Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike discuss focusing on people versus process. They dive into the question whether you have to hire exception people or run your business based on process.
Items mentioned in this episode:
Transcript
Rob [00:00]: In this episode of Startups For The Rest of Us, Mike and I discuss valuing people versus process. This is Startups For The Rest of Us Episode 247.
Rob [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 build your first product or you’re just thinking about it. I’m Rob.
Mike [00:26]: And I’m Mike.
Rob [00:27]: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, sir?
Mike [00:31]: Well, I’m in the middle of running a webinar but I had to set up everything up first so I basically copied one of my old webinar campaigns. Going through that and updating all of the little tiny things that need to be updated is incredibly tedious.
Rob [00:44]: Did you change the title and some of the content?
Mike [00:46]: Well, yeah. You change the titles then you have to go through, and you have to go through every single email to make sure you’ve changed the title there. All the dates, any times that you’ve changed, and then of course you have to reconfigure everything if you have it set off of a specific date. It’s just tedious to go through.
Rob [01:02]: Yeah, it’s almost like somebody needs to build a little placeholder thing on that you can enter it in one place and then reuse in a bunch of emails.
Mike [01:07]: Well, kind of. I mean it might be nice to have not tags but like variables that say, “Okay, put this here for the name of it,” or something like that. But even then, you still have to go through every single email and read all the copy and everything. I’ve got, I don’t know, like half a dozen of them or so that I had to go through so it was just a long process of like four or six hours to get everything done.
Rob [01:26]: Right, right. When you started this you said you were running a webinar right now which meant was you’re launching a webinar, right?
Mike [01:31]: Yes, yes.
Rob [01:32]: Yeah. You’re not actually running one while we’re talking?
Mike [01:33]: No.
Rob [01:35]: Cool. For me, we’re working on a bunch stuff. I’m running a webinar tomorrow morning. It’s kind of the first Drip-only webinar. It’s put on by us and it’s only going to be folks from Drip who are on it. Pretty excited by it. It’s nice to have first one, you can get a lot of attendee right? Because you can use your existing list and then the ones after this will have to pull from new folks and start running ads. But that prep has been pretty time intensive, to set up the slides and set up the demos and make sure the demos work, and work back and forth because I’m co-hosting it with Ana who does customer success with Drip. We know when you co-host something like that, it is so much to think about – who’s going to say this, who’s going to run the cameras, to figure out which person’s on at which point and then we’re also trading back and forth on some slides. So there’s a lot more complexity, a lot more logistics than when you’re just running one yourself.
The other thing we’re up to is we’re launching something called Drip University. It’s at getdrip.com/university, and the tagline that I finally landed on is “Courses so good other sites would charge for them.” So our first one is going to be a 20-part video course where I interviewed Patrick McKenzie, and each part is like a two to five minute video of a specific question and a specific answer about email marketing. So how often could you send, what are typical open rates, stuff like that. You get these questions all the time and so I wanted to get his take on it, obviously he does a lot of email marketing. If you go to getdrip.com/university, we’ll have that live in the next – it’s going to be a week or two until it’s live but obviously you could leave your email now and hear about it then. It’s kind of exciting. I’m excited. We have a couple of other courses that are already – we have webinars and stuff that we’re linking to that and other courses in mind that we’ll be launching in the future. So it’s kind of a way to help folks just have more answers about email marketing and obviously it’s a bit of content marketing for us.
Mike [03:27]: Cool. I’d imagine it’s a lot of those videos that you can probably reuse in some of your email marketing where you just send those out to people in sort of a Drip campaign.
Rob [03:36]: Exactly. Yep.
Mike [03:37]: Cool. So what are we talking about today?
Rob [03:39]: Well today, we’re talking about valuing people versus valuing process. And when I say it, it almost comes out weird like, “Shouldn’t you value people?” But it’s really this phrase that you hear in business about whether you have to hire exceptional people who are crafts people and super gifted, or whether you are able to basically run a business based on process and to hire folks who certainly are skilled and you hire the best you can but they don’t need to be these phenomenal talents. You often hear it out, we have to have a process and then we’re going to insert any person or we have to value people over process. The reason I want to talk about it is that for the past several years, I’ve heard a lot of people talking about the value of process. We have standard operating procedures, standard operating documents, you have Dan and Ian at Tropical MBA talk a lot about this, Brian Castle has talked a lot about it, and anybody who’s productizing a service is going to be talking about it. To be honest, I’ve never been a fan of process. I know that you need some. I have Google Docs and I have VAs who look at that stuff, but in general I don’t enjoy that, like I get bored with it pretty fast. So I started realizing that maybe I don’t fit in, like my personal way of running a business doesn’t fit in with the whole process emphasis. So I don’t particularly love creating them and I don’t particularly love following them. Within the span of a couple of months, I heard a couple of quotes from people who, I respect and they both talked about valuing people over process. It occurred to me that perhaps these are just two sides of a coin – that it’s not one over the other, that it really depends on your goals and perhaps your working style. So that’s why I wanted to talk about it today.
So the two people who had mentioned this valuing people over process, the first was the CEO of Pixar’s. His name’s Ed Catmull, and he has the book Creativity, Inc. where he talks all about their creative process. He kept pointing out in that book that in order to create the Pixar movies that they’ve done that they have to trust people, not process. They do have a process for creation but he says it wouldn’t get done without the people. The other person who talked about this is I heard Warren Buffett quoted as saying something very similar where like he said, “I just have to have really good people and then let them run it.” He also runs a bunch of companies so he has to hire like really good CEOs, and for him creating process wouldn’t work. But it just got me thinking along these lines, and I guess I’m definitely more of a believer in this people side of things rather than investing so heavily in process.
Mike [06:07]: Well, I think it depends pretty heavily on the type of problem that you’re having people solved too. So there are certain types of problems where there is either a single way to do it or there’s a single best way to do it and it’s clearly identifiable, or there’s a good enough way to do it and just go through these steps and although it’s not perfect, it doesn’t really make a difference. And then there’s this whole other classification of problems where you really need to have good people who are creative and are able to think outside the box and it’s not necessarily a standard type of problem. So for example, one of the things that you can look at is the software development which actually fits both of those types of things at the same time. So there are certain types of software development where you have to do design and you have to build good stuff, and that tends to happen I think more on the UI side of things. You need to have that creative side in place where you actually have to have good people. And then there’s other things, on the backend for example where the customer doesn’t see the code and it’s very straightforward, so like a simple [?] application where all the backend processes are pretty straightforward. That type of stuff, you can hire somebody who does more of a process-driven thing.
Now, of course the entire software development process, there’s a process in place for handling that and rolling out changes and everything else, but depending on the type of problem that you’re solving, it can go one way or the other. For any sort of services, business, some of the different names that you talked about earlier, any sort of productized service or business, those are heavily driven by process. You want to be able to produce a reliable output for those things so you’re going to need a lot of standard operating documents, you’re going to need a lot of processes in place. Anything that’s creative, you mentioned Ed Catmull from Pixar, they need to have a lot of creative people in there because there’s a lot of stuff there that you just can’t have a process for. They’re basically creating emotions. I’m not going to say that there’s no process that you could follow in terms of psychology to create certain types of emotions throughout a movie, but that’s very difficult to pre-engineer in a way that’s not predictable for an audience. You don’t want to have a ton of cookie cutter movies, which is certainly not what Pixar has ever come out with. They don’t do cookie cutter movies but they do do good movies.
Rob [08:20]: Yeah, it really is. The more I’m thinking about it, it really is a choice. If you want to grow fast, let’s say you’re venture funded, I feel like you have to rely on process because if you rely on people, you’re going to really not going to have a lot of process. You have to hire exceptional, exceptional people and so you must grow slower because by definition, you just can’t find that many people who are that good. So I think the question really boils down to is, should you hire the best you can find and rely on strictly documented processes or should you hire only exceptional people and rely on them to make good decisions realizing that it’s going to kind of stunt your growth a little bit?
Mike [08:55]: Well, I think there’s two pieces of that. They’re just entirely glossed over by that question, and the first one is, do you have the money? Second one is, then if you do have the money, then what do you want? What is your ultimate goal?
Rob [09:06]: Yeah, that’s right. There’s a couple of really good articles by Joel Spolsky on this topic. One is called “Ben & Jerry’s vs. Amazon” where he compares Amazon who is just raising a bunch of funding, and this was ten years ago. He wrote this maybe even more, maybe 15, and he compares them to just growing and growing and growing and obviously they needed enormous amount of process, enormous amount of employees and they just need to kind of plug them in where they come. Whereas Ben & Jerry’s was a very slow growth organic business. I don’t think it raised any funding. He talks about knowing your goals up front and I think that relates here.
The other article’s called “Big Macs vs. The Naked Chef” and we’ll link up both these in the show notes. But the Big Macs one is really interesting and probably even more applicable here because it talks about how the Naked Chef is this expert. He’s an exceptional chef and he can make everything up the top of his head, he doesn’t need any process, and he can start a restaurant but he can’t start a hundred restaurants without having a bunch of process and then bringing in people who are not as good as him. Whereas if you’re going to start a restaurant that serves Big Macs, he says Big Macs aren’t very good but they’re all not good in the same way. They’re very, very consistent and it’s because they have this killer process. So if you do want to get large like that, you kind of can’t. You just can’t rely on people as much as process.
I think some other roles that really lend themselves well like you said earlier to process are like virtual assistant roles, support, friend and support. That is one place where we do have a bunch of process. We have always had process for Drip and HitTail and [?] and all that stuff because it just makes sense and the things are a little more cookie cutter. I think if you have a manufacturing business, for sure, any type of productized consulting we’ve already mentioned. Yeah, I can’t imagine trying to scale that without having really good process and being able to hire – you hire good people. You hire as good as you can but they don’t have to be these truly exceptional people who are off the charts, either consulting in VC back there, perhaps the other places where you’re definitely going to need process just because you can’t find good people quick enough.
Mike [11:00]: I do wonder if a little bit of these just boils down to being able to think outside the box for certain types of problems. We did talk about it a little bit before. Any sort of creative activities, so Pixar obviously is a great example of scriptwriting and scripts in terms of movies and things like that, but anything where there’s not a clear best approach. Obviously movies fall into that, some software development falls into it, but I think that there’s also places in consulting where you do need to hire good people as well, so if it’s a consulting engagement where there’s the high potential that something could go wrong. I’ve done a lot of enterprise consulting before, and you need to have very good people. Process helps you to some extent, but you still need people who are extremely knowledgeable and know the software inside and out, and you can’t just throw some random person in there who’s got certifications because that doesn’t always work. They need to be able to not only manage the software but the project itself, and those are two different skill sets. There’s some people who are technical and some people who are good with people, and finding the overlap between those such that they’re able to solve not just the technical problems but also the people problems associated with that, that can be really hard to do and you can’t just have a cookie cutter process for something like that. Especially because there are situations that come up where you have to deal with them on the spot and you can’t just go consult a manual or you can’t go talk to other people, and you need to come up with an answer right then and there on the spot. Especially when it comes to a meeting where somebody looks at you and says, “What do you think we should do?” You can’t say, “Hey, let’s take a 30-minute break while I go talk to my colleagues and figure out what the best answer is.” Sometimes you just can’t do that. So there’s these places where you need to be able to think on the spot about that stuff, and that’s where the people over process comes in.
Rob [12:45]: Yeah, I would agree with that. I think any task that involves a high element of creativity or that’s extremely complex is really hard to turn into a process. When I say complex, that might not be the word for it, I’m thinking of software development like writing code. I’ve seen shops with 50 or 100 developers and how they tried it. Any process around something, any process for the basic steps of checking in code or checking out code from source control or deploying, those things, I’m not arguing against having process for that because it totally makes sense. But it’s like trying to turn software development itself, the art of taking a feature and architecting it, building it, and putting that out the door trying to turn it into a process, I’ve seen people attempt to do that. Again I’ll counter, it’s not a methodology either because Agile I would not say is a process, it is a methodology that guides you but you still need solid people. If you put crummy developers into Agile methodology, you’re going to get crap code out the other end. That’s what I’m kind of wrestling with. It’s like I think that certain roles really lend themselves well to heavy process and it’s the ones that are not necessarily as creative and they’re more road tasks and they’re not as complex as something like software development.
The complexity like I said might not be the word, it’s almost like craft. When it’s a craft, when you’re having to hand-shape something and build it yourself and pull a lot of brainpower and be that, they call it a knowledge worker. I think Bill Gates came up with that term. Those are the roles where you can put a process to it and I’ve seen it done “successfully” in the sense that software does come out the other side, but in my opinion, that software tends to not be very good. It either suffers from bugs or the features are not built really well or the UX is really awful. The stuff that I’ve seen that I want to emulate, the projects, the products, they are built by crafts people that are really, really good at their craft and it wasn’t a process that told them how to design the front end of it and how to build the UX and how to write the code. The stuff that really executes and is elegant tends to be done by these exceptional people. Frankly, I just enjoy being around people like that. They’re smart, they’re interesting. That’s who I want to work with day to day. So I think what’s occurred to me is even if it hampers my company’s growth because I can’t hire 50 people or whatever, I want to air on this side of valuing people versus trying to put everything into a process.
