marla

Show Notes

• Getting Organized using Evernote by Andrew Connell
• How to Craft a Marketing Story that People Embrace and Share
• Storytelling for Fun and Profit
• To Tell a Tale, To Craft a Story
• The Hero’s Journey Outline
• The Science of Storytelling: Why Telling a Story is the Most Powerful Way to Activate Our Brains
• The Secrets of Storytelling: Why We Love a Good Yarn

Transcript

[00:00] Mike: In this episode of Startups for the Rest of Us, Rob and I are going to be talking about how to craft your story. This is Startups for the Rest of Us. Episode 195.

[00:06] Music

[00:13] Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at launching software products whether you built your first product or you’re just thinking about it. I’m Mike-

[00:21] Rob: -and I’m Rob.

[00:22] Mike: -and we’re here to share experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Rob?

[00:26] Rob: I want to say a congratulations to lifetime Academy member Adrian Rosebrock on his first four-figure launch. He emailed me, and I know he’s used a lot of tactics and techniques that we’ve outlined in the Academy. And he’s also, he moved over to Drip from MailChimp because it was getting too complex to try to manage in MailChimp with segments and groups. And so once we got the rules built, he moved over to Drip. And he said, “I just wanted to say that Drip has helped me hit my first four-figure launch, and I’ve only emailed about 130 people from my 800 person subscriber list. I’m looking forward to the rest of the launch this weekend.”

[00:57] You know, I actually I actually have read through his crash course. He has a 21-day crash course in computer vision and image search engines.

[01:06] Mike: Oh my God.

[01:07] Rob: Yeah.

[01:07] Mike: Twenty-one days?

[01:08] Rob: And it’s really good. Like I would check this out, even if you’re not interested in this, just to see how to write a really good crash course. The content is exceptional. And there’s a bunch of really good content on his site as well. He cranks out lot of content, and it’s high quality. He knows what he’s talking about. The URL is pyimagesearch.com. It’s PY (python) imagesearch.com. You can go sign up for the crash course. And he’s released a couple of e-books you can find certainly on the site if you’re interested in this stuff. So that’s what this is, right? It’s using pythons and libraries to identify faces in photos and identify checks and stuff. So it’s pretty cool stuff.

[01:45] Mike: Oh, that’s really cool. So you remember a couple weeks ago I said that I had a hard drive crash on my network-attached storage device?

[01:50] Rob: Yep.

[01:51] Mike: And so I bought those four new two-terrabyte drives, and two of them I’ve had to send back because they were bad drives.

[01:57] Rob: That’s terrible. And you were talking about how they were inexpensive, right? The storage was so cheap. Was it because the drives were cheap, do you think? Are they off-brands?

[02:06] Mike: No, they were Seagate drives, so they were decent quality. And plus they were the enterprise versions of them. They weren’t the lower end ones. The smart drive piece of it was failing, was giving me errors. And I tried it in a couple different ways. I used one of Seagate’s tools. They have their own utility to check the drive, and that was coming back and telling me everything was okay, but I’m just like, “Yeah, I just bought these, and I’ve got two other pieces of software that are telling me they’re bad, so I’m going to send them back just to be on the safe side.”

[02:32] Rob: That’s such a bummer. When that mean time between failures is two days, that’s [laughs] too short. Hey, so remember a couple episodes ago we talked about ABCDE, it’s a prioritization approach?

[02:43] Mike: Sure.

[02:44] Rob: We got some really good comments for that episode. It was episode 191, and I wanted to talk about a couple of them. One is from Martin Frank, and he said, “I’m a big procrastinator myself, and I was hooked on the ABCDE method you present. My question: how do you manage different tasks from different projects? Do you have multiple Trello boards or do you merge them all into one?”

[03:03] I responded to him, and I said I put everything into a single list because otherwise I get project hypnotized, and I won’t switch between them, but I only keep stuff that really needs to be worked on in that board. So future tasks, nice to haves, etc, they’re on a different board. Because I don’t think you can manage 50-100 items with any level of efficiency in Trello. I do think if you have a to do list and you literally have 100 or 200 items that need to be arranged, then I would probably not use Trello. I would probably use something more like FogBugz or a took like that where you priority, backlog, and filtering are kind of these multiple dimensions to it. And it’s just better for organizing more information because you have more things to pivot on.

[03:40] Mike: My thoughts are probably pretty similar. What I do on Trello is I have the things that are the most important to me. And there’s some things that I’ll take from FogBugz and put into my Trello board, but then there’s other things that I’ll take from my Trello board and then add them into FogBugz and I just kind of wipe the slate clean at that point. And so if I’m moving it from Trello to FogBugz, I delete it from Trello, so that it’s no longer there kind of on my top level list of things to do. For exactly the reason that you said. If there’s too many things on that list, they tend to get lost, and you don’t necessarily go through and reprioritize those Trello boards every single day. Those are the top level things that you should be working on, and I find with FogBugz a lot of the stuff that is in there is stuff that tends to get shifted into the B or C column, and sometimes it’s just stuff that you need to get rid of. I just started taking things and just throwing them away and saying, “Look, I’m just not going to do this. I’m not going to do that because they don’t matter any more because they’ve sat there long enough that they never became a priority, so what’s the point? Just get rid of them.”

[04:35] Rob: Exactly. I definitely go through and purge items when I figure out that they’re never going to make it to the top of the board.

[04:42] We got another comment too from Andrew Connell. He says, “Like you, I used Trello but I recently jumped into Evernote and the secret weapon process.” Now everything is in Evernote. Email integration is killer so my inbox stays uncluttered. He uses a one through five priority so it’s like ABCDE, but it’s just numbers. And he’s basically doubled down on putting everything into Evernote, and it’s working really, really well for him. He wrote up the full process on his blog, andrewconnell.com, and we will definitely link that up in the show notes.

[05:10] Mike: Yeah, I think I’d have a hard time using Evernote for that. I feel like I never actually go back and do anything with it.

[05:17] Rob: I’d be curious. You should read through his post because he goes through the exact detail of how he’s using it, and I wonder if that would sway you so you maybe you could take a look at it.

[05:25] Mike: Yeah, that’s a good idea. I’ll have to do that.

[05:27] Well, today we’re going to be talking a little bit about how to craft your story. Some of this is taken from literary sources. How to write a good novel or a good story that would be published. But some of it is directly applicable to how to talk about your company, how to talk about your product and how that product came to be, and use that as essentially a marketing story that you can then use in your marketing collateral when you’re talking to people, explain your product and the services that you offer in relation to that story. Because the fact of the matter is that stories really resonate with people. In fact, there’s an article in the Scientific American Mind by Jeremy Hsu where he essentially points out that personal stories and gossip make up 65% of our conversations. People tend to remember stories, and if you relate your product in a story, it’s going to resonate better with them.

[06:16] Rob: This was the main premise of the book, “Made to Stick,” by Dan and Chip Heath. And I highly recommend listening to that book. It’s mostly about being able to talk about something in a way that gets people to remember it, and a really big part of that is telling stories. I have used the stuff I learned from “Made to Stick” in writing marketing copy, in writing blog posts, in crafting these podcasts, in organizing conference talk. I use it in everything I do. Anything public facing now, I think, “How can I integrate stories? How can I use stories?” And it was really heavily influenced by me reading that book.

[06:52] Mike: So before we get into this, why don’t we talk about some of the different companies that really do this well. Three that I thought of off the top of my head are 37 Signals, Apple, and Groove. And if you take a look at those three companies, if you take a look at Apple and what they do and how they position themselves and how they talk about stuff, every single one of their yearly demos at WWDC is them telling stories. Every single sales pitch for every product they’ve ever launched it’s all stories. It’s all about what sorts of problems they encountered, and they all follow a very, very similar formula.

[07:23] And then if you look at a company like 37 Signals, they came out with the rails platform, and if you take a look at how they’ve positioned themselves, they really say, “This is what we stand for. These are the types of things that are important to us.” And these are things that as a developer I should not have to worry about. We’re worried about design, and it should look good, and they take that to an extreme, and they definitely alienate some people. But in alienating some people they attract other people.

[07:49] And then Groove. I don’t know if you’re familiar with Groove. They have a help desk product that they’ve been pushing. They have a newsletter that they put out, and they really use that to push their story and talk about themselves, where they came from. And it does allude to the product a little bit, but it really does talk about the growth of their business. It really does come out and say, “Hey, this is who we are. This is what we do, and these are the trials and tribulations we’ve had to go through to get to where we are today.”

[08:12] Rob: Yeah, I’m familiar with Groove. He and I’ve emailed back a number of times actually going all the way back to 2011 it looks like. I was just searching through Gmail. He had asked for advice on a few things, and he’s doing a killer job at content marketing these days and getting people invested in his story as you said. I can think of a bunch of other examples off the top of my head. Think of Joel Spolsky when he was getting Fog Creek going. Him telling all the stories of hiring developers and his approach and everything. You buy into it, and you start getting invested in his success.

[08:39] Eric Sink did it with Source Gear. He doesn’t do it anymore, but he used to blog, and then he wrote the Business of Software book. I was so invested in that just hearing what’s it like to really be on the inside and then you start rooting for him.

[08:50] I think patio11 did this really well when he was blogging every week about bingo card creator, and that’s how he got known, right? He talked a lot about SEO and analytics and tactics, but it wasn’t just the tactics. It was that it was this once guy sharing the story of what he was doing.

[09:08] I found on my blog as I blogged about my journey through DotNetInvoice and then through HitTail telling those stories, the tactics are helpful, but that was when people really started to become more engaged with me and what was going on.

[09:21] I think Buffer’s doing a really decent job of that these days. They don’t necessarily tell the inside story like all the other guys, but they are giving you glimpses into how they pay their people. They released all their compensation number publicly. They have all their metrics up on Baremetrics at, I think it’s buffer.baremetrics.io so you can basically see how much money they’re making. And their transparency is part of that story.

[09:43] So stories get people talking if they’re told well and they’re told consistently over a long period of time. Especially if people start relating to you. We talked about this a week or two ago that when we started telling more of our story on this podcast then people become more engaged and they put up with an episode or two that isn’t as tactical, isn’t as super ultra productive or super helpful for them because they’re really just invested in your story.

[10:09] Mike: People can definitely have a story that they tell about themselves in relation to their company. It especially comes true when you talk about the product that you’ve built and you say, “I built this because” and you talk about some of your past work history experiences or problems you’ve encountered. And again, you’re telling a story, and it’s not necessarily about the product but it’s about the trials and tribulations that you went through in order to get to the point where you are today where you built that product because you had this problem that nobody seems to have solved in the way that you needed it to and here are the different reasons why those other things didn’t work. And you take a look at some of the corporate evangelists like Matt Cutts from Google and Rand Fishkin from Moz and then people like Scott Hanselmen from Microsoft, all of these people have a story about where they came from. As you start becoming more familiar with the things that they do you hear more and more bits of this story. Nobody ever sits down and listens to all of a particular person’s story, but you hear different pieces of it spaced out over the course of months or years in different places, and as you said, it’s one of those things that help the story resonate.

[11:10] So if you start looking at things like literary examples, a lot of what you would probably consider the classical stories that really resonate with millions of people, they tend to follow this common idea called the hero’s journey. Twelve different things in the hero’s journey. But if you start to think about classic literary examples that follow the hero’s journey you come across things like Lord of the Rings and Star Wars, The Godfather, Harry Potter, and the Lion King. All of these things kind of embody the hero’s journey. And one of the things that I came across in doing the research for this episode was Nick Reese, and I’ll link to his blog in this. He essentially simplifies this into what he calls the journey to success. And the journey to success boils down to these five basic points.

