mean if I’m just completely disconnected for whatever reason it seems like it takes a couple of days to kind of work my way back into, I will say a mental state where I’m going to be actually productive. I think a lot of it has to do with just trying to figure out okay well now I’m back to work what should I do, what should I do first? Because there is a billion things to do and it’s just that because there is so much to do you’re just not really sure where to start sometimes.
[02:47] Rob: Yeah, I must feel like it’s a learned skill. The more I go away on these short trips these one and two day trips in addition to the weekend, I’m starting to do once a month, twice a month just I’ll go to the coast or whatever. I’m becoming better at being productive once I get back. I feel like certain people and I’m one of them has a real hard time getting back and other people come back refreshed right? You take four days off you come back and they are just chomping at the bit and getting all types of stuff done but I’m not there yet.
[03:16] Mike: Got it.
[03:16] Rob: What’s going on?
[03:17] Mike: I’ve just been reworking some of the backend database in AuditShark to support some fun stuff called bidirectional database synchronization.
[03:25] Rob: And what are you doing that for?
[03:26] Mike: The short answer there is a component in AuditShark that people will install locally and it needs to synchronize with the cloud database.
[03:32] Rob: A component that you install locally has a database built into it?
[03:35] Mike: Yes.
[03:36] Rob: Okay.
[03:37] Mike: It’s basically about making database calls back to my database to be able to be able to store that information, that’s really what it is.
[03:42] Rob: And are there any, I mean you’re going to dot net right?
[03:45] Mike: Mmmh.
[03:46] Rob: Are there any libraries that help with that kind of stuff or you have to write from scratch?
[03:50] Mike: There is a synchronization library that Microsoft publishes but you have to have certain database columns in place in your database. What I’ve done is I’ve basically shoe horned these new columns into the database. There is like 11 different database tables that I need them in and essentially what you should do is you have to put four column into each of the tables and then you also have to create like a tombstone table for each of those tables. So I had to add 11 tables and then put two new fields into each of these new tables and then in addition to that change I had to add four more columns to every one of the existing 11 tables.
[04:26] Rob: I love that phrase “tombstone tables”.
[04:27] Mike: Well, its’ because if you delete something and you’re trying to synchronize between two tables how do you know where it was deleted?
[04:34] Rob: Right, right.
[04:35] Mike: Or where was add it because it could be in either one, it could be deleted from one table or added to another and depending on which ways you do the synchronization first you may be adding it or you might be deleting it. It’s just you have to keep track of that stuff which kind of sucks. But it’s getting close to being done so once I get that done then I can move onto other things. I’m working with some people from Microsoft on helping get some of the other stuff in AuditShark set up for automated and testing and deployment. Because right now I’m not doing a heck of a lot of changes that I think need to be tested, but extremely strenuously but I can see it done in the future and I’m trying to get into a position where down the road I’m not going to have to worry about that as much because I’m going to have like a full blown staging environment that’s going to be mostly a copy of production like a true staging environment which Azure doesn’t really offer you that.
[05:20] Rob: You said you’re working with folks from Microsoft, like their support or their technical help?
[05:23] Mike: They are BizSpark developers.
[05:26] Rob: Developer liaisons or something?
[05:27] Mike: Kind of yeah I mean like they reach out to you and say, “Hey do you have any questions or problems or anything we cans help you with?” And then I have this problem, so I have gone back and forth with them a couple of times. Right now at first I was just working with one person he handed it off because he wasn’t technical enough. That’s person basically involved somebody else’s. Now I’m involved with like three different people kind of talking about it because it’s just such a giant issue.
[05:50] Rob: Got it, did you tell them about your tombstone tables?
[05:53] Mike: No I did not.
[05:54] Rob: Okay, I wanted to talk about a new iTunes review and it’s from RC in New York City. He says a great podcast like the title says for the rest of us. I discovered this podcast of Stitcher when I ran out of tech entrepreneurs to listen to and boy was I pleasantly surprised. I was used to the tech — I like this next phrase a very good tonal phrase — I was used to the tech luminary type podcast where people bask in the glory of their own light and speak in obtuse generalities. Sir you have quite a vocabulary. Being a non tech wanna-entrepreneur it was refreshing and informative to hear the tough examples, experiences and tips and tricks of Rob and Mike as they slog week to week to make the projects/businesses a success. So thanks for that review RC in NYC we are up over 200 ratings now, really appreciate a rating and or a review on iTunes if you get the chance.