Mike [15:04]: I think one thing that comes to mind around this particular side of things is the unpredictability of the output. So if you do something, in the example of Joel Spolky’s “Big Macs vs. The Naked Chef,” on the Big Mac side they’re all cookie cutter. You know exactly what the input is and you know exactly what the output is and you need somebody to just execute that. But if you’re dealing with a problem where the end result is not necessarily known and you don’t even know if that’s the best result, I think that’s where the unpredictability is and if you can’t predict it, then you need good people. Process will help but it doesn’t guarantee success. It doesn’t guarantee that you’re going to get the best possible result. Even having good people doesn’t necessarily do that, but I think that it improves your chances. Maybe that’s really an additional element that needs to be taken into account is how predictable is the output? How predictable is the stuff that you’re putting into? For example if you got a process that’s executing and you have to evaluate the quality of the data going into it, well, you have to have good people in order to do that. Just process is not going to get you very far.
Rob [16:05]: Yeah, and let me point out that I think I have the advantage of kind of a little bit of naivety, right? We’re at five employees at this point. I think when you hit 10, 15 or 20, no matter how well you hire, perhaps you need to bring more process into it and there might not be any way around it. But somehow in the back of my mind, I want to try to avoid this heavy burden of – I’ve worked at companies where there were four developers and it was so much fun, and then we grew to 24 developers and it was awful. I hated it and I left, and that’s the traditional path that I see a lot of the dev teams go down and frankly just a lot of companies that as you get and add process, it becomes less fun.
Mike [16:42]: But I guess that introduces the question, is it because the team’s got bigger or is it because they lowered the standards and quality of the people they were bringing in?
Rob [16:50]: Yeah, they definitely lowered the standards and the quality of the people they were bringing in and they added a ton of process I think as a result. Maybe they would have added it anyways. But they couldn’t have gone to 24 people if they had raised some funding and they couldn’t have gone to 24 people without lowering the standard because there just aren’t’ enough candidates.
Mike [17:07]: Well, I wonder if there’s a correlation there between the quality of the people versus the amount of process.
Rob [17:13]: Right.
Mike [17:13]: It’s an interesting question.
Rob [17:14]: Well, it’s interesting to think like even Peldi who started Balsamiq, they hit, I don’t know, 12 employees? He spoke two years ago at MicroConf and he said they hit around 12 employees and that he had to introduce a decent amount of process. Actually that was one of the things he talked about in his talk was all the standard operating docs and the procedures, the stuff that he put in place. I was a bit surprised by that because I kind of thought of him as like a nimble startup, and I was thinking he was kind of in that camp of keeping it small and keeping it simple and keeping it lean and not putting much process on it. But A), maybe I was incorrect, maybe he just leans more towards process in general. It’s definitely a personality thing. Or B), maybe at 12, it becomes hard to do it. Although I can’t think of a couple of counter examples. I think like Xerox PARC back in the day, these research centers where they have PhDs and really, really smart people doing crazy exceptional things. I’ve heard that they have very flat management structures, they have almost no process, and they kind of just move forward in research stuff. I guess more of a scientific thing, and obviously you can’t put a process behind scientific research.
Mike [18:15]: No, but I would assume that once something gets to the point where it seems like it’s a viable product, there’s probably some sort of process in place to take it out of the research facility and put it into the market, and from there it becomes a full-fledged product then put a development team behind it and everything else. So there’s a point in which R&D is really not process driven, it’s more people driven, and then at some point when you start to scale it, that’s when you have to bring in that process. So maybe it’s that scaling side of things as well. That could factor into it. I like the idea of saying, “Okay, well, if there’s unpredictability in the output, that’s a factor in how much process you need. If there’s lower skills, you need more process. If it’s more creative stuff, you need less process.”
So it think the underlying question here is, what is right for you though? What stage is your business in? What fits your own personality? What kind of business do you want to build? You could build a very large company very quickly but you’re going to have to have a lot process versus if you want to stay small, you can probably get away with very little process especially if you have a small team. So those are the two different things that somebody might need to think about, and again it boils down to personal preference. You could probably forego a lot of process and grow slowly over time just by concentrating on hiring the best people in the world.
Rob [19:30]: Yep, I would agree with that. I think as a listener, that’s the point. Really the point of this conversation is not to use you or I as necessarily as the example, but for the listener it’s like, “What are your goals?” Because I definitely think that depending on where you want to head, it has a lot to say about what you are going to have to do in terms of putting process in place or of hiring the best people out there. A mix of both would be ideal, wouldn’t it?
Mike [19:55]: Yes, it would. Well, I think that about wraps us up for today. If you have a question for us, call it in to our voicemail number at 1-888-801-9690 or email to us at questions@startupsfortherestofus.com. Our theme music is excerpt from “We’re Out of Control” by Moot used under Creative Comments. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com where you’ll find a full transcript of each episode. Thanks for listening, and we’ll see you next time.
Episode 246 | 9 Reasons Why People Won’t Buy Your Product (And How to Fix Them)
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about reasons people won’t buy your product and how to fix it. They discuss common objections people have about products and why it prevents them from making a purchase.
Items mentioned in this episode:
Transcript
Mike [00:01]: In this episode of Startups for the Rest of Us, Rob and I will be talking about reasons why people won’t buy your product and how to fix them. This is Starters for the Rest of Us, episode 246.
Welcome to Startups for the Rest of Us, the podcast for developers, designers, entrepreneurs in all software products, whether you’ve built your first product or your just thinking about it. I’m Mike.
Rob [00:25]: And I’m Rob.
Mike [00:26]: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. How you doing this week, Rob?
Rob [00:30] I’m doing pretty good. I’m ramping up for a bunch of webinars. I’m doing a webinar with lead pages this week following up on the contest that I did a few weeks ago giving away some lead pages for Drip, and then we’re ramping up a couple Drip webinars. There’s an educational one, one that’s further down the funnel for people who are already using Drip or more curious about how it actually works. So, this is the fun part, this is where as creative people we get to kind of dive into outlines of things and figuring out what we’re going to say. It’s kind of like writing a talk but it’s a lot shorter and you’re going to be doing it online. So, it’s also fun to look at the whole funnel and figure out where we need a little few emails here and a few mini courses here and how to integrate Drip with whatever we’re going to use for the webinars and all this stuff. So, it’s exciting. I like launching new experiments like this.
Mike [01:21]: The best thing about doing those kinds of things is that you don’t have to get it right on the first time because it’s not like a talk where you go out there and you give the talk and essentially it’s over with. You might or might not be able to reuse it, but like with a webinar you tend to do those repeatedly so you can errate on them over time and find out more information about what worked and what didn’t. And that’s what I really liked about those things, it’s just the re-usability of it and the fact that it doesn’t need to be perfect the first time and even if you completely screw it up you can always try it again the next week.
Rob [01:51]: Yep, I totally agree. And the webinars I’ve done so far have been kind of third party things, drip hasn’t put on our own webinars yet, but I’ve still had a really god time just interacting with the people on the calls, and the questions that come out of it are intelligent and challenging. So, it’s been fun. It’s kind of like you know when we go to MicroConf, when you speak at a conference it’s always kind of exhilarating to do it. You get a little nervous, you deliver and then you have a Q&A part and then it just winds up being fun in the end and that’s kind of how webinars have been for me so far.
Mike [02:23]: Very cool. Well, I’ve been trying to adjust to the kids’ schedule while they’ve been home for the summer and it’s proven to be bit of a challenge because my wife, she owns her own fitness studio so she does some personal training, she also does group exercise classes. And because the kids are home for the summer and there are certain weeks where they are at different activities, whether it’s art camp or karate camp, some of those things are all day affairs and some of them are not. So, sometimes they’re home for half a day, sometimes they’re home the entire day, and going back and forth between my wife and I trying to figure out, “Okay, who’s watching the kids, who’s going to be able to do work?” We actually kind of broke down. Earlier today we had somebody come over and watch the kids for a little while. There’s another family who lives in the area and we hired somebody to come watch, not only our kids but their kids at the same time because their parents, they both work from home sometimes. So when the kids are both home- and they’ve got three kids, so when the kids are home you’re just not getting nearly as much work done. So, hopefully that issue will resolve itself sooner rather than later.
Rob [03:25]: Yeah, I never try to work with the kids at home. That’s catastrophic. I get too frustrated, and I guess I should say I never try to work with the kids at home when I’m watching them. Like, we have a nanny essentially that watches the kids a couple hours a day and also picks them up from camp. Because my five year old is in a camp that ends at noon every day and so she picks them up and watches them for a few hours and then picks her son up at four and it allows me to have a full workday. So that’s a no-brainer man, I think you made the right choice. I think if you’re listening to this and you find yourself in this situation, go back and listen to “Zenfounder”, episode 1, because Sharon and I delved into this. We talk about our Sunday huddle approach, how we hire people to kind of drive our kids around. It’s essentially a nanny, but part time is not necessarily the best quality time, so try not to drive all over town picking kids up. Rather we try to spend time when we can with them in the afternoons and evenings. So, what are we talking about today?
Mike [04:20]: Well, today’s topic comes from Niles. I met Niles over at MicroConf Europe last year and he says, “Hi guys, I just came across this post and thought it would make s great topic for the show.” And I run over and read the post and it was over on inbound.org and it was a post called “Nine Reasons I won’t Buy Your SaaS Tool”. And I read through the article, it was interesting but I also felt like it came from the perspective of somebody who doesn’t make the decisions about it based as if they were the business owner; it was more like personalized objections to it than anything else. I just felt like there was a different take that we take on this article and use it to come up with our own ideas about what sorts of objections people have about different products and why they wouldn’t come through and actually do a purchase. Whether it’s just going from a trial to actually purchasing it as a SaaS product or just if you have a book or something like that and if you’re selling it and it’s a one-time purchase, just buying that whether it’s downloadable software or book, etc. But I think that there’s a lot of different objections that people have and what I wanted to do was go through a list of what those objections are and then kind of highlight how you would go about overcoming some of those different objections.
So, to kick us off, the first reason why a prospect wouldn’t buy a product is that they don’t understand what it is that you’re offering. So, in this case they come to your website and they are looking at your product offering and they don’t really understand what it does or how it works or what it does for them. And sometimes this is just a problem with the marketing messaging itself. If you’re not really clear about what the value is that they get out of it. If you’re talking more about the features and the functionality than what it is that they get out of it, the results they’re going to get, those are places where they’re not going to understand what it is that you’re offering and what the benefits that they’re going to get from it.
Rob [06:02]: It’s easy to err on two sides of this coin and go too far to an extreme, and if you go too much into the features too quickly then people don’t understand the real value their getting out of it; and if you go too much into the value their going to get out of it and the benefits then it can actually be hard to figure out what your tool actually does. So, imagine if we had a social media tool like Hootsuite: right on the home page you could say these are the features it has and just start listing them down and people are going to have a tough time absorbing all that information without some type of context. So, that’s a mistake. Or if you went to the other side and you could say, “It makes social media effortless”, or, “It makes all you social media interactions like a dream or something. And you’re almost like too high level at that point. It’s like, what does that even really mean? And unless you dig down quick on that page and start explaining how it does that then look at a few features. I believe you need a nice balance of those things. You can’t just go after benefits, benefits, benefits because it’s just as easy to lose someone going that direction as it is to lose someone by getting out into the weeds of features too quickly.
Mike [07:15]: So, in your mind, what is a good mix between those two things? Is it 50/50, is it 70/30? Are there any sorts of rules of thumb that you can come up with that kind of guide you in terms of the number of benefits or the amount of benefits you should talk about versus the feature?
Rob [07:20]: Yeah, the rule that I use, or kind of my loose rule of thumb, is that the headline should be, I want it to be a promise rather than a description of the product. Sometimes you can put a description and it works. Drip, I do that with, right. It says, “Light weight marketing automation that doesn’t suck”. Now, that’s not a promise; that’s actually a description of the tool. That’s typically not the way I would go. There are some reasons that I’ve done that. But if you go to the homepage of HitTail the headline is a promise. It says, “Guaranteed to increase your organic search traffic”. Okay, so that right there is a benefit; it’s not a feature. So, I start with that so I typically would want some text digging down into that, of how it does that. So, it’s still benefits. You’re not talking about features yet, but you’re now talking about more specific. Like with HitTail’s example we unearth the keywords that you should be targeting but aren’t. Then I like to start digging into a couple of features and those are typically in some bullet points or in short snippets and on the homepage I believe that having maybe three features kind of digging into those, three to six features, is not a bad way to go once you’ve made kind of that nice promise at the top. Especially if you have- I typically have some testimonials above that before I dig into features, and I also like to have some prominent press links above that of folks who’ve written articles of that. So, I wouldn’t say I have mixed, like you say 50/50, but that’s how I think about a page in terms of first make a promise, then talk a little bit about how it’s going to do it and always keeping in mind that you’re trying to use “you” language, like “you, you” the prospect rather that “me, me”, the person who’s selling something and then slowly digging into more and more details. So, it’s that inverted pyramid idea of starting fairly broad and then working down into the features. Now that’s a homepage or a landing page. Obviously I think you should then have a full features page that digs into the nitty gritty of what your tool does, because that’s where you can go off in the weeds and if you don’t have a features page people can have the question, really basic question of like, “So then what does your tool actually do and how does it do it?” And I think that’s a benefit of having that features page that the people can dig into it if they have more questions.
