Show Notes
Transcript
[00:00] Mike: This is Startups for the Rest of Us, Episode 61.
[00:02] music
[00:11] Mike: Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.
[00:20] Rob: And I’m Rob.
[00:21] 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?
[00:26] Rob: I am within days of getting this new design launched on HitTail, man. I used so many bad words last week. I think I — not on the podcast but right before it and after it. Just burned in time but eventually I got through that within a day or two and feeling really good so I’m trying to — basically I’m gonna take at least two weeks off and basically trying to get this thing done and out before Christmas, trying to get it done.
[00:50] Mike: So it’ll be 8 to 12 days?
[00:52] Rob: 8 to 12 days, exactly, sir. It’s cool. I’m excited to take some time off but I’m not excited to take it off if this isn’t ready. You know what I’m saying? Like, it’s gonna be on my mind. So I’m hoping to take like I said two weeks off and then my wife today is actually on like, she took of yesterday, went to the coast. It’s about two and a half hours away and got a hotel room and so it’s — I’m watching the kids. And she’s basically thinking and mapping out like the next couple of years of her like personal goals and what she wants to do in her career. She’s a college professor and a therapist. She’s a psychologist. And so she’s looking at all this stuff and I’m gonna be doing the same thing hopefully the first week of January.
[01:31] So I’m gonna take off for just one overnight. I’ll have about 36 hours to myself and I will almost certainly have some updates on my plans for 2012 once I get back from that. So I really wanna leave and do that with a kind of a fresh mind, having HitTail pretty much ready to launch the new design when I get back. My goal is to get it launched before but there’s no chance I’m gonna finish this thing and push it live and then go on two weeks’ vacation because I know that there’ll be bugs and there’ll be little crashes and such and I don’t wanna be dealing with them over the holidays.
[02:00] Mike: Cool.
[02:01] Rob: Yeah. How about you?
[02:03] Mike: Well, as of last week, AuditShark has finally hit what I would consider to be MVP status so it’s minimally viable at this point. I could sell it and not feel terribly ashamed about anything that people see inside of it. I was working today to get — basically just walk through the installation process because I put together an installation guide or installation document to, you know, complete the screen shots and everything else to basically walk somebody through. Right after they’ve set up an account, it will walk them through install in the Windows server that sits on their machines.
[02:37] And I actually ran into a few issues in trying to do a clean slate deployment. So I have to figure out what those things are. I think it’s more in my build process than anything else. Everything works on my development machine; everything works on my other development machine. The only place that doesn’t actually work is on a clean slate.
[02:54] So I have to figure out exactly what’s going on there but I’m fairly certain that it’s just a configuration problem and once I get that straightened out then it’ll be all set and I’ve got somebody who has kind of volunteered to go ahead and install it in a lab environment and start running it and see how things go.
[03:14] Rob: Nice. And have you — you know, after our conversation last week that was Episode 60. We’re already getting some comments, some good in-depth comments. So if you haven’t heard Episode 60 already, I definitely recommend going back. Since then, have you talked to anyone? Have you kind of — what kind of progress or thoughts had you made on the marketing front?
[03:33] Mike: Not really much. I was just kind of finishing off the bells and whistles to get AuditShark to what I considered to be that MVP status. I did notice that there is a comment of there from Ted — I think it was more addressing my point about using resellers and stuff and how that was a giant, red flag. And I might have misused the term or misrepresented the term “resellers” a bit. What I really had in mind was people who essentially had customers where they already had an established relationship with them who would be willing to essentially walk me into their accounts and the purpose of that would be to essentially have them identify potential opportunities and then essentially put me in touch with those people.
[04:16] So it’s not really them necessarily acting as a reseller. I mean, maybe they’ll be there side by side or, you know, with me while I’m doing like a sales presentation or anything like that. But it’s not like I would be just be turning it over to them and saying, oh, here you go. Here’s something that you can resell. And there’s three main targets for that. One is for auditors who go into costumers and they have to go out into the customer environment and get the information and those people would be willing to identify their customers because then they wouldn’t have to actually go into the customer’s environment and do it themselves.
[04:47] The other two are very similar. One is service providers, manage service providers and one of them is consulting companies. Manage service providers essentially completely manage your environment. It’s almost like going with manage hosting environment versus unmanaged hosting environment where — I guess the primary difference is people are more hands-on with the manage hosting environment while with the manage service provider, you essentially outsourcing part of your IT operations to them.
[05:12] So they’re already billing people on a monthly basis and those people are already used to being billed on a monthly basis for various services. And in each of those cases, the idea would be that, you know, obviously I’m gonna be selling to the customer and they’re going to be working with me and what I was trying to get across in the podcast was how to compensate them but I’ve forgotten that one of the ideas that I had for essentially compensation for those manage service providers and those consulting companies was that once I’ve identified the problems in the customer’s environment, they’re gonna need to somehow fix them. And who’s going to be able to fix them? Well, that manage service provider or that consulting company that they’ve already got an established relationship with.
[05:55] The purpose of those — I don’t wanna call them reseller arrangements really. I guess the more appropriate term would be service providers but the purpose of those is really just to cut down on the number of false leads that I’m following up on because it’s very random to be able to just walk into a bank and say, hey, can I talk to somebody in the IT department. And you do, you get in or you don’t. I mean, it’s very time-consuming and the idea of using those leverage in those people, it’s to try and cut down on the number of places that I’m going into where I’m just — I’m not gonna get anywhere.
[06:26] Rob: So I think there’s a lot of — I mean, like I said, last time I think there’s a lot of complexity with that model and it’ll take a lot of time to get a reseller up to speed. I want to hear — I wanna see you try it and see it work for me to kind of understand more of what it’s gonna look like. I saw a lot of questions about how you’re gonna convince a company to spend the time to learn your software. I guess you’re going to have to offer him a nice chunk of commission and that kind of stuff.
[06:51] Mike: Well, that’s what I was originally thinking that like there’s a company near where I live that — and I’ve already talked to them about this. I mean, they have an $8 million a year manage services for they have all these customers that — probably two or three hundred customers that pay them on a monthly basis for various services. So they’re constantly talking to these people. They’ve got sales reps who are constantly working with them, trying to figure out what it is they need and what other services they can provide.
[07:17] And if I can go into their customers and — you know, they’ve already told me. We would love to have you work with us to help identify the problems in our customer’s environments so that we can then go in and charge them to fix those things.
[07:31] Rob: It definitely makes sense what you’re saying. My concern is that you now have two customers, right? You’re not selling to ends users and you’re also selling to resellers.
[07:40] Mike: Yeah, I’m not really selling to them though.
[07:42] Rob: But you do — you have to convince them that there’s enough of a market, that they should invest a lot of time into learning your product and into pushing your product and into supporting your — you know what I’m saying? Like you really are — you have to convince —
[07:54] Mike: I’d start saying — yeah.
[07:55] Rob: This is sales effort. They don’t have to buy it but there’s a sales effort nonetheless.
[07:58] music
[08:01] Rob: There was a couple other things. One is, you know, we’ve been kind of giving updates on how MicroConf is coming together and I wanted to let people know we’re planning to start selling tickets in January when we’ll have — you know, we’ll have the exact location and dates and all that stuff. But if you’re a listener and if you did not attend last year, I recommend you go to microconf.com, we’ll link it up on the show notes. We have a mailing list because we’re gonna give, well, two things. One, we’re definitely gonna give discounts to, you know, people who are on the early mailing list and anyone who attended last year and the tickets are going to be cheaper than if you’re just the general public.
[08:35] Second thing is we are limiting the number of tickets we’re selling. We got a lot of feedback last year that one of the coolest parts of the conference was how small it was and it was about 110 attendees. And so what we’re gonna do this year, we’ve talked about doing two to the seventh power which is 128. So we’re talking about limiting it to 128 attendees. And I don’t know, you know, at that level, with the level of interest that we have and the size of, you know, we have several mailing list. I’m pretty confident it’s gonna sell out fairly quickly. So if you are interested in coming it’s gonna be in Las Vegas in mid- to late April. I would definitely, you know, go to microconf.com and get your name on the list.
[09:10] Mike: You know, I told you last week that the previous week we’ve pushed off the podcast because of my medical issues with my back and my back has been doing a little bit better. I’ve been having some weird pains here and there in my leg which I may attribute to nerves, I may attribute to just not stretching out but I think overall things are a lot better and I’m open that that trend continues. We’ll see if it turns out that I eventually need surgery, I’ll probably find out some time next month. But one of the things that I found separate from that is that — how long have I been working on AuditShark here? You know, at least how long have we been talking about it on this podcast? Well, like 8 months, 10 months, something like that?
[09:44] Rob: Well, it’s December and you originally — I mean, we originally talked about you getting to Alpha in June which is six months ago so I know that it could easily be January. I can imagine it being a year.
[09:57] Mike: Right. And it’s not like I’ve really taken what I would consider a major break from it either. So I mean, I’ve really been kind of pushing hard ever since — I’ll call that missed deadline back in July or August or whatever it was that I ended up setting because I think I ended up missing the first one because of MicroConf and that set me back a couple of months. And then I ran into all these other things that I didn’t necessarily count for during the development and things that I needed to implement that I — that it took me just a lot more time than I ever thought that they possibly would. You know, having pushed through all of that, I’m at the point where — or I’ve gone to the point in the past couple of weeks where I’ve just realized like I am severely burnt out.
[10:36] So I tried to step back a little bit, maybe trying to figure out how to get my mojo back a little bit. So, you know, you and I both know that when you’re building stuff, you’re in this create mode and then in the past I basically cut off all my podcast, all my additional reading, all the additional information consumption that I was doing in order to focus on just churning out code and being creative about how I put things together. And over the past week or so I’ve taken a step back and try to get into the consumption mode a little bit again just to kind of — I guess recharge the batteries.
[11:10] And one of the podcast I really found to be helpful with that is the Lifestyle Business Podcast with Dan and Ian. And Dan was on a couple of weeks ago but I just want to say thanks to you guys for, you know, just helping lift my spirits and morale and everything because being in that constant mode is just, you know, it wears on you after a while and you don’t actually have customer, you haven’t actually launched yet. It’s funny all the parallels between their podcast and ours is just very similar but obviously I’m not here in own voice to talk.
[11:36] Rob: Right. No, I would totally agree on both points, man. When I cut myself off totally because we do. You go through the ebb and flow of a kind of being able to consume and being able to absorb it and process it and then you go to the times where you’re just so busy creating that you really can’t take any more input. And I find that when I get in the creation phases, it’s great but I can’t do it for more than a couple of months before I burn out pretty hard and then I need to go back to having some involvement in the community and I’ve done it a lot with audio with books and with podcasts. I totally know what you’re saying and it also give definitely — give a shoutout to Lifestyle Business Podcast.
[12:10] music
[12:13] Rob: So I have a couple of other things. The first is, I don’t know if you saw it on TechCrunch but WPEngine race a round of funding. WordPress Engine which is Jason Cohen of Smart Bear, his company. And I was one of the angel investors.
[12:26] Mike: Really?
[12:27] Rob: Yeah. Isn’t that crazy? He e-mailed me and mentioned — he said it was like a close round. It was like invite-only or something. And so he and I have known each other for a couple of years and I was obviously completely floored and very flattered. You look at the names. It’s like big name venture capital firm in Austin. Eric Ries, Dharmesh Shahand and then I’m like wait — and dot dot dot and Rob Walling. I mean, I still don’t get in that list. So I was totally, totally flattered that he asked and it was cool.
[12:52] So I don’t see myself becoming a big angel investor. I never would have approached him or anything but it was fun to be a part of it and now, I actually moved my blog there from DreamHost and that’s been nice. You know, as much as I like DreamHost I have so many sites on there. I am having problems with my virtual server at this point and getting my blog off there which is, you know, getting quite a bit of traffic these days has helped. So WPEngine, y’all.
[13:15] Mike: You’re gonna totally pimped it out now.
[13:17] Rob: But that and buying HitTail has really kind of tapped me out for a while so it’s been good that my other businesses can continue to do all right. Two more things. One is I have this 2012 prediction that I wanna throw out. There’s this website — have you heard of it? It’s called Pinterest. It’s like interest but with a P in front of it, pinterest.com.
[13:34] Mike: I have not.
[13:34] Rob: This site, my prediction is that 2012 is going to be the year of Pinterest. It’s a social network. It’s like a visual, social pinboard and so you create pinboards and you can just pin images to them and then you can share them with other people. The reason I think it’s gonna be big is within the span of maybe 30 days, three different friends in three different social circles who are not techies told my wife about it.
[13:57] It’s — right now, it’s a female driven website. I could totally — I mean, obviously there’s some men using it but I could see it, you know, becoming more gender balanced but guaranteed it’s pulling in — I mean, one of our friends is a physician. She’s our age. My wife’s a psychologist, a Ph.D. in Psychology. I mean, they’re educated there. They’re like the demographic that people want to attach to. So I seriously think Pinterest is gonna be big. The reason I mentioned it is they don’t have any PI yet but they’re working on one and I feel like some folks are gonna get in on the ground floor. Well, I guess we’ll see in six months if I’m correct.
[14:29] Mike: We’ll see.
[14:30] Rob: And you’re gonna try that out, aren’t you?
[14:31] Mike: No.