[06:45] Mike: You know I got an email from listener who had also send me –he’d heard that I was talking about putting together documentation for AuditShark. Although I’ve hired somebody to do it who has a background in writing documentation for compliance and security products, so I don’t really need this. But the products point from me to was something called Screen Steps Live from Blue Mango Learning and it looks like it’s a SAS application where essentially you sign up for a subscription and they will essential host your videos and just kind of streamline the process for building FAQs and tutorials and things like that’s for your product. So if you don’t have access to developers that’s a great tool to leverage that. But they do aim it specifically at non developers and I know that we do have a number of non-developers who listened to the podcast. So I thought I’d share that little tidbit and then send over.
[07:36] Rob: That’s pretty cool. Man they need to get a better domain name. They are at bluemangolearning.com/screenstepslive. Probably not ideal. I searched for their product name expecting it to be dot com or something so product sure looks interesting for that niche. So I am working on a basically a bit of procrastination because I don’t actually want to do real work. Every month about this time, I’m looking at my HitTail dashboard and I’m trying to figure out, where am I going to be at the end of the month? There is revenue sources coming from a few different things I’ve old billing, I have new billing, I have article billing I have just a lot of stuff to add up and prorate for the rest of the month.
[08:15] I found that there is so many ups and downs during the month, there are just certain days where a lot of people signed up one month and so during a simple prorating of, hey we are X days into the month multiply that by out to 30 or 31 days is just not accurate. So I’m working on a more intelligent prediction query for HitTail but it’s surprisingly challenging. I know the conversion rate of how many go from trial to paid during a particular 30 day period, but if I’m half way through that period for them and they are still there, then they have a higher chance of sticking around.
[08:47] So I can’t just use this blanket percentage across everyone, I actually have to prorate the conversion percentage across people who are still there. So I’ve only spend about 15, 20 minutes on it yet but like I said it’s not super productive per se but I do feel like it’s going to give me some better insight, I know where I’m going to stand at the end of each month. I’m still trying to sort out if knowing that information is actually helpful or actually helpful if it’s just mentally helpful for me.
[09:10] Mike: Well I think it might help prevent you from becoming distracted and thinking about it more often because if you have a dashboard that’s accurate and shows you that information and you’ve already done the code behind it to know that it’s pretty close to being accurate then you won’t think about it as much to try and figure out all the different scenarios for, “Oh well, my conversion rate last month was this and the month before that was this” and you’re trying to figure out and do some mental interpolation between those and figure out what your conversion rate is going to end up bringing in for revenue this month. So if you’re not thinking about all those different things kind of frees up your brain to think about other stuff.
[09:45] Rob: Yeah that’s a good point and that’s actually the way I look at it because every time I look at this dashboard I know that 90% of the numbers I’m like yeah those are on, those are on. But this one I’m just like, you know, because I have just a simple flat paraded prediction now and every time I look at it I’m like I know that doesn’t include this, I know it doesn’t include people who are currently in the trial funnel. I mean it’s just, it’s such a weak estimate that I’m not taking it seriously. Every week probably I do want to have an idea of where I stand this month and where I look to be by the end of the month. So I download an Excel file from PayPal and I go through some manual work and add it all up by hand just to see where it is and it would be so much better to have that for real.
[10:22] Mike: I have a question for you; I mean you obviously have all this historical data right?
[10:26] Rob: I do.
[10:27] Mike: Why don’t you go back to the historical data that you have and try and figure out develop an algorithm that will guess what it should be at the end of each month and then take a look at those and see how close it is at being accurate as opposed to trying to kind of guess because that’s basically what you’re doing right now is you’re guessing. Then you’re doing to have to wait a couple of weeks to try to figure out whether that’s accurate or not as opposed to going back and looking at the historical data and you already have that stuff so you can essentially run through the algorithm see if it’s right at different points along the month, see how close it is and just kind of do a percent gap and says oh it’s within 5% or 10% tolerance of this number and that’s good enough as long as it’s that close.