Mike [09:24]: The second reason people won’t buy your product is that they’ll look at the website that you have and say I don’t have that problem. And this really just a fundamental problem with the traffic sources that you have. So, whether you’re targeting the wrong people in AdWords or whatever paid advertising you’re doing or if you’re advertising for your product using the wrong social media or the wrong blog articles, any sorts of news outlets where it’s just not applicable or if you are trying to get from like Digg or Reddit and it’s just not the right audience. There’s lots of different ways to get a lot of traffic to your website but just because you get traffic doesn’t mean that it’s targeted traffic and you have to get that targeted traffic because if the traffic is not targeted they’re probably not going to have that problem and they are going to have absolutely no reason to stick around or buy your product.
Rob [10:12]: Yeah, targeting traffic is hard especially if you’re sending a bunch of stuff to your homepage. I think the less traffic you send to your homepage the better and the more traffic you send to individual landing pages that essentially look like you home page but that you’ve changed the headline to really resonate with the traffic source that’s hitting it, but you can’t always do that, but certainly if you are running paid acquisition, if you’re doing SEO, you can set up separate pages that target certain keywords. There’s a lot of ways to do this, and what’s interesting is your tool probably solves a bunch of different problems, but you can’t say that in a headline. And if you say the wrong one to the wrong audience then they will wonder off and have this objection of, “I don’t have that problem.” And so, the more specific you can get with your headline and you can say, “Boom, do you have this problem? Do you spend way too many hours managing your social media? Or do you no have enough organic search traffic?” Very specific thing that’s targeted to those people, you’re just going to stand a better chance of them continue to read the page which eventually often leads to them converting for you.
Mike [11:16]: And I think you can have this problem on any given page on your website. As you kind of indicated, the homepage is not often the best page to be converting people into trials or customers because it’s too generic, you don’t know the type of person who is going there. They may have just heard about your tool from somebody else or just typed it into a search engine or something along those lines. But if they come to a specific page, especially if you’ve optimized that page using SEO you can generally get a good idea of what type of person is coming to that page. So, obviously there’s bit of a difference if you’re using paid advertising because then you can have a little bit more fine-grained control over it versus if somebody writes an article about your website or your application, you don’t always have as much fine-grained control over what it is that they say or how they pitch it to their audience or how they talk about your product. But if you find that those links are coming back to your site you can certainly morph your pages to talk directly to that audience especially if you’re seeing that there’s a lot of traffic coming from some of those different sources.
Rob [12:15]: A third reason why people might not buy your product is that they don’t trust you. I think there’s a number of ways that someone could mistrust you. They could look at the site and think that it’s just a little too slimy or that it’s a little too, it looks like a scam, right. And I think that comes to a design problem. Your language could be over-sales-y, you could be pushing too hard and it could feel like you’re trying too hard and that could be a copy-writing problem. I think aside from those, a big one is that someone might not trust that you can deliver on the promises you’re making on that homepage or on that landing page. And probably the best way I know of to get around that is to use, essentially lead nurturing right. Instead of getting someone to sign right up, because they may not trust that you’re going to deliver or it may take too long to get set up or whatever they’re not believing that you’re saying, but you offer something very small in exchange for an email address. And so you can do an email mini-course educating them on how you’re going to solve their problem or how they could solve it by themselves on their own without buying your software. Or you can give them a tools list or PDF or why paper or something. And then once you have their email address you can email them a small min-course once a week and build that trust up.. Build up the knowledge to them that you’re an expert and that you can solve this problem and that you have done it. You can send them case studies, you can send them your credentials, quotes and testimonials, all that kind of stuff. I mean you just have so much more time to do that if you have the email address than if you try to pitch everything on a webpage while someone is skimming through that between their lunch hour and their one o’clock meeting.
Mike [13:50]: I think in addition to some of the things that you talked about, the lead nurturing thing I think historically has been overly simplified. I think in the past if you looked even five years ago or so, if you looked at the basic sales fall for any given product on the internet it was somebody comes to your website, they sign up for a trial and then they purchase the product or they don’t. The overly simplified piece of it was that lead nurturing that you talked about where they come to your website and you just met them. They don’t know anything about you yet, yet you’re trying to sell them on a product and they just don’t have that trust yet. And I think that’s- you talked about it pretty in depth- but I think that that’s the piece that a lot of people miss when they are trying to set up their website. They’re skipping over that piece and they’re not thinking about what it is that I can offer people that will help establish that trust before we even get to the point where I’m asking them to sign up for a trial. And like I said, that’s just something that I think people have kind of glossed over. I’d say it happens a lot less now than it did three or four years ago, but it’s starting to come to the forefront, like this is an important piece. And I think a hard part about that is just the length of time that it takes to go from, “This is a new lead and I’m nurturing that lead”, but it’s hard to tell how long that lead nurturing is going to take. Sometimes it can take days, sometimes it can take six months and sometimes it can take a year. And that nebulous piece of it, the time frame for that, is what makes it so difficult for people.
Rob [15:12]: Our fourth reason of why people won’t buy your product is that they are happy enough with what they currently have. And this is a tough one to get around. I think it’s pretty common that there’s going to be an incumbent in pretty much every market that you enter into, and frankly most people don’t enjoy change, and they are not going to go out of their way even if they can get some type of incremental benefit, they’re not going to go out of their way to switch to your product. And you know, Mike, as you noted here in the outline, the biggest competitor to most bug tracing software is probably spreadsheets, it’s probably some hacked together thing that people have done and if it works well enough then why would someone change? And so to think about getting around that objection you really have to show not just incremental value but you have to show dramatic savings of time, dramatic savings of money or how you can make someone a lot more money or how you can really remove the pain from their life and I think that’s a big thing. We talked about this B to B pain thing, right? You really have to figure out what that pain is, and you have to go after it, and you have truly understand what the pain is, why they’re feeling it and you have to talk about that on your homepage and in your marketing and in your copy. And if you’re kind of vague around that and you feel like you’re kind of solving a problem for a certain group of people that’s not good enough. You have to be a lot more specific about it or you have maximize folk trying out your app or becoming customers of you, you really need to understand that pain.
Mike [16:41] And number four is closely related to number five which is that it’s too hard to switch from what I’m doing today. And if what they’re doing today currently is just they are trying to sign up for a bug tracking software and all they are using is spreadsheets, one of the ways to overcome that is having a mechanism to load that spreadsheet into the software. There’s technical ways to do this particular piece of it ,and you can say, “Okay, I’m going to build an import mechanism for all of my competitors and allow then to upload a spreadsheet that will import stuff.” But you’re still asking them to do work in some way, shape or form. They have to figure out what that export process is, they have to make sure the data is formatted properly, and then imported into your system.
The other way to go about this is to offer some sort of a concierge on-boarding service where you offer to, either for free or as a paid service, import the data in some way, shape or form. And I distinctly remember Patrick McKenzie talking about this for appointment reminder where he offered a free data import regardless of what type of system you were currently using. And some people would send him spreadsheets, some people would send him PDF files, and he would just take that data and import it into an appointment reminder. And sometimes he literally had to sit there and copy paste things, sometimes he had to type things in, but at the end of the day what he was doing, he was removing the pain of switching from whatever their current system was to using his software. And I think that that pain of switching is very underrated. I mean, most people heavily discount on how much effort and mental overhead there is to getting rid of that because signing up for a new service is basically asking somebody to do work, and that’s not what they signed up for. They signed up to get rid of some of the work that they have to do and some of the pain points that they have. By forcing them to do this stuff manually, it is just a barrier for them to sign up for your service. So, if you can remove that barrier in any way, shape, or form then it’s going to get you to do it. My wife’s evaluating some different options right now because she has one, and the problem that she has is, “Oh, I’m going to have to take all my existing appointments and everything else and I’m going to have to move them into this new software and I don’t want to have to do that.” So, it’s definitely a real thing that people have to deal with and they do take it into consideration.
Rob [18:53] Yeah, in launching Drip, Derek and I sat down and said, “What are people biggest switching cost and how can we get around those?” and concierge service is one way, doing it for them. Building importers is another way. Even helping prepare people, like creating internal marketing docs. Let’s say it’s a doc that allows a developer to sell the product to convince his boss that they should be able to use this. Something your future customer can use to convince their higher ups, I’m getting all of these things work and I’ve seen them all done but to sit down and really give thought how is it to switch, why is it harder to switch and what is in our power to offer folks to try to eliminate that switching cost, and it’s very powerful.
Mike [19:37]: Yeah, which you’ve kind of alluded to and I’ve seen this done in the enterprise world where they have these kind of marketing documents where they will talk about what sort of problems are that people are facing and how to overcome those challenges with a new piece of software. Some of those things are as you said, you do it for them and you can talk about those things, but giving them the tools that they need to be able to justify internally because they’re going to ask the question “how do we going to go about switching and what are the pain points going to be of switching?” and if you can provide them that information and give some ammunition and be able to say, “Hey, let’s take this tool that isn’t doing the job for us and get rid of It and this is exactly how we are going to switch over, this is our road map to moving over into this new system.” If you can get that, and sometimes it takes standing up for your competitors, but at the end of the day sometimes you have to do what you have to do.
Rob [20:22]: Our sixth reason why people won’t buy your product is if they can’t figure out how to use it. And this is a pretty common one, right? Someone downloads a trial or they sign up for a trial and they can’t figure out how to enter stuff or they don’t know what they should do or they just kind of give up. And that typically means your product is too complicated or your on-boarding isn’t good enough. If it’s on-boarding that’s a fixable thing, there’s kind of a formula for this right. You’re going to want to send folks some emails on how to get on boarded, preferably very timely and spell out things they’ve already done and what they have left to do and obviously having some kind of walk through or some kind of setup within the app as well. If an app is just too complicated and software isn’t the answer, then you may need high-touch sales to explain it. If you’ve solved a complicate problem, you’ve built a complex solution, and you’re selling in to folks where the price point is worthwhile then people aren’t going to on-board to something like that when it’s really hard to get set up. And that’s why Enterprise Tools sells for so much money right. They sell for a $100,000 or a million dollars often because there’s so much effort, I mean there’s so much effort involved in building, there are so much sales effort involved in getting people on-board and it’s such a lag. And so I kind of think of it as one of those two things, either your product is too complicated in which case you need to up your game and go high-touch or you’re just not on–boarding well enough and you need to look at that.
Mike [21:44]: Yeah, I think what the misconception with some of the Enterprise level products is that people look at the price and say, “Oh, that product is so not worth that.” And in most case they’re right, the software isn’t worth that. It shouldn’t take that much effort to build the software, but what you’re paying for isn’t the software; you’re paying for the sales effort that is required to get in front of the customers and do the work to get them set up. That’s definitely something that heavily factors into the price in there. But, if software becomes shelf ware then it’s not providing any value, so you definitely need to figure out how it is you’re going to demonstrate that value. Because if it’s a SaaS product for example and people are signing up for a trial, if they can’t figure out how to use it and they are not getting the value out of it, they’re definitely not going to pay for it. You have to go through and figure out what those pain points are for them and why it is that they’re not able to use the software. And maybe it is too complicated, maybe you need to switch it to much more of a service-based offering rather than a software offerings. Sometimes that’s the answer. But at the end of the day as the entrepreneur your job is to figure those things out, it’s not to build a certain type of product or a certain type of company. It’s to figure out what those types of problems are and then fix them with the business.
Rob [22:52]: And that’s where the old-school, big ticket price, enterprise sales had an advantage because they didn’t have subscribers and when you’re providing a subscription service you have to deliver to the customer every month or they will cancel. And so if they are not using they are going to cancel. Whereas if you were Oracle or Ceeble or People Soft back in the day or even today I suppose, you can sell a six-figure or a seven-figure deal and all the effort is upfront convincing them to buy it and you don’t have to follow through and actually provide that much value. Obviously that sucks, I mean but I’ve seen it happen. I’ve been at large enterprises where there’s been this great sales job and then folks don’t follow through but the value is kind of provided all upfront and so was most of the money, aside from kind of the annual maintenance twenty percent that is typical.
