Show Notes
- Rob’s email marketing web app, Drip
- Mike’s security auditing app, AuditShark
- Laura Roeder
- Social Media Marketer membership site
- Creating Fame course on personal branding
- oDesk – for hiring contractors, VAs
- Double Double (book by Cameron Herold, mentioned by Laura)
- Authentic Jobs – a good job board
- Fiverr – Hire people for small gigs for $5
- Rob’s Growth Hacker Internship
Transcript
[00:00] Mike: This is Startups for the Rest of Us: Episode 143.
[00:03] Music
[00:10] 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.
[00:19] Rob: And I’m Rob.
[000:19] 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?
[00:24] Rob: It’s been a good week. The very first dollar came through for Drip this week.
[00:30] Mike: Congratulations. We should have like applause music or something like that.
[00:32] Rob: I know, yeah. It feels good. It feels like another milestone. I think there are 15-16 users in the system now and there’s about a third of them that are really super engaged and have already paid. So revenue is in the – I don’t know, it’s about $250 to $300 right now. That feels really good to have that down.
[00:50] And then another third is still getting setup, probably just got them onboarded in the last couple of days so they’re working on it. And then there’s another third that I’m working with. They’ve been on for a week or two but they’re still struggling to get their mini-course setup and kind of getting the time for their team to create it.
[01:06] But it’s as always been a fantastic learning experience and I love hitting milestones like this because it just keeps me and Derrick motivated to move forward because it feels like we’re making progress.
[01:18] Mike: Now are you billing people as soon as they sign up or you got like a 14 day trial period for them?
[01:22] Rob: Yeah. At this point, everything is manual and so it’s still early access. I haven’t even emailed the main list and so I’m basically working one on one with people via email and sometimes via video Skype. And once they get setup, then I monitor their account and I email them and say they are you happy with the results? Are you happy with the conversions?
[01:43] Like one guy’s been setup for three or four weeks but he’s not getting the conversions he’s looking for so he and I are kind of working out how he can improve that and it’s not until he sees value in it that I am going to bill. I email everyone before I bill them and I say hey are you getting enough value out of it to pay $49 and then I get their credit card info and do it from there.
[02:02] So it’s totally one off, totally manual. At this point I really wouldn’t have it any other way. Before we email, I have 100 or 200 people I’ll be emailing. Before we do that, that’s when I’ll need to get a trial in place and I won’t bill them upfront at least to start. I have to. I really think that they need to see some value in it before they get billed.
[02:20] Mike: Yeah. I’m working through some of the sign up code for auto-shark right now. Last week I was complaining about how everything just seemed like it fell apart and over the past seven days I’ve really gotten things – so everything’s back together again. And it actually is solid now so I don’t think things will fall apart in the way they did before.
[02:39] Part of it had to do with code merges. I found there were some code that have been merged and it broke some things so I’ve got most of that straightened out. There’s a few last minute tweaks that I need to get straightened out in terms of a sign up for the early access. I’m really close to having that all squared away and then touching base with a few people and have them sign on.
[02:58] And when to bill them is actually a question I kind of had in my mind. I was kicking it around a little bit trying to figure out do I bill them upfront or do I wait a little bit? I think I’m going to hold off of it. I’ll take their credit card information stuff as part of the sign up process because that’s already in there. But I probably won’t bill them for a couple of weeks. I’ll just kind of give them some time and let them see what they’re getting out of it, get some of the feedback that I need to make the tweaks and then touch base with them just the way you did in terms of saying hey, is it alright if we switch over starting to bill you.
[03:27] Rob: Right and that was the cool part is when I emailed folks. Most of the people who I emailed I only emailed because I knew that Drip was working for them and if they’re actively using it and they’re getting subscribers and conversions and all that. It still feels weird. It still feels weird to email someone say hey can I bill you $49 or one guy’s actually on a mid tier plan so can I bill you $149 for the next month of usage?
[03:51] And all of them, when they came back, it felt really good. They were like absolutely. This is definitely worth it. It’s like it gives you that rush of adrenalin of like we’re really doing something that works here. I’ve enjoyed this approach. I think trying to make an arbitrary trial length this early in the game or to bill people upfront when they’re basically – if they’re not doing you a favor per se but kind of. Its going to take a little more time than just signing up for a traditional service. I think that’s probably pretty mature right now.
[04:19] Music
[04:21] Today we’re going to be talking how to hire like a bootstrapper and we actually have a guest Laura Roeder. So today, Mike and I have the pleasure of having Laura Roeder on the show. She’s calling in all the way from London. So Laura we appreciate the last minute scheduling and the fact that you’re 8 or 10 hours off of us.
[0:04:40] Laura: Yes, super happy to be here. You even recorded it during the daytime for me instead of the middle of the night which is very nice.
[04:46] Rob: So Laura is an expert. She’s social media and personal brand building person. She was a 2012 MicroComf attendee and she is here today to talk about how to hire like a bootstrapper? And in typical startups that the rest of us fashion, this will be much less of an interview and more of a panel discussion as Mike and I pipe in with our experiences as well.
[0:05:07] Laura brings a unique viewpoint on this topic because she’s a non-technical person who has hired technical people. So we’re going to look at elements of how that was difficult or challenging for her. Laura has been on – she’s appeared on Mixergy twice. She’s all over the press, forbes.com, CNet, L.A. Times, fast company. She’s had a course on AppSumo. She also runs…
[05:30] Laura, correct me if I’m wrong this is where you kind of got your experience of hiring is you have a membership website called Social Media Marketer and then you have a course on its called Creating Fame which is more of a personal branding course. Is that where you got your initial experience hiring folks?
[05:47] Laura: Yeah. I have a team that helps me run the business and the business is those two courses.
[05:52] Rob: Very cool. Alright, so we have an outline that Laura’s graciously provided. We’re going to start popping through a few of these points. The first item we’re going to talk about is how hiring or outsourcing is different for a bootstrap startup versus a funded one. You want to talk a little bit about that?
[06:08] Laura: Yeah. I mean I think a lot of bootstrappers are completely and totally overwhelmed especially with how to do their first hire because traditionally when you look at hiring you look at the team you need and then you look at your budget, how much can we afford for everybody and a bootstrapper, your budget is zero.
[06:27] And you’re often thinking I know, I thought this in the beginning “well I can’t afford $60,000. I can’t even afford $30,000 to pay someone a yearly salary.” So how can I have and be one? I think the bootstrappers have to get a lot more creative in how they hire because you don’t have that. You never have $500,000 in the bank that you can just use to pay people huge salaries. You often never get to that point as a boot strap business. You’re just going a little bit by a little bit.
[06:57] Rob: Right. What’s interesting about that, I remember hearing Peldi talk about it early. He said he was questioning when to hire that first person and he said he waited until he had six months of that person’s salary in the bank before he would hire them because it just made him feel more comfortable that he wasn’t basically going to have to let somebody go so quick. So you can imagine how much slower his growth was than someone who as you said half a million or a million dollars in the bank to do it.
[07:24] Laura: I think that’s great if you can get there. I certainly have not been at that point for most my business and also if you’re starting out hiring freelancers they kind of know and it could be good motivation. We need this work to work out so we can keep the business growing and so we can keep paying more. You know?
[07:42] Rob: Right. So what? Have you had a rule of thumb for yourself or do you just – when you need to help if you have $1 more than the project then you’ll hire like freelancer?
[07:52] Laura: Yeah. I guess my only rule of thumb is just always to put money towards hiring first. I think a lot of people are willing to do things like spend a bunch of money going to conferences or buying like training various sorts but they won’t actually spend the money hiring people to do the things they’re learning at the conferences. They get so stuck in learning mode and not doing mode.
[08:16] So I haven’t had a certain amount of money in the bank or anything but I do try to say okay if I have an idea, there’s such cheap ways to get things done. If I have an idea that I know is going to grow my business, what’s the most down and dirty way that I can spend $100 even to get this idea started going?
[08:33] Rob: Right. You know the way I’ve done it for the past several years was to start by hiring essentially freelancers or contractors because there’s not such a commitment and you can hire them for a few hours a week and you can slowly ramp them up and then bring them on full time if needed. Is that how you’ve done it as well or did you kind of just plunk down and said I’m hiring someone full time from the start?
[08:54] Laura: Now I have people full time, now that I’ve been doing this for about four years but I definitely started with everyone as a part time freelancer because I couldn’t afford anymore than that. So I’ve had a few people that started part time and then have become fulltime. Now I try to hire out fulltime roles unless it truly is a onetime project. But even – we just added someone new for customer service. My company customer service is not a full time job. There’s not enough emails for eight hours a day every day.
[09:26] So we’re starting someone hourly. We’ll probably move her to flat rate part time assuming that all goes well. So if I can think that there’s going to be enough work for them, now I do full time but if its anything short of that which it often is, yeah I think starting with a smaller project is the way to go.
[09:44] Mike: I think the one thing that I hate about taking the leap from going directly to not having somebody work for you at all to hiring somebody full time for a position is that you don’t necessarily know how well that person is going to work out because you’re in the position where you’re on occasion you have to hire people who are technical and that obviously creates some challenges but it doesn’t really matter whether you’re technical or not.
[10:07] Hiring other people is just difficult. I mean you can look at all the studies and research you want and even Google has tons and tons of research which basically shows that nobody in Google knows how to really hire good people. And I’m serious about that. I mean if you look at the things that Google has published, they say flat out we don’t know how to hire good people.
[10:24] They have all these statistics that they’ve done and tried to identify who’s hired good people? Who hasn’t? And across the board, everyone is mediocre which basically you can translate that out to everybody else in the planet and say well if nobody’s good at hiring, how do you go about making sure that you do hire good people? I think the only way to really do it is to try people out. I mean you have to go down that contractor consultant route first and work with people in order to figure out whether you work well with them or not.
[10:52] Rob: I think we live in a time where this is possible and 15 years ago, I didn’t know of anyone anywhere who was trying to start a business like we have, the location independent business with a single founder who was able to find someone skilled who was willing to basically freelance and work part time. And so I just think it’s critical that people keep in mind as you’re getting started you don’t just think the old mindset of I need to hire someone 40 hours a week to do something.
[11:22] Because Laura the point you brought up about it as someone doing customer service, I agree. Even with all the businesses that I run, I still don’t have a full time customer service person. It’s been years that I’ve had these things running. So I think that’s a main takeaway of kind of this first discussion point. If someone’s not already thinking about the two benefits of being able to hire someone part time is 1) you don’t have the major commitment and 2) that you do get to try them out like Mike said, those would be the things I would try to take away from this.
[11:50] Laura: I think a little side bonus to what you’re saying that’s really interesting is that you often get more entrepreneurial people which I think is really essential for running a small lean startup. I need everyone to be entrepreneurial thinkers and the way to tap into this location, independent more freedom lifestyle without starting your own business is working for another company that has that lifestyle already. Everyone who works for me works from their own home.
[12:19] Yes they still have a somewhat boring normal job that they have to do but they can do it on their own hours. They can travel and do it from wherever so I think you attract the type of people that you want in your company too.
[12:33] Mike: Something else I found with contractors and consultants is that they’re very much the type of person who looks at specific problems and tries to find ways to solve those problems as opposed to when you get out – I’ll say it in a corporate world where people get hired and they know that they’re getting paid to be a butt in a chair and they will sit there and whether they’re being productive or not, that you’re getting paid for it.
[13:00] So they see it as basically they’re just trading off their time versus a contractor who’s brought in to actually solve a problem and that’s what they’re paid to do is they’re paid to solve the problem and yes they’re getting paid for the time that they put into that problem. But their primary goal, their primary motivation is to solve those problems.
[13:17] Rob: Let’s move on to point 2 which is to talk about the first folks that we each added to our teams, our first hires so to speak. Laura you want to kick this off?
[13:26] Laura: Yeah. When I started the business that I do now, it was just making online courses which is a very homemade thing and I didn’t need to hire a developer anything like that. It’s all very DIY. So the first person I hired was really a VA, a virtual assistant type of person who kind of helped with a little bit of everything.
[13:48] Customer service is something that I’m especially terrible at so I knew I needed someone doing that. So she did customer service. She also put on emails into our email marketing program to basic tweets and edits on wordpress website just kind of general admin help. And she was part time. She’s a stay at home mom. I found that there’s this huge un-tapped workforce. There’s all these parents out there that want part time jobs because they want to spend time with their kids.
[14:15] And that’s not a thing in the normal workforce to have any kind of part time job where you get to use your brain so she was a mom looking for a part time job and I’ll talk numbers because I know everyone always really, really wants to know. I’m pretty sure I started her out at $1,000 a month. 20 hours a week-ish flat rate.
[14:34] Rob: Nice.
[14:35] Mike: Yeah, I think one of the first people I hired came on as a contractor. I think it was hiring him at $1500 a week. He actually came to me through an agency and it was more because I needed somebody there who could do scripting at the time. I kind of got away from bringing people in like that just because it was so expensive compared to what he was getting paid from the agency. So having that middle man in there really ramped up the cost but then I switch over to using contractors.
[15:00] And the first contractors I found were through Odesk. I think I was only paying $10 or $11 an hour and I was able to essentially afford having them 30-40 hours a week and that seemed to work out pretty well but you do have to go through interviewing process to make sure that you’re getting the right people. And you need to be able to cut people loose and know that you’re making the right decision because it’s more important to have the right people than it is to just have people working for you.
[15:28] Rob: Yeah and for me it was a virtual assistant. This was probably 2007 I think after I read The Four Hour Workweek and I just had a couple small products that were ramping up and I realized that doing all the support myself and all the admin tasks just wasn’t the right way to go. I haven’t even realized that you could get hire people for a few hours a week around the world and it was a big light that came on for me after reading that book.
[15:53] Hourly rate was probably $5 or $6 an hour. I think they were in the Philippines. I don’t even remember at this point. I worked with them for a year or two and they’ve moved on and I’ve since found a number of virtual assistants and developers and designers like Mike said mostly on Odesk these days.
[16:09] I think something for folks to think about, if you’re at the point where I guess I feel like people wait a little too long to hire that first VA. I mean I wished I had done it earlier. I think there’s a longer learning curve than a lot of people think when you hire someone because you have to learn how to be a good delegator not to micromanage, not to throw a fit if someone doesn’t do it exactly the way you want it or how well you want it to be done.
[16:35] And so that takes time and if you want until the very last minute and you’re totally overwhelmed that then you hire someone then you now have this 1-3 month kind of learning period that is tough to do if you have this crunch time going on. But I think that hiring a virtual assistant earlier especially if its variable. I didn’t hire someone for 20 or 30 hours a week. It was more of an as needed basis which can be real benefit for you if you don’t have the money. I was in a situation where I didn’t have much money that I wanted to spend on someone on a monthly basis.
[17:06] Laura: I agree that people wait way, way,way too long and people get really overwhelmed by what the training process is going to be like but it’s one of those things that you’re just putting off the inevitable. I mean if you want to grow your business you’re going to have to do it sooner or later and I think it’s one of the top shortcuts for making a business more successful adding on other people.
[17:29] The training is really not – all the tools for screen sharing and recording what you’re doing and Google docs, I mean just the basic stuff, it actually makes I think a lot easier once you just force yourself to do it.
[17:43] Mike: I think sometimes it’s just a mental hurdle of trying to figure out what source of things you can hand off to somebody or hire somebody for. And there’s lots of things that people do on a daily basis or a weekly basis that they don’t even think about sending that off to somebody else or hiring somebody to do that for them. They don’t do the mental calculations of how much time it takes them to do X when they could pay somebody $10 an hour to do it for them. And they’re saving themselves that much time to either spend with their family or to do other things that are going to move their business forward.
[18:13] I think that’s a main thing that I see people doing or the main mistake that I see is people aren’t doing those calculations to figure out where they’re actually adding value to the business and where they’re basically just spending time building themselves a job.
[18:28] Laura: You know, something that really hit me on that topic, this guy Cameron Herold who I really admire, he has a business book called Double Double. He said go through all of your tasks and weight yourself at how good you are at them and the highest is let’s say E for excellence. And he said the lowest is I for incompetent and for some reason that really got me.
[18:51] I’m like I went through and I said where am I actually incompetent at doing something because we do tasks that we actually are literally incompetent at. We could just barely figure out how to do them and it really illuminates like why am I spending my time doing something that I’m actually incompetent at? I’m going to screw up my business.
[19:10] Rob: Something that I’ve taken to do is about a couple times a month I would go through my to-do list and I look at items that I’ve continued to push off that I have kind of a mental block against doing and I try to figure out if I have someone on my team who can do that or if I can hire someone to do that group of tasks?
[19:29] Because if I have a big chunk of them that I’m continually kind of skipping over then know that it’s just not ideal that I actually handle them. And whether it’s because I feel I’m incompetent at them like you said or whether I just don’t really have the desire to do them, those things sticking around on the list and not getting done typically isn’t advantageous. I either hire someone or I just mark them off the list and I say these don’t need to be done. They’re not important enough and that’s why I’ve been skipping.
[19:54] So we’ve talked about why someone should hire perhaps a virtual assistant earlier than they think and lets talk about some of the best ways to find help. And whether that is a virtual assistant or a developer or designer, we know that traditional job boards are not going to be the source for what we’re looking for because as bootstrappers we tend to just have to grow it slowly, organically, find people to work hourly and be flexible and work with us.
[20:17] So Laura maybe you can give us some insights on how you’ve done in the past? What’s worked for you and what hasn’t?
[20:23] Laura: Odesk has already been mentioned. That’s the really obvious one but I actually don’t realize I kind of had it in my head that Odesk was for people overseas like a lot of people in the Philippines and in India. I was a little behind the times on my Odesk. For this customer service role, we wanted someone in America and there are tons of Americans on Odesk working for $8 to $20 an hour and there’s plenty of Americans that are super psyched to get a work from home job, a few extra hours a week $10 or $15 an hour.
[20:57] Odesk goes way beyond even what I realized it was great for, beyond just developers but admin people, customer service people so I definitely love Odesk. If you’re going for a true fulltime person or even a true part time person, authentic jobs has been amazing for me. I found really, really good talent there and just posting to my own network always gets good people. So posting on my social media accounts, posting to my email newsletter, we always get people that way as well.
[21:24] Rob: Very nice. I have not had heard of authentic jobs. I’m looking at it now. I will be referring this later. Yeah, I’ve been n Odesk. I mean everyone on this podcast knows that Mike and I hire a lot of people through Odesk. I actually put together a course on hiring VA’s if anyone’s curious. That’s at startupvacourse.com but I recommend Odesk throughout that.
[21:42] I had tried bestjobs.ph I was on the Manila Craigslist, eLance, rentacoder, guru.com and there were all these sites and this is back really before Odesk came into the picture. And I tried all those and I had mixed results and you’ll still get mixed results even with Odesk there’s still a large hiring process that has to take place but in general I just haven’t found a better source of people especially the kind of hires we’re looking for which is kind of not a lot of hours per week and maybe some flexibility in how much they’re working as well as I love Odesk’s project management stuff – maybe not project management but kind of the time tracking, the work diary aspect of it.
[22:24] Mike: I mean like you I’m still a big fan of what you can get off Odesk and its primarily because you can see what people are working on and making sure especially if you’ve never met them or talked to them on the phone, you can see what they’re working on and making sure that they’re on track.