[11:51] And the first point is identity. Who were you when you started your journey? What was it that you were doing? How were you doing it? What was the lay of the land like when you first came into the picture where you want to start this story? Because obviously you don’t want to start all the way back when you were five years old unless the problem really came from that point. Where do you want to start talking about that? Where is the first place that you came across this problem and how can you introduce people to it in a way that’s going to be meaningful to them?

[12:18] Rob: Right, and you’ll notice as we step through these points, that this outline is very close to most Mixergy interviews. And Andrew has talked about that, how he uses the hero’s journey but how he uses that in his outlines to have a consistent format. And that’s what really separated his interviews early on from everyone else is that he started using this outline which is to- you’ll hear him start the interview, and the very first thing he says is, “Tell us where you are today.” So you want to start with success. And so my MicroConf talk two years ago was about HitTail and I was trying to talk about that journey, and I started- one of my first slides was the revenue curve. So I gave the punch line right at the beginning. And the revenue curve starts low and then does this big hockey stick thing. That’s what I started with. Then I said, “Now, let’s scroll it back, and let me tell you where I was and when I got it.” And I talked about the depths of getting started and how hard it was and how much money I paid. That was who I was when I started the journey, and again you’ll notice that Mixergy interviews do the same thing. He’ll say, “Where are you today?” And then he’ll say, “Okay, let’s roll the camera back. Let’s roll back a year or two. What were you doing then and then how did you move forward?”

[13:24] Mike: The second phase in this is turn against the status quo. What did you want to change about your prior identity or prior world? What sorts of things were you running into that were challenges? How were they not working out? How were you not able to overcome those challenges in a way that was satisfactory to you? This is kind of where you can start talking a little bit about your product or your service a little bit as well because those are the types of things that have led you to create the product or service you’re going to be selling.

[13:51] Rob: And so it depends on where you’re telling this story, but typically this is going to revolve around you being unhappy with all the software options that were out there or you really struggling with something that you needed to build a solution for. Or noticing that a friend had a problem and then going and building a solution. This is the impetus and this is where you really try to get people engaged because they can see themselves in your story. They start thinking, “Oh yeah, I have a problem too, and maybe I can do this.” or maybe “I’ve done this.” And then they start relating with you, and that’s really where stories start to succeed is when you bring people in and make them feel like they are or could be the protagonist.

[14:30] Mike: And that entire idea really helps them become much more engaged in the story. That kind of leads into number three which is the struggle. What sorts of things did you struggle against as you started to create this change?

[14:41] As you mentioned, if people kind of associate themselves as potentially that protagonist, you’re reaching out to people who may also have similar problems. You’re talking to them as if they’re they ones having these particular types of problems.

[14:53] Rob: This struggle has to be there. If there’s no struggle the story isn’t interesting. Because if you come out and say, “I was this person when I started, and then I really had this problem that I tried to solve. And then I coded it over a weekend, and it took off like a shot, and I’ve had a lot of success since then.” That’s interesting in a certain kind of unicorn and Cinderella way. It’s a Cinderella story. But most of us do struggle as we get our apps going and as we’re trying to start these businesses. It’s typically more interesting to hear about the long struggles and then breaking through and what they did to break through. We can relate more to that. As much as we do want that lottery ticket idea that just takes off, I think the struggle is a big part of it.

[15:37] Mike: I think the point you made about the Cinderella stories is only warranted in these cases where we want to be the person who doesn’t struggle. We want to be a Cinderella story. We want to be in a situation where things just get that hockey stick curve growth and we don’t really run into any challenges. That’s what we want for our own story, but at the same time, that’s not what we generally encounter and not what we experience. So those struggles resonate with us and that’s why they resonate with us. If you hear those stories where the person really didn’t struggle with whatever the challenges were, that doesn’t resonate with us which is why don’t tend to remember those types of things.

[16:13] Step four of this journey is insight. And what sorts of unique tools did you build or what insights did you have that made overcoming this challenge easier? Did you have ten or fifteen years’ experience in that particular industry? Was there some library that you came across that connected the dots for you that you decided to build on top of? There’s a lot of different things that kind of factor into this. But if you look at anybody who’s successful and look back at their history, generally there’s this situation that they were in that the reason they’re successful today is because of the situation they were in. And one of the things that I’ve seen is a lot of people relate themselves to other people, but along with that. You also have to remember that somebody else’s experiences helped shape them and get them to where they are today. And trying to copy somebody else’s success just by copying the things that they do is never going to work, and the reason it won’t work is because you didn’t go through the exact same experiences that they did. So because of that you’re not necessarily going to have the same insights that they did into the problems that they’re trying to solve.

[17:14] Rob: There’s a really good point here. If you don’t have struggles and it just takes off for you, you really rarely will have insights that are worth anything because if you don’t have to struggle through it and try different options and fail and then eventually succeed, then let’s say you had this amazing idea and it took off like a shot. You sell that app, you start the next one. You’re going to run into problems that you don’t know how to overcome because you have never faced them before because you lucked out with a good idea. We’ve seen this. There are entrepreneurs who A) have a really big first hit, and then they can’t repeat it, and they continuously struggle after that.

[17:49] The other thing that I’ve seen is people who have one big hit, and then they go write a book or they do talks or they write blog posts about how you can make it big or how they did it, but it’s not applicable. The insight isn’t there because they didn’t have to struggle through it. I especially think this is common with first-time entrepreneurs who have some success because they do learn a lot of things, but if they had that hockey stick idea right away and didn’t have to grind it out, then you do skip over a lot of the learning and you won’t have as much insight as someone who did in fact have to grind it out and who’s able to then repeat that, right? Because those insights are what allows them to do it a second, third, and fourth time.

[18:29] Mike: And this is kind of the very idea behind fail fast. You want to run into those challenges and try to overcome them and fail only to have to turn around and say, “Okay, that didn’t work. Let me try something else.” And the idea behind fail fast is to just simply iterate as quickly as you possibly can in order to gain insights as fast as you can.

[18:48] There’s people out there who say you shouldn’t aim to fail at all, and that’s not what that’s talking about. It’s about being able to make your mistakes quickly and then pivot and then make the right decision from there so you do get those insights and you do learn quickly.

[19:00] Step five in the journey to success that Nick Reese talks about is resolution. Who are you today and who do you serve? I do have a question for you. You said that you  tend to start out with the resolution first as opposed to starting out with who you are. Do you find that that works better or is that something that you’ve tested or no?

[19:17] Rob: Yes. That’s what I’ve found. I haven’t tested it, I just know that I’ve done it many times in talks, done it in interviews where I start with the end. The thing that it does, it gets someone to buy in early to care about your story. Because if you just start and you say, “Here I am. I’m the founder of this, and five years ago I was a developer” and you start talking about your story from there, people aren’t that interested. But if you start and you say, “Look, I took an app and I grew it from zero to $25,000 a month.” That’s where you start with the resolution of the story, and then you back up, then everyone’s like, “Wow! I totally want to hear how he did that.” Right? It gives them that punch line. Now, you don’t tell them the whole resolution because your whole resolution might be a five or ten minute discussion. But you give them a glimpse into it. Just a teaser – maybe thirty seconds or sixty seconds – just enough to show them what it was, and then if they stick around at the end then you can really dive in to what it was and how you got there.

[20:09] Mike: So as you’re going through these different steps, there’s a bunch of things that you need to keep in mind. The first one is that you need to know what your audience is. And if you don’t have an audience because you’re really just starting out, you need to pick one. Who is it that you want to serve? Who is it that you can think of that’s going to be your ideal customer? And in many cases that’s going to be somebody who’s like you, who is in your situation, who’s experiencing similar problems, and you want to be able to talk to that person and essentially put them in your shoes. You could look at it the other way, you’re trying to put yourself in their shoes, but the reality is you have the insight from your point of view, and you’re trying to create a story or create surroundings around them that they can relate to. That they can say, “Oh, I went through this and it’s really close to the things that you’re talking about.”

[20:51] Rob: Yeah, and one thing you’ll notice is that a lot of the people that we’ve mentioned who have told their stories – Joel Spolsky or Eric Sink – they were telling their stories to designers, developers, startup founders. I think the reason these guys all come to mind is because that’s the space we’re in and that’s what we pay attention to. But I also think it just works better if your people are online because then it’s easier to tell that story online. I think there are limitations to picking an audience- if you pick an audience that’s completely offline and not talking to each other or they aren’t on forums and they aren’t doing the discussion stuff then it’s hard to tell your story online. Now, if you’re going to give a conference talk, that’s a different story, right? Then you know what your audience is and even if you’re talking to electricians or counter top installers or whatever, then you’re going to know them, you’re going to know how to communicate to them, and you have their ear for the duration of your talk.

[21:22] Mike: I heard a podcast, it was the business and boot strapping podcast, it was with Brecht Palumbo who gave an attendee talk at MicroConf a couple years ago. And he said that when he was first getting started one of the things that he did was he went to local groups of real estate investors and was talking to them about the types of challenges that he was running into as a real estate investor and how he was solving those. And it kind of led into his story about how he built his product from using public data sources and essentially selling subscriptions to that data online now. If you listen to that particular episode he very closely goes through that and sets that up. And he is affiliated with that audience. He is one of them, so it makes it a lot easier for him to relate that story to them even though it is in an offline fashion because he is giving a talk to them in person.

[22:30] The second thing is to choose your point of view, and it’s perfectly okay to be contrarian. If you look at a company like 37 Signals they are very contrarian. They really want to draw a line in the sand and divide people and say, “We’re on this side, and you’re on that side.” And then to the audience they’re essentially saying, “Choose. You need to choose whether you’re on our side and you understand what we’re talking about and are with us or you’re going to go off and be somebody else.” And in some ways at least early on it was very much about either you’re a designer or you’re not. If you’re not a designer, go away. This information is probably not for you. And since that time it has expanded quite a bit I think. But in the beginning stages you really need to draw those lines in the sand and figure out who it is that you’re affiliated with and who is probably not a good candidate to pay attention to you.

[23:17] Rob: Yeah, I would go beyond saying it’s okay to be contrarian. I would actually encourage you to try to think of insane things in ways that other people haven’t. I think that’s the way that if you believe in your opinions and you’re able to justify them and you are contrarian that’s a way to make a name for yourself. With that said, there’s a difference between being contrarian, having an opinion and being a jerk. And being overbearing and using words like “always” and “never” which I hear people use and it just pisses me off when someone comes out and they’re like, “You should always do this! You should never outsource your core product!” Whatever. You hear people say that, and that’s not true. Maybe it’s most of the time. Maybe it’s 70-80%, but it’s really troublesome to me. It’s okay to be contrarian, but you let people abuse this and they sometimes take it too far. Be careful with that. Know yourself. Know if you’re the kind of person that would take it too far, and just be careful with taking your frame of reference which is probably pretty limited and trying to extrapolate that to the whole world in always and never language.

[24:17] Mike: The third thing to keep in mind is that you need to choose the premise that sets up the story that you want to tell. And by that I really mean that you need to be able to set up your story in such a way that you can logically move from the beginning of the story to the end of the story without losing people in the middle. So that you’re not making these giant gaps where you talk a lot about getting your first customers and then fast forward a lot and skip over a lot of important things. You end up in a situation where you’ve got 10,000 or 20,000 customers, and people are like, “Wait a second. I don’t understand how you got from 100 customers to 20,000. That just doesn’t make any sense to me.” You really need to pay attention to the audience’s point of view, and understand that they simply don’t know everything that you are talking about. They don’t know the whole story. There’s lots of details that they’re not going to know, and if you have a completely fresh set of eyes on the story, you need to be able to make sure that you’re not skipping important things that are going to confuse them.