Mike [23:40]: The seventh reason why somebody might not buy your product is that they forgot about you. They came to your website, they looked around a little bit then somebody walked into their office, and they got busy and they closed down their laptop and walked away or closed their browser and went to do other work that came up and they just didn’t sign up for anything, they didn’t download anything. So, by the time they get back to their desk and they decide they have a free minute, at that point they’ve forgotten what it is that they came to your website for to begin with. So, in cases like that you need to use something like re-targeting to help bring them back. If you were lucky enough to get their email address because they did sign up for something then you need to actually go through the process of actually emailing them on a regular basis. And I’ve done this in the past where I’ve collected email addresses and then just not emailed people for like two or three months and that’s the worst thing you can possibly do because they were interested at one point but two or three months down the road, unless you are getting in front of them and talking to them chances are good they either forgot about you or the problem was just not high enough on their list of priorities to come back to you, or they found something else to solve the problem and you weren’t it because you weren’t talking to them. So, making sure that you’re going back and getting in front of those people and getting either a yes or a no is, that’s essentially you job. It’s not your job to kind of self-select and say, “Oh, this person didn’t email us or sign up for a trial so I’m not going to bother them anymore,” and that’s absolutely wrong, that’s the wrong approach to take. You need to get through to them and you need to talk to them until they either say yes or go away.
The eighth reason why somebody might not buy your product is that they’ve tried similar things before, and those things didn’t work for them. And I’ve done this myself where I’ve signed up for a product and it didn’t work out and then I maybe signed up for one more and that didn’t work out, and suddenly I just give up on the whole genre of that particular type of product. You might have found this with something like Time Tracking or To Do lists. People switch to those types of applications on a fairly regular basis, and at some point I think people just get frustrated and they decide, “Look, none of these products work so, none of these products I’ve tried so far work so none of them are going to work.” And this isn’t necessarily true, especially if you’re taking a different approach to a particular problem. And if you’re taking a different approach than other people and other competitors in your space, what you need to do is educate people about why your approach is different. Maybe the competitors you’re looking at are doing it wrong. Maybe they’re not telling the story about how they went and decided to create this product because they were having that particular problem and nobody else was solving it for them and show people that the process needs to be molded to fit into this software. And sometimes that’s just the case, the vendors will create a product based on their own internal ideas of how a particular process should work and it’ll educate their customers as they’ll come on board about how they can modify their own internal processes tobe more efficient and to get more things done and then when the customer’s trying out the software, because there’s a mismatch between what the customer’s process is and what the vendor’s process is, those things don’t mix so they don’t work and eventually the customers get frustrated and they say, “Look, I’m done with this,” and they do the same thing with the next product, and the next product and the next product and eventually they kind of just check out of the whole thing. You can use education marketing to help correct this, but sometimes there’s also a problem with the problem solution fit. Maybe you’re not solving the right problem. Maybe the customers have a slightly different problem, and that takes customer development and you have to talk to people who’ve signed up, people who just cancelled and verify that you actually do have that problem solution fit. Because sometimes your promises don’t match what the customer expectations are and you need to know that earlier and sooner rather than later.
Rob [27:22]: I tend to think about this in two ways: if you’re in kind of a new space or a new market then the odds of them, of your customers having tried so many things that their tired of it are pretty low. And so I wouldn’t typically use this as a factor unless you’re hearing this from people who are canceling. My guess is you won’t be. But if you’re in a mature market where there are a lot of tools, or it’s been around for ten, fifteen, twenty years, then there probably are going to be some older tools, some incumbents that are higher priced, that’s real hard to use, that are cumbersome, it’s kind of the same story we see with QuickBooks or Quicken and accounting space and the big marketing automation tools or email marketing software. I mean you really see as tools get older they just get cumbersome. In that case it’s probably a good bet that people have in fact tried other tools and really don’t like them. We’ve used this term of “refugee” from Exproduct, Infusionsoft Refugee or Quickbooks refugee. It’s someone who is trying to flee that product that product because they don’t like it so much that they’re willing to use kind of anything else. And in that case that’s actually a really interesting marketing angle. It’s a really interesting copy-writing angle. It’s an interesting touch point that you can use in an email course, in a headline, in a sales letter, on a homepage, to basically call it out, just, “Have you tries a bunch of different products and they haven’t worked for you? Are you tired of this incumbent software that’s really expensive and hasn’t worked for you?” And you just tackle it head-on and then you present why your software isn’t that and how you’re kind of of a new paradigm.
Mike [28:54]: And the ninth reason why somebody might not buy you product is that they look at it and they say it’s too expensive. And in these cases, I think that if somebody looks at the product and says that it’s too expensive it tends to be an objection but it’s coming from some other place. Either they’re not seeing the value in it or there are features that they’re specifically looking for that are in a pricing tier that they’re not comfortable paying for that pricing tier because maybe it’s a one person sho pand the specific feature that they want is in a $100 tier versus the $20 tier. There’s a lot of different reasons why they may not be able to see the value. They also may not even believe that the value is there. And that might be an education problem, but it’s rarely the case that you’re offering the product and somebody looks at it and says out of hand that that’s too expensive. My guess is that there’s something else at play. It’s not necessarily that it’s too expensive, it’s more that they don’t see the value or they’re not looking at the right things and it’s up to you to kind of correct what it is that they’re looking it or educate them. I just don’t think that in most cases, unless your product is completely outrageously priced in comparison to all the competitors out there, it’s hard to overprice something if you’re not also delivering the value.
Rob [30:05]: Yeah, you’re always going to have some pricing objections to what you billed. I don’t think I’ve ever had a product priced even as low as you can possibly go and still not have someone tell you that it’s overpriced. But the point at which you might actually think you might be overpriced is when fifty percent of your people are canceling because of that. You really have to hear it a lot in order to actually start thinking about lowering prices in my opinion.
The other thing is, I talked about this last MicroConf, and it was in reference to Drip and it was in reference when we first launched, we had a bunch of people using it and cancellations were coming through and a number of people said very similar things. They said, “this is a great tool, I love the usability, it’s easy to use but I just couldn’t justify it in light of the price,” and they would say that, it was very similarly, it was too expensive for what it does, that kind of stuff. Now, you could look at that one way and say, “Wow, that’s too expensive. We need to lower our prices.” Derek and I looked at it another way. I wanted to go after something called aspirational pricing, which is basically saying, “I don’t want to charge less that $50 a month.” It was at the $49 a month price range, so how can we build enough value in the product that we are worth $49 a month? And these days that’s more how I think about rather that trying to lower prices to meet expectations, how can you build enough that their expectations are met at or above your current price point?
Mike [31:26]: Yeah, I think that exact topic came up in one of my mastermind group discussions which was, don’t drop the price, add value to it. And I think that you can probably generically apply that advice across the board to virtually any product on the market. Don’t discount the price, always add value.
Rob [31:43]: So, to recap our nine reasons why people won’t buy you product. Number one, they don’t understand what you offering. Number two, they don’t have that problem. Number three, they don’t trust you. Number four, they’re happy enough with what they currently are using. Number five, it’s too hard to switch from what they’re using today. Number six, they couldn’t figure out how to use your product. Number seven, they forgot about you. Number eight, they’ve tried similar things before and they didn’t work and number nine, you’re just too expensive.
That wraps us up. 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 Out of Control” by Moot used under Creative Comments. Subscribe to us on iTunes by searching for Startups, and visit us at startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 245 | Tips for Fighting Stress and Anxiety as a Founder
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about tips for fighting stress and anxiety as a founder.
Items mentioned in this episode:
- LeadFuze
- Bidsketch
- CartHook
- Useronboard.com
- Penzu
- Helpguide.org
- A Guide to the Good Life: The Ancient Art of Stoic Joy
Transcript
Mike [00:00]: In this episode of Startups For The Rest Of Us, Rob and I are going to be talking about tips for fighting stress and anxiety as a founder. This is startups for the rest of us episode 245.
Mike [00:16]: 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.
Rob [00:25]: And I’m Rob.
Mike [00:25]: And we’re here to share experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Rob?
Rob [00:30]: Well, me and the family were up in Oregon last week and I had a pretty cool meetup with a few founders out there with Ruben from Bidsketch, Jordan Gull from CartHook, and the Bootstrap Web Podcast, and Samuel Hulick from useronboard.com. It was cool to hang out with them for a couple of hours and as usual, 10:30 rolls around and I just wanted to sit there and keep talking. I had hours more on conversation than I wanted to have but we had the bail and I had like a 35-minute drive back to this music camp that I was out my kids. So, I wanted to say thanks to those guys for hanging out and if you’re in Portland, next time I’m up there because I’m up there probably once a year during the summer to hang out with you, how about you?
Mike [01:10]: Well, as the listeners know I was in Hershey, Pennsylvania last week for a family vacation and I had a really good time recording the terror of my children on the rollercoasters.
Rob [01:21]: Yeah, that’s always fun. I saw those pictures on Facebook. It was pretty hilarious.
Mike [01:24]: I think the part where he said, “Is it over yet?” halfway through the rollercoaster was probably the best one.
Rob [01:29]: That’s the best, yeah. So update on a couple of [?] marketing approach as we started the past couple of weeks. One is I’ve started using LeadFuze from Justin Miguel, he’s a founder café at Micropreneur Academy Member and we met him at MicroConf and LeadFuze, F-U-Z-E, and it’s basically outbound email and it’s been really interesting. It’s already been more successful than the previous outbound, the three-month outbound email campaign that I ran with another provider and we’re like two weeks in and we already have more leads from this. So there, I don’t know if it’s the market they chose or if it’s the approach they’re taking but it’s interesting. I’ll have to see, I want to wait about a month or two and kind of see what volume we get because my experience with outbound email like this is that it’s great for really high-price services right because you might get 10 leads or 15 leads a month, but when you’re doing more a SAS that’s lower price, 50 or 100 bucks a month, that 10 or 15 new people to talk to doesn’t often move a needle unless they’re pretty high price. So, in vertex allow but certainly the frontend results have been positive so far.
Mike [02:35]: Cool. And you also recently ran a contest for LeadPages, right?
Rob [02:39]: That’s right. Yeah, so basically, we use the KingSumo plugin which is a wordpress plugin for Map Sumo and ran a contest, one winner would win five years of LeadPages which is worth like $4,000. And, overall, I mean the contest with tons of Tweets I mean there’s a [?] rally to it where you enter and then if you Tweet and other people user length then you get like three extra entries or whatever. Overall, there’s a ton of bus during the contest. We ran ads, we mailed our list. We kind of did what you would expect to promote, but in the end the results were not where I wanted them to be instead of getting several thousand new emails. It was substantially lower than that. So, we did a post-mortem and I couldn’t pinpoint anything that I felt like we did wrong. Part of thinks that contest are so common place now that maybe they’re not the kind of the purple palette that used to be. Part of me thinks perhaps we misexecuted on something but it is what it is at this point and I don’t foresee doing another one in the near term but we’ll see what happens a few months down the line. So, what are we talking about today?
Mike [03:42]: Well, today we’re going to be talking about tips for fighting stress and anxiety as a founder and I kind of came over this idea because last week, I was on vacation and it occurred to me that this is probably one of the first vacations I’ve taken in a while where I didn’t feel stressed at all while I was on vacation and I kind of thought back about why that was and kind of came to the conclusion that one of the things that I did just dramatically differently this time was that I basically saved up money to pay for the vacation first so that I could go on vacation and enjoy it rather than thinking about all the things that I needed to do when I got back and how I was going to pay for the vacation afterwards. So kind of like frontloaded of what my savings were going to be for that and it occurred to me that there were a number of different places where I was feeling some stress and anxiety about the business and what things were going on and so I sat down and actually kind of did a stress review to figure out like what things in my life, in my business were stressing me out and I did this before I went on vacation and realize that there were a lot of ways that I can address some of those issues and by the end of my vacation, aside from getting sick was a little bit stressful. I was completely stress-free. It was not a stressful vacation in any way, shape, or form and I didn’t worry about anything the entire time. It was fantastic.
Rob [04:55]: That’s great. I mean that’s kind of the purpose of a vacation right is to get away and not feel stressed. I find sometimes it’s a mix bag where if you go away, it can make you a stressed out if A, if anything goes bad back at the office that you can’t handle then of course you’re going to get stressed out. And the other way is I feel like if I leave and there’s something undone or I realize that there’s a big push that we want to do and I’m not there and able to kind of participate in it, that always makes vacation kind of suck because it’s like you’re not being part of moving the business forward. But, when things are going well and you stuck away for a short amount of time, like I said, I think that’s the purpose of this to come back super refreshed and motivated, and ready to go. And so you’ve been back for a couple of days at work since vacation is over, have you had a lot of motivation to kind of get to work and get stuff done?
Mike [05:42]: Well, I’m kind of on the tailend of being sick. I started getting really sick on Thursday. So, and then through Thursday, Fridays, Saturday, and even up until today, I mean right now it’s Wednesday and we’re recording for next week, and I’m still feeling kind of the lingering effects of it. So, I’m not getting as much sleep as I probably could have but in terms of my motivation and my ability to get things done, it’s still there. It’s just I feel terrible throughout the day is really what it comes down through. But it has nothing to do with being stressed out or worried or having things to do that I’m procrastinating on and not getting done. It’s just my face just doesn’t feel good.
