Show Notes
In this episode of Startups For The Rest Of Us, Rob interviews David Cancel, of Drift, about whether or not to use freemium, innovating versus inventing, and the topic of asking for credit cards upfront. David also shares some upcoming topics that will be covered on future episodes of his podcast.
Items mentioned in this episode:
Episode 290 | Public Speaking as a Sales Channel with Rachel Andrew
Show Notes
In this episode of Startups For The Rest Of Us, Mike interviews Rachel Andrew about public speaking as a sales channel. They discuss the advantages and disadvantages and challenges you will face as a public speaker. Rachel also shares some of her processes and success stories of overcoming public speaking anxiety.
Items mentioned in this episode:
- Double Your Freelancing Conference Europe
- Double Your Freelancing Conference–Discount Code
- Perch
- Rachel’s Website
Transcript
Mike [0:00:00.1]: In this episode of “Startups For the Rest of Us,” I’m going to be talking to Rachel Andrew about public speaking as a sales channel. This is “Startups For the Rest of Us,” episode 290.
Welcome to “Startups For the Rest of Us,” the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products. Whether you’ve built your first product or you’re just thinking about it. I’m Mike.
Rachel [0:00:26.0]: And I’m Rachel.
Mike [0:00:26.9]: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. How you doing this week, Rachel?
Rachel [0:00:30.9]: I’m good. I’m back in the UK at the moment. I flew in from Boston last night, so I have no idea what time it is.
Mike [0:00:38.7]: Oh, that’s okay. I know that I caught you at a bad time, right between conferences. You just got back from one, and you’re headed out to another one tomorrow, right?
Rachel [0:00:45.3]: Yeah, I’m always in between conferences. That’s a permanent state, as you’ll discover.
Mike [0:00:49.9]: Got you. Well, speaking of conferences, I do have an announcement. Brennan Dunn is running the Double Your Freelancing conference over in Stockholm this year. And that’s next month. If you’re interested in that it’s a four-day event that is for freelancers and consultants. And it is aimed at helping them to grow their business, and essentially land more customers, make it more profitable, etc. We do have a ten percent off discount code that you can enter. Discount code is “Startups.” But we’ll link it up in the show notes with a direct link over to that. Again, this is primarily aimed at freelancers, so if you do have that type of business, or you’re a consultant, that might be a good option for you to help grow your business. But with that out of the way, Rachel, I wanted to give you a little bit of a brief intro and talk a little bit about your background; what you’re doing. You’ve been a main stage speaker at MicroConf Europe for the past couple of years. You are running a product called Perch, which you can find at grabaperch.com. It’s a CMS that is built for Web developers. You launched it back in 2009, and you work on it full-time right now. So with that background at play, I guess, expand on that a little bit, and tell the listeners who you are and what you’ve been up to.
Rachel [0:01:52.0]: So I’ve been a Web developer for a very long time; since sort of ’97. And I’ve been running my own company since 2001. And so we have Perch. My background was working really—we do consultancy and we built things for people. I eventually launched Perch, which was a sort of self-funded product; counter management system. And that’s sort of the main job really. That’s what I do, is I work on Perch; write documentation; do support for Perch. And as well as that, I do an awful lot of speaking. And much of that really came from the things as I do as, kind of, a weird sort of hobby. I’m involved with [Ready Open?] Web standards and CSS, and I’ve always been involved with that really, for as long as I’ve been a developer. So a lot of the stuff I do outside of Perch is regarding [Ready Open?] Web standards and things like that, and talking to people about that, and writing.
Mike [0:02:41.5]: I guess for a little bit more background on that, you said you do a lot of public speaking. How many speaking engagements do you do a year?
Rachel [0:02:49.4]: I think last year I did about 27 presentations, and sort of three or four full-day workshops.
Mike [0:02:56.6]: Okay. Now how big are these different presentations that you do? Are they 10, 20, 30 people? Are they more like 100, 200, 500?
Rachel [0:03:03.7]: Usually in the 100s. I also speak at meetups and things, and often what I’ll do when I’m traveling, if I’m asked sort of a bigger event that’s flown me in, I’ll then go and speak at some smaller things that are around as well. They wouldn’t be able to afford to fly in at international speaker, for instance. So typically the things that I’m speaking at are quite large events. But I’ll also do meetups, especially locally or whatever.
Mike [0:03:26.4]: Now when you’re giving these talks what is the general subject matter? I guess, how are you presenting things to the audience? What topics are they? I know you said that you are involved in Web standards. Is that the kind of stuff? Is it more technical? Is it more marketing?
Rachel [0:03:38.8]: A lot of the time. At the moment I’m speaking a lot about some very new CSS specifications that I’ve been involved with. So I’ll talk about those. So a lot of those kind of talks are really just training, essentially. It will be an instruction to a new spec, and how all that works. I often talk about business, as you know. When I came to MicroConf Europe I was talking about our experience launching Perch. So I do a fair bit of speaking about that. So it’s never directly sales related, in terms of our product, but I tend to be speaking to audiences who’d be interested in the product.
Mike [0:04:11.3]: So it’s mostly, I would say, technical presentations, if I’m understanding you correctly.
Rachel [0:04:14.9]: Yes, generally.
Mike [0:04:16.0]: Now, you said that the audience themselves, because you’re talking about this technical stuff and it kind of relates back to your business because you do have a product that is aimed at Web developers, what sort of impact have you seen from the speaking side of things on the product sales?
Rachel [0:04:31.9]: All right. It’s really, really difficult to know. The speaking kind of works on different levels. We’ve been doing Perch for about seven years, so we’ve got lots of customers. We’ve got customers worldwide. So one of the things that the speaking enables is for me to actually meet those customers. And it’s pretty normal that I’ll speak at an event and then afterwards I’ll get a bunch of people talking to me about what I spoke about. But also a bunch of people who are Perch customers. They’ll come up to me and they’ll be saying, “Oh, we use Perch, and we’ve got this feature request,” or, “Here’s a project that we’ve just used it for.” So that’s a real positive thing, and something I can see an impact from, because it means I can actually speak to our customers face-to-face, and I wouldn’t otherwise. But in terms of sales, I mean, we do get a sort of fairly steady stream of people who’ve, for instance, they’ve signed up for our online demo, and they quote, “Oh, I saw Rachel at XYZ conference.” So, it’s very difficult to actually measure the impact of this stuff.
Mike [0:05:25.7]: People that I’ve spoken with, that whole concept of attribution is somewhat difficult to directly assign, especially when you’re talking about conferences and just general awareness and visibility. But at the same time, if they hadn’t seen you would they have even sought out the product, or would they have even known about it?
Rachel [0:05:42.8]: I think there’s that, and there’s also the fact that in an industry where people need to have confidence that someone who’s creating a product like Perch, that people use Perch to do all of the projects that their business does for clients. So it’s quite a big thing to start using; to use a different CMS. And quite a lot of people have moved off, for instance, WordPress. So you’re jumping from one platform to another, and you want to know that the people behind it know what they’re talking about. So the fact that I’m there on the stage of a large industry event and seem to know what I’m talking about, I hope that then reflects positively on the product.
Mike [0:06:17.9]: Yeah. It lends credibility and trust, not just to you, but by virtue of you being the developer behind the product, it lends trust and credibility to the product. It just kind of transfers to that.
Rachel [0:06:28.0]: Yes, absolutely. And this is what developer relations people, for all sorts of products, do. A lot of the conferences I go to there’ll be quite a few people on the bill who’ve been sent there by their company. They’ll be speaking not really in a sales way, but they might be speaking about something interesting they’ve learned while developing the product. But that’s exactly why they’re there, is that reflects well on the product itself.
Mike [0:06:49.0]: So I guess you said that you did 27 speaking engagements last year. Let’s take a step back and go back in time a little bit. When was it that you first started speaking, and how did you go about finding the first speaking engagement that you ended up with?
Rachel [0:07:01.6]: It’s only in the last few years I’ve done this much speaking. For a long time I’ve — been a writer since way back when; I don’t know 2000, 2001, I think, I first sort of actually had something published in a book. And I started to be asked at that point, “Will you speak?” And there were far fewer conferences then for web developers. And I was actually really terrified of public speaking, and just wouldn’t do it. There was absolutely no way I was going to do any public speaking. And I’m not quite sure where the change happened. I think I did a panel. I was on a panel at a conference about ten years ago, and that was okay, because I’ve never minded being asked questions. So I was doing this panel, and then sort of slowly I started doing smaller things. And there is video somewhere of me absolutely shaking in my boots trying to do like a ten minute talk with absolutely no confidence, sort of, hanging on to the lectern in case I fell over. And so it was not something that I immediately thought, “This is what I wanted to be doing.” And really the change came, because in the industry being able to speak became far more important if you wanted to get something across that you had to say. And when I first started writing was, kind of, everything. I needed to follow that change really.
Mike [0:08:15.1]: When was it when you started to realize that doing some of these public speaking engagements was a viable, or a good, sales channel for you? What was it that drew you to it? It sounds to me like you started out really, really gently into it, and then over time, obviously, it’s ramped up quite a bit. But was there a turning point, or an inflection point, or something that sticks out in your mind that kind of jumped out at you and said, “This is something that I really should be doing a lot more of.”
Rachel [0:08:39.7]: I think with Perch it was we were sort of couple of years into Perch by the time I started doing a lot more speaking. And partly that was because my daughter got older and I wasn’t needed to ferry her backwards and forwards to things. It was easier for me to be away for a while. But then I’d start to see those comments. You know, people signing up for the demo and saying, “I saw Rachel on stage.” and I just started to realize that this is a valuable thing to do. It’s something that I’m quite good at. By that point I was a lot more confident. It’s something that I enjoyed. I’m quite introverted, but I find that when I’ve gone out there and spoken on stage that gives people a reason to come and talk to me. I don’t have to start those conversations. And so it makes it a lot easier for me to chat to people and find out what they’re interested in, and what they’ve been doing with Perch if they’re customers. It’s a combination of things that really made me realize this is important. And also just the fact that being at these events I get to see what’s important in the industry, and what people care about, and that’s vital for the development of Perch.
Mike [0:09:38.3]: It’s interesting that you say that you’re an introvert, because most people when they think of public speakers they say, “I could never do that because I am an introvert, and I just do not want to be up on stage and I don’t want to be the center of attention.” And I kind of, am the same way – to be perfectly honest – but at the same time I feel the same way as you do, and I’ve talked to other people who also have encountered this. They’re introverts and they don’t mind being up on stage, because they are comfortable talking about the things that they know about. But then it gives other people excuses to come up to talk to them, so that they don’t have to go out and seek them while they’re at the conference.
Rachel [0:10:11.3]: Absolutely. If I attend a conference I’ll not speak to anyone. I’ll hide in the corner with my laptop. So, actually as a speaker then, I speak, and then afterwards I know people will come and talk to me, and that’s great. And I enjoy that. It’s, kind of, like I’ve started the conversation on stage, and then for the rest of the conference I’m able to continue that conversation individually with people.
Mike [0:10:32.4]: That makes a lot of sense. So over the years has it gotten easier for you to find speaking engagements? I would imagine that in the early days it might be very difficult, because you’re trying to get your first break, or you’re trying to get noticed by people who either run meetups or conferences or just many events. Have you found it easier to get more speaking engagements over time?
Rachel [0:10:52.7]: Yes. It definitely gets easier, because I think people see a talk that you’ve done somewhere and think, “Oh, I’d like to have that person come and speak at my event.” And so it naturally sort of builds on one on the other. I’ve found that, certainly in the early days, pretty much every speaking engagement I was directly asked to do was because of something I’d written. So I’d write a blog post somewhere that someone would be interested in, and they’d say, “This would make a great talk. Have you thought about making this into a talk?” So that tended to be where people would approach me from. But particularly in the early days I just applied for these call for papers. There were sites you can go and you can find which conferences have got open call for papers. And the good ones will tell you exactly what they offer; if they’ll cover you’re travel or if there’s a fee, all the information about it. And you can just put together a proposal for a talk you’d like to give and post it there, and see if it’s interesting. Initially that’s what I was doing a lot of. I do far less of that now because, to be honest, this year I’ve turned down more requests for me to go and speak than I’ve actually accepted, because there’s so many conferences and they’re all at the same time and there’s only one of me. As you do more of it you’ll get more people actually saying, “We want you to come and talk about this subject.” At the beginning you kind of have to put yourself out there and find things.
Mike [0:12:07.8]: You mentioned calls for papers. There’s a couple of links that you gave to me before we got on the podcast. So we’ll link those up in the show notes. But there’s the Weekly CFP, there’s Tinyletter.com, and then there’s Lanyard. There’s also other places that you’re aware of for resources. Can you talk a little bit about what the process is for those call to papers? How in depth are some of the proposals that you need to give? Is it something that you can put together in 15 to 20 minutes, or do you have to essentially build like your entire talk before you even get to the point where you’re making a proposal?
Rachel [0:12:37.2]: Most call for papers just want a sort of abstract. So, kind of, a couple of paragraphs explaining: what the talk is going to be about, what the attendees will learn from it, the level it is. Because obviously – particularly if it’s technical stuff – it could be for beginners, or it could be something really advanced. So it’s useful to outline that. You certainly don’t need to worry if you’ve got a beginner’s talk, because a lot of conferences want talks for beginners. People think, “I’ve got to be an amazing expert in my topic to be able to speak at the conference.” And that isn’t true at all. There’s lots and lots of conference that wants things that are for newcomers to the subject, because they’re the people who are being sent along to the conference. So usually it’s a couple of paragraphs. And absolutely you can write the abstract before you’ve written the talk, and most people do that. You think, “This would be a great fit for this conference.”, and if it gets accepted then you go and write the full talk.
Mike [0:13:28.5]: So when you go through the process, and you have gotten to the point where you are going to be speaking at a conference, what are the general logistics of speaking at some of these conferences? Are they paid engagements? Are they unpaid? Do you get compensated for travel only? How does some of that work, or does it vary greatly between one type of conference or event and another?
Rachel [0:13:48.5]: It does vary. It varies between industries and so on. I, as a person who’s self-employed, I’m not funded by a big employer, so I won’t go and speak anywhere unless my traveling expenses are covered. Unless it’s literally down the road and I can just walk down there, they need to cover my expenses. Typically, I’m paid these days. I think you have to balance that with how valuable something is for your business; how much you want to be at the conference. Because, obviously, if you’re getting your expenses paid and it’s a conference you really want to be at anyway, and you’re getting a ticket for it too, then you might be happy to speak for free in order to get that. That’s fine. But as you go along you tend to find that if you’re doing quite well as a speaker you’ll get more requests than you could ever do. And it kind of becomes part of your income. Which for me it now is. I mean, actually speaking at conferences and doing workshops is a reasonable chunk of my income. Just that’s how it’s turned out. It was never something I aimed to do. But obviously anytime I’m spending speaking I’m not actually working in the business so I have to balance the two.