[25:09] Rob: Yeah, I think this touches on the next point that you make. You have an outline here which is honor the audience and view the story from their side. Everything needs to flow and make sense. This is what editors are for.

[25:20] So that means if you’re going to do a talk, if you haven’t written a bunch of talks, then you probably want someone to hear it before you give to everyone to make sure that there aren’t gaps because it is really easy to have gaps in a talk. It’s also easy to have gaps in a series of blog posts if you’re doing content or even on your about page. It is easy to have gaps. It’s also easy to give too much detail, right? It’s hard to edit it down to a palatable amount of data, palatable amount of information that still tells the story and doesn’t leave anything out. So there’s a lot of craftsmanship that comes into this, and I think that spending quite a bit of time honing the story will be well worth it because it will resonate with people more.

[26:03] Mike: I think that’s one of the things that when you start looking into how to write a good story and deliver a great presentation, things like that, I don’t know if enough time is spent on cutting stuff out. As you said, it’s very easy to overwhelm somebody, and if you start overwhelming them, you end up with all this content in there that isn’t necessarily relevant or doesn’t highlight what you wanted to highlight, and you get people bored. People start to listen or they’re invested early on but then they’re like, “Come on. Please move things along. You’re not getting to the point.” That’s one of the things that people definitely need to pay attention to when they’re trying to craft these stories.

[26:39] Rob: Yeah, I think an interesting illustration in this is that any Mixergy interview you listen to is going to be about an hour long, and typically when you listen to them you’re kind of like, “Huh.” I think it’d be nice if this was thirty minutes long because I would be able to listen to the whole thing. But what you don’t realize is when you’re being interviewed you’re leaving huge amounts of information out. You just have to. Because even to just squeeze your story down into an hour you have to leave so much out, and Andrew really pushes the thing along in order to really do it. So even getting a good story into an hour long interview or forty-five or fifty minute talk onstage is a lot harder than it sounds, and you will find that you have to leave things out and keep only the pertinent points that actually keep the story flowing and making sense.

[27:26] Mike: Yeah. And I think the last point I want to make about this is that your story is really an argument for a particular point of view. How it is that you address this particular challenge or this problem or if you have software that solves a problem in a very specific space, your story can be an argument for why your product is the best at doing that. And that helps you to position yourself against the competitors in a number of different ways. It can be not just pricing, but it can also be about where you came from. Are the people that you’re going against these large enterprise challenges or are they funded companies? Are you the underdog? And you really want to position yourself in a way that shows that you are struggling to do it, and you are overcoming challenges. Whereas those other people are lazy, they’re kicking back, they’re not really doing anything because they don’t really care. And if you can show those struggles you can illustrate them to people, that’s what will resonate with them, and that’s what will attract people to your brand.

[28:19] Rob: I’m going to let you in on a marketing secret that I’ve used for years. We just talked about how to tell your story. If you turn it around you learn how to tell your customers’ story, and you learn how to tell their hero’s journey from not having the software to having your software and what life will look like before and after that and the things they struggle with early on and the results they’ll get once they use it and you can learn to craft that story, that is one of the best long form sales letters you will ever read. You have to genere-size it. You have to talk to “you.” You can’t tell a story like, “Hey, John did this.” I guess you could, but it wouldn’t work as well. What you really have to do is get into the conversation that’s in the person’s head who is reading the sales letter, and tell them their story to themselves. And as you come along side them in the first few paragraphs, they will buy in and they’ll be like, “Yes, this is exactly me.” And then as you move on, then they’ll say, “Well, of course I want to do that. I want the end of my journey to look like that.” It’s an amazing marketing technique that is very powerful. I’ve done this with some long form sales copy. Actually, I’ve done it quite a few times. My most recent example of this is if you go to the Drip homepage, getdrip.com, we just pushed a new long form homepage live a couple days before recording this, and it pits us no longer against increasing conversions in email marketing, but it’s going into the marketing automation space. Email marketing automation. But if you read that story and it gets in the mind of someone who has tried marketing automation and is fed up with the status quo and Drip’s positioning itself to be the answer to that. So if you read through that it’s another way to tell a story, and it’s not about you in this case; it’s about the customer.

[29:59] Mike: So again, just to point out this outline was put together from a bunch of different resources including Nick Reese’s blog, Copy Blogger: Narrative First, The Writer’s Journey. We’ll link up to all the different references that were used for this in the show notes.

[30:11] Rob: If you have a question for us, call our voicemail number at 888-801-9690 or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for “startups” or by RSS at Startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening. We’ll see you next time.

Show Notes

• Craig McKeachie’s JavaScript Framework Guide
• The GrowthHackers.com thread we discuss in this episode
• Sean Ellis’ interview on Venture Hacks

Transcript

[00:00] Rob: In this episode of “Startups for the Rest of Us,” Mike and I discuss whether you should charge before product/market fit. This is “Startups for the Rest of Us,” episode 194.

[00:08] Music

[00:17] Rob: Welcome to “Startups for the Rest of Us,” the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product, or you’re just thinking about it. I’m Rob.

[00:25]Mike: And I’m Mike.

[00:26] Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. So, What’s the word this week, sir?

[00:31] Mike: I’ve undertaken the task of teaching my six- and seven-year-old boys how to play Dungeons & Dragons.

[00:37] Rob: Sweet!

[00:38] Mike: It’s not even the advanced Dungeons & Dragons. It’s, like, the original one from – I think the ’70s is when it first came out. But, yeah, it’s the really, really old stuff. [Laughs]

[00:46] Rob: Yeah, it’s fun.

[00:47] Mike: But it’s a lot more simple than, like, any of the advanced Dungeons & Dragons stuff. So, you know, they’re picking it up. They’re loving it.

[00:52] Rob: Yeah, I bet. It doesn’t have, like, encumbrance and pack loading and all that stuff. It’s super realistic, but it’s super time-consuming.

[00:59] Mike: Well, it does have that stuff. It’s just it’s a little bit different. Like, all the equipment lists are simplified, and –

[01:05] Rob: Right.

[01:05] Mike: – everything is just simpler. It’s more stripped-down. There’s less to keep track of. There’s less in terms of the equipment lists and stuff that you can buy, and prices aren’t measured in copper pieces for different things. It’s, like, all straight – you know, no matter what it is, it costs at least one gold piece.

[01:18] Rob: Right. Yeah, that makes sense.

You know, there’s a couple other options to teach their kid. There’s a game. It’s a board game called Dungeon. It’s like a Dungeons & Dragons board game; and it was put out, I think in the ’70s to kind of get – it’s like an on-road. It’s like D&D lite, basically – right? You actually have a board, and you have pieces that you move around in a dungeon. And it’s pretty cheap. I think it’s maybe 15 bucks on Amazon. That’s a pretty good way to get in there, because it’s really simple, and it’s all self-contained. You don’t have to create characters or any of that stuff.

[01:46] The other thing that I started teaching my son is Magic: The Gathering. And that’s, like, making a resurgence with, you know, the – I don’t know – the eight- to thirteen-year-old set. I played it in college back in the late ’90s, but you can get a Magic: The Gathering starter deck, or a couple starter decks, for – I think it’s like 15, 20 bucks on Amazon. And my son and I just sat down and just picked it right up, and so it’s great. We don’t have to bring all the stuff; and you can just sit down and, you know, just start playing with the cards. So, I don’t know if you played those in the past, but they’re really cool to get kids kind of on-ramped into this type of game.

[02:17] Mike: Yeah, I think Dungeon was re-released, and then there’s a couple of other variations. I think one of them is called “Hero,” or “Hero Quest,” or something along those lines. It’s another board game. I know I played Magic: The Gathering back in college, but I haven’t really played that in years. I still have a lot of my cards and stuff, which many of them they just don’t make anymore, so –

[02:33] Rob: Yeah.

[02:34] Mike: – they’re worth a lot of money now. But I haven’t played it in a long time.

[02:36] Rob: Yeah. So, you might want to buy a new, cheaper set if you’re going to play with a six-year-old [chuckles].

[02:39] So, things are going pretty well for me. DRIP – things are picking up with it. We’ve moved several people from MailChimp to DRIP in the past couple of weeks, and we’re doing the manual migration right now. Basically either myself or my support guy are helping people move not only subscribers, but auto-responder sequences and create rules based on stuff. We’ve integrated with Gumroad and Stripe now. You know, events in Stripe just can hit right into your DRIP account and send someone an email when their trial’s going to expire. Or, send someone an email when their card is charged, like an invoice email, with dynamic fields and everything. So, we’re hitting that critical mass point, I feel, where we have enough features that people are really starting to take notice; and we’re now differentiated from a lot of things.

[03:19] What’s a trip is that there really is this steady flow of people who are either outgrowing MailChimp, or who have tried to move from MailChimp to Infusionsoft, and they hate it. They don’t like the software, and it’s just not working for them. And so that’s where we’re getting refugees coming from – and I’m learning a ton about the next wave of features that we’re finishing up, but that we need to build in order to better serve those markets. So, it’s been a really good source of not only some new users, but more importantly, information on a future direction of the product.

[03:51] Mike: It’s interesting that you use the term “refugees” from other products, because it’s funny; because I’ve been talking to a lot of AuditShark users lately, and people who I’m trying to talk into using AuditShark. And they keep bringing up products that they’re essentially trying to move away from because they’ve either gotten too enterprisey, or they’re not serving their needs. They say, “Oh, we’ll, do this update,” and they never get through with it. And they talk to Product Management, and they’re like, “Oh, yeah, we decided that that wasn’t a feature that we were going to go after.” So, I’m seeing a lot of people take looks at AuditShark specifically because other products that they’re using and working with just aren’t doing it for them. So, it’s interesting. Maybe we should do a podcast about trying to target refugees [chuckles] from other products.

[04:29] Rob: Um-hm. Yeah, and the nice part about it is that these conversations – or, that type of thinking can then be worked into your marketing and into, like, a sales message of, “Have you outgrown product X?” or, “Are you using product Y; but this, this and that are wrong with it?” because I keep hearing the same this, this and that from all these people. Like, it’s the same stuff they all hate. And so to be able to address that and enter the mind of your prospect in that way – there’s a lot of power in that.

[04:57] For me, I’ve just rewritten the entire home page. It’s not live yet, but I’ve used a lot of that, and I’m hoping it’ll outperform what I have there now.

[05:03] Mike: Very cool. Well, I wanted to say congratulations to Micropreneur Academy member and MicroConf attendee Craig McKeitsche [phonetic], and he just recently launched his “JavaScript Framework Guide.” We’ll link it up to over in the show notes, but it’s at funnyant.com. And he basically walks through some of the different JavaScript frameworks, like Angular JS and Backbone and Ember and Knockout, and kind of talks about what sorts of things you can do with them, or why you should choose each of them. So, you know, kind of choosing the right tools for the job.

[05:31] Rob: Yeah, he sent me a copy, and I read through it. It’s good stuff. I definitely learned quite a bit about it.