[22:40] Lately I’ve actually gone down the road of hiring people through my personal network. I’ve got two different people right now who are working for me. One of them’s putting in about 20 to 25 hours a week. The other one is putting in between 10 and 20 and both of them are hired through people I knew or a friend of a friend type of thing. And they’re both working out extremely well so I think that those personal introductions or if you know somebody, even if you just reached out to people you’ve worked with in the past, it seems to me like that is an exceptional way to get really, really talented people because you already have people who are essentially vouching for their skills and vouching for their abilities as somebody who gets things done.
[23:23] Laura: I just remembered. I also have actually used Fiverr which is kind of weird but I found people to do just really random tasks. Fiverr has a lot of really scary scammy stuff on it but one that I did – I wanted a list of all the Facebook pages for local chamber of commerce’s to do Facebook ads on. I paid someone $5. They gave me a really good list and the recently for a blog because design has been a hard thing for me to hire. It’s one of those where we have intermittent need. We don’t have ongoing need but when we need it, we need it. So we don’t have a designer on the team.
[24:00] And we have a blog post and our editor for our blogs are like “oh it would be really cool if we had a graphic that looked exactly like this to illustrate what we’re saying in this post.” So we went to Fiverr to have someone make a graphic and that worked out really well.
[24:14] Rob: Yeah, that’s a good one. I’ve actually used Fiverr quite a bit as well. I really like the thought of using your personal network. I don’t know that I’ve really done that much. I think I’ve done it with one hire but I have an item right now on my to-do list. I’m basically going to start looking for a marketing intern for Drip and HitTail, someone to help out with a lot of the tasks that are kind of sitting on my plate right now.
[24:36] My first points that I’m going to look at before I post to authentic jobs or go to Odesk is I’ll probably tweet it out. I’ll mention on the podcast and see what I get from there because Mike as you said, it seems like not only do you get people who maybe understand your situation a little more but you just have a higher likelihood even if you only get a couple of people who are interested, such a higher likelyhood that they’re actually going to be a fit for the position.
[25:00] Laura: I think especially for an intern, it’s so great to go to your network because a fan would actually do a really great job as an intern. My old project manager for my business, when I first hired her, I actually could not wrap my head around hiring a project manager for my business. It just seemed like an insane idea so I kind of talked myself down and thought okay maybe I could get a project management intern which doesn’t really make sense for project management.
[25:25] But I put the listing out there and I got an email back from someone who had taken my courses, was working on starting her own business and my community and she said well I have a lot of experience in production and project management. I’m not really a typical intern but I’d really love to learn from you and work with your company and then she ended up becoming fulltime and playing a huge role in the growth of the company.
[25:47] Rob: Yeah and that’s great because she already kind of knew your deal. She’d taken your courses. She knows how you work and knows the kind of projects that you work on and I think that’s a big benefit. I think I’m going to take it in stages of I’m going to work the network first and then only if that doesn’t work then I’ll explore everything else. And kind of go too to the masses so to speak.
[26:07] I’m interested to hear and I’m sure the listeners are too. Just a brief description of what your team looks like. How many folks do you have working for you? Is everybody part time, full time? Are they distributed around the world?
[26:18] Laura: Yeah. So they are distributed around the U.S. and Buenos Aires currently. So we have a full time project manager and that’s what someone would call operations, basically runs the day to day of the business. We have a full time content manager and she also does social media because content marketing is how I market my business. So she managers our newsletter and our blog and our internal newsletter and managers our social media posting and our social media schedule, basically our content marketing strategy.
[26:51] We also have a full time developer/tech admin so he does everything from writing custom wordpress plug-ins to the really boring stuff like loading up our emails in Infusion Soft and doing all the super boring Infusion Soft technical stuff. We also have the newest person on the team is a full time copy writer/data person which is a bit of an odd combo but it’s all under that marketing umbrella.
[27:20] So she writes copy for a blog posts, also marketing copy of emails and stuff like that ad she also does data analysis of which promotions are working. She does Facebook ads, analyzes which Facebook ads are working. Definitely a small team. You end up with those positions where people do a random mish-mash of stuff. And then we have part time customer service and next we’ll be adding on an SEO intern to help with some of our kind of overflow ground work type of SEO tasks.
[27:51] Rob: Nice. What I like about your description is you have the copywriter/data person and you’re right, that is such a random assortment but I found the exact same thing that when you’re working on such a small team that if you find someone who is good at something and you hired them for a specific thing and you start giving them more random odds and ends and they’re good at it and they execute it and they enjoy it, you want to put these kind of bizarre job titles that you never have in a big corporate environment.
[28:18] But if the person is happy, they’re doing good work and it works for you and helps the company then it’s like why not? There has to be that flexibility.
[28:26] Laura: Yeah and I’m a huge believer in the idea that whatever people love the most is where they’re going to do their best work. So I’m constantly looking at what people enjoy and what they don’t and trying to give them more tasks they enjoy and see if it makes sense to move around the stuff that’s not as much fun for them.
[28:44] Rob: Let’s talk a little bit about your hiring process, writing a job description, that kind of stuff.
[28:50] Laura: The best tip in the world, I learned this from Ramit Sethi is to do a form the people have to fill out instead of sending in a resume. So in that form you ask them questions related to the job. So when I was hiring a project manager I asked her questions like two people have this conflict, how do you handle it? You need to mange scheduling this. Like what’s your strategy? What’s your plan of attack?
[29:15] Don’t let people send in resumes. Don’t let people send in cover letters. They can link to a resume as one of your questions, that puts the onus on the applicant instead of putting the onus on you to dig through hundreds of thousands of resumes that which is definitely the worst and most painful part of hiring. So most people will never make it through your initial survey. So you filter out tons of people there.
[29:40] And then just reading the survey answers, you actually get a really good idea of who you want to talk to. So by the time you get to the interview stage, it’s very few people. I’ve even have positions where I’ve only interviewed – this is a bit unorthodox I guess but I’ve had positions where I’ve read the answers, interviewed just one person, felt like they were it and then I just went ahead and hire them.
[30:00] Rob: Yeah. That’s a really good tip. That isn’t something I’ve done and I’ll probably think of doing it on this round as I look for this intern. Something related and I think I don’t remember who I took this from. I think it’s probably Dan Andrews from the lifestyle of business podcast. I asked for a two minute video of them explaining – I’ll explain the job and say why you’re a fit or I have a couple questions they should answer.
[30:23] And it’s like you said, that eliminates a lot of people in a good way because I want someone who’s willing to – depending on the job of course. If it’s a developer I may not ask for that. But if its someone who I’m going to be interacting with and who I need maybe to be a good writer or to have certain skills, then I will absolutely ask them to sit in front of your webcam and just give me a two minute spiel.
[30:45] I will also record typically in my job descriptions, I will link out to a video of me like a one minute video of me talking about here’s who I am getting an idea of a little bit of personality and here are some projects that I’m working on and stuff that you’ll probably be involved in. I found that that some people don’t like that. Some people are kind of like whatever. They’re put off by that but they’re not a good fit for what I’m looking for.
[31:09] Mike: One of the things that I find is a lot more important than the skill set is just the ability to work with somebody. The survey questions that you talked about, the video that Rob you talked about, those tend to be really good for filtering out people who aren’t going to be a good – for lack of a better way to put it, a cultural fit. I don’t think that’s quite the term that I would probably use most of the time.
[31:31] But you really want to be able to find people who are going to follow directions and do exactly what it is that you want them to do rather than go off in the left field and just kind of do their own thing or do things that they think are going to be helpful but are not really in line with the vision of what it is that you’re trying to accomplish. And just finding those people who can do the right is a lot more important than people who may spend the least amount of time doing something but if they’re not doing the things that are right or that need to be done then it’s not nearly as helpful.
[32:02] Because then they’ve gotta go back and do it over again or you’ve got to fix it for them and those types of things just create problems and friction and if you can avoid those types of frictions even if you’re paying a little bit more to have somebody spend more time on it, I think you’re in a much better position than to have somebody who’s fantastic in a particular job that doesn’t quite always do the things that are need to be done or do the error checking that needs to be handled and those types of things.
[32:27] Laura: Well I find it interesting that you bring up – why don’t you like that word culture?
[32:31] Mike: I don’t like the world culture because its kind of hard I think to have a culture when you don’t really have an office or nobody’s meeting each other. I think that’s more than anything else. It’s not that culture is the wrong word. It feels awkward when you’re not in an office with people. Culture is not the word that I think of as a way to describe it.
[32:51] Laura: I bring that up because I actually had a huge mindset shifts in believing that my company does have a culture. Because I used to feel like you did and I thought well a culture – because when you read those articles, how to improve your company culture they say put a ping pong table and a break room. That’s going to be so much fun.
[33:11] And I never felt like it applied to a virtual company but I kind of realized whatever word you like to use for it, every company does have their own – your philosophy, your beliefs, how you do business, how you interact your personality, my company does have a culture. And like you said finding people who fit in with that culture is really, really important. I totally agree. It’s even more important than their skills.
[33:36] And I actually took my business a lot more seriously when I thought yeah, I do have a culture and my culture is awesome and my company is a great place to work and there are a lot of people that are working jobs they don’t like that would love to work for an awesome company like mine where people are nice to each other which is a lot more than you can say than a lot of jobs. So I actually love the idea of having a company culture and thinking about how that applies for a virtual company.
[33:59] Mike: I don’t think that it’s wrong. it’s just that the word feels awkward to me and maybe it’s just the stage that I’m at and you’re a little bit ahead of where I am mentally in that respect.
[34:08] Rob: What I like about what Laura just said is basically to find the best people you’re going to need to actually do a reasonable job of selling your company in the job description. You can’t just be like the old guard. You see the big whatever, the big banks or credit card companies and they have these job descriptions that are just horrendous.
[34:28] You read the job posting and its like I feel like I’m applying to work for the government or like I’m signing up to go to prison. It just really doesn’t sound like fun. That’s something I typically – if you’ve never written a job description before, I would say forget everything you have ever learned about any job you ever applied for. Throw them out because that is not the way that you as a bootstrapper want to hire your first, second or third employee or freelancer.
[34:54] You want to convey a sense of something that what you’re doing is exciting. It’s interesting because that’s how you’re going to find the people that are going to jive with kind of the small company culture whatever word you want to use for it. So yeah, I think that’s something that the people should take away from this. Let’s look at our last point which is micromanaging. Laura you want to talk to us about why micro managing makes hiring pointless?
[35:19] Laura: Yes. Micromanaging is the worst spin of working with other people. It’s so bad because it really makes all that work that you’ve spent money on kind of useless because you’re just doing it again yourself. I think most of us have been micromanaged.
[35:38] I remember I used to work as a designer and I understand that attitude of why am I going to spend a lot of time on this? You’re just going to redo my work? Because that’s how I felt. I felt my boss would just come and redo everything I did her own way. And you really are training your employees not to try hard. Because they know that you’re going to come do their work over again and it’s just a huge waste of time.
[36:03] I’ve heard about people doing things like reading every email that one of their employees sends out before they’re allowed to actually send it live. It’s just a huge waste of time. Why would even hire someone to do it if you’re going to take your own time to read every single thing? Most of us have been micromanaged by others and they’ve trained us to be micro mangers so I think getting rid of this habit is a big key for success for running an effective team.
[36:29] Rob: Yeah there’s an expression. Its building a $10,000 fence around a $1,000 piece of property and the idea is you’re basically misusing resources. So if you’re going to hire someone and then you’re going to read all their emails before they’re sent out, you’re right. You shouldn’t hire them. I think that for the first week or two that I hire someone, I am vigilant about what they’re doing. I mean you have to make sure things are going right.
[36:53] It’s obvious that if you have that much of a need for control then either you’re not ready to hire someone or you have some really bad habits that you have to unlearn before you’re going to be ready to do.
[37:03] Laura: I think one of the biggest things is trust. A lot of people struggle with how much do you trust your employees? How much do you trust your freelancers? And it’s definitely something everyone has to figure out for themselves with what you feel comfortable with. I air on an immense amount of trust. I figure if people are going to steal from me or screw things up on purpose, I obviously did such a poor job of predicting that.
[37:31] It would be totally unexpected if that were to ever happen. So to base everything around hedging for that not happening, I would just rather give people full trust from the beginning and it allows them to do better work.
[37:42] Mike: Part of that is your trust in yourself that you made a good hiring decision because you have to just accept that you made this hiring decision and you’re putting them in charge of thing so that you don’t have to be that person making I totally agree with all of that. But what I mean by listening to people is that if you’re those decisions.
[37:57] I mean that’s what you hired them for. You hired somebody to make decisions on your behalf and you need to trust yourself that you made a good hiring decision that they’re going to make the right decisions. And there’s going to be occasions that they won’t make the same decisions that you would’ve. It doesn’t mean that its wrong or that you need to go through and redo their work.
[38:14] What you really need to do is make a conscious effort to never go back and redo somebody’s work because I think that just creates some sort of friction between you and the person you hired because they will get to a point where they say everything I do my managers is just going to redo it anyway so why should I bother to do a good job?
[38:31] Laura: Mike I think that is so important. I think that’s really the key what you said that they’re going to make different decisions than you’re going to make. I think that’s why a lot of good people go bad in hiring. That’s why a lot of good people micromanage because they say they’re willing to let go but they still want everything to be their preference.
[38:53] And your way is not the only right way. That’s why you hired someone else. So I think seeing that difference between okay what’s really important to you, what’s a real guiding value and philosophy and strategy of how you want to run your company versus what’s just your personal preference that actually doesn’t matter so much and someone else’s personal preference is just fine. Just let them do it.
[39:12] Music
[39:15] Rob: So to recap, we’ve covered how to hire like a bootstrapper for today. The first thing we talked about was how hiring and outsourcing is different for a bootstrap startup. Then we talked about the first folks we added to our team and next we talked about the best sources that we’ve used to find help, the websites that we’ve used. Fourth, we talked about the hiring process and a little bit about writing a job description and then lastly we touched on micromanaging.
[39:38] So Laura, if people want to get in touch with you, where would be the best place for that?
[39:43] Laura: You can find me on twitter as @lkr or find me @lkrsocialmedia.com.
[39:51] Rob: So yeah, Laura thanks again for taking the time to come to the podcast and help share your experience of hiring like a bootstrapper.
[39:57] Laura: That was fun. Thanks for having me as a guest.
[40:00] Rob: Yeah, absolutely.
[40:01] Music
[40:03] Rob: If you have a question for us, call our voicemail number at 888-801-9690 or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for startups or via RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 142 | Does Startup Validation Work?
Show Notes
- Dan Norris’ Blog Article on Startup Validation
- My Analytics
- Dominic Patmore of Pilifter.com
- The Lean Startup
- Inform.ly
Transcript
[00:00] Rob: In this episode of Startups for the Rest of Us, Mike and I are going to be talking about whether or not startup validation works. This is Startups for the Rest of Us: Episode 142.
[00:09] Music
[00:17] 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 Rob.
[00:26] Mike: And I’m Mike.
[00:27] Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Mike?
[00:31] Mike: I got an email from KISSmetrics regarding the app they develop called My Analytics. It allows you to take a look at all your Google Analytics data on your iPhone. Have you seen this yet?
[00:41] Rob: I saw the app. I had an early beta version of that, and it was pretty stripped down at the time. It looked cool but it didn’t do much. Is it pretty cool?
[00:50] Mike: I mean it’s probably pretty similar to what you saw. I mean it does allow you to see at least the basics and stuff. What I liked was it allows you to go back and compare to some of your data from yesterday or the current week against previous data points that they kind of hard code in. So you don’t have a lot options in terms of saying well I want to compare three days ago versus 14 days ago or something like that.
[01:12] Some of those data points are hardcoded in. So you’ve got options for yesterday, this week and then you can go back either one week or two weeks etc. But you can’t just do like a date range or something like that and compare those. But it does allow you to do at least some minimal comparisons and pull the data right up on your iPhone, which I didn’t have a way to do that before.
[01:33] Rob: Yeah. It looks really nice. The screenshots looked nice and it’s free.
[01:37] Mike: Yup.
[01:37] Rob: No fee to use it. Pretty cool. We got an email from Dominic Patmore and he’s at Pilifter.com. He says I’m been listening to Startups for the Rest of Us since December. It’s comforting to know I’m not the only one seeking to create and maintain small businesses. I wanted to say that your advice helped me help another entrepreneur for making a common mistake. I met with him yesterday and he was explaining his mobile app, which he felt was heading to version 2.0. And his aim was to get venture funding and get bought out.
[02:04] However, when I asked him how many users he had, he said zero. But said he had a number of interviewees who would be willing to pay him. And then he gets to how we become involved. He says hearing your voice in my head, I told him that the best thing would be to go back to those users and get them to pony up on a bet release. My reasoning was that if they so loved the idea, what would they pay to see it go to version 2, 3 or 4. If there’s no one, then maybe it would be better to back to see if the solution is actually addressing a real need.
[02:33] This was in a TechHub space. I think like a co-working space. And there was another developer next to us that jumped in to confirm what I’d said. Thanks to you, hopefully, I was able to steer someone away from putting more money into building something for no audience. Thanks again and keep up the great work. So thanks for writing in Dominic. I loved hearing stories. It’s kind of like second generation. We didn’t directly help someone but it’s like an indirect relationship.
[02:52] Mike: Very cool.
[02:53] Rob: The only other thing is Drip continues to move along. We have 11 early access customers. They’re 8 or 9 of them that are actually active. It’s getting to the point where we have enough people in there that it’s hard to tell what everyone is doing now. But we’re moving forward and keep getting emails about people wanting to use this. So that’s good validation for me.
[03:13] And we did push a big feature live today and that’s going to help with on boarding. And it basically allows people to easily create – it does something no other email app does. It allows you to do one click and have this whole template for an email sequences spit out and then you just kind of fill in the blanks. It’s a neat features and it’s finally out. And then we’re working on split testing next, which is really the last major feature we’re going to implement before launching to the world. So we’re about a month out. Every week the early access users grow and so I’m excited to move forward.
[03:41] Mike: That’s cool. It’s great to hear that you’re moving forward. Personally, for AuditShark, I feel like I’m moving backwards cause things are just going sideways.
[03:48] Rob: Is that right. What’s the problem?
[03:49] Mike: It’s not just even one thing. Like if it was just one thing I can deal with it, maybe two or three it would be all right. But it just seems like all these things that are moving in all different directions all at once right now. It just feels like nothing is going right. For example like the automated upgrade system for all the different things that I had in place that used to working now things are just not working for whatever reason. So whenever I go to do a deployment, basically the entire system stops functioning. And then I had a system of sending emails so that when audits would run, you’d get emails from them. That’s not working anymore.
[04:24] It’s hard to get to the bottom of all of it because there’s so many different, you know, I called them dependencies for a lack of a better way to put it. But all this different things that I didn’t necessarily write that I don’t fully understand how they work. So debugging them and troubleshooting them just takes forever.
[04:39] Rob: Yeah. That’s a real bummer. So its stuff that developers who are still working for you wrote or is it past developers?
[04:45] Mike: Well some of it is libraries. So for example, there’s a scheduler library that is supposed to run things on a scheduled basis. And when it fails, I don’t really get any feedback about why it’s failing or whether or not its continuing to run and it’s just like throwing exceptions in the middle of it.