Mike [0:14:50.1]: I was just about to ask that, because you do do a lot of speaking. So how is it that you’re able to balance that? Even if you’re getting paid to speak at a conference, you’re generally getting paid for going there and delivering your talk and some of the prep time for your talk beforehand. But at the same time, depending on where that conference is—like for me, if I were to fly out to Las Vegas it’s an entire day for me. I mean, it’s a six hour flight and then on the way back it’s going to be nine, because of the three hour time zone difference, plus an hour or two at the airport each time. It adds up. And for me, something like that’s an entire day. How is it that you’re able to balance this? Are you getting a fair amount of work done while you’re on the road, or in the air?
Rachel [0:15:29.9]: Yes. I work everywhere. I’m very able to do that, and I don’ think everybody is. My husband Drew, he really can’t work on planes, whereas as soon as that seatbelt light goes off I’ve got my laptop out and I will work for an eight hour flight. I will work from the minute that light goes off to the minute they’re telling you to put your laptop away in your bag. And I’ll get a ton of stuff done. I’m very organized. For flights, in most of the flights from the UK to the states, there’s no Wi-Fi. So you’re going to be offline. And so I just make sure that I’ve got absolutely everything I need for whatever bit of work it is that I’m intending to do, sort of, all ready. So I’m not being frustrated and thinking, “I can’t do this because I’m not online.” I get into hotel rooms. I set myself up. I’ve got a little stand for my laptop, and a separate keyboard, and trap pad, and I sort of get myself set up so I can actually sit down and do full day’s work in hotel rooms. And I do that all the time. You, kind of, need to have the work you can do like that. Obviously I can code or write documentation or do support very easily from a hotel room. And you need to be the sort of person who can work on the road, and I don’t think everybody is. That’s just a sort of personality type. But you do get better at it as you go along.
Mike [0:16:35.4]: Yeah. It gives new meaning to the word “road warrior.”
Rachel [0:16:37.6]: Yes.[laughter] You just have to be really organized if you want to be able to get a lot of stuff done. Which I am, just as a person. So that makes it, I think, a lot easier.
Mike [0:16:47.2]: What’s changed from when you first started speaking, to now, in terms of the preparation you have to do in advance of a talk? Are you reusing a lot of your previous talks, or is that very heavily dependent upon the speaking engagements that you accept?
Rachel [0:17:01.4]: Yes, it does depend. At the moment I’m speaking a lot about CSS specification now, being involved with CSS grid layout. So I’ve got hundreds and hundreds of slides and information, examples, and bits of code and things, around this subject now. So if someone says, “Can you come and talk about grid layout and performance, or something,” I can pull together the right set of slides. If they say, “We need a real instruction for absolute beginners, they’ve never heard of this before,” I can pull together a bunch of slides. So there is somethings that I can very quickly put what looks like a new talk together, but it’s essentially just repurposing things. And then there are events where I’m going to have to write something brand new, and that is going to reflect in whether I say yes or no. Because if I think “Yes, I could write this talk, and then I could use it for another event.” then that’s more useful than something completely unique.
Mike [0:17:53.0]: Now, one of the challenges that I’ve run into, in terms of putting together a talk, is the fact that you don’t realize it up front, but making your presentation look good actually matters to some extent. And you don’t realize how much effort and work that takes upfront. Are you reusing the basic template that you have every time? I mean, obviously the slides themselves and all the information on them will change, but do you have a template that you use from one talk to the next? Or one conference to the next?
Rachel [0:18:20.2]: I have a couple of things; I’ve got a keynote template that a designer friend of mine did for me when she redesigned my web site. A lady called Laura Kalbag. She made me a keynote template that matched my site, which I use for some things. And it’s got some really good slides in there for showing code. The other thing I use is an application called Deckset app, which is an application that creates slides from a markdown document. And it has a bunch of very nice themes that you can’t really modify. You just use one of their themes. For the sort of talk where I’m not showing code, and it’s just like a bunch of points and quotes and images and things, Deckset works really, really nicely. So you can just sit there and write your talk in markdown, and then it kind of makes it look cool, and it’s very easy to use. You don’t have a lot of customization, but, to be honest, I’m not a designer, so that’s quite good.
Mike [0:19:11.7]: Yeah. I’ve found there’s definitely resources out there where you can just go out and you can buy a template for PowerPoint or Keynote, or whatever. Then use that template. And sometimes they’re really difficult to modify after the fact, but if you find one that has enough page layouts, then you can usually make your talk fit into those. And even most of them will come with a black page so that that way you don’t have to worry as much about it.
Rachel [0:19:34.5]: I think it’s making them clear so people can sort of understand what you’re getting across without being distracted by awful clipart, or things like that. I speak at design conferences and I’m not a designer, so I always sit there and look at everybody else’s slides and think, “Oh, they’ve got these beautiful slides and mine are all code.” But I think a lot of it is just making them clear, and not objectionable to look at.
Mike [0:19:58.9]: Taking another step back, when we talk about going out and doing public speaking, and using that as something as a sales channel for your product, is this an approach that you think can work for anyone? Or are there significant challenges that people are going to need to overcome?
Rachel [0:20:12.8]: It depends on the industry that you’re in. I mean the web design and development scene has a big, big conference scene. There are masses and masses of conferences every week. And so that’s an opportunity. If you’ve got a product which is for those type of people, and you’re able to speak, you’re able to come up with interesting things that people in that audience are going to want to hear about, then that can be a great channel. But that’s not going to map to every industry that every product is aimed at. If they don’t have a big scene of conferences and so on, it’s going to be much harder to find places to speak about things that are related that then link back to your product. So I’m quite fortunate. But I can imagine that quite a lot of people listening to this podcast have things that are of interest to designers and developers and people who freelance in those kind of industries.
Mike [0:21:02.1]: That brings up a really good point, which is that if you’re looking at this as a potential sales channel for your product then make sure that there is a critical mass, so to speak, of these types of conferences, or events, that you can go to and speak at. Whether it’s either locally or regionally, or even across the country or around the world. Because if you can’t get enough speaking engagements then you’re probably going to spend a lore more time doing the preparation than it’s worth. Because I think in your position you’re doing so many of these speaking engagements, and you’ve amassed such a wealth of previous slides that you can reuse, that you’re probably in a position where to do another speaking engagement isn’t so much about building the presentation and doing the set up and the preparation for it, so much as it is getting there and still being productive while you’re getting there.
Rachel [0:21:51.2]: Mm-hmm. Yeah.
Mike [0:21:52.2]: So if you were to go back and do this over again, what advice would you have given yourself when you were first starting out and doing public speaking?
Rachel [0:21:59.4]: Just to get on and do it. I spent an awful lot of time being this person who was scared of doing this. And so every time I did any public speaking I would, kind of, lose three days before because I was so nervous. And then I would be stressed about it afterwards, like, “Did this go okay?”, or I was shaking, and, kind of, really overthinking the whole thing. And I do think to some extent you have to do it in order to get over that. But I think I’ve never really seen anyone, even the most nervous of people, go down that badly; nothing like as badly as you ever think you are. And so it’s really not to stress so much, because if you’ve got something useful for the audience then they’re really with you. They want you to succeed. They want you to get your information across. And generally, it’s an enjoyable experience presenting, once you can get past getting on stage for the first time. So I think I’d tell past Rachel not to worry so much about it and just get on with it. And the more you relax into it the more your personality starts to shine through, and you’re able to really hone your presentation skills as opposed to just trying not to fall over.
Mike [0:23:05.9]: Sure. even from the audience perspective, nobody wants a given speaker to go down in flames, because really what they’re there for is to learn and be educated about a particular topic. Nobody’s going to go to a session if they’re like, “I hope this person fails miserably, or falls off the stage and breaks something.” But at the same time there’s probably some major drawbacks or challenges that somebody might need to overcome. What types of things would somebody run into when they’re starting down this path of public speaking?
Rachel [0:23:31.0]: I think just the general logistics of it. Coping with the amount of travel, because there is a lot of travel. I’ve spent a lot of time traveling about, and making sure that that doesn’t then negatively affect the rest of your business. That’s quite difficult. And I think, as I mentioned, I’m very organized. And you do need to be to do that. I think a lot of people end up doing an awful lot of this and essentially just burn out. Because if you’re a good speaker you will get masses and masses of requests in certain industries. As I say, I’ve turned down more than I’ve taken on, and I’m doing a huge amount of speaking this year. So it’s very easy to end up essentially just burning out. And I see that quite a lot. You see people start speaking, they’re really great, they get loads of invites, and then suddenly they drop off the scene because they’ve just become exhausted. So I think a lot of it is learning how to manage this stuff, and to not get so excited that, “Oh yeah, people want me to speak.” that you make decisions that aren’t sensible, either financially or just for your own health.
Mike [0:24:27.0]: Or you just overcommit yourself. I can see a situation coming up where somebody doesn’t want to disappoint a particular conference organizer, and they say yes to a speaking engagement when they have something that was just the day before, or ending, and the schedules conflict a little bit, and then they show up late or they miss a flight or something like that. And it can really impact the conference coordinator’s schedules.
Rachel [0:24:49.6]: I’m really sort of obsessive about planning these things. And I’ll sometimes pay for an extra night in a hotel just to make sure that I don’t have connection problems with flights and so on. Because I’m really, really concerned about doing things that are last minute. But that’s very much my nature. I’m not a last minute sort of person. I think you have to take care of yourself like with everything. And it can be a really great way to promote your business. It can be a very nice life if you enjoy traveling, which I do. But you do have to also be sensible around it, and work out how to protect yourself when you’re doing this. Because these events come with a whole load of stuff. You know, speak at dinners, and people who want to go out for drinks every night, and all this stuff, and just all the time shifting with travel. So you have to take care of your own health as well.
Mike [0:25:36.9]: One of the things that I can imagine might be a little difficult is dealing with feedback, especially in the early days when you’re not really used to, or comfortable with, public speaking. Do you get a lot of feedback from people, either positive or negative when you’re speaking? And does that contrast differently between when you first started out?
Rachel [0:25:53.7]: Yes, you do get feedback. You get feedback in all sorts of ways. Often the events have an official route for feedback, so you might get PDFs of scanned handwritten forms that they’ve handed out, or they might just send you the votes and things. I really don’t like the sort of feedback where it’s like, “Did you like this presentation, yes or no?” Because you never quite know why they didn’t like it, if they didn’t like it. And if you’re presenting on a controversial topic you probably expect 50 percent of the audience to disagree with you. And then, well do they vote, “I didn’t like this presentation because I disagreed.” or because they thought you were a terrible presenter. You never know. If they’re going to do official feedback, I like it if it’s a bit more broken down into the different aspects of the talk, because then it becomes useful. You get people who come and want to tell you all sorts of strange things after you’ve spoken. It’s a well-known fact among female speakers particularly that there’s always a man racing up to you afterwards to tell you off about something which was totally not really to do with your presentation, but they feel they’ve got to have something to tell you. That happens after almost every talk. You get used to smiling and nodding at that. Feedback is often really useful. You hear from people who say, “That slide, it wasn’t very clear.” or, “I couldn’t quite see your code examples on this projector.” and you’re like, “Yeah. I need to shift the contrast of those.” So it’s always useful stuff.
Mike [0:27:14.7]: One of the issues that we’ve run into with MicroConf is creating a balance in our surveys to people after the conference. You addressed this a little, or talked about it, but when you’re asking about a speaker, one of the things we have in mind when we’re requesting the people rate the speakers, is their rating based on how applicable the talk was to their business, or was it their impression of the person on stage. And those are two extremely different issues, and having just one score for somebody can really screw that up.
Rachel [0:27:46.1]: Exactly. I think for other conference organizers, I think that’s the thing is breaking this stuff down. Because someone could be a fantastic speaker, but they’re speaking about a controversial issue. And then it looks like they’ve got a very low score because people disagreed with them, but it was important to voice that, for instance. So, as you say, the content might not be relevant to a good chunk of the audience, if it’s a single track conference. But that’s okay, because sometimes you’re going to have to sit through things that aren’t relevant to you. The next talk might be. So it’s useful to have them a bit more broken down, because I’ve got a fairly thick skin at this point, but if you just get what looks like a bad mark and you’ve got no way of ascertaining what that was about, well it’s not helpful. You might as well have not been given that.
Mike [0:28:26.4]: Right. I think that if you look at scores in aggregate across the spectrum – like let’s say you only asked for one number from the audience for a particular speaker – when you’re looking at the numbers – let’s say that there’s a 100 of them, a 100 ratings – you, kind of, have to not just look at what the average of those ratings is, but also the distribution of it. Because if you’re given a controversial talk, you’re going to end up with some that are much higher and then much lower, versus if they’re all clustered in a particular region. So if they’re all between four and six, for example, then it’s very different than if you got a bunch of twos and threes, and then you got a bunch of nines and tens.
Rachel [0:29:02.3]: Exactly. And I think as well, there are some speakers who are so good at just presenting, that they really could come and present the phone book and people would give them a high rating because they’re just talented presenters. I don’t think I’m that person. I’m a good trainer. I’m good at teaching stuff and making things clear to people, but I’m not the inspirational speaker type. And it’s those types people leave going, “Wow, that was a fantastic talk!” I hope that people leave going, “I learned something there.” And that’s really where I am with speaking. I’m trying to pass on information; stuff I’ve learned.
Mike [0:29:36.5]: Right. And that’s actually something else to talk a little bit about, which is making sure that you know what your goals are going into these. Because it’s one thing to accept a speaking engagement. It’s another to figure out what it is that you’re actually going to be getting out of it. Whether it’s just stage time, or getting in front of your customers, or even just being able to put yourself out there so that you can leverage that in the future.
Rachel [0:30:00.4]: Yeah. I think it’s worth thinking about why you’re doing it. Particularly if it’s taking time away from your business and your family. Why are you actually doing this particular event? And certainly as I get busier and I get more requests, I have to think, “Well it’d be really nice to go there.” because I do love travel and I think, “Oh, if I got an invite to somewhere I’ve not been before.” there’s always a little bit of me thinking, “That’d be nice, I can go there.” But I have to think, “Is this sensible for the business?” Because even though I’m good at working on the road, it’s obviously taking me out of the office. And it’s going to have some impact, going and doing that event.
Mike [0:30:30.7]: So, we’ve talked a little bit about some of the downsides, and what the different challenges are that you need to overcome. Why don’t we end this on what are the advantages to becoming a public speaker?
Rachel [0:30:40.5]: I think I’ve learned a lot more confidence, generally, by doing this. As I say, I was really nervous of speaking, and now I’m able to talk really to anyone about our product. I can present things a lot more clearly from doing this. Whereas before I was always very much into writing things, and not so much into actually being able to voice them, which I’m a lot better at now. I mean, there’s just personal things. As I say, I never got a chance to travel when I was younger. I had my daughter very young, so I didn’t have the time in my 20s or whatever where I went traveling and did that sort of stuff. On a personal level I enjoy seeing parts of the world. I enjoy meeting people from different cultures and finding out about how they work and how their lives are. So that’s a personal good thing. And, as I say, it helps me to learn what people in my industry are interested in at the moment. Because that is vital to the future development for Perch. We could build as many features as we like, but if they’re not what people are currently needing, who are building Web sites, then we’re not doing our job. As well as people finding out about what I do, I get to find out what they do. And that really is probably the biggest benefit.