[11:07] Rob: Right no that would be what to do except for the historical data I have, these are live customer records and so the data is actually not in the form it was when I was in say the middle of May. So in the middle of May I had X number of trials, certain number of people had cancelled by that point but over the next 15 days in May as more people cancelled then they get set to inactive. So their records are actually different now. So I don’t actually have a snapshot of the database on that day. Does that make sense? So I can’t go back and rerun the algorithm based on what it looked like at that point.
[11:39] Mike: Oh I see.
[11:40] Rob: You know what I’m saying? And like it’s not like I have some huge data mining thing that I took snapshot of it everyday and I could run it. It’s live data that has changed since then.
[11:50] Mike: I see, you’re not tracking the historical events as much as you’re changing the records of the individuals that are in the system
[11:56] Rob: That’s right and if I were — a couple of things one if I was architecting the system I would of course have a cancellation date instead of inactive bit because then you have the actual information right then I could go back and do exactly what you’re saying. But I didn’t architect the system and it’s not worth me for this thing it’s not worth me going back in you know adding a bunch of code just to get a little better prediction of algorithm. I think even given what I have I could probably spend less than an hour right now and get within 5 to 10% without changing app code.
[12:25] Mike: I see, I see.
[12:26] Rob: But no I like your approach that’s exactly what, that would be the ideal approach to it.
[12:30] Mike: Yeah what I did recently is I hired a developer who built the web hooks for stripe and then whenever stripe does something it basically sends out information back to this web hook that is on my server. It sends just information about hey this is just what happened and it sends and I think it sends JSON over through that request. I hired a developer who built two different things one was to go into stripe and pull in pretty much every single web hook that has been processed over the past 30 days and the second one was to actually implement something so that there is a web hook out there that I can have live so that whenever stripe does something it will kick off, it will send something to that.
[13:12] All I do is I take the entire JSON query and send it directly into my database so that if I ever need to put new post processing on it later, I don’t have to worry about it because stripe only keeps track of the last 30 days of web hooks that they’ve basically send out the last 30 of events. So to get around that I basically just save every single JSON query that they send to my web hook and throw in the database and it’s not like I really care about the storage space or anything like that. Then if I ever need to run through and do any post processing on anything all the way back to the beginning of time I can do that.
[13:42] Rob: Interesting I haven’t done any of the web hooks stuff; I’ve looked at it as kind of…
[13:47] Mike: Neither have I.
[13:48] Rob: Premature optimization thing I didn’t even know they only held it for 30 days. What kind of information do they have that you could need? Because I haven’t had a need and I’ve been running on stripe for about nine months and I haven’t had a need to go look at that stuff. What kind of information that I don’t have right now would you have in your database?
[14:04] Mike: So they have whenever somebody signs up. They have whenever there is a cancellation they have, whenever payment was attempted but fails, whenever payment was succeeded, whenever they send you money. I mean pretty much any given like all that happens and they keep a record of it.
[14:21] Rob: So you’re looking at the logs right, you’re logging events is what you’re doing. Because I can get that data but I only get the data at the customers and look at the payments and look at this and that but I can’t look at the event of when that happened and that’s what you’re getting.
[14:36] Rob: Got it.
[14:36] Mike: I mean I don’t have any specific use for it right now but it was a task that I was able to, you know, send out there and I knew that once that that 30 day period time goes by I’m not going to have that data ever gain. So if I ever need it in the future it would be good to have it and if I don’t ever use it that’s fine it’s not like I actually did the work on it anyway I just scoped it and said here is what I need. It took me it was like literary five minutes of my time to say this is what I need.
[15:01] Rob: You realize that the phrase “If I ever need it in the future” is the very definition of premature scaling that we talked about in the last episode?
[15:09] Mike: You know but I think with the premature scaling you’re also talking about something that takes more than five minutes of your time.
[15:13] Rob: You’re right; right you said something to me shortly before we hit record.