[05:00] So, I still have to dig into it and try and figure out what’s going on. Like I said it’s all this different moving parts. They’re all in the air and trying to figure them out is taxing to say the least.
[05:11] Rob: And the bummer is you’re like you’re in early access and so you’re trying to manage that process as well as this technical side.
[05:17] Mike: Right.
[05:18] Rob: I mean it underscores how many things you have to juggle as a software entrepreneur that wouldn’t have to juggle if you were launching say an information product or just a new blog or something that relies more on content. You’re not going to tend to hit all these snags that we do, cause software is very complex.
[05:35] Mike: Right.
[05:36] Music
[05:38] Mike: This week’s episode is kind of inspired by a blog post that Dan Norris wrote about whether startup validation is legitimate or not. You know he’s got some issues with Eric Ries’ book called The Lean Startup. You know you look at the startup community and generally, I’m kind of paraphrasing and over generalizing here. But the startup community generally says if you read this book and do what it says you’re generally going to be successful. But there are a lot of startups out there who’ve tried this approach and just failed miserably. And the question is does that mean it doesn’t work. And Dan has got a plenty lengthy blog article where he’s basically calling out and saying this stuff I tried this and I tried this and I tried this and this stuff just doesn’t work.
[06:21] Rob: Right. He gives a bunch of numbers. How he send out surveys and he gives you exact percentages. Shows the press coverage that he got and talks through how many people he get to sign up for a launch list and all that. So it’s a nice in-depth piece. We’ll obviously link it up on the show notes. But the title is “Is Startup Validation BS?” So, we want to kind of talk through with those.
[06:40] I have to be honest, my views on the whole Lean thing are constantly evolving. I’m still critical of people in a movement who are doing a lot of teaching but they’re not launching startups. In any field, there are academics who are studying and researching and then there are people on the ground who are actually doing, and there needs to be collaboration between those two sides.
[07:01] But the startup space has never really been that way. Academics have always tended to be behind. Like the MBA programs tend to be behind where the actual founders are. Maybe the Lean Startup movement is a diverging of that. And we are going to fit the model that psychology and medicine, computer science, you know those fields have fit for years. But its still a challenge to feel like someone with their feet on the ground who knows the tactics that work and the ones that don’t work to kind of hear this movement that I definitely think has positive points.
[07:33] But to hear some people take it on as like the gospel or the way to do it and that if you do this, you’d be successful; if you don’t do it, you’ll fail type thing. That’s where I say like my views on Lean are evolving. I’m not pro Lean or against Lean. I love some of the tenets of it. And I think other parts of it are questionable and I don’t do them in my own startups.
[07:52] Mike: I think one of the things that comes up in my mind is that there are a lot of these classic mistakes that you can make when launching a product that have absolutely nothing to do with startup validation. And although, you’ve gone through the process of validating your ideas, it doesn’t necessarily mean that you’re still doing the right things. Back in episode 121, we’d talked about seven catastrophically common launch mistakes.
[08:15] And you go through that list and you look at those and even if you validated your startup ideas, if you start going through and you commit all of these launch mistakes, it doesn’t mean you’re going to be successful with your products. I mean it’s very difficult to be successful when you’re shooting your foot every time you try to take a step.
[08:30] Rob: If you think about building a successful product as kind of this triangle or this three-legged stool and you need product as one of the legs. You need market as another and you need execution as the third. And so you can build an amazing product, but if it doesn’t actually solve a problem that anyone needs you’re going to fail period. If use Lean Startup or you use another method to validate it upfront then hopefully you have found a problem that actually needs solving.
[08:58] And then you actually need to find a market that you can market to. So that’s the second part of it. Then you need to actually execute well. In other words, don’t make the common startup launch mistakes, execution mistakes, marketing mistakes. So there’s a lot of elements that go into it that validation just says hopefully it says you have a good chance of people actually wanting this problem solved, and hopefully the solution that you’re looking at is going to solve it.
[09:24] But that’s how I view it. I don’t think you can get to a point of 99% certainty just by doing pre-validation. You know it get you above 5% certainty we used to get to. Maybe it gets you to 60% to 70% that if you execute really well on both the product and the marketing side, don’t make a bunch of common mistakes then you have a pretty good chance of success.
[09:46] Mike: Yeah. I mean I think it just points out the fact that there are no guarantees and that’s really what it boils down to. Even if you do all the right things, you’re not necessarily going to be successful. There’s always this asteroid that can come out of left field and blow your startup away. But even accepting that you can go through this process, try to validate your idea and then still fail at it because just not enough people are interested in buying whatever it is you have to offer.
[10:08] So one of the things that I wanted to point out was that even assuming that you have a very large mailing list, that’s kind of a classic assumption is that if you get a large mailing list you’re going to launch, you’re going to get lots of customers very very quickly. And I don’t believe that’s the case. I mean if you have 4,000 people on a mailing list, if you have 1% conversion rate that will get you 40 customers or 20 customers at a half percent conversion rate.
[10:34] I think that’s not true. I mean there’s some fallacies associated with trying to assume that having a large mailing list is going to equate to a large number of customers. And part of that is because of your conversion process. You have to be putting in good calls to action. You have to be telling them exactly what it is that you’re offering, why it solves their problem, how it solves their problem, how much money its going to save them, how much its going to be worth to them.
[10:58] You can’t just blast this out there to a giant mailing list and expect all these people are going to buy your product on day one even if they said they would originally. You really have to educate them about what the product is going to do for them and how it’s going to benefit them. You know blasting out this email is not enough.
[11:15] Rob: I don’t think Dan made, I don’t think he just sent out kind of a random email and said hey buy the product. I don’t recall if I was on the launch list for his original product which is called Informly. But he’s a good content marketer. He’s a good copywriter and he executes pretty well on this stuff. So I wish I knew a little more in depth. That’s actually one thing. His post, I like the way he formed it. I like the way he gives a lot of data. But he doesn’t really talk about what he did to turn people into paying customers.
[11:44] So some questions that come into my head are “Did he launch with a single launch email?” You know did he build up this list of 1,000 or 2,000 people and then just send them a list and say here’s the product, here are the benefits, come and check it out. Or, did he do a long sequence. You know I typically do a four email sequence during launch. I also typically email between 6 and 12 weeks. You know if you’re working on a product for 8 months, I would probably touch base with them every couple of months during that time with progress update to build anticipation and to actually see the response from that.
[12:16] If no one emails you back then it’s kind of not a dead list but it’s people who are not really interested in what you have. But if you get 20 response with people saying this looks fantastic. I can’t wait to get in. Then that’s a whole other story, right. I think the other thing that comes to mind is that Dan has a decent personal brand. So he has a podcast and email newsletter of 5500 people. He has a lot going on. So I found that sign ups from my personal brand audience don’t typically results in trials or sales of my software.
[12:47] I mean, Mike, we have the podcast. I have the blog. We have MicroConf. We have Micropreneur Academy. All that huge footprint and it is a pretty sizeable footprint, I would say I have 10s of HitTail customers out of – there are four figures of HitTail paying customer, and I have literally in the 10s. I don’t even think they’re a 100 people from my personal brand audience who signed up.
[13:10] So if Dan’s list was seeded with a lot of people from his own audience and not from the exact target audience who would actually need this, then that could have been another issue with having – cause he had a reasonable size list. I think it was a thousand. Actually, that’s another question. He mentioned that he has a 1000 person beta list and a 1200 launch list.
[13:30] Do you know what that means? Cause I’ve never separated those two. I think that you should all have them as one 2200 person list and you should pick out a handful of beta testers from that who can run through it. And everyone else is just given basically the early bird the kind of pre-launch discount to come use the app.
[13:47] Mike: I think that what he meant by that is that he had a 1000 people sign up for the beta over the course of three months and go through it. And then there were another 1200 people that entered their email address to be notified of the launch. I mean I’m kind of in your boat. I’m not real clear what he meant by that. But I got the impression that he kept two separate lists. He drew the line in the sand at some point and said okay. Everyone before this point is going to be a member of the beta. Everyone after this point is going to be notified of when the launch actually happens.
[14:17] Rob: Got it. That makes a lot more sense. So, that would be something I would have done differently then. I’m presuming that during the beta that perhaps it was free or he had a free plan or something like that. And that’s one of the catastrophically common mistakes we talked about. He did mention a free plan in the post. He had 4,000 free users and only 15 converted to pay. And that’s the problem with free plans is you give people an alternative. So even if they need their problem solved, if you give them a kind of way to half solve it then they would tend not to want to pay for it.
[14:48] Mike: One of the things that Dan points out is that he went through and did some customer development and started asking people questions about surveys. And one of the things that strike me is that when you’re listening to people who aren’t paying you money, its not going to get you anywhere. Cause nobody wants to hurt your feelings about what your product is. And everyone is going to tell this is a great idea. I would pay for that.
[15:09] But the fact is until you ask them for money, there’s this barrier to entry. If they’re willing to give you the money then you’re probably going in the right direction. But if they’re not willing to cut you a check or give you a credit card then you’re probably on the wrong track or you’re talking to the wrong person. And my inclination tends to be that you’re probably talking to the wrong person as opposed to you’re on the wrong track with it.
[15:33] Because you can usually talk to those people and say, “If you’re not willing to give me a credit card, why is it that you’re not willing to?” It could very well be that it’s not that big of pain point for me. And that’s the hurdle you have to overcome. If you can’t overcome that hurdle then make sure that you are, or you’re talking to the wrong person and you need to figure out how you get to talking to those right people.
[15:54] Because until you do, you’re not going to really find out what their pain point is. You’re talking to people who may have ancillary pain point but it’s not the one you’re trying to solve. You know you’re marketing messages are getting confused, you’re talking to the wrong people, and you’ll never going to get anywhere when you do that.
[16:10] Rob: I don’t think I feel as strongly as you do about having people pay you money upfront. I mean if you look at what we both done with Drip and AuditShark. I have a list put together of emails and I’ve talked to people about the potential price of what that might be. And I’ve shown them the potential features and the potential value proposition and there’s a lot of enthusiasm. And there are people wanting to get into the early access.
[16:34] When I mention the price it will be after the trial, some people have said that’s too expensive and then you let them go. Basically saying that’s fine. I’m not a good fit. But others, you know, they haven’t written me a check yet and they haven’t put their credit card number into the app yet, but I don’t think you need to go that far. I think in an ideal world, you would. But I just don’t think that’s feasible when you’re doing kind of a larger launch like this and you’re trying to get thousands of people on the list.
[17:02] I think the best practice that I would lean towards maybe – you know, the way I look at it is those first 10 customers kind of the people that I interviewed and got on the list in order to validate the idea enough to start coding. Those people I would consider saying all right would you send me a check or would you give me a credit card number.
[17:20] Mike: I totally agree with all of that. But what I mean by listening to people is that if you’re asking them questions like what would make you pay for this? And they say well if you build feature X and then you go off and build it for them. Then they say okay, now I’ll give you a credit card. You’ve solved that particular problem for them but you haven’t necessarily solved a problem that is the same for a lot of different people.
[17:46] Really what I meant by trying to figure out who’s paying you money versus who isn’t is when you start listening to people who aren’t pay you money and you listen to too many of them, then you’re not necessarily solving any one person’s problem or a group of people who all have the same problem. You’re solving these individual problems for different people and you’re not necessarily solving the same problem for lots of different people.
[18:06] Rob: Yeah. That totally make sense. And that’s where that problem solution fit and then product market fit need to be in sequence. Because if you try to go sell to a bunch of people before you’ve solved their major pain point that people are willing to pay for, you’re doing things out of order and you get scattered. As far as I know Dan is not a developer, so I think he was outsourcing development. You can’t just move fast enough unless you have a whole team of people. You can’t move fast enough to hit multiple markets and solve multiple problems at once. And so that could potentially be something that impacted him here.
[18:37] Mike: I think we’ve talked a little bit before about asking for credit card numbers upfront. I just kind of want to emphasize the point a little bit. It’s really more of – I’d call it more of a psychological barrier than anything else. Because when you’re trying to convert people from a free plan into a paid plan, or you’re trying to convince them that after signing up for the product that’s when they should give you the credit card after like a 14 or 30 day trial or something like that.
[19:02] Basically, what you’re doing is you’re putting another artificial barrier in there for them to continue using the product. And really this is a big mistake and the reason why like I said is rooted more in psychology. And I’ll use an analogy here. If you look at enrollment plans for a 401(k) plans, you’ll find that the participation rate is commonly more than 90% were automatic enrollment is isued. And that’s very synonymous with asking for a credit card upfront.
[19:27] If you look at companies where they only have – where has the opposite where you have to actively try to enroll in it, you have to go to the HR department say I’d like to sign up for this. The enrollment after six months I think the statistic is 26% to 43% after six months. And that’s a huge difference. I mean that’s almost four times the difference between them. So what you’re really doing here is you’re trying to give the user value and show them the benefits and not have them do anything extra to maintain those benefits. Your software shouldn’t be any different.
[20:00] And stop asking them if it’s okay for them to continue receiving the benefits of your software. They’ve already made the decision to sign up, so put that in as part of the barrier to making that decision and couple them together so they don’t have to make another one down the road.
[20:13] Rob: Yeah. I think that’s a part of execution and I think its not the only way you can do it, but it’s definitely the rule of thumb that when I’m in doubt ask for a credit card upfront. I think another thing as I was looking through Dan’s blog post I saw I think it might have pivoted too soon. It looks like Informly was launched maybe it was six weeks before he pivoted into something.
[20:32] And as I thought back I realized when I acquired HitTail after I re-launched it, it already solved the problem. And I took me five months even with the marketing knowledge that I have, it took me five months to really learn how to market and how to find the people that really needed this product. And that doesn’t even include the problem solution portion. While I don’t think its going to take five months for everyone, I was willing to be at five months full time and that’s what I was focused on aside from you know there was a couple other smaller task I was doing.
[21:06] But in general I was doing it was pretty much five months full time of my time to really get HitTail where it started to scale. It was growing slowly during that time. But if you expect something to take off fast in six weeks, and you have a free plan and you’re not asking for credit card upfront, and you’re not forcing people to make a decision, and you’re not trying convert them into a paying customer then its likely that even if you have built something good or almost good enough that you’re not going to convert people.
[21:30] I actually have a friend of mine who’s in the mastermind group. He said, he wrote me an email and said I’d tried the content marketing version of Informly and the product itself was pretty rough. So meaning that the product execution wasn’t where it needed to be for this person to pay. And then he said there was zero effort made to convert me into a paying customer. I didn’t get any emails. I didn’t calls to action. There was no credit card upfront. Basically it was some classic mistakes that we see in the startup space.
[21:59] So again, the point of this podcast is not to sit here and point out all the things that Dan did wrong cause that’s not that helpful. I think what we’re trying to say is in light of whether startup validation works or not, it’s a really hard question to answer. But it’s keeping in mind that it’s not just about validating an idea, it’s about validation really talks about the product, right. Does it solve someone’s problem? Everything else the marketing and then the actual execution is another thing entirely.
[22:26] And if you don’t execute really well on that stuff then you can have all the validation in the world but the product itself still might not work. It may work but it may not work as fast as you want it.
[22:35] Mike: We’d mentioned this in the past but it was the long, slow SAAS ramp of death from the CEO of Constant Contact. She spoke at the Business of Software Conference this past year. And that’s just accurate as all heck. I mean it takes a long time to get to where you want. And there are certain things that will give you a step function increase and there’s other things that will give you this very very minimal increase that they work and they work well. But because of the fact that it takes so long to get customers until you achieved this massive scale, those things are not going to measurably move the needle in very very small time slices.
[23:11] Rob: And that’s why SAAS is so brutal, right. And that’s why we talked about having small wins where you do the one time software download. You do the WordPress plug-in or you do the Mobile app or maybe you do the info product or the training course, the e-book. Because things are things that you can kind of get out of the door. They don’t require a ton of support and you can get early wins to build your confidence. So that you can then later take the long slug of actually building the SAAS app, which as we’re finding more and more it takes months if not years to really grow it into a sizeable business.
[23:44] Mike: You know one of the things that Dan mentioned was that coverage in Tech Press doesn’t work. If you’re looking for press coverage to get your customers, that’s probably not going to help very well. But it will give your product and your websites some validation. It will give us some SEO juice. But I don’t think that the traffic that you get in some those types of sources is going to convert into paying customers very quickly.
[24:05] I mean it’s great for those back links. It’s great for the SEO. But in terms of getting targeted traffic, I mean basically what you’re ending up with is that all these people who are interested in new startups and new technologies. They’re going to come check it out and they may sign up. But they’re not necessarily really interested. It’s almost like saying hey check out this tech demo. And you send it out to Reddit and people are going to come and they’re going to get this massive spike of traffic. But they’re not going to stick around because that’s not part of their job. It wasn’t a problem they were trying to solve to begin with. They were just interested in something to use as a diversion for their daily life.
[24:42] Rob: Remember when I got quoted in the – was it The Wall Street Journal?
[24:44] Mike: Yeah.
[24:45] Rob: That resulted as best as I can tell because they didn’t actually send a direct link. It was just a mention. But that resulted in right around seven paying customers for HitTail.
[24:53] Mike: That’s awesome.
[24:55] Rob: Which is a rounding error. It’s completely inconsequential. I’m not saying press doesn’t work. I have heard of businesses. It was kind of like iOS keyword tool and analytic tool for the iOS app store. And they got mentioned on Tech Crunch. And they got $25,000 in recurring revenue based on that mention. That basically built their business. So yes, it can happen if your audience is heavily heavily aligned with that press outfit.
[25:22] But I’ve heard several entrepreneurs talked about, and I’m the same way talked about – I would rather be on Life Hacker or for me it’s like SEO Moz Blog]than I would like to be in the New York Times because those first two are so much closer to my audience. It’s like getting the small tech audience. And by small, you know, tens of thousands of people is infinitely more valuable in getting hundreds of thousands or millions from the general public basically or the general press.
[25:50] Now, Dan didn’t get, you know, he wasn’t on Good Morning America. He was on Mashable, and The Next Web, This Week In Startups, Shoe String and some other startup related stuff. So they were reasonably targeted. They were at least in the tech space. And I don’t know how many sign ups he got. I guess he said he has zero paid users. See, that’s a problem though. In the post, he said I had zero paid users from those traffic sources.
[26:13] Now if he was already launched then you can tell that but if you aren’t launched then you really want to know just how many email addresses did you get. Because getting from that email to the paid customer then depends on your execution and your ability to close those sales. It doesn’t depend on just the validation piece of it.
[26:30] Music
[26:33] Mike: One of the things that I really liked about Dan’s blog post is that he showed some results from his targeted surveys. And he showed the number of people who had said yes, I would pay for this or no or possibly pay for this. And then he showed percentages of how those things stack up. And the one thing that struck me about the survey was that numbers were I’ll say fairly low. I mean it looks like it was less than 100 people who were surveyed as part of this.
[27:00] I don’t think that going and asking a hundred people or less than a hundred people is a bad way to go. But I think you also have to keep in mind that when you’re asking less than a 100 people and saying would you pay for this, yes or no. People are going to tend to lean towards “Yes, I would pay for this” or “maybe” so if you start combining the yeses with the maybes then you’d end with this number that is I’ll say artificially inflated.