[05:36] So, I have a retraction. Last week, I talked about Player.FM, and I said that I had downloaded and installed it on my iPhone. And when I went on to my iPhone to look for it, it wasn’t there. There was some other player there, and I was so confused. And it turns out Player.FM is Android-only. What I had done is I’d gone into the iTunes store. I searched for Player.FM, and I clicked the first one in there; but it’s some other thing called Pod Cruncher, which is a good app, but I realized as I listened to last week’s episode, it was like, “Uh-oh. Someone’s going to call me on this basically saying that I had downloaded something that didn’t exist.” So, if you’re on android, I’d recommend checking out Player.FM. Obviously, they got invited to Google.IO. Mike is doing something right.

[06:13]Music

[06:16] Rob: I want to give a thanks to Franz C for sending this into us. He sent us an email and pointed us to a growthhackers.com thread. I don’t know if you’ve noticed, but Hacker News is no longer moderated by Paul Graham. He’s handed off the moderation to someone else. This was months ago. And the focus of the site has shifted. There’s a lot less marketing stuff on there. There’s a lot less ways about how to grow product, and it’s become more – it’s startup stuff, but it’s definitely different than it was a few years ago; you know, even, maybe, a year ago. And so growthhackers.com was started by Sean Ellis. It has kind of become the de facto place for more of that marketing stuff – the startup marketing and the startup growth approaches. And Sean Ellis is on it, obviously, because he runs it; and he’s grown it pretty quick. And then you’ll see, you know, people chime in in the threads. And Noah Kagan, Hiten Shah, I’ve chimed in on a few of them. There’s a lot of people in there talking, and there’re some really knowledgeable marketers.

[07:08]  So, there’s a thread on there. The question in the thread is, “Should you charge or not before you’ve reached product/market fit?” So, I’ll read through the original post, and then we’ll dive into some thoughts that we have on it. I’ll also bring up some thoughts that other folks have in the thread.

[07:23] So, the original post says, “In Sean Ellis’ prolific interviews on Venture Hacks, he recommends not charging before product/market fit, because you allow people to explore all of the functionality of your app and can continuously survey them until some are saying they would be very disappointed without the product.” And that’s kind of the definition of “product/market fit” they’re using.

[07:41] So, the exact quote from Sean in the interview is, “I think that it’s easier to evolve towards product/market fit without a business model in place, meaning users are free to try everything without worrying about price. As soon as you have enough users saying they would be very disappointed without your product, then it’s critical to quickly implement a business model; and it will be much easier to map the business model to user-perceived value.”

[08:03] And the original poster says, “So, I’d love to hear this discussed further.”

[08:06] I think, to start off, I’d like to limit our discussion; because, you know, does this apply to B to C? Does it apply to B to B only ? Is it only SaaS apps? Is it mobile? And I think for the sake of our discussion, I’d like to limit it to services that will one day have a price. But I think B to B or B to C could work. So, Shawn has worked on products like Dropbox; and you would say, especially when they launched, they were more of a B to C play than B to B. But I still think that what we’re going to talk about today applies to that. So, I don’t think it’s a B to B, B to C line. I think it’s if you have a service that people value and will pay money for – not like a social network, a marketplace, an ad-based revenue model which charging isn’t even really relevant at that point.

[08:44] Mike: And I think that a[n] issue [that’s?] kind of trying to go down that road is that you’re talking about trying to achieve this product/market fit where you’re solving some sort of a problem for people versus something where it’s very nebulous about whether or not there’s any actual value in it for them to be able to pay for – for the users to be paying you directly for it. So, obviously, Facebook kind of falls into that line; because if you were to ask a lot of Facebook users right now, “Would you be disappointed without Facebook?” a lot of them would probably say yes. But at the same time, can you charge those people for it? And the answer is “no.” And for our purposes, I think we just want to limit it and say, you know, it’s only if you are directly charging those people.

[09:22] Rob: Now what I’d like to run through are some dangers of charging, kind of some negative aspects to doing that, and then some dangers of not charging and how to deal with those. And then we’re going to wrap it up with what I consider kind of the middle ground, like suggested solutions and approaches to this after we’ve looked at the pros and cons of each side.

[09:39] So, just kick us off. The first danger of charging is pretty obvious. It limits your user pool, because you’re going to get so many fewer people to come in and use your app. You know, even if you have a free trial, even if you just have a price up front and are not actually charging for it yet, fewer people are going to sign up for it, for sure.

[09:54] Mike: I think this becomes much more of a problem where you don’t have a mechanism for getting in front of people, or you don’t necessarily truly understand the right profile of the ideal target customer. If you have ideas about it, I mean that’s helpful, but obviously charging them is going to push people away. And I don’t know whether this goes back to why Google decided, “All of our products are going to be in beta. We’re not going to charge for anything.” There’s lots of companies that do it that way. There’s lots of people who go down this path, and as soon as you start mentioning money, they’re going to want to kick the tires enough to say, “Is this worth my cash?” “Is this worth the business revenue that we’ve got?” It does negatively impact it because then they have to start making value decisions, and there may very well be a timeline around how much time they can dedicated to it, how much effort can they put forward to kick the tires before the end of that trial period.

[10:46] Rob: I think the second danger of charging is that not only does it limit the number of people that will be involved, but it’s going to limit the range of feedback. So, could there be a market that you had never even thought of that may not be as willing to pay up front; but that, if you let people in for free, you could get added feedback?

[11:05] And then the third danger of charging is that it’s going to take you longer to receive the same amount of feedback; because since you have fewer users, you have a smaller range of feedback. You’re going to have to wait longer; and if you’re, you know, an impatient start-up founder, like most of us are, that’s kind of a pain. You can’t move as quickly, and you can’t get to market as fast as if you let more people in if you’re not charging.

[11:25] Mike: I think there needs to be a clarification here, because I think when Sean is saying this, he doesn’t necessarily mean that it takes longer to receive feedback. What he’s really saying is that it takes you longer to receive enough feedback to be certain of what your conclusions are. It’s almost like making sure that you have a statistically valid response, because if you have a limited trial period for somebody and they only have 14 days, they’re going to try to get feedback back to you within that 14 days; because they know they’ve only got 14 days to work with the software versus if you’ve only got ten people, you’re only going to get those ten responses back from people. You’re not going to get a hundred, or a thousand, or a critical mass of responses that will help you draw the conclusions that you need to draw.

[12:04] Rob: Yeah, and if you’re listening to this and you haven’t read through the thread, it’s definitely worth the listen. There’s good discussion back and forth. Several of these dangers that we’re talking about, or the negatives of doing these things, I came up with and put them in the outline. Some of them I also pulled from the discussion, and I’ll try to credit people.

[12:19] I couldn’t think of a ton of dangers of charging aside from the ones we’ve covered, but I can think of a lot of drawbacks to not charging. And the first one is that, if you’re not charging, and you have an app that people are using, you need a bucket of money to build and support the app in the meantime. So, what this means is really, if you’re truly, truly bootstrapping – and I don’t mean self-funding; there’s a difference – right? Bootstrapping is when you have a hundred bucks to start, or 200 bucks, or a very small budget; and you get to market, and you need revenue just to stay alive. Whereas, self-funding means you have some funding that is coming out of your pocket. And that may only be – maybe it’s 500 or a thousand dollars a month, or maybe it’s 10 or 20 grand that you’ve saved up for it. But if you’re truly bootstrapping it, then you really can’t go this way, because you need revenue up front very quickly.

[13:09] Mike: Yeah, I would say that that’s probably the biggest danger of not charging. I can’t think of too many other things that would so negatively impact your ability to move forward with a product, is this one right here.

[13:20] Rob: [A] second danger of not charging is you can potentially receive too much feedback, some of which can be from people who might never be willing to pay for the product. So, the original poster actually said – and I’m quoting him. He says, “It creates less noise. You can listen to the feedback of people who are paying, if you charge.”

[13:37] And then Sean Ellis talks back and forth about this, which is kind of cool. He gives kind of both sides of it, and he says, “Even if you are a great marketer, you can only get people to keep using your app if it actually provides real value. The noise issue tends to sort itself out further down the funnel, and here’s how. Each step in the funnel that a user takes imposes a real cost on that user’s time and effort.” And he doesn’t just mean marketing funnel. He actually means usage of your app funnel – like, how deep do they get in, and how much usage do they do, and how much value do they get out of it.

[14:05] So, continuing with Sean, he says, “If you think of repeat usage as a step in the funnel, the reward of a great, useful experience needs to be there to justify coming back. Fact is people are just as fickle about a free product as they are for a paid product. Free can drive lots of sign-ups, but often those people give up on the product just as impulsively.” Then he goes on to say, “If you have KISSmetrics, you can actually query specific users; get their emails if they’ve done X, Y and Z events; and then you’ll have a great customer development pool. Even without charging, you’ll know who’s really getting the value from the app.”

[14:36] And he wraps up by saying, “In my original answer, I did say it depends. For pure enterprise products, I generally don’t recommend having it be free during a beta period,” for some of the reasons the original poster had mentioned in his original question.

[14:48] So, what do you think about this issue of having too much feedback, or that you could potentially be receiving it from people who aren’t willing to pay?

[14:55] Mike: That’s definitely a danger when you’ve got a lot of people in there who aren’t paying for it, because they’re like, “Oh, this would be cool if X.” And suddenly, everybody’s an expert in what your software should do, even if they’re not going to use it. And so the danger there is you’ve got these people who are not necessarily well-qualified leads who are giving you feedback and advice that you look at their advice, and it may sound reasonable on the surface, and you don’t necessarily know whether or not they’re going to use it down the road. So, you may follow that advice and find out, oh, well, sure. That’s what they said, but they weren’t going to pay for it anyway. So, you build these features, or do these things that just have no bearing on what the critical mass of users that really would pay for it need or want.

[15:35] So, you do have to, I think, prequalify some of those people a little bit better than just taking in advice from those people. So, when you ask questions, you do things like you ask them what their market is; you know, what problems they’re trying to solve; what it is they do on a regular basis – basically, take a lot of their input with a grain of salt. And until you hear enough people saying the same types of things, you don’t necessarily go down those directions, even if you’re having great conversations with them; because they can definitely you down those rabbit holes that you’re not going walk out of with paying customers.

[16:05] Rob: Yeah, I’ve gotten in a lot of really in-depth conversations with people who weren’t willing to pay for one of my products. And they’ve given a lot of feedback. I’ll say some of it’s good. Some of it is kind of wandery, but I didn’t really know if they were going to pay for it or not. And, in retrospect, I should have; and the feedback sent me off-track. So, I do like Sean’s hack of looking in KISSmetrics and querying what users have done X, Y and Z events and then using those as the people who are actually using the app. So, I think that’s a nice, feasibly work-around around this issue.

[16:35] The third danger of not charging is the danger of legitimate users or businesses not checking out your tool because it’s free and their concern that it’s of low value, or that it’s going to be shut down. I try to avoid tools that really are free, because I know that either they’re not going to stay around very long, or at some point they’re going to implement a business model where they need to charge. And then they’re either going to dump the free users, or give them crappy service. I mean we see this happen time and time again; and, frankly, the switching cost once I’m invested in using an app is bigger than the savings of moving somewhere else.

[17:07] Mike: Yeah, I look at this a lot as well. I think it’s a little different if the app or the business behind it is funded, because you know that they’ve got money and they’ll figure out a business model eventually. And although you may not be paying for it initially, the concern, of course, is that at some point down the road, the pricing may be such that it just doesn’t work for you. And as you said, the switching cost is big; and it’s not necessarily just the monetary cost of switching. It’s the time investment of doing that. If you’re faced with a decision between two players, one of whom is well-established, and they’re doing a reasonably okay job versus another one that’s new; and it sounds great, but who knows what their business model is and whether they’re going to be around or not, I don’t know about you. I tend to bank on the ones that have been around for a while just by default, because I don’t want to have to move my stuff later on.