Mike [0:31:50.4]: I can definitely say that if you’re sitting in your basement or in your living room coding all day and you don’t get out of the house, then long-term effects are probably not very beneficial. But it does get you, not just the opportunity, but an excuse to get out there and talk to other people who are either doing similar things, or are in your target customer audience. Or maybe you’re part of their audience as well. So it’s nice to be able to just have those conversations and learn about people and their different perspectives.
Rachel [0:32:17.4]: Absolutely. And it does give you a platform for things you care about. And there’s a whole bunch of stuff outside of Perch. As I mentioned, things like the web standards stuff that I’ve done. These are things that I really, really care about, and have done for a long time. And so the speaking has given me a platform to talk about some of the things to do with the Web that I think are very important, and that need people speaking about them. So that’s a real sort of benefit that I get a chance to push; a bit of an agenda that I have in terms of things on the Web that I care about. So that’s cool.
Mike [0:32:48.4]: Excellent. Well, I just wanted to say thank you very much for coming on the show. If people want to learn more about you, or maybe see where you’re speaking, where can people find you?
Rachel [0:32:56.1]: I’m Twitter @Rachelandrew where I’m normally complaining about airplanes or something else. My web site is Rachelandrew.co.uk. And Perch is at grabaperch.com. And you can also find me on Lanyard, which is where all my speaking stuff is. And on Rachelandrew.co.uk/presentations is a repository of all my past presentations and slide decks and things. So you can see the sort of stuff I’ve spoken on in the past.
Mike [0:33:21.0]: Very cool. We’ll link all those up in the show notes. You also have a book, I believe. Is that correct?
Rachel [0:33:25.2]: Yes, I’ve got a number of books. The one most relevant to this audience is The Profitable Side Project Handbook, which I wrote really about how we got Perch to market with no money and without any real idea about how to launch a product when we started.
Mike [0:33:38.8]: Well you’ll have to send me over the link for that and we’ll link that up in the show notes as well. But I just wanted to say thanks for your time and really appreciate you coming on the show.
Rachel [0:33:44.5]: Thanks. It’s been fun.
Mike [0:33:45.7]: Well, I think that about wraps us up. 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 289 | A Short Guide to Online Presales for SaaS & Software
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike give you a short guide to online presales for SaaS and software. Some of the topics they dive into include inbound leads, sales funnels, lead qualification, and general sales process for buyers.
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 do online pre-sales for SaaS and software. This is “Startups for the Rest of Us,” Episode 289.
Mike [00:17]: Welcome to “Startups for the Rest of Us,” the podcast that helps developers, designers and entrepreneurs be awesome at building, launching and growing software products whether you’ve built your first product, or you’re just thinking about it. I’m Mike –
Rob [00:26]: And I’m Rob.
Mike [00:27]: – and we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Rob?
Rob [00:31]: Well, I want to apologize to our listeners that the episode that came out last Tuesday, published five hours late due to just a minor scheduling mix up. But we received quite a few tweets and several emails asking where the episode was. I think that’s a good sign – right –
Mike [00:49]: Yes.
Rob [00:49]: – a good problem to have that people notice when you’re a few hours late delivering?
Mike [00:52]: I think so. I would like to attribute it to the entire New England area going dark from Internet yesterday but I can’t say that that’s really the case.
Rob [00:59]: Right. It had nothing to do with it, but the timing is really good – right? We have something to blame it on.
Mike [01:03]: Right, yeah.
Rob [01:03]: Yeah, it was really a bummer. You said – was it a couple of states had a major shutdown?
Mike [01:07]: Yeah, apparently Level 3 Communications – somebody cut a fiber cable, and it took down the Internet throughout parts of – let’s see here. It was New York City, other parts of New York; and then there was Connecticut, Massachusetts and Rhode Island. It affected Time Warner Communications, Cox and Verizon. Somebody cut the wrong cable, I guess, so, “We just cut a cable.”
Rob [01:28]: So, were you tethering to your phone all day, then?
Mike [01:30]: Yeah, pretty much, which kind of sucks; because I was a little worried due to the fact that I had a demo to do yesterday morning. I was sitting there, tethered to my phone and running everything through that. I had Skype running. I had my sales demo running; and everything, amazingly, worked well enough that it didn’t really make a difference. But I did burn through, like, 500 MG worth of data in maybe an hour.
Rob [01:52]: Yeah, that’s a bummer, because it’s two-way, real-time video; so it can’t be compressed, probably, as much as other things. It’s audio, and that’s a lot of data. Are you going to up your data plan for the month?
Mike [02:01]: No. I don’t think I have to, actually. I’m on the minimal 5 GB plan for each month, and I actually have that shared between my wife and I; but I work from home, so I don’t really use it very much and just dropped my data plan because I didn’t really need all the extra bandwidth. Then, of course, the kids come home, and they’re like, “We want to watch Netflix.” I’m like, “No.”
Rob [02:20]: “Not a chance,” yeah. That’s funny.
Mike [02:22]: Nope.
Rob [02:22]: Hey, I have a book and a movie recommendation this week. I’ve been listening to a lot of nonfiction books that aren’t business-related, and there’s a book called “The Big Short,” by Michael Lewis, that I listened to a couple years ago when it first came out. I like pretty much everything Michael Lewis does, and I was blown away by this book when I had listened to it years ago. Then I heard they’re making a movie out of it, but I was thinking, “There’s no way they can pull off this movie,” because the book is so complex, and there’s so much to it. Although the book is better, they did an amazing job, and I think the movie’s probably going to be up for awards, if it hasn’t won them already. I don’t even know when the awards shows are. Apologies about that, but amazing writing and acting and all that stuff. So, if you have time, I’d say listen to the audio book or read the book, because it will blow you away. If you only have a couple hours, then watch the movie, but it’s about the financial crisis – essentially, the housing crisis in 2008 – and how the bankers caused it and a bunch of players. There were three-different players who predicted it and bet against it. It’s called “betting short” – right – “going short” on it. Just the characters in it are amazing. It’s probably my favorite film I’ve seen in the past maybe year and one of my favorite books during the past year as well.
Mike [03:27]: Interesting side note here: I actually know Michael Lewis personally.
Rob [03:30]: Is that right? Where do you know him from?
Mike [03:31]: I have to put a little caveat on here. It’s a different Michael Lewis, who is also a writer, and there’s a little confusion there.
Rob [03:36]: Oh, got it. Nice. You know a Michael Lewis.
Mike [03:39]: I know a Michael Lewis. It is not that particular Michael Lewis, but he does often get confused with that. Of course, he’s got the name and driver’s license to back it up, so he could pull it off if he really wanted to, but I don’t know how long it would last. [Laugh]
Rob [03:51]: “The Big Short” – read the book?
Mike [03:52]: I have not. I did see advertisements and stuff for the movie, but I haven’t checked it out yet. It does look good, though.
Rob [03:57]: Yeah. It’ll rock your world. How about you? What’s going on this week?
Mike [04:00]: Well, I hired somebody to do some manual testing on Blue Tick a couple weeks ago, and they’ve gone through and started sending over bug reports. Most of it’s little stuff, like, “This field right here doesn’t prevent you from putting in as much text as you want,” which is kind of nice, because that’s the advantage of having testers who their job is to go in and break things. At the same time, it’s creating a lot of work for you that I would say is lower in the priority list for most of it, and it doesn’t necessarily do anything specific for the app other than make it more stable in the long run. So, when somebody goes in and tries to do something funky like that, the app doesn’t break under what the person is doing.
Rob [04:41]: What’s your thought behind hiring this person rather than either doing it yourself, or having developers continue to do it? The reason I ask I know developers are not the best testers, and you need a certain personality type because a lot of developers will just crank it out and then push the code. At Drip, we are ten people. There’s a couple of part-timers in there, but we still don’t have a dedicated manual tester. We’ve been able to get by pretty well without it. I’m interested in hearing your thoughts on why you’re making that move early.
Mike [05:09]: Sure. I’ll call it more of a safety net than anything else, because there’s a bunch of different ways you can go about testing. The reason I hired somebody to do it was because going through that manual profess was just time-consuming, and there’re certain parts of the application that I haven’t been able to get to the point where we can automatically test them either using unit tests or integration tests or anything like that. It makes it very difficult to go through that, because it’s just so time-consuming. For example – just something little – I’ll give you a prime example. When I was first starting to onboard some people, we went through and I said, “I need you to go over to this page and register.” Well, we changed the back end route for the URL where you go to register; but it wasn’t something that we ever went in and tested again after making that change, because how often do you go in and actually register? We actually have code in there that just automatically sets up the account so that you don’t have to.
When I first went in to onboard somebody, I found out that that was broken, and because we didn’t have the unit test in place, or a manual tester who would go through and just perform some of the basic functionality, I ran into that. Fortunately, I was able to fix it on the fly; but, again, I want to make sure that as we’re pushing things into production, those types of things don’t come up, that are fundamental issues that would prevent it from working. You can do a lot of manual testing, but as I said, it’s time-consuming. So, what our basic process is now is we’re going through. We’re implementing unit tests and making sure that the back end of the application is functional. Then we push it into a staging area, and then in the staging area the person goes through, runs some basic spot checks to make sure that the app itself is still completely functional on the front end – or at least mostly functional – and letting them know, “We changed this,” or, “We fixed this thing over here. Can you double-check it?” Then they check it in the staging area. Assuming he signs off on it, then we take that from the staging area and move it into production.
That’s it more than anything else. I think it’s partially a result of the fact that we’re using Angular on the front end, so it’s a little bit more difficult to do unit tests on front end Angular code mainly because we just haven’t set it up to do that yet.
Rob [07:11]: Yeah, that’s tough. When you have that much code on the front end, you’re right. It’s a lot harder to unit test it. I also think that you’re essentially using contract labor, and so your developers may not be as committed to making sure all the I’s are dotted and the T’s are crossed as when it was Derek and I working – and he’s known us since a co-founder – hacking stuff out and has a very high standard for making sure stuff works before it ships. I think there’s perhaps a different motivation there, so you need maybe an extra check in place to avoid having things breaking on you.
Mike [07:39]: Right. Like I said, it’s partly a time commitment thing. I found that I was spending a heck of a lot of time. I’d send something over to somebody: “Hey, could you implement this,” or, “fix this?” They’d fix it, and it’d come back to me, and then I would have to spend additional time going through everything that I just did in order to make sure that not only did that thing work, but it didn’t break other things as well. And there were times where that happened very early on in the process. It doesn’t happen nearly as much at this point, but with that staging area in place, it makes things a lot easier. It cuts several hours a week of my time out of that process. The cost benefit is certainly there.
Rob [08:13]: What are we talking about today?
Mike [08:14]: Well, we got a listener question in from Guy Lewis, and he says, “Hi, Mike and Rob. I’m wondering if between you, you have a best practice for engaging with B-to-B clients who make sales inquiries via an online business. I have experience in pre-sales face-to-face, but translating this into an email dialogue doesn’t translate well for me. So, specifically, I want to understand typically how much should your pre-sales people who answer online inquiries be pushing early for trials, or just being more relaxed and answering client questions, leaving the clients to reply and come back when they’re ready to engage more. Thanks, Guy.”
Rob [08:42]: To clarify right off the bat, this is from the time someone first engages with you – maybe they sign up for an email list – all the way up until the point where probably they do a demo. So, this is all pre-sales and pre-demo that we’ll be talking about. Mostly, we’re going to focus on SaaS and software sales. It might apply to other industries, but obviously these are the things that you and I are most familiar with and qualified to talk about.
Mike [09:05]: Something else to point out is that I think that in most cases, this pre-sales process is probably not going to be as applicable to something like an info product or any sort of education or training material. I will put a little bit of a caveat on there that says that if you’re selling something that is high-price, that may not necessarily be the case. This could be applicable to those situations, because you are probably going to be much more involved in vetting those applicants or those people who are contacting you in order to identify whether or not your product is a good fit for them; because you clearly don’t want to sell a product to somebody who they simply can’t use it, or it’s not going to benefit them. At the same time, you are probably going to have to go through some sort of pre-qualification process to make sure that, if you’re selling, let’s say, a $5,000 training product, it is going to be a good fit for them and you’re not wasting your time trying to track them down to get them to come to the table and pull out their credit card.
Rob [09:58]: Right, and I’d say this also applies to even lower-priced SaaS apps and software products where at least you’re willing to answer questions and engage via email manually, one-on-one; or, you’re willing to do maybe a pre-qualification phone call or something like that. If you’re selling really no-touch signup and you don’t even want to answer individual questions if someone has some specifics about their setup or how you’re going to work, then this won’t apply; but I think almost every SaaS app that you’d be launching today probably should fall into this. Even if your price is 10 or 20 a month, you or a support person should be willing to do some manual pre-sales email back and forth. Even if you’re not ultimately looking for a demo as the end result maybe you’re just looking to encourage to go to trial. Having some back-and-forth via email and answering questions and encouraging down the steps of the funnel should still fit into the paradigm we’re talking about, all the way up to folks who – let’s say you’re selling for 100 a month. Then, for sure, you’re willing to go back and forth via email; probably jump on a qualifying call 10 to 15 minutes, and then ultimately move towards either a demo or a trial.
Mike [10:58]: The first step in this process is to look at your inbound leads as essentially a sales funnel and try to set it up as a decision-based workflow. Essentially, what that means is that when somebody comes into that sales funnel, you analyze where they’re coming in and decide what to do when they enter that point. If they come in through this web form, do this. If they come in because they replied to an email, then do this other thing over here. Or, if they went over and they viewed your trial page and then they viewed your pricing page and then sent you a support email, do something else. The idea here is that you really want to take a step back and look at your entire sales funnel leading up to the point where they sign in and go to a trial as a decision-based workflow of some kind, and you map out all those different decision points.
Rob [11:46]: Yeah, and to get really specific with this, in essence, once someone signs up for your email list – let’s presume that they’re either opting in to get an email mini course, or a PDF tools list just to keep things simple. When you first start out and you’re just building this funnel out, that’s all you’re going to have, and you’re going to want to educate and give them topics and content that they can use without signing up for your tool; but the whole time, you’re mentioning that your tool makes it a lot easier or faster for them to do it. It will save them time and potentially save them money, or make them money. Then you’re doing a soft sell during this time. Might have a P.S. that says, “Check out our trial.” Or, if you really do want to do demos, if that’s your main focus, then you could have a P.S. that says, “Hey, interested in learning more? Click this ca-[?] link at the bottom of this email and set up a qualifying call,” if you’re doing qualifying calls before your demos. The way to decide to do that, it depends. If you have a lot of people coming in and you really want to qualify them, you should do the qualifying call first. If you don’t yet have a ton of people in your funnel, you can go straight to demo and just qualify them in the first five minutes of the demo and then end the demo if they don’t qualify. There are some very specific questions you can ask people to help that.