[14:34] Rob: And last thing for me, I’ve read two book in the past couple of months that I just really wanted to share with people. One is if you’re gonna be doing high touch sales because I’m kind of ramping up, you know. I’ve always done more inbound marketing and low touch sales and I’m looking to do some higher touch sales with HitTail. The book is called the Ultimate Sales Machine by Chet Holmes that is ridiculously good. So I wanted to recommend that to people. I listen to it on audio which I have to do and I liked it so much that I bought the physical paper copy which I have not bought a paper book in months. But I just wanted it around for reference. I wanna be able to flip through it and take notes and do that stuff that I can’t do with the Kindle or audio version.
[15:12] And then the other one is more about finding goals and designing lifestyle and it’s called the Art of Non-Conformity: Chris Guillebeau has a blog that’s quite popular. It’s also under the same name. I actually recommended this book to my wife who’s not typically into this kind of stuff. She read it and she’s — now, she went on that two-day kind of vision quest and she’s using it as a guideline to help shape what she thinks she might do over the next couple of years. I’m probably gonna be doing the same when I go off in early January.
[15:40] If you’re wondering what the hell am I doing and what’s gonna make me happy? Like how do I wanna shift my career, how do I wanna shift my personal life? It’s a really good book. The guy is a really good writer. He’s done a lot of stuff. He has a lot of experiences. I highly recommend it.
[15:51] Mike: Very cool.
[15:52] music.
[15:55] Mike: So we’re gonna move on to some of the letters from our listeners for this week. We do have a number of questions that have been streaming in which we — I think I’ve been severely neglecting over the past several weeks partially due to the — how far had we got on some of our podcast episodes. So the first one is a discussion that I got into with a person named Tomas from planmysite.com. And planmysite.com is a web design company based on New Jersey and through the course of the discussion, we were discussing some web designs stuff.
[16:25] But one of the things that kind of stuck with me was the fact that e-mail is a notoriously terrible communication device and I know that like Jeff Atwood has serious reservations about using e-mail for virtually anything and absolutely hates it. He much prefers Twitter over e-mail but, you know, Twitter got its problems too. I mean, you’re limited to 140 characters.
[16:46] But I think that when you’re trying to use e-mail, the issue that comes up is you’re better off probably just getting on the phone with somebody because once you start writing more than a couple of paragraphs, the thing just go down real quick. I mean, things can easily get misinterpreted and you start making assumptions about what the other person meant. You know, it just start go down the wrong road. That’s one of the conclusions that, you know, he and I came to was e-mail was just awful.
[17:08] Rob: Yeah. I’m finding that the more I use e-mail over the years, the shorter my e-mails are getting and I think that’s a good thing. Have you seen the three sentences and four sentences that I have? For a listener who hasn’t heard, the domain name is like threesentenc.es or something like that. If you Google it, you can see that —
[17:26] Mike: It’s three, four, and five, actually.
[17:27] Rob: Yup. And so some people put the link to that — all that website says is, all of my e-mails are three sentences long and if you just put that link at the bottom of your e-mail and your signature, people might understand why you’re so brief. I don’t do that because I do like to preserve the right to go on and on and on. But at the same time, I find that when I’m e-mailing with friends or acquaintances or people I’m very familiar with, I actually find e-mail to be pretty good because people know your intonation. They know you’re not being an ass when you’re being sarcastic, you know, they don’t take offense.
[17:59] Whereas, yeah, if you’re on a discussion with someone brand new, who e-mails you, it is so easy to just — have things get out of control pretty quickly. It’s like, what is e-mail good for? I think e-mail is good for — it’s a brief message. It’s certainly when you wanna keep it private. I find Twitter painful to have a discussion over because of the 140 character limit. So I do like e-mail more than Jeff Atwood does. You know what I’m saying? I do still use it quite a bit. I would agree, yeah.
[18:22] Mike: Somebody should come out with Twitter that doesn’t limit you to 140 characters. It limits you to five periods.
[18:28] Rob: Google Plus doesn’t limit you although I used a lot of dot dot dots in my e-mails so that would kind of know me.
[18:33] Mike: It would, it would. Anyway, I do wanna say thanks to Tomas for having that discussion with me. So let’s move on to the next question. This question is from Ray. And he says, “Hi, guys. Finally got around to writing a review and hope you can help me with this problem. Gmail is fine but I really wanna be able to send and receive e-mail like it does in e-mail addresses for each of domains I own and manage. I think you said just forward everything to your e-mail but when it comes to sending, I don’t want my e-mails to come through as my name @gmail.com on behalf of so and so. I want to look like I’m an actual business. Outlook forces me to have separate e-mail boxes. I just wanna have one inbox and have the ability to send e-mail from a dozen or more e-mail addresses. Any suggestions? Is there a setting in Outlook that I’m missing?”
[19:14] Rob: And I actually applied to him via e-mail because it was about a month ago and I knew that it would take us a while to get to this but essentially in Gmail I’ve been using this setting for a couple of years now. If you just forward into Gmail and then reply, it’ll give you that stupid, you know, someone saw a Gmail as a whomever and that isn’t professional. But if you go into each address and you set up an actual like a mailbox instead of just forwarding into Gmail. You set up a mailbox on your mail server and then you can use Gmail to use POP3 and it will send as them and no one will know the difference.
[19:49] So I have probably a dozen e-mail addresses from probably ten different domains that all go into my Gmail account and then when I click reply, it goes out and uses the POP3 server of that domain. And I’m — I see we’re not gonna go into the specific details of how to do that in Gmail because it’s so painfully boring but if you go to Google and you type send using SMTP from Gmail — oh, I realized I’ve been saying POP3 to send the e-mail, what I meant was send using SMTPs.
[20:17] So if you go into Google, type send using SMTP from Gmail. You’ll get detailed instructions on that and you do have to configure each one individually but then you’ll have that professional look of, you know, a dozen addresses all going out in the same inbox.
[20:31] Mike: So the next one is from David Wilson. He says, “Hello. I love your podcast along with Rob’s book. It’s been a great help to me while developing my first SaaS app. My question is whether you guys have any experience using Google SMTPs server to send the e-mail for web apps, for appointment reminders, app notifications, etc. I have an e-mail address for my app to use from Google apps and I have set up the e-mail back-end to send the e-mail from this address using Google SMTPs server. This works well in testing and I like the idea of not having to run a mail server myself. However, I’m not sure if there are any drawbacks to this approach that I’m not aware of. Any thoughts on this configuration or sending an e-mail in general. Thanks, David.”
[21:09] There’s a few different things that you can use. We just switched the academy over to using one. I think it was — do we use SendGrid?
[21:17] Rob: We’re using Postmark at postmarkapp.com. Yeah, it’s a $1.50 for every thousand e-mails you send.
[21:23] Mike: Right. And then there’s other things like SendGrid and then there’s also Elastic Email I think it is.
[21:29] Rob: Yup.
[21:30] Mike: So there’s a lot of different options but basically they’re hosted SMTP servers and you sign up for an account. You promise to pay them, I don’t know, like a penny for every 10 e-mails you send or something ridiculously cheap like that. And your e-mails will basically go through their servers. You call it just as you would a standard SMTP server. Sometimes there’s additional authentication code or something like that that you have to include in your e-mail or sometimes there are changes that you have to make to your DNS servers to prove that you own a specific domain.
[21:59] But by and large it’s a pretty simple and painless process and it’s dirt cheap to send those e-mails. I mean, if you’re sending 10 million e-mails, obviously, that’s gonna go a little expensive but for the most part if you’re just sending notifications and reminders and things like that, it will not cost you very much and for something like a SaaS app, chances are you’re charging 10, 20, 30 dollars a month and you’re gonna be paying in pennies per customer that you have in order to use these services.
[22:25] Rob: Absolutely. I started using Postmark just maybe three or four months ago and I will never go back. I told you this, Mike, a couple of weeks ago. I mean, I just — the control that you have over it, well, there’s a couple of layers up but one is I can see every e-mail that goes out and they logged it in their web app and you can — if it gets bounced or if they marked it as spammed or if anything happens, it’s all marked there.
[22:47] In addition, I caught a bunch of — you know, when you’re writing code and you’re searching and replacing in an e-mail, you never really know how it looks. You send yourself a test and then that’s it, right? But some user’s data are different and all that stuff. So I was just flipping through a bunch of them and I realized that some people had a weird anomaly in their domain name and it was coming out funky in the e-mail and I went in then fixed it more professional.
[23:08] In addition, their deliverability is gonna be way better than if you try to run an SMTP server from your own server. It’s just night and day. How much better, how many more e-mails you’re gonna be able to deliver if you go through one of these services. So yeah, I will never go back especially for SaaS apps. I’m sending quite a few e-mails. You know, we’ve talked about I’ve been sending some blasts out to older groups of customers and so I — you know, I sent 4,500 e-mails. What was that? It was $6 or something. You know, I mean, it’s a complete no-brainer and I bet the deliverability, I bet between two and five times more e-mails got to people because I did not send it through my web server SMTP server.
[23:46] Mike: And just doing the math on that in terms of what your conversion rate is on those people that you got to versus that ones that you probably wouldn’t have. I mean, that pay is to $6 on its own easy.
[23:55] Rob: Right. It pays it for the rest of my life probably. And, yeah, so I would not use Google SMTP server. It’s just not designed to do that. My guess is if you actually started sending any kind of volume that they would flag you because they just don’t really want you using it as like an application e-mail address. I would just absolutely bite the bullet and I’m migrating — like you said, we migrate at the academy over. I’m looking at migrating a couple of other apps that I have over just so I have the control and the visibility and, you know, there’s just so much there for a low cost. So to me it’s a no-brainer these days.
[24:25] Mike: So the last question we have is from Justine Chimura who has e-mailed us — I think this is his third question but he says, “Hello. I’ve got a couple of ideas that I’ve been forming and iterating on. I’ve come down to choosing the web technology to build them off of — ASP.NET MVC or Ruby on Rails. They both seemed like really cool technologies. To preface this, I’ve been a consultant focusing on just .NET and I’ve started a new job for a fairly large city doing .NET work. So my primary business experience is on .NET. I recently picked up Ruby on Rails and I’ve been playing with it. It seems really cool but to build a working production app would take me probably twice the time as if I use .NET. With that all in mind, I know you guys are Microsoft developers and have built, maintained and enhanced .NET web apps. I would like some advice from people that doesn’t end with Microsoft sucks. I’m trying to take into consideration cost, difficulty of maintenance and time of development. Thanks, guys.”
[25:14] Rob: When he called us Microsoft developers, did you cringe a little bit?
[25:18] Mike: Just a little bit. I did —
[25:19] Rob: That’s funny, yeah. But we do — I mean, you and I do most of our development in — we both know other languages, right? I’ve done PHP and Java, ColdFusion and I prefer these days to use PHP but you and I both have apps written in .NET.
[25:32] Mike: Oh, well, I started off my response by basically saying that I work with pretty much everything. I own computers and devices running Windows, OS X, iOS, AIX, Solaris, HP-UX, Linux and ESX. So if it’s a good technology, I’ll use it but that said all technology sucks in some way shape or form. So, you know, it’s really important to understand what you’re trying to do and why. And the why is the most important part of it. And Justine, if you have any intentions of outsourcing your code, you should seriously consider Ruby on Rails. They’ve got a great community and you can generally find programmers who are much cheaper than .NET programmers. Or, at least that was true a little while ago.
[26:15] Rob: So Ruby on Rails programmers tend to be a little more expensive than PHP and less expensive than .NET and Java but they’re all out there.
[26:22] Mike: I mean the fact is that if you’re outsourcing the code, it shouldn’t really matter which technology it’s in because it’s not about the technology at that point it’s really about all the other things that go into it. In terms of cost, both can be completely free. Microsoft’s got their BizSpark and Web Spark programs. Those are dirt cheap to get into and sure they cost money down the road but you’re gonna be paying for things one way or another.
[26:45] So you know, do you wanna pay for those software licenses, yes or no? And if you end up with a host provider, it’s very possible that they could be providing those things for you. I mean, you don’t need to buy a sequel server license. You can essentially rent a sequel server database from most hosting providers.
[27:00] On the Linux side, yeah, you can run Ruby on Rails over there. My sequels are probably gonna be a little bit less expensive in terms of hosting cost but at the end of the day, you’re hosting cost are gonna be far less than either your cost of development and that’s in terms of the time that it takes whoever it is to develop the times or in their hourly rate.
[27:19] Rob: It’s assuming they don’t have some specific limitations, right? Like with HitTail, since I have such high IO, Disk IO, I actually do have some very specific hosting requirements and the Windows stuff is substantially more expensive than Linux but that’s a special case. For most SaaS apps that are just doing basic, you know, putting stuff in a database and taking it out, you’re right. You’re gonna get a VPS for, you know, 100 bucks or 150 bucks either way, right?
[27:45] Mike: I mean, the only thing I mentioned to him was that you really need to consider the time to market. And if it’ll take you in 100 hours to build in .NET, do you wanna spend 200 hours doing it on Ruby on Rails? And if you want the experience, go for it. You know, if you’re not looking for that experience since it really makes sense going through and making all the mistakes that you need to make in order to get the software to where it needs to be. That’s a judgment call that you’re gonna have to make either way.