[17:53] Rob: Yeah, I’m the same way.

[17:54] So, the fourth danger of not charging is that you don’t know if people will pay for your product, or if they’re just using it because it’s free. And Sean weighs in on this point. He said, “The benefit of charging from day one is that it tells you if your product promise is something people would pay for.” And when he says “promise,” he’s talking about the value proposition – right – the value that your customer is going to get out of it.

[18:15] Back to Sean. He says, “In my experience, I can rarely guess the product promise.” I found that very interesting. And he says, “I have to learn what it is based on the feedback from people who consider the product a must-have.” And here he’s implying that, whether they’re paying for it or not, that if it is a must-have for them, that their feedback is valuable.

[18:34] Mike: But I think that goes back to finding out why. If they are paying for it, you need to ask the direct questions about exactly, “What is it that this product is doing for you that is making you pay for it, giving you the necessary impetus to pull out your credit card and say, I’m willing to pay for this?'” “What are the key features for you?” “What business problems or personal problems are you having that you’re using this software to solve?” And whatever those features happen to be, those are the things that you can harp on in your marketing collateral as your headlines and as your product promise. And you can use it to hone in and to help you get to that product/market fit.

[19:09] Rob: And the fifth danger of not charging, Trevor Owens posted in the thread. And he actually does a good of this, so I’ll just quote him directly. He says, “My problem with doing a free beta is that when users stop using the product, I wouldn’t know if it was because the product wasn’t good enough, or they weren’t serious enough. If I charge a small amount, I only get people who, based on the idea of the product, actually have a need for it. Furthermore, if they cancel their account, I can immediately reach out and get their feedback.”

[19:37] Mike: Yeah, this is one of those situations where it’s kind of like one of those long-distance relationships where you gradually grow apart, and you don’t necessarily have that feedback loop, or the daily check-in, or weekly check-in to kind of know really what’s going on. And customers are kind of the same way, but if you’re not getting that feedback from them and they kind of gradually drift apart from your product, sometimes it’s hard to know when that happens, or there was some other, external event. And if they are paying for it, you can reach out and directly ask them. But you also want to draw a line between how often you check in with them; because, sure, you can reach out to them on a weekly or monthly basis; but eventually they’re going to stop listening anyway. You know, I’ve seen email and auto-responder campaigns where you send them a bunch of emails; and gradually over time, most people tune out over time. There’s a lot of engagement up front, and then over time – unless they’re continually using it – that engagement just fades.

[20:31] Rob: Most of the time, when someone actually cancels, they actually churn out of your SaaS app. They’ve typically already churned two months earlier. They just never cancelled. Most people stop using your app and then cancel a few months later, and it’s way too late at that point to try to rescue it.

[20:47] Mike: Oh, yeah. It also depends on what type of application it is, too. Like, I recently cancelled my LessAccounting subscription, and I stopped using it back in January. And I only recently cancelled it within the past couple of weeks, so you’re talking six months later. And the reason I kept it around was because of, you know, the tax season; and I wanted to make sure I got all my data out. And I wanted to make absolutely sure that I didn’t need to go in there for anything else. And to their credit, they did follow up with me and say, “Hey, we see that you haven’t logged in in X number of days.” I think it was a month, or two months, or something like that. They reached out a couple of times [and] said, “Hey, you haven’t logged in in a little while. Is there something we can help you out with?”

[21:19] I thought that their follow-up was extremely good, but at that point, I had obviously already made the decision way, way in advance to say, “Look, I’m going to move to something else, and I just really just need my data here.”

[21:30] Rob: The last bit I’ll add is a quote from Andy Newborn, who weighs in in this thread, and I really liked the way he’s thinking about product/market fit. I never heard it phrased this way. You know, typically product/market fit means that your product solves a problem for everybody, and you’ve found the market, and that’s when it’s time to scale. And you pump money in. You pump marketing, and you just scale that sucker up. It’s really hard to get there. Most apps never get to that point. And Sean Ellis has a test. It’s a three- or four-question quiz. Maybe it’s a one-question quiz, but the big question that he looks at is, if product X went away today and you could no longer use it, would you be mildly inconvenienced? Would you kind of care? Would you be a little bit disappointed? Very disappointed? Extremely disappointed? And if – I think the number is 40 percent or more are very or extremely, then that’s his definition. That’s when you’ve hit product/market fit. Okay?

[22:19] Andy Newborn chimes in. He says, “I’ve found that someone getting excited about your product does not mean you have product/market fit. It only means that you are good at explaining it and found an obvious solution-need pairing. What makes true product/market fit, in my opinion, is when the user changes their behavior to match your product or service and it becomes sticky. That’s fit that can be charged for.”

[22:43] And so while it’s only tangentially related to the topic at hand today, I love the way he put that. In fact, Sean references it back in the thread again. I love the idea of someone using your app, because you know you have a lot of people who come in and log in, and then they never really get on board. And you have some people who come in and get on-boarded and start using it, and then they kind of drift away. And then there are those who use it all the time. Like, they log into it every day to look at an analytics dashboard. Or, they get an email. They rely on an email they get from it once a week. Or, they need it every time they talk to their customers, or every project management “to do” is in there. You know, that’s when an app really becomes sticky, and that’s when you can scale something up; because people really need it.

[23:20] Mike: I think another way to phrase that is that they start using it for things that it was never really originally designed for. You see this with products like FogBugz, where people are using it for customer support. And it wasn’t necessarily meant for that, but people really shoe-horn it in there, and Fog Creek to their credit, has kind of made the products do that sort of thing; because they kind of did it internally for themselves. And then it has kind of caught on, and a lot of people use it for that. But there’s all sorts of things that, you know, that particular product and lots of other products are doing today that are not advertised on their website; because they weren’t ever really designed do that. But they work for it, so people use it for that, and it works for their own mental way of picturing the world of that particular problem.

[24:00] Rob: So, we’ve covered the dangers of both sides. Let’s look at three suggested solutions. These are things that I came up with. These are middle-ground approaches. I came up with the three of them, and then I went and looked in the thread, and all three of them were suggested in the thread as well. So, it was cool to see that the collective had also come up with some good approaches.

[24:19] So, the first of the three is to maybe not charge right from the start, but to have a free trial and maybe have a really long free trial when you start, like a 90-day free trial, or a 60-day, or something that gives people a ton of time to get in there and really knock it out and use it. At the back of my mind, you could even have some lower pricing at the start to allow more people to sign up, because there is a barrier. If you’re going to start, “All right, 99 bucks a month is my lowest plan,” you’re going to get a lot fewer people than if you dropped that down to $20 or $30. They’re going to get different people signing up; but, hopefully, you know, more people signing up. And as I said, it’s like a middle ground, so it’s not charging at all; but it’s giving people a long time to really get in and get on-boarded. And this was also suggested in the forums by Anonda Sanwal [phonetic]. So, I wanted to give him credit there.

[25:02] Mike: The second one is to make it free, but with the expectation that it’s not going to be free forever. So, the way Sean puts it is essentially the product is free during beta. And whether that beta is 30 days, or three months, or six months, it doesn’t necessarily matter. The idea is that you’re setting the expectation up front that they are going to be charged for it, and you have a rough idea of what it is that they’re going to be charged.I think the difference between this and the previous one is that, with a free trial you’re specifying, and there’s almost like this hard line in the sand that’s like, you know, “Once you cross this, we’re going to start charging for it.” But with free and the expectation being placed that it’s not going to be free forever, you’re essentially going to bring in on in the future. And I think you actually did this with DRIP. You basically said to people, “Hey, this is going to cost you money, but it’s going to be free for the time being until you start seeing value out of it.” And I really like that approach just because you’re on-boarding people, and at the point where you feel like they’re getting the value out of it and they can justify paying for it, that’s when you start charging them for it. You don’t draw this arbitrary line in the sand that says, “Okay, after 30 days,” or 90 days, “that’s when I’m going to charge you,” because you don’t necessarily know if they’ve gotten the value out of it. And you don’t know if the product itself needs to be adjusted or changed in order to meet some of their needs.

[26:16] Rob: Yeah, I did this with DRIP, like you said. I did it when I was doing the high-touch sales early on, or the high-touch, on boarding when it had – maybe it was up to about the first 15. “Early-access users” is what I called it – right? And so Sean says “free during beta.” Mine really was “free during early access until you get enough value out of that it’s worth 49 bucks a month.” And since I emailed with every person and manually on-boarded everybody – we didn’t even have a sign-up page at the time, I don’t think – I created their account, and then I would let them know that, like, “We intend to charge this much, but you can have as long as you want until you get value out of it.” I think that was a decent approach.

[26:50] I mean you could do that with – let’s say you have 500 or a thousand people that you’re emailing all at once. I suppose you could just put that as a line, that it’s free during early access. And early access is as long as it takes, but a minimum of 60 or 90 days. I think this could work. I really do feel like this is a decent middle ground to get a lot of people in and trying it. To be honest, early on I didn’t ask for a credit card. Again, we even didn’t have a credit card form in there. So, I had no credit card info for people, and this is for me – right – the guy who always wants to put a credit [chuckles] card form up and have the commitment. But I knew that people were committed. If they were going to take the time to get in and use it and get on-boarded and spend the time to just try stuff out, that if it worked for them, they’d probably be willing to pay for it.

[27:30] Mike: That’s kind of a difference – or, you know, one of those quantifiable points is you said that it’s going to take them some effort. It’s not like a drive-by, where you can sign up for an account, and you can check something out and then kind of walk away and never come back to it, and it’s not really a big deal. With DRIP – and there’s a lot of other applications that are like this, where you go to sign up for it, and it takes some work to set things up. I mean it’s not sign up for a form, and you immediately get value out of it; or, you could start seeing all these analytics from your web server, or something along those lines. You really have to put some effort in in order to make it work for you. It’s not something that you can just be up and running in a couple of minutes with.

[28:05] Rob: And the third middle-ground suggested solution is to go freemium. And I know this is not going to work in all cases; but if you have that bucket of money, and if you have maybe the support staff; or, your app is of low support, and you can actually handle a good number of people using the app, I think freemium could be interesting. Even if you were only freemium during early access, and you had a premium plan that people could upgrade to; or, even having a limited plan – I mean there are cases when this is going to work, and it’s definitely going to get you a lot of feedback. And it gets you a lot of users quickly. And then if you can pinpoint those who are getting a lot of value out of it, whether they’re free, or whether they’re on the premium plan and paying you – and if you can use the technique Sean talked about in KISSmetrics, or if you can just query your own data of who’s using what, I think there’s some potential merit to this approach.

[28:56] But to couch this, I don’t love freemium. I haven’t done it. I didn’t do it with DRIP, but I do think there are some times when it could be used.

[29:04] Mike: If you’re making it a freemium up until you’ve lost and are actually putting a revenue model behind it, then it’s not really freemium; it’s more that free trial. But you’re right. Unless you’ve got this bucket of money behind you, I still don’t think the freemium’s really the way to go – especially out of the gate. I mean once you’ve got everything kind of scaled up, and you’re trying to figure out how to scale the business, and you’ve got a lot of quantifiable metrics behind it in terms of on-boarding and how much it costs to acquire a customer; and, you know, you’ve got your product/market fit, then maybe it makes sense to try out freemium.

