Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike review their 2015 goals and talk about whether or not they were able to achieve them and the reasons to why they were successful or not. They also set their new goals for the upcoming year.
Items mentioned in this episode:
Transcript
Rob [00:00]: In this episode of Startups For the Rest of Us, Mike and I look at our goals for 2016, and we review the goals we set in December of last year. This is Startups For the Rest of Us, Episode 269.
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.
Mike [00:29]: And I’m Mike.
Rob [00:29]: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. So where are this week’s, sir?
Mike [00:34]: Well, we have an email here from Simon who is referring to Episode 267 where we talked about scaling SaaS support. And he says, “Hi, guys. I’m a single founder, and practically speaking, the only employee, developer, support staff, etc. In that episode, Rob mentioned how the early days of DRIP involved a lot of hands-on support especially by the technical staff and Rob. I don’t have any employees, and I’m still looking to scale things up so that I can leave my day job. What suggestions do you have for a solopreneur such as me?”
Rob [00:59]: Well, you don’t want to hire a full-timer right out of the gate. You want to hire someone basically hourly, and that’s how I’ve been doing it since 2008 maybe, 8 or 9, which is when I hired my first support VA, they call themselves. But really it was just Tier 1 email support. And I’ve had folks supporting info products. We have someone who helps us with support for the Micropreneur Academy. And of course, SaaS apps, just help for products I’ve run. And frankly, until Drip, none of my support people ever worked full-time. It was always purely on an hourly basis. They would basically check the support queue once or twice a day as needed and respond, and they just build based on the hours that they worked. And it’s nice to do that through something like Upwork. Or if you don’t want to use Upwork, you can use Hubstaff to track their time because then they click the button when they working, and you’re really only paying for the hours they worked. But it’s a no-brainer. I don’t think it’s feasible if you’re still growing your app and you haven’t even quit your job yet to try to hire someone full-time. The economics just don’t work out at this stage.
Mike [01:56]: Simon doesn’t say it outright, and I definitely felt like this at one point as well, but it feels in many ways like support requests can’t really wait and you want them to be taken care of as quickly as possible. But I don’t think that most people have that expectation. When they send an email into support, they typically expect a 24- or 48-hour turnaround. And if you get back to them within 12 hours, awesome. But if not, then they weren’t really expecting it anyway. And a lot of times, those support tickets can wait probably significantly longer than you think that they probably could anyway. So that’s something else to keep in mind if you’re a little leery of going down the hourly support route just to have somebody essentially on-call for answering tickets that may or may not be coming in.
Rob [02:38]: Yeah. It really depends on your volume of tickets and how urgent they are. With most knowledge products as well as software products, there isn’t as much urgency as you probably think. And so if you need to hire someone, one thing I would advise, even if you’re going to hire someone part-time, is hire someone who is basically a full-time VA or a full-time freelancer so that they do have flexibility of schedule and they’re not just working in the weekends and the evenings. I had a couple of people like that, and it was a bit of a drag that boy, if they miss one evening because they had something, then it was like a two-day span until they checked in. That really, in my opinion, is unacceptable.
But there’s a lot of ways to make this work. I don’t like it when people come back and say, “Well, no. All the support is just really too technical,” or, “Well, I really need to get back to these people within an hour or two.” It’s like, “Pretty much no. If you’re a solopreneur, it’s probably neither of those is the case.” I know that it feels like that, but there are ways to do this. There are ways to set up a document with the process that people need to troubleshoot. Hire someone who’s intelligent, somewhat technical. I found a guy who was an old helpdesk guy, and so he doesn’t know how to code, but he was able to do some minor troubleshooting of people’s systems.
And it’s not a matter of, “Oh, this will or it won’t work.” It’s how much you’re willing to invest in terms of time to find someone and budget to pay. If you’re paying someone $10 to $15 an hour, you can get someone pretty good probably within your time zone who speaks your language. And they’re going to be pretty sharp, and they’re going to save you buckets of time. And it’s pretty valuable at this point to A, learn the skill of delegating this, but also to buy back that time.
So the other thing I wanted to mention before we dive into our 2015-2016 goals is that the first game from Patrick McKenzie’s Starfighter has launched. And if you listen to this podcast regularly, I’m sure you know who Patrick McKenzie is, formerly of Bingo Card Creator and the Appointment Reminder. He’s been a speaker at MicroConf several years in a row, and he’s launched his new app. It’s Stockfighter.io, and this involves some pretty in-depth programming challenges, and folks can play the game for free. And then certain programmers, as they rise to the top, I’m assuming they’re eligible for really high-end coding jobs in, kind of, a lot of the best employers or most technically oriented employers, in the Bay Area and then other places are looking to hire out of this pool of people who are scoring high on these games.
So it’s a cool freemium model in a way, right? It’s like a two-sided marketplace where you need to find developers, and you need to find people to hire. And they were able to quickly find people to hire, because everybody’s looking to hire high-end developers. But getting the developers in is always the hard part. And so Starfighters is basically doing it by building games that would interest programmers, and that have really difficult programming challenges. So if you’re interested in this type of thing, Stockighter.io looks pretty cool.
Mike [05:17]: Yeah, and definitely congratulations to Patrick for getting this out there. And it looks like it’s pretty involved. And I’m sure there was a huge amount of work that went on behind the scenes behind it.
Rob [05:26]: Yeah, and this is a long time in the making. They spent the last year plus developing it, and I know there’s been a lot of long nights. So it’s cool to see Patrick and his crew get this out into the wild.
Mike [05:36]: Well, I guess we’re going to dive right into our goals, huh?
Rob [05:39]: Yeah. So in Episode 214, we talked about our 2015 goals. And so those were the goals we were hoping to achieve over the past 12 months. And it looks like we each had five goals. And so we’re going to run through those briefly, talk about whether or not we achieve them or not, and why or why not. And then we’re going to look at our 2016 goals, something that we can look ahead and probably review again in 12 months.
So my first goal for 2015 was to 2.5X Drip, so to basically grow revenue by 250%. And we did achieve that. In fact, we achieved it a few months back. You know how I’m really bad at celebrating victories? I didn’t even notice that it had happened. It’s definitely a win for me. But in the sense of recognizing that it was a win, I think I need to work on that for next year. We actually 3.5Xed. There’s still eight more days left in the year here. But assuming that happens, then we’ll be at 350% growth for the year. So far, so good.
Mike [06:37]: Well, congratulations on that.
My first goal was to run a series of what I was calling life experiments. So that included things like going to the gym every day for a month, and getting up early, and eating differently, and various other things. And I would say this is probably about 30% to 40% successful. What happened was I had this list of things that I wanted to do, and the things I just listed were on that short list, along with one or two other things. And I got through that list and then saw that there was nothing else. And I said, “Oh, I need to think of something else to do for the next month.” And then I just didn’t do it, and I fell off the bandwagon at that point. So I ran out of stuff on the list and then stopped. But while it was going on, I stuck with it. So I would say that’s a partial win, and I’m not sure how to count that.
Rob [07:19]: Yeah. This was a tough one because it’s not easily measurable. We talked about the SMART last time, the, what is it, sustainable and measurable and attainable whatever. I think this one doesn’t necessarily qualify for all that. I think you probably want to make it more specific this year if you’re going to return to it and actually have 12 things, one per month, written out in advance. And then you can easily measure it.
Mike [07:41]: I think I had four or five. I think I started out with four, and then I added a fifth one, and then I just didn’t add any after that. And I think that was my problem is I just didn’t have enough to start with and I didn’t dedicate the time to following up on it and adding more to the list.
Rob [07:56]: So my second goal for 2015 was to return to the point where I could choose what I wanted to work on. Because especially towards the latter half of 2015, I was doing a bunch of work that was not enjoyable for me, and I had gotten away from this whole “I’ve run my own show and I can do what I want and have fun while I work,” and I just was not enjoying it in the latter half of 2014. And so this is one of those that is tough to measure, right? Because I had specifics in my head, but it’s hard to communicate them on the podcast without getting into the weeds. But the bottom line is yes, I achieved that.
And I was able to do it through two ways. One is I hired someone who, I don’t know what you call her, but, kind of, an executive assistant, I guess, you’d call. She’s remote. She goes through my email inbox and catalogs stuff, and handles some minor tasks like appointment setting and that kind of stuff. And that helped get me out of the weeds in terms of that stuff. The other thing I did is hired Anna, who runs customer success at DRIP, and has been helping with growth for the past, what, six, eight months. Both of those things allowed me to step a little bit higher up in terms of setting vision and setting direction, and thinking more strategically about things. And so within probably the first four to six months of 2015 I felt like I had returned to the point where I could choose what I wanted to work on again.
The interesting thing is towards the end of 2015, we spun DRIP off as its own corporation, which required a bunch of legal stuff because we have to deal with lawyers, and then move payroll and health insurance. All the stuff had to transfer. And so as I was back to the very same spot of returning to the point where I was working on stuff I didn’t want to. But it was a very defined season, and I already feel like I’ve been coming out of that in December. So I’m hoping that heading into 2016, I’m able to stick to that.
Mike [09:37]: My second goal was to spend some dedicated time each month figuring out how to systemize more of the things that are going on. And I would chalk this up to a complete and utter failure. I just didn’t do it. And I didn’t really have any reminders in place or mechanisms or [forcing?] functions that would remind me that I needed to do that. But I’m using Teamwork.com, which has the ability to schedule tasks, and I have a scheduled task in there now to do that on a monthly basis. So near the end of the month, I think it’s set for the 28th, to essentially go through and start reviewing everything that’s happened over the past month and where there are things that need to be done better. So I’m hoping that now that I have a system in place to systemize stuff, it’ll help out with that. That’s a little bit meta, but I think that’ll help.
Rob [10:18]: My third goal for 2015 was to host two MicroConfs. And my intent here was to host two MicroConfs that were as good as, or better than, previous years’. That’s what I really wanted to do, was maintain the quality and really impact other entrepreneurs and founders. And while this one’s a little bit of a gimme, and it’s a little bit hard to measure, I would give it a thumbs up. Because we put a lot of thought and care into running these conferences, and so I wanted it to be prominent last year because it’s something that takes enough mental space that I wanted it to be listed as a goal. And I feel like we had two really good MicroConfs in 2015. It may have been the best Europe conference we’ve ever thrown actually, in Barcelona, and the one in Vegas was among the top as well, in terms of the Vegas ones we’ve thrown. So I consider this one a success. Although, as I said, it was a little bit of a gimme, so it’s not as if it was some big stretch that I was concerned about hitting.
Rob [11:11]: My next goal was to build a system for maintaining an inbox zero, and I’d say I did really well with that. I hit inbox zero on a very regular basis. Obviously emails come in all the time, but I have, I don’t know, between 50 and 100 rules set up inside of my Gmail account that mark things as read or move them to different places so that I can review them as needed. And then I also go through my email once in the morning and then periodically throughout the day to make sure that if there’s anything important that’s coming in, I can deal with it right away. But at the same time there will be things that I will let sit there until I get a chance to take those things and either deal with them or put them on a to-do list someplace. So I would chalk this up to a success. And it’s interesting that maintaining that inbox really close to zero also frees up my brain to focus on other things because it’s not remembering, “Oh, I got to go back and I got to deal with this in some point in the future.”
Rob [11:59]: Yeah. inbox zero is surprisingly productive for me as well. I was always, kind of, [pooh-poohing?] it thinking that it wasn’t going to be valuable to do. But when I do it, it definitely releases a mental weight.
My fourth goal for 2015 was to launch another podcast, and that was a success. So that’s ZenFounder over at ZenFounder.com. I launched it with Sherry, and we talk about startup, family, and life, and the balance between the three. And so far, so good. The podcast is growing really well, and we’ve put out I think 48 episodes, or a few more than that. So we’re just about to hit 50 and we’ve had some good series going on over there. So I consider this one a success.
Mike [12:36]: My next one was to do a better job of systemizing my different revenue streams. And I have a tendency to jump around sometimes, and it’s a little bit haphazard at times. And I recognize that I needed to be a little bit more calculating with what I did. And over the course of the past year, I’ve come to realize that it’s not just about me jumping around. It’s about not necessarily taking a plan – and I’m good at putting the plans together, at least starting to put plans together – but what I have a tendency to do is start working on the work before that plan is finished. So what will happen is that I will have this half-finished plan, and I will get through that entire half-finished plan, but I don’t have the rest of it in place, or I haven’t really thought all of it through. So because of that, I get to the end of that and I don’t really have a good idea of what I should be doing next because I haven’t planned it out. And I don’t necessarily put together the time to plan out the rest of it. So I’d say I probably did a 50-50 job on that. There’s definitely places where I made really good progress. And then there’s other places where it just didn’t go so well. But I think that the recognition that those plans need to be taken just that much further is really going to be helpful this coming year.
Rob [13:42]: And before I talk about my fifth goal for 2015 I wanted to circle back and talk about how I do a retreat every year and that’s when I typically set and solidify my goals. And we set these goals before I did the retreat last year. And I think within a month after setting them, I went on the retreat and I actually decided not to do this fifth one right away, and I came back and mentioned it on the podcast. But it was essentially an honorable mention, and it was to write another book. Maybe that would be the second addition of Start Small, Stay Small. I didn’t know at the time what it was going to be. But I basically said it on the podcast, and then a month later, said, “Yeah, not going to do that.” So that’s what this one is, is to write another book. Obviously, didn’t do that. And I knew relatively early in the year that I didn’t want to take the time away from the other things from the second podcast, from the two MicroConfs, from growing DRIP, to sacrifice those things in order to write that second book. And so that’s where that one is. So definitely not a win there, but it is something that I realized early on in the year.
Mike [14:36]: My last goal was to keep up my writing habit. And at the time I set this goal it was because I knew that I was going to start through that process of writing The Single Founder Handbook. And I was able to push that out. I finished it, and I forget, it was March or April of last year. After the book was out, I didn’t do so well in keeping up that habit, but the first several months of the year it was good enough to be able to publish that book.
It’s a fairly lengthy book. It comes in at 327 pages. So it was quite an undertaking, I’ll say. So I don’t know how I would count this one as well. Maybe half or three-quarters. But I’m pleased with how the book went, and I’m pleased that I was able to finish writing it.
Rob [15:13]: I think if we were to go back to that episode a year ago, I would probably have asked you to make this one more specific, because keeping up the writing habit is a little vague. I think a better goal would have been to launch your book, because then it’s very measurable. And maybe even launch your book in the first six months or something, first six months of the year, because you achieved that. But keeping up your writing habit, it feels to me like you didn’t achieve that, even though you had a success along the way, in essence getting your book live.
Mike [15:37]: Yeah. I don’t recall whether I had come out and said, “Hey, I’m going to be launching a book,” at the time. I don’t know if I had said that on the podcast yet, but I distinctly remember having that in mind at the end of the year. It’s like, “Hey, I want to buckle down and get a lot of good writing done on this.” But you’re right. I should have probably been a little bit more specific about that.
Rob [15:53]: So I got to be honest, Mike. You had five goals. I think you achieved like one or two of them. Pretty shaky record for you this year, man.
Mike [16:01]: Yeah. As I said it comes down to the planning aspect of it. And I think the other part of it is that I don’t really go back and look at my goals. Or at least I haven’t historically gone back and looked at them and stayed on top of them very closely month over month or anything like that. I think that with the reminders and stuff that I’ve put in place this time, I think that I’ll do better. But obviously time will tell.
Rob [16:26]: I think something else you could do is put it in your mastermind outline every week. Have that be some part of it so that you can check in, “How am I doing on these goals for 2016?”
Mike [16:36]: Yeah. I think we put something in there to review them on a quarterly basis. It was either a quarterly or monthly basis, I forget which, but that’s something else. We’ve actually discussed this a little bit in our mastermind group to try and figure out a better way of tracking our progress towards our [?] goals, because I don’t think any of us do it very well. And it’s easy to let things slide through the cracks because you’re focused on the low level stuff, and you’re not really paying attention to the macro goals.
Rob [17:02]: All right. So that was 2015. Let’s dive into what we’re looking to do in 2016.
Mike [17:06]: I put together my list, and I spent, I don’t know, it was probably like a day or two thinking about what I wanted to do for the coming year, and came up with a couple of really high level goals, and then some milestones to reach along the way, and some sub-goals that fit into those overarching goals. So I have two major goals that I want to achieve this coming year, and the first one is to launch my new product, ideally by early next year. And by early, I mean by April at the latest. I want to have people onboarded and using the products in March or April, and then be able to do essentially a full blown public launch by mid-year, mid-year being June or July.
Rob [17:43]: Okay. So hold on. You named many different months there.
Mike [17:46]: Sorry.
Rob [17:47]: So launching your new product by early next year is too vague. So I’m going to hold you to it. Let’s talk about a date. That is when you email your launch list. What is your goal in terms of a date for that?
Mike [17:59]: Well, I want to have people using it early on because I don’t know how much system resources it’s going to take, and a lot of things are up in the air. So I want to have the 10 people who’ve prepaid me using it by April 1st.
Rob [18:12]: Okay. So then how long do you think from there it’ll take you to launch? A couple of months?
Mike [18:17]: Yeah, I think so. Maybe two months. Possibly three. Probably three.
Rob [18:20]: Okay. So April, May, June, so July 1 then is a reasonably conservative view, assuming it takes you three months from the time you get your 10 early access people in there.
Mike [18:31]: Yup. I think so.
Rob [18:32]: Cool. So I’m going to note that down, July 1.
Mike [18:34]: Hold me to that one [?]
Rob [18:35]: Or at least holding you to it or not, I think it’s just good to have an actual date in mind. And I’m noting down early access by April 1, and then email the launch list by July 1, because I think it’s good. The July 1 is the one that I actually think has more flexibility either way. Because you remember with DRIP, it took us months to do the slow launch to build the features people needed, and iterate on that. And that’s stuff that is hard to rush. The April 1 deadline is one that at this point, since that one’s only, what, essentially 90 days out, and it’s really just you building software, that’s when you have much more control over is that you know what features you have to build. And you have to get the code out there. I feel like hitting that April 1 deadline should be much more in your control.
Mike [19:17]: Yup. Totally agree with that.
Rob [19:19]: Exciting. And when do you plan on starting to mention it on the podcast, in terms of what it is and what it does?
Mike [19:23]: I’m going to give it a couple of more weeks. I’ve got quite a bit of planning that I need to do for it to figure out how long different pieces of it are going to take, and prioritize some of the things that need to be done. There’s also some stuff that I need to learn about, because there’s pieces of it that I technically don’t know exactly how it will need to be done. So there’s a little bit of a research component there. And I don’t know how long some of those things are going to take. But I want to get through those before I start talking too much about it.
Rob [19:48]: You also need to get a landing page up.
Mike [19:49]: That, too.
Rob [19:51]: You got it.