[27:25] Because possibly or the maybes you can’t count them one way or the other. I mean maybe you can split them down the middle, but still you’re just kind of guessing. I feel like survey should kind of guide your views and test of your assumptions. But you also have to be very very cautious about the conclusions you draw from some of these responses. If people are paying for it, then that helps out a little bit.
[27:46] Because if they’re paying for the product then any new features that they’re requesting, those are things that are going to keep them. Versus people who are not paying for the product, you really need to find what their problem solution fit is to get them and convert them into a paying customer. And testing some of those assumptions would be helpful, but you have to figure out exactly what the pain point is that you’re solving. And I feel like that that’s what the survey should be for. And it looks to me like – I’ll say that the surveys were a little bit squishy in terms of what the surveys were asking.
[28:16] Rob: Yeah. And for the record, this is when Dan pivoted from Informly which was an analytic aggregator and he pivoted into a content marketing analytics app. And I actually loved this idea to be honest cause we’re doing content marketing with HitTail and I’m working on it for Drip. And frankly, it is hard to track. Google analytic does not do a very good job of that.
[28:35] So I would absolutely pay for something that was easy to set up and that worked. You know when I looked at Dan’s kind of record of people who paid for it. He said that 22% which is like 17 people said that they would pay for it. And then only three people signed up. One cancel and then two weren’t using it. That’s where you basically hit the pavement and you email every one of these people and say, why didn’t you sign up. What doesn’t’ it do. What kept you from doing it?
[29:00] Because I think that that one was a winner. I really do. It’s my personal opinion so it’s not worth very much. But I would pay for something that helped me do a better job of tracking content marketing than Google analytics does. And so, at that point, I wouldn’t have stopped. I would have continued with the pursuit of emailing everyone. Finding out if I had not communicated the value proposition properly.
[29:21] Meaning that if I only got three sign ups out of this whole list then perhaps my positioning or the description, my headlines, you know the value I was going to offer wasn’t good enough or the product itself wasn’t good enough. It wasn’t solving their problem yet. And then figure out what to do. What to iterate on in order to get to the point where I was solving one of those things. Personally, like I said I think this is a problem worth solving the content marketing analytics thing.
[29:48] And I don’t know of a smaller inexpensive SAAS app that does it. I’m sure there’s $500 a month packages that do it but there’s no one in the startup space that’s doing it.
[29:58] Mike: So what are your thoughts on Dan’s comments on about building the MVP? He says that it’s a lot harder than it sounds.
[30:03] Rob: I think he has a valid point. He basically talked about how Eric Ries talks about building a minimum viable product and kind of talks about that its easy or implies that it’s easy or maybe that just has come to be known as getting a MVP you can do on the weekend and then iterate on it. And that’s the thing. If you take that very literally then maybe you do release before it’s a solid product. And maybe your failure on the product side is because you released too early.
[30:28] So, yes, I actually think he has a very valid point here that it’s very hard to know whether an MVP is good enough. To be honest, I think this is why you have to let a few people in at a time. And you have to find people who when you talk about the single problem that you are going to solve, and there should be only one when you start. When you talk about their problems, it’s the people whose eyes light up or who replied to your email when you send them and they’re really excited.
[30:55] And then you say okay, Mr. Person#1 I’m going to let you in and you’re my first early access customer. Try the app. Does it suck? Is it good? Tell me what it needs to do? Then let Person#2 in. Once you’ve built all Person#1 features. And to do this, it requires a lot of time and it requires a lot of iteration. And it requires quite a bit of patience as well as the ability to tell someone you know I’m not going to go in that direction. That I’m not going to build features that you want. That you’re not my ideal customer.
[31:25] So it’s not as simple like Dan says it’s not as simple as a lot of people expect this whole building the MVP and then iterating on it. It’s not as simple as building up a big list, throwing everybody at it and then iterating, because by that time, you’ve burned to your list now. You had a 2000 person launch list and you send them all there. But if the product didn’t solve the problem then poof you’re done. You have to start over.
[31:46] And that’s where I think really trickling it out very slowly which is the way that I’m doing with Drip right now. After a couple of months of basically having a fully functional MVP, we still only have 10 active people on the system. Because we want to build up those features that these people really need before letting in that next group.
[32:04] Mike: Yeah. I totally agreed. I mean this is probably the most frustrating part about it. And I feel like Lean Startup, the book itself really glosses over this fact that it’s such an iterative process and its time consuming. That’s the part that I think is so frustrating. It’s just so time consuming to work with individual customers in a way that in no way, shape, or form, scales. And developers want to get, they’re like the code is done. It works. Let me just throw it out there. And I don’t have to worry about bugs in the product.
[32:35] Maybe you don’t. Maybe everything is functionally complete. But if it doesn’t do what people expect or what they needed to do then it doesn’t really matter. And you need to somehow get through that process and take that step back and work through things slowly with people. You make sure that you’re solving the broader problems. And once you do it then you can throw it out there. But until you get to that point, it’s very difficult to be able to do that because as you said you’ll burn through your list very quickly and then you’ve got to start over.
[33:05] To me I think that’s probably the frustration that a lot of people find is when they try to build an MVP and they say it’s working. Let me throw it out to people and try to get as many customers as I can as quickly as possible. It doesn’t really work that way. And I don’t think I’ve ever really seen it and explained to say hey you really need to work through this slowly as opposed to just throwing it out there.
[33:26] Rob: And I think in Dan’s defense that’s the point he’s raising. Is that you read the Lean Startup book. You follow what the kind of Lean Startup movement and the folks who are teaching and it’s very high levels and it’s academic. So they’ve never said the things we are seeing right now in this podcast. They never say titrate it out. They never say build the MVP; have a few people using it. You know exactly the steps we’ve just laid out because a lot of them are not actively on the grounds developing products.
[33:52] And that’s okay. It’s not as tactical as it might need to be for someone like Dan who isn’t an experienced startup founder. He probably hasn’t launched a startup like a software product before. When he reads something that is as high level as Lean Startup, he still needs much more detailed guidance. And frankly, I don’t now where you go to get that. I mean I think that’s why we started the podcast. That’s why we have the academy. That’s why we have the MicroConf is to provide that kind of education.
[34:19] Not just in the Lean Startup space but just in general, for software founders who want more detailed actionable step by step stuff. And there are certainly courses out there on Udemy and that kind of stuff. But there’s no real single place that I know of where you can say all right, I’ve read the Lean Startup. Now how do I actually implement the Lean Startup? And I think Dan kind of took some hard knocks himself basically learning that, right.
[34:42] He learned step by step that parts of Lean Startup are harder than they might appear or harder than they were presented in the book. I mean I got to really thank Dan for putting this blog post together, for doing the experiments, for putting all the detail in here, and basically for raising the issues so that we can discuss it intelligently on the podcast. Cause I think this raises the level of dialogue about the whole topic. You know both of us; we wanted to thank Dan for putting this post together for sure.
[35:09] Mike: Yeah. Definitely hats off to Dan. I mean if you look at all the different things that have been written about the Lean Startup, I mean there’s all this stuff that says it’s great. You do this. You do that. Everything is hunky-dory. The reality of the situation is once you start putting feet on the ground it’s not that simple. And it never is. I mean when you’re trying to go from a book to reality. There’s a difference between theory and reality. So going through it and having a – I don’t want to say it’s an alternate point of view.
[35:36] But a lot of the things that Dan expressed I mean some of them are points that I share and some are frustrations that I share in looking at the Lean Startup because it’s not that simple. And it tries to portray it as being a, I don’t want to say a step by step guide. But they’re like if you just these things and pivot a little bit and take into account what your customers are saying or what your potential customers are saying and pivot as quickly as possible and iterate everything is fine.
[36:03] And it is just not that simple. And it just glosses over all of the details and all of the tactics that you actually need to execute on. And I feel like its just too high level in many cases to be applicable to not all startups, because I think that there’s definitely pieces of it that apply to very very many of them. But it’s just not tactical enough or provides you enough information to be able to decide when what you’re doing is completely off the rails from what they recommend.
[36:32] But at the same time, that doesn’t mean you’re doing the wrong things. There are no hard guidelines in there for when you should listen to it and when you should ignore it.
[36:38] Rob: Yeah. As I’ve said from the start, my views on Lean are certainly evolving. And I think there’s a lot of good that can come out of it and there’s some good high level information. There’s also that lack of detail you’d mentioned. And then there are some things that I do think that are questionable or have not worked in my experience at all. So if you’re interested in checking out Dan’s app, it’s at inform.ly and he’s basically pivoting to something that I think he’s now having success with and it’s beautiful client report for freelancer and web agencies.
[37:07] So inform.ly connects to Google analytics and other apps and then it provides a monthly report that you can use as a freelancer or web industry to keep your clients happy. So we definitely wish Dan best of luck with this product moving forward. You know we hope he continues to update us on his blog at thedannorris.com.
[37:26] Music
[37:29] Mike: And if you have question for us, you can call it in to our voice mail number at 1-888-801-9690 or you can email it to us at question questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt used under Creative Commons. You can subscribe to us in iTunes by searching for startups or by RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 141.5 | MicroConf Europe Ticket Announcement
Show Notes
Transcript
[00:00] Rob: So this is our extra special episode of Startups For The Rest Of Us 141.5 in which Mike and I tell you that there are only a couple of days left before we do the pre-launch for MicroConf Europe. And MicroConf Europe happens this October in Prague. We are going to have a bunch of awesome speakers that we had in Vegas including Mike and myself, Patrick McKenzie, better known as Patty11 on the Internet. We’ll have Peldi. Peldi from Balsamiq. And Dave Collins from Software Promotions.
[00:30]And so it’s just a couple days left. We don’t actually have that many tickets left to be honest even in the pre-launch. I think we…What did we sell out in like 51 hours or something for the Vegas one this year?
[00:40]Mike: Yup
[00:41] Rob: So I could easily see selling out in a matter of days. So if you are at all interested in going to MicroConf Europe. Which is October 5-6 in Prague. You want to head over to microconfeurope.com and get your name on that early bird list because that’s really going to be probably your last chance to get a ticket.
[00:58] Mike: Yeah, and just a reminder that the MicroConf in Prague is going to be a little bit smaller than Vegas, so don’t get your expectations up for having a larger conference. We are intentionally keeping it small. And again as Rob pointed out, I mean, we’re expecting to sell out rather quickly. So, make sure you are on that list because that’s probably the only way that you are going to be able to hear about it. Just go over to MicroConfEurope.com and that will take you over to the MicroConf website. And just enter in your email address at the top of the page. And we’ll notify you next week when the tickets go on sale.
[01:27] Rob: Thanks for listening. We’ll see you next time.
Episode 141 | The 5 Elements of Effective Thinking (and How to Apply Them to Your Startup)
Show Notes
- Rob’s Startup VA Course
- Rob’s email marketing app, Drip
- Mike’s security auditing app, AuditShark
- Book: The 5 Elements of Effective Thinking
- The 5 elements:
- Understand Deeply
- Make Mistakes
- Raise Questions
- Follow the Flow of Ideas
- Master Change
Transcript
[00:01] Mike: This is Startups for the Rest of Us: Episode 141.
[00:03] Music
[00:11] 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.
[00:20] Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Rob?
[00:25] Rob: I’m pretty fired up. After having kind of a rough month in June with some ads not working and just feeling not like I was making progress with Drip. I’ve made a lot of progress in the last couple of weeks. A lot of good things are going on. So first is the VA course that I’d mentioned. Its startupvacourse.com. I just past the 100 student mark.
[00:44] It’s just a nice milestone and it feels good and I’m getting a lot of positive feedback. People are putting five star ratings into the Udemy. It feels good to launch something that’s fairly small and contained. Unlike these projects you and I are working on that take months and/or years to complete. It’s like getting the VA course out there. It just feels good to publish and to ship.
[01:04] So if you haven’t checked it out, it’s startupvacourse.com. And my other update is that Drip now has five active early access customers who are using it. Have it installed. And then I’m adding two more. I have 2 more log-ins I’m shipping out tomorrow. So my hope is to be between 7 and 10 by next week.
[01:24] And we also nailed down the final features for our prelaunch, which it looks like it’s going to be between three and five weeks from today. I will know almost to the day by the time we record next week. And so it feels good. Every piece of development is laid out and prep for the launch. I got to be honest. Drip feels like a real app now, like I’m using it daily.
[01:43] I’m in there looking at stats. I’m starting to migrate more and more of my lists into it. I think I have four mail Drip accounts across all the stuff that I do including the micropreneur stuff. I think I’m going to start moving some of them into Drip.
[01:58] Mike: That’s cool. It’s always nice to get to the point where you’re actually using your own product, especially if it applies to you in any way shape or form. You’re right. I mean it does give you that feeling that it is a real product. I mean I got AuditShark up and running on one of the servers. Actually, I have several servers but the one that I’m primarily looking at is the server that I use and host over at Rackspace.
[02:18] So I have it up and running there. And I’m looking at the stats and stuff that are coming in the reports. It’s nice seeing that information. But I wish that I’ve gotten a lot more accomplished this past week. Some other things have been moving on. My developers have been kind of plotting forward at the meantime. And I’d talked to one of them and they came back and said “Hey, is there anyway to do this, this and this.” I was like, “No. But I can add it in if you really need it.”
[02:38] We started talking through it and it looks like I got more work to do there. But the things that he proposed are a lot more extra work that other people and customers are not going to want to do. So I’m going to have to do some more backend code. But I’m not going to kind of delay anything. It’s just I’ve been sick so I haven’t made any real progress on my side.
[02:55] Rob: Right. That’s the balance too, right. It’s like if you’re a single founder with no contractors or employees then when you get sick and you’re down, nothing happens. You can’t response to email. It’s a real bummer. So that’s where having at least some help can help really keep your business going. And you know like you and I have actual developers who are helping so that your business can actually move forward in your development process even though you were probably laid up in bed for a few days.
[03:19] Music
[03:22] Rob: This week we have the five elements of effective thinking and how to apply them to your startup. So this is based on a book that I listened to last week. It’s called The Five Elements of Effective Thinking. I will link you to it in Amazon on the show notes. But it’s two mathematicians who got together and looked at how people think, how they analyze, how they learn. And they put all their thoughts into this book.
[03:46] And what’s nice about the book is it’s not that long. They kind of boiled it down. They kept it short. So it’s about 3–3.5 hours of audio, which is less than half of a normal book length. And so today, we’re going to be looking at these five elements. And so let’s dive into this. The first element of effective thinking is to understand deeply. The idea here is not to face complex issues head on but to break them into component parts and to understand those more simple underlying ideas deeply.
[04:17] So the examples that were given in the book are you have to understand basic math before you can start working with Algebra. You have to understand Algebra before calculus. If you try to teach someone calculus and they didn’t have an understanding of basic addition and subtraction and those underlying simple concepts, they’re probably not going to be able to grasp it.
[04:36] What the authors talked about is about breaking things down that no major scientists look at complex problems and try to attack them head on. They actually look for simpler versions of the problem. Well this can help us think more effectively. We also want to relate this back to startups and to launching a product and software and that kind of stuff.
[04:54] And so the idea here and how I see it, how it relates to building an app is breaking your app down into the minimum features you need. So you don’t try to attack the whole app at once. But you launch one piece. You let people in. you build that minimum viable thing that people can use to get value out of it and you expand based on what you learn from them.
[05:11] So you don’t attack the whole complicated at once, you start small. The other thing I thought of is like with the marketing plan. A lot of people I see get overwhelmed. They say how do I mark up my app and how do I drive traffic. Well that’s a huge question. It’s very complex and it’s very big. But if you break that down and you instead just put together a bulleted list like a Google doc spreadsheet and you attack these things. You prioritize them. You attack them one at a time. You’ve broken them down in their components ideas and it’s a lot easier to get started and not be overwhelmed by the complexity of the issues you’re facing.
[05:42] Mike: I think one of the other side of this that, I don’t know if the authors went into this or not, but when you start breaking down a complex problem into much smaller chunks then it makes it easier for you to tackle those in terms of your motivation. Cause if you start looking at this blank slate that you got some problems and there’s this blank slate that says there’s all this different things that you can do. You really don’t have any good place to start.
[06:06] So it can be very very overwhelming and you just back off from it and you procrastinate or you don’t do it or you do all the things that are associated, or related to your business that don’t necessarily move you forward with solving those problems. You know in some ways it’s a morale issue but in some ways its productivity as well.
[06:23] But if you understand the complexity of the problem and you are able to break it down and simplify it into much smaller chunks, then that helps you to bypass those I call them mental issues and actually move forward on it.
[06:34] Rob: Yeah. And that’s actually a good led into the second part of understanding deeply and that’s to choose small wins. So this relates to taking a complex problem and breaking it down into simple underlying ideas, but more specifically choosing small wins. What does that look like? The example the authors gave was the moon landing. That John F. Kennedy said we’re going to land on the moon in this decade.
[06:56] They didn’t put two guys in a spaceship and shoot them into space and try to get them to land in the moon. The first thing they did was shoot a rocket, first they just try to get out of the orbit. And they shoot further up and then they actually shoot something right on the moon surface. It was like going super fast like 5,000 miles an hour or something when it hit. It might even have been faster. And it’s just boom. Hit the moon really hard.
[07:16] But they knew that each of those was an incremental step. They choose those small wins. Very incremental. And it took like 12 or 15 flights before they actually got up there. You know got someone safely landed on the moon. It’s a very complex problem that these brilliant scientists who were doing something no one had ever done in history that they broke down into small wins.
[07:38] To put this in context of launching an app, building software, doing a startup, think about instead of tackling something large and wanting to build long term recurring revenue with the big SAS app, think of building a small win. Like an add-on or WordPress plug-in or a Drupal plug-in. A single feature app, mobile app. Something small that you can launch and learn how to market.
[08:02] You know you and I have even talked way back about being an affiliate marketer to learn the ropes before you build your own products. Because being an affiliate marketer, you can learn. you’ll have a small wins doing that. You can learn the marketing side before you have to dive in head first and attack what is a really complex problem. Which is trying to build something people want, launch that, market it, support it. Just handle all those elements at once.
[08:25] If you break it down and you get some small wins along the way, you’ll just have so much more confidence in your ability to execute as you move forward. So the second element of effective thinking is to make mistakes. We’ve talked a lot about how failure is a stop along your road to success. And the authors basically say the same thing in the book.
[08:43] They say the mistakes are critical part of learning. That effective failure is a critical part. You must learn from your failures. So when you fail, you look back. You asked how you can improve the next outcome. I think what we’ve said on this podcast a lot is that there’s no replacement for real world experience. You can listen to us. You can listen to Mike and I talk. You can read all the blogs that you want.
[09:04] But until you actually launch an app and you start to fail, that’s the only time that you’re going to know a tiny percentage of what it takes to actually do it. And so I like something the authors pointed out in this book. They said think that for any large task you’re going to accomplish, that you’re going to have nine failures and then one success. So that when you do fail that first time when you’re trying to do it that you’re 10% of the way there.
[09:26] And that’s a really good way to manage your expectations so that you don’t crash and burn. We talked a lot about motivation and how you need to maintain that motivation and not get disappointed when you launch your first app and it doesn’t work or when you blow $1500 on ad words and it doesn’t work and all the other stuff. We’ve talked about what you and I have done. And thinking long term, playing long ball and thinking “wow, it’s going to takes me nine failures.” I actually think it’s a pretty good rule of thumb.