[29:34] Mike: Well, I think that about wraps us up. If you have a question for us, you can call it in to our voicemail number at 1.888.801.9690. Or, you can email it to us at questions@startupsfortherestofus.com.

Our theme music is except “We’re Outta Control” by MoOt, used under Creative Commons. You can subscribe to us on iTunes by searching for startups, or by RSS at startupsfortherestofus.com, where you’ll also find a full transcript of each episode.

Thanks for listening, and we’ll see you next time.

Show Notes

• SqlSmash by Latish Sehgal
• Remote: Office Not Required by Jason Fried & David Heinemeier Hansson
• Episode 64 – Hiring and Managing Remote Developers
• Episode 68 – How to Hire and Manage Virtual Assistants
• Episore 143 – How to Hire Like a Bootstrapper with Special Guest Laura Roeder

Transcript

[00:00] Mike: In this episode of Startups For The Rest of Us, Rob and I are going to be talking about distributed team collaboration for startups. This is Startups For The Rest of Us episode 193.

[00:07] Music

[00:15] Mike: Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.

[00:23] Rob: And I’m Rob.

[00:24] Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s going on this week Rob?

[00:28] Rob: We, meaning you and I and this podcast appeared on the floor of Google IO last week.

[00:34] Mike: Wooo Hoooo!!!

[00:35] Rob: Yeah. We were contacted by Michael Mahemoff. He’s the creator of player.fm. Which is a podcast app. And he said that 13 companies were invited by Google to participate in the developer sandbox at IO. And he emailed us. He wanted to find out if he could basically use our logo or use us as one of the place holders in the big player.fm app on the floor.

[00:58] So, it was really cool. He sent me two pictures of what the display looked like. You can see our logo. And it’s huge on this big on this extra large monitor. That’s always exciting. It’s kind of a nice tip of the hat and I really appreciate it. You know, Michael doing that for us.

[01:11] I have not checked out player.fm. I have since downloaded it. And let me tell you it’s quite a bit better than the built in Apple podcast app. Which I have been looking to leave for…Well, since pretty much the day they launched it. I think I might be trying to start migrating to player.fm.

[01:28] Mike: Got it. I’ve been using Casts, which is an interesting app. I like the fact that you can just set it up to download everything in the background. And you can set up these filters so that you can filter in different criteria. And what I do is I set mine up so that it is unplayed and then I have it unplayed by date in reverse order. So that way if I’m behind at all I can just catch up in the order that the podcasts were received on my phone.

[01:50] Mike: So it’s kind of nice it doesn’t make you go episode 30 then 29, 28 ect. You go the other direction. So that’s kind of a nice feature. And then like I said, it just downloads stuff in the background while you’re connected to wifi. And you don’t necessarily have to worry about it. It pops up little notifications to let you know that new episode have been downloaded. It cleans up after itself after things have been played. And you just have to delete stuff afterwards.

[02:13] Rob: Yeah. None of those things happen in the Apple podcast app. It’s a mess.

[02:17] Mike: The biggest problem I had with it was it would start to download an episode and then wouldn’t download the whole thing and if you were not home or on Wi-Fi then it would say “Oh! I can’t play this would you like to stream it?”  I’m like; I don’t really want to be sucking up all my data.

[02:31] Rob: But even then if it got stuck in the middle and then you tried to stream it, it would choke.

[02:35] Mike: Yeah. Well, we got an email from Latish Sehgal. And he says “Hi, guys! I’ve been a regular listener for the last year or so. I’m a developer and love building tools and utilities. Over the last year I worked on one of my side projects and launched it last month. It’s called SQL smash. It’s productivity plug-in for people who work with SQL server. I have a few paying customers and I’m getting a lot of good feedback. I’ve made mistakes on this journey but have avoided a lot more because of everything you guys talk about. Just wanted to drop a note and say thanks.”

[03:00] Rob: Very cool. Congrats Latish.

[03:02] So, we have some new iTunes reviews, several actually. One is from Santa Monica Boone and he says “Best podcast for how to do anything in business. Podcast gets right to real advice on how to implement tactics. There’s no fluff, filter or lame teasers. Content is not just for software startups any business can benefit from Rob and Mike’s advice.

[03:22] I have another one from Lucas. And he says, “Amazing show-always learn something. Love the show and listen to it all the time. Rob and Mike always have interesting items to talk about and they don’t “talk down” to the audience at all- they move at a fast pace that is perfect for any developer looking to start a business.”

[03:36] We really appreciate 5 star reviews in iTunes. It helps us out tremendously.

[03:41] Mike: So we are slightly behind on this announcement but June was back up awareness month. And in the spirit of that I recently had a hard drive in my network attached storage device die on me earlier this week. It’s a 1.5 TB drive and fortunately I didn’t lose any data because I have everything at rate six already but I ordered 4 new 2 TB drives for measly $330.

[04:04] Rob: Oh Jeez.

[04:04] Mike: [Laughter] I think I paid more than that back when I bought one of my first computers for a 1.6 GB drive

[04:11] Rob: Incredible, yeah I paid more than that for my hard drive on my Apple IIe. That’s for sure. It had…but it wasn’t hard dive, I’m sorry. It was a floppy disk drive. It had no storage. [Laughter] Ahhh. That’s crazy.

[04:22] Mike: Crazy how much things have advanced. And how cheap, just computer parts in general have gotten.

[04:27] Music

[04:31] Mike: Today we’re going to be talking about distributed team collaboration for startups. And some of the topic sections are kind of pulled from the 37 signals book called, Remote: Office Not Required. So what we’re going to do is we’re going to talk through some of the different general topics of the book and kind of give it our own unique spin for much smaller teams.

[04:49] Rob: So, it looks like you’ve put together 5 points and each of those points has several specific items that we will be talking about. This first point is why you should think about hiring a remote team.

[04:59] Mike: Yeah. And I think the first one is for somebody who is starting a small business or running a small business, the first one is probably the most important one, which is it’s a lot more cost effective both for hiring the people themselves and for avoiding the office costs. Office costs tend more to be more of a sunk cost. I mean, you put the money in. You don’t necessarily get anything out of it. And then in terms of hiring people you are somewhat limited to the people that you have in your geographic vicinity. One problem that I had, for example, I put out an advertisement to hire people, several years ago, because my office was located near the monster.com office my advertisements for employees were getting overrun by their advertisements on their own website. Which totally sucked. I complained to them and everything.

[05:42] But the issue of course is that if I want somebody to come into my office they have to be located near me. And within a reasonable commuting distance. I know that there’s people out there who have 2 and 3 hour commutes each way. And that absolutely sucks. I mean, that’s probably part of why a lot of people gravitate towards building their own businesses. But when you kind of extend your reach and you say “Hey! I don’t care about you coming into an office. I don’t need you to do that.” Then you can extend your reach across the globe. And then you can use things like Odesk and outsourcing facilities and lots of other ways to get quality people in the door to help you build a unique business.

[06:19] Rob: Yeah. And I think you touched on two things there. One is that it tends to be more cost effective. And the second is that you’re not limited to geography. And so you can find the best talent in the world, at basically the budget that you can afford. I think another reason to think about hiring a remote team is that generally people like working remotely. Right. They like either working at a co-working facility working at their house and to be able to save time and avoid a commute and avoid sitting in traffic with everyone else. That flexible telecommuting type situation. But a lot of developers that I talk to that work for big companies, they’re still grinding it out on the 405 in L.A. an hour each way, you know. What is that 10 hours a week of wasted time? And not only is that exhausting mentally but it’s a huge time suck. And it’s time you can’t spend with your kids or you can’t spend working, frankly, developing the product.

[07:06] So, I think that the benefit, the perk of allowing people to work remotely not only benefits the employee but the employer as well.

[07:13] Mike: I mean, with something you just mentioned there, is if you’re spending two hours a day commuting, that’s 10 hours a week. That’s an extra full day of work that you’re not actually getting anything done, which totally sucks. You know both for the employer and for the employee.

[07:26] The other thing I think that people tend to forget a little bit about when you’re putting together a distributed team is that when you have a distributed team it means that any sort of office disaster is not nearly as destructive to the productivity of the team. And by office disaster I mean the electricity goes out or there’s a storm. I live in New England. So snowstorms are fairly common. And that will just kill productivity because you don’t necessarily want people to come into work at that point anyway but then you also have to deal with the aftermath because of the weather. And sometimes there are power outages that go along with it. If people are working in a distributed fashion that might happen to one or two people but that doesn’t necessarily happen to everybody all at the same time.

[08:03] Rob: Yeah, this is one that I haven’t really counted on or thought of as a big benefit in the past. But I do suppose that if you do have customers around the world it’s nice to have folks in time zones around the world, both to handle support as well as get around local disasters like you’re saying.

[08:18] Mike: When you’re talking about putting together a distributed team there’s a lot of common objections that come about. And many of these come from what I’ll call the big company line of thinking. One of which is how do I know that people are working? How do I keep my data secure? How do I keep things moving along because they’re not working in the same time zone as I am, so I send them a message and it takes 4 hours or 8 or sometimes 12 hours to get a response back. Which means you’re kind of pushing answers into the next day.

[08:45] Those are some fairly common objections. All of which have some fairly straight forward answers. In terms of knowing how people are working, you just look at what they’re doing. Whether it’s…If they’re developers you can look at code commits, whether they are closing out bugs anything like that. I can almost guarantee that in large companies there are so many different ways that data can be lost or compromised that it almost doesn’t matter. You’re almost on par with the large companies as you are with a small company in terms of data security. And obviously you have to do at least the bare minimums, like making sure that you don’t have open firewalls and you’re running antivirus and basic things like that.

[09:21] But at the same time you don’t necessarily have to worry too much about losing IP because really the marketing behind your products is the core of it. It’s not necessarily about the code or compiling everything. It’s about all the different business processes that you are putting in place. That’s where the value of your business is. Not necessarily just the source code.

[09:40] Rob: I understand both of these objections, I think. How do I know people are working is reasonable. Right, it’s a reasonable concern to have especially when I’ve worked with contractors internationally, some of whom took advantage of the fact that we were remote. And they basically just billed me for hours that, in retrospect as I looked through stuff that they were not working. And that’s one of the reasons that I really liked when Odesk came out with their thing that actually gave you screen shots every 5-7 minutes.

[10:07] Because it was a really effective tool for managing people. And now anyone I work with who I don’t know already I will ask them to use Odesk. Working locally here now that I have a couple of developers that I work with. I know these guys well enough that if one of them moved away; I know they are working because I trust them. This trust has been built up through a relationship and through working close with people. So, to me that those are the two sides of it. If you know and trust them then you know they’re working. If you don’t know them well enough to trust them then I think you need to fall back on some software whether it’s Odesk or there are actual third party apps that you can buy that will monitor what people are doing, with their permission of course. You tell them this is a condition of getting hired or whatever. And they have to install it and it will send you screen shots. Or of you don’t trust your employees. And that’s just a problem, right? Then I think you’ve hired the wrong people. If you do know them well enough and you still don’t trust them. That’s kind of a whole other issue that I think is unrelated to whether or not they are working remotely or not.

[11:03] Mike: One of the things that the book Remote brings up is that if you can’t see somebody. If they’re not in your line of sight then you have a much harder time feeling like you’re in control of the situation. And what they’re working on and what they’re doing. And I feel like that’s more of a mental hurdle than anything else. There’s lots of people who just because they’re sitting in a chair does not necessarily mean they’re working. If you can see them that doesn’t necessarily indicate progress is being made. It’s really what you need to focus on is the work itself as opposed to seeing them as a person.