Mike [19:51]: I’ll start a landing page up, too. [?]
Rob [19:52]: You got to start collecting emails, yeah. All right. So my first goal for 2016 is to 2.5X DRIP. So it’s basically the same goal I had last year. To grow by 250%. I’m going to need to focus heavily on this and get all my team on board and all that, because it feels like an ambitious goal. We’re on pace right now, given our current growth rate, to grow by about 1.7 or 1.8X. And to go to 2.5, it doesn’t sound like that much more, but when you actually look at how many more trials and how many more conversions we need throughout the year, just how many more people we need to use it, it’s a substantial amount. And so I feel like this is certainly measurable. It’s definitely attainable, but it feels like I’m really going to have to focus and pull some new levers this year, some new traction channels we’re going to have to find in order to hit this mark. Because we’re talking substantial numbers at this point, right, to 2.5. We’re not 2.5Xing from $10,000 a month anymore. It’s a lot more than that. It’s, sort of, finding that many more people to grow the app is going to be both a lot of work and also a lot of fun, I think.
Mike [20:53]: So my second major goal is to re-run some of the different experiments that I was running last year. And as I said before or earlier in the episode, I feel like I fell off the wagon a little bit mid-year just because I didn’t have the rest of them scoped out. So what I’m doing over the next week or so is writing down 12 different things that’ll essentially keep me busy for the next 12 months, just doing one per month, and focusing really hard on that, just that one thing, in order to see what happens. Part of it’s just about combating boredom. Part of it’s about trying new things. But I just want to try a bunch of different things, see what works, what doesn’t, what resonates, what’s fun, what’s not, and see how things turn out. But the first step is to put together that list of 12 things in the next week or so.
Rob [21:34]: All right. So I have a challenge for you. On next week’s episode, I would love to see your 12 things and which month each of them is going to be done in.
Mike [21:44]: Okay.
Rob [21:46]: A, I think it’ll make it better for you because then it’s super easy to be accountable to it. And you can review it with your mastermind group, or you can review it here on the podcast every month if you feel comfortable. And then I also think that one of the few reasons you said you weren’t able to achieve it last time was that you only had three or four of them, and then you wandered off after that. So if you think you’ll get it done in the next week, I think that’ll be a really good thing to just revisit quickly on next week’s episode.
Mike [22:05]: Sure.
Rob [22:05]: So my second goal for 2016 is to support Sherry with her ZenFounder book. She’s starting work on a book about startup, family, and life. And I think my role is going to be helping her shape the outline, reading drafts of it, helping contribute to it, and adding anecdotes and stories to help beef them out. Because she has a lot of research background, and she has done consulting with founders. But obviously I have more reach into the community and stories of my own. And so I think, technically, I’ll be listed as a second author on the book. That’d be my role, but I really want to help support her to get it out.
I found that over the years, I love being involved in a lot of projects. And in the past, I’ve done too many of them myself, right? I want to write the second book. I want to start the startup. I want to run the conference. I’m going to do all these things. But I’m finding now that the more I focus on running DRIP and just doing only a few things, but if I have a little bit of input into other things like advising startups or doing some angel investments here and there, being able to talk to entrepreneurs, that I get that same endorphin rush and that same feeling that I am involved in a lot of things. And so this is one of those ways where I feel like I can be involved in a book, but the weight of it and the vast majority of the work will not be on my shoulders. But it will still allow me to learn and be interested and to be involved in something exciting that’s happening. So Sherry’s goal is to get it out before the end of the year. To be honest, I don’t know if she has a particular month in mind yet, but we’re working out the details. And so my goal is to basically support her and help her get that out the door.
Mike [23:37]: Very cool. That’s, kind of, exciting.
So the next things I have in my list are essentially sub-goals, and they fit into the two that I just talked about. And the first one is to be much more deliberate about where I spend my time. And that involves separating things out into work time, family time, and then me time. And my intent is really to work less and enjoy my off time more, and essentially be overall healthier, both physically and mentally. Because I have a tendency to think about work when I’m not working, and I really need to start drawing walls of separation between those things so that when I start working, I’m essentially more fresh on it. I can just sit down, and with a clear mind, start working on things that need to get done, and then draw that line on the sand that just says, “Okay, this is family time,” or “This is alone time,” or “This is time I’m spending with my wife,” and I’m not going to be thinking about work, or thinking about other things that are going on.
Rob [24:25]: Do you know how you’re going to measure this one?
Mike [24:27]: I have some ideas about it. It’s a little difficult because I think that if you start thinking about work, for example, in the middle of the evening while you’re eating dinner, it’s a little difficult to just turn that off. But part of it’s going to involve time-boxing a little bit and saying, “Look, these are the hours that I’m going to be working on this. And these are the hours that I’m going to be spending doing that.” I think that’ll help me to put things in perspective a little bit. And I’ve also found that just putting that added pressure on myself of saying, “Oh, I’ve only got these hours to work on something,” that really, really helps me.
Something else I’ve found is that earlier in the week I’m much more productive than I am at the end of the week. So Mondays and Tuesdays, I can put in 12-hour days very easily and I don’t really get interrupted by the kids who are coming home from school, and I don’t have to watch them when they get home because my wife’s around. And what I find is that later in the week, on Wednesdays, Thursdays, and Fridays, I don’t have that – I’ll call it a luxury – but it affects me more. It gets me out of the zone much, much quicker when they walk in the door. So I think that focusing on the Mondays and Tuesdays as being my highly productive days will help with that, and then blocking off Thursdays and Fridays and saying, “Yeah, I know for a fact I’m just not going to get as much work done. So I’m just going to, rather than try and fight it and try and get things done anyway, I’ll just accept it and say, “Look, I’m just going to push these things off and not worry about it until Monday because I’m not going to be as productive on it anyway.””
Rob [25:45]: This is one that I think you’ll need to review on probably a twice monthly or monthly basis or else you’ll forget it, I think.
Mike [25:51]: Yeah, I agree with that. I wouldn’t call it so much as a goal, as more of a strategy of trying to get to some of the other things.
Rob [25:58]: Yeah. That’s what it seems like. It’s like a behavior change rather than an actual goal that you’re striving for.
Mike [26:03]: Yeah, I guess that’s probably a better way to put it. Maybe calling it a goal was a misnomer, but that’s the way I was thinking of it. It’s like what has to happen, or what do I need to do in order to be able to achieve those other goals that I set forth.
Rob [26:14]: Very cool. So my third and final goal for 2016 is to make another handful of angel investments, and I’m thinking probably three to five in 2016. And what I found is, in total I’ve made about nine small angel investments – about six of them I’m a little more involved in, where I’m actually helping and advising, and they’re a little more substantial. And I found that my sweet spot is, not surprisingly, helping folks with B2B SaaS. Hopefully if they’re at product market fit, post traction, that kind of stuff. So folks who are at $5000, $10,000, $15,000 a month in revenue, and there’s some type of path to start getting this thing going.
And frankly, as weird as this sounds, it’s like investing in bootstrappers. And that doesn’t make a ton of sense, right? Because typically bootstrapping means that you’re doing without funding. But it’s this new model of “fun-strapping”, as Colin from Customer.io talked about, where essentially folks have the intent of raising a single seed round to grow quickly, get to profitability, and then that’s it. They don’t plan to go the venture-funded route. And those are the businesses that I like. And I’ve made a couple of investments recently that I’m very excited about because A, there’s a lot of value that I can bring. But B, they’re not trended to grow hundred million dollar businesses, and they have a very high likelihood of becoming seven-figure businesses and potentially even low eight-figure businesses. And that’s where I’m looking to be.
So that’s where I really enjoy it, and where I have some insight and value to add. And this again comes back to I don’t want to start other things because I really want to focus. But just being involved in a little way with these founders who are getting stuff done is exciting and it keeps me learning. And it keeps me, kind of, interested in knowing what’s going on. And so I guess if you are a bootstrapper and you hit that point where you start getting some traction and you’re thinking about raising this small, single round, certainly drop me a line because I’ve been talking to several folks lately.
Mike [28:09]: The last thing I have on my list, as you pointed out earlier, is more of a strategy than a goal, but is to be more complete with my planning. And essentially that involves creating a full plan rather than a partial one, essentially walking the process of the projects that I’m working on all the way to completion and mapping out everything that needs to be done, as opposed to getting it 70%, 80% of the way and then stopping and saying, “Oh, that’s enough of a plan. Let me dive right in and start getting things done.” So, as I said before, I have a tendency to get to near the end of those plans and then I’ll start thrashing because I don’t really know what I should be working on because I haven’t planned it.
Rob [28:43]: Yeah, that makes sense. Again, like you said, this is a strategy or a behavior change. It seems like launching your new app by April 1 to early access, and then July 1 to your launch list, is probably your main goal, and that’s where you listed it, as number one. And so, if I were in your shoes, that is what I would totally be focusing on and getting weekly milestones nailed down and planned out. Especially if you know you have that tendency to not follow through in the end; to get to the point where, like you said, you start thrashing, I think that you need to be keenly aware that around March or April, your lizard brain is going to start finding reasons why you shouldn’t be working on it, or why you should wander off and try to start something else. Or other stuff is just going to magically come up because it always does. So I think it’s good to be aware of this in yourself, and I think that as you go through the year, it’s something to review on a monthly basis of like, “Am I letting this one get the best of me like it has in the past.”?
Mike [29:45]: Yeah. I noticed that I’m for thrashing a lot because my productivity just plummets. I spend more time looking at my ever-growing list of things to do that there’s things that just get added to it. And I’m like, “Oh, I’m not sure what I should be working on.” So what ends up happening is I don’t work on anything. And I’ve already started putting together the weekly milestones like you just pointed out, and finding ways to hold myself accountable to those different milestones, and making sure that things aren’t getting pushed off, and making sure that I’m also assigning a reasonable number of tasks to each of those milestones so that I don’t get so far behind that things just go completely sideways, and then I’m in a position where I’ll never catch up.
I don’t know about you, but I think this coming year it’ll be pretty exciting.
Rob [30:24]: Yeah, I’m stoked to get started with it.
Mike [30:25]: Well, I think that about wraps us up for the day. If you have a question for us, you can call it into our voicemail number at 1-888-801-9690, or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us 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.
Episode 268 | How to Set Annual Goals
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about setting your yearly goals and some processes to use in order to make sure you meet those goals.
Items mentioned in this episode:
Transcript
Mike [00:00]: In this episode of Startups For the Rest of Us, Rob and I are going to be talking about how to set annual goals. This is Startups For the Rest of Us, Episode 268.
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 [00:23]: And I’m Rob.
Mike [00:23]: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. How are you doing this week, Rob?
Rob [00:27]: Doing pretty good. I’m gearing up/down for the holidays, gearing up to hunker down. I want to do some reading, some thinking, and some high-level plotting of next year. I don’t know if I’ll be able to take my retreat in the next two weeks, but it’s getting to be that time, because I really need to nail down how I want 2016 to shake out, the goals that I want to achieve, and frankly taking an in-depth look at how 2015 went and measure it up to the goals that I set last year. And we’re going to do that in an upcoming episode. I think it’s next week where we actually revisit the goals we set last year, talk about whether or not we achieved them, and then look at our 2016 goals. So I’m hoping to take some time in the next couple of weeks, and then go on my retreat hopefully to nail everything down. How about you?
Mike [01:09]: Well, I’ve been recovering from about two weeks’ worth of major back inflammation. My back’s been acting up on me again, so there were several days where I literally just could not even sit down.
Rob [01:19]: That’s a bummer.
Mike [01:19]: So I basically just laid in bed and read the entire time, because I literally couldn’t do anything else. So five chiropractor visits later and a ton of Aleve, I’m feeling better, but there’s still lingering issues to get over.
Rob [01:32]: Yeah. It’s really hard to get work done when you’re debilitated like that.
Mike [01:36]: Well, when you can’t even sit at your desk. Literally I was just sitting there. It was painful.
Rob [01:40]: Yeah, it’s a real issue. So MicroConf sold out pretty quickly.
Mike [01:43]: Yeah, what was it? Do we have official time on that? Was it seven minutes, or was it six?
Rob [01:48]: Yeah. It was pretty bad. So we did it in waves this year where we sold through Academy members first, then returning attendees, and then the early bird list. And each year it has sold out faster and faster. So we’re having some internal discussions of what we want to do next year in terms of there’s a lot of possibilities, right? You could throw a third conference. You could expand this conference, which is something we haven’t really wanted to do in terms of the size. There’s a lot of alternatives. I think as [Xander?] said, it’s a success problem. It’s a good problem to have, but it’s definitely a problem that we need to think about ways to work around.
Mike [02:18]: Yeah. As you said, there’s a bunch of different potential solutions, but every single one of them also comes with its own set of problems. So trying to figure out what the lesser of two evils is – or the lesser five evils, I guess in some cases – is a little bit difficult.
Rob [02:33]: Right. Because is MicroConf still MicroConf if there are 325 people there?
Mike [02:37]: Yeah. I don’t know. The thing is it’ll change no matter what. I mean, if you’re just adding people it will it make it change? But I also think that much of it is the factor of how much year-over-year growth there is. So if you go from, let’s say, 250 to 400, obviously that’s a much bigger difference than 250 to 325. But even that doesn’t necessarily solve the problems. So tough call, tough call.
Hey, we’ve got all good listener question here come in from [Jeremy Vot?], and he says, “Hi, Rob and Mike. Love the show. I’m curious about something I’ve seen, and recently I’ve seen Rob do it with DRIP, which is to giveaway e-books and video courses for a limited time, and then charge for them. I assume they’re free for things like webinars as gifts. So in all reality, these are free items. So my question is about the strategy of putting a cost to them. Do people actually buy them? Is it simply to give them more value in their minds? Thanks, Jeremy.”
Rob [03:24]: Yeah, that’s a good question. The bottom line is the reason we put a price on them is to communicate the value of what they would be worth if they were not subsidized by the main business, which is obviously the software business – the email marketing software known as DRIP. What we did is we literally sat down in the office and said, “What would this be worth if we were running an info product business, and how much would we sell this for?” And we released a set of three e-books a few weeks ago on email marketing, beginners’ guides, and we released a 20-part video series. It’s an interview series with Patrick McKenzie on DRIP email marketing and tactics and things like that. In both cases, we set it less than I think I would have if we were really trying to turn a profit.
But the idea was, A, to communicate the value, and B, yeah, we have actually sold several copies. It was funny, several hundred dollars’ worth of the e-books, and I was surprised that that happened. But it’s a nice little perk. We were joking that it’s our espresso/snack fund for the office, because it’s not any real revenue compared to what the main product is driving. But it does, A, make these things worth it. So it’s not like we’re giving away a free e-book on XYZ, because instantly that makes you think that this thing’s probably not very good. And they are good. We spent literally thousands and thousands of dollars across writing, editing, and the design and the layout and all that stuff. And we packaged something that is worthwhile, and so we wanted to put a value on it. And there’s also a nice thing. We give it away free for seven days, so there is a little bit of time urgency for people to download the thing. And it’s not something that is going to be free forever, and so you’re able to get it into more people’s hands sooner.
But coming back to it again, I don’t think you can just put a price tag on some white paper that you crank out that’s not actually valuable or not worth it, because that will come back to bite you. It negatively impacts the brand. People start thinking, “Well, they’re putting out crap and putting a price on it just to try to fool people,” and that’s not a good way to go. And so we’ve been very careful that any of these things we do put out are what I consider very high quality. They are production-level, things that I have no qualms about selling. And the people who have purchased them, no one has asked for a refund. So they’re obviously worth that to these folks.
Mike [05:22]: Yeah. The first thing that jumped into my mind when I saw this question was part of it was to set that time urgency so that people would pick it up sooner rather than putting it on the back burner. And that would also, I assume, drive people to your email list so that you can then do marketing to them afterwards.
Rob [05:37]: So what are we talking about today?
Mike [05:38]: Today, what we’re going to talk about is how to set your annual goals. And we’ve talked in the past about goal-setting in general and using a system that’s commonly known as SMART. It’s setting goals that are specific, measurable, actionable, realistic, and time-bound. And in this episode, what we you want to do is we want to focus specifically on how to set your yearly goals. Because this is essentially a timeboxed set of goals that you are going to have for a one-year period, and the idea here is that you want to be able to meet all of those goals. So obviously, in setting your annual goals, we’re going to conform to that SMART system. But this is going to talk through the process of how to go about setting those goals and some other things that should go along with it that are associated with that process, but not necessarily part of the goals themselves.
Rob [06:23]: Right. So we’re not going to rehash SMART here. We have talked about it in the past. A lot of folks have talked about it, and it’s. kind of, the elementary thing that you may have heard a little too much about at this point. Really we’re going to talk about seven ways to set goals that are meaningful and that are worth setting.
Mike [06:39]: And to make sure that you’re achieving them throughout the year, because obviously I think that there’s a lot of people who set their yearly goals and then they just don’t look at them for the rest of the year. They’ll maybe revisit them in September or October or November timeframe and say, “Oh, yeah. I haven’t even started on that yet.” So this process is really about not just setting those annual goals, but making sure that you’re putting systems in place, or forcing functions in place, that will help you to meet those goals throughout the year with various milestones.
So we’re going to walk through the seven different steps in this process, and the first step is to make the time to set your annual goals. And the problem I’ve been guilty of in the past on occasion is to set goals when I have time. Or I’ll think about them and say, “Oh, I should do this” or “I should do that.” And what I’m not doing is I’m not really dedicating time to sit down and really give some serious thought to it and making sure that those things are a priority rather than an afterthought.
Rob [07:33]: Yeah. And I typically do this in an annual retreat. We’ve mentioned it here before. And we did spend a whole episode of ZenFounder — if you go back to the ZenFounder Episode 2, we talk all through founder retreats. And this has been an impactful part of my entrepreneurial journey for the past, I think it’s three years, maybe four. And it’s a bit of a learned skill, but the more you do it, the more addicting it becomes to do it because you realize the value of it. I, kind of, view like It’s like an annual meditation where you go off by yourself and you carve out this time to review the past year and look at the future. And I use it as my goal-setting device. My goal of coming out of that two-day retreat that I do is that all my goals are set, and my vision for the next 12 months is secure.
Mike [08:20]: Exactly. And the first part of this process is making sure that you’re setting aside the time to do that. Because if you don’t set aside the time, you’re not really planning it out. You’re thinking about it, it’s, kind of, on your mind, but it’s not really a main focus. And I think if you’re going to do something as serious as setting these annual goals, you really need to make it a priority and make it your main focus for whether it’s several hours or a couple of days with a weekend retreat, something like that. It needs to be the primary focus of what you’re looking at, not just something you do a couple of hours here or a couple of hours there, or even just when 20 or 30 minutes here or there.