[28:12] Rob: Yup. If you don’t know Ruby at all and you’re gonna outsource it, I would be hesitant to outsource a Ruby app only because if you’re a .NET developer, you’re gonna get it build and there’s gonna be, you’re gonna launch. There’s gonna be tiny little tweaks, tiny little fixes, little things you want to add and that becomes a pain in the butt when you can’t just go and tweak your own code. So I would say be careful of that. Again, I’m not saying don’t do it on Ruby. If you’re a Ruby developer looking at doing a . NET, I would give you the exact same advice the other way. So its language diagnostic, it’s more of what you know.
[28:44] Are you really interested in learning Ruby? Are you really interested in learning this moving forward? Because if you’re not, then I would probably not do it in Ruby. I would stick with the core competency because the technology doesn’t matter, right? No one’s gonna know when they’re using the app, what technology it’s written in.
[29:04] Mike: Well, they may know but they won’t care.
[29:05] Rob: They won’t care. That’s a good point. The bottom line is if you were, you know, a quasi-expert in Java, .NET, Ruby, PHP, and Python, then there will actually be a question where we could say, well, which one actually has the best development committee. Which one is best for web development or SaaS app development? And we could get into a philosophical discussion about that. Probably not worth it. You could also say which might have the most if you ever plan to sell it, which one might be easier and it’s probably gonna be PHP or Ruby in my experience.
[29:35] That’s gonna be the easiest to sell if people are more willing to take over and if I — these days if I was gonna built something completely from scratch knowing the languages I know, I tend to lean towards PHP because I know it. I know that Ruby has a better web development framework and, you know, debatably from what I heard it does. I wouldn’t go with it just because I don’t know it and I don’t want to take the time to learn it right now.
[30:00] I think my recommendation, Justine, if you really want to learn Ruby then, you know, go ahead and do it. And if you don’t, if you’re kind of just thinking which technology should I use and you wanna get in fast then I think sticking with your core competency. If that’s what you know, and you really don’t wanna learn something new, you really just want to get an app out then that would tend to be my recommendation.
[30:19] Mike: On the surface, what you said earlier about if you’re a .NET developer then outsourcing to have somebody writing in Ruby on Rails is probably a bad idea and if you’re a Ruby on Rails developer outsourcing somebody to write something on .NET is probably a bad idea. You mentioned things like once you go into production you have to make little tweaks and things like that.
[30:38] Most people who are building businesses or who are entrepreneurs, you know, tend to be decent developers or the very least think they are and feel like they could probably go through and debug things. But the issue I think you run into is that there are going to be times where you don’t necessarily have the time to mess around with it. Somebody’s got a problem and you want to or you need to fix it quickly and because you’re not familiar enough with the development environment and the debugging techniques, it’s gonna take you much, much longer to do it.
[31:10] Rob: Right. And so I guess for, you know, we have a lot of listeners that are not developers and so for them, they would just ask the general question like what should I develop my next app in. If they’re really gonna built an app, I would actually base purely on availability of labor cost of developer’s ability to sell it later on if you want to and just go to frameworks. I would probably go with PHP, I may go with Ruby on Rails. I would go with one of those two. What do you think?
[31:37] Mike: I think I’d probably lean towards PHP or Ruby on Rails, something like you said and it’s more just because of the saleability later on and, you know, the availability of the programmers who do that kind of thing. I think that you’d have a much easier time finding them. I think that it’ll be significantly more cost effective, or at least, you know, more cost effective. And if you don’t know anything about it but what difference does it make with it’s written in because you can’t fix it anyway not because it actually makes technical difference. Because like I said, your customers don’t care. It could be written in VB6 or Delta in it. And I know that there are production applications out there that are still selling today that are written with those and they still sell and they still sell well.
[32:20] Rob: Absolutely. HitTail is written in classic ASP. Man, that was deprecated in 2001 when .NET 1.0 came out but it’s absolutely still functioning and going so — and no one, you know, who’s using it is gonna know the difference. If you don’t listen to this podcast you wouldn’t be able to tell.
[32:35] Mike: But Microsoft is trying to get rid of it. You can tell by — if you do a Windows 2008 install and you install IIS, ASP is not selected by default. You have to —
[32:44] Rob: Oh, totally.
[32:45] Mike: Yeah, you have to manually tell — let’s to say include this.
[32:48] Rob: Oh, I did. I did when we did the new server. And, in fact, obviously my ultimate goals is to get off the classic ASP and move to a different technology. Yeah, either ASP.NET MVC or something else. I mean, but it just goes to show you — I mean, HitTail has a pretty — it has a heavy volume. It’s gonna have a heavier volume than probably 99% of the SaaS apps that anyone’s gonna want to build and it functions just fine.
[33:09] Mike: But I do have a question. You said you would port HitTail to ASP MVC or something along those lines.
[33:15] Rob: Yup.
[33:16] Mike: Why wouldn’t you — if you’re doing a port, why wouldn’t you port it to PHP or Ruby on Rails.
[33:22] Rob: I have thought quite a bit about this. The migration path from ASP to like ASP.NET MVC is quite easy because they can both co-exist on the same server, easily share cookies. There’s a path there. Whereas if I go with PHP, I basically have to rewrite all the code at ones, create this monolithic new thing and then migrate everyone to it. Also, everything in the sequel server 2005 back-end, it’s a 250 gig database with literally more than a billion rows. I don’t exactly wanna move that into PostgreS or MySQL.
[33:56] So I have some reasons to stay with the Microsoft Stack just because — again, if I was doing it from scratch, I would probably go with PHP and I would go with NOJS as the, you know, the tracking part where the JavaScript calls back because there’s so much traffic going through there and NOJS handles a lot of request really, really well. I would wanna move to a Linux box I would use PostgreSQL and I would go with PHP NOJS and that — but that’s a massive undertaking even with this app is, you know, “small as it is” as I’ve looked at it and try to spec it out, it would be big.
[34:28] Whereas with moving to ASP.NET whether it’s web forms or MVC, I can do it gradually over the course of a year or two and just do a piece of — rewrite a piece of it at a time and kind of leave the database intact and leave everything else intact.
[34:42] Mike: I just thought that the listeners were probably finding this strange why you would not make that leap but —
[34:47] Rob: Yeah. And I’m —
[34:48] Mike: I know you have good reasons.
[34:50] Rob: Yeah. Yeah — no. And I would be totally up for discussing it at some point because I spent a lot of time early on. I mean, as I was gonna require to start looking through the code and I was like good grief, like I really wanna just get all this rewritten. I don’t wanna pay for the — like I said the hosting is — it’s absolutely more expensive maybe even twice as much on the Windows Stack since I do have such heavy volume and I need a full process or license or multi-process or license of equal server.
[35:13] I need a lot of things that would be much cheaper on Linux Stack. But, yeah, the cost and/or effort to do that would — it just would completely not be worth it at this point. It wouldn’t be worth paying itself back so I’m always open to discussions and stuff about that because I did put a lot of time and effort in, you know, figuring out how I would do that later on.
[35:32] Mike: Cool.
[35:32] music
[35:35] Rob: If you have a question or comment, please call it in to our voicemail number at 888-801-9690. You can e-mail it to us in text or mp3 format to questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under creative comments. If you enjoyed this podcast, please consider writing a review on iTunes. Let’s see, there’s at least 71 ratings for us right now. Just go to iTunes and search for startups and we’re in the top three podcasts. You can subscribe to it in iTunes or via RSS at startupsfortherestofus.com. And a full transcript of this podcast is always available at our website. Thanks for listening. We’ll see you next time.
Episode 60 | Delving into the Future of AuditShark
Show Notes
Transcript
[0:00:00] Rob: This is startups for the rest of us episode 60.
[0:00:04] [music]
[0:00:13] Rob: Welcome to startups for the rest of, podcast that was developed for designers and entrepreneurs to be awesome at launching software products. Whether you’ve built your first product or you’re just thinking about it. I’m Rob.
[0:00:22] Mike: And I’m Mike.
[0:00:23] Rob: And we’re here to share our experiences to help you avoid the same mistakes that we made. So what’s going on this week Mike?
[0:00:28] Mike: I am in full recovery mode.
[0:00:31] Rob: Yeah you’ve had like minor surgery right?
[0:00:34] Mike: I went in and I had some spinal injections done. You know it’s funny that I’ve talked to other people and they’re like, oh I didn’t feel a thing and I’m just sitting there thinking to myself “ yeah but you’re not immune to Lidocaine.
[0:00:43] Rob: Yeah so oh really, it doesn’t work for you, it doesn’t make you numb?
[0:00:47] Mike: No.
[0:00:48] Rob: That’s not cool at all.
[0:00:49] Mike: And people don’t believe me when I, especially doctors don’t believe me when I tell them that that stuff just doesn’t work on me. But the last time I was at the dentist I had six Lidocaine shots plus two bone drills and that was when I finally stopped feeling pain.
[0:01:02] Rob: Wow. Well I’m sorry to hear that man you’re already on the road again right, okay sure.
[0:01:07] Mike: Just for this week and next week though.
[0:01:09] Rob: Okay but you’re able, at least you’re able to travel and such.
[0:01:13] Mike: Yeah.
[0:01:13] Rob: I was just thinking getting shots in your back would kind of hinder that for a while but it’s good you’re…
[0:01:16] Mike: It actually didn’t. Things were actually a lot worse before I had the injections so it’s a steroid cortisone injection because some of the lower discs in my back were having fragments that were breaking off and what happens is it gets inflamed and then they’re supposed to kind of dissolve on their own. But they haven’t been and it’s because the whole area is inflamed and not infected or anything but it’s just you know irritated. So they don’t naturally dissolve on their own and because of that it basically creates more inflammation which creates more swelling and everything just you know, the cycle just kind of repeats. So it gets worse and worse.
[0:01:53] The day I had the injections it was last Wednesday and things were actually pretty bad and then I took things easy for the rest of the day. And then the next day things were a little bit better and the day after that it was better. And I had a three hour car drive a couple of days ago that was pretty rough afterwards. But other than that I’ve been feeling pretty good.
[0:02:10] Rob: Yeah the astute listener will notice that we missed an episode last week, we didn’t release any and it’s because Mike had this procedure and took a medical leave, a medical week from the podcast. So hey I want to give folks an update about MicroConf, you and I were just talking about it before the podcast. Basically at this point we are we’re honing in. We had already talked about Tropicana and Hard Rock and we still are looking to making up our mind. But some dates I wanted to throw out for people to mark on their calendars for potential dates are April 16th,17th, April 30th May 1st.
[0:02:42] And those, don’t buy plane tickets yet obviously, it could feasibly still change and be a whole different month but that’s what we’re looking at. We’re upstaging it this year, last year we were at the Riviera which is an older hotel and we’re looking to just go you know quite a bit more upscale per popular demand. And we already have some awesome speakers lined up, keep your ears out we’ll be talking about that in the coming weeks.
[0:03:10] You know today we’re going to get pretty heavy into Audit Shark. I got a long email from a listener and a guy we both know of. I wanted to give folks an update on Hit Tail. So you might hear it in my voice I am pissed off right now because I freaking, I spent the last 12 hours basically until about 1:00 in the morning last night and then I got up and I just worked all day today. And all I’m trying to do, it’s a six page web application, that’s what Hit Tail is right. There is a marketing side, that’s 200 and something pages but inside in the back end it’s about six or seven UI pages and they’re very simple. They pull out of a database and they display in a grid.
[0:03:45] And I cannot get, I have a new design for those and all I’m trying to do is integrate one, the first one into the old code and I can’t do it. Everything is broken. There are so many includes, there’s like eight or nine JavaScript and ASP files to make a single page work. The structure of the code is so bad that it’s just a cluge and I have looked at rewriting it and it would take me several weeks. And so I don’t know there’s no simple answer but this is totally, this is like the lowest, probably the lowest point since I bought the app, you know I bought it three and half months ago.
[0:04:21] I just have to get through and struggle through it, this is the last thing that’s keeping me from basically re launching the site because I need to get the new look in before I market it because it’s so dated right now. I just feel like it’s going to be a pretty leaky funnel. Remember the big mailing I did last time? I mailed like 4000 people, they were old customers that had cancelled and such.
[0:04:40] Mike: Yeah, yeah.
[0:04:41] Rob: That turned out really well. I got somewhere around 50 or 60 new signups.
[0:04:46] Mike: Oh my God.
[0:04:47] Rob: Yeah. And anywhere between there’s some $10 plans and some I think I got a couple of $30 plans as well. So yeah it’s a SaaS app so it’s acquiring revenue so it’s pretty nice. It really really helped and then I have a recurring monthly now that essentially emails anyone who has cancelled but is still sending us requests and that we have new keywords for. And you know they get emails that says, hey we have new keyword suggestions for you if you want to check them out you can come sign up.
[0:05:11] So it’s kind of a nice little monthly reminder for folks who’ve cancelled. Yeah so things are going really well on that. I mean I’m really pleased with the new signups and I’m pleased with the way that the marketing has gone. People are pleased with the way the app is coming around, people who have used it. You know there’s a couple of hundred customers now, over a couple of a hundred actually.
[0:05:29] And that’s really good. It feels good in terms of you know, I feel like the app is validated and it’s working again. But in terms of getting this new look and I’m just like furious. I’m hoping by the next podcast I’m just done or you know like 80% of the way there because I had wanted to get this done sooner so that I can start marketing the thing. But looks like will, the big marketing push will definitely have to wait until after the first of the year now.
[0:05:54] Mike: Now are all these includes or they are all JavaScript includes?