[11:33] Rob: Yeah, I totally agree. I do agree with the objection of “How do we keep things moving along because of latency issues”. Because that is probably my one biggest hang-up that still gets me to this day having worked with dozens and dozens of remote workers for the past, what?, 7 years maybe, is the latency issues. And I’ve figured out some work arounds and ways where I will stay up late. And make sure to work on that stuff late or early so that if I do have questions they’re at least online and they can back to me and stuff. But overall I think, this is the…Perhaps the biggest drawback for me, is that if people are not in your same time zone there’s just latency and in my opinion the other positives outweigh it. But I don’t know anyone who is getting around this that effectively.

[12:16] Mike: And that’s something I have a little bit of trouble with as well. What I’ve found is that, you suggested one mechanism for handling it which is kind of arrange your hours to overlap with the people who are working in different zones. Another one that is helpful, but obviously not something you can do all the time, is if you’re able to plan far enough in advance to be able to have them working on something that isn’t necessarily time critical. Then you can ask them questions about it and kind of have a couple of different things going on at the same time. I do find it when a project sprint is coming down to the wire and you really need things done on a specific time schedule. That’s when it becomes much more of a problem. At that point you really have to just start adjusting your schedule to be able to get the answers you need. But otherwise you can sort of slip stream things in as you’re working.

[13:04] Rob: Another common objection to having remote workers is that you won’t have a company culture. And if you listen back to episode 143 of this podcast where we had Laura Roeder on the show. One thing that she said that we discussed at length was that she says that every company even companies with remote workers have a culture. And that you need to be deliberate about it. And the companies that I’ve seen make the remote thing work. They definitely have a culture. And they have a culture whether it’s be it through their email system, whether they’re all in kind of a chat window at the same time, whether they meet up once or twice a year as a group but there’s definitely a culture and a vibe to the company. And I think it’s …It’s possible to have it. It may not be as easy to have as when everyone is in the same office. In fact I know it’s not. But it’s still possible to have a specific culture and a specific, kind of, mentality that everyone at the company embodies

[13:58] Mike: Yeah, one of the things that I’ve found that’s pretty helpful for keeping everybody on the same page in terms of company culture is getting HipChat up and running. HipChat basic is free right now. They recently changed it over. Previously it was up to five users it was free. And now it’s unlimited users and it’s free forever. So, you can just install HipChat on your Windows machine or your Mac machine. And it will just be sitting there running in the background and it’s basically just a nice private instant messaging utility that everybody can be on. They also have HipChat Plus which is only $2 per user, which gives you video chat and screen sharing and several other features. But again that’s still very very cheap for what it is.

[14:39] Rob: Right. And the other tool, that Ruben actually just mentioned to me today, is Slack. Slack.com. And supposedly it has a better UI than HipChat. Definitely has mobile versions and all types of stuff. So, I think those are two pretty good options if you want everyone to be basically chatting all day or available to chat during the day. I think those are pretty good ways to do it. I think the last objection that we’ll look at is “Who will answer the phone?” And this one’s laughable. I’m pretty much going to skip it. Because in this day in age with IP phones. It’s like, you can have a phone number and you can actually have more people answering it at more hours of the day if you have them on multiple time zones, right? You don’t need a physical phone in a physical location in order to do this.

[15:19] Mike: Yeah. I think that even, I’d say probably 3 years ago this was a much bigger problem because I think it’s only been in the past 2 or 3 years that it’s been a lot easier to have essentially a virtual PDX that you can, kind of, manage from your phone or manage from the web and be able to redirect people to from a centralized number to be calling different people in your organization. So, like I said, even 3 years ago I think that it was a lot harder than it is today. I mean, today you can just sign up for a Grasshopper account and you’re up and running.

[15:51] Rob: So, we’ve talk about why you should think about hiring a remote team, talk about common objections. The next step, the third point we have here is how to hire a remote team.

[16:01]Mike: Yeah, so I don’t know as we should dig too much into how to hire people because I think that we’ve talked about this quite a bit before in three different episodes that I can think of; episode 64, where we talked about hiring and managing remote developers. And then in episode 68 we talked specifically about how to hire and manage virtual assistants. And then again in 143 we talked about how to hire like a bootstrapper. And that was the one with Laura Roeder.

[16:25] So I think we’ll go on to the next one which is how to collaborate effectively. And the primary thing here I think to keep in mind is you really need to be using web based tools, especially ones that you are not actively managing. You know, there’s any number of services out there for all kinds of different tools that you can sign up for. That most of them are subscriptions based but you just pay that monthly fee. And you can add in the users that you need to be able to access the system. Whether its wikis or bug tracking, source control. I use a combination of things like Basecamp, HipChat, Skype and then there are all these CRM systems out there like PipeDrive and Act CRM. You can also use Grasshopper if you need phone systems. You can also use WebEx. I use a WebEx account. There’s  … You can also use GoToMeeting. GoToMeeting and WebEx are pretty comparable I think in terms of features. But those are all the different tools you can use and just sign up for an account for them. And it’s like I said some of them are free. And you can use them until you get to a certain point. Once you get to that point chances are really good that your business is in a position to be able to pay for those services.

[17:24]Rob: Another tool someone told me about just today is called I done this. Idonethis.com. And it’s basically email as UI. So everybody on your team gets an email and they reply to it and I done this parses though it and gives everyone a status report the next morning with what everyone accomplished. And if you’re running into things you can comment on their stuff. But it just tracks your progress every day. This is obviously not a real time thing but it can be super helpful for distributed teams. And knowing what’s going on on your team. Because even whether you are the manager of the team or you’re just a member of the team it’s a good tool to know what everyone else is up to.

[17:58] Mike: Another key piece of collaborating effectively with your team is to try to operate on a non interruptive schedule. And by that I really mean make sure that you’re reserving voice and instant messaging communication for critical items. Not the everyday stuff. For all of the everyday stuff use email. Use something like I Done This. There’s also a service you can sign up for called 15 Five. It’s the numbers 15 and then f i v e. com. And essentially what that does is that … You’re essentially getting these weekly reports from people to help the management stay informed about what’s going on. And does I Done This go to everybody or just the managers?

[18:37] Rob: Everyone.

[18:38] Mike: I think that 15five only goes to the managers, but I could be wrong on that. But I came across that a few weeks ago as well. But the idea there is that you’re really trying to get information from people and surface it in a way that does not interrupt your daily flow. And leave it up to the people who are working to not only get their jobs done but at some point communicate information back. And that kind of goes back to the latency thing that we talked about a little bit before. And if you can kind of plan around that you’re impacting people’s productivity a lot less which allows them to get more done.

[19:09] Rob: Yeah, I have heard of some remote teams who are in a chat window all day. So they’re in CampFire or HipChat all day. I did that about 10 or 15 years ago when I worked at a dot com startup in the first wave of the dot com boom. And it was great fun but it was not very productive. And these days I have no chat windows open ever. And if my team needs to get a hold of me then they email me. If they need to get a hold of me urgently they text me. Those are the ways that I want to be contacted because I’ve found that being in a chat window, for me personally, it leads me to either get interrupted more than I want or to interrupt other people more than I want. Because if something pops into my head I’ll just ask them and often times it’s better to just have to wait. Right? It’s better for the whole teams productivity if it’s not as easy for me to just interrupt somebody and if I kind of get the discipline where I can just send someone an email and then wait for it. And then if there is something urgent then we do communicate on the spot but other than that. Personally I am not a fan of this. Not to say that this is right or wrong to all be in the same chat window, everyone has their own working style, but that’s the direction I tend to lean.

[20:15] Mike: Yeah, I think that just comes down to just how you’re comfortable working and how your team’s comfortable working. We use HipChat. And it’s kind of nice. But if I need to get work done I’ll put myself on do not disturb. So that even if stuff goes in there I don’t end up seeing it. But you can also just use email to schedule time to say, “Hey, can you get on chat. We’ll chat at such and such time.” One thing that I like doing is using a common set of sprints or scheduled milestones to get people working towards the same things at the same time. Remember before I talked about how if you have a couple of different things going on at the same time if one of them is sort of a blocking issue and you need an answer to move forward on it, you can kind of switch to the next one. It’s nice to be able to kind of aggregate some of those into a specific sprint or a scheduled milestone so that everyone is working toward the same goal. And they know when those deadlines are coming up.

[21:02] They know when that stuff’s got to be done. So they’re rearranging whatever their personal lives schedule is in order to be able to meet those. And it’s nice because then everybody is on the same page. I find that just having those, I’ll call them snapshots or of points of where people’s work crosses one another, you know, converge. That can be very very helpful for keeping people on track. And not only meeting that particular milestone but meeting further milestones moving forward.

[21:28] Rob: Yeah, I think this makes sense if you’re working on big features in separate subsystems. Right. And this allows people to sync up and not just do integration testing but see how the whole app works and get an idea of how everything is working together. I think with our stuff with HitTail and Drip since we are building and deploying new features constantly. I mean, we may do, there are days we do multiple deployments in a day. And launching tiny little features as they’re done. We have less of a need for this. We don’t really have, aside from like the rules engine, that was a milestone. Aside from that we don’t tend to have many grouped launches of features. They just tend to go out when they’re tested and when they are ready. There doesn’t tend to be so much overlap between work people are doing. Now I also don’t have 5 developers working on one product either. People are kind of spread out among multiple products.

[22:19] Mike: If you’re deploying a lot of things very very quickly then having those sprints or milestones doesn’t make nearly as much sense. But it’s obviously the things that are a little more complicated. And your situation also with those developers is a little bit different because they’re working in the same office. So, it’s a little bit easier to coordinate some of those things because you can just stop by and talk to somebody. And hash things out over half an hour and that’s not to say that you can’t do that over Skype or through a chat message or something like that. But obviously some of those things play into it a little bit.

[22:49] Rob: Yeah. That’s true.

[22:51] Mike: So I think the next section we’re going to talk about is some of the common pitfalls that people run into. And I think the first major one that I’ve seen is that people are not on the same page. If you set yourself up as the manager for a bunch of different people who are working for you and you don’t keep everybody informed about everything that’s going on. Then everybody feel like they’re in a closet and in the dark. And they don’t necessarily know all the other stuff that’s going on and they don’t know the interdependencies between the stuff that they’re working on and the things that other people are working on. And I find that that is not helpful for the team morale but it’s also not helpful for making sure that people are kind of working on their timelines and deadlines. So, if somebody doesn’t know that there’s 4 or 5 different things coming together and they just know what they’re working on and they say “Oh! It’s got to be done by Friday.” But if they know that there’s 3 or 4 other things that are also coming together on Friday and there’s a press release or something like that going out. Or some new marketing campaign and if they don’t get it done everything is going to be held up because of them. I’ve seen that this has kind of a motivational factor to it. People tend to make sure that they buckle down and rearrange their schedule to be sure those deadlines are being met.