Rob [08:51]: Yeah, I agree. And you may have to do some trading. If you have kids, and your spouse needs to watch the kids for that weekend, then you may have to trade and work something out to where this is possible. If you want to do an overnight somewhere, it’s not always straightforward, and there may be some sacrifice involved. But I think there’s a lot of value in taking the time to set these goals.
Mike [09:08]: So once you’ve set aside that time to do it, Step 2 of the process is to recap the current year. And you have to give some thoughts on what went well, why did it go well, or what are the things that you didn’t accomplish that you wanted to, or are there things that you want to happen in the current year that you just weren’t able to fit into the schedule? I also think that what you want to do is you want to make sure that on your list for the following year, you want to keep in mind what it is that you want to be celebrating the following year. So at this time in December of next year, what is it that you want to be looking back on and saying, “Yeah, I’m really proud of that. I set this goal and I was able to achieve it.”? What is that? It might just be one thing. It might be two things. But you have to give some thought to what that is, in advance.
Rob [09:46]: Yeah, and this is a loose outline and, kind of, a high level. It doesn’t cover all elements of basically the outline of what I used for my retreat. And I took that, of course, from Sherry and adapted it for my purposes. And then she had also taken it from some monk from the 1300s who had a meditation and looked back and said, “What gave me life in the past year? What took life? What do I want to do more of? What do I want to do less of?”
There’s a brainstorming element of it. I always use my Moleskin notebook and I write a bunch of stuff, just page after page of notes. Sherry has a big sheet of butcher paper, sketches ideas out, thoughts, and she keeps the butcher paper from year-to-year. And, of course, I keep the Moleskine notebook. You can do it whatever. You can do it on your computer if you want. I find that the computer tends to tempt me to go check email, or go screw around on the internet, and so I like the feel of pen and paper because it is just so different. It doesn’t make me think of work like the computer does. But to each their own, and you want to figure out which way you do it. But I think recapping the current year and really looking at what you want to do more and less of ,and how you’re going to get there is your first step to setting these goals.
Mike [10:46]: And if you go over to ZenFounder.com or look it up in iTunes or whatever your favorite podcasting app is, there’s a really good episode. I think it’s Episode 2 in ZenFounder where it discusses how to go about a personal retreat. And I think we’ve talked a little bit about it on this podcast before as well.
So moving on, Step 3 in the process is to limit yourself to one or two major goals. And the thought behind this is that these goals are going to take quite a while to reach, and it might take you four to six months to even reach one of them. But you also have to allot some time for essentially a little bit of extra padding in case things go wrong, or you get sick, or some family emergency comes up and it’s going to set you back several weeks or a couple of months. There’s always other things are going to come up, and you have to make sure that you take those into account. But once you’ve got your one or two major goals set then you start doing backwards planning in order to set your quarterly, monthly, and weekly goals. And along with this, you can start setting milestone goals that will give you specific feedback about what your progress is along the way. What you don’t want to do is you don’t want to have this big, fat, hairy audacious goal that you’ve set, and no real way to track how far along you are on that goal. So if it’s writing a book, for example, you don’t want to just say, “Hey, I’m going to write a book.” You want to be able to spell out how far along you’re going to be at different points to be able to make sure you are on track to finish that goal.
Rob [12:04]: I think that especially if you’re not totally in control of your time yet – meaning you have a full-time job, or consulting, or things where you’re not just working on your own products – I think one to two goals is where you want to be. And I think one goal can be, “I want to have quit my job by the end of the year.” Or it might be, “I want to only be doing 10 hours of consulting a week, or zero consulting.” That, for me, was my goal for several years in a row. I didn’t go through this process at that point. I wasn’t doing retreats. This is, let’s say, back in 2006, 2007, and 2008. But I knew that that was my one goal, and then I work backwards from that. And I have just focused all my energy on growing my apps, or acquiring apps, or building apps, or doing whatever in order to hit that revenue mark, and there was a number that I needed to make.
And so if you don’t have your “freedom” yet from your job, or from contracting, that, I think, has to be a goal of yours, assuming that you want to do the entrepreneurial life. If you already have products or you’re already working full-time for yourself in essence on your own products, and you’re making a full-time living from them, I think you can have more than one or two goals. I think you’re in a position where you have more control over it, and I think that having a revenue goal and then maybe a goal of launching something new, whether it’s a new, I don’t know, podcast or blog or even a new product or some new major marketing efforts around your existing product, I think all of those could be included in your goals. And it, kind of, depends on how you label the major goals, but I think early on that you’re going to want to keep it to one to two, and then you can maybe expand it a little later as you get a better feel for how much you can actually get done in a year. Because I think most of us early on overestimate how much you can get done. And then you become more and more pessimistic as you set these goals and you review at the end of each year, and you realize, “Boy I really didn’t get that much done.” And you start pushing stuff off to the next year. You become a bit more realistic about it.
Mike [13:58]: Step 4 in the process is to identify specific ways that you can hold yourself accountable through the various milestones that you’ve set up. And the idea here is that you want to set up an automated system that will essentially ensure that you don’t forget about the milestones along the way, or that you aren’t letting things slide. And you can do this through a variety of different ways. You can use a mastermind group. You can use an accountability partner. Your spouse or significant other is also a good one, or a fellow business owner. If you meet up for drinks, or lunch, or dinner, or something like that on a regular basis with anyone else who is doing the same types of things as you are, you can use them to essentially to bounce ideas off of, and essentially just put together an outline and say, “Hey, every week or every two weeks, this is what we’re going to talk about.”
And you have to schedule this time. One of the things that I’ve found is that if I don’t set aside the time for this, if I don’t actually schedule these periodic check-ins to go back and look at that, it’ll be three or four months before I even go back and look at my goals. So you have to schedule the time and make sure that in some way, shape, or form, that you are paying attention to that moving forward. Because it’s very easy, as Rob said, to just push things off. I find that if you have an automated email that comes in to you every week or every two weeks – this is one of the things that we do in our mastermind group – is we have a link that just gets emailed to us every Monday morning that points to the Google Doc, and that tends to work really well just by drawing attention to it. But at the same time, it’s also fairly easy to almost ignore that, or bypass it, just because it comes in on a Monday and we don’t meet until Tuesday night. So depending on the timing or scheduling of that, it might be a factor. But if you schedule it very close to a particular meeting, it’s going to pop into your email and you’ll see it shortly before the meeting. It’ll be essentially a trigger to remind you, “Hey, we need to discuss this.”
So again, any of those things – mastermind group, accountability partner, all of those things – if there are triggers that you can set in place, especially if they’re automated to remind you that hey, you need to review this on this periodic basis, that will help you to hold yourself accountable to those milestones.
Rob [16:01]: I pretty much always have a revenue goal for the main product I’m working on, which has been DRIP for the past few years and was HitTail before that. And what I have found as extremely helpful for me in the mastermind groups that I’m in is at the end of every month, the next mastermind that I have, I say what the revenue was. And just forcing myself to calculate it to the penny and report it in the mastermind group, even though people aren’t necessarily holding me super accountable to anything in the meetings, it really helps me visualize where I am on the path to that goal. And the nice part is your mastermind folks aren’t going to remember your revenue from month to month, so it forces you to basically say, “Hey, two months ago, I was at this. Last month, we were at this. And now, we’re at this.” And it makes you actively think, “Oh boy, we only grew by a thousand each of the last two months. I’m not going to get there if I grow that slowly.” Or if you can say, “Well, last month we grew by 5000, like the month before,” then suddenly you just become more aware of it because you have to explain it to another person. It’s like the concept of how you really know something once you can teach it. I think that, for me, I’ve always calculated monthly revenue. I’ve always looked at it. But something that helps me absorb it and process it is to then explain it to the folks in my groups. And it really helps solidify that, and it adds this level of a recurring accountability milestone.
Mike [17:21]: The fifth step in the process is to identify your motivational triggers, and these motivational triggers can be either positive or negative. So a positive motivational trigger would encourage you to do more work, or to be more productive, while a negative one would essentially hold you back from that, whether it’s making you procrastinate or just doing some form of work avoidance, or spending too much time on certain things because you feel like maybe they’re ultra important and they need to be just perfect. Those are the types of things that you need to identify so that you can implement additional ways to make sure that those things are not holding you back, or that you are encouraging those motivational triggers that are positive. And these are essentially feedback loops that you want to set up.
Everyone has a different motivational trigger. Some people are positively reinforced by money or fame. Or other people who just say, “Hey, I just want to be healthy.” They don’t necessarily have these giant, grandiose goals, but they just want to concentrate on their family, or they want to concentrate on personal learning. Each of these things, there’s nothing right or wrong with any of them, but you have to recognize what your own motivational triggers are and then set up feedback loops so that you can make sure that you positively reinforce and double-down on those ones that are positive and reduce or eliminate the ones that are negative.
Rob [18:34]: Recently with DRIP, we’ve launched those two knowledge products; that e-book that I mentioned that we gave away for free for a week and then started selling, and then the video series with Patrick McKenzie. And what I’ve noticed is the motivational trigger during that time was that the positive feedback of doing something risky and doing something scary in public, right, because you launch it, you email the list, and you’re wondering, “Boy, are people are going to like this? Is it going to go well? Or is all this time and money we spent just going to go out to crickets?” And I saw excitement in the team as we were reporting the numbers and the number of downloads, and the number of uploads on product time, and the number of comments and all that stuff. And so for me, doing things in public and getting positive or negative feedback has always been a trigger of one kind. And I think the further I’ve gotten away from that, You know, I blog less than I used to due to time constraints. Luckily, I still have the podcast and the conference and stuff. But I think that getting back to the things that really matter to you, and push you in a virtuous cycle, I think, is important. I know that I’ve just recently rediscovered that and remember it. I published just a couple of blogs posts in the past few months. And the feedback, and just knowing that I pushed something out into the world again, and writing – it was something I don’t do often – was really a motivational trigger for me. And so I think that learning that about yourself, and then noting it down and not forgetting – which is frankly what I’ve done as I’ve stepped away from that – I think it’s a positive thing.
Mike [19:57]: And some of those things you just talked about lead us into Step 6 of the process, which is to identify the patterns that indicate that you’re demotivated. And some of these things just boil down to a basic sense of procrastination, but sometimes you can recognize certain patterns. So, for example, maybe you wake up later than you usually do because you lack focus, or clarity, or lack a sense of drive to just get out of bed and start working on your product. And this is especially true if you own your own time and you aren’t sure what you should be doing. And it’s very difficult to motivate yourself to get out of bed and sit down and be motivated to be productive if you’re not really sure what it is that you’re driving for, or what you’re trying to do, or you’re not sure what to do.
Another symptom, or a pattern that you might be able to recognize, is if you’re playing an excessive amount of video games, or watching a lot of TV or movies, or you’re just making a general lack of progress towards your milestones. Any of the activities that you typically do that are essentially time-wasters tend to fall into this category of patterns where you can recognize that you’re demotivated. And I think the recognition piece of it is really important, because if you don’t even recognize that this is a problem there’s nothing that you can do about it because you don’t even know where to start because you don’t know that there is a problem. So recognizing that the patterns that you undertake during those situations is really important. And it warrants writing them down so that you have it in your mind that, “Hey, these symptoms, or these things that I do, or these things that go on in my environment, are demotivational to me, and will hold me back.” So as long as you have that in mind and you’ve written it down, you can use that as essentially a trigger to recognize them. And again, going back to identifying specific ways to hold yourself accountable, these are things that you should review on a periodic basis to make sure that you’re not falling into any of those traps that are going to hold you back.
Rob [21:44]: We’re all going to become demotivated at one point or another throughout a year. The key is, as you said, to identify it, and then to figure out if it’s a short-term or a long-term dip. And if it’s short-term, you can often pull yourself out using tactics, or making small adjustments. And the tactics I tend to use are music, getting a playlist together that matches the mood and that I start to loop and, kind of, puts me in the zone. I will up my caffeine intake for the short term and do it at really key times or about 20 minutes before I’m going to start working. I’ll also change my work environment. If I haven’t worked from coffee shops in a while, I will go work in a coffee shop. Right now, I’m actually working at our house – that’s currently on the market – that we’re not living in, so there’s no one here. And I’m here maybe once a week. It feels like a new environment, and that is extremely motivational to me. And I think to most people, to be in a new environment, it tends to spark creativity and ignite something in your brain, because you feel like you’re in a new place.
I think something else to think about is if you find yourself being demotivated for longer periods of time, it might be that the work is just crappy. Or you’re doing the wrong thing? It’s not a good fit for you. If you feel like you’ve wandered off and you’re, I don’t know, writing an e-book or an info product because everyone’s saying you should, and you’re really, really struggling with it and hating it, then maybe that’s not for you. Maybe you’re more of someone who should launch software. Or vice versa. If you’re sitting there just toiling away at your SaaS apps for months and months and months and you haven’t launched it, and it’s demotivational, maybe that’s not the right path for you. Maybe you should take some expertise and put it into an e-book instead and do something in public, get that virtuous cycle started and go off in another direction.
It’s something to think about and reevaluate, and not just take things at face value that what you’ve decided to do is what you have to do. Because if two, three months down the line you’re still feeling this way, something is probably wrong, either chemically with you – which is certainly a possibility. Wintertime is definitely tough when it’s dark and cold and you don’t go outside. Or it may be that the work is just not a good fit for you and that you’re not going to be happy even once you launch. That’s the thing. If you’re not enjoying the journey along the way, for the most part, then you’re not going to enjoy the destination when you get there.
They’ve done studies and such with doctors, or folks in med school actually. And the people who are really unhappy and just grinding it out, trying to get through, and they’re saying, “Well, as soon as I’m a doctor, everything will be great,” it doesn’t tend to be great for them when they get to be a doctor, right? Because they really didn’t love the work and the journey. And it tends to be the folks who are enjoying themselves along the way. Even though they know it’s hard work, they are enjoying it along the way. And then when they get to their destination, now they can look ahead at the next destination. And it’s not like, “Oh no, I need to grind it out for four more years.” It’s like, “I’m going to enjoy the journey to the next destination as well.”
Mike [24:23]: And a little addendum to that is that if you recognize that you are in those situations, it might be a good time to reevaluate what your yearly goal is. Just because you’ve set those yearly goals, it doesn’t mean that halfway through you might change your mind and decide that it’s not something that you actually want to achieve. You shouldn’t just grind it through just to make sure that you meet that goal if it’s not ultimately going to make you happy. So keep those types of things in mind as well.
Step 7 in the process is to set up a reward system for meeting your milestones and major goals. Know what it is that you’re working for, both in the short and the long term, and use those motivational triggers to help push through some of the hard times. And some of the different rewards that you can give yourself — they don’t even have to be very big. You might just treat yourself out to lunch at Qdoba or something like that. I mean, just go to a taco place in the middle of the day for no other reason than it’s a Thursday afternoon and you decided that one of your milestones was to get to a thousand subscribers, for example, and that you just recently met that goal. So treat yourself.
And there’s a lot of different ways that you can treat yourself in small ways that will help with that positive reinforcement. And it’s great to be able to hit those milestones, but tacking on additional rewards to those things can be really helpful as well. And it could just be a dinner and a movie out with your spouse or your significant other. It could be a new video game. It could be some new music. It could be a new album, a new book, for example, or it could just be a short trip, or even just a day trip out to a museum or a theme park or something like that. Everyone’s is going to be different. Everyone wants different things. And some of those rewards are going to be more appealing to you than others, but make sure that you’ve attached some of those rewards to some of the different milestones that you’ve set up in order to make sure that you’re getting that closed feedback loop that is going to help reinforce you moving forward.
Rob [26:05]: I’m actually really bad at this, and I’m trying to get better. You know who’s really good at this, is Phil Derks. And he has his WordPress Simple Play plugin and a couple of others over at Moonstone Media. He did an attendee talk last year at MicroConf and he lives here in Fresno. And all along the way, he had these great milestones set up when he hit a thousand in revenue and X thousand in revenue. And it was fitting, too. They got bigger along the way. It was like, “Oh, it’s a nice dinner with my wife.” Then it’s a, I think, wine club membership was another one that I thought was a great reward for yourself, because that’s a non-trivial cost each year. But if you’re thinking to yourself, “Boy, when we hit five grand a month in revenue, it’s a big milestone for me,” then do something worthy of that. Go out of town for a night without the kids, or do a really nice dinner, and spend more than you typically would. Or do any of the things you said, or set up a wine club membership, something that you wouldn’t normally do, and that is really icing on the cake to give yourself the payback for all the work that you’ve done.
Because although the journey should be fun, and the goal should be worth doing just for itself, I do think there’s a lot of value in celebrating with some other people around you, and then just having that cool thing that then reminds you of the goals that you’ve achieved, right? Because then when the wine arrives in the fall, then you can think to yourself, “You know, I earned this. I built a business that supported this, and that goal paid it back.” And it’ll remind you of achieving that goal, which I think is something to relish. Because as entrepreneurs, I think oftentimes we are trained to be a little more pessimistic. Maybe it’s just me, but we can tend to look at the dark side of things or look at what’s not going right rather than what’s going right. And so I think we need as many reminders as we can.
And speaking of going and seeing a movie, opening night, Star Wars Episode 7, baby. I’m going to see it with my kid.
Mike [27:55]: We’ve threatened the kids with leaving them home or going to see it while they’re at school.
Rob [27:59]: Nice. That’s great. I love it. That’s a great punishment. Yeah, I wish I had a goal that I had achieved recently and I could attribute it to this, but alas, it’s just I want to see it. And it’s weird that they’re selling tickets Thursday nights. Are you seeing it Thursday? Because it’s supposed to open Friday, but then they have a bunch of Thursday showings.
Mike [28:16]: I didn’t know that they were doing it Thursday before midnight. Usually I like doing it on opening night for a movie. Like if it’s a big movie, they’ll do it at midnight, and so they’ll have midnight showings. I haven’t heard of anybody showing it before midnight on Thursday though. But I haven’t looked either. We haven’t really set aside the time to figure out when we’re going to go.
Rob [28:31]: Yeah, there’s a bazillion showings here starting at 6 or 7 p.m. on Thursday night.
Mike [28:35]: You could just say that your reward is for your lifetime achievement of being the oldest today that you’ve ever been in your life.
Rob [28:41]: Boom. That’s it. So to recap what we said in today’s episode, we had seven steps for how to set annual goals. The first one was make time to set the goals. The second one was to recap the current year and then look ahead. The third was to limit yourself to one to two major goals. Fourth was identify specific ways to hold yourself accountable. The fifth was identify your motivational triggers, both positive and negative. The sixth was to identify patterns that indicate you’re demotivated. And the seventh was to set up a reward system.
If you have a question for us, call our voicemail number at 888-801-9690, or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us 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.
Episode 267 | How to Structure Your SaaS Support Team
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike speak from their first hand experiences about how to structure a SaaS support team as well as the tools they use.