[15:17] Mike: I had just said something like, “Oh I hate java” and you asked me if I was working with java and I said no I would shoot myself if I had to code in java.
[15:26] Rob: And why is that? Did you code java back in the day?
[15:27] Mike: I did for a while it just irritated me for some reason I don’t know why. Part of it was the IDEs that you had to work with and don’t get me wrong I haven’t worked with java in probably nine years.
[15:37] Rob: You’re still going to get hate mail.
[15:39] Mike: Yeah.
[15:41] Rob: And you know what people should send you? Java is not bad you work with .net you idiot.
[15:46] Mike: I don’t care, I just it rubbed me the wrong way when I was working with it and it just seemed like they were always making these weird changes that didn’t make a whole heck of a lot of sense. Then they came out with net beans and this and that.
[15:58] Rob: It was pretty gnarly. It was pretty complicated.
[16:00] Mike: What is all of this stuff? It just didn’t make any sense to me and so I just kind of got away from it.
[16:05] Rob: I coded java for about 18 months and it was I found it complex. It’s my memory of it, I remember the ring no-good IDEs for it and I remember it being extremely complicated even and that is coming I’m a dot net developer like dot net is not simple compared to php and ruby and python and you know those types of frameworks. Java really kind of pushed it over the top and maybe it was the documentation wasn’t good so it just seemed complex but it was definitely a struggle to build things that are easier to do in a lot of other languages. It’s also building web apps and I just don’t think it’s the ideal language to build web apps with.
[16:37] Mike: Yeah I don’t either. I would attribute a lot of it to the IDE.
[16:40] Rob: Right.
[16:41] Mike: And I think that the reason I think that is because at least with dot net if you’re typing something you get a little interface that pops up you’re starting to type a function and it just will auto complete it for you and it will show you all the command-line parameters for that. Whereas if you have a bad IDE for java you are not getting any of that but with dot net you’re typically you’re working with visual studio and everything is right there you don’t generally have to worry about it.
[17:06] Rob: Yeah most languages don’t have the intelisense that dot net does and you get so spoiled by that as a developer because it dramatically improves your productivity. But stepping into when I step into php I have I’ll just say it takes me a lot longer because I have to sit there and look everything up, it doesn’t auto populate it like it does with .net.
[17:23] Mike: Yeah the other issue I think I have with java was all the debugging.
[17:27] Rob: I remember spending like six hours just getting a step through debugging working on a JSP server
[17:35] Rob: So Mike and I are going to be talking about eight sentiments that do not bode well for your startup. Realistically these are a bit tongue in cheek. But before the call Mike and I were talking about how each of us including us here on the podcast as well as most people out there and most entrepreneurs that we talk to make at least one of these mistakes and typically several of them during the time of building launching a product. So the first sentiment is, “This product idea is awesome. Now off to the basement to build it I’ll see you in six months”. Mike how many times have we covered that on this podcast?
[18:06] Mike: At least one.
[18:07] Rob: We’ve talked about this certainly with AuditShark you built it for quite a while before showing the actual app to customers, I think we see this everyday. We get questions from podcast listeners who basically say, “Glad I found your podcast, I’ve already build this app and about to launch it but I have no mailing list, I haven’t done any marketing”. But that might be the most common email I get these days actually is ,“ I have this product and either I’m just about to launch or I launched a month ago and no one is buying and I don’t know what to do now”. Typically my first thing is, “Well, does anyone want this? Like have you talked to customers?” If you didn’t do it before you built then you need to do it now so that you can determine if you should, you know, even continue with this product. There is no reason to throw good money after bad.
[18:51] Mike: Or good time after bad.
[18:52] Rob: Indeed. So our second sentiment that does not bode well for your startup is, “I haven’t even finished the features I want to build yet and potential customers are already asking me to build X”.
[19:04] Mike: I love this one because the translation to this is basically, “I’m sticking to my product idea no matter what my potential customers tell me”. I have this vision in my head of stuff that I want to build but people are asking me to do these other stuff and I’m not done yet I’m not done yet I still want to do this other stuff. What they are telling you is what they want and what they are willing to pay for and what you’re telling them is no I’m going to do this because this is my vision. You’re basically saying my vision is more important than what my customers want.