[09:54] Mike: I think though an important piece of thinking that if you fail the first time, you’re 10% of the way there. The thing to keep in mind is that when you get to that success it takes you exponentially further forward than those failures do. Those failures do move you forward but they don’t necessarily give you that step function increase that the success will. But once you hit that success, it’s going to count for a lot more than those failures. And it will move you forward and it’s very motivational to be able to do that.
[10:21] Rob: Yeah. That’s a good point. I agree with you. That failures are more likely incremental whereas a big success can be a step function that gets you up there. So the second part of making mistakes is to think about iterating on failure to fill in your gaps. So basically fix what’s broken and then move on and fail again. The examples they gave were things like Hemmingway. He rewrote the last page of Farewell to Arms 39 times.
[10:49] I was thinking about this and how this relates to things I’d been doing for the past decade. I started looking back to the features and tweaks and bugs that we’ve been working on with Drip over the past several months. And I think we’ve closed like 80 different features, tweaks or bugs even in the past couple of months. And that’s total iteration.
[11:07] A bunch of these were things that we came up. A bunch of these were things that early access customers have come up with. And that’s it. I mean as good as the product was when we launch it or when we start letting people use it, there’s just so much iteration that’s required.
[11:22] Mike: Yeah. I totally agree. I mean even with AuditShark I’ve had to back paddle in a bunch different cases, where like I went down this path and things were working fine. But then you start adding, try to scale it up a little bit and try to use it beyond what it was initially envisioned for and then things just fall apart. And then there’s been cases where we just have to go back and just completely rewrite giant sections of code because it wasn’t going to work.
[11:46] And of course that puts you behind, but at the same time you’ve made those missteps. And you know figuring out what those missteps are allows you to go in the right direction that will take you monumentally further.
[11:59] Rob: Yeah. As I was listening to this book I thought of what you should ask yourself is what’s the minimum thing I could build to get you out there, and then ask yourself the question, why does this suck and how can I improve it. So I’ve coined this thing “Rob’s, why does this suck test”. And I’ve started actually asking myself that as I’ve been using a couple of apps that I’m working on.
[12:16] And it’s really helpful to put it in terms of it’s just a very blunt questions to ask. And it’s helpful to put in terms of like “what’s the biggest thing that we can improve now to make this more useful to the people who need it, to make it provide more value to them?” The third element of effective thinking is to raise questions. The authors say never act like you know more than you do.
[12:39] If you’re in doubt say that you’re in doubt and asked someone who knows. Doubt is actually a sign of strength rather than weakness contrary to what society says. When we watched election debates, anyone who has any doubt or anyone who shows any signs of changing their mind or anything like that, it seemed to be some big flaw. What they’re actually saying is being able to doubt your beliefs and being able to take other people’s thoughts and opinions truly to take them into account and allow them to change you is actually a sign of someone who is active learner and someone who is going to move things forward instead of keeping things stagnant like they have been for so long.
[13:19] Mike: One of the things that this reminds me of is the fact that there’s a lot of entrepreneurs out there who have sort of a control freak aspects to everything about their product. They have to know everything that’s going on. They have to either write the code or do all the marketing and everything else. And it just makes me sit there and think you don’t necessarily need to know all that stuff.
[13:38] And having doubt about different things and not fully understanding all the inner workings of everything is not necessarily a bad thing. It also reminds me of the story that Joel Spolsky has on his blog about him pitching VBA for excel to Bill Gates. And he had this giant specs that he’d written over the course of weeks or months or whatever. And he went in there and Bill Gates basically shredded it.
[14:01] I mean he just ripped apart from beginning to end, walked through it and then at the end of it he’s like how do we know all this stuff is going to work with all the dates. And because Joel had put so much time and effort into the spec and understood it thoroughly, he was able to answer that question and say “well, there is one case where there is going to be a problem but I think we can work around that.”
[14:20] And he had a pretty good answer for that. In that case, he knew all the itty-bitty details about what he was doing. But he didn’t necessarily need to know for example how VBA was going to fit into Word or any other applications that Microsoft was shipping. And he didn’t need to. But when Bill Gates was looking at it from his perspective, he is the person in charge. He’s the one who’s trying to figure out whether Joel knows enough about what he’s doing to be able to trust him to make the right decision.
[14:49] And in that particular case, Joel showed yes I know exactly what I’m talking about because I’ve spent the time and effort into this. I’m neck deep in it. And even though Bill Gates didn’t know it, he was able to see that Joel did and was able to look at that and say, “Ah, I can trust him to make the right decisions. I can back off from this. I can focus my attention on other people cause I can trust him to make the right decisions.”
[15:08] Rob: The second part of raising question is to be aware of the source of your beliefs. And the authors talked a lot about our built-in biases. And how by looking at what you belief and why you belief that, you have such a better method for identifying those biases and figuring out, it’s kind of know yourself type thing. Cause once you know yourself you’re able to much better manage what you do and how you do it.
[15:35] I started thinking of a few questions, different beliefs that people in our industry probably have. So think about these questions for yourself. Like who told you that happiness depends on working for 40 years and then retiring. Who taught us is raising funding or starting a multi-million dollar company. Can you be successful if you’re a single founder with no employees making several hundred thousands dollars a year?
[15:56] If your answer is yes or no, ask yourself who told you that. Why do you believe that? What are the underlying assumptions that you’re making to answer all those questions. Here’s another actually I thought of cause it seems to be, it’s a strangely polarizing thing. But does SEO always work? Is it a big scam? Why do you believe that? Why do you belief what you belief about SEO?
[16:16] Cause I’ve mentioned it to some people. And it’s funny cause there’s like a visceral reaction thinking that SEO only cause of black hat stuff. And I’m just curious where you heard that. Being aware of that and raising these questions in yourself when you have such a positive or such a negative reaction to something is just one more way to manage your direction and to wind up in a place where you aren’t sitting there unhappy because you follow these beliefs that someone else taught you that you never questioned.
[16:45] And I think this actually relates back to building apps as well and building software. Because if you’re following this path, and whether its the lean startup methodology or whether you’re listening to Mike and I or whether you’re following any type of methodology, always think about why you believe that and who told it to you. And if their goals and the way they do things are in line with you. Or if it’s a venture capitalist are saying something but you want to be a single founder who’s bootstrapping, you’re goals are not in line. And so you probably don’t want to listen to their advice.
[17:15] Mike: You know Jason Cohen had a great section on one of his talks from the business software a couple of years ago that kind of segmented different, I’ll say leaders in the entrepreneur community against one another. Basically saying that 37 Signals has their view. Fog Creek Software has a different view. If you talked to like Angels or VC they have a slightly different view as well. And they can give you advice that’s just diametrically opposed from each other. But it doesn’t necessarily mean that any of them are wrong.
[17:43] What’s happening is the advice that they’re giving you is correct for their situation and the way that they view the world. And as long as you understand that where that advice comes from is in some ways bias by the people who are giving that advice in figuring out whether or not your views lined up with theirs. It will help you figure out how much stock you should put in that person’s advice or whether it’s just not applicable to your situation at all.
[18:09] Rob: The fourth element of effective thinking is to follow the flow of ideas. The authors talked about looking backwards to see where ideas come from and looking forward to see where they’re headed. What I really loved about this is they talk about how ideas are almost always evolutionary rather than some big leap. They talked about Edison and how he invented the light bulb. And he just didn’t come up with that out of thin air.
[18:32] There were a bunch of other people working on it. There were people who tried other experiments. And then he tried how many hundreds or thousands of different experiment until he got it. If you think about the iPhone, you think about how that evolved from the Newton in what the late 80s and early 90s. Then they tried to build iPad internally. They built iPad prototypes in like 2003 that didn’t work. Then they come out with an iPod touch and then they add the phone to it and then they built an iPad. And then it’s just like on and on. These things are evolutionary.
[19:00] And so the thought was don’t try to go out there and build something that’s completely new. But think about building things that are extensions, variations, or applications of existing ideas. I think this is a really good exercise if you’re trying to come up with ideas for startup is to follow this flow of ideas. So let me give you a few examples. I mentioned three things: extensions, variations and applications.
[19:25] An extension of an idea in the startup space could be a really small like an add-on to Freshbooks or SalesForce or Basecamp or QuickBooks, a WordPress plug-in, something that extends an existing piece. So it’s not some brand new fancy idea but it’s just something that adds value to an existing user base. A variation could be let’s say there’s QuickBooks out there that serves all small business. Well what about QuickBooks online for freelancers, for dog walkers, for plumbers and so on.
[19:54] And then in terms of taking something and applying it to a new niche or a new application take a random technology. You could take QR codes. You could take Near Field Communication or NFC. You could take mobile apps and you say how could this be applied to the problems that any niche has like freelancers, dog walkers or plumbers, etc.? And so, using this as a thought experiment and a brainstorming experiment, you can sit down with a pen and paper. And just think of all kinds of extensions, variations and applications, new applications of existing software, of existing technologies, and think of how they can be mixed and remixed to help just get your mind flowing in terms of thinking of new ideas.
[20:38] Obviously, you need to focus on how these solve a problem. Don’t just come up with random ideas and think that that’s going to be something that you can market. We have to come back to the problem that they solve and you need to validate that and stuff. But a lot of folks that we talked to have problems they get stuck in the idea phase. And this is one way to kind of break that loose is to follow that flow of ideas.
[20:58] Mike: One other thing that you can do to apply this to your own business is to take a look at your product, and try and figure out where it’s going and the different milestones that you need to hit to basically take it in that direction. Because as you are building up, if you’re building up a product portfolio or if you’re building up a single product to start competing with larger product, there’s certain milestones and things that are going to be necessary to have in place in order to make your product able to compete with those other products.
[21:26] So if you look at, as you just mentioned, if you’re going to take QuickBooks online and you’re going to create it for freelancers. Well what are you going to need to be able to do that? And you can kind of sketch that out. But if you have this long term vision of being able to compete with QuickBooks for small businesses, then you’re going to want to be able to tackle that freelancer niche, tackle the plumber’s niche, dog walker.
[21:49] And try and figure out how many of those different things that you can kind of hop to and what sorts of features are going to overlap with all of those. Because chances are, really good that there’s a lot of those things where the functions of the software are very very similar for all those different niches. But then you take those and you just simply morph the marketing collateral a little bit in order to reach those people.
[22:14] You do the SEO that needs to be done. And eventually you get to a point where you’ve done enough work on the product itself, such that it solves all of those problems. But you just need to be able to present them to the different groups of people in ways that make sense to them.
[22:26] Rob: And the fifth element of effective thinking is to master change. The authors say that you basically need to master the first four elements that we’ve already discussed, and actually implement them in your life in order to change how you think and learn. And so, they go into a long discussion about not being afraid to change. Again coming back to the politician example, they talked about how if a politician changes their vote over the course of 20 years or changes their stance on something; it’s view as this big negative thing.
[22:57] But they’re saying in order to be an effective thinker that you have to be open to that. That you should follow changing opinions and passions. That you need to let old ideas crumble fast especially in technology in our space. And you need to be willing to change in the phase of compelling evidence. They give an example of Einstein spending months of work on a single theory. And he received like a letter from another professor somewhere who had said I just proved why your approach can’t possibly prove this theory. There’s no way to do it.
[23:31] And Einstein basically just took all the months of work and he tossed them and he took a whole new approach to it. He actually solved it in a manner of days. But he was wiling to not sit there and question and say that guy is wrong or all this months of work is kind of the sunk cost fallacy, right. All of this is leading toward something. He was able to be wiling to change in the face of that compelling evidence that a professor had sent him.
[23:55] Relating it back to software and startups. There’s always going to be stuff that’s changing. It changes really fast. The technology changes fast, the approaches, how much we’re learning about things like even four or five years ago no one was talking about split testing in the startup space. No one was talking about email marketing. It’s just something that’s come up over the past couple of years.
[24:13] So if you still hold the old mindset of “Well, I don’t do split testing. Only info marketers do that. I don’t do email. Only spammers do that.” then you’re going to miss out. You need to let these ideas crumble fast, roll with the punches and basically keep up with the space or else you’re going to get left behind.
[24:29] Mike: I don’t think it’s necessarily all about letting some of the old ideas crumble quickly. It’s more about being able to do things that are uncomfortable to you, because as you said there is a certain amount of fondness that we have for the old way of doing things. So there’s certain comfortability that we have with doing things the way that we’re currently doing. And it’s a lot easier to point to somebody else’s work. And say well I spent 3, 4, 8 months of my life working out these theories. And I’m fairly confident that they’re correct.
[24:59] So I’m not going to put any stock in your proof that you just sent or this little note that says that the way that I’m doing it is incorrect. I’m going to keep going down this path because I’m so ingrained in it. I know what I’m talking about. And if you’re willing to back off from that and be able to look at different points of view and pursue them down their logical course, then you will be a better thinker for it.
[25:20] As long as you’re not afraid to take those turns or back up a little bit and maybe give credibility to other people and say, “Hey, maybe I am doing the wrong thing or maybe I should be doing this other things.” Even though they’re uncomfortable, it will make you a better thinker.
[25:34] Rob: And the last element of this, your point no. 5, which is to master change. They talked a lot about how experts in any field are often performing a different task than the rest of us. So the example they gave was a pro tennis player. They said if you put someone on the court, who’s never played tennis. When the ball is hit to them, they’re basically looking at the ball and trying to watch it into the racket. That they can’t estimate where that ball is going to be.
[26:00] But that a professional tennis player that as soon as they go the ball go over the net, they can tell based on the spin, based on the velocity, based on the angle they actually know where it’s going to hit. And so they’re running to it right as it heads over the net. And I’ve actually talked to professional baseball players and college football players my brother used to play with.
[26:20] And they talked about the same thing about seeing as soon as the quarterback would release the ball, they know exactly in their head if they had to slow down or speed up. The best receivers and the best outfielders can see that. It’s not about actually watching it into your hands. It’s about knowing right away when its release based on the spin and everything where it’s going to be.
[26:38] And so they’re basically through expertise and repetition, they’re performing an entirely different task than the rest of us would be if we were doing that same task. And so taking that and extending it in our world of startups and software. Like instead of memorizing facts, you need to understand something very deeply. You have to become a master in things.
[26:57] The more experience you have in any particular field or doing any particular task, then the more frameworks you can apply to it and the faster you can learn new concepts in that space. And so that’s where, you know, if you’re consuming on a superficial level a lot of educational stuff and you’re not actually doing anything then you’re not going to be able to become a master.
[27:16] And you’re never going to hit that level where as soon as the ball gets hit off you can see what your paid acquisition is going to do, or how your contact marketing is going to go, or the little tweaks you need to make to your SEO to make things work, or the costumer development you need to do in order to get people using your app. And so it’s all a learning process.
[27:35] But the idea here is to go deep and to actually understand things deeply so that you can become a master of at least a small element to it and then expand out from there. Because the superficial understanding will always leave you essentially watching the ball into your racket.
[27:49] Mike: This reminds me about a lot of the previous discussion that we had about whether you should become a generalist and learn a lot of things at kind of a shallow level, or whether you should learn several things at a very very deep level and essentially try to outperform all the other people who are kind of dabbling in that.
[28:08] And obviously, at the end of the discussion, we kind of came to the conclusion and talk about the fact that you are much better of going really far down and deep into certain topics. As oppose to trying to round out the things that you don’t necessarily a lot of experience at. So you invest the time and effort to become mediocre at it just like everyone else which really doesn’t buy you a lot.
[28:30] You’re much better off become an extreme expert in certain facets of your career as oppose to trying to shore up your weaknesses and deficiencies.
[28:42] Rob: Right. It’s like following your strength rather than shoring up your weaknesses.
[28:44] Mike: Yup. That’s exactly right.
[28:46] Rob: And this all comes back around. It comes back to simplifying and going for early wins, because if you have a huge problem to attack, you can’t possibly become a master in that. It will take you years to do it. But if you pick a single tiny thing like I’m just going to learn online marketing, or I’m just going to learn customer development, or I’m just going to learn how to code right now. You’ve broken it down into a small enough thing that you can choose some small wins.
[29:09] You can actually become kind of an expert at that. And you can go deep so you can then move on to that next thing and add it to your tool belt. So there’s this balance here, right. You don’t want to become the jack of all trades. You don’t want to have 20 things you’re trying to do. But you may need as a founder you may need four or five really deep core skills that you have to be an expert at, and then you can outsource the rest.
[29:32] So to recap. The five elements of effective thinking are: 1. To understand deeply; 2. To make mistakes; 3. To raise questions; 4. To follow the flow of ideas; and 5. To master change.
[29:47] Music
[29:49] Rob: If you have question for us, call our voice mail number at 888-801-9690 or you email us at question questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for startups or by RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 140 | Gorilla Fighting 101, Cost of Creating Content, Selling to Offline Customers and More Listener Questions
Show Notes
- Zapier
- 3D Virtual Tabletop
- The Ultimate Sales Machine by Chet Holmes
- MailChimp
- Constant Contact
- Drip
- HitTail
- ThemeForest
- MicroConf Europe
- Clickity.io
- SendGrid
Transcript
[00:00] Rob: In this episode of Startups for the Rest of Us, Mike and I are going to be talking about fighting with gorillas, the cost of writing articles, selling to offline customers, and answering more listener’s question. This is Startups for the Rest of Us: Episode 140.
[00:13] Music
[00:21]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 Rob.
[00:29] Mike: And I’m Mike.
[00:30] Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Mike?
[00:36] Mike: I am recording totally in the dark, quite literally in the dark. There is no light on. So our dishwasher went out last week, so I had to rip it out and have the guys take it away. Unfortunately, whoever owned the house before us wired the lights from my office in the basement to the dishwasher upstairs.
[00:52] Rob: That’s not good. So they’re out right now, until you replace it?
[00:55] Mike: Yeah. And it’s funny cause all my other outlets and stuff work. It’s just the lights that don’t work right now. Having fun in the dark.
[01:01] Rob: Yes. It sounds like it. I have mentioned a couple of episodes ago I launched my startup VA course, the course on how to hire a VA for your startup. And I finally have a domain name. Its startupvacourse.com and that just go to my Udemy landing page. So, if folks are interested in that, getting more details that I’ve recorded an hour video, packed all the information all the questions that I’ve ever received on this topic into one hour video.
[01:27] It have audio transcript, a job description, sample VA training Screencast, the whole deal. So it’s all DRM free. It’s downloadable. And it’s typically $99 but if you’re a podcast listener and you want to partake, go to startupvacourse.com, and use coupon code podcast and you’d get $20 off. And I’ll leave that coupon code off just probably for the next week and then shut it down.
[01:48] But it feels really good to finally launch that. I mention I had a goal of launching three in 2013. I paired that down since Drip still hasn’t launched and I plan to launch before MicroConf. I’m thinking that I’d probably try to do one more video course towards the end of the year once Drip is out.
[02:05] Mike: Cool. I’ve got AuditShark up to 350 security checkpoints now. So, we’re working some issues we discovered with our signup process. But once those are straighten out which I’m hoping will only be a couple more days, we’ll start rolling out to new costumers. My goal is to put anywhere between one or four customers on each week for the foreseeable future until I feel like all the signup issues and things like that are kind of worked out and go from there.