Rob [06:15]: Right. Yeah, that’s a bummer. Cool. So, let’s dive in to these tactics you have.
Mike [06:19]: Sure. So, basically, we’re going to walk through four different stages of taking a look at the stress and anxiety that you’re facing and talk a little bit about what to do in each of these, I’ll call them faces because it’s kind of an analysis of the anxiety and stress that you’re facing. And the first one is think about the big picture of what’s going on. And this is about identifying the things that stressing you out and understanding and recognizing the different science of that stress. So, for example, if you’re procrastinating on certain things or you’re avoiding certain types of work, or if you’re spending a lot of time thinking about a specific problem or a specific subset of problems that you’re facing during your business or your personal life, let’s say that you’ve got some bills that you’re trying to pay down and maybe it’s credit card debt or something like that. Or if it’s just the marketing strategy that you’re trying out and it’s not working and it’s frustrating. So, all of those things are things that can kind of contribute to the stress that you’re facing and are ultimately going to essentially drag you down in other ways that are not necessarily easy to quantify but will definitely impact your business in the bottom line. So, some of the science of this are if you’re overindulging into something whether it’s videogames or if you’re smoking a lot more or you’re drinking a lot more, eating, watching TV or movies and just [?] out in front of the TV at night, doing drugs that you shouldn’t be doing or sleeping much more or much less than you typically do, any sort of withdraw from social situations. So if you’re avoiding going out with your friends, or essentially just avoiding talking or interacting with people in general because you think to yourself, “Oh, I’ve got all this work to do, so instead of going and hanging out with my friends, I’m going to do this work and try and get it done.” And what I found tends to happen is that you end up spending more time in front of your computer trying to get work done than you do actually get in any of the work done. And it kind of comes about as much more a surface is a much more of a form of procrastination than anything else, and to me that’s when I know that I’m stressed out or I’m anxious about stuff is like I start procrastinating. And the natural reaction for me is to sit in front of my computer more or try and get more work done, but that never happens. It always end up putting me in a position where I end up procrastinating when I’m sitting in front of my computer and I’m still not getting as much work done which is essentially a vicious cycle. So, you spend more time in front of your computer, trying to get stuff done. It’s not getting done. You procrastinate and then it makes you want to spend more time there because you’re not getting things done. To me, that’s just the vicious cycle and to me that’s the sign that I need to do something about it.
Rob [08:46]: Yeah. I think the big signs for me personally is when I notice that I have this kind of feeling of stress or anxiety and I can’t pinpoint where it’s coming from and I always take that as a point to where I need to stop and think about when started and what kicked me into it. And oftentimes, I’ll find that it’s some ridiculous thing like an email I got from someone that was confusing or that means that I have to do some work tomorrow or that, I don’t know, it’s something that didn’t go exactly the way I wanted to but it isn’t actually that big of a deal but it somehow triggered a reaction in me that I then carry with me for an hour or two, or three. And as soon as I can pinpoint, “Oh, that’s why I’m upset? Like that’s why I’m feeling this?” That’s when I’m able to let it go, right, and to either do a short, I won’t even say it’s a meditation but it’s kind of just a short check in and saying, “All right. I’m letting this go because there’s no other reason that I should be feeling this way.” But the other thing, I think the excess of angry you talked about, I think overindulging them and I found myself definitely watching too much TV at times, not this year as more in 2014 where I had kind of a, yeah, just kind of tough battle with there’s some cash flow and there were other things going on there trying to grow drip that I was frustrated with and I think all the indicators that you mentioned about zoning out and withdrawing from social situations or things that I’ve certainly experienced.
Mike [10:10]: Right. So, as I said, step one or stage one I guess is just thinking about the big picture of what’s going on and recognizing that there is some sort of stress or anxiety that you’re facing. And then stage two is really just identifying what those stressors are. So, what I find it helpful is to list all of the different things that may or may not be stressing me out or frustrating me. And it’s helpful to just write them down and say what it is, why it’s stressful and what is about that particular thing that is stressful. So, one of the things that I find helpful doing this is keeping a personal journal. So I use a service called penzu.com or you can just go in and you can have it send you emails and notifications about when you’re supposed to be doing anything in your journal and I just have it send me a reminder that for certain things, so for example I keep a sleep journal that just says, “Hey, how did you sleep last night?” And what it does it helps me keep track of how well I’ve been sleeping and whether or not I’ve been well or sleeping poorly, and it helps me just pay attention to it. So it’s not about measuring it so much as it is about just kind of being aware of what my sleeping patterns look like. I used to use a [?] to actually measure how much sleep I was getting on any given night but they went out of business and the machine went on the [fret?] so I haven’t found anything else to kind of replace that yet, but I found that this journaling application has helped me to understand when I am and when I’m not getting good sleep. And you can use a journal and application for anything so you could use it for your personal life, use it as an end-of-day check-in, you could use it for sleep, you could use it as an exercise journal for example. I mean there’s lots of different things that you can use where the activity isn’t easy to measure but by journaling about it, you can give yourself an opportunity to just think about whatever it is that’s going on. And by listening to those things, you’re essentially identifying them, and once you’ve identified them, you can move onto stage three which is just dealing with that stress. And there’s a lot of different ways that you can deal with it and kind of the five that I came up with was you can ignore it, you can avoid it, you can outsource that stress, you can eliminate it, or you can adapt. So, let’s talk about those five different things in order. And the first one is ignore it. There are certain types of stresses that you can just completely ignore them. So for example, one of them is negative blog comments. If you have a blog that you’re writing and we talked about this a little bit in a previous episode where we talked about dealing with haters, but if you a blog you’re inevitably going to get people leaving blog comments on there and if you’re in anyway controversial, there are people who are going to believe negative blog comments and just reading those is extremely detrimental, I mean we talked about it quite a bit before but the way to avoid that stress by reading those things is just completely ignore those comments. You don’t have to even read them. There’s pros and cons to not reading the comments on your blog, but if you’re getting enough comments you’re recognizing the negative ones throw you off for a couple of hours, or for a couple of days, it might be worth considering just ignoring them entirely.
Rob [13:01]: Yeah. There’s definitely a pretty large group of stressors that you can outright ignore I think, blog comments and hacker news comments, and Twitter comments and frankly feedback or input from people you don’t know or that’s unsolicited or that you didn’t ask for I think is typically something that you kind of have to learn to ignore as you build up an audience or as you build up a customer base because there’s always going to be somebody, you know, someone off case of one in a thousand or one in ten thousand people who’s going to say things that stresses you out and learning to kind of deal with that and not let others have the power, that power over you I think is definitely one way to avoid the stress because frankly, at this point, if every time I heard a negative comment about something that I’m involved with all that we do in terms of MicroConf, the blog, the podcast, all the apps, everything; if I got upset every time someone made a negative comment, yeah, I would be stressed quite a bit. And so, I think getting a little more fixed scanned and learning to ignore those things that should be ignored, is a learn skill.
Mike [14:10]: Right. And just to kind of clarify a little bit. There is a slight difference between ignoring the entire thing versus not letting to get you, I think because there are fine line between those two so that you can take it one of those two different ways. The second one in this list is to avoid at something entirely. So, one of the things that I found is that overcommitting for me can be a big stress and nobody likes to say no to somebody especially if somebody comes and says, “Hey, can you help me out with this?” I love to say yes to anyone who comes to me and ask for help, but at the same time it’s not always possible. So, especially if people come to you and earlier on, I think in most of our careers, we always have family who come to us and say, “Hey, can you help fix my computer?” And I used to kind of jump and say, “Oh, yeah. I can totally help you out with that.” And overtime, I got to the point where I realized that not only was that not helpful for me or for them because they weren’t necessarily learning to fix or address the wrong problems. They were just basically passing them off to me, but I was committing to things that I didn’t necessarily have time for, and at this point, I definitely don’t have time for them. So, it is a lot easier to be able to say no to those types of things, and saying no can be really, really hard and that’s one of the issues that a lot of us are going to have to face at some point. You’re just going to have to say no sometimes even if it doesn’t feel good at the time but you have to understand that sometimes saying no is the right decision for you in the long run.
Rob [15:27]: Yeah, earlier on in my career, I said yes to everything and I think that’s probably advice I would give to most people is to take advantage of it as many opportunities as you can early and then as things build up for you, you have to start switching that to a mix of yes or no and then at a certain point, nobody comes your default answer, and that’s been my default answer for a few years now where I don’t have time to think about it, or if unless it’s like what [Derek?] [?] says, et cetera, hell yes or a no and that’s at a certain point how it has to get if you are overcommitting and I think most of us overcommit. This is not just about business, right, this is about personal life and this about overcommitting your kids to play three sports and do gym and ballet and all the stuff and you’re driving all over the place, that can be crazy even though you’re not overcommitting yourself, you’re kind of overcommitting your time and your family and spending a lot of time in the road, these are things we’ve chosen internally, as a family to kind of pick one thing and invest heavily in it. So my kids each playing instrument and then maybe they do one sport that kind of comes and go and gives us a gap. Some families may work to do three or four things at once, but we know that overcommitting in our personal lives can be as bad as just committing to help everyone who emails you which just becomes impractical at a certain point.
Mike [16:42]: Yeah. I mean even this past year, my kids were just currently entering karate and they were doing karate two days a week and then they had soccer another two weeks a week, and they both decided that in this coming fall, they don’t want to play soccer because they’re already doing karate and they know that it takes up a lot of their time and they have to basically be there for one or the other almost every single day of the week. And they just decided they didn’t want to do that. So they’re going to take a year off and kind of see how things go which is kind of very admirable of them. We didn’t fight it, we just said, “Okay. If you want to take a year off from soccer, that’s fine.” But karate like for your kids, it’s music for our kids it’s karate and they just do that and it’s kind of their primary thing but it’s nice to kind of be aware of those types of things that they are both business related and personal life related. So the third strategy for dealing with some of these things is to outsource it. And this usually comes with certain types of tasks especially if you tend to procrastinate on any of these types of task. And one thing that I did a while back was I started outsourcing a lot of the financial stuff for my business and I kind of got to the point where I almost wanted to go over to doing on the personal side as well because I hate seeing money come out of my bank account especially in large quantities. So, I hired a bookkeeper other basically manage all the books and handle them and it’s not that I completely ignore them, it’s just I’m not looking at them on a daily or weekly basis in order to figure out what bills to pay or whether I need to pull money from one account or the other like that stuff is just taken care of for me and I don’t have to worry about it anymore. And when I did that was I hired a bookkeeper to do all that stuff for me and she pays the American Express bills. She goes in and she runs the payroll. And I don’t have to worry about it. I just basically just ignore it and trust that she’s doing the right things, and if there’s a problem, I’ll deal with it but otherwise, I just don’t want to be involved in that kind of thing. Another type of thing that you might want to outsource is if you’re running any sort of a SAS products where there are cancellations on a semi-regular basis. Well, you want to reach out to those people and ask them why they cancelled but if you are the one getting the email every single time there is a cancellation, then that may very well be a source of stress for you. So, a better strategy would be to hand that off to a support rep or to hire somebody who’s sole job is to go out there and email those people and aggregate their replies and put them into a spreadsheet so that you can review it maybe once a month or something like that. And what that does is it essentially offloads it and aggregates it all into an hour at the end of every month that you look at that spreadsheet versus once a week or two or three times a week you’re getting these emails that you have to go in and you have to make sure that the account is cancelled and you have to go out and send an email to that person or ask them why they cancelled and then you see the response. All that stuff can be detrimental and instead, if you’re outsourcing that responsibility to somebody else, you are consolidating all of that into one single interaction instead of 15 or 20 throughout the course of the month.
Rob [19:27]: Yeah. Virtual assistants, bookkeepers, I mean we’ve covered this before but these are the things that had a major impact on my ability to get more done and to be less stressed about it when I made that shift from trying to do everything myself to hiring these folks out and I don’t know, I can’t say enough good things about it and I think that the cancellation stuff you said is a good deal. I think customer complaints get old and having one or two support people who can kind of feel bad upfront after you’ve dealt with stuff for a few months and you get a feel for it and the complaints or the feedback aren’t helpful anymore and you know that it’s either someone just being angry or it’s not a good fit for your product or whatever. As long as it’s not something that you’re not missing or ignoring, then it’s definitely something that I think there’s value [?] yourself from this type of feedback and that virtual assistant that can certainly help by handling score for you.