[0:05:58] Rob: There is a bunch of Java Script and there is several ASP. It’s classic ASP so it’s Olean technology but…
[0:06:04] Mike: Got it, got it. I mean you could for the JavaScript itself if you’re having those sorts of failures you can download Firefox and use Firebug.
[0:06:12] Rob: Yeah.
[0:06:12] Mike: That would certainly help with that because you could step through all the JavaScript and find out where it’s failing and then make sure that those things are in there.
[0:06:18] Rob: Yep. Without Firebug I would have been sunk, I would have been sunk. I have been using that to look at the, you know http requests. You know the other thing that screwed me is Chrome will not allow you to set a cookie with the domain local host but it doesn’t tell you that. So I’m trying to log in for like two hours and I’m like, there is something crappy in the code it’s not picking up my cookie. And just over and over I’m like…and you can’t step through at ASP so I’m like the response not right, where is it failing, where is it failing?
[0:06:49] And finally I was just like on whim after seriously two hours of screwing with it I went and got into Firefox and it work and broke in a different way. And then I’m like, what is going on? So I went online and sure enough if you’re, since I’m running on local host Chrome won’t allow you to send a local host cookie. And not it [0:07:07][inaudible] yeah and it totally screws you so. Little things like that, there has been like ten things that have just been weird tricky Ajaxy, you know things that are so hard to see because you’re not able to step through and see them in a debugger and it’s all kind of guesswork that’s what going on.
[0:07:23] Mike: Mmhmm. Yeah that does kind of suck. I mean I ran into, not quite similar issues for AuditShark because I had to develop locally. But I’m using SSL certificates so that makes things a little bit challenging because everything, everything is done over SSL. So I have to make sure that in my Java environments I’m also using you know SSL as well. So I have an SSL certificate for my laptop, one for my desktop and then I also have one for my server a bit of challenge.
[0:07:54] Rob: Right. No, that makes sense. Yeah I’ve resigned I mean this is, this is the downside taking over a code base, and I know that I knew that going into it. You know that taking over someone else’s code is always hard and like I said this is the low point. I’m not saying, “ Oh I shouldn’t have done this”. I have no regrets like I’m very pleased with it. But I’m just at that low point where literally like two hours I was just spouting curse words at the computer you know, so pissed off.
[0:08:21] And questioning every hour that ticks by I’m thinking how I could rewrite this. It would take me several weeks but maybe you, should I do that should I do that. And so there is that doubt in the back of my mind of, do I just rewrite this whole damn thing? And so I started sketching out what might look like. I actually started writing a spec and recorded a screen cast for a developer who works me to rewrite it in ASP and NVC. And the more I go into it the more I realized although it’s only six or seven pages it is, it’s quite complicated.
[0:08:51] And it’s seems simple when you look at it but as you enumerate everything they’re going to have to do and how they have to do it because you can’t just use basic queries right? You can’t just say “select star from this” because one of the tables has 1.2 billion rows in it. So you have to have a very specific query structure. So there is just, at that point it’s like “ huh this gets more complicated”. And I’m going to lose, have bugs and I’m going to lose some features and you just now that goes when you go to rewrite something. It’s always more complicated than you think it’s going to be.
[0:09:19] Mike: No, I definitely know. I mean just look at how long I’ve been working on AuditShark, my original intention was to, what was it, have it out of the door and possibly….
[0:09:29] Rob: After ten weeks?
[0:09:30] Mike: I think I wrote a blog post about it a while back it was back in July or something like that. That was when I was looking to originally push things out and start going live with it and here it is five months later.
[0:09:41] [music]
[0:09:44] Rob: I think we want to get pretty deep into AuditShark and specifically some comments that I’ve heard both from this email I got from a friend of the podcast, Lester Burk as well as some stuff you know Ted mentioned, Ted Pitts mentioned base as a software and other people have mentioned you know offhand to both you and I think. And it seems like it might just a good discussion to kind of dig into some specifics, some points about AuditShark and some points about maybe some confusion about what AuditShark is. How you have, or haven’t been marketing it, have or have or haven’t been developing it, you know just different opinions that people have and kind of just hear your side of the story.
[0:10:19] Mike: Sure.
[0:10:20] Rob: Lester was at MicroConf last year, he is a Micropreneur Academy, I’m pretty sure he is a lifetime member. He sent a very long well written well thought out email to me. He’s like, I have concern about AuditShark and Mike and I’m concerned that you know he’s going to release and nothing is going to happen.
[0:10:37] And I read it and I was like this is good and I forwarded it to you and so Lester I apologize, I just, it totally didn’t occur to me. Because I thought it was just so well written but he’s really given constructive things. He just is, but he tells it like he sees it.
[0:10:49] Mike: I sent a couple of emails back and forth to Lester and I even told him the questions he asked are really good questions. I told him flat out, I said I don’t think you should temper those questions in fact they should probably be a little harsher because and not just for the questions he asked me but in general when you’re asking questions it makes whoever is answering them be spot on with their answers.
[0:11:09] And they have to have clearly thought through what their answers are to those things and being prepared for those types of things makes them truly think about what it is that they’re doing and whether or not they have seriously considered the ramifications of whatever path they’re on.
[0:11:24] Rob: Right.
[0:11:25] Mike: And I told him like I didn’t take offense to anything he said one bit and he asked me very good questions. So we’ll definitely get into those also.
[0:11:33] Rob: Cool. I don’t think I’m a great accountability partner. I don’t push things right? I ask your opinion you say, “Oh this is what I’m working on” and then I let it go. And it seems like other people they just tend to push more and for some reason that’s not like my personality. So even this email stuff I’m going to read is just like more forceful than what I would tend to say on the podcast.
[0:11:51] And so this is motivation for you to think about how maybe you reshape, how you talk about AuditShark and this is motivation for me to think about how I kind of push you in future podcasts. So first quote was from the last where he says “Frankly I hear myself in the things Mike says and thinking that reciting technical manouche is the same as business progress. Does Mike actually enjoy the marketing? In your book,” that’s my book Start Small Say Small “you come right out and say that it will be 15% coding and 85% marketing. But you let Mike of the hook with 85% coding and 15% marketing progress”.
[0:12:25] And then he puts in a quote kind of a you know kind of a chuckle, kind of like “But it’s so good it would sell itself”. So he’s just, he has a concern that you’re not working enough of marketing that really when we do our updates I do tend to talk more about doing marketing tasks and you tend to talk more about technical challenge that you faced.
[0:12:42] Mike: He’s absolutely right, I talk more about the technical side of the things that I have been working on primarily because they’re the things that I am most focused on at that time. And it’s not to say that I’m not doing any marketing because I certainly I am. I mean I’m doing like building, I’m building a mailing list.
[0:12:57] So one of the things that I haven’t really talked about so far is that I have been putting together a newsletter where it’s very leading to whoever subscribes to the newsletter. And the idea is to essentially teach the subscriber to the newsletter about compliance and the things that they should be looking for and the things they should be doing. And it’s not technology specific in any way shape or form, it doesn’t even relate to AuditShark at all. What it relates to is specifically how they should go about their job and what they should look in the tools that they use to get that.
[0:13:28] Now I’ve done compliance software before actually built compliance software and I know what sort of things people are looking for because I’ve done enough compliance consulting. And the things that enterprise companies look for are basically the same things that smaller companies look for. The problem is the enterprise companies tend to have external regulation that dictate what they need to do. The smaller guys it’s more of an honor system, they’re supposed to looking at certain things but in general they’re supposed to look at their environment and start identifying where there are regressions to their security policies.
[0:14:02] And it makes it difficult for them because there’s not necessarily established benchmarks for them to look at and it just makes it difficult for them to know what they should be looking at. Their first question is always “ what is everybody else looking at?” And AuditShark will help them with that. But I don’t necessarily say, “ hey AuditShark is going to solve your problems”. I say this is what you should be looking for. And then kind of let them make those mental leaps in talking about AuditShark.
[0:14:30] Rob: That newsletter or the series of articles you have is obviously, you can put it in auto responder where people give their email you drip it out to them over the course of a few months.
[0:14:40] Mike: Yep.
[0:14:40] Rob: Could you release that now? Do you need a product in order to do that?
[0:14:43] Mike: No I don’t. And what I’m waiting for that is to kind of finish out my thought process in the newsletter so I’m out to about four or five newsletter articles right now and I’m trying to think of how I’m going to mould it such that it comes to a logical conclusion. And say, “ this is kind of where this newsletter ends, if you have any questions let us know blah blah blah, etcetera”. But I’m kind of in a cliff right now. So until I address that cliff I’m not quite sure whether or not I should move forward with pushing that out.
[0:15:17] Rob: Why are you making it end?
[0:15:18] Mike: The newsletter is more like an introduction to compliance and an introduction to it kind of has to end somewhere.
[0:15:24] Rob: I guess honestly if I had a list and I’ve got a few hundred subscribers if it’s going to be a decent funnel I wouldn’t stop it. I wouldn’t say that’s the end of this thing. Because you know someone may not buy within two months right?
[0:15:37] Mike: Mmhmm
[0:15:37] Rob: I mean it make them six, you may have a six months cycle on this thing, you don’t know yeah.
[0:15:42] Mike: I think, you make a good point though. Why should it end at that point? And the idea is I guess it’s kind of like anything where you’ve kind of pitched enough of your products or the idea behind your products and what it can do for people. And granted in this particular newsletter I’ve been focused more on the problem of compliance in general. What I’m looking at for kind of the next set of newsletter articles is to trying to weave AuditShark into that such that it becomes more of a sales pitch.
[0:16:12] I mean initially its education, education from the standpoint of I’m an expert in this particular area these are the things that you should be looking for. And then morphing that into more of this is how AuditShark can address these issues that you may have thought of and oh by the way, here is a coupon code for a free trial for 60 days or whatever for being a member of this list. And then leveraging that over time to hopefully try and convert those people.
[0:16:37] And then obviously you have to measure how many people are, eight newsletters in who have purchased, how many people are 12 newsletters in who have purchased. And trying to figure out where is the inflection point of where people convert the most.
[0:16:51] Rob: Right. It sounds to me at least the feedback I’ve gotten is that people want to hear more about this kind of stuff you’ve been doing with AuditShark. You mentioned that you have been doing marketing with it. That you’ve done some link building, you’re working on some SEO and that you’ve written these lists, episodes of a newsletter. What else, like do you have, I mean I’ll throw out an example. Like with HitTail, over the past five months, six months since I started looking at it, I put up a Google doc and I started a marketing plan. And all it is a bunch of bullets, like I’m not into big formal plants.
[0:17:19] It’s a huge bulleted list and I started with Noah Kagan’s Mint.com marketing plan that he published online a year or two ago. And I morphed that towards HitTail and it includes low touch, high touch, all these different kinds of marketing approaches. Some of which, I mean obviously I did a bunch of his because I’m not going to do similar things it’s just not, you know it doesn’t translate.
[0:17:42] But then as I’ve been reading or listening to podcasts of blogs or books, anything over the past six months I’ve expanded that plan. And at this point I have 11 pages solid single space bulleted list. And that freaking thing is ridiculously good, like I’m not trying to pat myself on the back but I get so excited when I look at it because I have this ream of to me like interesting potentially valuable, hopefully highly valuable marketing approaches that are catered to HitTail.
[0:18:11] And it isn’t vague stuff. It includes specific tactics and it includes specific websites that I’m going to do this on or this with. Realizing that half of them, 75% of them eventually are going to fail but I’m going to basically find you know the approaches that work really well. What do you have in place for AuditShark right now? Do you have bulleted list, is it all in your head, are you just looking at like marketing through SEO in this newsletter? Is it going to be cold calling, is it going to be like, what is your plan?
[0:18:39] Mike: I haven’t formally written most of it. I keep most of it in my head. I will be the first to admit it’s probably a terrible terrible place to leave everything like that because I’m sure that there’s things that I’m missing. I do keep some things in Evernote probably not nearly as much as I should. I’ve got some things kind of distributed between my iPad, my phone and I should really use Evernote on all of them and I just don’t.
[0:19:02] So I could definitely do a better job in that regard. One of the things that Lester brought up was that he doesn’t hear me talking anything about customer development. Have I even shown this to people? I have done a demo, I did a demo for three people at one point all on the same call basically walking them through the interface, walked them through how it would work, what it does, what sort of reporting they’re going to be able to get out of it.
[0:19:24] They liked it, they were impressed enough by it that they wanted to continue the discussion as I got further down the road with it. But I was at least able to get some of that initial feedback. A couple of weeks ago I had a day off where I actually went to all four of the banks that are in my hometown. And just basically walked in and started talking to them and saying, “ you know I just want to talk to your IT department”. I got in and talked to them and said, “ This is what my idea is” and tried to kind of hash out the things that I had been working through my head in terms of what my plan is.
[0:19:55] But the target market, I’ve kind of talked about is really small business, small banks. And when I talked about compliance software being generally enterprise software, AuditShark is really not aimed at the enterprise. And by enterprise generally I think of a thousand employees and up. That’s not necessarily the number of employees or computers that constitutes an enterprise, really enterprise is just a label. I mean if you go out to small companies like Axosoft for example they have an enterprise version of their products, it is aimed at ten developer companies, ten developers or ten employees is really not an enterprise but that’s the label that they have placed on it.
[0:20:30] So that’s the expectation that people have for their software. With my software my target market is really companies between 50 employees and about 250 employees.