Items mentioned in this episode:
Transcript
Rob: In this episode of Startups for the Rest of Us you are about to hear, Mike and I discuss how to structure your SaaS support team. This is Startups for the Rest of Us, episode two hundred sixty seven.
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–
Mike: And I’m Mike.
Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Mike?
Mike: You know, as you read the intro I totally thought you were going to mess it up.
Rob: Yeah? That was from memory too. I didn’t even read the doc this time, unlike at MicroConf Europe when I was trying to intro the conference and froze in the middle of the intro, and you had to pick it up. That was a moment.
Mike: Yeah, that was rather interesting. I thought about singing a song or something like that but I couldn’t come up with anything good on the spot.
Rob: You bailed me out. So, what’s going on with you?
Mike: I talked a little bit about it last week, about taking pre-orders for the product I’m working on it. I’m up to ten pre-orders at the moment, and I’ve got some more that are going through the decision making process, and the a few more that need to be scheduled. But I’m thinking about breaking some ground on the code right now, and working out exactly what the timeline is going to look like and whether or not everything is going to make it because that’s still a little bit in flux but things are looking good so far.
Rob: Congratulations, man.
Mike: Yeah, I want to do – in parallel – some testing with some paid advertising to pull in some cold leads, and do a little bit of experimention to figure out what that marketing plan is going to look like post-launch, but I think I have a good handle on exactly what people are looking for and how to position it.
Rob: One piece of advice I’d give is get that landing page up now. Even if you’re not going to run ads to it, eventually you’re going to mention the domain name here on the show, people are just going to start talking about it, it might show up on Twitter, and you want to be able to send them somewhere and have them be able to enter their email. So, if you don’t already have that up I would do that before I touched any code.
Mike: Yeah, that’s definitely on my list of things to do. I’ve been–I wouldn’t say pushing off, but it’s just been a lower priority just because of all of the other things that are going on. So yeah, I recognize that I’ve got to get that done. Even the people that I’ve given a demo to have looked it over there and said, “Hey, there’s no landing page or anything here!” There is a place where they can pre-order, but there isn’t really any content there.
Rob: Right. Have you already created mockups, and you feel like the folks who have pre-ordered know what they’ve pre-ordered, like it’s very locked down?
Mike: Yeah, I spent probably twenty to twenty five hours working out the mockups and building the entire UX for the application, and the demo process that I went through with these ten people who have pre-ordered–I spent anywhere from 25-30 minutes is on the really low end, but the vast majority of them were 45-50 to 60 minutes. I think the longest one was about 2 to 2 1/2 hours; walking through exactly what it looked like, how it would work, answering any questions that they had, working through different scenarios and things like that so everyone who has pre-ordered I believe has a pretty good idea of exactly what it is that they’re getting.
Rob: Very cool, so you’re just itching to get into the code, aren’t you?
Mike: Yeah, and that’s something that I’ve been holding back on.
Rob: Yeah, it’s always a good idea to fight that urge as long as possible.
Mike: Right.
Rob: Because once you get into the code you become hyper focused. I’m not saying you, just in general, developers, we get sucked in.
Mike: Yeah, tunnel vision is really what it comes down to.
Rob: Yeah, there you go. So, I have a couple of things, one is, if you’re listening to this and you didn’t know that I have another podcast that I record with my wife, I wanted to tell you about it. Episode 45 of our podcast “Zen Founder” seems to be catching some people’s eye. It’s about getting your spouse on-board with your startup aspirations. I saw you had recommended it to someone via email, and some other people were emailing and tweeting about it. So if you haven’t checked out Zen Founder, it’s in iTunes obviously, ZenFounder.com. You might want to start with episode 45 because it seems to have resonated with a lot of folks in the boot strapper space. The other thing I wanted to mention is, if you’re not connecting with Mike and I at Twitter, come check us out. I’m @RobWalling and Mike is @SingleFounder.
Mike: So, what are we talking about this week?
Rob: Today I wanted to talk about how to structure a support team. I think we’re going to focus mostly on SaaS. This would probably apply to any type of downloadable software, membership sites, info products. They all have similar issues, and I really want us to speak from experience. I’ve been making it up as I go along for sure. There are experts in this space, Sarah Hatter has built her career on being a SaaS support expert, and spoken at MicroConf a few times. So she has a lot to say about the mindset and how to organize a team, and replies, and how you should handle things. Today we’re going to talk a lot about structure, first hand experience, and the tools that we use to get the job done. I think we’re going to break this up into a couple of areas. The first is email, because that’s where a lot of your support is going to come through. The second, third and fourth are going to be shorter; talking about knowledge bases, live chat and potentially phone/Skype if you end up doing that.
So, to dive into email — it’s interesting because years ago when I had small info products and downloadable software, I was doing all support via Gmail. I basically had a number of email addresses piping into G-Mail, and of course you can then “send as” when you replied and that actually worked. If you’re one person doing support, it’s not totally sustainable, it doesn’t scale that well to not have tickets, and not be able to make notes, and all of that stuff, but I think it’s the best way to get started right off the bat if you have just a small, simple product and you just want to, kind of, do it. But you’re going to want to transition out of that when you hit any type of a scale and move into a system like Help Scout or Groove. From Gmail, there was no Help Scout and Groove when I transitioned, and I moved into Fogbugz which I stayed with for many years. We used it both for issue tracking and for support and, frankly, we outgrew it and it became a little long in the tooth. They haven’t updated it with a ton of new stuff, and so now we actually do use Help Scout and we really, really like it. So, this is how we support my email marketing app, Drip. Help Scout has a lot of advantages over other tools that I’ve used in the past. Basically there are a ton of keyboard shortcuts that you can use, almost like the G-mail keyboard shortcuts. You can do an “A” for “Reply All”, “R” for “Reply”, you can add a note with “N”, you can set Status using “S”, you can almost not use your mouse and use the app. So it’s a lot faster than other tools I’ve used. Another cool thing is it has this email interface, so when you get notified–if you pick something up on your phone that you got an issue sent to you, you can reply directly to that issue, that email right on your phone, or from Gmail, and the reply will go directly to the customer. Or, if you put–there are some fancy keywords you can add; so you can put @note, just the @ sign and then note, and you can attach a note to it, then reply again and put @assign and assign it to someone on your team. It allows you to do stuff without ever having to log into a web app, which I found is hugely productive for me if I’m on the go.
Then it’s fast and there’s a really nice plugin you can build. I think it took us an hour or two — we’ll reference this a little later – but in essence on the side of Help Scout issues, we can see the customer, and we see their gravitar, and we can see if they are paid, or trialing, or if they’re not a customer at all. We can see how many months they’ve paid, what plan they’re on, and their past support tickets. I’m sure there are other systems that can do similar things, but we’ve really enjoyed using Help Scout for the past six months. How about you, Mike, what tools have you used for support?
Mike: Well, kind of, like you, I started out just using Gmail, and right now I still run everything through FogBugz. It’s fast, it’s easy to have everything dumped all into one place, and I don’t really have to worry about it. I don’t get enough support tickets for most things anyway. I maybe get a handful a month, so it’s not really worth going down the road of building this full blown support system. It’s a manageable level, so I don’t really worry too much about it.
Rob: Yeah, very cool. Let’s talk now about these three stages that I’ve defined here. In essence, think about email support when you first launch as Stage 1, and then within three to six months you want to get to Stage 2 – that we’ll define in a second – and then after that Stage 3. So, Stage 1 is the founder, or founders, are doing all of the support. This is really where you need to start, because at this point you don’t have enough information to be able to train anyone else to do support, and your contact with your customers early on is invaluable because you’re going to be getting so much new information and so many new questions all of the time that, A. you’re going to want to improve the product quickly, B. you’re an upstart so you want to be able to respond instantly. When we had just launched Drip, I was responding to everything within 20-30 minutes. Every ticket you’re just getting back to people. Literally we would get a ticket and build the feature, or add the check box they needed, and get back to them within two hours. That’s how you have to be in the early days, in my opinion, of running a SaaS app or software product, is super responsive because that’s one of your main advantages over one of these big companies, it’s your speed of doing it and your knowledge. Since you’re not a front line person at some big company, you can offer in depth advice and you really know how your product works at this point. So I think there is a lot of value in the founders doing email support for the first, let’s say, 3-6 months.
Mike: The other advantage of doing all of that support yourself early on is that you get a sense of where people are struggling with your product or service. So especially if you start seeing the same types of things over and over it allows you to not only build some training collateral that you can hand off to somebody for tier 1 support later on, but it gives you an idea of where the hurdles are that people are running into, so you can either tweak the product itself, or the service, or you can educate the person who is going to be taking over the support later on, or you can just educate your users a little bit better, and your on boarding material. So, there are a bunch of different advantages to doing that support yourself upfront. I see people trying to just take that and say, “Oh, I don’t want to do support” and they try to hand it off to someone else, and that’s really hard to do just because the fact is you need some of that information. It’s harder to get it from someone else than when you hear that stuff firsthand, because then you get this broad view that is unfiltered from these customers, versus when you hear it through a support rep, because the blinders are on a little bit so to speak. Not that they’re hiding information, but they don’t necessarily relay all of the correlations between the different conversations to you.
Rob: I totally agree. Having that directly line with your customers is big, especially early on. You start to build relationships with folks, and they learn to trust your app, and trust you, and think of the whole experience as being a good one. You need to do that early on in your apps life cycle because you’re trying to build this brand in the early days.
Mike: Just what you said there about the entire experience though, that also relates to how you’re going to do business with them in the future. I think that’s an important piece of this, is that when you’re able to get back to them very quickly and you take care of them, down the road if they start running into problems, they’re not just going to throw up their hands, walk away and go sign up for something else. They’re going to come back and talk to you, especially if you’re either not meeting their needs or if something goes wrong — they’re going to be more willing to cut you a little bit of slack if things start to go wrong. And they’re having problems with the support rep, or maybe there are things going on that are just wrecking their productivity–they’re going to be more willing to come back to you because you’ve done the right thing in the past than they are to just walk away and go find something else.
Rob: Right, and the other reason you want to do support in these early days is that you have no process yet. You don’t have frequently asked questions. You may have made up a few and put them on your website, but you haven’t received enough questions and had to think hard about the answers and created some canned responses, and to know the struggles people are having to be able to train a support person. So, in essence, if you did bring someone in this early on, you could say, “Alright, go play with the app, and then answer the questions the best you can. Anything you can’t answer refer to me”. In a sense they’d assign it to you, but you’d be getting a lot of stuff assigned to you, and at that point I believe wholeheartedly in the value of just being on the front lines for all of the other reasons we mentioned as well as this one.
Then at a cretain point you’re going to want get to Stage 2, because as a founder you can’t spend all of your time supporting the app, and handling front line support. You’re going to involved to some extent, but as the requests become a little more repetitive and you do start to develop a process in your canned responses, and you’re seeing the same questions over and over, you want to move into Stage 2, which as I said tends to be about 90 days in. It depends on how fast you’re scaling up. If you’re still at 20 customers 90 days in then maybe you don’t need to move away from it. But if you hit 75-100-150 customers, you do need to start thinking about getting out of the support role. Here is what Stage 2 involves; it’s basically hiring someone to handle your Tier 1 support. By Tier 1, that’s your front lines. That’s the person who handles every single email that comes in, and either answers them or assigns it to the appropriate person. At that point the founder will probably handle all other issues. At this point you have all of this knowledge so you can create your docs, your training screen casts for the basic recurring issues, and then anything that your front line person doesn’t know how to handle they can assign to you and typically what I was doing was then trying to train that Tier 1 support person by not responding directly to the customer but by giving the support person the knowledge so that they could respond, and either put it into a Google doc or just putting it in the reply so that that person is now trained on how to handle that issue moving forward.
There are a couple of different types of Tier 1 support people. In the old days when I had some small info products, I really didn’t have much of a budget, I did hire really low cost VA’s, let’s say 3 to 7 dollars an hour, often in the Philippines or India, and they were handling stuff. As I’ve been able to level up and build apps that generate more revenue, as well as require a higher level of support, I’ve been able to hire higher caliber, more knowledgeable — some people even with a little bit of technical skill, like help desk level skills, maybe not programmers, but people who know what FTP is, and can explain things to folks. If you get that second kind of person — you know we have Andy doing Drip support and Micropreneur Academy support and that kind of stuff — he is willing and able to learn new things and teach himself, so when we did launch Drip – I had been telling him about it, and I was intending to create a bunch of docs for him – he said, “Just give me a login. I’m going to log in, I’ll look through the KB that you have, I’m going to play around with it, and anything that I need help with I’ll let you know”. That’s obviously the highest caliber support person you’re going to find, but you can certainly start out at a lower level where you really are just handing people canned responses. Even if they’re just handling 50-60-70% of the support and others are still coming through to you, it’s still a worthwhile investment until you’re able to level up.
Mike: And that level of support person is going to take time to cultivate. I mean you said yourself that he had started more on HitTail, and then you transitioned him over to Drip, and by the time he got to that point he just said, “Hey, give me the stuff”. That level of effort on his part is also partly a factor of how you have treated him as a contractor for you. So, that translates over to that new product so that you don’t have to train someone from scratch. Obviously there is training that needs to be done because it’s a new product, but you don’t have to train him on how to behave toward the customers. You don’t have to reset – or set – his expectations about how he should be answering questions. All of that knowledge carries over. It’s not the product knowledge, it’s the “how do you do business?” knowledge, and that’s also very important.
Rob: I agree, and that’s something else to communicate. We have a very customer-centric approach to support where we try to go out of our way and do everything we can to help them, and our refund policy is very liberal as well. So folks want refunds – and unless it’s some crazy thing where they’re asking for the last six months to be refunded – every once in a while we do get those, but other than that, when in doubt lean toward doing what the customer is asking for. And instilling that in the support person; you can’t give them the rules for everything. At a certain point there are judgment calls that need to be made, and if you don’t want to be making those judgment calls every time then you need to start instilling some cultural things, or strategies, rather than just the tactics of how to respond to each individual ticket.
SoSstage 3 of handling email support comes a little later, and I think this timeline depends on your growth but it’s definitely going to be when you start hitting multiple hundreds of customers. This is when, as as founder, you don’t even want to be handling all of the tier 2 stuff anymore. You’re still going to have your tier 1 support person. They might be remote. They might work with you. The odds are they’re going to be remote, because that’s the way you’re going to find someone at a reasonable cost who is still high quality. That tier 1 person is going to be doing the repetitive work; answering frequently asked questions, triaging things.
Then tier 2 spiders out. Instead of it just being you, you, kind of, have five roles that I’ve defined. A founder may need to handle more than one of these, but the five support requests and questions that we see coming through are : developer oriented ones, where they just get too technical for someone who is not into code to be able to answer. So that’s the first kind. The second kind is consolation/advice. And this could be pre-sales, it might be while they’re trialing, or it might be when they’re a customer.This is when someone really needs help understand concepts rather than how to use the specifics of your app. I’ll dive into that in a little bit. The third type is billing questions, asking for refunds, exception, the stuff where someone doesn’t want to make a monetary call. Your tier 1 person may not feel comfortable doing that. Your fourth is product questions, often feature requests and that kind of stuff, and then there is this “Other” bucket that I’ve shoved a bunch of other stuff into like partnership and such.
Let’s take a look quickly at number 1, which is “developer”. If you are the developer, as the founder, you will probably need to be this tier 2 role as well. With Drip, when Derek and I launched it, we pretty quickly realized that there are a portion of the tickets that come through that are just too technical or complex for a tier 1 support person, or even a non-technical founder, frankly. In the early days this developer will obviously be a founder or a true developer, but we realized after we launched Drip, that Derek was not going to be able to actually get anything done if he had to handle all of the tickets that were coming through to the developer support role. Because it can wind up being a quarter or a third of a person’s time in a given week, depending on how many customers you have. So, we hired someone as a developer/support person, so they do handle the tier 2 support. If you’ve interacted with Ian at all, in our support que, that’s who handles that.
Mike: Now I have a question for you about this. When you have Ian doing that does he do any actual development too, or is just a developer who is doing developer level support?
Rob: No, he is spending most of his time building features for the product. He is a Rails developer, and then as support requests are escalated to him he flips over and handles them. But actually less of his time is spent responding to support requests, but he does have that in depth developer knowledge.
Mike: So I’m a little confused. It sounds like you hired someone to shift the responsibility for the tickets off of Derek, but then this other person is spending most of their time doing development. I’m a little confused about how that works. It sounds like you just shifted a problem from one person to another.
Rob: Right, when I said Derek was not going to get anything done that may be an exaggeration. He was spending a quarter to a third of his time responding to tickets, and so development — he’s the lead developer. He handles everything that goes live – all of the deployments – so constantly having him pulled off in the middle of the day, he was really struggling to get the big features built. So we did hire someone else who is not the lead developer. He was, kind of, a Junior when we hired him and now he’s worked up to a mid-level, because he’s worked with us over the past year plus. But then a quarter to a third of his time spent doing it is just a better use of time, because Derek is focused on the big, meaty things, and we can move faster – when all the poll requests Derek has to handle, and that’s his distraction.
Mike: Got it, so you’re really just shifting where those interrupting requests end up.
Rob: Exactly, and overall it makes us more efficient. We get more done. And as we add other developers – assuming your developers handling support requests can continue to handle those – then other people are freed up and they don’t need to handle support requests. It’s not like it Round Robin’s. I feel like that could spell trouble if you’re interrupting a lot of developers all at once. I also think that some developers are good at switching. and others it’s a lot more of a struggle for them. And we happen to have found someone who is pretty good at it. So I think if you do find an avid developer and he’s struggling to do the switches -I’m not good at it actually. When I used to write code I had a real tough time switching into support mode, so I quickly knew that it wasn’t something that I was going to be able to do, so keep that in mind. It’s not something everyone can do.
All right. So our next type of tier 2 question, is this “consolation or advice?”. This almost comes down to customer success. It’s helping them be successful with your product – not necessarily about the nuts and bolts of it – but as an example, with HitTail, we used to get questions about, “How should I do SEO? Does SEO work? Here is my site, do you have any advice for me?” With Drip we often get, “How should I structure my tags?” or email marketing questions, “Are my open rates reasonable? Am I doing something wrong?” It’s like architecture and marketing, structure and advice. Sometimes we will jump on a call if it’s short and it’s an easy question to answer. Other times we’ll answer via email. We do have consultants that we refer people out to if we feel like it’s really exotic, or something where they need a lot of time to help. But being able to offer this kind of expertise quickly and give a few sentences of guidance, we found to be absolutely invaluable. And again, it sets you apart from these larger companies. You email an AWeber or a Constant Contact and they have tier 1 support, but they’re not necessarily knowledgeable on how to structure things, so you don’t expect them to help you out on this front. And as a small company this can be one of your competitive advantages, being able to give very quick consolations or advice for free via a support que.