Mike [20:20]: The fourth strategy for dealing with these situations is to see if you can eliminate the source of whatever the stress is. So, if you can fix the underlined problems, then the symptoms of the stress go away. So for me, for example, the vacation stresses that I used to feel was that I would worry about paying for it afterwards but of course when you’re on vacation, then that becomes an issue that you think about why you’re on vacation. So you don’t enjoy your vacation nearly as much. And instead, for me, I just decided to say for it beforehand and that way, when I was on vacation, we would go out to breakfast, we would go out to lunch, we go out to dinner, and I just didn’t care how much it was going to cost because I knew that I already had the money to pay for it. I wasn’t going to have to go out and do any sort of consulting work or pick up a couple of extra weeks of work or work extra hours or anything like that. It was already paid for. It was already taken care of and handled. So, I was just able to enjoy myself completely as opposed to worrying about what was going to happen down the road. And there’s other places where you can eliminate those sources of stress and we talked about some of them more already about being able to outsource or just avoid them, but at the core of this is being able to completely eliminate the source of whatever that stress is.
Rob [21:26]: And I think we tend to have more options than we think. I think that there’s a learned helplessness that some folks fall into is kind of trap and you can say, “Well, I’m stressed out because of this and I can’t change it.” But there’s almost always a way to change it, and it may not be something obvious or it maybe something that’s difficult to do but sitting down and taking a retreat to figure out if it’s big enough and worth it, or just spending 20 minutes in writing down 10 solid ideas of how to eliminate something. One of those is going to kind of come about and be a feasible idea, I would bet. Even if you have something like, “Well, I don’t have enough cash to pay for this.” Well, it’s you’re not tied to your current income if you’re an entrepreneur. And so, could you do a really quick info product. Could you just go sell some consulting really quickly if you have a name recognition or you have some old clients, like there are a number of ways to get around things that seem insurmountable but you actually sit down and think about them, there tends to be a way to get around them. Another thing I would do is talk to folks in your mastermind, right and say, “This is a problem I have. It’s really bothering me. Can you help me figure out ways, think of some ways that I could get around that?” I think that’s just a strategy that can help a lot as well.”
Mike [22:38]: The fifth strategy for dealing with some of these stresses is to adapt to it. Are there ways that you can change how you think about the problem or can you reframe it? Or can you adjust your standards? If you’re building something and you’re disappointed or frustrated with how things are going, maybe it’s time to adjust your standards about what your expectations were for that particular thing, whether it’s for a product or whether it’s for a particular marketing strategy that you’re trying. Focus on the positive elements of what it is that you’re doing and make sure that they are realistic, because if you’re trying to do something and let’s say you’re trying to build an email list of 25,000 people and you’ve never built an email list before, then 25,000 is probably a ridiculously high number that is just out of your reach, so it’s going to be frustrating, it’s going to be stressful. And just by reframing and adjusting your expectations about what your current capabilities are, then you can reduce the stress that’s going to be caused by that. Let’s say that you’ve set a deadline of 12 months to get that, and it could be very, very difficult for you to do that. But, if you look at that and say, “Well, I’ve never done this before. This is a learning experience for me and I will learn how to do this better in the future.” That right there has reframed your expectations to say no, it’s not about getting the 25,000 subscribers. It’s about getting as close to that as I can and learning as much about the process as I can, not about that end piece of it. So, in a way, you’re kind of adjusting what your goals are and what your expectations around those goals are.
Rob [24:04]: You know, one thing that helped me with this is this book called A Guide to the Good Life: The Ancient Art of Stoic Joy. And I was a bit skeptical of going to it. I mean it’s kind of been an interesting title and stoic is something that seems to be kind of all the rage or whatever and a lot of people are talking about it. But, to be honest, I really enjoyed this book and it’s written by a philosophy professor I think he is and I love the way he ties everything together and basically, the idea of stoicism is not to be some cold-hearted person who never feels anything. But it’s to not hang onto everything. It’s to not be stressed about everything. I mean that’s really what it comes down to. There’s some other elements to it and I took so many notes from listening to this book about different ways. They have things about dealing with difficult people. They have things about even with your internal strife and it’s just a mindset thing. It’s just kind of a life philosophy. So if this is something that you struggle with which I certainly do kind of feeling stressed often and having kind of an ongoing anxiety, I definitely recommend this book, A Guide to the Good Life: The Ancient Art of Stoic Joy.
Mike [25:09]: Yeah, I’ve read that. I would definitely recommend that as well although I guess you listened to it instead of read it, so.
Rob [25:15]: Right. Right. And so, in terms of reframing it and adjusting your standards of focusing on the positive elements, I mean that’s really kind of the main core message of the entire book.
Mike [25:25]: I think the last part of today’s podcast is going to be about some of the different stress recovery activities that you can use to help deal with some of the existing stress and I think if you just go and do a quick Google search on how to relieve stress, you’ll find a lot of, I’ll call them really basic types of things that really do work. So, for example, you’ll find things like walking and exercise, going on vacation, socializing, listening to music, doing any sort of meditation, yoga or massage, self-reflection tends to be up there as well, I find journaling helpful for example and then any sort of movies or comedy shows, or anything that gets you to laugh, those are all typical stress recovery activities, but those are things that are essentially coping mechanisms for existing stress that you may or may not be able to do anything about, and if it’s possible to completely get rid of those stressors, then that’s definitely a profitable course of action than to deal with the symptoms after the fact.
Rob [26:20]: I found that under the right circumstance working helps me relieve stress. It depends, and it’s not if I’m working super long days and it doesn’t help me, but if I’ve been away from work, and I’m stressed about something that needs to get done or stressed about something that I’m uncertain about, then sitting down and making a plan and kind of writing it all out in a notebook or writing it all out and just making sure that I can see the vision in the next 30 or 60 days, that helps me quite a bit if I’m stressed about kind of an unknown because I think that’s something that freaks a lot of people out, me included is not knowing what’s next, right? It’s about having this kind of unknown blackness over the next 30 to 60 days that you can’t see or it’s about having a specific scenario like, “Boy, I have this big webinar next week and I have no idea what I’m going to talk about or I have this talk to deliver and I don’t know what to do or the business is not growing and I don’t know what to do.” As soon as I have a plan of action or game plan, that’s when my stress tends to go away and then I want to go into work mode and actually execute, grind it out, and get stuff done. And so, I think that could be another way is to kind of make a plan on how to do things to remove that kind of unknown that stands ahead of you.
Mike [27:26]: Yeah. It’s interesting you bring that up. That actually made its entry into one of my talks from MicroConf I think the year before last where I talked about the fact that fear of the unknown is something that people are much more afraid of than negative consequences and it’s not knowing what’s going to happen or how you’re going to deal with the particular situation is way more stressful than knowing that things are going to turn out poorly and I could definitely see how if you don’t know what is happening in your business or how you’re going to deal with stuff, it’s sitting down and going through some of that work and some of that planning effort can help out. But obviously, if you’re procrastinating about working then that’s not going to help, but there are certain circumstance where I can definitely say that helping out a lot.
Rob [28:06]: Yeah. And I think if you go back and watch the two talks from MicroConf where Sherry basically covers this type of stuff in her talks about how to kind of stay mentally fit and stable while you’re starting up. She has a lot of good mechanism and even a breathing exercise that can help with this kind of thing.
Mike [28:24]: One of things that we’re going to do in this episode is we’re going to link up in the show notes to helpguide.org and there is a specific article on stress management that you might want to take a look at. It’s got a lot of good information on not just how to go through and take a look at some of the different stressors in your life, but how to go about coping with them as well and they’ve got six or seven different stress management techniques that you can use. Some of this podcast episode was pulled from that but not a lot. So, there’s a heck of a lot more good information in there. So if you’re feeling any kind of stress about your, either your business or your personal life, definitely head over to that link or check it out.
Rob [28:59]: As a closing comment, I can’t think of a time when I was stressed about work when my business was growing. So, I think that one of the remedies for feeling stressed at least for me is to be successful. It’s to be getting the end results that I’m shooting for in my work and I think that wraps us up for today. If you have a question for us, call our voicemail number at 888-801-9690 or email us to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Out of Control by Moot used under creative commons. Subscribe to us on iTunes by searching for startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening, we’ll see you next time.
Episode 244 | Competition, Transparency and Funding with Baremetrics Founder Josh Pigford
Show Notes
In this episode of Startups For The Rest Of Us, Rob interviews Josh Pigford, the founder of baremetrics about competition, transparency, and funding.
Items mentioned in this episode:
Transcript
Rob [00:00]: In this episode of Startups For The Rest Of Us, I talked with Josh Pigford, founder of Baremetrics about the good and bad of competition, transparency, and funding. This is Startups For The Rest Of Us episode 244.
Rob [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 and Mike is on vacation and we’re here to share our experiences to help you avoid the same mistakes we’ve made. So Mike is out-of-town in Hershey, Pennsylvania with his family and so this week I decided to bring Josh Pigford, founder of Baremetrics on the show because he has a lot of unique experience. He has bootstrapped a SAS business for the past couple of years and it had a great growth trajectory and amidst that, he’s had a ton of competition crop-up. He’s also raised a small round of funding to help with his growth and he’s been very transparent with all of their numbers actually published a dashboard with all of the growth numbers and the lifetime value in turn and pretty much opened a kimono on it and that’s at demo.baremetrics.com. So I talked to Josh about all three of those topics because of anyone I know he’s really in the midst of the throws of competition, funding, and transparency, so I hope you enjoy his takes on these topics. Let’s dive right into the interview. So today I have the pleasure of speaking with Josh Pigford. You probably know as the founder of Baremetrics. You haven’t heard about Baremetrics that they are one in click analytics for stripe. So for using the subscription API with stripe particularly if you have a SAS app, Baremetrics gives you a really cool dashboard of all your numbers and your turn and lifetime value and all that kind of stuff typically the stuff that you spend a week or two with the developer trying to build out so it’s not something that most SAS providers want to spend their time doing, and Josh has the pretty unique story that he’s had strong growth since he launched. He got out ahead of the market and then raised a little bit of funding and that’s why I wanted to have him on the show today to talk about it. So, thanks Josh for taking the time to join us.
Josh Pigford [02:13]: Thanks for having me, Rob.
Rob [02:14]: Absolutely. All right. So I want to cover a couple of topics today in particular. The first one I want to start with is transparency. Transparency is something that you’ve been a big advocate of in the sense that from really early on in Baremetrics history, you wanted to kind of have a live demo of Baremetrics, of the dashboard, and so you’ve just opened the kimono and essentially, you show all the numbers for Baremetrics that’s at demo.Baremetrics.com for those who want to go check it out, and it’s your live numbers obviously you’ve obfuscated those customer names in there that are changed for the protection of the innocent but you have real lifetime value and your real monthly occurring revenue and all that stuff. Tell me a little bit about the motivation for it and if you think that’s been a plus or a minus for Baremetrics’s growth.
Josh Pigford [02:58]: Sure, sure. So we back in, I guess been a year and a half now, so February 2014, I had this idea like I need a demo for the software and I mean I guess I didn’t have to have one but it just seems like it was the easiest way to convey the value and honestly, it was all kind of the result of my own laziness so I thought I needed a demo and I could spend a ton of time pumping out like fake data and trying to generate enough fake data to look like I have a legit dashboard but I mean there’s a lot to Baremetrics so like there’s a dozen plus metrics in each of those, have their own individual metrics pages with even more in depth data on all of those. It would’ve taken so much time to put all together and I thought or I could just add a line of code and make my own stuff public. So, I went with the lazy route and at that time, we weren’t making a ton of money, we’re kind of doing like I don’t know, a few thousand bucks a month and so just decided, “I will put it out there.” And there’s I guess a little bit of altruism to it in the sense that I’ve been building software for the web for a decade and I always appreciated other people kind of given me a look into what their startup looks like successful or not, and there’s a little bit of that aspect of it but I mean it initially was a bit of laziness that turned into something bigger.
Rob [04:16]: Sure. And now that you are obviously substantially more than a few thousand dollars a month and since your revenue is public, I don’t have it [?] but it looks like I think your MRR right now is 32,000 or 33,000. Now that this takes a little bit bigger and you have competition and that kind of stuff, do you – and maybe regret is too strong of a word but do you still think it wasn’t a right choice and are you happy every day when you wake up and see your numbers in public?
Josh Pigford [04:38]: So it’s a mixture. It was at the right move, absolutely, I mean so many things came out of it so, kind of the biggest plus was that Buffer, another startup decided to make their stuff public through Baremetrics as well. And then they’re substantially larger. I think their MRR is like $400,000 a month or maybe like 500,000. So it’s a lot of money and a lot of people follow them. And so that would not have happen had I not made mine public because like kind of that wasn’t even an option to make all these revenue public, or at least not in this like easy one-click setup. So, I don’t regret it. It was definitely the right move but man, did it bring up a number of copycats that poured in after that was substantial. So, yeah, but there’s been a couple of I would say legitimate competitors but the [?] 90+% of them, a lot of them just literally, directly ripped off like the design and everything. So, it’s one of those things like it’s sort of a bit of a gold rush in a sense that the way I certainly can’t compare of like their metrics to the app store but I mean in the same way that you hear somebody makes a lot of money on the app store, “Oh, I can do iPhone apps too.” And they copy lots of people and it’s sort of the same as you see but they’re not much more scaled but that’s kind of happened here. And so that’s just really annoying more than anything like that’s the part that’s so frustrating and then the other aspects of it like because we have to be kind of private, we don’t want to surface individual customer’s data. I feel like we have to give a somewhat scaled back demo. And so, the fear is that that kind of almost implies. The Baremetrics doesn’t do as much as it can, but it does we just can’t show it all from the privacies side of it, so.