Beyond that, as you expand this, you’re probably at some point going to do a webinar. You’re probably at some point going to be creating some free content, or even valuable content. At Drip, we have two eBooks now, one of which we sell; and we actually sell real copies of it through Gumroad, and then we have a video course that we sell. These are all things that can educate and are valuable and that do give your brand some legitimacy, I guess. So, throughout the funnel – as you expand it; you don’t have to do this from day one – we then start pitching, and we say, “We’re going to give you these free eBooks.” “We’re going to give you this free video training,” which is a recorded webinar we’ve done at some point. Each of these touchpoints is an excuse to then say at the end, “If you’re interested, click this button and do” either whatever you’re looking for. You’re looking for a qualifying call, or you’re looking for them to sign directly up for a trial, or you’re looking to encourage them for a demo, or you’re going to qualify them. That’s a couple more specific ideas and thoughts about how to structure this front end piece of the funnel.
Mike [13:45]: And much of the decisions that you make there are going to be based on volume. As Rob said, if you only have a couple of people that are coming into your sales funnel each week, then it’s a lot easier to push somebody towards a demo, regardless of the price point because you want to be able to get information from them, and you really need to be able to gather some of that feedback in order to use that information for future efforts and to redirect your attention towards doing different things for those people. But if you have a ton of people coming in, let’s say you have a hundred a day, then your strategies for dealing with 100 people are going to be very, very different than if you were only getting one per day.
Along with that, what you need to do is you need to take a look at your sales funnel and map out, either using paper or some sort of flowchart software, and get at least an idea or approximation of how many leads you’re getting in from different places and what the decision points are for the customers at those points. One of the things that – I’ve done this myself in the past where I’ve set up some sort of a sales funnel, and if I don’t map out the entire decision tree, it’s very easy to lose some of the decision making along the way for the customer. If a customer gets to a certain point at the end of a particular email sequence, or in the middle of an email sequence, if you don’t have those calls to action mapped out, or at least documented some place, it’s very easy to forget that you either didn’t have one, or that it leads to a certain place. Then the customer just kind of gets lost, because you’ve lost track of them at that point and you didn’t take the time or the opportunity to redirect them in a certain place. Even if you did, what happens if they don’t? What happens if they do not take that step that you wanted? Do you just drop them at that point? That’s something to be very careful, of because you don’t want to have a sales funnel where these people are just dropping out of it because you didn’t give them a call to action, or you didn’t take into account the fact that they may not have gone in the direction that you wanted them to or expected them to.
Rob [15:35]: Yeah, and in terms of mapping out your sales funnel – in the old days, I used to literally map it out on paper and then scan it in. This is five, six years ago. I also used Vizio for a while. I think these days, I’d probably – a lot of people are using Gliffy, but these days people have moved towards building it in the app you’re using. If you’re using the right tool – let’s say you’re using Drip. You can use the workflows or using Infusionsoft. You can use their Campaign Builder. You can really build out a sales funnel visually in the tool that you’re using, so you save yourself having to keep documentation, essentially; because your documentation is this actual funnel, and you can move people in and out and have it all in a nice, visual flow.
Mike [16:09]: Yeah, that’s extremely helpful. What I tend to start with is just graph paper, and I’ll work on things from there until I get to the point where I want to finalize it and then move it into the app. But you’re absolutely right. Having that visual workflow inside of an app is very helpful in terms of being able to redirect people through your sales funnel. Even if you’re not actually using the tool for those people – if you have a workflow that you’re trying to move people through, even if they’re not actually doing it inside of the tool, if you just want to tag them or something like that, that can still be very helpful for helping to determine where people are going. There’re similar things in other tools, such as Pipedrive, for example, where you can just people through a sales funnel. They’re not quite the same, but it is helpful to see it visually.
Rob [16:51]: We also have several workflows that are in draft that we use more as documentation than as actual production use. Someday they will be in production, but we use it as reference.
Mike [16:59]: The third step is to take a look at your price point and the complexity of your products in order to determine how to proceed for the business. If you have a high-price-point product, or it’s a complicated product, or if it integrates into a core part of the customer’s business, then taking people and trying to push them into a personalized sales demo is probably going to work out a lot better than sending them directly to a trial; because the communication medium for a phone call or a demo is much different than it is if you’re just trying to engage with somebody through email. If you send them an email, it’s very easy for those things to get lost, or for people to glance at it and not really take in some of the subtle nuances that you’re looking for them to understand. In any sort of business or product where it integrates highly into the business, it makes much more sense to try and get those people into a call of some kind so that you can have those conversations.
At this point, you really have to ask yourself what’s the best or most cost-effective way in order to move somebody towards making a purchase. Just keep in mind that I didn’t say “into making a purchase”; I said “towards it.” There’s a very key distinction there in that you want to move them along the path but you don’t necessarily want to force them. There’s a couple of different reasons for that. One is people don’t like feeling as if they’re being forced into buying a product, or feel like they’re being pushed; but at the same time, you also need to make sure that you’re giving people the information they need in order to make a good decision. And that good decision might be something that they can make immediately, but it might not be something that they’re comfortable with for a week, or three weeks, or even three months. It really depends on where they are in their buy-in process.
Rob [18:32]: At Drip, we used to encourage everyone to sign up for a trial, and then while they were in their trial we would try to contact them and help them get onboarded. We would do calls at that point, if needed. Then about – really, it was over a year ago now. We switched to where we have two different calls to action, and people can choose to either start a trial – because some people like self-serve. I actually prefer self-serve and to dig in and figure stuff out on my own, but a lot of people like to see demos. If you go to the Drip homepage, you’ll see at the bottom it says “Start a trial” or “Schedule a demo.” Then we have a whole funnel to submit yourself to schedule that demo. What we found is that, initially, like the first month, it was a hit to our trial count; because there were enough people that were hitting that demo button that weren’t clicking the trial button. But over time, the people who clicked the demo and actually showed up are way more qualified when they sign up; and once they get inside the app, they’re more educated, and they’re more likely to actually convert. So, it can be good to give folks a choice if you’re on the edge.
We’re email-marketing software, and some people are experts, and they just want to get in. They don’t want to be forced to go through a demo. There’re other funnels where you really need to go through a demo before you get in the app, because you’re just going to be lost, and your trials – they just aren’t going to convert by themselves. That’s what you were saying, Mike, when you were talking about if it’s an extremely complex product, or fits a high price point. There are certain things to it that you’re just going to need to educate. Even if your product’s not complex, but if it’s complex for the audience – like, if you have realtors who aren’t super good at, let’s say, project management or something; and you have a management tool for them, or a process management tool, you’re probably going to want to do demos with most of them; because a lot of them are not going to be technically oriented enough to just be able to get up and self-start. you’re going to have to make a judgment here as to whether you give people a choice, or you force them down one path or another.
This is part of optimizing your funnel. We talk a lot about getting to product-market fit, and product-market fit is when you get that product that everybody wants to buy, and people really will convert and stick around. The next step after that, or the thing you’re doing at the same time is you’re trying to figure out – it’s almost like sales process or sales funnel market fit where you’re trying to optimize that to reduce friction and to figure out what works the best for the people who are coming to you and for the leads who are coming to you. What is what most of them want? And then try to help guide them down that path, and that’s really what we’re discussing here – is the discovery of that and then the architecture of the funnel as they come through and start to become pre-qualified.
Mike [20:55]: Let’s talk a little bit about the general sales process for people who are making purchases. The key thing that you want to try and do here is to be able to identify where that prospect is in their buying process. This ties a little bit back into what Rob was just talking about where he was giving people the option to either take a look at a demo, or to start a trial immediately. There are a couple of different stages here. The first one is awareness. In the awareness stage, are they even aware that there is a particular problem they’re experiencing, or that there are other solutions that are available? The next step in this process is nurturing. Do they even know enough about the nuances of the problem and the solution that you offer? The third step is qualification. Are they a good prospect for you to start going after, or to even use your product at all? The fourth one is evaluation. Are they looking at the different options that are available and deciding where they are going to spend their time, either doing a demo or a trial – taking a look at those things and really deciding whether or not they’re going to not just move forward with a purchase, but taking a look at the different competitors and figuring out which one is the best for them? Then the last one is actually making a buying decision, which is purchasing.
Try and identify where the prospect is in their buying process. You can use what your inbound funnel looks like to some extent to help figure that out. If they come to you and they’ve started a trial, for example; or, they’ve come to a demo, you know that they’ve come to that demo and they are probably past the awareness stage. They’re probably past the nurturing stage. You don’t need to send them additional educational material. That said, depending on what their questions are, you may need to send them some more stuff. You may need to send them some more educational information, but those different touchpoints that you have with them are going to be key pieces to trying to figure out where they are in that buying process and then adjusting where they end up starting into your pre-sales funnel.
Rob [22:44]: Right. It’s easy to assume that when someone first signs up for your list that they’re in the awareness phase. That’s not always the case. You may have someone who already knows about your product. They already are comparing it to two or three other options. They have a short list. They’re a savvy buyer; and really they’re in the third phase, the qualification phase, already. This is where having not just some email marketing tool, but actually some type of nice marketing automation tool where someone can click a link and jump ahead, or they can opt to get quicker to qualification, or quicker to a demo, or quicker to trial is actually really, really helpful. In the traditional roles, marketing is the first three that you mentioned. Marketing is essentially awareness, it’s nurturing, and it starts qualification. Then sales tends to pick up at qualification and then helps with evaluation and purchase. So, again, depending on your price point and your complexity, when marketing hands off to sales, that first piece that sales needs to do is qualify them. They’ll be partially qualified through how they’ve interacted and how they’ve maybe filled out a form, or what you know about them; but at a certain point, you’re really going to have to dig in and start asking some actual questions in terms of who they are, what their usage is like, who they’re evaluating you against, etcetera.
Mike [23:53]: That said, let’s talk a little bit about the lead qualification process, because that’s really where the core of this particular episode is headed. You really need to be able to qualify those people in order to determine how it is best to treat them inside of your sales funnel.
There’s a couple of different things to lead qualification. I think the differentiation between two different types of qualification is that qualification can either be explicit or it can be implicit. It depends a lot on whether you need to speak with those people directly. How do they come into your sales funnel? Is it through an email list? Is it through a webinar? Did they fill out a simple form that just asks for their name and gave a text box for their phone number? Or, did you have this two- or three-page application process that they needed to go through in order to submit that to you so that you could take a look at it and review it? Depending on which of those mechanisms you’re looking at, you can decide whether or not that’s more of an implicit or an explicit lead qualification. If they filled out a giant, lengthy form, then that’s pretty explicit. You’re going to be able to get a lot more detailed information. If they just signed up for an email list, it’s much more implicit, and you can’t really judge just yet whether or not they’re going to be a qualified lead.
Rob [25:04]: The most important part of lead qualification is you’re trying to figure out is it worth your time and is it worth their time in continuing the conversation. You’re trying to be mindful of both of your resources and schedules in this, because if they’re not going to get value out of the product and it’s going to be a bad experience for them, then you’re wasting both of your time in this. The key thing that we found is to figure out a short list of qualifying questions, and that’s something you’re going to have to develop over time. You’re going to start intuitively, and then over time you’re going to see patterns. Get those into a doc as soon as you can so that you can ask the same questions the same way every time and then slowly split-test those questions with others and figure out what it is that essentially – there’s certain things that you shouldn’t be doing with your tool at all, so you’re going to learn over time.
I’ll give you an example. With Drip, we get multiple people per week jumping on demos, and the first thing they talk about is how they have a purchased list, or how they have a list of people that they’ve scraped from the Internet, and that’s called “email outreach.” While that’s perfectly acceptable in some tools, it’s not in tools like Drip, MailChimp, AWeber and Fusionsoft. We’re for warm leads, and we’re for nurturing once people have opted in to hear from you. That’s an easy pre-qualifier for us – a disqualifier, I would say. To just be able to say, “Tell me about your list.” “Where’d you get it from?” “When was the last time you emailed them?” You talk that through. We have very specific things.
You’re going to learn what that question is for your tool. How are people accidentally – because it’s not malicious. They just don’t know. They see “email tool,” and they feel like they can just put whoever in that they want. So, figure out what those questions are to disqualify folks early on, as well as the ones that will really qualify them well. You might know that you serve SaaS businesses and people who are bootstrappers, people who have raised funding, or info marketers, or bloggers. There’s going to be a group that you serve really well. Figure out if they’re in that or in the periphery and can fit your use case. If they’re not, it’s really nice for you to have knowledge of your space and be able to actually recommend them out to a tool that is going to work for them; because, again, it’s a matter of using your time well and using their time well.
I heard [Sully Efty?] say this. You don’t owe a demo to anyone. You don’t, and you don’t want to use your 30 to 40 minutes of demo time on someone who you know is not going to get value out of this. So, if they’re qualified, then do it. If not, then you’ll figure out some key phrases to basically politely encourage them that you’re not the right fit and, hopefully, recommend another tool that might be a better fit.
Mike [27:27]: A nice side effect of going through this process and really taking a hard look at this information and what those qualifying or disqualifying questions are is that those can also be used on your website and your sales collateral and your marketing collateral to help guide the people who are going to be a good fit into your sales funnel, and further down, versus trying to push those people away. There’s a couple of different ways that you can push those people away. Maybe, as Rob said, you recommend somebody else’s product for them. In that particular case, if they came in and they have a purchased email list, for example, then they’re not a good fit for Drip. Is there another product out there that could be recommended, or another mechanism that could be used for them to use that list? Those are different ways to down-sell to some extent, or to just provide them with value such that if they come into a situation in the future where they could use your product, then it would be a better fit and they can come back. At the same time, if there are lower-tiered opportunities for offering different products, or lower-price products; or, if they’re a do-it-yourself type customer, can they buy a lower-tiered version of it and do everything themselves? Or, if you have a higher-priced consulting product, maybe they’re a good fit for that. Depending on where they are, what you’re doing and how they fit into that, you’re going to be able to start pushing them – probably “push” is too strong a word, but help guide them in one direction or another based on what it is that you offer, what it is that they’re looking for; and be able to answer those questions pretty concretely.
Rob [28:54]: Another question you want to think about is: would this lead perhaps be better served with a lower-tiered or lower-priced product? Are they a DIY type? Are they not a good fit for you at all due to one of these disqualifiers? Would they be better served either by a competitor or even another class of tool, or even just staying with paper and pencil? Sometimes, we’ve had people to purchase who are doing – he was just getting an email started, had zero people and was going to do something with bars or restaurants and get the owners to sign up. Then he was going to send emails manually. It was just a really manual thing, and we realized, “You know? Maybe just have, like, a Google Doc or an Excel spreadsheet, or even just a paper signup form and then send the emails yourself manually until you prove this out. Then if things work, you can look at a tool like Drip, or even a free account with MailChimp for a little while, if you’re really just sending small broadcasts.” Often, especially people who are just getting started, they may have more of a need for a lot of support. You have to use your judgment. The people who are going to pay you a lot of money tend to be the ones that are more tech-savvy, and they’re further along, so they’re going to tend to be less supportive and definitely worth any support time you have to spend with them.