Mike: So early on I assume that you were probably doing most of these in order to help offload the interrupting nature of those types of requests to Derek. What are you doing at this point? Is there someone that you have dedicated to that type of thing right now?
Rob: Absolutely. I was doing that for the first 18 months at least, maybe two years, and it was super helpful. And it helped me develop my knowledge of all of the markets and how they work differently, and it expanded my knowledge of email marketing and marketing automation and all of that kind of stuff with these different spaces that people are using Drip for. Then about six months ago we hired Anna, who is head of customer success, and she handles these now. It’s going really well. If people are trialing your product they are basically wondering if it’s going to work for them, and if they need help and you aren’t able to give it to them the odds are pretty high that they’re not going to convert. And if you do help them–it’s like you said, it’s that early experience, they learn to trust you as an expert and if your advice works out for them then they become customers. I don’t know that I’ll say life long customers but they become loyal customers because they know that you can help them out in the future if you run into this type of stuff. I think this is probably overlooked in a lot of support qeues, or support structures, but being able to offer this is really quite valuable.
Mike: So, the third one you have here is billing. How do you currently handle billing requests that end up geting escalated to tier 2? I think there are two different things to address here. One is how you handle it versus how it can generically be handled. Maybe we tackle those two things differently.
Rob: Sure, billing is in essence — tier 2 stuff is pretty much passed up to me, because often your tier 1 person won’t feel comfortable making monetary decisions. I will often give tier 1 support the flexibility to make the decision up to a certain dollar amount. You could say, “If it’s 50 or 100 bucks no problem. Don’t even both me with it.” And they may not make all of the decisions exactly like you would, but it’s just not worth your time to handle twenty requests if they’re going to make the same decision with eighteen or nineteen of them. It’s just not worth it. So when billing stuff comes to me then I have to make a decision, and often times I’ll involve other people on the team and get their opinion on how we should handle it, because sometimes there are tricky ones of someone asking for a refund of a bunch of months. There are just anomalies that come up where you have to make a decision and there is no clear path.
Mike: Yeah, some of those there is no right answer and it depends more on what will make the other person happy without disrupting things too much internally, both in terms of your cash flow — because the last thing you want to do is go back and refund like an entire year, especially if the person has been using it for at least part of that time. But yeah, there are always situations where someone needs a refund for a very specific reason, and those tend to be more cut and dry, versus the time where someone asked for a six month or twelve month refund because things have been ongoing. And hopefully you knew about those to begin with, but there are those occasion times that come up where something was going seriously wrong and you had no idea and now suddenly it’s a big issue and fiasco that you have to suddenly be dropped in the middle of without any knowledge of what was going on before.
Rob: The fourth category of tier 2 requests are really around the product. And these are mostly feature requests, maybe bug fixes. But really if it’s a bug the developers are typically just going to jump on it. I think if it’s a super low priority bug, only impacting a small amount of people and it’s not any type of showstopper — like let’s say a misspelling, something not catastrophic – then it’s going to go in the qeue and they’re going to handle it. But it’s feature requests that, kind of, need to be escalated because those always need prioritization. When feature requests come through you want to figure out a bucket that you can put them in. And you can either assign them to a made up person, if that’s how you want to do it. For us, in Help Scout, they get assigned to me and put into “pending”, so there’s a list of all of these pending tickets that don’t show up as active that I need to respond to them, but every so often I go through and make decisions of which ones to put into the issue tracker – which we use a Code Tree over Get Hub issues – or I get the team’s involvement, and I’ll often run through a bunch and make decisions and then ask the rest of the team based on what they’ve been hearing, because they’re dealing with a lot of customers as well and they might have the sense of urgency of certain ones.
In an ideal world, when you get passed a feature request you’d have some context for it. Because not all feature requests are created equal. If a customer is paying you $50 a month versus $1,500 a month, you may need to rate that feature request from the $1,500 a month customer higher. Or if it’s someone that you know really knows the space, and their advice is actually going to help your product grow – we’ve had a ton of those. You get someone like Brennan Dunn or Ruben Gomez using your product and they make a suggestion, that has a lot of weight to it because they know product, and they know email marketing in terms of Drip and when they make suggestions these are ones I really listen to because my guess is these are things that are actually going to be applicable to other people. That’s probably a whole other episode to record, about how to prioritize feature requests. But I think the point here is when they come through support you want to have a pretty systematized way to deal with them, because you are going to get a lot of them. We get several per day. You can constantly being manually copying those into some Google Doc or into some other system. They do need to sit somewhere, and you need to figure out a way to batch them.
Then our last category of tier 2 support is just miscellaneous, or other. You’re going to get these requests especially as you grow, for partnerships, integrations, someone is putting together a packet for entrepreneurs or marketers and they want a discount code, they might need a sandbox or test account, they want to interview someone, they want a quote for a [blog pop?]. I mean, there is just stuff that just comes through. And what you’ll find is that as you grow you start getting more of certain kinds and you’ll want to start either automating them or teaching tier 1 how to make the decision. The example of needing a sandbox or test account, you’re probably not going to build that from day one because it’s quite a bit of time, and so over time it’s been escalated to tier 2 every time, and then I take a look at what they’re doing a make a decision. But recently we’ve realized that we’re getting enough of these requests now that we are going to put something in place with a special URL we can provide for people that have a 90 day sandbox account. This makes it a lot easier for us to handle and it’s not a manual process every time. I think partnerships, any of these, really, could be done that way. You could send them a link to a specific form that goes into a Google spreadsheet and you could handle that in batches, instead of handling each one individually. It’s probably going to be worth it at some point for these kinds of partnership requests or interview requests or that type of stuff.
Mike: It seems like these other requests are the ones that tend to take the longest because you don’t have a canned answer for them, and you have to evaluate every single one of them not only individually but also in the context of the other requests that you’ve received in the past that were even remotely similar, and try to maintain some sort of consistent approach to them. But then in addition to that you also have to take into account the growth of your app or product and making sure that you are doing things in a way that is consistent with what your future plans are for it. So all of those things said, it makes it difficult in some cases just to even estimate how long it’s going to take to address some of these, because some of them take a lot of back and forth as well.
Rob: Okay, so moving on from email support, there are, kind of, three other categories that we’ll cover pretty quickly here because it looks like we’re running out of time. I broke them down into like having a KB or some type of self service support, perhaps using live chat and then finally phone and Skype. Let’s look at KB’s really quickly. We were talking offline before we started recording and I was mentioning how surprised I am at how many people use our KB, and how many people really do want self serve, and they don’t just want to send an email in. They either want the answer immediately, or I don’t know what it is. You had some other theories.
Mike: Mine was that because your audience is somewhat technical they view their time as being valuable, and if they’re working on a problem they don’t necessarily want to do the context switching of moving away, sending off an email to support, moving away and then coming back two or three hours later or however long it takes to get an answer that tells them exactly how to do it. Then they have to slot their time in to come back to whatever it is that they were working on. Essentially they’re in a time period where they say, “Hey, I’ve got got an hour or two to work on this” and they just want to get it done and over with, as oppose to working on it a little bit and then having to sit it down and walk away and then come back to it and do something else in the meantime. Honestly, it’s distracting to have to do that, so when you’re in that situation it’s a lot easier and it feels better to say, “Okay, I’m going to dig through the docs a little bit to see if I can find the answer to this”, instead of just going straight to support.
Rob: Totally, and KB can be used in tandem with your email support obviously. We tend to try to answer questions directly and not just refer people off to KB articles because I hate that. If you email a big company and they just send you a KB link, often times I’ll find it’s a massive article and I can’t find my answer in there, or it’s the wrong answer. So if someone would have just answered me like a human then it would have worked out better. So we air heavily on the side of actually responding to someone, but it’s only when they ask something like, “How do I set up this integration?” and we have step by step that answers exactly what they want. Then we’ll be like, “Hey, we created a KB and here is all of the screenshots and everything. Look them over.” So KB’s are cool for both your own support team to be familiar with as well as external customers. In terms of setting up a KB there are a bunch of options. I have a few that I recommend to people. Help Juice, that’s a shout out to [Amyl Hassrick?]. He has helpjuice.com and I know some folks who use it and are happy with it. Desk and Zendesk which, I think if you’re using them for support they have KB’s built in. I’m not a huge fan of having a KB built into your support software because it’s just one more reason you can’t switch away if you decide you don’t like it. Then, you can use what we do on Drip which is just a WordPress plus a support theme. There is one called [Know How?], there are a bunch of others. If you search for it you can do that. Then you have to work with WordPress and deal with it’s anomalies, and themes breaking, and that kind of stuff so it’s not nearly as easy to maintain as a SaaS approach like Help Juice. But then you aren’t paying the monthly fee and you can customize it as much as you want since you’re in control.
Let’s talk about live chat really quickly. If you’re going to use live chat for support, then you’re going to want to put it “in app” only. If you put it on your marketing site, you’re going to get a lot of sales questions, and that’s a whole other discussion of whether or not you want to do that. But if you’re going to use it for support you put it in your app, and I would even consider only activating it for trial users if you can. That’s something we’re entertaining the idea of these days. We’ve done some “in app” live chat stuff with Drip and have had mixed results in terms of how well it works. Often times you just need time to research something, or you get a question that you need to talk to a developer, or you just can’t answer everything so it’s not actually the most efficient even though it seems like it should be. But there are a number of solutions for this; Olark, Zopim. I’ve heard that Intercoms live chat that what they’ve added is not actually live chat. It, kind of, pings you, but it doesn’t show if people are online, it doesn’t work the way you think live chat should work. I haven’t used it personally, but I’ve heard negative reviews about it but Olark and Zopim are the players that I’ve heard a lot about for this type of support.
Mike: Yeah, I’ve never used chat support before. Inside Communifier where we host the Micropreneur Academy there is a chat system there, and I’ve used that to some extent, but it almost feels like there are much better solutions out there for chat and a lot of things just come in through email. Some people just prefer email over the chats. A chat is one where unless you’re there all the time it can be difficult to do that. So I can definitely see where Intercom might fall down if it doesn’t work the way people think a traditional chat system would work.
Rob: And lastly, talking about phone or Skype or something like that. I think if you’re a single founder and you’re just launching a product on the side then this is not something you want to do. I tried it early on with DotNet Invoice and it was incredibly time consuming. It also depends on the type of customers you’re dealing with. Certain customers you can jump on the phone and it’s a piece of cake, and then others are just really tough to explain things to. You’re trying to explain what a screen looks like, or how to click here, and you can’t give screen shots. And if they’re really non-technical you can’t get them to join a screen share to show them, so stuff can become pretty cumbersome and really kill a lot of your time. It’s also interruptive if you’re taking in-bound calls.
The successful companies I’m seeing do this on a smaller scale – you know, when you have a team of five or something – is to have you initiate the call. You can either give them your number or you can call them directly, or you can set up a [?] and try to do something later in that day, or the next day. It depends on how urgent this issue is, for sure. Sometimes it really is the best route if you have a customer – there are certain customers that you know., and you trust, and you know if they have an issue that it’s not some crazy thing where they’re going to waste a bunch of your time, that they really need help now and sometimes that’s just the best way to do it. And then other times you’ll get a customer who you’re not sure about, and you’re a little concerned that maybe they’re going to try to get you on the phone for 30-45 minutes. Those are the ones you have to make a judgment call about when you do it. If you want to do screen sharing, join.me is a decent example. Certainly if you have something like GoToMeeting and you’re paying for that already. It’s a no-brainer. We found that Skype has mixed results. Some people just don’t use Skype so they don’t have a user name. You have to add them and then they have to accept. There is just more to it than that, but there are definitely options for doing this and sometimes it just is the best option for handling more complex issues.
Mike: Yeah, in terms of tools there are a bunch of different systems out there for screen sharing. Join Me is one. Another one — again, these are tools, and the specifics of the one that you choose are going to be heavily dependent upon how you need to interact with them. So whether it’s you need to show your own screen or you need to share a screen and maybe control their screen, all of those things factor into which tool you use but as you said, Join Me is one of them, Copilot from Fog Creek is another one. Then there is also WebEx and GoToMeeting, and both WebEx and GoToMeeting. Both WebEx and GoToMeeting, on the surface they look like you have to pay for them, but they both have free accounts that you can sign up for. It’s somewhat limited, I think on WebEx you can get a free account and you’re limited to three participants, but after the trial period is over I don’t think that you can request control of the other person’s screen. I think up until that trial period is over you can hand off control, but once the trial period is over you won’t be able to do that.
One of the things that we came up with just before the podcast episode was the idea of treating some of the people you’re onboarding differently based on whether or not they’re currently in a trial, versus when they have been a customer for a long time. Because obviously those people who are just signing on to your service are going to have a much higher likelihood of churning if they are not familiar with who you are, or what you’re doing, and they’re not ingrained in the product. So we discussed this a little bit, we don’t really have any experience there, but if anyone out there is listening to this and you have tried doing this before we’d love to hear from you. Just send an email to us at questions@startupsfortherestofus.com we’d love to hear you’re story and we’ll share it on the air with people.
I think that about wraps us up. If you have a question for us you can call it in to our voicemail number at 1-888-801-9690 or you an email it to us at questions@startupsfortherestofus.com. Our theme music is an exerpt from “We’re out of Control” MOoT used under Creative Commons. Subscribe to us on iTunes by searching Startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening and we’ll see you next time.
Episode 266 | How to Cope with Hard Times
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about some of the hard times they have come across in their entrepreneurial careers. They also give a list of eight coping strategies to help with these hardships.
Items mentioned in this episode:
Transcript
Mike [00:00:00]: In this episode of “Startups for the Rest of Us,” Rob and I are going to be talking about how to cope with hard times. This is “Startups for the Rest of Us,” episode 266.
[Theme Music]
Mike [00:00:15]: 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 [00:00:23]: And I’m Rob.
Mike [00:00:24]: … and we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Rob?
Rob [00:00:28]: Well, we just made the announcement. HitTail has sold, and so I’m down to one software product, just Drip. It feels really weird.
Mike [00:00:37]: I can imagine. Well, congratulations on getting yourself down to just one.
Rob [00:00:41]: Thank you. I appreciate it. We were talking before. We hit “record,” and I genuinely don’t know how to feel. Of course, I’m happy, of course. People are saying, “Congratulations,” and it does feel great to have a nice little exit and have some cash in the bank, be able to focus on Drip; but at the same time, there’s just a lot of emotion. It’s a big change to not have this thing. I’ve owned it for four years. I spent between 18 and 24 months, full-time, just building it up. So, I did find it a bit emotional, I’ll say, to see it go and to realize today, like, “Huh. I no longer own that, and someone else can do what they want with it.” They might redesign the marketing side, or add features to it, or add services or whatever; and I just have no involvement anymore. So, it’s kind of a trip.
Mike [00:01:18]: Cool. Well, on my end, I’m still taking preorders for the new app that I’m working on. Right now, I’m looking at maybe writing some paid ads to drive some cold traffic that I’m going to try and convert to preorders. So that’s my next step in the validation process; to validate the channels that I might try to use for this. I have some ideas based on the conversations that I’ve had from people, and the preorder process has been going pretty well. Nobody I’ve talked to has really had a problem with that. So that part has been going well; but right now I’m focused on trying to figure out where my sources of traffic and customers are going to come from. That’s the next step for me.
Rob [00:01:51]: Yeah, I think that’ll be a fun experiment to run. When you run the ads are you going to run them to the landing page and ask right away for a preorder? Are you going to just ask for an email address and nurture them? What’s your plan there?
Mike [00:02:02]: It’s a work in progress, and it could adjust as it goes along. What I’m thinking right now is I’ll set up a landing page, start collecting email addresses and make it look like – initially, it’s, “This is the problem that it solves. Are you interested in this?” and then put them on a mailing list. Once they get on the mailing list start interacting with them individually to talk to them about the specifics of what it is that they’re trying to solve, why. Although it’s a cold lead at that point, my hope is that those people will have not heard of me before and talk to them and try and convince them to preorder. I do realize that there’s always going to be some shortcomings with that, but without a finished app to show them I’m reduced to showing them mockups. But the goal will be to get them on the phone and talk to them and walk them through some screenshots of what it’s going to look like, and convince them to preorder without having them know who I am. Right now, most of the preorders have come from people who I either know directly, or who know of me, so that makes it, I would say, a little bit less qualified. They’re trusting in my name more than – not necessarily more than the product – because they have heard the product. They’ve seen what it looks like. They’ve seen what it’s going to be capable of. But what I really want to know is can I convert somebody who doesn’t have any association with me first?
Rob [00:03:13]: Yeah, I think that’s probably a good way to handle it. Obviously, I was thinking of the traditional, you know, having a landing page and just doing pre-launch. Like, “Notify me when we launch.” You know, having the value prop and everything. But I think since you have been doing basically high-touch one-on-one so far, and it’s working, I think it’s a really good experiment to figure out if that is something that you’ll be able to do with cold traffic, because that one-on-one stuff and doing the demos it really is magical. It’s so different than just trying to convert someone with words on a page. So, if you’re able to do this, and able to send cold traffic and then basically do demos and get preorders, I think you’re really on to something. And if you aren’t, I guess it would be back to the drawing board to try to find better traffic sources.
Mike [00:03:54]: And that’s what I’m trying to figure out right now, is whether or not the traffic sources that I have in mind are going to be good ones, or do I have the marketing campaign or the ideas about what cold leads would actually want down yet; because I know what the people I’ve talked to want, but can I translate that into words on a page and convince somebody to walk through the process. I know that it’s not going to be perfect. I know that my conversion rates are going to be radically lower than the ones that I’ve experienced so far, but I still want to walk through that process and see what that looks like so that I have a sense, moving forward, of what I can expect once I get to the point where I’m actually doing a full-scale launch.
Rob [00:04:29]: Very cool. What are we talking about today?
Mike [00:04:31]: Well, today’s episode is inspired by episode 11 of the “Startup Chat” with Sully and Heaton, and there they talked about hard times that they had come across inside of their entrepreneurial careers. So, what I thought we’d do today is we’d talk about a couple of different hard times that we’ve gone through, and then go through some coping strategies for hard times in general, and walk through what people can do, how they can evaluate where they’re at, and map out how to move on.
Rob [00:04:56]: Yeah, I was really struck by episode 11. That came out several months ago. But in listening to the story, I found myself resonating with their hard times, and you can just feel the pain that they went through. Coming out the other side, they learned so much from it that I feel like this episode can offer a lot of value to folks maybe who’ve listened to this podcast for a long time and aren’t in tune with what our hard times have been, because I don’t know that we’ve ever sat down and talked about multiple hard times we were experiencing.