[19:31] Rob: Yeah and this is a really hard balance because as soon as you launch an app and as soon as you have people using it you’re going to get feature request especially if you launch when you’re still a little embarrassed about your product and I think most V I.0 are they should be launched when you’re still a little embarrassed about it. So you’re going to get a slew feature request and it’s up to you to figure out well which one of these should I actually implement, which one of these maybe lined up with my vision, which ones don’t but are still worth implementing and maybe even have a higher priority that the features I have in mind because frankly your product can go down an entirely different road than you imagined and it could be more useful to your potential audience if they are using it in a way that you never thought possible.
[20:11] Mike: Yeah and it’s interesting the dynamic here because I was actually having a conversation last night with prospective partner of AuditShark and he’s asking me he’s like, “ What do you see is the vision for this, you know, what do you envision this turning into down the road?” But I basically put it blunly and I’m like, “The product direction is going to be driven by what the customers want, and at the end of the day if I do what the customers want then I will make a metric ton of money, it’s not going to matter. But it’s really about what they want not necessarily what I want for the product.
[20:44] Rob: Yeah and again that is a really, it’s a hard thing to do to actually implement what you’ve just said. Because it’s hard to know when you get 20, 30, 40 customers all sending you a request you can’t do everything the customers want, you have to parse it out and figure out which on or which set of features is actually the thing that you can implement that is going to help the most customers and attract the most new customers to the product. So the third sentiment that does not bode well for your startup is, “I’m half way done with this idea but that shiny new one over there seems so much better”.
[21:19] Mike: Aren’t we all guilty of this one?
[21:21] Rob: Yeah absolutely. Every month yeah I’m currently evaluating ;let’s just say a couple other potential acquisitions and I’m in due diligence right now I’m signing an NDA on one and right away I told it to one of my mastermind groups and one of the guys was just like what are you doing? Like I feel like you’re taking your eye off the ball. You know he didn’t say it quite like that but in so many words.
[21:41] Mike: I’ll say it, I feel like you’re taking your eye off the ball.
[21:43] Rob: Yeah, no it’s definitely something in the back of my mind I mean if you listen back 10 episodes I’ve been talking about this you know about to shift focus because there is this thing that I’ve said over and over is that I never work on two products. I never try to grow two products at the same time. Anytime I’ve tried to that I’ve failed because there is just too much to do. I have a couple tricks up my sleeve that I’ve never had in the past — but the bottom line is it’s risky game and it’s always a gamble if you’re going to try to either do two idea at once or even worse just leap from one half completed idea to the next because that’s a good way to kill three, four, five years of your entrepreneurial career and never actually launch anything and launching is when you really start learning.
[22:25] Mike: Yeah I mean you can take a look at the hard drive of just about any developer and just count the number of unfinished products and that right there will give you a good idea of, you know, how I guess pervasive this particular problem is. I mean there are people who just leap from product to product or projects to projects because they never actually finish anything and after two, three, five, eight years of working on this stuff they still have nothing to show for it. I think we are all guilty of that at some point I mean there is always these projects that we get involved in that you kind of bogged down, you loses your motivation to work on it and it’s no longer as exciting and sexy to kind of push through to the finish line because you don’t have customers yet, there is nobody really relying on it yet and you’re just like, “Well you know that looks really interesting” it’s very easy to get distracted and go on a different direction.
[23:13] Rob: Yeah and don’t get me wrong here I’m not saying don’t own multiple products because obviously that’s you know really the approach that I’ve taken on, I’ve had success with it it’s not to bounce from idea to idea without completing one and either getting it to a state of automation or of some type of semi autopilot state where you are not just having to really focus on it to make it grow all the time. Our fourth sentiment that does bode well for your startup is, “I plan to quit my job 60 days after I launch”. So why is that a bad sentiment?