Rob [06:23]: That’s interesting. Yeah, I hadn’t thought of that. So, as you’re clicking and digging into detail, you can’t necessarily show every screen of –
Josh Pigford [06:29]: Exactly. Like I can show a couple of screenshots here and there but I mean I can’t let you, we get into the okay well especially when we start talking about like customer profiles and stuff. We have to, at that point have to generate a lot of fake data because we can’t show any kind of customer identifiable information there. So, we’re looking at different ways to handle that but it’s like there’s pros and cons but the pros is far with the cons.
Rob [06:52]: Yeah. Right. And so it sounds like you do feel like it brought some competition once folks saw your growth curve, but the pros were that it gave you this plastering on.
Josh Pigford [07:00]: Sure. Like if you look at our graph, like MRR for instance, the big inflection point is when Buffer made their stuff public because it just instantly brought a ton of exposure. And so it changes the angle of the graph permanently. And so, yeah, from that perspective, it was unquestionably the right move.
Rob [07:19]: Right. And for folks who want to check that out, it’s at buffer.Baremetrics.com. Another thought in transparency, I want to hear, I get your thought on it. I think there’s been a movement towards it and I think the first time I heard someone devolves at the revenue a few years ago, I can’t even think of who was like [?] has done it for a while, you have become famous for doing it. It blew me away right it’s this totally unique groundbreaking thing. More and more companies are doing it now, do you feel like it might be losing some of its impact and losing the maybe the bump that if someone came out today, let’s just say I came out today and exposed all of drips back in stuff, do you feel like it would still be worth doing or that the pros maybe kind of getting water down and a lot of people are doing it?
Josh Pigford [08:04]: I don’t know that I would suggest, I mean that’s kind of mixed back here because we sort of kind of partnered with Buffer and so it just opened startup thing where so baremetrics.com/open. You can see, I don’t know, it’s going to be seven or eight different startups that have all made their Baremetrics dashboards public. And like there’s this aspect of like wanting to support people being transparent because I think it can be interesting. The problem is, transparency just solely for transparency stake I would say has lost its kind of gimmicky at this point. I think when you can use it to tell some kind of story, right, like for us, the story it tells is like the Baremetrics story, right? Like it is a demo of our software. It makes complete sense from that perspective and the fact that the numbers, or our actual numbers kind of has this like, “Oh, that’s neat” kind of aspect of it that’s I think kind of been going a long way to maybe adding some sort of face to the company, but like [Josh Mo’s?] random billing software or like I don’t know, maybe he sells some subscription T-shirts or something like or his numbers are all that interesting, probably not to all startups but maybe to other T-shirt companies. And so, like if he’s taking the role of trying to help other T-shirt companies like show you how to start them and kind of the ups and downs, okay, like I think that can be interesting. Or like on a regular basis taking a look at your numbers and saying, “Okay. We had a big spike in user turn, let’s talk through that publicly about like why that happened and how we can fix it because I think that’s helpful to other startups.” But I think a lot of people just like start posing their numbers like because that’s just what people do, and I think there’s a little bit of vanity to it as well like I was guilty of it at first in the sense of like I would post on Twitter like our MRRs are X and some of that was just I’m excited because “Wait, hey, the company is growing.” But I mean to some extent sure, I’m like I feel like I was bragging to some extent too and so, I tried to be a little bit more humble about it at this point but –
Rob [10:07]: Sure. Yeah. I’ve definitely caught some people or in my mind like I feel like certain people are transparent to truly help others and then some folks, I do get the bragging vibe from them of like, “Look at me, look how cool I am.” That thing, and it gets an easy trap to fall into for sure.
Josh Pigford [10:25]: Yeah. And especially early on, like and if you feel like you get a little it attraction and especially we’re like it’s easy to look at yourself from the lens of basically the people that are in your little circle of influence and if maybe you’re doing better than the 10 guys that you hang out with then it’s like it can quickly it can kind of become a bragging thing but like if you’re doing it just to kind of be like a shell off, I think it kind of turns people off.
Rob [10:49]: Right, right. Yeah, there’s an interesting thing I was thinking about. It’s like there’s ongoing transparency which is kind of what you’ve done and what Buffer has done and then I think there’s like point in time transparency which you just touched on where you might write a single blog post about how churn went up, this is what it was, this is what we got it to, and here is what we did, and that’s super helpful, right? But you’re not necessarily just saying, “Here’s my churn every day. You can come and look at it. I think that point in time aspect is something that I’ve personally lean towards like I will, you better MicroConfs, I will often devote everything. I do it once a year if that and it’s not necessarily a commitment that I’ve made but I have an open source, or not open source but I have made everything open but I think there’s some value in transparency. I guess it’s just, yeah, I just wanted to hear your take on it.
Josh Pigford [11:32]: Well, I mean earlier on, the first and that is six to eight months after I made our stuff public, I would do a monthly blog post like, “Hey, here’s the July update of our numbers.” And what kind of touched on what worked and what didn’t but I mean to some extent it was like it was a point in time thing and not necessarily all that useful, and so we stopped doing those but like to me there’s a lot more value so content marketing works really well for us and specifically made once a week writing, end up of a blog post as I’m able to push up that week but like trying to just genuinely be helpful to other people and for us our target markets and other startups so rather entrepreneurs and so that’s sort of an easy thing for us, but I think like transparency when like when it matters to other people is what’s more interesting, right? Like I remember a couple of MicroConfs ago, we talked about making your numbers public like the one where you have shown, not this past but like a couple of months ago but the one before that would drip yeah, and how that just like showing the growth of that was so interesting to me and kind of opened my eyes a little bit about like, “Oh, okay.” So like that’s probably what something more successful looks like, well actually that might have been three years go.
Rob [12:55]: It might have been HitTail.
Josh Pigford [12:56]: HitTail, that was what it was.
Rob [12:57]: Yeah. So, this is when you were back before Baremetrics, right? This was when you –
Josh Pigford [12:59]: Yeah, yeah. So this was PopSurvey and contemporary and like stuff was in my head, I kind of go in okay but also at the same time and sight it was awful, and now that I’ve like you to have a different level of success there. And so, but when I saw like how HitTail, how you’re able to grow that and it’s like that’s when I sort of thinking like okay, like, “I could potentially make some software that could make a lot more money than it’s making right now and I just needed to find a different thing to do that with but that’s where it was super helpful, right?” So for you to release those numbers, because it was a motivator for me.
Rob [13:31]: Right. Yeah, that’s a good point. I want to switch it up a little bit and talk about funding because you’ve been a bootstrapper for a decade or more. You launched PopSurvey, you had Temper, I’m sure there’s many others that I haven’t heard of that you bootstrap. When you launched Baremetrics, it was getting great, growth numbers and at a certain point you were offered funding. The numbers were public, I’m pretty sure. It’s a half million dollars and you took the funding. And I know that there are some folks out there that say, “You should always take funding. You should never take funding.” And I’m not in either of those camps and I know that you weren’t either, so I’d like to hear what your motivation was and what your decision process was like when you were considering, do I keep Baremetrics all my own or do I take some money and essentially move faster but now have some investors that I’m working with?
Josh Pigford [14:21]: Yeah. So for me, there had been this point where Baremetrics was doing from like a growth perspective, talking in percentages, I think was doing between like 20% and 50% every month growth with MRR and so at that point, and our numbers are public so those are the kind of growth rates were investors start like, “Oh, that’s kind of interesting. How can I have the piece of the pie?” So I started getting all these phone calls or emails or whatever and I humored a few people but for the most part it was just kind of the typical like I’m just not comfortable with giving that much of the company and we just aren’t really jiving or you sound like a jerk, like all these kinds of things where it just wouldn’t sit right with me and I was fine with where we were at like I think when most of the funding email started, it was me for the most part and then like I had just hired another engineer. And so like, we’re doing fine and I didn’t have any really big aspirations at the time but I was still kind of riding the wave of like, “Oh, this works.” And so, yeah, then this $500,000 thing came up and just the terms ultimately like I mean honestly, if you start thinking of the health of the business and maybe what my goals are for the business, I would’ve been an idiot to not take it and I think that’s where my mind shifted change was like I was proud of the bootstrap aspect of it but when you start looking at things from a different perspective of like well the things that we could do with this money and what are the sacrifices relative to that. If the sacrifices aren’t anything I’m opposed to then well yeah, why not? So the evaluation, there’s 500,000 for at a $10 million evaluation which equates to 5% and –
Rob [16:06]: So they don’t have control?
Josh Pigford [16:07]: No, and so technically, so it’s a safe like they don’t even have the shares. They get the shares in the event that we sell or that we raise an all-around –
Rob [16:14]: Raising it around. Right. So it’s essentially a convertible note, right, it’s a loan –
Josh Pigford [16:19]: But it’s not even that, I don’t have to pay it back unless like if I shut the business down, if there’s no time, there’s no date attached to anything, like nobody’s hand can possibly force me in any perspective. So, like it would’ve been dumb for me to not take it.
Rob [16:35]: Yeah. Those are some very generous terms.
Josh Pigford [16:37]: Right.
Rob [16:38]: And when you’re making that decision, there’s this money in the table and obviously the terms are favorable and that’s the interesting part is I have stopped saying, “I won’t take funding.” And I’ve started asking myself these questions like when I go and refuse or whatever like, “Under what circumstance would I?” And it’s a different way to ask it but obviously, there were very appealing terms. You took the money. Did you know when you took this half million dollars, how you were going to spend it?
Josh Pigford [17:03]: Yeah, absolutely. I was itching to hire some people like after I started thinking through, when that was suggested as, “Hey, we can put in this amount of money.” Like I instantly started sitting down and brainstorming of all the ways that I could spend it and ways that what does Baremetrics need to grow and to see the goals through that I had that can keep Baremetrics growing and people ultimately what was going to make that happen. So, that was an easy one, for sure.
Rob [17:34]: And how long? Has it been about a year now?
Josh Pigford [17:36]: So, it’s been 10, let’s see, we closed on the deal in I think September.
Rob [17:42]: Okay. So like 9 months, 9-10 months, yeah.
Josh Pigford [17:44]: Yeah. Somewhere around there.
Rob [17:45]: So now you have some perspective and some distance from it, was it the right choice? Was it a good choice for you?
Josh Pigford [17:51]: Yes, absolutely the right choice. I think in [?] sight, I think I would’ve done a few things differently. There was a little bit of a, “Holy crap. There’s half a million dollars today in my bank account now. Woohoo. Let’s spend some money, right?” And I mean part of it is the investor wants you to spend their money. They’re giving it to you not so it just sits there in a bank account but at the same time like I probably spent too fast and at the time I was still maintaining the like 20%-30% average growth rate per month and then like shortly thereafter, it started the growth rate, it started like not tanking but it wasn’t 20% or 30% or more.
Rob [18:28]: Leveling out.
Josh Pigford [18:29]: Right. It’s just like that was inevitable but it happened over the course of 30 to 60 days like it happened pretty quick and I think from that perspective, I’ve kind of ended up overshooting early on how much I was spending. So we’re like at a point now like we should be fine without like needing to raise any more money but it’s just like having to be a little more cautious with our spending money at this point.
Rob [18:51]: Right. Yeah. When you’re growing like that, it’s easy to get ahead of yourself and say, “Well, in six months, we’re going to be at 50,000 or 60,000 recurring revenue and therefore we need to staff up to all of these people and it’s easier to spend money quick when you’re growing up fast, I know the feeling. Now, you leveled off after you raised the money, did you catch any flock from your investors? Did they expect that or were they kind of concerned when that happened?
Josh Pigford [19:11]: Yeah. So, they’ve just been helpful. We have a roadmap wise with the stuff that’s on the roadmap is partially influenced by customers. It’s partially influenced by like investor input about ways that we could potentially expand from a market perspective. And so, if anything, they certainly weren’t like, “Oh man, this is best bad news.” Like sort of, “Hey, yeah. There are some things that you work on to probably fix these things and so that’s us kind of getting [?] now.”
Rob [19:40]: Right. Now, typically, if you’re going to raise an angel round, the majority of folks are going to give you this money, expect the series A then a series B and they want $100,000,000 evaluation, right, or they want $100,000,000 market. Was that the expectation that was communicated to you or did you guys talk about kind of the fun strapping around where you said, I’m going to raise this single round, I want to use it to get the profitability and build a nice profitable business, was any of that discussed?