This is an evaluation piece you have to do early on. In your road and your journey of your product, you’re going to want everyone, and you’re going to learn who are good fits and who are not. Then you refine this over time. As it goes further on, dealing in volume and just getting a lot of people using your platform may not be the right play for you, especially if you’re a bootstrapper; because supporting someone at a $29-a-month plan, they’re going to be more likely to churn, more likely to be unhappy; and they’re often going to need a lot more support than someone at the higher end. So, a qualification is not just can they get value out of the tool, but it’s is it a good mutual fit in both directions.
Mike [30:39]: One of the things that you had mentioned in there was how far along are they. I think that there’s two, different aspects to that. One is how far along are they in the life cycle of their business. Then the other side of it is are they already performing the tasks that your tool is offering to them today, and they’re doing it manually versus are they looking at potentially using it to start doing that. So, if they’re already entrenched in doing that; they’re doing it today, but it’s painful, then your tool can certainly help them out, versus a situation where they look at that and say, “Well, I’d really like to try that out, but we haven’t done it before.” Those are two, very different types of customers. I think that the people who are already doing it today, they’re much easier to sell on it. They’re much easier to work with because they know exactly what they want and what they’re looking for, versus the other ones where you are probably going to do a lot more education with them to help them figure out how to solve that particular problem, because they’ve never run into any of the challenges before because they’ve just never done it.
Rob [31:33]: I think the bottom line is that the majority of pre-sales is really to identify where someone is in the buying process and give them the right information that they need that’s relevant to that step. I think in most cases, a quick phone call tends to be the best if you have the bandwidth to do that. Then in other cases, if you don’t have the bandwidth, you can try to do it via email. Probably not as successful, but some people will prefer email. So, giving them either option, I think, is the ideal way to do it. Your results may vary depending on how much time you have to do it and how good you are at talking to people on the phone and how interested you and/or your team are in doing that.
I think that’s going to wrap us up for today. We designed this whole episode around a listener question. If you have a question for us, you can call our voicemail number at 8-8-8-8-0-1-9-6-9-0; or, email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt, used under Creative Commons. Subscribe to us in iTunes by searching for “startups” and visit startupsfortherestofus.com for a full transcript of each episode.
Thanks for listening, and we’ll see you next time.
Episode 288 | How to Choose and Test a Paid Marketing Channel
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about how to choose and test a paid marketing channel. They give you some criteria and discuss the mindset you need for choosing the channel that’s best for your business.
Items mentioned in this episode:
Transcript
Rob [0:00]: In this episode of “Startups For the Rest of Us” Mike and I discuss how to choose and test a paid marketing channel. This is “Startups For the Rest of Us” episode 288… Welcome to “Startups For the Rest of Us,” the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products. Whether you have built your first product, or you’re just thinking about it, I’m Rob.
Mike [0:29]: And I’m Mike.
Rob [0:30]: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, sir?
Mike [0:33]: You changed up the intro a little bit.
Rob [0:34]: I know, I added in some more stuff. Because we always talk about launching in the intro, but really, now often times we’ll talk about the building, and the growing, and the scaling and all that. Maybe I’ll update that actually in the doc. That was, kind of, off the top of my head.
Mike [0:48]: Well, of course, you know, there was the little flub there, which will thankfully be edited out.
Rob [0:53]: Indeed. So what’s going on?
Mike [0:54]: Last week, I had talked a little bit about how I had started onboarding people into Bluetick, and I recently just uploaded a spreadsheet into Bluetick so that I can have it automatically send out the emails to people to get them scheduled, so I don’t have to individually email each person. And of course the nice thing is that it will gradually email them out over time instead of all at once. So that’ll be helpful in terms of putting a little bit of spacing in between some of those. Obviously, they can choose anytime on my calendar, but it will be nice to not just use it in kind of production environment, but to also let people who are coming on to it see the app in action and what it will look like on their side of things.
Rob [1:31]: Yeah. That’s pretty cool. So, you’re at the point where you’re able to dogfood it, and use it for your own use.
Mike [1:36]: Yes.
Rob [1:37]: Yeah. You know, I remember when we first hit that moment where we could do it with Drip, and we started really using it for a lot of our email marketing. At that point it was like something flips, and you’ll suddenly — you already look at your product a certain way, because you have been building it. But something, kind of, shifts once you start using it, because you’re going to notice everything that’s clunky about it, everything that you need to fix. Even more so than you did before you started using it. So I think it’s really a plus to be able to use your own product, and to catch bugs before the people – or even to catch usability issues before the rest of your customers do.
Mike [2:11]: Yeah. I mean, I started trying to do this a couple of weeks ago, and as you said, it was clunky, and there were things where I ran into where I could do those functions and perform those actions, but it was a little painful. There was a few too many clicks, and there’s still a few places where we could optimize what we’re doing in the user workflow, and how they get to different places in the app. But we basically redesigned the entire navigation, and merged a couple of pages so that people don’t have to click around as many places. It’s a lot better today than it was even just a week or two ago. We just pushed out a new version of it this morning. It’s nice to be able to do that now, and as I said, it was working a few weeks ago, but it was a little painful. I think we are starting to turn that corner where the app – it’s not just inherently useful but – it’s nice to be able to dogfood it in a way that is not as painful.
Rob [2:59]: Yeah, for sure. I think there’s that quote that’s kind of over-quoted at this point about how, “If you’re not embarrassed by the first version of your app then you waited too long to launch.” I think that there’s two sides to that embarrassment. One, it can either be that you just don’t quite have the usability right yet. I think that’s one reason to be embarrassed. I think another one is, maybe it is really useable, but you just don’t have enough features to do what you want to do, and you feel like it’s sorely lacking. I think those two axes can either be off on one or both of them. But identifying which one, and kind of moving up market, or even just improving upon those axes, I think, is a big thing in the early days.
Mike [3:33]: What about you, what’s going on this week?
Rob [3:34]: Well, we had a pretty good response to a recent blog post on the Drip blog. It’s probably the post that’s gotten the most uptake in that last several months, and it was called, “Email Marketing Tips: 33 Industry Experts Share their best Strategies and Tactics.” It was an expert roundup, basically where really Zach on my team headed it up and did most of the legwork, although I contacted some of the people who I had contact with. But we got some really solid tactics from people like Devesh Khanal from Grow and Convert. We got Josh Pigford at Baremetrics, Joanna Wiebe at Copy Hackers, Dan [Norestelli?], Alex Turnbull, Brendan Dunne, Patrick Mackenzie, Noah Kagan – just this big expert roundup, and there’s some really interesting tips in here that people are using to improve open rates, and click through rates, and just overall just improve stuff. So it went to the top of GrowthHackers for a while. I think it went up to one or two on inbound.org, and at this point it’s got 300 social shares. If you haven’t checked it out, it’s a really good post, and I’m not just saying that because we put it out. There’s a lot of cool tips and tricks in here. We’ll obviously include that link in the show notes, but if you go to the Drip blog, or if you just search “33 Industry Experts Best Strategies and Tactics” you’ll find that.
Mike [4:44]: Awesome. So what are we talking about this week?
Rob [4:46]: Well, we periodically get questions from listeners about getting started with paid acquisition, and today we are going to be talking about how to choose and test a paid marketing channel. Most recently we received this question from Ryan Frank, and he said, “I’m sure this had been requested multiple times but I’d love to get some insights on the show regarding setting up and running marketing campaigns. What platforms do you choose to advertise on, and why? How much is a reasonably initial investment? How do you brand the campaign? How do you target? How many do you run at a time, etcetera?” He goes on to ask some more questions that we’re going to cover today. The interesting thing is we don’t tend to cover this topic specifically because—well, there’s a few reasons. One, this stuff changes so frequently. Even the ad networks that are going to work for bootstrappers will completely roll over in, let’s say, 12 to 24 months, and anything we say here about specific ad networks will be different then. In fact, with Facebook – for a while there – it was like every 90 days things were changing in the ad interface itself, and different ad types started performing better than other ones. You just had to be right at the cusp of it, and either in touch with someone who really knows what they’re doing and are constantly testing, or you have to listen to some really detailed, recent information. That’s why we don’t often dive into specifics. However, today we are going to talk more about like the mindset, and the approach, of testing and choosing a paid marketing channel. Another reason we haven’t talked about this a lot is it can get often to the weeds, and it can get a little too detailed and boring. We’re going to try to avoid that today. Then, finally there’s really this, kind of, factor of competition. And this has become more of an issue of late, with competitors kind of, I’ll say, borrowing heavily from some approaches, which has been a bummer, and it comes with a little but higher stakes now that I have ten people working for me, and we’re paying mortgages and doing that kind of stuff. So, kind of, giving away exact detailed information of exactly the wins that we’re having, and why, isn’t necessarily as feasible as it used to be when I was selling eBooks and beach towels. With all that said though, there is a really specific path that I take when I’m thinking about testing and choosing paid marketing channels, and picking out new networks, and how to test. And we really are going to dig in. There’s a lot of meat in today’s episode.
Mike [6:53]: Awesome. So, let’s dive right in.
Rob [6:54]: Yeah, so we’re going to, kind of, break it up into two sections. The first is the criteria for choosing, and the second one is really how to run a test on a paid marketing channel. The interesting thing is, it’s only getting more complex these days choosing a platform to test on. There are more choices, and within those choices there are more choices. There weren’t YouTube ads at all, and then there were YouTube ads. And now there’s YouTube Instream, and there’s YouTub- in-display, and there’s another type that I forget the name of it. And with AdWords, it used to just be the little text ads, and then there’s the display network, and then there’s the text display network, and the visual display network, and Gmail ads, and on and on and on. It’s just getting more and more ubiquitous. The nice part is that does give you more choices and more opportunities, but the negative is it makes it hard to choose. I think the kind of first thing I’ll throw out is that, these ad platforms, there the cheapest when they first launch. That’s also when they’re hardest to use, because the management tools are not very good, and there’s not a lot of insider info on how to, kind, of use them for optimum results. So you really are pioneering, and you’re going to just do trial and error. But as these ad platforms get more advanced, and they get more matur – like AdWords is an example – they become so expensive that there’s just no chance that you’re going to make them work. Whereas a platform like Facebook is probably in the middle right now, it used to be cheap. It’s not totally out of the range of being affordable, but it’s in the middle. Then somethings that’s really new – maybe Pinterest for example, or Instagram’s pretty new in terms of ad networks – those will be the cheapest clicks, but there are also maybe the hardest to use, hardest to target, and you don’t have a ton of information on how to do that.
Mike [8:29]: I talked to somebody – probably a year and a half, two years ago – about some strategies that they were using on Instagram for paid acquisition, and they showed me a graph and I looked at it. It was insane. They basically doubled their revenue almost overnight by doing Instagram marketing and just paid acquisition through that channel, and there was no mechanism for doing it. They basically built an entire system themselves. They had all these spreadsheets and data, and they were calculating all these different metrics on their own. And for themselves, they pioneered it. They didn’t really talk about it publically, but I looked at what they were doing and it was absolutely incredibly and insane. The results that they were getting, it was really, really hard to argue with the results, just because there was a point and time where they weren’t doing any of this type of advertising, and then they started, and immediately you could see the graph. It just doubled the revenue almost overnight. You are right, I think, about getting in when those platforms are new. I think the downside of that is that when these new platforms come out you can spend a lot of time and effort trying to get something working and running, and it may just not work. Because that’s one of the risks that you’re taking with those, because you are pioneering something completely new, there’s no benchmarks to go off of, there’s no guidelines, there’s really not very many people you can talk to, or ask about, in terms of being able to work on those channels. But if you can find something and make it work, it can be really, really cost effective.
Rob [9:51]: Yeah, that’s pretty cool. I remember that guy’s story, assuming it’s the same person that I’m thinking of. He basically went in before there were even official ads. There was no ad platform, and he was paying the more popular Instagram users X dollars to post the thing. It was in essence, ads, but he was so early that he got in when it was really cheap. I heard Noah Kagan talk about this – before advertising in email marketing newsletters was getting really big – he would just approach big email marketing newsletters and make them an offer. That’s a kind of way to get around the ad networks, because the ad networks are marketplaces, right? And eventually they kind of even out, especially once your competition is there, then your cost per click is just going to go up and up because there is competition for those clicks, and your cost required is going to be similar across competitors. So it is going to even out eventually at some type of norm, but if you get in way early then that competition doesn’t exist yet, and you can get the cheapest clicks early. There’s obviously a lot more danger there. That’s really the balance.
Mike [10:46]: Right. I guess one of the takeaways from that, that I just thought of off the top of my head, was that if you are getting in that early, and there isn’t a marketplace for ads on a particular channel then you could probably negotiate for some sort of exclusivity when you’re working with those people. And if you can get it, then you can, sort of, lock your competitors out of that as a channel. That’s something that also worked extremely well in that particular case. That’s something you might be able to take away from that.
Rob [11:14]: I think another question you want to ask yourself is, are you going to do this yourself? Like, are you going to test the channel yourself, or are you going to hire someone? This depends a lot on whether you want to learn it or not, whether you have time to learn it or not, and whether you have budget to hire someone. The nice part is, three or four years ago, hiring someone to do it was very, very expensive. These days there are knowledgeable folks who are managing AdWords, or Facebook ads, or Twitter ads, or I’m sure Pinterest ads – I haven’t used anybody for that – but that are not these big agencies that charge enormous sums of money – or a percentage of ads spanned – but that may charge per lead, or that just charge a lower monthly fee. There was someone that was going to manage Facebook ads and I didn’t wind up using them, but it was a few hundred dollars a month rather than several thousand like a lot of the old agencies. I think, keep in mind that running a test is not terribly hard, but it is time consuming to actually get this to work and then scale it up. So be realistic about how much time you actually are going to have to run these ads. To take a step back, I’m realizing we didn’t really cover when you should try to do this. Like, when should you think about running paid ads. I think that the two points are: really early on when you are maybe testing a value proposition on landing page, and you want to send someone, and you want to test that value proposition and get email signups. I think it’s very valuable then. I think in the interim – kind of between that launch and product market fit – when you are just trying to get more people to use it so you can do customer development, I think that’s a good time to run it. You don’t want to scale that one up. You just want to get enough people in there to get enough feedback to improve your product. That’s the second time. The third point, I think, is once you’ve built a product and you have a value proposition and things are really starting to scale up, that’s when you want to hit this really hard, and I would recommend actually getting the budget together and hiring someone. I think in the first two instances you only need such a trickle of traffic when you’re testing stuff, that I would guess unless you do have money at your disposal – like you’ve raised funding – that it’s not going to be worth going out and hiring someone for the small amount of clicks that you’re actually going to be buying.
Mike [13:10]: This is one of those situations where, as a bootstrapper, you’re kind of caught between a rock and a hard place, because in order to spend the time and effort to get the results that you want, it’s going to be time consuming, and you either have time or you have money; you typically you don’t have both when you’re doing this. It makes it painful to go in and start running some of these experiments. You have to pick and choose your battles a little bit in terms of where you’re going to try and optimize things inside of your ad campaigns, because it’s going to either cost time or money, and you typically don’t have both available to you. So often times you are trying to implement things, or run some tests, and they’re going to be less than optimal. I think that that’s an important thing to keep in mind, is that you’re not necessarily looking to optimize each and every single test. You’re looking to learn from the early ones so that you can scale things up and make them better in the long run. You don’t want to spend a lot of time and effort trying to figure out, “Okay. What is the single best ad that I can come up with?” Take three to five of them, throw them against the wall, see what happens and then measure the results and iterate from there. It’s not about getting things right on the first time. It’s about iterating over time and then enhancing your results.