[0:20:42] Rob: So is that 50 nodes?
[0:20:44]Mike: Yes.
[0:20:44] Rob: And 250 nodes so obviously for those who are new AuditShark is auditing software, it installs on a server and then it’s charged per node. I think there is a little client piece that installs on each client Mike or not?
[0:20:55] Mike: No, no, you install it on one…
[0:20:57] Rob: Okay so it’s all on the server okay.
[0:20:58] Mike: Yeah you install it on one machine and it agentlessly queries information from all the other machines.
[0:21:04] Rob: So then if you have 50 nodes, they pay, the pricing is still five bucks per node per month, 50 nodes ten buck, okay.
[0:21:10] Mike: Yep.
[0:21:11] Rob: So it would be 50 nodes would be 500 bucks a month that they would pay you and obviously 250 would be 2500 a month. So these are definitely see, this is actually an interesting thing because I have been confused in the past and I’ve mentioned like, Mike I don’t think anyone is going to find your site through SEO and buy from you. I think everything, every sale is going to be high touch, definitely at first and probably for ever because it’s such an expensive price point.
[0:21:34] You may not be selling to enterprises but it’s an enterprise price point in my opinion, 2500 bucks a month for 250 person company is, you know it’s decent chunk of change, 30 grand a year. Would you agree with that or do you think that you’re going make sales off your website? Someone is going to click an “add to cart” button and buy this you know this $1000 a month software?
[0:21:51] Mike: I don’t think I’m going to make sales off my website. What I do expect to happen though is I’m going to get leads from the website…
[0:21:58] Rob: Absolutely.
[0:21:58] Mike: And I’ll be able to follow up on those leads. So that’s really what I’m looking at from the website perspective. My anticipation is not that somebody is going to browse through my website and I’m going to get a 1000 visitors and ten of those are going to say “oh well I’m just going to buy your software” and they’re going to plunk down $2500 a month, that’s just ridiculous it’s not going to happen.
[0:22:20] But what I would expect is that maybe somebody signs up for a newsletter. And they give me their email address which basically is permission to email them at which point I can personally email them and say “ hey just wanted to let you know if you’re interested in it, I can schedule a demo of the software and walk you through how it works or talk about maybe the compliance problems that you’re having and do more of some personalized one on one stuff”. Because at a price point for 500 or $2500 a month it is worth my time to go after them individually.
[0:22:50] Rob: Absolutely.
[0:22:50] Mike: A price point of $10 a month is not, it’s absolutely not worth your time.
[0:22:56] Rob: Right. I think the question you were getting at is enterprise versus not enterprise, I mean it’s just a label. I think you know Lester brought up he said when he’s spoke with you at MicroConf you had said you had a friend who ran like a bank with 500 nodes who may be interested in AuditShark. And then lately you have been saying you know that this is an enterprise software. So you’re saying like you don’t consider 500 nodes to be enterprise software even though that’s like five grand a month.
[0:23:20] Mike: I think for compliance software it’s not and the rationale behind that is that when you get into a much larger environment and it’s to step back and take a look at the industry of banks a little bit, there are about 8000 to 8500 banks in the United States. The average branch size is about ten. So ten branches you figure maybe ten employees per branch, about 100 employees on average.
[0:23:43] Unfortunately if you chop out like the top, I don’t know was it ten banks or so they constitute 70% of the market, that means that the other 8490 banks constitute the rest of them. So your average branch size drops from 10 to substantially lower amount maybe three or four. You go to any given town here in Massachusetts and you will see at least one local bank if not two. Here in my home town we have three, there are three local banks. And one of the ones that I went into a couple of weeks ago I went in and I talked to them, I just said “ I just want to ask some questions”, they sat down with me.
[0:24:22] And I said, “ what are you doing to manage your environment and how are you dealing with the compliance issues?” And they said, “ well we hire an outside consulting company to do that for us”. Which incidentally is something that I had heard before so that kind of goes to another point that I’ll make in a second. But to drive kind of deeper into this particular perspective where I’ll say, in discussing with them it seemed like I was having a hard time explaining to them what AuditShark was and what it did.
[0:24:47] So I tried to simplify things a little bit and say “ okay well you guys log into your machines you have a policy and you know you log into the computer by typing in your username and password and it authenticates with Active Directory”. And they said “ We don’t use Active Directory”. And I said, “ excuse me how do you manage permissions and everything? Do you use Novell?” And they said “ No what’s Active Directory?”
[0:25:10] And at that point I realized that this was not my intended customer. Because they had no idea what Active Directory even was and one of the things that my software relies on is the existence of Active Directory. They were using it, they just didn’t know it and the reason they didn’t know it is because they had outsourced it to this other company. The other thing I found out from them was that they were an 18 employee company which means they didn’t even have an IT department. So they’re relying on an outside consulting firm which to me leads me to something else I learnt from talking to other prospective customers that the smaller banks tend to rely on these outside IT consulting firms.
[0:25:46] And there’s a limited number of them and these banks tend to work with the same ones year after year. So one of my go to market strategies is actually going to be approaching firms and saying “ hey here is what I can do for your banking customers” and letting them kind of do the legwork a little bit or the introductions to help make into those accounts.
[0:26:09] Rob: Right so you’re talking then about into selling into IT consultancy IT auditors right?
[0:26:13] Mike: Almost kind of like an, I haven’t worked out all the details in my head about how that would work yet. But you can almost think of it as a high level like an affiliate program where they…
[0:26:22] Rob: Sure it’s like Symantec do that, Norton and those guys.
[0:26:26] Mike: They do but they don’t really offer software as a service. I mean they have resellers and in a way this is a reseller arrangement as well but because it’s a SaaS application it complicates things. You know whose customer is that at the end of the day?
[0:26:40] Rob: Microsoft does that actually. They do SaaS and its form or fashion so you may want to look at their model of how they do it because they have partners who go and sell and they split revenue some, I don’t think it’s 50 50 but in some form or fashion.
[0:26:55] Mike: Yeah I have seen for like for Exchange Server you can definitely by Exchange email boxes and stuff and there are different companies that will host it and then Microsoft has their Office 365 I think it is that you know there’s resellers out there for that I believe as well.
[0:27:09] Rob: Right. I like the approaches that you’re talking about. I like that you’ve talked to folks, it sounds like you’re learning stuff from banks. My biggest concerns as you go to sell Audit Shark is that it sounds like you have a lot of different avenues that you are trying to pursue and without doing it fulltime I am concerned that you are not going to be able to do any of them to the extent that they need to be. Because you know you and I both know how intensive, time intensive high touch sales are.
[0:27:32] And so you are going to get some leads through your website. I’ve not doubt that you’re rank first in terms, you will get some leads and you will be following up with those guys. But if you are not doing that 9:00 to 5:00, 9:00 to 9:00, five days a week and you are doing that evenings and weekends then how are you going to even begin to do out, you know basically external prospecting with these IT auditors and develop the product? And once you get it installed at an Alpha site or a Beta site you are going to be working with those guys.
[0:28:00] I mean it just seems like you are really going to be strapped for time and there is a lot of complexity, sounds like there is complexity or just a lot of different options for the sales channels. I don’t know, how do you plan to sort that out?
[0:28:12] Mike: Yes, the answer to most of those is yes, there is a lot of complexity and one of the things I am doing now in talking to people is trying to figure out what is going to be the most valuable in terms of my time. What’s going to be the most fruitful in terms of learning those first customers, those early people who are going to give me the feedback that I need.
[0:28:30]And it is not to say that I can’t somehow morph Audit Shark a little bit so that it is less aimed at banks or maybe uses the same backend and it’s something at a price point that people could afford. So I am not removing options like that from the table. I am definitely keeping them in mind. But I haven’t come to firm conclusions on how to deal with some of those things because you are absolutely right about the fact that those high touch sales are going to be very time intensive. I may have to do a lot of hand holding there is no doubt that I am…
[0:29:00] Rob: The installation, you are going to have to help with the installation especially early on you are going to have to…
[0:29:05] Mike: Installation, installation is almost a joke.
[0:29:05] Rob: You think it is, we think it is [0:29:09][inaudible] invoice. It is like FTP this and run a sequel script that’s all it is and we spend so much time supporting that because people do not know how to do it or they do it wrong. Or they have a server that is all jacked up and doesn’t have components that every other server should have and they don’t. I know you have an MSI and you have a really nice installer and all that…
[0:29:28] Mike: What I have at this point is once you have created an account in the website it directs you to go to a page where you download a zip file you unzip it, you run the executable with the command line of the install and that’s it.
[0:29:43] Rob: So they have to open the command line there you go.
[0:29:45] Mike: Right.
[0:29:45] Rob: That’s a support ticket right there, no I am serious dude it’s…
[0:29:48] Mike: I know
[0:29:48] Rob: I know that sounds so simple and I could do it. But so many people are going to screw that up, I guarantee it so…
[0:29:54] Mike: I understand and…
[0:29:55] Rob: Or it is going to crash or whatever you know there is going to be something there.
[0:29:58] Mike: Yeah.
[0:30:00] Rob: So but that’s neither here nor there. So yeah you’re going to have installation support you’re going to have sales, you are going to have lot of stuff going on.
[0:30:05] Mike: But it’s not like installation, if I needed to do the installation for somebody I could do it via a WebEx or go to a meeting or something like that and literally be done in about two minutes. It is not really that difficult and I have already got something to work on my list of things to do to put together a PDF that outlines exactly how to do it. And then I am going to take that PDF and I am also going to create an HTML format of it that goes on the download page that says, this is exactly how you install it complete with screen shots.
[0:30:31] So I am looking at ways to mitigate those types of problems. I mean one of the things that I spend some time on that didn’t need to be there kind of from my minimum products but it dynamically creates the zip file for the user when they go to download it. And it does that so that it can insert their customer specific data into it.
[0:30:52] Rob: Right, yeah.
[0:30:52] Mike: So that the user doesn’t have to do it because otherwise I would have had them open up an XML file and then modify some stuff that would have just been, it would have been a nightmare.
[0:31:00] Rob: Right, bottom line let’s just say they get the command line and they get it installed and they are going to run it and they are going to, stuff is going to come back, they are going to have questions for you right. Especially the first 10, 20, 30 customers you selling this to they are going to be all over you for support. And you need to be all over them supporting them just to keep this stuff going.
[0:31:18] So super time intensive and I guess the question that, that may be the question that has been in the back of my mind the whole time is, I mean Lester points it out several times. He says, “Mike says this isn’t enterprise software. But he talks about like long sales cycles, high touch sales, higher price points. You know having an auditor involved maybe selling through an auditor as a partner into these banks is definitely more enterprise than not”. Stuff like that, its like has a one person’s software shop ever successfully actually sold mission critical software to a bank. If the bank switches to Mike’s stuff and you are hit by a bus, you know what is his story to his customer.
[0:31:52] There are certain things that go along with enterprise software sales. Things that we have just covered that Audit Shark will have long sales cycles, higher price points, needing like a partner, you know having an IT auditor that is a partner but then you sell through, you have to recruit them, give them a cut and then you know get into the bank potentially cold calling, high touch sales in general.
[0:32:16] I mean so these all really are much more enterprise than say HitTail, right? Being a lower end you know price point SaaS App or done at invoice those are obviously not enterprise. And this is more it is sounding to me like it’s more enterprise than not. You may not be aiming at Fortune 500 or Fortune 1000 but there are enterprise considerations that come with building this product. How do you plan to run an enterprise sales organization as a one person shop?
[0:32:43] Mike: I don’t believe it will stay one person forever. I have kind of resigned to the fact that if I wanted to actually grow this out it has to be more than me I can’t possibly do everything and I understand that. I mean if you look at the code base for the product, the code base alone is I think 65,000 lines of code right now. And this for what I refer to as my minimum viable product for this there is no way around it.
[0:33:08] And it sounds like a huge amount of code for what it does. But in many ways what I have done and how I have done it is necessary for what my long-term vision is which is not something that I have really shared with people because that vision kind of needs to come to fruition before I start talking too much about it. There are things that I want to be able to do that if I start talking about them I feel like it would not only derail me but would invite competition for things that I don’t necessarily want people to go after yet.
[0:33:38] And I understand that there’s lots of people who will say well you know, talking about your ideas it’s how you get them to become reality it’s, nobody is going to steal your ideas. I understand that but there are other things to consider. I think you are right in your assessment that there is a lot of things to consider and there are a lot of things that I am just not going to be able to do or handle as a one person shop and I don’t expect to be able to. But over time I also expect that this product is going to grow to the point that I am going to hire people to help me out with it.
[0:34:10] Rob: Right but I mean there is always that point where you like you have more support and sales efforts, prospecting efforts and all that stuff you have way more time than you do money. You may need 40, 50 hours a week you are working you know doing consulting and then you are doing this and other 30 plus hours a week. But you are not bringing in enough money to hire someone. I mean have you thought about that I mean like at what point you think you can bring in an employee or a contractor to help out?
[0:34:37] Mike: Not specifically it really, the money has to be there. I mean I can already cut my hours, and I have already talked to the company that I do a lot of subcontracting through and told them flat out I would like to cut my hours. And that is so that I can start working on Audit Shark on not necessarily a fulltime basis but on a more regular basis. And they are interested in potentially being a reseller for it because they have looked at it, they have seen what it can do and they know what my capabilities are.