Josh Pigford [20:05]: So some of those discussed, like if we think of the purpose of my funding round, my money technically came from General Catalyst which is a big VC. They’re not typically like angel round investors. But as part of this stripe specific fund the faith created and they’re like one of the main investors in stripe. So, and for them it’s like it’s a mixture of sure, they want their money back with some returns on it but it’s also this sort of load confidence in the stripe ecosystem for them so like marketing play is not necessarily the right phrase but it’s like for them, it was just as much about saying like, “Let’s beef up. Stripe, they’ve got however much hundreds of millions of dollars put into the stripe. So, if they can make stripe more successful, then this is like then that kind of pays off indirectly for them.
Rob [20:56]: It’s almost like a strategic, it’s a strategic investment for them, right? And to build the ecosystem.
Josh Pigford [21:01]: Exactly. And so that’s kind of again, like that was one of the way that I was sort of unique from that perspective. And so that’s sort of when I also have a little bit stress from the, “Oh, man. I’ve got to get their money back” from a I’m a good human being perspective like I don’t want to lose their money but at the same time they’re not like screaming at me about anything [crosstalk] –
Rob [21:22]: Yeah. That’s nice. So, to kind of wrap up the funding portion, we talked about the advantages and kind of the no brainer aspect of raising this round for you, you’re nine or ten months out, have there been any major kind of negatives or regrets or like bad things that have brought about?
Josh Pigford [21:38]: Not really. I think in hindsight I would be a lot more careful, and this is just naiveté on my part without the evaluation side of things because of you think of it in terms of how much of the company are getting up like okay, at the end of the day kind of giving up 5%, fine, whatever. Like I would give up more, right? So I have thought like, hey, what about I could actually technically add onto the same round even nine months later and that would be great, more money, right? But the probably is I kind of got like a Silicon Valley evaluation which in a lot of times are a little inflated. And so, it makes it a lot harder for me to raise additional funds if I wanted to because a small time investor is like, that’s not worth it for them at that evaluation because they’ve got such a tiny piece of the pie. So, I think in hindsight I probably even though like they suggested the evaluation, I can hindsight I probably would’ve should’ve downplate that a little bit so they get easier to raise more.
Rob [22:41]: Yeah, right. Instead of potentially having to have a downround later or –
Josh Pigford [22:45]: Exactly, right. Because nobody will stop so –
Rob [22:47]: Right. Do you watch Silicon Valley on HBO?
Josh Pigford [22:49]: Yeah, it’s great.
Rob [22:50]: I love that show. So remember when he negotiates with the VC because he wants a [?] evaluation?
Josh Pigford [22:55]: Right, like that’s that.
Rob [22:56]: Yeah, yeah. I totally get it.
Josh Pigford [22:58]: And it was sort of one more point here to the whole evaluation thing like I raise money from a big VC fund whereas there is a whole slew of by single person angel investors, a lot of them completely disconnected from the tech scene who would love to give people money for pretty decent evaluations and like not have a lot of demands about things, like I think that’s sort of where the dogmatic bootstrapper mindset comes from is all the really awful junk that they read on tech grunge and that’s not the norm like. That’s not what most of the investment world looks like just because the rest of it is just boring, it makes for bad news. So, I think like if people are interested in like say they just want $100,000 like a really long way for them. You can probably find one angel investor or a few angel investors who would come in together at a decent evaluation to give you that money and that would just be genuinely helpful or maybe they’re completely hands off and they just kind of want to get their hands dirty in the tech space. So, I think if people are interested in that they should like ignore the hype that they read elsewhere and just kind of start poking around places like AngelList to find like individual angel investors who were just kind of want to help people out because they exist for sure.
Rob [24:22]: Right. Yeah. I like the term colon from customer that I usually call it fund strapping and that’s where you raise a small seed round of I like to think of it as between 100,000 and 500,000, I’m kind of being arbitrary about that but I think that’s probably the range you’d want to do it and you raise it from between one and five angels and it’s like you said, they don’t take control, they’re going to board sit. They can’t kick you out and then you use it essentially to get to profitability and it’s more of the way that traditional businesses are funded say a restaurant or a carwash or dry cleaner, you’re just probably going to have a lot of higher profit margin than those, so it’s an interesting part.
Josh Pigford [24:55]: And I don’t want see, that’s the thing like there is I guess a small possibility that it would make sense for us to try to raise a series A or something like that, but what I am stanchly opposed to is having to be the founder, a founder who just raises money all the time because there are so many that do have to do that where the CEO is essentially the guy who like, okay. He raised around well, six months later he’s going to start again because it takes six months to close another realm. He has to keep doing that over and over and I hate that junk. So, I have no intention of doing that. Profitability for me is the goal.
Rob [25:32]: Right. Yeah, I think of it, I use the phrase building slide decks instead of building a business, right? And I prefer to build the business, so [crosstalk]. Cool. Okay. So, our last topic of the day is competition. I like to think that any time you have a good idea and you execute on it and you achieve some success, you are going to by nature bring competition into your space and you have done that well, you had a good idea with one-click analytics for stripe. You obviously have success and more public about it and so many competitors have sprung up around Baremetrics. Do you think that competition is good? By I say good I mean beneficial to you or because you kind of hear both mindsets of well, competition validates the market but you are already in the market, you had already validated that was working so do you feel like, boy, having more competition is helpful and it’s generating more attention around the space or do you feel like the more crowded it gets, the harder it is to be heard above the noise?
Josh Pigford [26:30]: So, to me I think of it from the point of view of the customer, right. So, competition is ultimately good for customer which I think ultimately is good for us because we’ll hear indirectly a customer say like, “Hey, I was checking out their competition and they had X feature which means, translates to they solve X problem that I have.” So, can you solve that problem for me? Well, maybe not right now but if I hear it from enough people, then yeah, we’ll try to solve that problem for you. And I think that it’s good from that perspective or it stops being good is when there are two dozen people or companies who are all kind of the same. And so, we’re trying really hard, I think this sort of space, this sort of like analytics that you don’t have to think about or work to set up kind of set up a space. We’re at a point where we’re kind of start to kind of fork where there’s a lot of people playing the baseline metrics game where click here, connect to stripe account and you get MRR lifetime value cheering all these stuff. But on that level, it’s not like it’s useful but there has to be something else pass that I think for it to be really valuable but that also it’s really difficult to build but that’s where I feel like we’re starting to kind of fork off on our own is trying to move away from my numbers game and move into the genuinely useful for making business decisions game like helping people understand why things are, what they are, and how to fix them and that kind of thing. And so I think the prevalence of so many competitors right now has helped pushed us in that direction which I think is ultimately a positive thing, but I mean like holy crap is that annoying.
Rob [28:09]: You’ve seen people pop out with your whatever and I don’t know anybody who’s done this but I would have to imagine because I’ve seen it with my stuff, people are popping up probably using your same tagline, probably using names that are similar to use, probably using designs that are similar to yours.
Josh Pigford [28:22]: Oh, sure. That’s amazing, I mean almost there’s one that I’ve seen making the rounds a lot more maybe their content stuff like the stuff that they randomly post on their blog I’ve seen a lot and I’ll go to their software or whatever. It is a direct rip off of Baremetrics and it’s just like how do you sleep at night? And people are using our logo but like changing from a different shade of blue or something, I mean just stupid stuff that’s like at the end of the day, copycats, their motivation is purely to try to make a quick buck and in a year they won’t exist. But for the year that they are around like, I mean you’re like the annoying kid at school that keeps tapping me on the shoulder like, go away. That’s kind of how I feel about them.
Rob [29:04]: Yeah, no, that make sense. You were in the space where the onboarding is really easy, right? It’s one click to get in, it seems like that would be a double edged sword. It’s easy to get people onboard but then it’s easy for people to switch. Yeah.
Josh Pigford [29:16]: Switching cost are way too low right now and so yes, that is probably our number one problem from like a charm perspective is that switching cost are so low which is in the short-term good for a customer because it gives them a lot of options. At the same time, it makes for a customer who doesn’t want to get invested in their software which maybe for them, that sounds like a good thing. But, I think when you’re like so wishy-washy about trying to solve at the end of the day solve your own business problems, being wishy-washy and not saying like, “Here’s what we’re going to use. Here’s what we’re going to stick with, and this is what we’re going to base our business around.” When you stop acting like that, you end up with stuff that’s just not useful at all. And so, yeah, so we’ve got a bunch of stuff that’s coming out soon that the switching cost will be much higher and that sounds a little like just rude, but at the same time, I think it ultimately will make for software that people in the long-term get a lot more value out of.
Rob [30:11]: Right. Well, I mean it’s hard if you have 20 people in the space, or 15 people in the space with no maybe one clear leader and everybody else is kind of milling around creating noise. The customer is actually not getting the best software because everybody is competing whereas if they’re only two or three in the space and they’re really [dooking?] it out, then you’re going to get some awesome new features, right? You’re going to be innovating against each other and that kind of stuff. So, I think it’s interesting that it’s essentially, it’s like the one-click stripe analytics as you said has almost become a baseline for a lot of these products and you know how to rise above it which in the short-term is probably painful and it’s annoying to see all the competition but in the long-term it’s going to make for better products and just going to make you move pretty fast which I think is better for customer.
Josh Pigford [30:55]: Yeah, 100% agree with that.
Rob [30:57]: Cool. All right. So you’ve actually have a customer, I don’t know how – or I’m sorry, not a customer but a competitor crop-up who’s offering one-click stripe analytics for free, so they’re just kind of doing a free-mium model, when you first heard that news, I can imagine the look on your face, was that brutal was it were you kind of like, “Yup. I knew this day would come.”
Josh Pigford [31:17]: I was totally wasn’t surprised. I think start kind of poking around to see okay first, how are you even doing that? Because that gets expensive to store massive amounts of data and processes, like it’s expensive. So it’s like how are you guys pulling that off, and then you start realizing, okay. This is actually like a lead generator for their other business that which is a completely legitimate business, the other one is and lots of people love them but it’s like when you’re like releasing tool just as a lead generator, then no way does that software sort of stand the test of time because it’s ultimately like a loss leader for you and that’s just so hard to maintain especially on a small team. So they don’t worry me and our customers feedback on that has been basically the same that like, “Hey, we’re using this other one because it’s free but like no way would we ever stop using you guys. Their stuff is just not good.” So, it doesn’t bother me and in reality, so in the next month or so, hopefully, we’ll actually have a free version. I think this plays into our long-term plan, like in the short-term we actually may take a little bit of a hit but in the short-term, yeah, we’ll start playing a little bit of the free game, the free-mium game and see how it plays out. We haven’t, because we’ve never had a free plan, I mean a year and a half in and we’ve never tested it. So, it seems a little short-sided of me to not at least humor that as a possibility.
Rob [32:43]: Right. As a test, and so that, I mean it was kind of my next question is like so how do you compete with free because obviously this is going to happen to anyone who has a good idea and has some success, we’re eventually going to get a free competitor and it sounds like so far, number one is you know the game. You’ve been doing this now for 18 months, 2 years. And so, you know what it takes to really run this service in terms of cost and team size and then continue to innovate. And number two, is potentially fight fire with fire, maybe release a free version and to continue to build in an innovator, you have to stay ahead of the game. You have to keep building features that they don’t have.
Josh Pigford [33:19]: Exactly. It’s just one of those things where you kind of have to just, I know what our goals are and I can’t make any assumptions about what my competitors’ goals are. I like the types of problems that one competitor is solving for their customer base however small it may be is not necessarily the same as what I’m doing. And so, it would be super short-sided of me to say like, “Oh, well they just launched some feature. I need to do the same thing.” No, not necessarily, like their customers may want that but our customers may not. Or, the way that we solve that problem is totally different. So, I think it’s just being hyper focused on what it is that you do and you do well is kind of the way to not worry about competition.
Rob [34:05]: Well said. All right, sir. So, folks want to keep up with you online aside from checking out baremetrics.com, what you get is one-click SAS analytics for stripe. How would folks keep up with you whether it’s blog url or Twitter handle?
Josh Pigford [34:20]: So Twitter is @Shpigford and I that’s really about it. I don’t blog much anymore.
Rob [34:26]: All right. I would recommend your podcast which is called Founder’s Journey.
Josh Pigford [34:30]: Yup.
Rob [34:30]: Is that right? I’ve been listening to it for the past couple of months and it’s essentially you reading some blog post that you’re posting on the Baremetrics blog and adlibbing, you’re adding more stuff which has been kind of cool.
Josh Pigford [34:42]:
Rob [34:43]: Very good. Well, thanks again for coming on the show today, man.
Josh Pigford [34:46]: Thanks for having me, Rob.
Rob [34:47]: That wraps us up for today. Thanks again to Josh for coming on the show. If you have a question for us, call our voicemail number at 1-888-801-9690 or email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Out of Control by Moot used under creative commons. Subscribe to us on iTunes by searching for startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening, and we’ll see you next time.