Rob [14:20]: Another criteria to think about when you’re choosing an ad platform is, is it B to B, or B to C, or is it a mix? I’ve found that there’s a lot more B to C inventory than there is B to B. The B to C inventory tends to be really low quality, and so it can work, the clicks are really cheap, but if you’re not targeting something like weight loss, or online dating, or these really broad consumer interests, it can be hard to make money with those more B to C networks. And those are things like Chitika and Clicksor, and I think Infolinks is like that. I tested 10 to 15 ad networks back in the day when I was really trying to scale HitTail, and I found that most of the ones that I hadn’t heard of were just kind of junk traffic. They were super cheap clicks – five cent, ten cent clicks – but average time on site was two seconds or three seconds or something. So it was pretty noticeable that either the clicks genuinely were just bots or not real people, or they were accidental things, or they really were just looking for more stumble-upon content to hang around and be enticed with info market stuff, rather than actually trying to sell a product. You definitely want to think more. We’ill talk through a few networks here. My next bullet spells out several networks, and there still are a lot of B to B and mix networks that do have quality traffic, but you’ll want to think about this in terms of the product you are selling, and the type of scale that you’re trying to get to.
[15:43] The next criteria to think about is, does the ad network have enough volume to scale traffic? Early on, like I said, when I was running ads for HitTail, I actually ran ads on Bing and Yahoo and other search engines, and those were examples of things that converted for me, but I couldn’t get enough clicks that it was even worth managing the ad platforms. So, while you can look at all these kind of peripheral ad platforms, it often will be a waste of time even if you can get it to work. The majors are things that you’ve heard about. There’s Facebook, there’s Twitter, there’s Google AdWords. Then there’s the AdWords display network, which is basically what AdSense runs on. Then there’s YouTube with multiple different types. There’s a LinkedIn ads. Pinterest now has an app and network. AdWords has a Gmail ad section that can advertise on Reddit, and I got those to work for a short time. BuySellAds.com is a nice display network, and then we start moving in to the consumer stuff. I think there may be one or two more that are at scale and you can do B to B, but the ones that I have already listed are pretty much what I know about. Then there’s like Outbrand, and Chitika, and Clicksor, and Infolinks. There’s a good article summarizing these. It’s on monitizepros.com and we’ll include that in the show notes. The idea here is, if you can find an outlier ad network and you can make it work, the clicks are going to be super cheap and it’s going to be very, very lucrative for you. The trick is, I’ve never been able to do that, and I spent quite a bit of time and money trying to do that at one point, and I found that the ad networks today that people are talking about, there’s a reason they are talking about them. It’s because that’s where the real people who actually spend money are. So when you think of the Facebook, Twitter, the Google, the LinkedIn, and the BuySellAds, and maybe Pinterest and Instagram if that’s kind of your thing, those are going to be the mains that you’re going to have to evaluate and think – based on what I am selling – is someone going to buy email marketing software on Pinterest or Instagram? The odds are probably not. That’s not going to be at the top of your list if you are going to advertise. You’re going to want to stick more to an ad network where you feel like you at least have a chance of someone being interested in your product.
Mike [17:47]: You know, the fact that you had an ad budget for Yahoo means you probably could have spent enough money to just buy Yahoo outright of what they were worth.
Rob [17:55]: I know. Interesting. For real. This is back in the day. They were still worth something a few years ago.
Mike [17:59]: Are they negative now?
Rob [18:00]: Oh, it’s so sad to see a giant like that just go down the tank.
Mike [18:08]: Oh, well. So, what’s next?
Rob [18:09]: So, the next thing to think about is to take into account what the cost per click is going to be, verses your budget, and the lifetime value of your users. You’re just going to have to ask around, or do Google searches or whatever, but these days we know that Google AdWords is very expensive because it’s such a mature platform and Google’s really smart. Whereas Pinterest and Instagram – since there are early – the ad clicks are going to be a lot cheaper. You can get some cheap clicks on BuySellAds, and I have heard there’s cheap clicks on YouTube these days. Whereas Facebook, like I said, is kind of in the middle. Twitter, I think, is in the middle as well. They are both starting to mature, and they are getting a little more expensive. So this is one where I think that the most value can be had probably in the early to the middle section there, and I think a lot of the older – or the larger – enterprises are doing the more advanced, or the more mature, platforms because they are easy and more qualified clicks, but they are definitely a lot more expensive.
Mike [19:00]: I think one of the things we might want to touch on here is talking about the cost per click, or the cost per lead, that you are getting verses your budget, and that kind of ties back into what the lifetime value for your customer is as well. So obviously, if you have a one-time sale for a product, then your lifetime value is going to be whatever the sale price of that product is. So, if it’s 50 dollars to buy a WordPress plugin, it’s going to be 50 dollars. But if you have a SAS product, or anything where there’s recurring revenue – and it’s let’s say 100 dollars a month, and people are going to stick around for 10 months – you’ve got a lifetime value of about a thousand dollars. I think that the general rule of thumb that I’ve heard from most people is that you don’t typically want to spend, on a long term basis, more than about a third of what you’re lifetime value is to acquire a given customer. Now, that’s not to say that you can’t spend upwards of break even for the first set of them, but you’re going to drive your business into the ground very, very quickly if you do that for too long. The primary reason for that is because you’re going to be spending a lot of your ad budget now, and let’s say that you spend a thousand dollars to get a customer now. But the problem is that you’re not going to make up that revenue for any given customer until they are there for the entire time period. So you’re not going to get all of that money back until 10 months into it, so that makes it very difficult to do that. When you’re trying to go through and budget for this, make sure that you are very aware of how much money it is that you are spending, and keep in mind that the tests that you are running early on, you may very well run way above and beyond that, and it’s primarily just to go through and do the testing on those different channels and iterate and try and make your ads better. You’re not going to get them right the first time. You’re going to spend a heck of a lot more money the first time through, but as you iterate, if you can get that under about one third of your lifetime value then you’ve got, essentially, a sustainable channel that you can start pumping money into. Now, that’s not to say that you can do it on an unlimited fashion, because even if you are doing that, then you’re still not getting that money for at least three months. So you can’t just pump every dollar that you have into it. You do have to be careful. You do have to budget for those types of things. I certainly wouldn’t run the bank account down to almost zero with the anticipation that you’re going to be able to make it up within 30 days.
Rob [21:12]: That’s a really good point. I think the one third LTV is a good reminder, and then – typically if you are bootstrapped – I see most people not going more than about three month payback. I see some people edging up to like a four month payback window on your trial or sale cost. So that’s not a click cost, but that’s someone coming in and actually becoming a customer, and you want to get paid back within four months. In your example, if you were doing a hundred bucks a month then you could pay up to 400 hundred dollars to acquire a customer. But, then like you said, you need the cash to be able to do that. Funded startups, the rule I’ve heard is, no more than a third of lifetime value, and no more than a one year payback. They tend to raise enough money that they can cover out, but when you’re bootstrapped — I remember first starting out it was like I had like two month payback with HitTail. Then as I got more cash it was three month, then it was four month. Then once I really optimized it, and I widened the reach, and I knew that not only were the folks signing up and becoming customers, but I was watching them remain customers, I actually kicked it up a little higher than that. That’s kind of the range that I would think about. I think the last criteria for choosing a network is, are you going to need banners or fancy images? And do you have a way to do that? I know Bannerarchitect.com is a pretty good way to do that, and there are certainly people on Upwork these days that can create banners. But keep in mind, there are some text networks that work really well, and you don’t have to spend the time and money to develop banners, and banners burn out as well, so you are not going to have them made once and have then last forever.
Mike [22:31]: That’s actually a really good point about the fact that those banner ads will burn out, and the same images that you use today will not necessarily work the same even a week from now. I mean, sometimes they burn out very, very quickly. Other times they will last for a while. Again, every image I’ve ever used – or ever seen – in any of my ad campaigns, they inevitably burn out after a while. And what will happen is you will notice that the effectiveness of that campaign will start to decrease even after you’ve optimized it. So you will have to refresh those images, and use different ones, and play around with it. And the thing that sucks about that is that it screws with your stats, because even week to week you can’t necessarily guarantee, or look ahead and say that, “Oh, this advertisement is going to have this effectiveness.” because it will change over time as people see it, and they basically become blind to it.
Rob [23:22]: So moving into how to actually test a network. As a rule, the higher your budget the faster you can test. But you can test cheaper channels with a budget of, say, $10 a day. You’re not going to be able to test AdWords at that budget, but you could start running let’s, say, a Facebook test, or even maybe there’s some cheap clicks – like I said – on YouTube, or Instgram, or Pintrest. I’m sure you could do those for 10 bucks a day. I personally like to start with about 20 bucks a day so we can move a little faster. And I commit maybe around a couple thousand bucks to a full test, unless it’s either doing really well at the start, or it’s really tanking at the start, we’ll go in one to two thousand bucks; that’s just the scale we’re at right now. But you could probably make a call after a few hundred dollars. I recall doing that. I mean, some of these are just going to be so obvious that they’re not working that you don’t need to invest a huge amount of money in order to figure it out.
Mike [24:10]: I think one of the things you have to be careful about when you are doing these tests is that you have to be aware that the way that the advertising channel shows you those advertisements is not going to be identical to what is displayed to the user. So sometimes their interface is just blatantly wrong. I can think back to a scenario where I was starting to do some paid advertising for Bluetick through Twitter, and I was using their lead cards. And everything showed up in the Twitter advertisement interface just fine, and I put it out there, and I forget how long it was, but people started sending tweets back to me with screenshots that showed me that they were displaying just a link to the Twitter card, as opposed to the Twitter card itself. And people had to click through it. And at the time I was looking at my stats saying, “Well, these are abysmal, but they’re not costing me very much, so I’ll just let them run.” Because I was still getting email addresses, gnd going back and looking at the screenshots that people were sending me, my ads were just fundamentally broken. So I ended up stopping them at the time just because I was clearly spending a heck of a lot more money, and I didn’t want those images to burn out, and quite frankly it was kind of a distraction at the time. So just that said, you need to be aware that just because your advertisements are tanking doesn’t necessarily indicate that, “Oh, this entire channel is junk.” It could also mean that you’re doing something wrong. So you want to be careful to at least do some spot checks to identify whether or not, “Is it my advertisement that is wrong? Or is it just this channel?” And it’s sometimes difficult to tell the difference.
Rob [25:37]: Yeah, that’s tough. I haven’t seen that happen with AdWords or with Facebook; where the ad showed up different than the preview. But I have to imagine that happens. Especially with Twitter where all the clients are— not all the clients – but the third party clients tend to display stuff differently than the native Twitter things that they own. So I could imagine that there would be differences in display. It’s something you need to watch out for. The next step in how to test is that if you’re going to do this yourself is to educate yourself online. I would just start doing Google searches of “how to run Twitter ads”. And I would try to find like Growth Hackers links from growthhackers.com, or people who are actually doing it, kind of, in your space, because you’re going to find a lot of stuff of people running ads on this network, and they’re doing it for, again, like diet pills, or “make money online”, or just stuff that doesn’t apply to you, and it isn’t necessarily going to be that helpful. But I personally try to buy a course if I can. I try to find a podcast on the topic, and then I try to buy that person’s course – assuming that the podcast is reasonable. And obviously you’ll pay something for that course, but it can save you dozens of hours of trial and error. And maybe it’ll even convince you it’s not a good channel and it’ll save you the time all together.
Mike [26:44]: In terms of courses, there’s a lot of great resources out there that are free. And as Rob indicated you can also go out and look specifically for paid courses from people who are actively working in that particular industry. But there’s a couple of different resources you might want to check out. You can take a look over at Udemy, or Udacity, or at Coursera. And all three of them have courses that are available, either for free or for reasonably low cost, that you can just pop in, learn what it is that you need to learn and get out. And I think the one thing to keep in mind when you’re looking at these courses is that you don’t need to consume every single piece of information that’s there. Skip through, find the things that are relevant to exactly what it is that you’re doing, and then get out and start practicing with that stuff. Because if you spend too much time getting into the weeds, then you can spend forever there and not actually get your ads done. And I think that setting up your ads, and getting the images, and the text, and all that stuff all set up can be very time consuming. And if you’re spending more time learning – and we actually talked about this in a previous episode a little bit; how to balance your time in learning mode versus execution. So if you haven’t listened to that, go back and take a listen to it. I think it was episode 286 where we talked about that. It was “Five guidelines for balancing learning and doing”. So if you think that that’s an issue that you might need to contend with, go take a listen to that episode. But again, you just want to make sure that you’re getting in, getting the information that you need, and getting out as quickly as possible, so that you can start learning how that particular channel applies directly to the product that you’re selling.
Rob [28:09]: Yeah. That’s a good point. There’s a lot more resources on these topics – on ad networks and how to run them – than there were a few years ago. And those course web sites that you mentioned, I’ve actually had good luck finding decent courses on them, and have bought several for my own edification. So the approach I take when I’m testing is that I tend to try to go immediately from an ad to a sale, or a trial, or a demo, to see how that pans out. And then judge is my ad click through rate too low? Or is it the landing page that I’m sending them to that’s too low? Which should I optimize? And typically it’s going to be the ad at first, because your ads aren’t going to be very good. Then I split test images, headlines, and the audience, until I get to the point where I’m paying a reasonably small amount and getting a decent amount of traffic. By that time you’re going to find out that your landing page sucks. And then I’m going to use Optimizely to improve that. If I then spend several weeks trying to improve the landing page, and trying to get them to buy or to try, and that’s still not working, then my guess is that either the traffic is not qualified enough, or I’m just asking for the sale too quickly. So then I shift into this “Plan B mode”, where instead of asking for a sale or trial I ask for email opt-ins – either to a webinar or to an email course. Then nurture those leads, see how many convert, and this is where a tool like Kissmetrics or a Drip – because that’s what we use it for – where you have tags, and you can actually report on everyone who’s coming through those ads – because their tagged as their source is that ad. Then you can see, “Boy! Did they sign up for a trial? How many of them did? Did they sign up as customers? How many of them did? How much have they paid us?” It’s very, very big, because it’s hard to do that without a tool where you can actually see individuals and not just aggregate data. That’s a quick run through; the philosophy of actually running a test is to first try to ask for the sale trial, figure out what’s not working, fix the ad, then fix the landing page, and then – if you get that working – then it’s awesome and you can scale it up. And if that doesn’t work, then you switch into this plan B mode of getting the email opt-in and nurturing. So it sets you sale cycle out longer, it means there’s more steps between them initially clicking the ads. And, not only steps, but more time in them signing up and buying from you. But that’s what this is about. It’s about finding and reducing friction during this process.