[02:32] Rob: Wow. Congratulations man. So you’re in early access then. You’re really diving in and getting folks using it.
[02:37] Mike: Yup. Finally at that point.
[02:39] Rob: That feels good. Yeah. Is this Windows or Linux?
[02:42] Mike: All of the security points so far are for Windows, but the system does work for Linux. So if you had Linux machine and you knew what you wanted to run on those, I would say it’s almost in some ways like you’re running cron jobs from remote servers and then pulling back that data to a central location. You know it would be done through SSH from my servers into somebody else’s. It is cross-platform. It’s just that in order to access Linux machine, it’s only through SSH right now. I don’t have a native agent.
[03:09] Rob: Got it. Speaking of early access, Drip now has four early access customers, paying customers using the system. There are five with log-ins but only four have actually installed it. Every person we get on board we learned more and more. And right now, Derek, the developer is just cranking through like mad, cranking through all the feature editions. There are almost no bugs, right. Everything is working. We tested thoroughly. Derek’s code is solid.
[03:36] But it’s just all this little tweaks that you need to get one more thing. You know encourage someone to push this button to activate everything or have an arrow that goes here, a better help video or a better this or a better that. So that’s what we’re doing. It’s really honing, trying to, like you trying to get one and four new people using it a week now. It’s a good learning experience and I look forward to kind of getting it out into more people’s hands.
[03:59] Mike: Yeah. It’s funny that as you’re adding people in, you’re getting in all this feature requests. The person that I hired to build all these control points for me, as he was going through and building them, he would ask me questions about how can you do this or how can you do that. He’s picked it up really really well. But there are some things that he was trying to do that he just couldn’t do it and we have to add features in order to allow him to do those things easily.
[04:23] So that’s been something that’s been holding things up a little bit. We’ve deployed some new code update for him. He’s just downloaded him and run through and implemented with the new set of instructions that I gave him. And so far those things seemed to be working well. But you’re right. There’s all this additional feature requests that come in as you’re putting somebody into the system and having them to use different parts of the products and exercise it and say well, this doesn’t work or – it would be nice if this did something slightly different because the way it does, it now just doesn’t work for me.
[04:51] Rob: That’s where it’s important to have good early access customers and people who you trust their opinion and that you can actually either tell them, you know what, we’re not going to build that and have them not throw a fit or realize that a lot of the suggestions that you get if you do have good early access people you are going to going want to build.
[05:06] And so, I think probably 80% to 90% of what’s been requested of us, we build. And it’s because all of my people who are in there right now are other founders and they all have good products. They have good product knowledge, and they aren’t just asking for kind of ridiculous. You know, you can get some people in there who just want everything custom and everything to totally apply to them. That’s obviously a danger when you only have a handful of customers using it because you don’t know really what to build yet.
[05:28] I wanted to update folks on my inbox zero trials. I did get past that road block. I think I had 29 emails when I came back to it. And with the help of suggestion from Rafael Durda who’s a long time academy member and MicroConf attendee. He pointed me to Zapier and I can’t believe I didn’t think of it. But zapier.com it’s basically if this then that for business. So you can set up this recipe to interact between different apps.
[05:59] So with just an handful of clicks, no code, I was able to take any new thread in Gmail that I label with a certain label and it automatically goes into my to my Trello to-do list, so really cool. So now I’m able to do that automatically as needed. And at this point, I still am. I think I’m about a month into inbox zero. And as of now, I literally have zero emails in my inbox and I’d been able to keep that up really well. So, thanks to Rafael for that suggestion.
[06:26] And the other thing I wanted to mention is that same week Wade from Zapier. He is a co-founder. He emailed me. And he said they’re in need of dot net contractor or two to do a bunch of integration like exchange and Dynamics and BizTalk. So I know there’s a lot of dot net folks listening to the podcast. If you’re interested in doing some contract work for Zapier, they’re a funded startup and they definitely have money to spend if you want to dive in some SDK’s. You can just email at wade@zapier.com and let him know that Mike and I sent you.
[06:57] Mike: One of our other listeners named Tommy wrote in. Remember when I was talking about how I had some signs up around my office that says focus on them.
[07:03] Rob: Yup.
[07:04] Mike: There’s a web app that he pointed me to that was developed by a friend of his called FocusBell, which you go to this site and you can just plug in a number and it will ring a bell after that number of minutes. It’s very similar to something you might find as iPhone app or something like. But you can use it as a web app and it will just ding in the background of your machine whenever that time expires.
[07:25] Rob: How cool. So instead of needing a sign, you just get a web app. Awesome. So I saw on Facebook you’re learning to fly.
[07:31] Mike: Yes. I went to my first day of flight school today.
[07:33] Rob: How cool. Have you been thinking about it for a while?
[07:35] Mike: I’ve actually been thinking about it for, I don’t know, probably 10-12 years at this point. One of my instructors in college was a pilot. And he had like a timeshare for a plane near the college. And he took a couple of students here and there but I never got a chance to actually go with him. It’s really cheap to get your pilot license up in upstate New York.
[07:55] So after I moved away, I was like I don’t really have time and just various things came up. And my wife remembered from years and years ago that I had always kind of wanted to do some flying. So, for Father’s Day, she bought me a groupon to go to a flight school for a day. So I went there today and had my first flight. They let me take off and everything and it was a lot of fun.
[08:16] Rob: Very cool man. Congratulations on getting that started.
[08:19] Music
[08:21] Mike: So, today we’re going to be answering a bunch of listener’s question. The first one we’re going to answer is from Brendon Duncan. And you might remember Brendon. We talked about him a little bit on a previous podcast. He had that application that it was called 3D Virtual Tabletop. That was basically for Dungeons and Dragons player where it was on your iPad or your Android tablet and it would show a map and you can zoom in and import different images and things like that.
[08:46] He wrote back in to us for some advice and he said he’s released their product in its early stages. So, it’s really more of a demo than a proper product. And he’d like to do some more things with it. But it’s going to cost him some time and money in order to upgrade some of the software tools. And it’s going to cost him really thousand of dollars that he’d really rather not spend if he can help it. He can work around it if he needs to but it’s going to cost him a lot of time to do that. So, right now, he doesn’t havea lot of direct competition in the mobile space, but he knows that some of the bigger players in the industry are going to be heading their soon. So he’s really trying to get the scoop on them before they have a presence there.
[09:19] So what he’s thinking is doing some sort of a crowd funding and he also thinks that that would be some great publicity. And he says my issue is at this stage I don’t know how much each customer is going to cost me for hosting the back end, because he’d like to kind of turn it into a SAS app. And he says I’d like to experiment with a few different ways and or levels to charge them to find out what works. A successful crowd funding campaign could be a disaster if I have thousands of new costumers that I’m making a loss on. On the other hand, if I mention the price in the crowd funding campaign and it’s too high, it will probably fail. I have enough users at the moment to experiment with. But if I just stick with them and don’t try to go big now, I worry about my competitor gaining market leadership in the mobile space like they have in the PC space right now. What sort of things should I consider when I’m making this decision?
[09:58] Rob: My initial thought is that I really like the idea of crowd finding since it is B2C and since it is for gamers, role playing gamers in particular those things tend to do really well on crowd funding sites especially Kickstarter. I’m actually, I’m a closet Kickstarterer. I fund a lot of things. I fund 10 or 12 things in the last six months. I don’t know. I really like what’s going on in that site. So. I’m familiar with what’s there and this would fit in well.
[10:25] The question mark in my head with this question is he says my issue is I don’t know much each customer is going to cost me for hosting, like hosting on the backend. I’m assuming he’s going to build a SAS portion of it. And in my mind like unless you have a super resource intensive app, something that does thing like not only just in real time but is like getting bombarded with incoming analytics data. Every time a page loads on a customer site you get a ping like HitTail does. Unless you have that the cost of hosting each user is almost negligible.
[10:58] So, I’ve read through is email that if you get any indication that it’s going to be anything more than just create, read, update, delete SAS app where you’re putting stuff in and out of the database. I mean if you just tracking some character and tracking some movement and rendering some stuff, I don’t feel like this is going to be any type of extensive expense to host someone.
[11:17] Mike: Yeah. I did not get that sense from him. The only thing I can think of is that maybe he wants to be able to track all the different moves that somebody makes on a map. And I’m just completely speculating here, but he might want to be able to do it such that somebody can network several iPads together through his Cloud application. And then you could basically have like a game master managing all the things, moving all the things like moving the monsters in the PC around and then each of the character he’ll say make your move. You can move up to three spaces or five spaces or whatever. And then they moved and it updates on everybody’s iPad all at once.
[11:51] So that to me says that maybe it’s a little bit more than I might think but those things aren’t going to be used at all time. There might be five or six people connected in a particular game at any given time and I don’t know what the subscription kind of look like. But I can’t imagine that is that resource intensive especially if you’re doing it like with the REST API or something like that, where you just don’t need to worry about maintaining state across all of these different things because it’s just held in the database.
[12:17] Rob: Right. So I think at this point, you and I don’t have enough information to really comment on that piece. And that’s kind of a critical piece to this because my inclination based on what he said is that, yes, he should do crowd funding. And that its not going to high per user cost to host them. Now at the same time, I don’t think you should give people a lifetime access when they do the Kickstarter. It should probably be a one-year subscription at a discounted rate.
[12:40] You know, Brendon, if you’re doubting how much this is going to cost, I would find a web developer and explain to them what you’re trying to do, and they should be able to give you an idea of like “that’s a piece of cake or wow you’re going to need 20 Amazon ec2 instances to handle that.” And that will at least get you one step closer to knowing how much you should try to charge for the different Kickstarter levels.
[12:59] I also wouldn’t be concerned. You know, you say on the other hand, if you mention a price in a crowd funding campaign and it’s too high, it will probably fail. Well, then it fails. It’s a crowd funding campaign. There’s no real downside to doing that. I mean it’s a bummer if it fails but if you need a certain amount of money for people to use your app and to pay for you app for a year then you need that much money. Don’t undersell yourself and don’t sell a bunch of lifetime membership or even annual memberships way under market and then get six months end and not have the funds to do the hosting.
[13:32] So I would definitely be careful there and I would not be afraid to charge what you’re worth. You know what I’m saying. Like software developers in general tend to want to under price their stuff cause they don’t feel as worth as much as it really is. And so that’s just my sentiment based on the five paragraphs you have here. But I think it’d be a great Kickstarter campaign. I’d probably fund it myself even though I’m not playing D&D these days. I don’t see a real red flag or a reason not to do that. You see some of these RPG’s and other related things getting way overfunded and I think you have the potential to do that.
[14:06] Mike: Something else that jumps to mind is that if seems like if you’re building the infrastructure to actually do some of this stuff, you could probably build either an API or something along those lines kind of in the front end of it. And then use that API to build that prototypes for customers. And by prototype, I really mean something that emulates what customer behavior would be. And then essentially what you’re building is a piece of software that’s going to sit out there, and do some load testing on your system to make sure that you know how much its going to cost you and you know how much of a load it can handle.
[14:41] So you’re basically just building a simulator that helps you gauge that type of activity, what it does, how much you should charge for it, etc. I don’t think that’s uncalled for. The question I have in my mind is kind of what order you do that in, because obviously you don’t want to spend a lot of time and effort and money doing that upfront. It seems like you’re in this catch 22 where you need the money in order to be able to do that stuff and that’s where the crowd funding campaign comes in. But until you’ve done the prototype you don’t know how much to ask for in the crowd funding. So maybe you take the risk and you buy the tools and then you do the crowd funding campaign. I guess that piece is a little tricky.
[15:16] Rob: And I do think he has an advantage cause he’d already released what he says is a tech demo but he sold a thousand copies at 99¢. So he does have a user based. Maybe you could cobble together a test over a weekend to try to get a vague idea even if you get within 50% of what the load would be, that would give you a better idea. The tech demo is also really cool because if you do Kickstarter, you can put together a video demo pretty easily. You can point people to download the existing apps. They can see you for real. It builds more confidence. I mean you are a step ahead of 80% of the kickstarters that I see because you actually have a working app that does something. It’s not just kind of some diagrams and drawing at this point.
[15:55] Mike: So, Brendon, thanks for the question. I hope that helps. Our next question comes from Greg. He says, “Hi, Mike and Rob. I’m a huge fan of you guys. I’ve been listening for quite a while now. I’m getting close to launching my SAS app with a partner. We’re trying to line up some writers for long tail article generation. How much should I be expecting to pay per article for some decent but not great writing around the 500 word mark? Thanks for your time. Keep up the awesome work. Greg”
[16:16] Rob: Well this is a pretty subjective question for sure. You said decent but not great writing. I mean I know people who for 500 words who pay $50 or a $100 but I would call that exceptional writing. It’s a viral content. And then on the super low end, you can get articles for $3 to $5 but they’re pretty bad. Cobbled together I’ll say maybe by a non-native speaker. So I think the sweet spot what you’re probably looking at is between $10 and $20 for 500 words article. And yes, I know you can get them for $7 or $8. You may be able to find them there.
[16:53] But it’s just all that balance of how many people can you find that can generate enough content in your timeframe with enough quality, the quality that you don’t have to go through and edit it. You want to make sure that you’re not spending a bunch of time. If you pay $5 but you have to edit all the articles then you just wasted time. I would rather pay $15 and not have to edit a single one.
[17:12] Mike: One of the things I would do is because going through and reading this can be somewhat time consuming, hire a VA who is a native English speaker and have them vet the article. So send the same articles to like three or four different writers and have them put the articles together. And then have your VA go through and read them, and kind of basically have the VA judge them and kind of figure out which one of those three or four writer is the best writer and then continue to use that, and established essentially a relationship with those writers so that you can leverage them going forward.
[17:44] Otherwise, if you go to a website where they’re basically just hiring all these different writers and you don’t necessarily get the same one every time, then you can run into issues where one time you get a fantastic article for $12 or $13 and then the next time its complete garbage and you have to have it rewritten. By establishing those relationships, you help smooth out those fluctuations from one request to the next. So Greg, I hope that helps.
[18:06] Our next question is from Rick. And he says “Hi, Rob and Mike. Avid listener of the show from London and I think you provide tremendous value to the listeners. Keep it up. I’ve had a modest exit from a brick and mortar turned internet play three years. Now, I’m on to the next project full time which will be a SAS play to a specific niche and I expect the market in play to be 90% high touch offline. I have two questions. First is what tactics would you suggest in contacting and selling the SAS product to offline clients? And the second question is, in terms of pricing on value, the ongoing cost to me will be minimal but the value provided is high to the client. When competition enters the market they may use penetration pricing. How would you suggest addressing this so my clients wouldn’t switch? Thanks a lot. Rick.”
[18:44] Rob: The first thing I would do is read The Ultimate Sales Machine by Chet Holmes, and he covers a bunch of offline marketing techniques that I would use almost to the letter if I were to go with offline marketing. It’s going to be postcards, direct mail and some direct email and some cold calling. Those are probably the three or four that I would use. But I would do them in a sequence like Chet Holmes describes in The Ultimate Sales Machine. And it involves finding a list of your dream customers, putting them together, and targeting them over time with essentially a campaign and not just doing this just one off stuff that most people do.
[19:20] The second question was regarding pricing on value. He said the ongoing cost is minimal. Well, the ongoing cost to almost every SAS app is minimal. I mean it can be a $1 per user or less. So that’s very common. You’re concern about competition entering the marketing so this penetration pricing. You know, I wouldn’t even worry about it now. I wouldn’t address it at this point. I think you need to get in. When competition enters, you can worry about it at that point.
[19:43] But if you’re truly going into a vertical niche and you have a SAS app, if you get a head start with people and you become the brand name in that vertical, and you get people using your app and they’re happy with it, most people don’t want to switch SAS apps. I have a bunch of SAS app. I mean I probably spend a couple of thousands a month on across all the businesses in terms of all the SAS apps that we use. I have never once gone out and change because someone dropped the price, a competitor have a lower price.
[20:13] Because the switching cost it’s too painful. It’s too expensive, right. Because I value my time, I value my people’s time. And it’s not just two hours of signing up for another app. It’s relearning that. It’s knowing that it probably has bugs. It’s why is it so much cheaper. The support probably sucks. The app probably isn’t as good, all these things. So I would be much much less concerned about a competitor coming in and trying to go cheaper at this point. Because by the time that happens, you’re going to be so far ahead of them. And hopefully have tens of thousands of dollars a month in revenue that you’re going to know the space much better than them and you’re going to just be a better marketer. So that’s the attack I would take.
[20:52] Mike: Yeah. What he said. There’s really nothing I can add to that so I’m just not even going to bother. So, Rick, I hope that helps you out. Next one comes from Seth. And he says “First, I wanted to thank you for your inspiration, your resources and the motivation you give to micropreneur community. I had a question about dealing with guilt. Like everyone I’m always surfing the web looking for ideas and getting inspired by things I found. One of the things that I’m always feeling guilty about is copying an idea. I tried to rationalize that I could do I better. But I guess I have a fear of being labeled a knockoff artist. At this point, I’m feeling I shouldn’t surf the web anymore for fear of finding a business idea that I’m thinking of that someone has already done. Am I alone here? Thanks. Seth.”
[21:30] Seth, I don’t always, I wouldn’t worry about it. I mean the fact of the matter is that almost virtually every single idea that you come up with, somebody else will have had it at some point. I can think of any number of ideas that I’ve had in the past where either I didn’t pursue them or I half-heartedly pursued them and then somebody else comes out with something that was either just as good or maybe quite as good but they did a much better job marketing it than I did.
[21:54] So I’ll be honest. I really wouldn’t worry about feeling guilty about copying somebody else’s idea. What I would be concerned about is if you look at somebody’s idea and you literally mimic it. You know complete from copying their entire website, their design, their layout, their marketing plan and then feature for feature their entire product. That’s what I’d probably be a little bit leery of doing.
[22:14] But if you look at somebody’s idea and it looks like a good idea but they’re just not doing very good with the execution, and that could be the marketing execution or that could be product execution. If you feel like you can do better then you shouldn’t feel guilty about providing your customers with a better experience than somebody else’s. I mean that’s what you really need to focus on is: are you proving better value to the customers than this competitor.
[22:39] So what if you are have idea Seth? It doesn’t matter. What matter is: are you are providing value, are you providing good value? I think it really comes down to, are you plagiarizing their site. Are you stealing their intellectual property? And if you’re not doing those things, I don’t see any reason why you should feel guilty about it.
[22:55] Rob: Yeah. Guilt is an interesting way to put it. Because if you’re feeling guilty about it, it either means you’re too hard on yourself or you care a little bit too much about what other people think about you. Would you say that MailChimp copied Constant Contact because Constant Contact was the first email newsletter management system? And MailChimp when it started was very very similar. They didn’t even niche it down. They didn’t really had their unique thing of hey it’s a Mail Chimp and they were going after startups.
[23:22] But really they’re very similar and yet none of us say MailChimps just knocked off all the other email providers, Aweber and Constant Contact that came before them. I agree with Mike. If you take someone’s design or if you a screen by screen knock off that sucks. But if you offer a similar value proposition and either you out market them or your app is better or you just have some unique variation of it, whether that is a niche or just being somehow different, then I don’t see that as being a big deal.