[0:35:03] They have an established customer base I have no doubt that I could leverage them to start selling it to some of their customers. And that would cut out probably two thirds of the issues that you raised. You know for example how am I going to find time to do demos? I don’t need to find time to do demos, I could teach them how to do demos, I could teach them how to talk about the product.
[0:35:23] They already have the customer base I don’t need to find them. So there are a lot of those issues that basically get resolved by working with resellers and partners. The real question on my mind is how to structure of the compensation because it is a SaaS App how do you do that? And that’s not an answer I have right now.
[0:35:42] Rob: Honestly we could talk about this for like another hour. I have more questions and there is even more stuff Lester talked about in the email and I am sure you can certainly talk about it for hours. It seems like we might you know want to continue addressing this in future episodes and I think that…
[0:36:00] Mike: We could ask people to send in questions for me.
[0:36:02] Rob: Send in questions, yeah I think maybe sharing what you have in mind could potentially help other folks beyond just the kind of the development of it.
[0:36:13] Mike: Yeah I definitely agree, I mean I can certainly be more than happy to share the things that I can.
[0:36:19] Rob: I think people listen to podcasts because they want to hear our stories.
[0:36:21] Mike: Right.
[0:36:22] Rob: You know what I am saying, they want to hear what you are doing, what you are thinking and basically like how are you marketing this, how are you thinking about it because I think that’s why people tune into the show.
[0:36:29] Mike: Yeah
[0:36:30] Rob: It is to hear our trials and tribulations and they really hear the failures. It is not that everything has to work it’s just people want to hear us try stuff, you know.
[0:36:38] Mike: Yes. It really seems like the way that I need to go for this is leveraging resellers to get into those accounts where because it is high touch sales those people who already have their relationships that’s going to be important. That is going to be key to me pushing a product out and getting people signed on with it. I am not going to get those people driven on my website in the volumes that I need and be able to establish the trust that I need.
[0:37:04] Rob: Yeah I would agree. I think it’s going to be too time intensive and it’s going to take too long to ramp up. I think that resellers are obviously good, it’s intensive to do that right? You have, it sounds like you have some existing relationships so you won’t have to cold call to find resellers. But just finding resellers and managing them as an example with [0:37:22][inaudible] voice we have resellers and it is way more of a time sink than we have ever gotten money out of it. Obviously resellers work for some business but my experience as far has been that it is not that good.
[0:37:32] It seems like your like Audit Shark and the banking model is different and they may be more used to that and they maybe more of a viable option. But I wouldn’t underestimate the time that it would take to get them on board and trend and constantly reminding them to push your product right because otherwise they forget and they are not going to sell your product for you unless you kind of tell them to do that.
[0:37:52] Mike: Right, yeah and I have talked to three different consulting/service companies about Audit Shark and all three of them were interested in either becoming a reseller for it or talking to their customer about it and having them buy it directly. There are a bunch of different options there. It is just really a matter of me finding out what model fits because I have given a lot of thought to how different resellers models work, and I am not terribly happy with any of them that I have found really so far. I mean if you take a look at for example Microsoft.
[0:38:25] Microsoft reseller model is that if they sell direct to you, you have to buy at a significantly higher price point. I mean you buy the full MS RP and the reason for that is because they don’t want to undercut their resellers. If you look at other companies like Symantec, what Symantec does is they have, you know a two tier distribution model where they sell to distributors and then everybody else all their partners buy from distributors. And that is not really any big secret.
[0:38:54] But when you start talking to those customers or to those partners, you can go to any of those partners and you can ask for a price quote for something and then you can ask for a price quote from somebody else. And depending on you know what level of a partner somebody is with Symantec or you know what their discounts are with their distributor you can start playing price words between them. And you know their sales reps are going to go back and forth. And then you will end up with in fighting between your partners who are trying to resell your products because they are trying to make margins.
[0:39:27] And I don’t really like that model just because of the fact that let’s say you are a reseller for me and let’s say I am going to sell my software to you for $6 per node and then you turn around and resell it to you know whoever you want. If I make the same deal with somebody else and they are able to sell it for $6 basically the two of you if you are competing for the same customer you are going to be going back and forth with the price. And you are going to lower the price back and forth between each other to land this one customer and all it does is devalue the product.
[0:39:56] And I don’t like that whole concept because it basically just puts a minimum price on everything. And at the end of the day honestly it’s I am going to get whatever it is from the end customer and then you are going to get some cut of it. I don’t necessarily like that model. What I have been considering is something in more of a form of a rebate where I have a little bit more control over it where depending on the customer aligns with me directly. And then I turn around and provide a rebate back which almost fits in more with a SaaS model anyway.
[0:40:28] Rob: Right sounds like there is a lot of question marks around that model, I mean sounds like…
[0:40:31] Mike: There are…
[0:40:32] Rob: I mean you have talked to resellers have you demoed for resellers?
[0:40:37] Mike: Yeah.
[0:40:36] Rob: I mean it sounds like that is kind of your next gig if you are going to go that route. Like next time we record the podcast, do you have anything scheduled between now and then where you are going to demo or show it to a customer or anything like that?
[0:40:49] Mike: Not on my calendar last I think it was Thursday or Friday I had a conversation with one who was, they wanted to take another look at it. And just because they had some more questions about it and at the time when I first demoed it to them it didn’t have, it really wasn’t full featured at this point. As of last week sometime I would say that I am basically done with Audit Shark in terms of being able to install it for a customer and have them use it.
[0:41:14] There is one outstanding bug that I have to fix that I kind of introduced in the process of implementing the scheduler that where it doesn’t save the data properly. So I need to fix that but that shouldn’t take more than you know maybe an hour or two of work to fix. But beyond that the product is done I can install it in somebody’s environment and it will run on a scheduled basis it will run the audits it will, you can go to the website, you can click a button, you know just by choosing a couple of dropdowns, you specify the policy, the group of machines, you click audit and it will execute that audit as quick as possible against those machines and it will pipe all the data back up into the internet.
[0:41:50] So everything is basically working at this point, it is just a matter of tweaking some things in the UI to make things more comfortable adding some of the documentation, I have already had a lot of the documentation added into it. But having those as you pointed out having those conversations with those prospective resellers is probably going to be pretty important. And I haven’t, I don’t have anything specifically in the product right now that allows somebody to sign on a customer as kind of a subcomponent over their account so to speak.
[0:42:19] Rob: Right and that’s probably not something you want to build at this point, you want to sell at my opinion you want to sell before you even start writing any of that kind of stuff, you know what I am saying?
[0:42:28] Mike: Yeah.
[0:42:29] Rob: Get some money in the pocket.
[0:42:30] [music]
[0:42:32] Mike: The one thing that I would say for anyone who is listening is if you have questions or you want to hear more about what my plans are or thoughts are or something doesn’t make sense or if you think I’m way out and left you on something, feel free to let us know. You can call in a question or comment to our voicemail number at 1888019690 or you can email in an MP3 or text format to questions@satrtupsfortherestofus.com. Our theme music is an excerpt from ‘We are out of control’ by Moot used under Creative Commons. A full transcript to this podcast is available at our website startupfortherestofus.com.
[0:43:04]If you enjoyed the 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. Thanks for listening we will see you next time.
Episode 59 | Why You Should Hire an Intern (with Dan Andrews)
Show Notes
- Lifestyle Business Podcast
- Tropical MBA
- Tropical Workforce
- AuditShark Compliance Software
- HitTail Keyword Tool
Transcript
[0:00:00] Rob : This is start ups for the rest of us, episode 59.
[0:00:03] [Music]
[0:00:14] Rob : Welcome to startups for the rest of us podcast for developers, designers and entrepreneurs, the ultimate software launching product. Whether you’ve built your first product or you’re just thinking about it. I’m Rob.
[0:00:22] Mike: And I’m Mike.
[0:00:23] Rob : And we’re here to share our experiences to help you avoid the same mistakes that we’ve made. What’s the word this week Mike?
[0:00:28] Mike: Well I spent most of this past weekend completely rewriting the guts of the Windows service that customers are going to install for Audit Shark and the reason I rewrote it is because I started putting together the installation instructions for it. And it was a lot more difficult to get it installed that I thought because obviously you know I need customers to be able to install it and I did it on my development machine and I was doing some I’d say kind of funky things to get it installed. And I got to the point where I said this is just going, this experience is going to suck for the customer. So I basically re wrote it so that the installation is literally just a single command line, you know you can unzip the Zip file that’s got all the files and stuff and you put it wherever it is that you want. You call the executable with the install parameter and that’s pretty much the end of it. It would just work, it installs itself as a Windows service and you just from there.
[0:01:23] Rob : Nice. See that’s, and that’s like iteration, it’s like you get the thing to Alpha and then you realize there is this early step that you’ve kind of forgotten about because you probably haven’t installed it for months because you know just in dev environment. And I don’t know fixing that feels like a nice step towards getting this thing ready to go in customer machines so that’s pretty cool.
[0:01:42] Mike: Yes it was really cool to see it actually work because all of the stuff that I had in place it’s sort of works but there were some funky things that kind of happen, it’s just not going to work for the customer. It’s not going to present the experience that I want the customers to see.
[0:01:57] Rob : Cool I think, I want to talk a little bit about Hit Tail because I’ve gotten several emails like people asking, like so what is Hit Tail, what does it do? And I feel like it’s funny I kind of talked about it early on yeah its SEO Keyword tool. But like people don’t really get the idea and it’s a super simple idea and I can almost say in one or two sentences. Hit Tail which is the app that I’ve acquired it’s a software it’s a service app, all it is at its purest form is a way to find out the keywords that you should be targeting on your website. So the SEO keywords you should be targeting. And the way it does that is it doesn’t use the Google data that everyone else uses. Like Google keyword tool you can plug into that and you can do all types of analysis.
[0:02:37] And that’s what Market Samurai uses, that’s Micro Niche Finder uses, that’s what all the tools that you do keyword research with essentially use that same corpus. It’s basically all just conjecture based on what people think people are searching for. It’s reasonably accurate, it’s a good estimate. What Hit Tail does is you install a snippet or Java script on your website like Google Analytics and so Hit Tail is able to see all of the keywords and all the traffic you’re getting. And it actually looks at the proprietary actual real time information in your traffic. And then it analyzes it and it says, these are the keywords that you’re going to rank easily, they have enough traffic you should write a blog post or you know write an article about this and you’ll appear on the first page of Google for this terms.
[0:03:25] That’s what it is. That’s all it is. So really the whole app could be one page. You install a Java script and the whole app could just be this list of keywords that you should then either write about or hire a writer. I have writers I can recommend, that I do recommend to Hit Tail customers. So that’s it. Now the app is more than one page because we have, there is a long tail diagram and there’s real time refers and there’s you know other stuff that we give you. But the bottom line is it’s all about the keywords that no other tool can tell you and at this, the recommendation algorithm has analyzed 1.2 billion keywords.
[0:04:00] I was looking at it, I thought it was 700 million and I looked in the database last week and it’s billion. You and are both accused of not selling hard enough, like we don’t plug our products, we don’t talk about the academy very much. And it’s just not kind of not our way right? We’re just more mellow dudes. So I’m not like trying to push Hit Tail on people but I genuinely believe in the value of this thing. I mean this is why I bought it. I’ve been a customer of it for five years and you know there are several thousands, there’s actually about,40,000 people who’ve tried Hit Tail that are in the database. And I have like raving fans who you know were really frustrated with the old ownership because it kept going down.
[0:04:34] I do truly believe there is value for people here. You know it doesn’t work for everybody, you need at least, between three and five thousand visits a month. You probably want at least 15, 20 of content on your site. But once you have that it can definitely provide value of the price. Its 10 bucks a month at the lowest plan and it goes up from there. So any questions?
[0:04:53] Mike: Not really, I mean I’ve looked at it before so I know…
[0:04:56] Rob :So you know what…yeah.
[0:04:57] Mike: I know what’s got yeah.
[0:04:57] Rob :The website right now as of this recording you know doesn’t do a good job of conveying what I’ve just said. It’s hard to…
[0:05:03] Mike: It really doesn’t.
[0:05:04] Rob :No. And even the app itself when you, if you log you got an account you don’t know what to do. It took me a long time to figure out the app is not very usable. So that’s why I’ve been talking about it, the whole website is being redesigned, the app is being redesigned to basically underscore what I’ve just said. You know to tell you how to use and how to go about getting the most out of it.
[0:05:22] Mike: It’s interesting that you mention the app is being partly redesigned just to help people or help new customers get the most out of it because right now I’m in the process of pursuing a copy of early customers for Audit Shark and that’s exactly what I’m zeroing in on and asking them for feedback on is, does this stuff make sense to you? Do you even know what to do, what sort of things are missing from the UI, to basically help you make sense of what you’re even looking at because that’s important. I mean that first impression is going to be what they see and if they don’t have a good impression of your software when they first log in, they’re never going to log in again.
[0:05:59] Rob :Yeah I agree. I think it’s a huge piece that’s often overlooked but you can have a great you know marketing and sales funnel and get people to your trial and basically if that first user experience, that first run experience is crappy you’re going to have a leaky funnel and people are going to be falling out of the bottom of it. For great first time experiences you can look at Apple. Anytime you’ve opened an iPod, an iPhone you just this amazing magic feeling when you open it. And 37 Signals does it great with software. That even when you sign up for the trial and they’re basically guide you through what you should do. They’ll often have some sample data populated so when you get to this page, the first page is not blank like a lot of apps are when you first log in. they actually give you some data so you know what stuff is supposed to look like.