Mike [30:23]: And I think something that that process kind of highlights is the fact that you’re going to have to go through this several times in order to find out whether or not a given channel even works at all. Because one of the first things we talked about was making sure that you had enough budget to go through and run these tests. And when you’re testing them, make sure that you’re taking a look at the statistics, and identifying your conversion rates, and how much you’re paying for the incoming leads, and whether or not those people convert to trial. And it’s time consuming to gather that information, and analyze it, and figure out where the leaks are in that particular sales funnel. Again, it’s just a matter of going through, gathering as much of that data as you possibly can, and then iterating through it multiple times in order to find where those leak points are. Because you’re not always going to find them the first time. Sometimes it’s misleading it best. I mean, you’re going to look at those things and say, “Well, this particular channel isn’t working.” And I think that that’s where a lot of the fear, uncertainty, and doubt comes about from some of these different ad channels. Because somebody will try them out and say, “Oh, well, I tried that and it didn’t work.” And your response to that should be, “Well, what did you exactly do? And why did it not work out?” And if somebody can’t explain why something didn’t work then they may not understand all the subtle nuances about it, or they just didn’t dedicate the time to it. A lot of these ad channels will work if you spend the time and effort to optimize them. Now that said, there are some that are not going to based on the type of product that you have. But if other people are advertising on those ad platforms, chances are good that it’s working for some of them, because if it didn’t work for anyone then nobody would do it. So nobody’s going to spend money to make nothing. That’s obviously a losing strategy.
Rob [31:57]: I think a final thought is that if this sounds complicated and scary, it’s not. But it does take work and it does take time. And just the dream of plunking an ad on to AdWords and paying five or ten cents a click, and then just having this amazing cost per acquisition is not—I’ve never seen that happen. It does take work, and it does take refreshing of the ads. So if you have the time to do it, invest, but consider it another marketing channel. It’s not anything that’s going to be easier than other marketing channels, or particularly less time. The nice part about it is if you get it to work then it tends to scale really well, and you can drive a lot of trial pretty quickly. I think the last thing I’ll throw in is if you’re not already doing retargeting, that is actually where I would start before I got into all this stuff that we’ve said here. I would consider using a tool like Perfect Audience, or going directly to Google AdWords, or to Facebook, and they have retargeting images build into them where you can get a pixel, and then essentially cookie people, and then retarget them with ads as they travel around the Internet or on Facebook. Those are going to be your cheapest clicks and your highest converting clicks. And so that’s actually pretty easy, and there’s not too much magic to it; maybe some testing of the ads and such. But you don’t have to get into all the targeting, which is nice, because you just have this audience. And that would be, I think, the low hanging fruit in terms of paid acquisition. But if you’re trying to get new visitors, that’s really more of what this episode was focused on. Because to do retargeting you need to have a nice bulk of existing visitors already. You can’t just start from zero, because there’s no one to retarget.
Mike [33:25]: I think that about wraps this up. If you have a question for us you can call it in to our voicemail number at 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 in 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 287 | 5 High Leverage Areas Bootstrappers Should Focus On
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about five different areas bootstrappers should focus their time on. You’re not going to have time to do everything and some things should be a lower priority.
Items mentioned in this episode:
Transcript
Mike [0:00]: In this episode of “Startups for the Rest of Us,” Rob and I are gonna be talking about five high-leverage areas bootstrappers should focus on. This is “Startups for the Rest of Us,” episode 287.
Welcome to “Startups for the Rest of Us.” The podcasts help developers, designers, and entrepreneurs be awesome at launching software products. Whether you’ve built your first product, or you’re just thinking about it. I’m Mike.
Rob [0:24]: I’m Rob.
Mike [0:25]: 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 [0:29]: Well, week’s going pretty well. I had about two and a half hours yesterday that I totally killed because of the way that Gmail forwarding works, and the way that it’s really smart and it knows if, like, another Gmail account can send as a certain email address, and if you try to send from a Gmail account to itself as a different address that it won’t send the email. And I had like two or three Gmail accounts and I was trying to troubleshoot all of it, and I won’t to the vast complexity of it, but it was this funny string of, “Man! These things are not forwarding. Google Apps doesn’t work the way I thought it did.” There was a certain forwarding setting that I had set and it just wasn’t working. And two and a half hours later I finally realized, “Oh, it’s because Gmail knows that the other Gmail account could send as that thing, and so therefore it wouldn’t forward the email along. And by the time I had someone else in my office send the email and then it all worked it was like two and a half hours later. So, it was kind of a bummer.
Mike [1:26]: That sucks. You could have asked me. I would have told you that.
Rob [1:28]: Yeah. Well, I knew how it worked with one account, but it was that there were these three accounts that were linked in this chain. To be honest, moving from DreamHost to Google Apps to manage our email has been a fairly seamless transition aside from the upfront work, but just not knowing the interworkings of how it’s gonna do some things, and there was an email that got lost, it instantly made me suspicious. I just hate being on new systems where like you don’t quite know how everything operates and interacts. They aren’t necessarily bugs, but they are like, features or odd behaviors that [crosstalk]
Mike [1:59]: Yeah. They’re little quirks.
Rob [2:00]: They are. That’s what it is, you know, just legacy of how they were built type of thing.
Mike [2:04]: Yeah, I’ve seen that myself. I think the way that I got around it was that what I did was I would send the email and, inside a Gmail, I would have it send through an external SMTP server that would then, basically forward that email back.
Rob [2:17]: That didn’t work. I did that.
Mike [2:19]: Really?
Rob [2:20]: Yeah. It’s exactly that. That’s why it took me two and a half hours, because I was like, “There’s no way it knows.” but it did. It’s crazy. There’s a bunch of technical detail that doesn’t make sense. The bottom line is I killed two and a half hours and I should have just assumed that Gmail was smart. Because that’s really what it is. I mean, when I actually look at it, they built it pretty intelligently. I just didn’t expect it to be that knowledgeable of a separate Gmail account and that it would know who was sending as.
Mike [2:45]: Yeah, I just don’t understand why they prevent you from doing that to begin with. That doesn’t make a lot of sense to me. I don’t know why. Maybe there’s some weird technical thing on the back end, and it might have been something that was early on and then at this point, they’re just like, “Well, it’s not broken so let’s not bother changing it.”
Rob [3:00]: And I also wonder if they’re trying to keep infinite loops from happening, where you like forward from one account to another and then if you were to forward back it would infinite loop back and forth or something? This behavior would avoid that, and so that’s part of why I think they might have done it.
Mike [3:13]: I guess, but at the same time those would be rules, not necessarily like an active send. If I literally send an email, or if I send it, it should send it. It shouldn’t matter what other rules and stuff are in place, and they should have stuff in there. Like if they’re smart enough to do that, they should be smart enough to detect whether or not there’s gonna be infinite loop of forwarding back and forth. It’s six to one, half a dozen the other. It’s like you can solve it in one or two different ways.
Rob [3:35]: Perhaps, but I know that the forwarding can get really complicated and have like custom rules and all that stuff. So they would have to evaluate those on both sides. That would actually be a lot more complicated I think, then just having –
Mike [3:46]: Google.
Rob [3:46]: – the flat. But do they want to waste their time on that, or do they want to be like be shooting rockets in other space?
Mike [3:52]: Or making us all live to the end of time.
Rob [3:54]: Exactly. That kind of stuff. How about you, what’s going on this week?
Mike [3:57]: I on-boarded another customer this week and I am unfortunately not gonna make my deadline of having everybody onto Bluetick by the end of the month, but I am at least making steady progress to it. And the app is getting more and more solid each week that goes by. So my self-imposed deadline of having the app completed was back at the beginning of this month –
Rob [4:16]: Right, and you hit that.
Mike [4:16]: Yeah. The thing is it was completed, and it was largely functional, and we’ve spent the past several weeks cleaning up a lot of the rough edges and double-checking to verify certain things; that everything’s working. And then anything that’s not working, we’re going in and fixing it more or less as I onboard people. Initially it was just, get at least one or two people onto the system, find out where they’re stumbling, and basically I’m just kind of watching over people’s shoulders as they’re going through. I watch them sign up for the app. I watch them configure everything, I watch them as they struggle through the interface and take notes about pretty much everything that they’re doing so that that way I can go back and log new cases and say, “We need to fix this.” or, “We need to move this over here.” or “Make this more clear.” or “Change this text so that if there’s any questions about how something works.” Some of it’s just very simple stuff that you wouldn’t necessarily think of, and it’s just adding some explanatory text is what will fix it, or changing a text on a button. All of that stuff is pretty simple to do. It’s just a matter of knowing that you have to do it. So watching over their shoulder really helps with that.
Rob [5:18]: Yeah, that’s really cool. I mean that’s the benefit to being so hands on in these early days. So, you said you’ve on-boarded another customer What’s your total customer count up to?
Mike [5:25]: I’m up to three and I’ve got another one scheduled for this Friday, so I’ll be up to four. I actually don’t know what my preorders is up to at this point. It’s somewhere between 16 and 20.
Rob [5:36]: Nice.
Mike [5:37]: I don’t know exactly. So that’s kinda where things are at, and I’m hoping over the next couple of weeks I’ll get everybody else on-boarded and start working through the issues. I mean, we’ve already redesigned a bunch of the navigation to make it easier to use, and easier to kind of pop through the screens and do what you need to do. And then a lot of the other stuff is just adding in little bits and features that people need. And one of the things that I really wanted to have operational on day one was Zapier integration, and the person I put on-board yesterday they were able to do that. We wired everything up, connected to a form on their website, sent everything directly through, automatically added them to an email sequence and made it so that they could start sending those emails, basically automatically. It was really kind of awesome to watch.
Rob [6:17]: Yeah, that’s fun. It’s fun to get some real people using it. Have the people you on-boarded actually started sending emails? Are they using it for production use?
Mike [6:25]: Not yet. That will probably be next week. So right now they’re just kind of going and putting it through its paces internally and testing it with just test email accounts, and then I think next week I know of at least one person who’s gonna start using it in a production capacity assuming that everything goes well this week.
Rob [6:40]: Cool. And are they on a trial basis where you’re gonna touch base and find out when they’ve got value, and then you’re gonna charge them for they subsequent month or is it a predetermined timeline, in terms of the trial length?
Mike [6:52]: Yeah, it’s not a predetermined timeline. It’s essentially when I brought them onboard I had them give me a preorder. I took their money and then said, “Look, I’ll work with you through the onboarding process, and if the very first day you can say it’s providing value, great. I’ll apply a credit for however much you gave me and then in X number of months, I will charge you again for that “first month of service” which is, in reality, like three or four months out. But if you can’t say that for six weeks, or for eight weeks, or 12 weeks, then we’ll just keep working with each other until you get to the point where you can say it’s providing value and then we’ll do that. So, they’ve kind of paid already, but I’m not actively charging them more if that makes sense?
Rob [7:32]: Yeah, no that makes sense.
Mike [7:33]: But I don’t have a specific timeline. I mean, I would be disappointed if it took like eight weeks for people to look at it and say, “Yes, I’m getting value out of this.” because then it would mean that there were a lot of things that I got wrong, and I don’t think that that’s the case.
Rob [7:45]: Yeah. That makes sense. That’s how we did it with Drip as well, when we on-boarded those first ten or eleven early access users. I was just so high-touch, and just so aware of what everybody was doing at that point, that at a certain point I was like, “Man, they sent a broadcast to 5,000 people, and got this open rate, I have a feeling they’re getting some value out of this.” So it was purely based on me just circling back every week and reviewing everybody’s activity rather than having a predetermined trial length. And then I went and used that data to then inform, “How long should our trial be? Does it need to be 30? Can we do 14?” And obviously we settled on 21-day trial, but at this point learning and just getting people using the app is more important than the money as long as the people are willing to pay you in the long-term, because you want the right people using it who have money, who aren’t going to be perpetual free users. I think you’re on the right track with that.
Mike [8:34]: Yeah, and that was the purpose of taking that money upfront. It’s more just to maintain an affirmation of commitment than anything else.
Rob [8:40]: It’s a token, yeah. So if listeners are interested in seeing what you’re up to they can head to bluetick.io, and I guess they would sign up for the email list there and you’ll be in touch once stuff’s ready.
Mike [8:51]: Yep. That’s right.
Rob [8:52]: So, how about today, what are we chatting about?
Mike [8:54]: So, today what we’re gonna talk about is different high-leverage areas that bootstrappers should focus on. And I kind of came up with this idea because I’ve been personally buried with just tons of different things that need to be done, and what I’ve realized was that I was kind of going down the rabbit hole in certain places. So, I kind of took a step back and thought about what I should be doing versus where I am spending my time, because I track my time using RescueTime so I’m able to go back and see exactly what it is that I’m doing, and how much, and things like that. It seemed like kind of an appropriate topic to talk about and to share with people. I did a little bit of research when I was taking that step back, and so this is loosely based on an article from Fortune magazine which we’ll link up in the show notes. It talked about five different ways that CEOs should spend their time.
Rob [9:40]: And before we hit record, we talked a little bit about how really these five areas are aimed at more full-time bootstrappers who are trying to grow a business. So right now if you’re nights and weekends, or you have something that’s on autopilot, this probably isn’t gonna be as relevant. It’s more for people who are gonna be hiring some contractors, potentially employees, at some point and who are really thinking of building something that they want to grow and are investing in it. And you know, it’s funny, I’m not sure that it needs to be full-time, but it’s like if you’re hitting it hard and you’re investing time and money into it, and are heading for growth, I think this is gonna be in line with what you should be focusing on.
Mike [10:15]: Yeah. I think the other thing that factors into it is making sure that you’re spending time in the right places and you’re not overworking yourself. I think that that’s an easy trap to fall into if you’re doing something where it’s just taking and consuming a ton of your time and you don’t really have a lot of free time to do other things to kind of wind yourself down. And what I found was I was spending just vast amounts of time working on some of this stuff, and quite frankly some of it I just didn’t need to be doing. It was better left to other people. But at the same time there’s this core group of things that just needed to get done that I’m kind of the only person who could or should be doing those things, and it’s just a matter of balancing those things and making sure that not only do they get done, but I don’t burn myself out in the process.
So before we dive into these, one of the things that I wanted to point out is that I think that it’s a mistake to think that as a small company you can do everything right that the big companies get wrong. I remember years ago when I started my own company I looked around and said, “Well how are they still in business? How is it that they can sustain themselves when they do this laundry list of things wrong?” At the time I remember promising myself that I would never act like that and just drop things on the floor. And with time comes a little bit of wisdom, I suppose, and I’ve realized since then that it’s very difficult to not just drop some things. You can’t always move everything forward. You’re not always gonna be able to pay attention to the smallest details, and there’s gonna be things that get dropped. And that kind of goes along with this particular podcast episode, because there’s gonna be places where you should be spending your time, and then there’s gonna be places where they’re gonna be lower priority. You’re gonna have to neglect them a little bit. So with that said we’re gonna kind of dive into these five different areas. The first one is strategic planning. Under the umbrella of strategic planning this includes things like: your business roadmaps, your product roadmaps, the vision of where the company is going and how it’s going to get there. And along with those things you have to have at least an idea of what it is you’re trying to accomplish, and what the timelines associated with those are, because if you don’t plan those things out and figure out how you’re gonna get there then it’s gonna be difficult to achieve those goals.