[23:49] Mike: So Seth, we hope that helps you get through that guilt and actually move forward to taking one of your ideas to the next level. Our next question is from Steph. And he says, “Hi, guys. Love the show. I’m taking notes like fiend and I’m doing my best to execute daily on your sage advice. I’m a graphic designer, illustrator and storyteller. And I’d love to know your take on the most compelling arguments to be made for having great design and branding in business. Many small companies don’t see the value in design and choose to cut corners. What problems and pain points does great design solve? Clear communication, consistent messaging and enhance customer experience spring to mind. How many more design specific considerations can add value to a company’s bottom-line. Thanks so much guys. Steph”
[24:27] So Steph, here are my thoughts on it. As a small business great design and branding does very very little for you. And the reason I think that, and you kind of alluded to this in your question, is that a lot of small businesses don’t see the value in it. And I personally don’t see it either. You know you have to focus on what problems you’re solving for the customers. And that’s really to kind of get your foot in the door with the costumers.
[24:49] You’re trying to establish enough of a customer based to just get you through those critical time periods, where you need to figure out whether or not your ideas is going to fly and whether or not you’re going to be able to turn it into a real business. And if you can’t then it could be a couple of different problems. One of which could be okay that niche is just way too small to support a big business.
[25:10] At which point, branding and brand recognition really doesn’t make a difference. Because the people looking for that solution they don’t care what it looks like as long as it works. As long it solves their problem. And it’s not like you’re going to have a lot of competitors in that particular space anyway. On the other side, when you get into a position where you’re starter to get larger costumers, you’re starting to establish yourself in an area.
[25:33] And you’re starting to grow the business to the point that you multiple employees or you’re getting millions, tens and millions of revenue, that’s the point in which branding and messaging starts to provide that extra value. Because then people they’ll see a flyer or they’re see an advertisement on a webpage and then two or three or four months later they’ll see a similar one and they’ll associate it with that company.
[25:55] But until you get to that point till you have a big enough foot print I’ll say it doesn’t really make a difference. And I think that’s probably why you’re seeing this from a lot of small businesses that they don’t care about their branding and messaging because they’re small enough that it actually doesn’t matter. At least that’s my opinion on it.
[26:10] Rob: Yeah. I think there are a couple of components here. There’s design of the product. There’s branding and then the third is messaging. I think messaging is critical. To me, that’s also the same as positioning. It’s if you look at the 10 headlines that I tested when I put up a Drip landing page, I was trying to hone the messaging. And that is figuring out what message resonates with people who are visiting this page. What message resonates with a customers that I want to reach and that I think are going to get the most value out of Drip.
[26:40] I think that is absolutely crucial and probably more important than the other two combined. I think for small startup launching design can be useful. I think it’s helpful when people hit a landing page that is gorgeous or hit a website that’s gorgeous, they instantly think these guys have more funding or these guys are legit or these guys know how to build a product. I bet it’s good. They give you the benefit of a doubt.
[27:01] Now you actually still have to build a good product that provides value to people. But it gives you that instant 3 second test of I kind of have confidence. It starts you up on the right foot that these guys are doing a good job if the design is good. With that said, I also see early stage founders getting caught up, especially first timers, spending months trying to figure out what logo to get. And they go on 99 designs and spend four weeks doing something.
[27:25] But I’ve said it before I don’t even do logos. I literally when I acquired HitTail I told the designer when he was redesigning the site, just pick a good font and put HitTail on the upper left. I literally don’t want to spend anytime thinking about it. I did the same with Drip. Both times the designers couldn’t stand it and they did some little tweak. They put a font and then put a little tail or a little drip of water or something to kind of make it a unique thing, and I actually really like those.
[27:48] But I spend zero time thinking about that. And so there is a balance here. You can go overboard especially if you’re just trying to get something out the door. If you’re in a small niche and its your first one and you’re trying to get it off the ground, you need to pay less attention to design than I think you might think you need to. So pay less attention to fancy logos and hardcore design and don’t blow ten grand on some amazing design and idea you just had.
[28:13] You need to vet it first using the $7 template from ThemeForest. And once you vetted that, maybe consider spending a couple of grand on a nice design. But get that affirmation first, the confirmation I should say, before you just start blowing a bunch of money on a great design. Now there is a caveat. If you’re in the design space then yes you need a great design. Cause designers are going to pick it apart. They’re not going to use crappy design, etc. etc.
[28:37] But the further away from the design space you go, the further away from the technical space you go, the less well designed or the less gorgeous your app needs to get traction. And the thing is once you do get traction, once you do have paying customers, once you have several thousands a month in revenue, it’s so much easier to go back and improve the design and then bring it to the next level. But if you spend all that time and money upfront, and the thing never takes off then you basically wasted a bunch of time.
[28:59] The third point that Steph brought up was branding. And if he means branding like having a logo and having a unified look across all your ads and your website and all that stuff, I’m not really a big proponent of that, especially not with bootstraps startups, especially not people operating in niches. If you can do it, great. But I would never spend a spare moment that I could be spending on actually getting costumers to pay me money. I would never spend that time worrying about having this big unified brand because frankly I never seen a brand to pay the bills. It’s always actually selling to costumer that does that.
[29:32] Mike: Yes. Just to point out the messaging component that Steph had pointed to was great design solves clear communication, consistent messaging and enhance customer experience, which are all things you really can’t measure anyway. But the clear communication, you can get around that with words. Consistent messaging, again words. You don’t need to have as Rob just said a great looking logo. You don’t even need to have a logo. You basically need to make sure that you’re addressing people’s pain point and telling them what the problem are that you solve. But you know as Rob also said, when you’re in the design space, you have to have good design because people aren’t going to trust you as a designer if you’re doing that.
[30:08] Rob: I don’t want someone to write in and say you’re saying design is completely underrated or that you don’t need to do it at all. Because I do get emails with links to landing pages and if they’re crap and people are running away from it or complaining or saying this look unprofessional then yes. You need to rise to a minimum bar that resonates with the people you’re trying to hit. But that minimum can be accomplished again by $7 on ThemeForest landing page rather than trying to cobble something yourself together or using KickOffLabs or LaunchRock.
[30:37] I mean any of these have good enough design to sell ticket to MicroConf Europe as an example, like we didn’t hire a designer to put together a landing page. We use a LaunchRock and just drew one up and put a nice image around it and that’s been good enough and we’ve gotten several hundred emails from that. So think about what’s good enough for your audience.
[30:56] Mike: So Steph, thanks for the question. Our final question comes from Andy at clickity.io. And he says, “I’d been listening to your podcast while driving work over the last few months. I think they’re great and very relevant to us. It’s incredible how apt they are sometimes. Both Drip and AuditShark had released teething problems and so did we. In fact, ours was worst. We pulled our new product completely as we realized they just wasn’t fully featured enough to be able to sell it and providing support might have been too hard.
[31:20] Now, we’re reconsidering our options. You always hear release early and I guess part of the reason for that is so that you can find out quickly how far you are off from having a fully featured product. It can turn out to be very demotivating. I have a few questions. We’re a bootstrap startup on full time jobs. We have a few costumers on our current products but not enough. As it’s a tool that can be used in many different situation, it’s difficult to market it and find costumers. Should we try and find vertical markets or perhaps accept that it’s never going to be the hundreds of costumers we need?
[31:47] Can you see any vertical niches for this product? We’d been on the market for six months. The other options we’d been considering is building something that complements our existing offering more rather than a separate products which our pulled product was. What if there’s new product idea would go up against a major player in the market. Should we fear patents that they might hold? We’re both developers so there’s a tendency to lets build more instead of lets market more. Any inspiration is great appreciated. Andy”
[32:11] Rob: So clickity.io the headlines says easy email delivery testing. And then the subtext says Clickity helps you test the most important part of your site/app outbound email. Protect your business from the embarrassment from a broken email system. I don’t know what this app does. I don’t know if this is SendGrid or if this is something different. So, I think the problem is exactly what Andy said it’s a tool that can be used in many different situations so it’s difficult to market it and find costumers.
[32:37] My advice would be find one of those situations. Pick one, pick the one that’s most dire, pick the one that has the largest audience, pick the one that has the largest audience that you can reach and that is willing to pay for this. And then no matter what your app can do, nobody cares. Just pick that problem and put all your marketing, all of your positioning, all of your branding, all of your messaging around that single problem and start there.
[33:02] And if you dive into that for three months and you run ads or you do SEO or you change your entire whole homepage to focus on that, you get costumer to comes and still nobody buys, then yes I would rethink maybe this whole idea isn’t going to fly. But at this point, this doesn’t show me what pain point this solves at all. And to be honest, I don’t exactly understand though. I haven’t click past the homepage. But I should have an idea on the homepage of the value proposition that you offer.
[33:26] And easy email delivery testing. It makes me think are you testing whether my emails can be delivered. So how does that work? If I’m using MailChimp it will test it or if only I have my SMB server. I mean there are a lot of details here that I think need to be focused on this landing page. And once that happens, I would probably air on the side of not building more cause Andy said they’re developers. They’re going to tend to lean that way. And so I would first look at trying to find an audience for this.
[33:55] Mike: So I thought the exact same thing as you. Is it SendGrid? Is it something else? And when I saw easy email delivery testing my first thought was maybe they’re testing how these emails come up in somebody’s browsers or how they come up in different email clients or something along those lines. And I started clicking around and just based on the homepage alone, I’d probably would just walk away and say I have no idea what this does and is not worth my time and investment if they can’t tell me on the homepage.
[34:23] With that said, I clicked over the API screen and the API screen says integrate emails into your unit test, which to me sounds like a great value proposition. That needs to be on the homepage. I mean that’s perfect. That’s exactly the type of problem that you want to pitch to people and say we do unit testing on emails. So when you send an email to somebody we’re able to go into this fake mailboxes and do all the testing to make sure that your emails are actually getting sent, that they’re showing up, that their right URLs are going into them, those URLs are clickable, etc.
[34:56] This API screen, that’s your tagline. Integrate emails into your unit test. That needs to be on the homepage. I would just take that and run with it. Cause it seems like to me and I’ve gone through this with AuditShark that’s one of the few things that I can’t unit test. I have no idea how to go through and unit test something like that. Could I build something? Sure. Am I going to? Probably not. And the reason I’m not going to is because it’s not worth my time and effort to do it.
[35:18] However, you apparently have a product that can do and I would harp on that and go to your customer base and market to the people who want to do unit testing for emails. None of this stuff is on that homepage. Even looking at the homepage now, after seeing that, it still doesn’t speak to me that it solves that particular problem. Rework your marketing strategy. That would be my advice.
[35:42] Rob: I’m really glad you found that. I haven’t seen it and I agree that’s a great value prop. I also think you should be way developer focused then. I think the headline Mike said could easily go on the homepage and it should say for developers all over this site. Because I didn’t realize that this was a technical tool for developer. Use the jargon that we all use so that people know that wow this is built by developers for developers. And don’t use that phrase cause it’s super cheesy.
[36:05] Even if it say easy email delivery testing for developers then it instantly clues me of like I’m a coder and how is this going to help. So unit test like that’s something that a non-developer is not going to really know what that means. So put that smack that on your homepage, so that when someone comes and they know they’re speaking directly to me and maybe even have that, your code snippet. Don’t be afraid to have code snippets on the homepage.
[36:28] You may want to go and look at stripe.com and see how they’re positioning themselves. Cause they’re basically a payment gateway for developers. And right on the homepage you see for developers. You see some code. You can change the language of the code and rerender it. There’s a lot of stuff there that shows you hat they know how to make things easy for developers. I agree. I think that’s got to be the first market that you hit.
[36:50] Mike: So Andy, I hope that helps. Definitely give us an update and let us know how you do. But I would recommend against folding. You definitely needed more of your marketing to tell people the problem that you’re solving for them.
[37:01] Music
[37:04] Mike: And if you have question for us, you can call it in to our voice mail number at 1-888-801-9690 or you can email it to us at question questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt used under Creative Commons. You can subscribe to us in iTunes by searching for startups or via RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 139 | 6 Questions You Should Ask In Your Customer Development Survey
Show Notes
- Mike’s Altiris Training website
- Drip email marketing software for startups
- Trello
- Google Docs Surveys
[00:00] Mike: This is Startups for the Rest of Us: Episode 139.
[00:03] Music
[00:12]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.
[00:19] Rob: And I’m Rob.
[00:20] Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Rob?
[00:24] Rob: Sound the trumpets. Sound the alarms. If we had a cheesy clap audience sound I would put it right here. There are two real customers using Drip as of now. We got them online this week.
[00:36] Mike: I’m impressed.
[00:37] Rob: Yeah. It feels really good. I didn’t realize what a milestone this would be. But getting them on it, using it, actually seeing the excitement as I did a video Skype earlier with one of them and he was really excited. Actually, it’s a small company called Ambassador – getambassador.com. They have five or six employees and he was like everyone in the office was just stirring cause we haven’t collected this many email and right away we were stoked about it.
[00:59] And it was just this really good feeling. He’s like yeah I really see the potential here and how easy it was to set up. So, it was a lot of positive. You kind of need that positive feedback to keep going, you know. You write code in the basement for too long and it just feels like is somebody going to like this even though you’re getting all the good signals, so that felt great. The other customer #. 1, it was Brennan Dunn with Planscope.
[01:20] And he got it up right away and also didn’t run into any issues. So, it feels good. We have two – no, we have three more scheduled to get on in the next probably seven days. We’ll see how that pans out. We’re working through this early access list and then we’ll, you know, we still have quite a few features, and they’re coming in now that people are actually using the app. Excited to actually do the launch to the early bird list.
[01:41] I’d say it’s a couple of months out to be honest. But we are making progress. It’s not a stagnant couple of months. It’s a moving very quickly trying to implement everything and improving the product the whole time a couple of months.
[01:52] Mike: I’ve discovered that I need to carve out some time to my Altiris training site to convert it from a subscription pricing model into more of a static pricing model. But it’s so low on the priority list right now. I just don’t have time. So it’s going to probably sit there for several months while it’s just kind of eeking out some revenue but not nearly as much as it could. The lifetime value is a lot lower for people than I’d like it to be.
[02:17] I know that I could charge more on a static model, cause people are only sticking around for maybe two or three or four months. I’ve had some people stick around for as long as seven or eight. But I haven’t really generated any new content. So, basically, they’re paying a subscription fee for something that realistically they can get through most of the content in less than a month. And there’s people who just stick around and keep paying it because they don’t want to yank out the credit card or whatever and go through the cancellation process.
[02:41] But then there’s other people who will get in. They’ll use it for a couple of hours or a couple of days and then they’re done. They don’t even need to pay for it at that point. So, I kind of step back and evaluate it a little bit and said okay if I convert this over and I just charge a flat rate of like 499 or 799 or something like that then I can just hand them the videos. They can keep them. Then I don’t have to host them and do all this other things and the lifetime value essentially increases at that point. But it’s a matter of taking the time to do that, and right now, I just don’t have the time.
[03:10] Rob: Yeah. I think that’s a really good move actually. Give them a big zip file of everything. The other thing you could think about is to upload them to youtome.com. It will probably take you 1 to 2 hours to do that. The advantage there is youtome has a lot of people looking for stuff. I don’t know if they’re searching for Altiris. But you know my course on – video course on how to hire a VA for startups is on youtome. I’m already am seeing a few sales from people who weren’t on my list.
[03:36] It could be an option. But it’s like you said if you don’t have time then all of that is just talk. And that’s a tough part about having multiple products like this is you do get spread too thin. And even when you have something that you build and you feel like it’s been automated. As soon as you hit a bump in the road like this, you know, if you lose Google rankings or your advertising stops working or a VA quits on you or any of these things, suddenly it’s not automated. And it’s like you have to carve out that time to go back and fix those things.
[04:03] Mike: But it’s sitting there in the back of my mind. At some point, I have to go do this and it’s a matter of going to do it. Because if I do that then I can actually go to a lot of partners and a lot of the Altiris partners and pitch it to them and say, you get to resale this to your customers. And it’s very much product based as oppose to a subscription when they come in and they may use it for a little while. It’d much easier to give it to them as am one off and not have to worry about that ongoing subscription.
[04:28] Rob: You know, what you can do that would probably be fast is to have someone build just a landing page. Kind of may be a longer form landing page and then use Gumroad cause it’s a really simple way to integrate with Stripe, and just give them a zip file. That would probably be the least friction way. I bet that would be a lot faster than any other method. Cause I like that idea of just doing a big bulk payment. I think you’ll make more using that method.
[04:59] Mike: So what else is up with you?
[05:01] Rob: Well, I have two other things. I wanted to update folks on Inbox Zero that I’ve been doing with Gmail and Trello. It has been working quite well and then I fell off the wagon two days ago as we started getting people using Drip. Just a bunch of stuff came up. So, right now, I have 19 messages in my inbox and I’m now going to have to go through and either ply to all of them or get them into Trello. So, this is probably my first big hurdle with that.
[05:26] And we’ll see if we make it through or if I punt and give up on Inbox Zero for good. And the last thing is it’s an email from a listener. His name is Jerome Samuels. He says, “Hi, Mike and Rob. I wanted to drop you a line to let you know that I’m almost ready to official launch my SAS app. It’s at goalreports.com. I could not have gotten this far without all your startups for the rest of us advice. I started listening to your podcast religiously in July of 2012, and in September of 2012, I decided to get going with building my app. I’m a nontechnical founder but a domain expert in soccer coaching. Thanks again for all the advice. I could not have done it without you. Jerome Samuels” So thank you very much for writing in Jerome.
[06:01] Mike: Yeah. Thanks Jerome. It sounds like we got a lot of feedback from people who are nontechnical these days too.
[06:06] Rob: The audience has grown into that and I didn’t expect that when we first launched it, the podcast. But there’s definitely – I mean if I were to put a number on it, I would say it’s 30%.
[06:14] Music
[06:18] Rob: Today, we’re talking about the anatomy of customer development survey. And so, this episode is based on a question from Richard Steer. And he says, “Hi, Rob and Mike. Love the show. Thanks for sharing and being transparent. I’m interested in the survey that Rob ran for Drip. Love the marketing segmenting nugget. If you have a link to the survey you run that would really help me as I’m struggling with mine. Thanks.”
[06:40] And the survey he’s asking about I mentioned, you know, it was probably four or five episode ago. So, Drip is my email marketing app. We’re going to be launching it in the next month or two. We have a landing page at getdrip.com. And at a certain point, I was trying to figure out where we actually building something that was providing value for the people on our launch list. But I just wanted to confirm it cause I was starting to doubt it after talking with a lot of people.
[07:04] So, we have about 1400 on the launch list on that point and I sent out a survey. I asked them six questions. I got a lot of good data out of it. And so, I didn’t really go through those questions on the update a couple of episodes ago. But we’re going to take today and kind of dig into what Mike and I think makes a good survey and then a couple of things about what not to ask. And this is all during customer development. We’re going to couch it as that.
[07:27] So, it’s during that time before you’ve launched a product, when you’re still trying to figure out what you should build to solve the problem at hand. We’re going to touch on six maybe seven question types that you should ask, and I’m going to try to keep them generic. Obviously, I have the survey sitting here in front of me that I asked about my app. But I’m going to try to make it generic so it applies to yours. Before we start talking about specific questions, first thing I think you should have at the top of the survey and you can easily use Wufoo for something like or Gravity Forms if you have WordPress site.