Mike [00:05:23]: So, to kick us off, the first hard time that I’ll relay came from back in 2008. At the time, I was running a consulting company. I was actually running my software company and my consulting company at the same time, but I was much more focused on the consulting company. And in December of the previous year, I went out, and I got an office space, and I looked around for somebody to hire. I went to Monster.com and hired somebody through there. I brought in probably, like, a dozen people before I made somebody a full-time offer. And over the next – I’d say, the first four or five months of the year, we were doing great – we had a lot of solid work coming in, and the future looked good.
[00:06:01]: I’d say probably around the fourth month or so of the year – it was probably April-May timeframe – when things started to just not come through. There were engagements that we were expecting to come in, and they didn’t come in. Then the next engagement didn’t come in, and everywhere we looked the world was kind of coming to a grinding halt. This was systematic throughout the entire consulting industry at the time, and it was because of the massive economic meltdown in 2008. One of the first things that companies do when they come on hard times is they start cutting services, and the first service to get cut is what they consider to be “extraneous expenditures”, like having consultants come in and spending anywhere from 6 to $10,000 a week on them. So, almost overnight, our entire consulting revenue dried up, and I ended up letting go both of the employees that I had, and I still had an office space that I was paying a couple thousand dollars a month for. I was in a lease that I couldn’t get out of, and I’d say probably the next five to six months were really, really hard, trying to string things together.
[00:07:01]: I floated the company for a couple of months on credit cards just to make ends meet, and at some point I just said, “Look, I can’t do this anymore.” That was when I let go both of the guys that were working for me, which was really hard because one of them had been the best man at my wedding. I’d known him for 15 years. The other one, I knew that he had a wife and two kids. It was just a very difficult time for me – obviously emotionally, but also financially – because I had dug myself a $75,000 hole, and it was not easy to dig myself out of.
Rob [00:07:31]: What toll did that take on you? What impact did it have on your emotional state, on your day-to-day life: sleeping, eating, emotional state – all that stuff?
Mike [00:07:41]: Oh, it was awful. I didn’t sleep well. I didn’t eat well. I gained weight – and, of course, all those things roll into one another as well. I mean, if you’re not eating well, then you’re probably not going to sleep well. And if you don’t sleep well, you’re not going to eat well either. You’re going to overeat. You’re going to be anxious, stressed out; and all of those things just snowball onto one another.
[00:07:57]: It really wasn’t until about a year to two years later before I got my financial legs underneath me again before things started to really turn around. So it took a long time, and it was just a lot of work to get out from under it. And in terms of an emotional toll, it was just awful. I felt terrible having to talk to the guys and tell them, “Look, this is just not going to work out. I’m going to have to let you go.”
[00:08:20]: At one point, I remember I had taken a trip to go see a prospective customer, and I was on my way back and one of the guys called me from the office, and he say, “Hey, I’m just working on this over here.” I was like, “I let you go a week ago. Please stop working.” I was like, “I can’t pay you for this.” I felt bad, but there was really nothing I could do. I was already in debt up to my ears.
Rob [00:08:40]: Yeah, that’s tough. Yeah, before you get to your second hard time, I wanted to throw mine in. It’s probably the hardest time I’ve had as an entrepreneur since I left salaried work, and it was in 2014. I’ve alluded to it in the past; but, in essence, what happened is 2013 was a very good year. HitTail brought in a lot of revenue. I think we did two MicroConfs that year. Just everything was hitting on all cylinders, and coming into 2014, Drip had launched – at late 2013 – and I had assumed it was going to start growing – right – because, “I’ve done this before, and DRIP’s just going to take off like a rocket.”
[00:09:18]: Of course, that didn’t happen. Drip launched to a nice 7, 8, $9,000 a month; and then there was this five-, six-month period where we were trying to find our positioning, trying to find our market, trying to find the headline, trying to find the right feature set and all that stuff. It was trying to find product-market fit, in essence. Before that time, I had a lot of cash in the bank from 2013 revenue, and I hired a couple developers – a couple extra ones in addition to Derek, so there were four of us. Three of them were developers. And right around March of 2014, I was making some angel investments with some of the cash I had, and I also learned that I had this enormous tax bill. It was the biggest tax bill I’d ever had, and it was because 2013 had been such a big year, and my estimated taxes from the year prior didn’t really cover it. So, now I had a burn rate on DRIP, because I’d essentially over hired – planning for growth, so to speak. But I had so much cash in the bank, I knew it would back it; but then a huge chunk of that cash went out to the IRS. Then the estimated for that year went up. So it wasn’t just paying the previous year, but my estimated taxes were huge.
[00:10:21]: Then all my angel investments that I’d committed to suddenly seemed like they all came due at once. So I wrote a bunch of checks to those, and it was super stressful. My bank balance dropped by 90 percent to the point where I was making lists of “How am I going to cover payroll?” and I was pretty stressed-out. This was early – let’s say, between March and June of 2014. Then things rebounded, and it kind of just bounced around to that year. It wasn’t until Drip really started growing in, let’s say, August of that year – that’s when the hockey stick started. It wasn’t until then – so it was a solid five, six months where I was having trouble sleeping. I was thinking constantly about, “Where can I get cash from?” I was looking at my 401(k), which is something I never do. I mean, you hear me talk about on the podcast about how risk-averse I am, but I was thinking, “I need to cover this thing, because I don’t want to essentially lay someone off who I hired 60 days ago.”
[00:11:16]: So, overall, it was a rough year. It was a really good learning experience for me, both to be more aware of taxes and estimated – stuff like that – not to over commit just because I have cash in the bank. I just wasn’t looking hard enough at the upcoming expenses. There was actually another expense. Like the hotel expense for MicroConf came through late, and I should’ve known that it was going to come through, but I didn’t think of it. So, it’s kind of like that. I’ve become more wary and more aware of, “Just because I have cash in the bank, obviously, I need to be looking down the line and figuring out what big expenses are coming here in the next 90 to 120 days.”
Mike [00:11:49]: Yeah, sometimes those budgeting things are really hard when you’ve got the money in your checking account, and it’s not always easy to set that money aside in your checking account. It’s not like you’ve got little folders where you can tuck the money away or tag it for different things and say, “This is, kind of, already spent.” What was the timeline there? You said there was, like, five or six months where –
Rob [00:12:05]: Yeah.
Mike [00:12:05]: – it was bouncing around, and you were kind of unsure whether or not you were going to make payroll?
Rob [00:12:09]: That’s right. I was going to whatever lengths I could. I was going to go whatever lengths to make payroll – selling annual plans of things, and doing special deals to my list, and really just trying to keep the boat afloat. I never got to the point where there wasn’t money for payroll. I never had to do anything crazy, but I don’t like to be that close to the edge.
Mike [00:12:31]: Now did that have any sort of effect on your relationship with Sherry? Because I remember when I was going through stuff with my consulting company, things were not good in my marriage either, and it was just a stressful thing. I mean, it wasn’t like we were fighting or anything like that. It was always financial stuff. It was just like, “Oh, how are we going to pay for this?” “What’s going on over there with that bill?” Credit cards were mounting up, and when credit cards start to mount up and you’re carrying 50, 60, $80,000 on credit cards, it’s stressful. And it’s not just stressful on me; it was stressful on her as well, because I’m relatively open with that stuff. It’s not like I hide any of my money anywhere. Did that have any effect on your relationship at all? Or, is that stuff kind of insulated?
Rob [00:13:09]: Lucky for me, our personal stuff is insulated enough, and I didn’t put any money on personal credit cards or anything like that. I was still taking a salary, and Sherry was still taking her salary. So the personal stuff was actually fine. It was just the business stuff I was worried about. We didn’t have trouble with that. There were no fights over that, but I was just kind of a pain in the ass. I was pissed off all the time and just stressed out. Rather than pissed off, I was stressed out all the time – for months. There was so much stuff. It wasn’t just about money either, you know? It wasn’t like, “I need more cash.” It was like, “Why the hell isn’t this app growing?” “What’s going to bail me out of this? It’s DRIP growing. Why isn’t it growing? I’ve done this before so many times. Why can’t I get this app to grow sooner?” That was really the thing. So, I was just probably not the most pleasant person to be around during that time, and I think that caused more the issues than anything.
Mike [00:13:56]: Sure, and it’s funny because that – not funny, but it’s ironic that that anger carries over into other aspects. So, you get very frustrated very quickly about just little things. You’re trying to watch a movie on Amazon, and it’s not working, and you get really poised off really quickly – and it has nothing to do with Amazon, really. It has to do with the other stresses that are in your life.
Rob [00:14:14]: Absolutely.
Mike [00:14:15]: On my end, one of the issues was that my wife had stopped working the year before. So we didn’t really have that second income to rely on, which was a contributing factor; but that kind of stuff happens.
Rob [00:14:25]: Sure. It makes it hard, man. It’s hard to make decisions based on the current information, and it’s the best decision you make. Because I’m sure at the time your wife stopped working because you guys were fine. There was cash in the bank, and you had business. Then something changes so drastically, so quickly, and it’s like you can’t recover, and that’s where you get pushed to that limit.
Mike [00:14:44]: So the second hard time – we covered this in a podcast earlier this year, but the second hard time for me was essentially killing AuditShark. And, unfortunately, it was something that I had known for months, probably closer to almost a year, that that was on the horizon, and it was a very distinct possibility; but it didn’t necessarily make the decision any easier. I think when we did that episode, things were probably still pretty raw. The decision was still pretty fresh. But looking back on it now, I look at that and say, “Yes, that was definitely the right decision. I wish I’d done it sooner”, but I also think that there’s a lot of decisions that we make that we wish we had done sooner, and we just didn’t because we were afraid of the changes that were going to take effect because of that.
Rob [00:15:24]: Yeah, that makes sense, man. It’s hard to be into something five years and just make the decision to turn it off. So I know that was a tough one for you.
I think, to a lesser degree, my other hard time was just the recent sale of HitTail. There was a hard time during due diligence and everything, because where were some – we’re trying to transfer it over, and due diligence can fail pretty quickly, and then sales can fall through. And by the time you’re that far in, you are emotionally invested in exiting, essentially, and not owning it anymore. You know that the cash is in escrow, and that it can go into your bank account anytime. And so I actually had many sleepless nights just a couple weeks ago, wondering if the sale was going to go through. We had trouble transferring some servers, and some of their guys were in the Ukraine, and so it meant that I was up late at night. So, I wasn’t sleeping well. Like you said, I was eating, kind of, crappy, different times of the day, and it just – it was a tough week, two week span during that time.
[00:16:18]: Now that I’m out of it, I expected there to be a massive relief when it happened, and it’s hard to process. Like I said earlier in the episode, it does feel good, and it’s the right choice, and I feel good about it. But it doesn’t mean that suddenly all of that stress is – poof – gone, right? I think I almost need time to heal from that and then get some distance from it, because I’m still turning on that and having maybe some resilient feelings about it.
Mike [00:16:44]: You know what that reminds me of, is selling a house. Last year, I sold a property that I had up in the Adirondacks that I had bought back in, I think, 2003 or something like that. It was basically this little cottage on a lake that I had kept for all these years, and I sold it last year because it just wasn’t something that we used very often. It was a monthly drain, and, quite frankly, for the amount of time that we used it, it just wasn’t worth keeping it. But at the same time, there’re still issues with selling a property that, one, you don’t live in, and. two, you’re just not anywhere close to. I mean, it was a six- or seven-hour drive to get there, and it was a seasonal property, so selling it was problematic. When it finally got to the point where it was going through the process, and they had brought somebody in to take a look at it and inspect it, and going through all the paperwork with the lawyers – that stuff just takes time, and you do have sleepless nights when that kind of stuff is going on. So, I can definitely relate to that. I mean, I think that that’s probably a similar situation, and I think there’s a lot of listeners out there who probably will go through something similar at some point in their lives, because selling your house is something that a lot of people go through.
Rob [00:17:47]: Yeah, I do think it’s similar. There’s also some emotional attachment to a house, typically and –
Mike [00:17:52]: Yeah –
Rob [00:17:52]: – that’s part of it, you know.
Mike [00:17:52]: – Definitely. Yeah, with mine, it was a vacation property that – I grew up in that area. It was a very small lake. It was only, like, three-quarters of a mile long, or a half a mile long, or something like that; but I spent my childhood there. So I was very emotionally attached to the area – not just the place that I had purchased. So, yeah, all that stuff factors into it. It can be hard to let go. And when I sold it, all the paperwork was done, the money hit my bank account, and I’m just like, “Huh.” I didn’t know how to feel. I should have felt great about it, because it’s like, “Oh, I’ve got this financial burden, and I’ve got money in my account now.” I didn’t really know how to feel about it.
Rob [00:18:26]: I think that’s a good summary of how I feel. I don’t know how to feel about it yet, you know? I think as you move further away from it, I think that’ll become more clear for me. So it looks like you have eight strategies here for coping with hard times.
Mike [00:18:39]: Yeah, the strategies that I put together come from a couple of different sources. Some of them actually come from Alcoholics Anonymous. Other ones come from places like “The Huffington Post” and a couple of other places, and we’ll link those up in the show notes. These eight coping strategies essentially allow you to reflect on what’s going on, and work your way through it both mentally and emotionally. To start off with, the first one is to reflect on the situation. Whatever that situation is, you have to recognize that not everything is your fault, but that doesn’t mean that you shouldn’t take responsibility for some of the things that are. So inevitably, in any situation where you’re undergoing hard times, there are going to be places along the way where you made some mistakes. And you have to admit that you made some of those mistakes, because you can’t change something if you don’t take responsibility for the mistakes that you’ve made.
Rob [00:19:26]: Yeah, definitely in 2014 I was reflecting pretty hard on. “How did I get there?” I think I have several pages in my notebook where it’s like, “What did I do wrong so that I never do this again?” I did tend to adopt things as my fault. I took responsibility for what had happened. There were a couple unforeseen things. There were a couple foreseen things that I didn’t keep in mind. I’m a big, big proponent in taking responsibility for as much as you can handle, because I think that the sooner you do that, then the sooner your attitude will turn from one of kind of a victim, of “Everything bad happens to me,” to, kind of, the victor – right – someone going after victory and striving to overcome a hardship; and to look at it rather as something that’s beating you down, as something to overcome.
Mike [00:20:12]: And something else that you had just mentioned there was the fact that there are things that are going to happen outside of your control. That’s part two, is accepting that you have limitations. There are limits to things that are under your control, and some of those things you simply can’t change. That includes things that have happened in the past. Stressing over the things that you did, or the things that you didn’t do, isn’t going to change any of those things – and you have to accept that. There’s no other way to move on is to accept that there were things that probably happened that were completely outside of your control.
Rob [00:20:41]: I think that’s important, and I think there are things that happened that could be within your control, but they’re done now. You made a bad choice. You got yourself into this mess. Now figure out how to fix it rather than stressing about things that you did incorrectly, or you did poorly, or you didn’t foresee that you should have. That’s actually why I sat down and spent the focus time to write it in the notebook and figure out: “What did I do wrong? What will I not do again? What are the strategies that I’m going to use to get out of this over the next several months?” I used that, frankly, as a way of closure, so that I was, in essence, accepting my limitations; accepting I made some poor choices. Then at the end of that, I said, “Okay. Now I’m not going to think about that anymore,” because I’ve essentially documented it here, if I ever want to reference it in the future. If I suddenly come up with another idea of something I did wrong, I will come back. I will write it on this list, and I’ll be done with it.” I, kind of, brushed that dust off of me. I was done thinking about the stupid things that I did, or the mistakes that I made, or the decisions that I shouldn’t have made; and then I was ready to fight this thing head on. That’s a transition that I think you need to make in this. Kind of, accepting your limitations and not stressing about the past.
Mike [00:21:52]: The third coping strategy is to recognize that everyone makes mistakes. You can’t always be perfect. You’re not always going to out and be successful at every, single thing that you do. But at the same time, you have to make sure that you’re willing to make those mistakes, because if you’re not willing to make mistakes, then you’re not going to learn. You’re not going to grow as a person. But you have to be painfully aware that everything you do isn’t going to turn to gold. And even if there’s people watching you and you don’t want to make mistakes, you’re going to make them. You can’t always be perfect.
Rob [00:22:21]: I don’t accept this. I know that I’m not going to be perfect, but I still get pissed off every time I make a dumb mistake. Every time I look back at a decision that I made and I think, “You know, I should’ve made a different decision. I had the information,” or, “I was sloppy,” or, “I was a little bit lazy” or whatever, it infuriates me. So, of all these eight, this may be the one that I struggle with the most. I hang on to things for too long. And that’s why I’ve started adopting that approach of going into the notebook, writing down what I did, writing down why I did it, why I’m not going to do it again in the future, and essentially trying to close that chapter so that I can move on and fix the problem.
Mike [00:22:57]: The thing that gets me, I think, the most, is in situations like this – where I’m afraid of making mistakes – is that I’ll have a tendency to procrastinate, or hold off on making a decision, because I don’t want to make the wrong decision. I know conceptually, “Oh, I should just make a decision and move on.” But sometimes it’s really hard because you don’t have all the information you need. You know that you want to make a decision, but you don’t want to make the wrong one and waste a lot of time or effort. For me, I find that –
Rob [00:23:22]: I think that’s really –
Mike [00:23:22]: – challenging.
Rob [00:23:23]: – common. I do that from time to time, too. The procrastination on a difficult email, or a difficult decision – it’s like our lizard brain’s way of keeping us from making that hard decision, right? Because we don’t want to endure the pain of it.
Mike [00:23:37: The fourth coping strategy is : remember that you grow as a person through some of these experiences. These experiences are what help to shape you, and they help you learn, even if they’re painful. One of the things that you have to keep in mind is that the mistakes that you’ve made in the past are essentially what make you who you are today. If you’d gone through a hard time in fifth grade, for example, you’re going to remember that, and it’s going to influence who you are today, what decisions you make, and what decisions you make down the road. That’s true of anything that’s happened in your past. Anything that sticks out in your memory, those things shape who you are. But they also make you what you are. You wouldn’t be where you are today, or who you are today, without those experiences. So it’s important to just take a little bit of a step back and recognize that those things are important to who you are.
Rob [00:24:23]: I think they have a way of feeling really crappy while you’re in them, and then, in retrospect, being pivotal points in your life – or, at least have the potential to be, if you look at them the right way and if you learn from them rather than make that same mistake over and over – which some people do, unfortunately. But if you’re self-aware enough to be thinking about this stuff, I think that when you’re in the midst of a hard time, it is much better to think about, “Wow. This time sucks. I feel like crap. I know a lot of other people go through it, too.” And you can come back to this episode. You can go to episode 11 of “Startup Chat” to hear each of us talk through that, and you can probably hear a little bit pain in our voices. You don’t just get over this stuff. It hangs around with you. There’s this resonant internal trauma that I don’t know if that ever goes away, because you remember how hard that was. So, if you’re in that situation, what I’ve started doing is: a) trying to think about other people who have gone through it, or go through something like this, and also realizing that there is opportunity here; that, “Even though this part sucks, once I make it out of it, I’m going to be a better entrepreneur, a better founder,” or a better whatever it is you’re trying to be.