[23:45] Mike: I think that is a bad sentiment because it places, I’ll say, unrealistic expectations on your launch and when you don’t meet those expectations it’s not only mentally draining but it’s also going to put you in a position where you’re starting to look for excuses, why didn’t this work? What didn’t go right? And you’re going to basically put blame everywhere except for where your expectation should have been. I just don’t think that it’s good for your mental health; I think that being able to quit your job 60 days after launch is just an unrealistic expectation to have for virtually anything. I mean I can’t think of anything where that sort of thing would happen. They are going to take some time to kind of get to the point where you have the steady stream of visitors and customers who are coming in and saying, “Yes, I’m willing to pay money for this.”
[24:31] Rob: Right the problem is that, if you set your expectations so high and then you fail to hit them and you fail miserably to hit them, which is really likely will if you think you’re going to have may have a fulltime income after 60 days. It’s just very discouraging, you know, there is kind of these three dips that you hit when you’re launching a product. One is about half way through development, one is just after launch and then the other one is like three, four, five months after launch where the buzz has worn off the launch and this will just contribute that all the more and will encourage you to basically bail on the product.
[25:07] Our fifth sentiment that doesn’t bode well for your startup is, “It will take me as much time to explain this task to someone else. So, I’ll just do it myself”. You know Mike I think we should start startups for the rest of us drinking game because we talk so much about VAs and outsourcing and not even outsourcing to developers and designers that everytime we mention it everyone listening should have to do a shot.
[25:30] Mike: You know I think that is a great idea, I think that our listeners should start sending things in. So anyone who is listening please send us some stuff for to firstname.lastname@example.org send us your thoughts about what should go into the podcast drinking game where anything we say or something somebody asks that should go in every time that comes up you take a drink.
[25:51] Rob: Right because we I mean that has been a recurring theme since episode one of not trying to do everything yourself and especially not using the excuse of, it would take me as much time to explain this task to someone else so I will just do it myself. I think the big, I mean there is many, but one of them I think the one that I found to be the most kind of impactful to me is that it always feels this way the first time you have to hire a developer, the first time you have to hire a designer, tier one email support. Any of those things it’s like gosh! Four hours, six hours, eight hours whatever to hire this person and this task is only a one or two hour task.
Well, a couple of things. 1. You’re probably not very good at estimating so you’re probably underestimating the actual amount of time it’s going to take to do it. 2. Once you have that person and you find them and they are good at this, then the next 100 times you have this come up, it’s a five or ten minute email to send them a task. Right? A one hour a 30 minute tasks can be outsourced really easily if you don’t have to go through the hiring process. So there is this almost like these economies of scale, once you get these first several hours of hiring them out of the way then you can build on that. This stuff does not happen overnight but it’s about building a team of people you can rely on, even if you don’t use the all the time but you at least have them as resources and it makes outsourcing very easy and very cost effective and time effective.
[27:10] Mike: Well the other thing that comes up is that and I was talking to somebody last night about this which was the person I was speaking to has to do billing for a bunch of different customers and it has to be done in a very specific way and it’s a lot of it is recurring thing. He’s constantly just looking at this stuff saying I will just do it myself as opposed to sending it to so and so to do. I told him I was like why don’t you just create a video, you know, do a screen cast, walk through it, sign up for screencast.com and buy Camtasia studio and just walk through the process, record it once. Send it over to the person who needs to do it and if you ever need to replace that person or if both of you are busy and you need somebody else on your team to do it, because he’s got a team of like 10 or 15 people, I was like just send it over to him, send him the link to the video and say this is who it needs to be done I need you to do it.
[27:58] There is new customer they need to be added to the CRM package here is all the information that you need to do it and here is the video that explains exactly who to do it, please go do this and take care of this. Because they are employees of yours, they are working for you just go ahead and get it done. As opposed to spending all of your time doing these things when there are repetitive task that somebody else can be doing.
[28:18] Rob: Our sixth sentiment is, “I don’t want to bother with all that click through and conversion rate nonsense I’ll just build a great product”.
[28:25] Mike: I lovethat “ the click through and conversion rate nonsense”. I mean basically what you’re saying is you know build a better mouse trap and they will come and building a better mouse trap is not actually a good strategy. Mouse traps themselves have really not changed over the years. People have tried to build better mouse traps but if you look for building a better mouse trap there is pictures of all these really weird contraptions that just generally don’t work very well. Building a better product does not draw new customers, solving their problems draws customers.