[0:06:42] Mike: Wow that’s a great idea. Actually I’m glad you said that because that was something I was wondering about for Audit Shark and that’s something that I’ll probably put ads like my list of things to do is to basically give them a flag that says enable or disable sample data and it basically will just show them data that they could look at that you know isn’t necessarily their data but can show them, this is what the application could look after it’s been populated. So you know kind of what you’re looking at and you don’t see all these blank charts and everything. That’s a great idea.
[0:07:13] Rob :Yeah. There’s two good ways to do it, one is just like you said where you have some sample data that they can add a flag on or off or they can just delete, easily delete all of it when they start. The other way that I’ve seen is to just have, it’s almost like a light image as the background of the page. And the image is of a fully populated data set. And so if you look you can see it but it’s kind of light it’s almost like a watermark. And then as soon as you start entering stuff that image changes to you know more of a white background. So that’s kind of a tricky way to do it but it means you don’t have to deal with you know actually data in their database. But then they can’t sort it, it’s all static and stuff.
[0:07:51] Mike: Right, right. I’ve seen that done before too but I think that just having fake sample data in there will probably be the quickest and easiest way to get it done.
[0:07:57] Rob :I think for you… yeah I do too.
[0:07:58] Music.
[0:08:01] Rob :Today we have a very special guest. Dan Andrews for the Lifestyle Business Podcast. You’re going to learn all about how to hire interns, why the line should be blurred between employees, VAs, contractors and interns and basically hear a lot of knowledge from Dan who has 11 folks working for him and has basically bootstrapped $1 million product business. Not software but actual physical products over the past couple of years with his co-founder. So Mike and I had the pleasure of interviewing him, he’s in Bali and he stayed up late to talk to us. So I guess let’s divert into that interview.
[0:08:38] Music.
[0:08:41] Rob :So today Mike and I are here with Dan Andrews of the Lifestyle Business Podcast. You’ve actually heard me give me shout outs several times in the past. And I’ve been listening to Lifestyle Business Podcast which I’m going to refer to as LBP from now on. I’ve been listening to it since somewhere around episode four and they’re now on, what are you now on Dan, episode…
[0:08:58] Dan: 83.
[0:09:00] Rob :83 yeah. So they go weekly in there. Why don’t you say hi to the audience Dan?
[0:09:04] Dan: Hey everybody. It’s good to be on the other side of the mike this time I guess. I’m usually on the ear buds doing this show.
[0:09:11] Rob :Nice. So in about a week you’ll get to listen back to this.
[0:09:14] Dan: Yeah.
[0:09:14] Rob :So why don’t you give folks an idea, you know there’s probably a lot of folks who haven’t listened to the LBP. Give them an idea of what it’s about, what you’re about, just kind of get them introduced.
[0:09:25] Dan: Sure. So I’m a four hour work a week so like I had a job, a 9:00 to 5:00 guy and that book really influenced me. I was running a manufacturing company at the time and I read the book and it just like hit me like a ton of bricks I was like yes. You know because my passion was always to travel and I really never saw it as a possibility for me. And immediately after having read that book I sat down I thought well what could I do with a business that would allow me to start to free up some of my like you guys are talking about location independence. I scoped out with my friend and business partner Ian who is my co host as well an e commerce company.
[0:10:00] And we just got started like absolutely from square one with a Yahoo Store and put it up and started selling some products and here we are four years later and it’s just been an amazing ride. I think about halfway through we decided to start podcasting about all the stuff we were learning and sort of build up a community around what we were doing. And here we are four years later it’s not, so I’m in Bali right now, Ian’s visiting me for six weeks and that’s been an incredible ride.
[0:10:27] Rob :Yeah and I haven’t told you this before but what I like about your podcast is that you guys are legit. You’re not information marketers trying to sell people want to know how to make money online. You guys have started, essentially it’s an online business or several online businesses that self physical products. So one of your lines of business is cat furniture right?
[0:10:45] Dan: Unfortunately…
[0:10:48] Rob :Unfortunately?
[0:10:48] Dan: Yes tough market. I wouldn’t recommend it.
[0:10:51] Rob :You also sell stuff related to hotel, servicing hotels is that right? I mean I don’t actually, you don’t actually talk specifically about it I’ve just heard you mention it.
[0:10:59] Dan: Sure we sell key boxes, we sell security like safes and stuff, we sell portable bars for conventions and hotels It’s kind of like a hodgepodge, it’s similar to your approach, you guys take the software. I mean we buy into markets based on key terms, based on maybe a passion that we have. So we’re probably actively involved in six or seven e commerce markets right now.
[0:11:25] Rob :Got it. And some of the them Ian actually designs or you guys design products and have them manufactured and you deal with manufacturing in China and that’s a lot of the stuff you’ve talked about in the podcast. And then others I assume you resell, you don’t design all the lockboxes and all that.
[0:11:39] Dan: That’s right we do a lot of drop shipping as well.
[0:11:40] Rob :Right very cool. So Mike and I wanted to have you on to talk about finding staff cheaply because it’s something that you’ve talked a lot about on the LBP, you’ve talked about getting interns. I know the Tropical MBA if people haven’t heard about it, it’s a way that you’ve convinced some really bright folks to come on board for basically a lesson they would make as a salaried employee. But you fly them around the world to the Philippines or Bali where you’re living now. You put them up in a house and you get this genius, I’ll say kids because I’m 36.
[0:12:13] Dan: [Laughs]
[0:12:13] Rob :I know they’re like in their 20s but they’re like genius kids to help you out all kinds of crazy stuff. And you guys are running, you did a million bucks this year huh?
[0:12:20]Dan: We did a, actually probably I think this week we just clicked over to a million bucks so.
[0:12:27] Rob :Congratulations man.
[0:12:28] Dan: Crazy, thank you.
0:12:28] Rob :Yeah. So today we’re going to talk about how to find staff cheaply. And I guess I want to start by maybe introducing the four kinds that I have in mind. We’ll probably wind up covering all of them. As you know we don’t tend to do straight up interviews, we tend to do more like interactive discussions because Mike and I have experience with this stuff as well. But I think you have a unique lens to put to this because like I’ve never hired an intern and I actually some specific questions about how you might go about doing that.
[0:12:56] So I’m going to get started with the four kinds of staff. The first is employees, and that’s what a lot of people think of you know when they’re thinking about starting a business. I know that Mike hired employees, you hired several employees in Philippines Dan. And then I have for myself I don’t think I have, maybe I’ve hired one employee in the past ten years. So the second kind is contractors and that’s what I’ve tended to stick with and I’m sure we’ll all have some insight on that. The next is a virtual assistance and then the final is interns.
[0:13:25] And so we’re going to kind of cover each of those. I’m sure there are going to be a lot of overlap and similarities and such. Mike you’ve been pretty quiet so far, sorry about that, talk briefly about which of these have you had experience hiring.
[0:13:38] Mike: For me it’s been employees, contractors and virtual assistants. I’ve never hired an intern, I looked around a little bit for an intern a while back, had somebody in for an interview but it was, I knew the person kind of peripherally through some you know links I had back to college. So it wasn’t like he was a complete unknown and he ended up going to get an internship at Google instead so [Laughs]
[0:14:03] Dan: [Laughs].
[0:14:05] Rob :How about you Dan? Have you covered all the, all four of those?
[0:14:09] Dan: Yeah currently I think we’ve got all four.
[0:14:11] Rob :Like I said so I’ve definitely hired a lot of contractors and VAs. I think I’ve hired one employee although I’m trying to think it might have been myself that I hired. You know when you set up an LOC like hire yourself. And then but I have, I did hire quite a few, probably 10 or 15 developers at a previous job and I gave a couple of hundred interviews over the course of a couple of years. So I definitely have experience in that realm. So it seems like Dan has the unique intern hiring experience here.
[0:14:38] Dan: Well I can, I can share my big fat principle. So for everybody who’s sitting there saying like, ah I don’t want to listen to this joker talker. Like arguing, that’s development stuff. So this is the one message I will leave to the audience. It is as entrepreneurs, as people who have businesses, by like travelling around the world and meeting so many people that are both aspiring to do this and have managed to pull it off, we are in such a unique position and it’s one that aspiring entrepreneurs. Like when I was 22 years old and had a crappy job I was just praying that some guy would you know put an ad up on Craigslist and say, follow me around with a notepad and do my crap work, I’ll teach you how to be an entrepreneur.
[0:15:16] And that opportunity just did not present itself. And now with things like you know the blogosphere, you can do that, you can present those opportunities to other people and people are just dying to learn directly from people who have business. So I think that’s the number one thing that entrepreneurs undervalue, they’re not, they sort of get caught up in their own world and they forget how meaningful that information is to other people. And by now having nine interns through the Tropical MBA program and a bunch of employees I’ve realized how valuable that experience is for them to actually learn and work directly with people.
[0:15:50] So I think I constantly see entrepreneurs sort of just second guessing themselves, maybe not being so confident about it. But I just want to reassure the entrepreneurs out there how valuable that is to other people that are aspiring to do that, even if you don’t feel that successful yourself.
[0:16:07] Rob :Right and that’s a good point. If you have experience it’s like you said basically by offering to share that you can get really smart people to come work for you as interns or you know one of your other types. And thinking about the intern question because that’s kind of the big thing on my mind, you’ve like I said some really smart kids to come work for you by sharing your knowledge. Why do you then continue to have employees, contractors and VAs? What role do they fill that the interns don’t?
[0:16:33] Dan: Well the interns get hired. So that’s sort of what ended up happening and I didn’t really expect that because at the beginning I was like well if you come work for me for six months I’ll help you get your own business off the ground because that’s sort of the whole reason they wanted to work for me in the first place. But what I realized and you know remembering back to my own experience is that it takes longer than six months to launch a business generally. So they ended up wanting to stick around longer. And so I just brought them on the payroll and that was that.
[0:17:02] And so I think one of the things is that the lines between these things are very unclear for me because it’s not so clear what an intern is versus a VA or what an employee is versus a VA. And like you know it’s my Drupal developer in Manila a VA or an employee? It’s not quite clear in our organization. What ended up happening with the interns in particular the people I brought on to be mentored, a lot of them I ended up hiring. That’s been great. In fact we’ve run unpaid internships more classical type internships through our California office. We do industrial design out of that office.
[0:17:37] And you know those interns have come and work for free for college credits and then we’ve ended up hiring two candidates who’ve done that. So we see internships as a springboard into employment in our company.
[0:17:48] Rob :Got it. So I find it interesting that you kind of blur the line between employee, contractor and VA. Do you still have all kind of four types working for you?
[0:17:59] Dan: Why are we blurring the lines? [Laughs]
[0:18:00] Rob :Yeah I mean why do you, why would you have employees and contractors still? Is it just for short term stuff that you hire contractors or have you thought about moving everyone to W2?
[0:18:11] Dan: A lot of it is so caught up in like the story of our business. So basically I started using my location independence to start chasing down more cost employees. So first I went to Vietnam and then I went to the Philippines. You know everybody has heard about the Philippines and the VAs there. And then I decided wow people want to travel with me so then I started inviting interns over. And when I hired those interns it wasn’t like I was going to put them on the payroll of my California company. So what we ended up doing was opening up offshore companies and the paying them out like contractors. And obviously there are much lower rates than what you traditionally think of an employee.
[0:18:48] So we’ve got people in California back at like at the classic, they’ve got the 401K and they’ve got their health insurance and all that kind of stuff. But the guys that are sort of traveling the world doing my ad words and PPC and SEO and all that kind of stuff, those guys are paid out just like contractors would be. Does that make more sense?
[0:19:04] Rob : Yeah it does yeah.
[0:19:05] Dan: So it’s crazy, it’s totally illegible [laughs].
[0:19:08] Rob :Yeah but what’s funny is it sounds like it’s brought on more like government red tape or regulation or just it’s the specifics of bureaucracy that force you to do that rather than like you, it sounds like you view everyone as just part of your team and it doesn’t really matter if they’re a contractor or an employee, that just a designation you have to make to satisfy government taxes and such.
[0:19:28] Dan: Exactly. And that’s my philosophical way of you know just managing the business in general. If I’m paying you a 150 bucks to do a gig for me welcome to the team you know. And that’s the way I look at it and also that’s the way I do management because I find it so creatively draining to delegate. And so what I need to do is infuse sort of the vision of the business into these people around me so that they can take care of it for me and they can sort of lead themselves.
[0:19:56] That’s why yeah this whole idea of the classic, oh you have a VA and there is a Rip sheets and they’re just like follow the 15 steps on that sheet and then voila you’ve made your money on your VA, I’ve never done that. It’s never worked for me.
[0:20:10] Rob :Right. I have about seven or eight different contractors who work for me. Several of them I would classify as VAs and then see I classify developers and database administrators kind of technical people differently just maybe because I am one but I don’t call them VAs. But I do have VAs who basically do tier one email support and it’s mostly a process. Like it mostly is a Google doc and a Screen Cast that gets them started and then they have these snippets to reply. It’s not all robotic, I mean I still have to hire good people who are fluent in English and all that stuff.