Mike [00:25:30]: The fifth coping strategy is to not give in to some of your fears. Many of the fears that we have are more imagined than they are real. So, for example, not everyone is watching you or is thinking about you all the time. Many of the beliefs that we have, or the fears that we have, are very self-limiting. So going back to what you had said earlier; people procrastinate when they’ve run into a situation where they have a difficult email to write, and they either put it off or they take forever doing it because they don’t want to make that decision. They don’t want to click the “send” button, for example. There’s other situations where you’re simply afraid of – you know what action you have to take, but you’re afraid of what the consequences are. I think the reason for that is we’re more afraid of the unknowns than we are of the things that we know we’re going to run into. So, you click the “send” button. What’s going to happen? You might be able to think of two or three different situations that can come out of that, but you also know that there’s a distinct possibility that there’s other things that could happen that you just aren’t aware of, or you couldn’t even begin to contemplate happening. That’s what’s more scary. It’s not the things that we know could happen, it’s the fact that there could be things out there that are going to happen as a result of hitting that “send” button that you just didn’t even consider.
Rob [00:26:39]: I’ve gotten so much better at this over the years, and the first thing I ask myself now when I see things tanking, or when I feel hard times coming on, or when you get an email from a patent troll saying they’re suing you for some patent they own that they aren’t using. The first thing I ask is, “What’s the worst that can happen here?” “What’s my worst-case?” And if I don’t know the answer, I try to find out. I find an expert. I find a friend. I find the Internet. I research and figure out what is the worst-case outcome of the situation. Maybe that means sitting down with your notebook, or talking to your spouse, or talking to a trusted adviser, or someone. Try to get a reality check on your fears, because your fears can run rampant, and your body stresses out, and anxiety goes through the roof; but often the worst case is nowhere near as bad as you are feeling it could be. And if you sit down and logically think through what you’re actually afraid of, in most cases it’s not nearly as bad as you think.
Mike [00:27:32]: That one leads directly to the next one, which is remembering that you’re not alone in the world. There’s always other people that you can talk to who are going to listen. Whether that’s friends, or colleagues, or family, they can help to level-set your expectations and help to ground some of those fears, or biases, that you have and help you objectively look at them a little bit better so that you don’t sit there and dwell on them forever, thinking, “Oh, I should’ve done this.” or, “This could happen.” They can give you a little bit more objectivity than you might have yourself.
Rob [00:28:01]: Yeah, and like I said earlier, that can range from a spouse. It can range from your mastermind group – which I definitely talk to about all this stuff. It can be someone that you hire you might trust, and you can hire them through Clarity. Or, maybe it’s an adviser that you’ve had for a long time. Or maybe it’s a therapist. If you go to therapy already, someone can give you a sanity check on this type of stuff. I can even see having a consultant or some type of expert that you pay. It depends on your situation, but let’s say you’re in a legal thing, or a tax thing. It’s like getting a CPA or a lawyer to tell you, “Oh, the worst-case is this.” That’s actually worth quite a bit to hear from an expert that it’s probably not a bad as you’re making it out to be in your head.”
Mike [00:28:42]: The seventh coping strategy is to map out the appropriate course corrections. Essentially, what this amounts to is determining what things need to change, and how you can get there. You need to pick one thing that needs to change and fix it and, then once you’ve done that, figure out what’s next. Sometimes you can do multiple changes at the same time, but depending on how big they are, or the situation that you currently find yourself in, that can be more difficult than other times. You really need to sit down and logically think through, “What are the next steps here?” “How do I move on from this, and what needs to be done?” “What do I need to do?” Because just sitting and waiting for a situation to resolve itself is almost never going to actually resolve it – unless it’s some time-based thing where you literally have to wait until a certain date before you get more information. Typically, that’s not going to happen, but if you can sit down and walk through – clearly identify the one or two things that absolutely need to change, and those things need to change first – you can work on those and then iterate through the rest of them and eventually solve the problem.
Rob [00:29:40 ]: Sherry has a phrase that she used once. I don’t know if it’s common or not, but she said, “I went from ‘Oh, no’ to ‘Oh, hell, no.’” It just meant this mindset shift of feeling like, “Oh, no. Everything’s terrible whether I made a mistake. I’m going through a hard time. This is stressful,” to, “Oh, hell, no. I’m not going to allow this to happen.” That’s what we’re talking about here. It’s that mental shift from dealing with the stress, or dealing with the hard time, to suddenly shifting into fixing it, and figuring out the strategies that you’re going to sketch out in your notebook, or you’re going to talk through with the expert, with your spouse, with your mastermind group to correct this course, and to make things better – and not make the mistake again, but also to be able to fix it in the short term and move away from whatever hard time it is that’s plaguing you.
Mike [00:30:28]: The eighth coping strategy is to ask people for help. This could be in the form of accountability, or moral support. It could be guidance. It could just be you need an extra set of hands to work on something. But essentially you need a framework to help make sure that change is going to happen. Sometimes all you need is that accountability. Sometimes you need somebody to say, “Hey, this is something that you still need to work on, and it still needs to get done.” Or, if you just need somebody to say, “Look, you’re doing fine,” and, “Things are not nearly as bad as you think they are, but you still need to keep going.” Sometimes, that’s all you need. Sometimes, it’s just, sort of, a coach. But other times you will need that extra set of hands. If you ask for it, chances are really, really good that you’re going to get that help.
Rob [00:31:07]: Yeah. I think, as founders, we’re a little bit headstrong. I know that I am. I have a really tough time asking for help, but it’s something I’ve gotten better at over the years, and to letting people into my inner world as I’m going through hard times, rather than referencing them once I’m through them. I personally think, in retrospect, looking back at my life, I think it’s a mistake when you try to deal with stuff on your own, because there are almost always some people around who – if you give them the information and you let them know what you’re going through – they can help.
[00:31:36] That wraps us up for the day. If you have a question for us, call our voicemail at 888.801.9690, or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt, used under Creative Commons. Subscribe to us 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. [00:31:57]
Episode 265 | The Absolute Bare Minimum You Should Know About Segmenting Your Email List
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about the bare minimum you should know about segmenting your email list. They discuss the different stages your customers can be categorized as and how to target them specifically in order to get them to the next stage.
Items mentioned in this episode:
Transcript
Rob [00:00:27]: In this episode of “Startups for the Rest of Us,” Mike and I discuss the absolute bare minimum you should know about segmenting your email list. This is “Startups for the Rest of Us,” episode 265.
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.
Mike [00:00:28 ]: And I’m Mike.
Rob [00:00:33]: – and we’re here to share our experiences to help you avoid the same mistakes that we’ve made. What’s the word this week, Mike?
Mike [00:01:06]: Well, we got a really interesting listener question from Chris Koenig, and he says, “Hi, Rob and Mike, I really enjoy the show. My question stems from your FAQ on startupsfortherestofus.com, specifically the part about transcription. You’ve switched transcription services in the past and mentioned how each one seems to decline in quality over time. When you see a pattern like that, what, if anything, does it tell you about the market? Does significant customer turnover mean these companies are having trouble scaling up? Or, might it be a deliberate tactic to focus their attention on the newest customers for that initial trial period? Hope it’s not too inside-baseball for the show, but I’m curious about the space and would be interested to hear your viewpoint.”
Rob [00:01:39]: My take on it is that people come into transcriptions because it’s easy to enter, and there’s no barrier to entry, and that’s a problem. It’s basically a commodity business, and people underprice themselves at the start because there’s no other way to compete in a commodity business, right? It has to just be cheap; but then they get in three months, six months, 12 months and realize, “I’m not making any money. This is a lot of work,” and they either just bail on it; or, maybe they’ve raised prices, but they’ve grandfathered, and so those grandfathered people, they’re giving less service to because they’re not making as much money. That would be my take on it.
Do you have a sense?
Mike [00:02:37]: Yeah, that was going to be my guess, was the grandfathering of existing customers because if you’re offering a commodity like that and and the price point’s really low, it’s difficult to justify raising your prices to the existing customer base. So, when they find that they need to raise prices because they’re not getting the people to do the transcribing that they need to, or things are just not working out as well in terms of quality, then their pricing model basically goes to heck in a hand basket. So, it makes it difficult for them just to make ends meet. And I think that that’s it more than anything else, because most of these – I think the ones that we’ve gone to tend to be newer. It’s not like there are transcription services out there that we’ve used that have been around for a very long time, so obviously there’s going to be that issue of trying to go up-market with it and keep your existing customers happy while also trying to charge them more. I think that most of them just – I don’t think any of them have ever come to us and said, “Hey, we need to raise our prices.” I think they’ve all just capped it at, like, a dollar a minute or something like that.
Rob [00:03:40]: I know, and if I was doing a productized consulting service or, I guess, even as these guys are, really, at just an hourly service, I don’t think you can grandfather the way that you do a SaaS; because the reason you can grandfather with SaaS is because a lot of the effort and the time is spent up front acquiring the customer and then onboarding them and supporting them early on. After that, the marginal cost to support them is very low, and so grandfathering them at an older, cheaper price is pretty easy to do. But in terms of ongoing consulting engagements, where you’re literally paying someone to do an hourly or a by-the-minute task, I do think that you need to raise prices over time. Just the way it needs to go in order to maintain a viable business. I do think that your better customers are going to understand that.
We did have some pretty reliable services transcribing over the years, and if they had come to us and said, “Look, we need to raise 10 percent, 20 percent,” we would’ve done it; because the switching cost is painful. If they needed to double their price, that might’ve been a problem, but the fact that the quality has declined over time pretty much across the board – I think we’ve used six or seven, different transcription services in the last five years because within about six to nine months, they all eventually flail around.
Mike [00:04:27]: I think the other thing that factors into that is when you are running a service like this, you have employees or contractors that are working for you, and they’re working for a set wage. Let’s call it $10 an hour just for a nice, round number. At some point in the future, you’re probably going to want to pay the people who’re doing a really good job more, and it’s difficult to raise their salary if you’re not bringing in any more revenue from the customers. And that is a fixed cost. If it’s $10 an hour, if you’re only making $11 an hour from the customer, it’s hard to raise what you’re paying that person in order to retain them as a good employee or a good contractor and still make ends meet. I think that also factors into it as well just in terms of the timeline, because you’re right. We’ve gone through a bunch of these, and over time, without fail, they eventually go downhill.
Rob [00:05:23]: That was a good question. Thanks for writing in.
On my end, just kind of as an update, my chaos is definitely subsiding. Some things have wrapped themselves up. There was a big sale I was working on that closed last week, and so I do feel like a nice exhale coming about in my life as kind of the overwhelm has dissipated. I feel like I’m able to get back to focusing on things that matter instead of just rushing around like I was for the past few weeks. Things are clear, and it’s end of the year. Not a ton happens in terms of business stuff here end of November and December, but this is the time when I’m going to take to really focus on what 2016 needs to look like; and I’ll probably be doing my personal/business retreat here in the next, I’d say five or six weeks, taking notes, figuring out what my goals are. You and I need to record a goals episode, where we look back at the goals we had for last year and plan our goals for 2016. I’m going to be honest. I’m kind of looking forward to what I’m hoping is the quiet of December.
Mike [00:05:30]: Cool. Well, on my end, I’m actively taking pre-orders for the new product that I’m working on, and I’ve got about half a dozen pre-orders so far.
Rob [00:05:31]: Nice.
Mike [00:05:48]: The product itself is aimed at automating the process of moving people through your sales pipeline. If it’s a high-touch sales pipeline, it helps to automate the process of moving them through it so that you can essentially focus on your own work as opposed to going back and continually following up with people.
Rob [00:05:54]: Very nice. When you say “taking pre-orders,” do you mean that you’re getting verbal commitments, or are you actually charging credit cards?”
Mike [00:05:56]: No, I’ve actually charged half a dozen credit cards so far.
Rob [00:05:57]: Bravo.
Mike [00:06:09]: Yeah, it’s going well so far. I’ve still got a bunch of conversations that are scheduled over the next couple of weeks, and I’m hoping to reach my internal goals for financial commitments. And once that’s been reached, then going to start breaking ground on the code.
Rob [00:07:00]: Sounds good, man. It’s exciting stuff.
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Mike [00:07:01]: What are we talking about this week?
Rob [00:09:24]: This week, we’re talking about the bare minimum that everyone should know about segmenting your email list. The idea here – obviously, I run Drip, which is about segmenting emails and sending targeted communications to people based on the things they’ve done and what you know about them. It’s actually funny. When we’ve demoed Drip at, let’s say, conferences, or went to the Microsoft Build conference last year, people say, “Oh, so you guys send spam or something?” Developers especially would come up and joke about that, and we said, “Actually, no. We ensure you get fewer emails that are more targeted to you rather than just getting these blasts from these big companies.”
So, that’s really what we’re talking about today, is the fact that one-to-many email, you know, just the broadcast email, sending it out to your massive list, is really dead, or it’s dying. The businesses that are really savvy at it these days are moving towards one-to-few and one-to-one email, and what that means is that the more you know about someone, the more customized that email can be to them, and the more customized the flow that they follow through your app and your email sequence will go. It’s not magic. It’s not like it’s some AI thing cranking out these magical emails. You have to write these emails, and you have to build certain flows and move people in and out based on tags, or based on what they click; but the idea is it’s about sending people the exact message they want to hear at the right time, to encourage them to take the next step.
That’s what email segmenting is about. It’s about figuring out, “How many buckets do I need to drop people into?” because it’s not as complicated as it sounds, right? It’s not like you need 100 different buckets for your list. Really, what we’re going to talk about is there’s essentially four stages, or four buckets, that I start with. You can go more complex than this, but the minimum you’ll want to know is you’re going to have a marketing list. And these are people that have not signed up for a trial. They have not downloaded a sample of your product. They’re people who are just hanging around, and they’re going to want top-of-the-funnel educational content: maybe blog posts and updates on your product from a high level, like feature stuff, but not in detail how to use it. It’s not super educational. That’s the first bucket, or first stage, is marketing.
The next one I call them a “trial user.” This applies mostly to SaaS, but it also applies to – let’s say you’re selling an eBook and you have a sample chapter. I consider them a trial user, because they have downloaded something, hopefully consumed it. You’re going to need to encourage them to consume it via email, and that’s your second book. It is, in essence, a trial user; and your goal there is to nurture them through that trial path to becoming a customer. That’s, of course, the third stage, is someone paying you. Then the fourth stage is someone becoming a repeat customer.
Mike [00:09:54]: I think there’s different subsections of these stages that you can have as well. For example, if somebody’s a trial user at that second stage that Rob just talked about, they could be somebody who basically fell out of the bucket at that point. They signed up for a trial, and then they decided not to proceed, for whatever reason. That, in essence, becomes something of a subset of that particular stage, and you may want to market to them differently. But at a high level, these four stages generally capture the bulk of your audience.
Rob [00:11:50]: Yeah, and if you’re listening to this, wondering who does this actually apply to, I think there’s three or four markets that I thought about when I outlined this episode; and they are, of course, SaaS and downloadable software. That’s the first. Second is consultants and freelancers. The third are people selling information, basically eBooks, online courses; if you have a personal brand, or you’re a blogger, that kind of thing. All of this heavily, heavily applies to you and you really need to be doing this, moving forward or, else, you’re going to fall behind.
The other two that I thought of that this applies to, but it’s not necessarily what I was thinking when I outlined this, e-commerce. E-commerce tends to be quite good at this. If you have an online store, you basically have your friend list and then people who are hot leads, and then you have your customers and then your repeat customers.
And lastly, even – in Drip and, frankly, in HitTail we’ve had a lot of folks who are lawyers and real estate agents, and it’s the more tech-savvy of those groups. For them, it applies as much as it does for consultants, as much as it does for SaaS. You may not be doing it, but it really puts you ahead of your competition if you are segmenting your list like this and really sending people exactly what they want to hear.
So, let’s dive in. Like I said, there’s these four stages. It’s basically marketing, the trial user, customer and then your best or your repeat customers. Let’s start with this first bucket of marketing. These are the people that really you want to be educating about your space, your industry. You want to be educating them a little bit about your product, but you’re not doing necessarily a hard pitch very often. You’re going to be capturing these emails using a lead magnet, some type of opt-in reward. I always recommend an email mini-course over something like a PDF, because the course is nice because it’s over five or seven days, and it gets them used to opening your emails and reading them. People are more likely to consume something if it’s in their email inbox, because they can just do it right on their phone; whereas, a PDF, they’ll typically download it, put in Dropbox and then not read it unless you ping them again and encourage them to do so. A PDF tools list is a really good start to capture that email. But I prefer, if you have the time, to instead put together an email mini-course.
Mike [00:12:32]: The other thing, I think, that is overlooked in terms of the tools, especially in terms of PDFs, is just Excel spreadsheets that allow people to calculate different things. I think when we had Jesse Mecham on the show, he talked about how his very first product was actually just a Excel spreadsheet that people could download and he would charge them for it, and people were more than happy to pay for that because it would help them do their household budgeting. That essentially morphed into youneedabudget.com and the product that he sells today, but it was a tool that people could use. And Excel is notoriously useful in a variety of different circumstances, and if there are ways to build a simplistic tool out of Excel, then you could offer that as a download as well.
Rob [00:13:12]: Right, and if I was going to do that, what I would do is offer the Excel as a download. Just as a reminder, you don’t want to attach that to the email, because spam filters and all types of stuff choke at that. You definitely want to have it up on a server somewhere and then link to it within the email. Once they download that, well, then you put them in a sequence to hear from you the next day and be like, “Hey, what did you think of that?” “Did you notice that cell 35 does this?” “Here’s a quick use case for it.” Then you ping them two days later, and you say, “Hey, by the way, with that thing do you know there’s this other feature you can do in that Excel spreadsheet that I gave you?”
In essence, you turn it into a mini-course even though they really opted in for that core thing; but you’re kind of educating and teaching them how to use it and how to get value out of the thing that they downloaded from you.
Mike [00:13:36]: Why don’t you expand a little bit on that, because I think that some people don’t necessarily realize that just the nature of attachments – not just that they get blocked on a regular basis, but also the fact that you don’t know if they’ve opened it or not? You don’t know if they were interested in that attachment. Why don’t you talk a little bit about the process of, for example, tagging people when they click on those links? Obviously, if it’s hosted someplace, how do you know that they downloaded it?
Rob [00:15:00]: Yeah, that’s right. That’s a good point, actually. With an automation tool like a Drip or an Infusionsoft, you can basically just put a little rule in that says, “If someone clicked on this link in the email, then tag them with downloaded Excel spreadsheet,” right, or, “downloaded X, Y, Z report.” Like you said, you can’t tell with an attachment, so you lose out on that reporting.