[28:55] Rob: The challenge with this is that building a successful business requires an ongoing stream of people who are interested in your product. It’s over romanticizing building software, building web apps, building startups to say that the product is going to be so good that word of mouth is going to spread or that the virility is going to spread the word or that social media. These are the things that are fun that we do anyway right? People are on Twitter, on Facebook and so thinking that that’s going to be enough just having that good product is going to make people talk about it enough to build a sustainable business is wishful thinking bottom-line.
[29:32] And while you don’t have to be like ultra left brained about it and do hardcore click through, conversion rate analysis and just be all about the numbers you can move a little more towards the center. Every entrepreneur that I know who has been successful in the long term has a really good handle on what their conversion rates, click throughs, at what their numbers are for their business. I don’t know anyone who does it who doesn’t know that. Anytime someone has a business and I ask them where is your marketing and they say, ‘Oh its’ all a word of mouth”, hugely skeptical right away.
[30:03] I’m hugely skeptical that either a) is their business actually successful; and b) is it really word of mouth or is this person just attributing all these other things that are happening to word of mouth because they don’t know any better? This may be the one that I don’t think is talked about very much, I think it’s wishful thinking to believe that the product is enough to make a successful business.
Our seventh sentiment is, “My idea is pretty hard to explain, do you have 20 minutes to spare?”
[30:33] So this probably comes back to that kind of enterprise software, the high tech software versus being able to sell on the web. The problem with having something that is so complicated and you can’t explain it in a couple of sentences, is that it’s very hard to sell. It means that you have to educate your market which is very expensive and time consuming and you have to educate a lot of people and only a few of those people will buy. It also means it’s extremely hard to do with like paid customer acquisition because you have to send them through a long funnel. You can’t just have a headline that explains what your product does, if you can’t explain it in 30 characters which is I think is 32 characters is you know a Facebook headlin or 50 something characters is an Ad Words headline.
[31:12] If you can’t explain your product then you have to go a different route that is almost like a lead gen route and you have you have a headline that kind of addresses part of the problem and then either have them talk to sales people, go through auto responders, download reports all those are good tactics to do long term for any business and they will expand your sales. But if you can’t make sales without them, then you’re basically a medium to high tech sales all the time and that’s just a different business then. You knew I think as a solopreneur or a micropreneur than you want to be in.
[31:42] Mike: I think the other side of it is that, if you can’t explain it succinctly then it’s very difficult to convey that to new customers very quickly and when people hit your website they are just going to leave very quickly. I run into this problem I think a lot earlier on with AuditShark where it was very difficult for me to explain to people what it is that AuditShark does and why you would wants to do it. I still feel like I’m tweaking the response and what I’m telling people, but basically I feel like AuditShark is a product that brings clarity to the security posture of your web servers and that’s really it. It just tells you where your server stands with regards to security, how vulnerable they are etcetera.
[32:22] Rob: Right and I think there are, you know, with this one my idea is pretty hard to explain do you have 20 minutes to spare? I think there are two ways to look at time. One is either that your idea really is that hard and that’s obviously a danger sign or your idea isn’t actually that hard and you just don’t know how to explain it yet. That’s also a danger sign it means and you can correct that one right? You can learn the language of your customers, we talked about that last episode and you can just learn how to more succinctly describe it and that’s absolutely a requirement if you do plan to sell online like you said through sales or marketing website. So rounding out our eight sentiments is, “I don’t want to talk publically about my idea because someone might steal it”.
[33:01] Mike: This has got to be one take a drink.
[33:04] Rob: This is the other drinking game one I know. We’re getting quite a few emails with a question but the person won’t tell us their idea they just say, “Oh it’s in the kind of commerce space” and here is this question but the answer to it depends entirely on having more specifics.
[33:21] Mike: So the issue with this is that’s, if you’re not talking about your idea then it’s very difficult to find people who are going to basically tell you you’re crazy that it’s not a very good idea. If you’re not telling people what the idea is, then who are you talking to about what problems you’re actually solving? If it’s a known problem then people are presumably already talking about it and searching for it so it’s not like it’s this giant secret.