[0:20:40] But they’re more like, I guess a VA in a company they’re more like the people in the call center who are a bit removed from the core team building the product. And that maybe a detriment to what I’m doing. I mean I guess, what’s your perspective on that? Like do you, when you have people doing admin work and you also have people doing hardcore technical SEO, building products and stuff do they interact and they all know each other and they really are part of cohesive team or is there separation there?
[0:21:07] Dan: On the one hand it can be business specific. So we don’t have like, I’m kind of jealous of businesses like that. I think our business is kind of haywire and it might be a reflection of who I am. But mostly what I would do is instruct the people on the team to go hire out contractors from either people in our personal network because generally we do or people on Elance or Odesk or something like that. So often times it’s kind of like admin tasks, nobody on the team wants to do that stuff because we very much have this kind of like upper route feel in the company. People, you know we encourage people to push things forward and be creative.
[0:21:40] So when you put a bunch of admin work on their desk they’re kind of like, eh not so much. We take contractors on outside countries from either Odesk or Elance to do a lot of that kind of stuff.
[0:21:49] Rob :Got it. Okay. So you know we have a lot of folks who listen to this who listen to our podcast, who are probably you know either just building an app or have launched or thinking, wow when do I hire someone and what do I hire? You know do I try to look for an intern first? Do I look for a VA? Do I look for a contractor? Mike give me some perspective on your thoughts on that. Like at what point does someone need to start thinking about getting outside help and maybe what should their first step be when they start.
[0:22:18] Mike: I think that the time you start looking for help is about the time that you kind of get to this point the business can actually support having it so you have to have a business first. I mean if you’re hiring in advance of the need then you’re, I won’t say you’re throwing money down the drain but you’re basically taking a risk. The business that you expect to come may not come at all. At which point you are paying somebody money which essentially becomes a money sink which you somehow have to support that but because the business isn’t there you can’t sustain that for very long.
[0:22:50] So you have to make sure that the business is able to financially support that and I’ve made that mistake in the past and I know others who’ve made that mistake, but if you’re hiring in advance of the needs then that’s just a bad idea.
[0:23:02] Dan: My hand was raised when you said I know others have done that. And I’ve done it a bunch of times and a lot of times what I do is I hire because I want to avoid the emotional labor. So if it’s like I know there is money over here somewhere right? And alright well I know I can hire someone in the Philippines for $400. So I’ll hire them and I’ll like sort of push them in that direction and say go make the money.
[0:23:24] And that’s like the worst strategy ever. It always just loses you $400 a month [laughs]. That’s why like you know cut the suspense for you, that’s what’s going to happen. So yeah I mean you’ve got to go and identify a repeatable scalable source of income or at least a sustainable one and you have to forge that yourself. I mean that’s what entrepreneurs do. You have to build that, you have to talk to the first clients and then plug somebody in. I tend to plug people in super fast. Like when I find out that source of income is going to pay for itself I will immediately hire.
[0:23:53][Music]
[0:23:56] Rob :I guess that leads us to kind of the first steps to how to find an employee, contractor, VA or intern. Dan in your experience is it similar for all those four types? I imagine the intern process might be different than the other three. What would you say?
[0:24:10] Dan: First of let me talk about a bit of an opportunity that I’m trying to spearhead on the web which was sort of based on how to I wanted to live. So there is this phenomenon called Location independent entrepreneurs or location independent freelancers. And this has just been gangbusters for our business is identifying young people, generally young people but it’s not limited to them who want to travel the world as they work. And this is just an incredible subset of people and if you can tap into them I used to be backpacker. And that’s where like all this wanderlust came from. And the magic number for backpackers is 1000 bucks a month.
[0:24:47]And a lot of our websites need you know incredible amounts of, we need to do a promotion every day but plus we do customer service plus we need to do this, we need to do that, it’s tough to find a Filipino VA to do all that. But it’s really to find like a recent college grad who is in a really tough job market who wants to hang out in Thailand and do all that stuff for you and essentially that’s like the market that I’ve been trying to put my hiring fingers into to incredible results.
[0:25:15] Rob :Got it and that’s what Tropical MBA program right? Where you bring folks around the world and…
[0:25:20] Dan: Right. So I’ll shamelessly plug a free service which I’m trying to get off the ground, it’s called Tropical Workforce which is basically just a job board and it’s free. Anybody, a listener on this show wants to post a gig or an internship there you’re more than welcome to I’ll help you with that. And yeah it’s a bit of an experiment right now. We just started it a couple of weeks ago. But the idea is basically take the idea of the Tropical MBA and extend to other entrepreneurs. You know all my entrepreneurial friends are basically like, oh I want to do a Tropical MBA I want to do it, I want to do it. So this is sort of our task with that.
[0:25:52] So that’s to back up and that’s basically something that I’m really excited about because you know this websites, there’s a lot of moving parts, there’s a lot of not so just…I’ve tried the whole Filipino VA thing, you know I lived there for a year and a half. I thought it was going to make me rich, I thought I was going to sit in Manila, get 20 agents for my business and it was going to be gangbusters and no bueno. So the, what I found is that the travel those are amazing and because you’re offering them the opportunity to travel which is deeply deeply core motivation for them, they really deliver well.
[0:26:27] Rob :So how would that apply to someone like me who lives in Fresno California, you know wife, a couple of kids so I’m not going to be able to move around the world. Does that still apply to me even though I don’t live in Thailand or Bali?
[0:26:38] Dan: Well like I said like my right hand man who you know does all of my social media websites, all podcasts, in fact he manages two contractors. He would just jump ship if you offered him a job tomorrow [laughs].
[0:26:51] Rob :Got it. I see.
[0:26:54] Dan: But yeah I don’t think you need to, you don’t need to be traveling at all. I think you just need to extend the mentorship and you need to input in the time, that’s the biggest thing is they want to be able to work with you and see the vision and see how it works from the inside.
[0:27:09] Rob :So it seems like you have kind of a funnel going on where you attract people, you attract really smart younger people into this internship program and you can essentially you know it’s like you said you pay them 1000 bucks a month and they’re able to travel. They’re able to learn from you the mentorship that they require, but they also giving back a lot more than you can get from maybe from a $400 a month VA like you said. And then if they work out, I imagine some of them are phenomenal and those just fit right into your kind of your employee funnel. And if they don’t work out then you know you part ways. That’s how you’re finding people these days?
[0:27:42] Dan: Yeah and they all become evangelists too. So like a lot of my top blog refers are successful bloggers that sort of came out of the program as well. So there’s all kinds of side benefits and everybody is getting together and doing stuff. I think when I step back and look at our whole business it’s just giant hack to try to get staff involved cheaply. And maybe that’s because you know we’re not developers and so we were always a bit hamstrung especially when it came to our development efforts
[0:28:09] You know it’s just so tricky for non developers to hire developers and so always trying to hack that situation. We’ve used bonus incentives, we use commissions so we have guys in China that work for us on commission only. We’ve used outsourcing, we’ve used in sourcing which is this whole I live in Bali I invite guys to come to my house and then we use the mentorship thing. So there’s sort of a broad range of these morphed our organization like you said to turn into a funnel. Because for me that’s the process, I don’t build scalable software platforms like I have to have something. My platform is my people, the team.
[0:28:42] Rob :Right. How many folks do you have working for you?
[0:28:45] Dan: It depends how you count. We have 11 and one is a business partner by the way. You know I want to make sure that I mention the captain. He’s, it all goes down because of my wonderful business partner Ian, also the most expensive employee. Just found out the other day he costs 50 cents on every dollar I make.
[0:29:02] Rob :How cool [Laughs]. Nice.
[0:29:05] Dan: So we have 11 people full time right now.
[0:29:08] Rob :Got it. Wow.
[0:29:10] Dan: And that’s kind of amazing for a company that’s the size of ours. For us that’s how we feel like we grow things, it’s by growing the team.
[0:29:16] Mike: But Dan, Dan I have question for you. When you brought in some of these people as interns and I know you set forth kind of the expectation that they work for you for six months and then maybe they go off and do their own business. But and then you turn around and you said, hey I’m going to hire you full time and whether that’s, you know whatever label you put on that as either employee or contractor, I think it’s kind immaterial. But what are your thoughts around the longevity of that person sticking around? I mean do you not offer somebody a job if they’re really gung ho about building their own company and leaving? I mean do you decide to not bring them on fulltime or do you say, hey that’s cool whenever you decide to do it? What are your thoughts around that?
[0:29:59] Dan: The way that we do it is I can kind of have always have an image in my head is like every person they want to get somewhere. Like they have their own personal idea of where they’re trying to get with their life. And I try to figure out how my business can sort of be a superhighway for them. So if this person like I just know he wants to travel and I’m not going to get off the travel bug. So I want to figure out how I can help him travel better than he could do it on his own. That way I’m going to get his best energy.
[0:30:26] Another way to answer the question is just to say we try to understand what their core motivations are. Our first intern Sean Ogle who is now a successful blogger, internet marketer. I just knew his passion was with his own projects and so what I did was supported him full stop and basically pushed him, you know pushed him out as hard as I could and said you have to do this. And so I think you know we get pretty up close and personal with really what they want to do and try to deliver that to them.
[0:30:53] So you know of the things that has never worked for as an employee, as a manager is trying to be possessive or try to control people. So I try to do the opposite which is try to push them. So if that’s going towards their own projects I’m offering them you know mentorship, I’m offering them investment, I’m offering them whatever it takes to get out of the door and what it is they want to do.
[0:31:13] [Music]
[0:31:17] Rob :I wanted to find out if there is anything else, I mean I feel like you have so much knowledge on this topic that you could kind of riff on it for hours. But is there anything that I’ve missed or anything you’d like to tell, anything you’d like to share with them about this topic that I haven’t asked about.
[0:31:30] Dan: I think there is one element to team building that we haven’t touched on yet which is masterminding. The cheapest way to get somebody on your team is to I guess maybe get a partner. It’s cheap in the short run, expensive in the long run. Maybe even cheaper than that is just to put together a mastermind group and I know you guys talk about that on the program. And that’s the simplest way just to get started with this idea of working with others.
[0:31:54] And for me masterminds have just, it seems so simple. It’s like such a simple thing right, like put up a blog post and say, here is who I want to talk with on the phone every week and here is you know here is the profile and are you out there? And if you manage to get those people on the phone, my experience has been profound, like absolutely light years ahead in the business. That’s a great way to get started, if you’re a solopreneur it’s to reach out and try to have a mastermind.
[0:32:18] Rob :You know that’s really good advice. It’s actually something I’ve been meaning to talk about for a while because I’m now involved, I’m involved in person mastermind and then I’m just starting a Skype mastermind with different kind of folks.
[0:32:29] Dan: Oh cool.
[0:32:30] Rob :And something, a question I get a lot is I’m a solo entrepreneur should I find a co founder? And I tend to say you know unless you really know someone and you really you know essentially going to get married to them I would say go solo. Mike and I recommend that approach as a rule. Unless you do have a partner who’s likeminded and you know there is a lot of stuff that comes together.
[0:32:49] But then the next follow up question someone always asks is well I need someone to bounce ideas off of, I need someone to support me and to talk me through stuff. And that’s, I realized that answer is a mastermind. Someone doesn’t need equity to support you and give you feedback and understand your business. I think that’s my new thing is like masterminds are substitute for co founders or can be if you find the right people.
[0:33:10] Dan: I’m in locks up with you guys on this point. And we even have a name for it, we call it an accountability partner. So people are just really mess things up by jumping into partnerships way to early in the process. Absolutely agree to get an accountability partner, a lot of people in my immediate network have done this and they’re on the phone every Friday night at 8:30 pm and it’s stastic. And it really really helps.
[0:33:34]Rob : Yeah something I’m starting to see when folks do that, when they do an accountability partner over time if they are a crappy accountability partner then you guys tend to drift apart. And if they are really good, you tend to drift towards starting a business with them which I think is, an accountability partner is a good way to vet them maybe as a potential partner over the long run. You know you spend a year being accountable to each other and then once you start the marriage it’s kind of like you’ve been dating for a year and you know each other pretty well.
[0:34:02] Dan: No question. It’s great advice, it’s great advice. Partnership is a sinking ship [laughs]
[0:34:06] [Music]
[0:34:10] Rob :Well Dan really appreciate you coming on the show. Where can people find out about you? Where would you like to send folks?
[0:34:16] Dan: Sure the best place to catch me is the tropicalmba.com. That’s my personal blog and I do a podcast there as well. That’s the best place to find me. Also we do the lifestylebusinesspodcast.com if you’re interested in podcasts so…
[0:34:29] Rob :Yeah I would definitely…
[0:34:29] Dan: It’s 2:00 in the morning [laughs]
[0:34:32] Rob :Yeah, hit iTunes, go Lifestyle Business Podcast, highly recommended. Thanks again Dan.
[0:34:39] Dan: Thanks guys.
[0:34:39] Rob :Alright.
[0:34:40] Mike: Thanks Dan.
[0:34:41] [Music]
[0:34:44] Mike: If you have a question or a comment you can call it into our voicemail number at…
[0:34:48] Rob :1-888-801-9690.
[0:34:51] Mike: Or you can email in text or MP3 format your questions at startupsfortherestofus.com. Our theme music is an expert from Moot used under creative commons.
[0:35:01] Rob :If you enjoyed this podcast please consider writing a review on iTunes and you can subscribe to us in iTunes or via RSS at our website. A full transcript of the podcast is available at our website, startupsfortherestofus.com.
[0:35:12] Mike: Thanks for listening we’ll see you next time.