What you can do later on with the information of whether or not someone actually downloaded it is if they didn’t download it, then you can send them another email the next day, or two or three days later. You can say, “Hey, I noticed that you got the email and you didn’t actually download the thing. I wanted to give you another opportunity to do so.” If they do at that point, then you’ve now pulled them into your funnel, and you can send them more information about how to use it. If they don’t, then that may be time to write them off. You don’t want unqualified prospects in your funnel, because that just kind of wrecks your numbers and over time, if they’re not opening your emails, not clicking your links – the ESPs are pretty smart these days, like Google and with Gmail and Hotmail on Yahoo, they’re starting to get smarter and smarter, and if people are not interacting with your emails, not opening them and not reading them, over time Google knows that; and they start putting your stuff into promotion and eventually will just put your stuff in spam if you even get a small number of spam complaints.
It’s valuable to know who on your list is doing what so that: a) you can target them differently. That’s really what we’re talking about here, right, is segmenting them; and b) so that your deliverability and your placement in these email inboxes remains high.
Mike [00:15:39]: What I like to do in those cases is, if you see that somebody hasn’t downloaded something that you sent to them that you wanted them to, you just send them a reminder email so it doesn’t say, “Hey, I noticed that you didn’t do this,” because it depends on your audience a little bit, but it can come across as, “Oh, my God. You’re tracking me,” or, “You’re looking at everything I’m doing.” Well, yeah, you are, but at the same time, you don’t necessarily want them to feel that way. So, I like to just send them an email that says, “Hey, just wanted to remind you about X.” But if they downloaded it, then they wouldn’t get that reminder. So, that’s a neat way to be able to get around those. And those are all psychological objections. They’re not technical limitations or technical objections. It’s just how you are interacting with the people that are on your list.
Rob [00:15:58]: Yeah, that’s a good point, actually, is knowing your list and knowing how they’re going to react to this stuff because, if you’re emailing marketers, they know. They know that you know if they opened it or not. But if you’re emailing less technical folks, or maybe developers, or people who aren’t necessarily in tune with all the fancy tools that we have in a tool like Drip or Infusionsoft, then you’re right. You may need to couch it a little differently.
Mike [00:17:09]: Part of what you can do in addition to just tagging people is you can use mechanism for what’s called “lead scoring.” The lead scoring allows you to figure out who is engaging with your emails. You can use that lead scoring mechanism to subscribe them to additional sequences, and you might use that in cases where, if somebody has opened every, single one of your emails. Then chances are good that they are really engaged with the content, and you might want to send them a special offer. So, if their score reaches a certain level, you send them into a different sequence in order to either make an offer for an upsell, or a special bonus or something like that. It doesn’t even need to be something that you’re selling to them. It could just be something that you’re giving to them as a reward for interacting with your emails. But those lead scoring mechanisms can help you to determine who you should be approaching with some of your different products or different services that you’re offering. You tend to not want to send an email to somebody saying, “Hey, buy my thousand-dollar products,” if they’ve only ever opened up one of your emails before. So, in a way, this lead scoring allows you to get a lot more intelligent about who you are targeting with the different emails that are in your different campaigns.
Rob [00:20:45]: Yeah. If you’ve never used lead scoring, it is mind-blowing to basically be able to have a score that tells you how engaged someone is with your website and with your emails. The concept behind lead scoring is you can set a point value that, when someone opens your email, let’s say they get +1 point. That’s typically the default, and there’s kind of a generally agreed-upon marketing automation thing. I think Pardot and Marketo published things, and they said open is worth one point. A click is worth three points, and then visits to your pricing page is often worth five points. And so we have that, of course, all built into Drip. We built lead scoring into it pretty early on.
And then you can configure it as well. Our tour page, we give folks three points if they visit it. If they visit your careers page or your job listing page, you typically deduct ten points, because it’s indicating that they’re probably looking for a job. You can then add custom events, like, hey, they signed up for a trial, maybe, or, even if you had maybe used a tool. Like, if you have a tool where you’re doing a website grader, or a speed test, and they entered their URL, that could be an event that, hey, they pushed that through, and you could give them five or ten points for that. Downloaded a report.
And then you basically set a lead threshold where you say, “This person, when they’re below 65, let’s say – and that’s, again, typically the default – when they’re below 65 points, they’re really considered just a prospect. They’re hanging around. When they bump above 65, now we’re going to call them a lead, and you can do stuff with them.
One thing we do with Drip is if you get on our list and you’re really engaging with our stuff, in addition to the educational content that we’re sending you, we also subscribe you to a second campaign at the same time, that we call our – it’s our RTB sequence, “Ready to Buy.” That one has a little more Drip-specific stuff. It’s less education about marketing automation and less segmentation, and it’s more about, “Hey, this is why Drip is for you,” and, “This is what Drip can do for you,” and, “This is a comparison of Drip and MailChimp,” “Drip and Infusionsoft.” “Here’s how to sign up for a trial.” “Here’s how to click to get a demo.” There’s a little more sales talk. It’s not high-pressure, but it definitely leans in a little bit. The reason we can do that and feel comfortable is because these are the folks who are really engaged with our emails, so it’s indicating that they are actually interested in hearing about us.
The last piece in the marketing stage is something that you can do. Again, this is optional, but it’s interesting that, if you’re asking folks to do a live demo, what you often find is you have a lot of unqualified folks signing up for demos. If you can figure out what that pivot point is, where someone is a really heavily qualified lead, or that they’re worth doing a one-on-one demo, it’s pretty easy to segment them just by – you give them the form where they enter their email to sign up for a demo, their first name, last name. Then you ask them one question that’s basically like, “How many subscribers do you have?” or, “How many invoices do you send per month?” It’s whatever that pivot point is for you that, hey, if they send ten invoices a month, this person is worth doing a real, live one-on-one demo. And, again, when they fill out that form, they’ll select it, and that goes right into marketing automation. Obviously, Drip does this. Infusionsoft does this, ONTRAPORT. Then right in there, you can just say, “Hey, if that person filled out this value, then let’s send them a [Calendly?] link where they can sign up to have a one-on-one demo.” “And if it’s less than that value, then let’s actually send them over to do more of an automated demo,” because you’re going to get – 70 percent, 80 percent of your people are going to be less than that value because they’re just a lower-end tier, and you may not have the manpower to be able to do all the one-on-one demos.
That’s something we actually do at Drip. We’ve had a lot of success with it, and it’s something that you can only do if you’re segmenting. You can’t do this with older-school newsletter tools, like an AWeber, a MailChimp, a Constant Contact. They just don’t have the capability to be able to do this lead scoring and then to very simply, without writing any code, be able to put them in different buckets and send them different emails to move them along into the trial phase.
Mike [00:20:56]: Let’s start talking about the trial phase. What’s involved in treating somebody like a trial user? Obviously, they have to sign up for a trial, or download a sample chapter of an eBook; but what are the different things that you can do in there?
Rob [00:22:30]: Yeah, this is where you make the switch, right? You’ve segmented them into someone who has a lot of interest, and they have interest in your product now, not just in your space. They’re not just thinking, “Oh, I might need an email marketing provider.” They’re actually saying, “All right. I’m really going to dive in. I’m going to either compare you to other things I’m already using, or I’m doing hardcore evaluation.” The goal here is that you want to really convince them to consume the material or try the product, right? So, if they’ve downloaded a sample chapter, you want to switch from that marketing lens of “I’m just trying to educate now.” You want to totally cut that stuff off, in general, and you want to switch to now, “Hey, did you see what was in that first chapter?” “Have you done the exercise at the end of the chapter?” “Here’s some more information.” “Here’s chapter two,” maybe, even, if they’re engaged.
Or, if they’re trying your SaaS app, you need to find out that “minimum path to awesome,” that MPA that I’ve talked about before, which is what does this person need to do during their trial to get that endorphin rush of, “Oh, my gosh. My head is about to explode?” If it means that they need to activate an email campaign with a couple emails in it and get a form installed on their website and get at least one subscriber, then you figure out how to guide them through that. You’ve really switched modes here from marketing and education into much more trying to show them how to use the product.
It’s not an easy problem. It’s not an easy thing to do. Really, if you summarize it, it’s onboarding. You can onboard someone with a sample chapter. You can onboard someone with a SaaS app. You can onboard someone as a consultant to try to get them to spec out their project, or whatever; but each of those things is the mind-frame that you have to switch into when you’re treating someone like a trial user instead of just as a cold prospect, like you would with marketing.
Mike [00:24:01]: I think one of the key pieces of treating somebody as a trial user is essentially giving them an experience that they are going to be comfortable with such that they will give you money, and that ultimately boils down to trust. You want them to trust that you’re not only going to deliver, but that you know what you’re talking about, that your product does what it’s supposed to do, that you’re going to be responsive if there’s any problems. You want to make sure that, if there’s any sort of time pressure or time deadline associated with it, especially for, like, a time-limited trial, that you are giving them all the information that they need in order to succeed during that time frame. The last thing you want to do is give them the product and just say, “Okay. Let me know if you have questions,” because that’s generally not going to work. People are going to need a little bit of hand holding and, in fact, they want that hand holding. So, if you know that somebody has just converted into a trial user, then you want to give them the information that they need in order to succeed.
Along with that, I mentioned this earlier, if somebody essentially falls out of that trial user bucket, you treat them as a lost trial. That’s kind of a subset of this. You can also treat somebody as somebody who is a trial user who may be having some problems. Have they not done certain things? If they haven’t done certain things, you can use that with either lead scoring or tags to essentially notify your email automation system that this activity, or lack of activity, is going on and go back and reach out to those people to try and help them figure out what is holding them back from being successful with the product.
Rob [00:25:17]: Exactly. Those are all really good points. One thing I’ll add, and then we’ll move on to customer communication, is another tactic that you can use with trial users is figuring out which track someone is one. There might be multiple ways to get onboarded in your app, depending on the person’s goals. In Drip, for example, when you first log into your account, the very first time we have a guided setup. It says, “Are you trying to send emails to your marketing list, or are you trying to send emails to your trial users and customers?” There’s two buckets we put people in, and if you click that marketing list, then we send you down a different path of emails because it’s a different setup process, right? You don’t need to connect the API to Drip. You just need to get the form on your website; whereas, if you’re doing trial users and customers, then you either need to do an import, or you need to do some type of API interaction. There’s a number of different ways to do this.
But figuring out early on and then sending that one-to-few or one-to-one communication that I talked about earlier will have an impact on your conversion rates of people who actually do get onboarded. The cool part is I’ve watched it over time with all of my SaaS apps that I’ve worked with. And the number of people who actually do get onboarded and get to that “minimum path to awesome” that you define, it highly, highly correlates with the number of people who convert to paying customer.
Mike [00:25:18]: What’s next after trial user?
Rob [00:26:32]: The next two stages are customer and then your best, or your repeat, customers. There’s actually a lot less to do with these folks. You definitely want to keep them engaged, and you want to let them know how you’re improving the product. That’s something big that we do with SaaS is that, since they’re continuing to pay the same amount month to month and you’re improving the product, they’re actually getting better value over time. I think that’s probably one of the first things that you’ll want to keep communicating to customers, because basically you’re trying to retain them and you want to show them that they’re continuing to get value and that they stick around. So, sending out a feature email every four to six weeks, based on what you’ve launched, showing them what you’re doing for them so that they do stick around is one thing that you’ll want to be sending to your customer list.
You want to send similar emails to your trial list, but it’ll be couched a little differently, right? It’ll say, “Hey, look at the cool stuff we just released. Maybe check it out,” but you’re phrasing it differently than you would, say, to customers, which is, “Look what we’ve done for you,” and, “You should really stick around.” You can send that same email to your marketing list, but with your marketing list you want to go much less in-depth. You don’t want to really show them how to get onboarded with it, because they don’t care yet. Right? They haven’t used your app. They haven’t logged into it. You just want to give them a high-level view with some flashy screenshots of, “These are the cool things we’ve rolled out.” But it is a different thing, so having that segmentation is powerful.
Mike [00:27:03]: And that essentially allows you to reuse the existing content that you’re creating, so instead of just educating your existing user base about what new features you’re adding, you are educating your marketing list about what new features that they could potentially have access to if they were to sign up for a trial of your product and start using it. As you said, it’s a difference in how you present it to them, but, in essence, the basic concept behind those emails that you’re sending is going to be very similar.
Rob [00:28:16]: Right. And then something else you’ll want to do is, if they’ve done a one-time purchase, let’s say they purchased an eBook, then you’ll want to lead them down the product path, right? You want to pitch your next product, because if they purchase an eBook, then maybe they want to attend live training, or a conference, or purchase a video course. You basically want to pitch them on your next product, because these people are much more likely to buy that next, maybe more expensive product that you do have. If you’re a SaaS app, that’s obviously not what you doing, right? You’re not going to tend to pitch them on the next product, but maybe you want to pitch them on an annual plan: get 12 months for the price of ten, and you get all that cash up front so that you’re able to go out and buy ads and do other things.
Basically, you’re offering them some value by showing them how the app’s improving, and then you’re basically pitching them on some other ways that they can become deeper engaged into your funnel, become more committed users and generate more cash for you in the short term.
The other thing that I like to do is to ask for referrals. This is the point where, if people are in and they’re engaged and they’re pretty happy – you don’t want to ask someone for a referral when they’re two weeks into their trial, so don’t do it then. You want to ask for referrals really when they become customers and then definitely again once you’ve determined that they are one of your best or repeat customers.
Mike [00:29:11]: A lot of that capability has to do with the timing of the emails that you’re sending, so a lot of this is going to be based on sometimes just customer actions; but sometimes it is going to be situational, based on what your business is doing. Other times, it’s situational based on what the customer themselves are doing. For example, if their credit card is coming up for a renewal, that might be a good time for you to pitch an annual plan so that they won’t have to worry too much about their credit card expiring. It may be one of those things where you get them to not only upgrade to an annual plan, but you get their updated credit card information as well. Because you’re giving them a discount, then it helps to push them in the right direction.
But all of this is just simply about having a little bit more intelligence about what your prospective customers are doing and what level of activity they have and really being aware of where they are in your marketing funnel.
Rob [00:30:13]: And then to wrap this up, there’s this next level of customer, and these are your best customers, your repeat customers, depending on what you’re selling. If it’s one time, these are going to be your repeat customers who’ve bought a lot of your stuff. You get to know these folks by name. In SaaS, your best customers are maybe people who are on your bigger plans, folks who give you a lot of helpful feedback and work with you and spread the word. These are folks that you want to reward with some stuff.
Something that we do is we’ll often give our best customers early access to new features or inside information, so I have a small group with a tag called “Drip Insiders.” These are consultants who are actively getting people onto Drip, and I’ll send them stuff several weeks before other people are going to know about it. They love to have the inside track so they can look to their customers like they’re knowledgeable. We give them alpha access to new features we’re rolling out; and so, again, you’re giving them value. You’re not just always pitching and asking for stuff.
So, think about what you can offer your best customers in a way that makes them feel like they have exclusive access to something and like they’re maybe getting a little more than just the other customers.
Mike [00:30:39]: And on that note, one of the pieces that you want to make sure of is that you’re treating this like a relationship. A relationship will go both ways, so you don’t always want to be taking. You want to be giving as well. If these people are already customers, if you’re already charging them, then you want to be giving them as much value as possible so that they feel like they’re being taken care of, and they feel like not just a good customer, but they are getting value out of it and it’s in their favor.
Rob [00:32:12]: Right. What you’ll find over time is that you develop a genuine relationship with these folks. You don’t view them as subscribers or some aggregate thing. Everyone on that list is a person. I think that beginning marketers, early marketers often make that mistake of just thinking too much in terms of aggregate numbers. Pretty quickly, you’re going to realize that everyone on your list is a person and that this is about building a relationship. So, by giving these best or repeat customers something exclusive and making them feel good, then you can sometimes ask for stuff. Sometimes you can pitch a higher-end product, or a higher-end tier or a done-for-you, productized consulting service that adds on to your SaaS that’s very expensive, but that these folks are much more likely to use. Or, again, you can ask for referrals. That’s another thing that we commonly do in our best customer lists. We say, “Hey, obviously, you guys rave about us. You tell a lot of people. What’s another way that you can get the word out? Can we do a joint-venture email?” “Can we do a co-webinar?” “Can you tell three friends?”
There’s a bunch of different ways to do this, but this is when it’s valuable to know who these people are. Because, again, you don’t want to send any of those emails to people in your marketing list, or people in your trial list. You have one goal for them, and it’s to get them to the next stage. And by the time they’re here, your goals change, and that’s why we wanted to talk about segmenting your email list today because this is so critical, and so many people are not doing it. And with the tools that are coming out now, these email marketing automation tools, it’s becoming easier and easier to do it.
It’s just a no-brainer. The benefit that you get from this is tremendous. If you’re listening to this, and you’re thinking, “Oh, my gosh. This is blowing my mind,” it really is. The more you do it, the better results you will get.
Mike [00:33:08]: I think the last piece of being able to know who your best customers are is that it allows you essentially a focus group of people who you can talk to and reach out to on an individual basis to ask them questions about what other things that they need. In essence, to them it looks as though you’re reaching out to the to help provide more value; but at the same time, moving forward, if you’re able to provide that value to them and if they are your best customers – however you define “best customer,” whether it’s the amount of money that they’re paying you, or the amount of usage on the product. It depends on what stage your business is. I think later on down the road, you’re more interested in the amount of money versus earlier on, you want the most active people so you can gain knowledge; but that knowledge will help you to direct the future development of the products to gain more of those type of people. That’s really what you want, is you want to be able to identify who your best customers are, whatever the criteria for that is; and to be able to zero in on those people and get more of them.
Rob [00:33:54]: And I was very careful, as I’ve outlined this episode and as we went through it, to not make this just a big sales pitch for Drip because that’s not the intent. The intent is to give you tools that you can take and use with any automation provider. So, there is ActiveCampaign and Infusionsoft and Drip and ONTRAPORT, and there’s others out there. In my opinion, if you’re listening to this podcast, Drip is probably the best one for you. We’ve heavily focused on SaaS apps, downloadable software, consultant freelancers, and people selling online information products, like eBooks, online courses or, if you’re a blogger, selling a digital product online.
So, I’d encourage you, if this does pique your interest and you’re either unhappy with your current provider, they don’t give you the automation you need, or that you haven’t tried an automation provider before, I’d encourage you to come check out Drip: getdrip.com, and we will definitely take good care of you.
Mike [00:34:15]: I think that about wraps us up. If you have a question for us you can call it in to our voicemail number at 1.888.801.9690 or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an except from “We’re Outta 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.