[07:57] Myself, I love the Google Docs survey. It just puts it into a Google spreadsheet and allows easy manipulation of everything. So that’s what I used for this. The first thing you should have at the top of the survey is a big thank you for those taking the time to give us your thoughts basically, right? That their answers will really help you etc., etc. I use stuff like your feedback totally blows us away and it’s going to make this an awesome product and that kind of stuff. Either way, you just want to make it so that it’s heartfelt and it doesn’t sound like some stiff automated thing of like thank you for your survey response.
[08:26] So after you have that, after you have that big kind of thank you at the top. This is a survey I put together. I haven’t tested it, you know, split tested it or anything like that. But I did send it out to my list and I got really good feedback and results. I got lot of responses and that’s going to depend on your list. So, I’m not claiming that this is somehow the definitive customer development survey. But what I am claiming is that what I learned from doing this and some of the good decision and bad decisions I made, I think it’d be carried over to your survey as well.
[08:54] First question that I asked is “What problem do you really hope product name will fix?” And I actually said, “What email marketing problem do you really hope Drip will fix?” and then I gave them four or five radio buttons. And I asked very specific questions. It was some high level issue that I hope Drip would help them with and then I gave them an other radio button that had a text box and they could fill it in. So I can get some ideas.
[09:18] You want to keep this small. You don’t want to have 10 options and you also want to ask the most pertinent. I mean you’re really asking, what is the # 1 problem that you want to fix. Now, some people wrote other and then said all of the above and that’s fine. I kind of disregarded those ones because I don’t want people who want everything, cause I can’t build everything on this list. The three things I asked about were: Do you want more website conversion? Do you want more sales leads? Do you want better email workflow or are you just curious about Drip or other?
[09:48] And those options were awesome. Like it totally broke down who was interested in Drip. You know 20% of the people said they were just curious and that really help me to basically eliminate them from my analysis.
[10:01] Mike: Yeah. That’s really important is being able to eliminate people as potential customers. And most people think that I want to get everybody as a customer. But the fact is you really need to filter out those people who are either just kicking the tires or are going to give you feedback that’s going to take you in the wrong decision because they’re not going to pay for it anyway. So you have to be really careful about who you’re directing these at.
[10:22] Another thing I want to point out is that what Rob is talking about in terms of what he did for the Drip survey, was he was asking them what email marketing problem do you really hope Drip will fix. And this is assuming, and you have to understand that this makes an underlying assumption that they already understand what the product is. If you’re putting out a survey to get feedback about an idea of something, you’re trying to solicit information from them about what problems they have versus what problem are they hoping to solve.
[10:53] So, there’s a very subtle difference and distinction between the two. On Rob’s side, he had this fundamental assumption that he’s helping them with an email marketing problem, specifically what kind of email marketing problem do they have. Whereas if you’re trying to solicit information about a product you’re interested in developing, you want to solicit a little bit more information in either one of two things. Either you approach it the way Rob did or you let them know upfront. Here’s the problem and here’s the solution that I have come up with that I think would solve that problem, and here are my questions to you about that.
[11:24] Rob: That’s a really good point. I’m glad you brought that up. I have specifically already emailed this list with at least two updates about what Drip is, what it’s going to do, some of the basic value props, screenshot, that kind of stuff. I’m not saying everyone read them. But I assume there was a certain level of education about what Drip is and what it does. That’s right. You should keep that in mind as you’re hearing what I’ve asked in this survey because there is some education.
[11:48] It was a landing page that has quite a bit of information and then I given them information via email. So, they are quasi-educated consumer. So, the next question that I asked folks is I said, “Is there anything else that product name needs in order to be invaluable for you?” And with this one, I have four choices and I asked about some very specific features that we are considering developing. So, the first question was about their pain point. What do you want more of?
[12:16] The second one is about some very specific features that I was debating and hearing from people one on one request, but trying to figure out how many people feel this way. So for me, it was option #1 was I love your cool pop-up opt-in form. #2 was split testing of emails and sequences. #3 was analytics and conversion tracking. And #4 was other. And, of course, I got a lot in other. But that really told me a lot of people wanted some pretty complex stuff. Again, those folks I had to kind of eliminate from the analysis of this question because we’re not able to build a lot of complex stuff right now.
[12:46] Mike: And the interesting thing about what Rob just said is he basically asked what the problem was that they were having. And then the second thing was what features are you interested in. And if you basically do some quick math between those things, you can – you know just take the option from the first question, the option from the second question and multiply them together, add them up. And you can figure out essentially the largest segment of your audience that is interested in that specific thing.
[13:12] And that’s part of why the survey is so helpful. Because it allows you to understand what people are most interested in. So, that you can concentrate on that first and then you can move on to the second thing and then on to the third thing, but assuming that those things are all related. And that they’re going to fit in with the greater feature setup of your product. The primary thing that you need to do is figure out what to concentrate on first. And a lot of times, you just don’t have a gut feel for them.
[13:36] Getting this feedback is just absolutely critical in order for you to prioritize things. Because there are so many things on your plate to build the products that you need to figure out what it is the people want the most.
[13:46] Rob: Question # 3 was “Which competitor do you currently use?” So, I set out MailChimp, Campaign Monitor, Constant Contact, none and other. And what was nice is I was looking to figure out how many are we going to need to integrate with if in fact people don’t want to leave their existing competitor. And there was a big cluster on a couple of these and so it kind of made easier for us. I think that asking about what competitor they’re using and including none, and sometimes including Excel and sometimes including pen and paper, I think all of those are competitors to your app. And knowing that is a pretty invaluable lesson.
[14:23] Mike: Another way of asking this type of question is just leave it open-ended. You don’t give them the options. You just say what other email marketing apps do you currently use? It will do a little bit of marketing research for you because you know that they’re probably using something else. And that they’ll tell you if they are because they’re going to know that off the top of their head. And there are going to be things that they’d probably tell you that you’d never heard off before.
[14:45] They may not say Constant Contact. They may say some other email capture program. But if that hasn’t come up on that radar, you might want to take a look and figure out why are they using that. Are there a lot of people who are using this based on the people who come back from that survey? And it can give us a little bit more insight into not just what people are using but why they might be using it.
[15:07] Rob: Yeah. That’s a good point. And you had mentioned offline that in an AuditShark survey you had asked what other like server software do you currently pay for and just put a big open text area there. I think that can be invaluable as well. I think I’m a little further down the line. You had sent that out months ago. But I’m further down the line. I wanted to be more specific. I didn’t just want to broad range of things. I was asking them specifically to figure out what to integrate with. But I also think that your question could be really important as you’re trying to kind of feel out what it is that people are using.
[15:38] Mike: The specific question I asked was “Do you currently use any services for monitoring your web server. If so, which ones and why?” And part of that was to understand what other things people are using but in some ways that gives you price points that they’re already comfortable paying. So that was helpful to me because it helps me in figuring out what I should be charging. Because if somebody else’s is already paying for New Relic for example. New Relic is not a cheap solution. But if they’re already paying for it and they’re interested in AuditShark, and they’re looking to fill out the survey and provide me with that information then chances are that I could probably get away with charging something along those lines.
[16:17] So, it can help you in terms of price points. It can also help you in terms of understanding why is it they currently pay for those solutions? So then you can integrate that information back into your marketing collateral and say “Well, you’re interested in New Relic because you want high up time. AuditShark can help you do that and here are the reasons that it can do it and here is how it does it.”
[16:36] Rob: The next question asked which question # 4 was “Are you planning to continue using your exiting product type as long as product name integrates with it?” So mine was are you planning to continue using your existing email marketing app as long as Drip integrates with it. Not everyone needs to ask this question because it’s not relevant. But Drip can potentially be seen as add on to something like MailChimp or Constant Contact.
[17:00] I didn’t know how many people plan on staying with their MailChimp account and how many people just wanted to wholesale runaway from Mail Chimp and come to Drip. And my answers, the first one is “Yup, if I can get the benefit of Drip and ensure that every subscriber is also added to my existing list, I’m all for it.” And the other answer was “No way. I’m looking to cut bait and run to Drip with arms open wide.”
[17:21] And frankly, the vast majority wants to get the benefit of Drip and ensure every subscriber is also added to their existing list. And obviously, it’s really good for me to know. It shows that, one, that people probably will like their existing providers or just have that confidence in their existing providers. They already know the features and they don’t want to go to the headache of moving. But there was a chunk of people who also did want to move in. So that means, at some point, we’re going to have to implement enough features that we can essentially not replace everything in a MailChimp or Constant Contact.
[17:49] But we know that we’re going to need broadcast emails as an example, which is something that really Drip doesn’t need by itself. But to replace a MailChimp you have to have something like broadcast emails. So, again, this isn’t necessarily a question everyone needs to ask. But given what I knew and what I’d been hearing this is how I was able to clarify that in my mind and actually put some data to the numbers. I should have mentioned this earlier. But I had about 1400 on the list when I emailed and I got over 300 responses.
[18:17] And so a really good response rate in my opinion. And as a result, the data it’s pretty clean and it’s pretty clear and indicative of what I think what the majority wanted.
[18:25] Mike: Yeah. I like that you asked this question. Cause it is important to understand whether or not people are looking to just outright switch from some other products, or whether they just want some sort of integration, or they’re looking at your product as an add on not necessarily a replacement for other things that they’re already using. Because in some ways they set up expectation for you because they’re expecting to be able to completely move off say MailChimp for example
[18:50] Then they’re going to expect that a lot of the features that are in MailChimp are also going to be in Drip. And when they sign up for it, they’re going to be extremely disappointed when that’s not the case because that’s not what you were building. You were not building a replacement for MailChimp.
[19:01] Rob: Right. And I bet that on our marketing side, we’re going to add that verbiage. We are not a replacement for MailChimp or Constant Contact. We are an add-on. I mean that’s probably how – when we launched, I bet I’ll have that verbiage somewhere on there. Some the next question that I asked was “How do you spend your days?” The options I gave were running a startup/software company, email marketing, online marketing and other. And with this one, I was trying to figure out which role – chose which of the options above.
[19:34] I wanted to figure out which role really wanted the split testing, which role really wanted more leads versus more website conversions. And this was infinitely helpful because I know where to reach these certain demographics. I have reached in to some of them and not others. Actually, the more I dug into the data – there were a lot of folks who would say like other. It’d say 9 to 5 and looking to launch, a startup type thing. So, I was able to put even more of them into that software/startup company bucket. I definitely think I almost didn’t ask this question. I didn’t do it till the end. And I think this is one thing I would put on every survey I ask for now on. Because it just allows you to see the responses that are really going to matter to you.
[20:15] Mike: Because you need to know who it is that’s answering your survey. Because if you’re just getting this generic answers from people – it can be kind of hard to figure out sort of role they play in the company that they’re responding from. So, if they’re not the decision maker, for example, then their answers aren’t going to make a world of difference than if they’re the startup founder. And they are the ones who are calling the shots, and they’re the ones who are saying what they do and they pay for it. So, you want to give a little bit more credibility to the people who were cutting the checks versus the people who are just doing the marketing or essentially carrying out the needs of the company.
[20:48] Rob: So the sixth and final question that I asked was your email. And I put in quotes, if you’re interested in early access. This was surprising. 85% of the people who fill out the survey put their email in there. Now, I already have their email, right? Cause I just emailed them. But what this allowed me to do is now I have a full view of what that person with that email actually needed. So, I can go back and say okay Drip is going to focus on website conversion first rather than the other options that I named because the vast majority wanted that.
[21:19] Then we already have, in terms of the features asked about, we already have a pop-up form. And we’re going to do split testing. We already have analytics. So, I could group those together. We already have a MailChimp integration. So slowly I can just by sorting and copying and pasting and I could figure out my early early bird list. I very well may do a three-layer launch. Right now, I’m dealing one on one with early access customers.
[21:40] Then I may do a group of this early early bird or pre-early bird list, which are the group of people who answered basically all inline with everything we’re already doing with Drip and are very much in line with it. They’re going to be the most likely to use Drip, get value out of it, and most likely to convert. You know, they answered all the question inline with what we’re doing with Drip. And so, I might just launch to them and get them in and then work on some features for them and then do the final launch to the entire list, which would obviously convert less.
[22:11] You know that way I’m not trying to manage everyone coming in at once with a bunch of future request. Cause what you’re going to do is you’re going to get folks in who really want a bunch of complex workflow or other features that you really don’t want to build. And there’s a lot of noise when that happens. And if I can keep it to my core audience of people who really know what Drip is, what it’s about, and know that it provide value for them based on these responses, it will be an easier time for that few months building something that really helps this people out.
[22:41] Mike: Yeah. I did the exact same thing when I was putting together the survey for AuditShark. When you asked people for their email address you can take that into account and segment your early access list into several different groups of people. One of the things that people just kind of assume is that in the early access it’s going to be everybody all at once or you’re going to be allowed along with all the other early access people, but that’s not necessarily the case.
[23:05] What you’re going to go is you’re going to have to phase your early access to separate out the people who are going to be interested in the features that you have available when those features are available. So if you’re interested in feature 1 and you got that implemented now, you let those people know. And then if you got feature 2 that people have comment to your list and they’ve gone through that survey and say “hey, I’m interested in feature 2 and that’s the most important thing to me.” You let them in. It’s kind of a phase 2, maybe a month later when you actually got that feature ready.
[23:35] So, you don’t just open up the flag gate to your early access list all at once. You’d phase them in over time and you do that based on things that they said that they were interested in.
[23:44] Rob: The seventh question that you may want to consider asking, and that several people wrote me directly and said you should have included, is you might want to include an open text field just for more comments and other suggestions. I didn’t do it on purpose. I actually didn’t want other comments and suggestion. I really want these very specific answers to these very specific questions. And that’s the point that I’m at. We’re focused. We’re moving forward. We’re building very specific feature.
[24:08] So to get a slew of just new feature ideas about email marketing it’s not necessarily something that I want. Now I did get some emails with some interesting thoughts and interesting suggestion. Almost none of them were that new. And I still have to parse through them. You know, there are things that we’re pretty much are already looking at. We’ve already considered. At the same time, there were several people who replied and let me know, hey, you should have included it. So you may want to include it.
[24:31] Mike: As Rob said earlier. I mean this is the not end all be all of the things you should ask. You definitely want to ask things that are pertinent to the applications that you’re building or that you’re interested in building. I mean for AuditShark one of the questions I asked was “What are the two primary concerns you will have about this type of service?” And I asked that because I wanted to know what objections people would have to somebody to somebody coming in and auditing their servers and pulling security information from their servers.
[24:57] And I was very clear upfront in the survey and I say this will pipe data from your machine out into the cloud. And I wanted to know if that was going to raise objections. And if so, how would I address those in the marketing material cause I’m going to have to address them at some point. I’m not going to be talking to everybody upfront and explaining to them in explicit detail with my voice and experience saying this is what I’ll do and this is how I’m going to handle it. Because I need to know that I can convince people from a website that I’m going to do all of these things and help protect their data.
[25:28] Rob: Very nice. I really like that question actually. I think that can be very useful for a lot of people. So, the last thing I’ll note about the survey – well there’s two things I guess. The last one is after they took the survey they get a confirmation page. And Google’s default text is it’s kind of lame. It’s generic. It says something like your request has been submitted and that’s not interesting. So add some personality to it. I said thanks a million for taking the time to let us know how you’d like to use Drip. We’ll be in touch as launch approaches.
[25:54] It’s nothing fancy. But at least it lets them know that you’re really going to listen to them. And I think the other thing I wanted to say is with every email I’ve sent to this list including the survey one, I’m receiving 20 or 30 replies and lot of people asking to be on the early access list. And that’s to me a good sign. I think that if you’re sending this out and no one is responding then either your list is not primed. Your list is not the right target audience or you’re just doing something a little off with your marketing. So keep that in mind as you move forward and maybe make adjustments if folks aren’t responding to it.
[26:26] Mike: So, we’ve talked about the things that you should be doing and should be asking. What are some of the things they should not ask?
[26:32] Rob: The first thing I think of to never ask is here’s this list of features we have in mind, go ahead and rank them or here’s a list of features we have in mind, rank them all on a 1 to 10 basis. That’s asking a lot of people. You’re going to get so many fewer responses if you ask a question like that.
[26:51] Mike: I think the other problem with that sort of question is that you’re asking them to rank all of these things, and they may put something at the bottom because it’s completely irrelevant to them. It has nothing to do with how important it is. It’s completely immaterial to them. A lot of this that you use for this types of thing, it kind of forces them to choose each of those things. So, you have to be really clear about that.
[27:11] Rob: I think correlated to this one is don’t ask anything that takes anything more than a checkbox or a quick note.
[27:18] Mike: Yeah. That’s a really good point too. Because there are some thing that they’re going to know off the top of their head. So, it’s okay to ask some open-ended questions where they’re going to have something to say about it or they’re going to list off a couple of products that they currently use. But is very very different to ask them, you know start asking opinions. And if you can focus what your question is and focus it down on yes/no and start validating the assumptions, that’s what you’re really interested in.
[27:45] And that’s why you run this survey cause they’re validating your assumptions. If you start making things too open-ended, it’s really hard to do that. Because then you’ll have to start sifting through the data. And it’s not always clear cut whether or not somebody means X or Y when they start expounding upon their ideas.
[28:01] Rob: Yeah. That’s a good point. The broader your questions are, the more time it takes and the less accuracy you have in these surveys. And so all my questions are pretty specific because I had one on one conversation with at least 30 people, whether it was conversation via email some are via Skype and some are on at MicroConf. And I had all these ideas and thoughts and different features ideas and value propositions. And I was trying to nail down of those which specifically does my launch list want the most. And that’s why I was able to be so specific.
[28:30] So, open-ended question while they can be dangerous, it is totally I think reasonable to put an open text box. They’re not required at the bottom like we said, right? To have that kind of comment thing so people can give other thoughts. But make that kind of that main part of your survey, that you’re grabbing data from, you don’t know enough of your product if you’re asking questions like that. The next thing what not to ask is you shouldn’t be asking about you or your product. You should be asking about their preferences.
[28:59] And so a question like tell me what competitors you see for this product. You’re asking people to think hard, potentially do some research. I’m not a fan of that question. What I prefer is tell me what competitor you are using? It’s a really easy question to answer or what have you used in the past. Something like that. It’s so fast. It allows people to not have to feel burden like they have to really rack their brain for these answers.
[29:27] Mike: The last thing you need to keep in my mind about what not to ask is don’t ask about features you’re not planning to build for months for years. And a corollary to that is don’t ask about things that you don’t immediately need to know, because if you’re not going to act on that information in the very near future then essentially it’s irrelevant. You’re asking them something for the sake of asking them not because you’re going to use the data. You really want to ask them things that are going to be relevant to you and that you can act on.
[29:52] Rob: So to recap. Six questions you probably want to ask in a customer development survey are: 1. What problem do you really hope product name will fix? 2. Anything else product name needs in order for it to be invaluable to you? 3. Which competitor do you currently use? 4. Are you planning to continue using your existing product type as long as product name integrates with it? 5. How do you spend your days? 6. Your email if you’re interested in early access? And no. 7 is a maybe and that’s an open text field for comments.
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