Rob [12:21]: There’s a concept from the E-Myth where the author says that, “A technician thinks about today. The manager, who’s one step up, thinks about this week. And the entrepreneur thinks about this month, or this quarter.” That’s where this strategic planning comes in. You have to be thinking out three to six months, and thinking about what features are going to need to be built? What marketing approaches you’re going to need to take? Do you have the cash? Do you have the personnel – whether it’s contractors or full-timers. And really where is the whole space headed if you’re in a competitive area? How you’re going to react to things that other people do? I mean, there’s a lot to be thinking about in this kind of umbrella of strategic planning and vision, and no one else is going to do it. This is really a founder level responsibility, because everyone else is focused on getting stuff done day to day. And this is actually hard to do in the very early days when it’s just you, or you and one or two other people, because you are so focused. You are a technician, and manager, and the entrepreneur. And those are the hardest days in my opinion, because you’re just trying to get the support tickets responded to, and get the next feature built, and get the next page of documentation written. But as you’re able to fire yourself from some of those roles, meaning that you hire good people to take them over – so suddenly you’re not responding to the support emails, you’re not writing the KB articles. This is all stuff I was doing two and a half years ago as we launched Drip, and I’m not doing any of that anymore. Once you do that you find that you free up more mental space to start thinking strategically, and this is where you spend time taking in outside content basically. This is why I do listen to a lot of audio books and podcasts, and I keep up on what’s going on in the email marketing space and marketing automation and marketing technology in general. And I have time to do that because I’m able to essentially delegate all the tasks I used to do, kind of the technician and more hands on stuff. So, you have to make a decision here. If you want to stay small as a one or two person, and you want to keep writing code, that is totally cool. But you do need to fit some time in your week to do some strategic planning even at that level. Then if you do plan on getting bigger, and becoming, let’s say, five, ten employees, you will want to start to move back from some of the more hands on roles.
Mike [14:35]: And I think that’s a difficult line to draw in the sand, and you eluded to it early on when you said that in the early days you are acting as both the implementer and as the manager. And it’s very easy to get sucked into all the short-term stuff and ignore the longer term stuff, thinking “Oh, it’ll just sort itself out.” and you won’t need to think about it, especially if you do really well on all the short-term stuff. And that’s not the case. I mean, because there are definitely times where you need to take a step back and look up to look to figure out whether or not those short-term things that you’re working on are even relevant. Do they even need to be done? And sometimes they just don’t. Sometimes the things that you’re doing short-term make absolutely not difference whatsoever, and it is better to leave them alone and walk away and essentially let them fall on the floor and do something else, because it makes more strategic sense to go do something else. The second high leverage area is to focus on communicating. And there’s three different place where communicating is applicable. The first one is talking to your prospects. When you’re talking to people who are looking at purchasing your product, or using your product, they are going to give you an indication of where the market is headed and where things are trending. The second place where you should be communicating is with existing customers, because they’re going to give you an indication of where they’re at with their business and how you can better serve them in the future. Presumably, those customers are growing, and if you are able to grow your app and meet their needs in the future, then that means that your customer base and the relevance of your app to that customer base – whether they are small or as they are growing – is also going to increase. So, it essentially increases the breadth of people that your app is applicable to and gives you essentially a wider market that you can tap into. And then the third place where communicating is really important is communicating with your team. And that is to essentially make sure that they understand the vision of the product, the business, and where the company’s headed, how you intend to get there, and all the timeline things associated with it; the roadmaps, the goals, the milestones, etc. They need to understand what the priorities are for the business, and if you can’t communicate those things to them effectively, in a way that they are going to understand and be able to relate to, then it’s going to be very difficult to get them to all go in the same general direct. What you’re going to end up with is a lot of people who are either going off into the weeds, or are working on things that are simply not relevant, and you’re going to get frustrated. It’s very easy to assume that because you’ve been involved on all these conversations with customers and prospects and all the different people that you have working for you, that other people know those things. And that’s definitely not the case, especially if they’re sitting there, heads down, writing code, and they’re not talking to the customers. They’re essentially relying on you to relay that information, and if you’re not communicating it with them how could they possibly know that information? So, this is where communication with your team is just as important, if not more important, than communicating with your prospects and your customers.
Rob [17:25]: Yeah. That third part is about communicating your vision. It’s the vision of the company and where it’s going. And, like you said, what the timeline looks like. And I find that thinking out 90 days, in a pretty concrete manner, and kind of having a pretty set up roadmap of where we’re going, is a good place to start. Things change so quickly that past 90 days, for me, it’s always murky. And I know as you get larger, if you’re a 20 person company, you probably need a roadmap longer than that. So, at this point, with Drip, we have ten people working for us. A couple of them are part-time. But, still, a 90 timeline has been plenty. And looking out beyond that it gets a little murkier, but I do have bulleted lists of where I want to see the product going. And what’s interesting is Derek and I will talk about it and come up with what’s happening, and then we have a weekly team meeting where we’re able to communicate that to everybody and give them an idea. And I feel like since everyone is doing their day-to-day job, and they’re busy just cranking out content or doing demos or cranking out new features, they aren’t necessarily thinking about the higher level of like, “What are we building?” And that’s where, as a founder, you need to bring that up to the higher level and summarize it to people. Like, “Did you guys notice that all we’re doing right now is a bunch of UX stuff?” or, “All we’re doing is performance?” or, “We’re building this big feature that’s going to take three to four months.” And communicating it back to them in the way that you see it so that it can lend clarity to them and they don’t just feel like they’re doing all these little tasks, but there’s a higher level strategy to it. And I think there’s a lot to be said for that. And it doesn’t need to be some big leadership ra-ra thing at all. It can just be getting feedback from everybody about what they’re seeing, what they’re hearing from customers – because assuming you’re not the only person talking to customers – and then communicating back to them the current vision for the company. So I think as you get bigger – like say you were a 30 or a 40 person company – you’d split these roles, and the person who’s maybe hearing from prospects and customers would be like the CPO. I think the CEO needs to keep communicating to the team because it’s just so important to keep that ball rolling.
Mike [19:23]: The third area bootstrappers should focus on is researching and testing marketing channels, or at the very least finding ones that are working really well and then doubling down on them. And again, this goes back to what we had talked about very early on in the episode about how not every business needs to go through fast growth. Or some of them just simply aren’t capable of it. But if you are in that situation where you are trying to grow the business, what you’re doing today may not get you to where you need to be, or where you want to be. And some of these new sales channels are going to be very critical to growing your company. Another thing that you have to keep in mind is that not all of these channels that you’re currently using are infinitely scalable. And, in fact, some of them are just going to dry up or go away, because they were – not necessarily fads – but they were not sustainable channels. And that could be because the channel itself collapsed, or it could just be that you have grown enough to the point where the things that used to work in that particular channel simply aren’t moving the needle for your business anymore. So as you get larger a given channel may no longer work as well for you as it did in the past.
Rob [20:25]: Yup. Especially, I’d say early on until you have several employees, this is going to be your key driving factor, because finding good marketing people and someone who knows growth is very, very hard, and they’re very, very expensive. And they’re just a handful who are going to be able to drive this like you will be able to. It’s one of the most difficult roles to fill, I would say. And so, definitely researching and testing marketing channels. At least getting them to the point where they’re working, then you could hand them off to someone else. But this is going to be a critical growth lever in the early days.
Mike [20:57]: The fourth area is what I’m going to call “moving the furniture.” And this is based loosely on an article that Joel Spolsky wrote a long time ago about the fact that what he saw was that the job of management was essentially to remove obstacles from the path of developers so that they could get their work done. And I think that this applies to a bootstrapped company as well. As a manager, or as the founder, your job is to really do the same thing for not just the developers working for you, but also the other people who are working in your company. So whether they are on the marketing team, or you have hired somebody to do copywriting, your job is to essentially remove obstacles for them so that they can become more productive. And whether you perform those tasks yourself in order to remove the obstacles, or you empower them to remove the obstacles themselves, either way that has to be done. You don’t want to have people who are going to run into an obstacle and then either be really hampered in their ability to get work done, and not have any mechanism for taking care of it, or not have somebody that they can turn to to get those problems taken care of for them. I think “moving the furniture,” also applies to allowing your customers to use your product more effectively. And this goes back a little bit into communicating with your customers. But you want to identify ways to get them better results, and those better results are going to allow them to do their job more effectively, they’re going to make those people who are users look better to their existing employers, and essentially want to use your product more. And they will talk about it. So those are all things that fall under this umbrella of “moving the furniture.” It’s more about making sure that everybody on your team is operating it at as high a level as they possibly can, and at the same time still not burning themselves out while doing it.
Rob [22:37]: It’s a really interesting duality where you have to both be removing obstacles and making decisions, but also being able and willing to ask for help and delegate to your team. So you’re both taking things from them and giving them out. And that’s a struggle, I think, that might befall you in the early days; you think that removing obstacles involves you doing everything and taking everything onto your list, or you might over-delegate the other way and not be removing enough. And I think that the idea here of removing obstacles tends to be making decisions, setting game plans. It doesn’t tend to be, “Well, give me that. I’ll just write the copy.” or, “I’ll just write the code.” It’s not taking the task over, but it’s taking over the decision process. Or if there’s like a key intro that needs to be made that you have, or there’s some roadblock that really you’re going to be the best at fixing without actually doing all the technical work, that’s really what we’re talking about here. Other interesting thing is my dad was an electrician, and then he became a foreman, and over the years became a general foreman, and then he was a project manager. So he was just rising up. Then at some point he was an executive project manager managing multiple project managers. And what he told me – because I asked him “What’s the difference?” – and, a, he said being a foreman was the most fun because you had this small team and you could think just out a week, and you were really building stuff and it was so cool. He said the higher up that you go all you hear about are fires. You hear about all the things that are going wrong. Because when things are going right, everyone’s doing their job and they’re able to move forward, you’re only going to hear about the roadblocks. You’re only going to hear about the problems and the trouble. And so that take some getting used to, coming from being able to build stuff with your own two hands, to then making that mindset shift of your day is just basically filled with your good people not being able to overcome things. So there are always going to be challenging problems that are brought to you if you have built a good team. You’ve got to start to enter into that mindset as you move forward, because as you said “moving the furniture,” removing roadblocks, it’s not necessarily always an easy job, because you have to make decisions without complete information. And that’s perhaps the best description that I can think of of someone who’s running a team. You almost never have all the information you need to make the decision, and you just have to learn to make it so that people can move forward.
Mike [24:50]: And sometimes “moving the furniture” is as simple as just making sure that people don’t have to stop to come ask you for a decision. Sometimes you can just say, “Hey, if a decision needs to be made here, just go ahead and make it.” And I’ve actually found that with contractors they have a very hard time with this concept, because I don’t think that most of them are used to being trusted in such a way. Most of them want to stop what they’re doing if they get to a point where they don’t know how to proceed, and they will basically stop all work and come to you and say, “Hey, what do I do here?” And it’s like, “Well, just make a decision.” And you have to set that culture, that expectation, with them. And then another instance where I’ve run into this is where if somebody needs something, whether it’s a piece of software, or they want to purchase a service that will help make their lives easier and more productive, then just giving them access to the company credit card is a mechanism to prevent them from having to come ask you for permission to use it. And you just give them a blanket statement: “If it costs less than X dollars, just go ahead and do it, and then I will reimburse you for it.” So, if you don’t want to give them access to the credit card, you can just say, “Hey, I will reimburse you for anything up to $50 if you just decide to go do it.” So that’s another mechanism for handling that.
And the last area where bootstrappers should focus on is finding good talent. And I think finding good talent is probably one of the more difficult pieces out of all of these, because it’s not just you doing it. When it comes to doing a strategic planning or communicating, you’re the one who is essentially doing that work. You’re pushing out emails, you’re sending instant messages to people, or you’re having those meetings. When it comes to finding talent, essentially you are searching for other people and trying to identify whether or not they’re going to be a good fit for, not just you and the way that you manage people, but also for your team. And are they going to be a good fit to integrate with the team based on their own working style? And that can be very difficult to figure out. And there’s a couple of different aspects to it. One is how they have essentially gone through their career? What their career arc has looked like? Are they early on in their career? Are they much more entrenched in the things that they’ve done? Are they able to pick up new things or not? And another thing that I think most people don’t really think a lot about is whether or not the person you’re bringing on is for a short-term need or for a long-term need? And I think, depending on which of those two things you’re hiring for – whether you’re hiring a contractor because you have a very specific set of things that you need accomplished and you know that it’s probably going to be a short-term need that they’ll be there for two, three months and that’s it – or you want to try and identify somebody that you can keep around for the next two, three, or five years. Those are two entirely different situations, and depending on which one you’re trying to do, is going to influence a lot of the different ways that you handle that particular situation and you go through the hiring process. And the other flipside of that is being able to balance the talent that you’re hiring with the cash flow of the business, because you’re not always going to be in a position where you have the money on hand to be able to hire somebody. And there are going to be times, probably, where you have to hire somebody and you don’t quite have the money yet. So you might be operating at a little bit of a loss for the business. Which, I think for most bootstrap businesses is kind of unusual. When we put this list together one of the things that we thought about including was the idea of cash flow as an element of itself. But for a funded company that tends to be more of a focus of the CEO, because they’re operating at such a huge deficit every month or every year. With a bootstrap company you typically don’t do that because you don’t have a lot to work with to begin with. But, still, when you’re going out and you’re hiring somebody, you still have to make sure that you have the cash on hand, because the last thing you want to do is lure somebody away from their current job, hire them, and then have to let them go in three weeks because you made a bunch of mistakes in your own business. And it’s really not fair to make them pay the price for your mistakes. But, inevitably, that’s what’s going to happen if you don’t pay attention to your cash flow.
Rob [28:43]: Yeah. Hiring’s a big topic. Obviously we could dedicate a lot of time to it. But the bottom line is there’s a lot that plays into hiring. It’s hard to find good people. When you find them, keep them around. The best folks that I’ve worked with I plan to work with for many, many years. And I think it’s interesting you brought up the cash flow aspect of it, because as a bootstrapper you do need to be careful. It’s pretty easy to hire ahead of cash flow and to suddenly have some bill that comes up. Like tax day comes and you get a bill for 20 grand or something that you didn’t count on, and suddenly you could find yourself in a pretty tough position. If you’ve hired right up to the point where- think about your revenue – if you’re making 20, 30 grand a month in revenue and you hire right up to that point, it can be tough if you do get any type of unexpected occurrence and you don’t have a backstop. Because you really don’t want to be laying people off, especially in the early days, because it’s stressful. So this is definitely one of the things that you’re going to need to spend a lot of time on, and it’s something that I have never seen delegated well. As the founder, as the bootstrapper, trying to delegate this to someone else I think would be a real mistake.
So to recap, our five high leverage areas bootstrappers should focus on are, number one, strategic planning; number two, communicating; number three, researching and testing marketing channels; number four, “moving the furniture”; number five, finding good talent. If you have a question for us call our voicemail number at 888-801-9690, or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control,” by MoOt, used under Creative Commons. Subscribe to us in iTunes by searching for startups, and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening, and we’ll see you next time.