[33:44] The other side of it is that the second you launch it’s out in public I mean everyone knows about your idea at that point because the world is connected to the Internet so everyone can see it it’s not like you’re able to hide anything at that point. So if somebody really has tons of money and wants to come steal your idea they are going to do it. But the problem is that nobody wants to steal bad ideas. What they want to do is they want to steal successful ideas. So, if you have an idea you could tell everybody in the world and nobody is going to care but if it’s a good idea that you follow through with and you’re successful with it that’s when people are going to start copying you, that’s when people are going to start taking your idea and trying to implement it or come after you with more money. But it’s not until you’ve proven that that idea is successful that anybody is going to care.
[34:30] Rob: Right and there is a difference here between going on a podcast with several thousand people listening and saying here is what I’m going to build and here is exactly what I’m going to build and how I’m going to market it and all the steps I’m going to take, I mean that could be stupid, right? You’re basically giving away a plan of something that is actually valuable. But talking to people in person or over the phone mentioning it to some people, asking people and saying hey I would appreciate if we don’t tell everyone about this. But here is the idea what do you think and getting really in-depth about it there, is not much risk in doing that, right?
[34:59] Even going on the podcast Mike if you and I were to sit here and talk about and I always explaining a whole idea, I questions how many people would even move forward with that and how many people would be able to basically the out market you even if you gave them most of the broad tips of how to do it. Because everyone has their own idea and they all want to implement it, right? They don’t want to implement your idea they tend to want to implement their own because they are passionate about it and that’s probably another sentiment that doesn’t bode well for your startup, is being able to adopt other people’s ideas or acquire startups that are failing rather than just the traditional, I’m going to build a novel product and launch it like every other developer does.
[35:37] Mike: Well I think I have a perfect example for this is mean Jason and Justin from the TechZing podcast talked about the idea of AnyFoo. Their product idea was essentially providing a market place where if you need a expert on whatever the topic is sit can be a programming topic, it could be C Sharp, it should be you know Azure, it could be Ruby, I could be Rail whatever, I mean any of those topics there are experts out there. Their idea was to essentially build the website where you provide a market place for going and hiring these people. Now obviously you’re not going to hire them for an extended period of time because they are going to probably charge you a bare minimum of $100 and they talked publicly about this for a long time.
[36:20] They said somebody should build a website where you go there and I can pay $200 to talk to an expert on security for an hour. Just to pick his brain, to get some thoughts and figure out what I should be doing and you know what sort of things that I’m missing in the existing things that I’m doing. They talked about it for a year, they told their entire listener base, “Hey somebody please implement it” and nobody did. So they finally decided to actually follow through and start building it themselves because nobody else had. They are publicly talking about it and they are actually asking people to go do it and not one person steps up and goes to steal that idea.
[36:53] Rob: Yeah there is so much more that goes into building a business than the idea, basically the idea is a small piece of it and having a great idea is great but there is so much execution and work and expertise and development and marketing that goes into it, that just having someone know your idea is not enough for them even if they get there first it’s not enough for them to beat you if you can out market them. Well, that about wraps us up for today, top review our eight sentiments that do not board well for your startup are:
- This product idea is awesome now off to the basement to build it. See you in six months.
- I haven’t even finished the features I want to build yet and potential customers are already asking me to build X.
- I’m half way done with this idea but that shiny new one over there seems so much better.
- I plan to quit my day job 60 days after I launch.
- It would take me as much time to explain this task to someone else so I’ll just do it myself.
- I don’t want to bother with all that’s click through and conversion rate nonsense. I will just build a great product.
- My idea is pretty hard to explain. Do you have 20 minutes to spare?
- I don’t want to talk publicly about my idea because someone might steal. [Music]
[38:02] Rob: If you have a question or comment you can call it in to our voice mail number at 888-801-9690 or you can email it to us at email@example.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt, used under Creative Commons. You can subscribe to this podcast on iTunes by searching for startups or via RSS at startupsfortherestofus.com where you will find a full transcript or each episode. Thanks for listening we’ll see you next time.