[23:57]Rob: Yeah, I think there’s a lot of ways to get people on the same page. The daily check-ins that we talked about with 15five and I Done This is a really nice way to keep people communicating. I think another way is to have coding standards. And style guides for HTML/CSS and that kind of stuff. This sounds like big company stuff but its shocking how once you have two or three developers working on the same project. Things like how many spaces should a tab be in your editor? Should you always run the clear trailing spaces command when you’re done with a file? Are the variable names upper camel case, lower camel case or do we put under scores in the variable names? I mean there’s all this kind of stuff and if you want consistency in your code files then this is stuff that even a one page doc can do wonders. If someone is able to refer back to that. And there’s some pretty good examples of this, there’s a GitHub ruby style guide and I think there’s one for CSS as well. If you read through it, it’s like “Yeah. This stuff makes sense.” They’ve done a good job in a very short amount of time. This is not a 50 page style guide. Its one to two pages but they communicate a lot with it. And I think being able to document that in one place where everyone can go back to. And it’s living and breathing too, right. We can go in and edit it. And anyone should be able to keep it up to date as it goes. It’s not set in stone. But just to have a common understanding, keep your consistency across all the technical assets you have will keep that consistency high.

[25:21] Mike: Yeah. And some of those things you can do with technical controls as well. So like for C# there’s things like Style Cop and FX Cop that you can use to essentially do a static code analysis of the software that is being written. To make sure that it is conforming to whatever the style guides that you’ve set forth are. And then you can just integrate it directly into the build process. If somebody checks some code in that doesn’t meet the style guidelines you can kick it out and say “Hey! You’ve got to go fix this because it’s not passing. The build server’s crashing on it.” It says “No! I’m not going to allow you to build this and push it out because you’re not following the style guidelines.”

[25:54] Another thing you can do is incorporate some of those things into just standard operating documents or procedures, some of your general operating guidelines. As long as people generally know how the business is being run and this isn’t just necessarily about software development. But how the business processes are done. If they run into a situation where they’re going to be doing something and there may very well be a situation where somebody could come in after them and have to do it themselves. They should be empowered to go in there and modify those to be able to document that stuff and say “This is how it is done.” And if we need to change this process later on it’s not a big deal but here’s the documentation that explains how to do this.

[26:31] My bookkeeper’s actually been really good about documenting the things that she’s been doing and adding them into our Google Docs so that she just links to them from our standard operating documents. And just puts it in there so that if she ever moves on and goes to do something else then whoever comes in afterwards and picks up the books can go in and basically pick up where she left off. And know exactly how everything is supposed to be done. And if they don’t like it they can change the documents and change the process. But you need to be able to empower these people to actually do that stuff, so that everybody’s doing it consistently.

[27:02]Rob: Another common pitfall that we have listed here is employee burnout. I have to be honest I’ve never encountered this. And I don’t know if it’s the culture of the company here or it’s just the folks who I’ve hired specifically but I haven’t had anyone kind of work themselves into the ground. Do you think this is a common pitfall?

[27:19]Mike: I think it’s a common for the founder of the company.

[27:21]Rob: Ahhh. Got it.

[27:23]Mike: Yes, I don’t know that it’s so much for the people who are, you know the contractors, especially for contractors I’ll say. Because with contractors I think the issue is, like, they’re getting paid however much they’re getting paid for however many hours. So, you know generally speaking how many hours they’re working because you’re paying them for that. So, if they work 30 hours a week at $20 an hour you’re going to pay $600 for the week. And if you start paying $800 or $900 a week for that person then it’s pretty clear that they are working a lot. But I think that if you’re not tracking their hours for whatever reason. And they’re not tracking them. Then it becomes much easier to kind of to go into the… down the road of burnout without being aware of it. And I think that that’s a…that’s the biggest part of that is that if you’re not aware that burnout could become an issue.

[28:07] You could get to a point where it’s just too late. It’s become a problem and it’s too late to do anything about it. You need to basically need to send them on vacation for a while. It’s more of a problem for the business owner than it is for the people working in the business.

[28:21] The next pitfall is accounting and HR problems. When you are hiring people across state lines or in other countries there’s all these different problems that come to mind like, how do you pay them? for one. How do you account for any sort of benefits? You know, how do you give them time off? And I think the general consensus between at least you and me for these types of situations is go as long as you possibly can using people as contractors. Because then you are able to avoid those things. And you’re going to be paying them as a contractor you’re going to be paying them hourly. Such that they can go out and take care of that stuff themselves. There’s two different things that happen there. One is that you don’t have to worry about what sort of health plan you’re going to be using to cover everybody in all different states and different countries and things like that. And the other thing is that they get to choose whatever it is that they want.

[29:07] Using something like Odesk really helps out with that because they also handle things like 1099 forms. So what I’ve had to do every year is whenever I’m working with contractors if I pay them more than $600 a year. Then I have to issue them what is called a 1099 form. In the US that’s just a standard form that notifies them and the IRS that this is how much you paid them. And let’s the IRS know that they should be expecting tax money from that revenue. I don’t know what it’s like in other countries with that regard but if you’re using Odesk. Odesk takes care of all that stuff for you.

[29:39]Rob: Another common pitfall is people doing their own thing. Either not following instructions, not doing good work or doing other work during the time that they are billing you for. I mean, this is just a matter of keeping an eye out and like we said earlier, it’s like trusting your people. And watching what they’re up to, looking at their productivity and stuff. And if you do find out that stuff isn’t working out then it starts with a one on one conversation of you raising the issue. And if it doesn’t clean itself up really fast. This is where letting someone go that you don’t have a relationship with, right? If you’ve know and worked with them for a couple of years and you know and trust them and something is going awry. Then in my opinion, it’s up to you to dig deeper and figure that out. But if it’s someone that you just started working with, you are 2 or 3 weeks in and you know things are kind of going awry. I’ll give someone one chance and have a really good talk with them. Solid talk explaining exactly what’s going on and what my expectations are and if it doesn’t clean up after that I consider it a lost cause at that point. I don’t have the time to teach someone that they need to be productive or that they need to not be doing someone else’s work while they’re billing my company for it.

[30:41] Mike: I think sometimes it’s very hard for people who are starting a new business, I’ll say, come to grips with because a lot of times you feel like, “Awww. I went through all this effort and time to vet this developer or vet this new employee and I’ve done all this extra work to essentially integrate them into the processes that run the business. And you don’t want to spend all that time and essentially walk away with nothing out of it.” You really want to be able to get that person to be productive. But, as you’ve said, I mean, I really like your approach with it. To just say “Okay. I’ll have one talk with them.” But after that but if it doesn’t straighten itself out, you kind of have to pull the plug. Because otherwise you’re going to be back in that situation in six months or 9 months later or even maybe three weeks later. And you don’t want to have to keep going through that. You’re much better off finding somebody else who’s a good fit. Who is going to be able to provide you with what you need without the micromanagement oversight that you’re going to have to apparently provide in that situation.

[31:38]And along with that is that, as I said, there’s this sunk cost that you have in hiring these people. And you have to remember that there are always more people out there who are just as good. You can find somebody else, who’s just as good, if you are willing to put the effort in and look for them. Because you already found somebody like that once, what’s to say that you can’t find somebody else like that again.

[31:57] Rob: Yeah, I agree. It’s not easy to find good people but the times where I have hung onto people. Or given them too many chances. What in retrospect was too many chances. I’ve always regretted and as soon as I have let them go and found someone new who is what I needed, it’s like a smack to the forehead. And why didn’t I do this months ago. Every time it works out to that. So, yes there are still costs in hiring and training to bring someone else onboard but if you really work with them and things aren’t working out then there’s no other choice here. Right? Just the same if you’re working on site with someone. There’s some costs in that. You’ve gotta let them go, find someone new. It’s time to do it.

[32:34] So to recap the 5 main points we touched on with distributed team collaborations for startups was: 1) Why to consider hiring a remote team. 2) Common Objections. 3) How to Hire 4) How to collaborate effectively and 5) Common Pitfalls.

[32:50] If you have question for us, call our voice mail number at 888-801-9690 or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for startups or by RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening. We’ll see you next time.

Show Notes

• The Hard Thing About Hard Things
• Contagious: Why Things Catch On

1. Principle 1: Social Currency
2. Principle 2: Public
3. Principle 3: Practical Value
4. Principle 4: Stories
   1. Made to Stick

Transcript

[00:00]Rob: In this episode of Startups For the Rest of Us, Mike and I discuss how to make your SaaS app more contagious. This is Startups for the Rest of Us, episode 189.

[00:08] Music

[00:16]  Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you built you first product or your just thinking about it. I’m Rob.

[00:25] Mike: And I’m Mike,

[00:26] Rob: We are here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week sir?

[00:30] Mike: I apparently have lost $7,000.

[00:32] Rob: Really?!

[00:33] Mike: I received a check for $7,000 in the mail. And I put it someplace because I had to go away for the weekend and then I got back and forgot about it. I’ve been looking around for it. Because I was trying to make sure all of my books and stuff were straightened out because it was the end of the month. I can’t find this check.

[00:48] Rob: So, you either… you going to have to reissue it or something?

[00:50] Mike: It’s frustrating because I have a system to take this into account. I usually put all that stuff into this little blue box for all my business stuff. But it’s just like, I got it. I was on my way out the door for like a long weekend. I think it was like a Thursday afternoon. I’m like “I’ll take care of this when I get back.” And I didn’t do it.

[01:09] Rob: Yeah, that’s a bummer. You know the the thing that’s saved me from losing checks recently is my bank finally started doing their deposits through their iPhone app. And so now almost everytime, unless I am in a rush out the door, when a check comes I open it right then. I endorse the back. I flip it. I take two pictures of it using the my banks app. And it is electronically deposited. And that keeps me from having to put it in my wallet or put it in some envelope and then bring it to the ATM next time I go. It saves me a lot of time.

[01:38] Mike: It’s just frustrating. It throws off your entire day. That’s the problem.

[01:40] Rob: Oh, totally. Yeah, because your thinking about it. And you keep thinking maybe it’s in my car. And so you go out and do that. It’s distracting, right?

[01:47] Mike: Yes, yes.

[01:48] Rob: By the way, How has it been not consulting for the past week or so?

[01:52] Mike: It has been very very nice. [Laughter]

[01:54] Rob: I bet it has. Yeah.

[01:55]Mike: My wife has opened up  her own fitness studio. So it frees up a lot of time for her to do that and I find that I’m kind of splicing my work in between when she’s going out. So it’s like I’ll be watching the kids and she’ll come back . And I’ll go back and do a lot more work. And what I’ve found is that I’ve actually gotten a lot more time to concentrate on myself , in terms of like going to the gym and eating healthy and doing all those other things. It has helped me become more productive too. It’s a nice side benefit that I didn’t quite expect.

[02:23] I expected, oh well, I’ll get a lot more productivity out of working these extra hours. And the reality is that I am actually working less but I’m getting more done during the time I am working because I’m so much more productive. At certain times of the day I am concentrating on going to the gym and I’m listening to podcasts and things like that. And I come back and I plow through work for a couple of hours. But that couple of hours is way more productive than it would have ever been previously when I was just trying to, you know, just work 9-5 on my stuff.

[02:49] Rob: Right, right. I guess you’re just not wasting your good glucose on other things. You’re able to focus it on the things that really matter to you. That’s cool.

[02:57] So couple things for me.  We’re moving HitTail to new servers. We’ve already rewritten it in Rails. Only took a couple of months. One developer and we’re just about beyond that now. But we… its code complete and we’ve already started kind of setting up the database migration. We have new servers and stuff. But I am excited about this to not be the technical guy. The reason I’m doing this, you know back in the day, people kept saying “Are you gonna rewrite it? Are you gonna rewrite it?” and I never wanted to there’s no reason to. But it’s gotten to the point now I have  three Rails devs working for me.

[03:28]  And HitTail  is written in classic ASP  and.net and so I’m the guy who always has to go in and make code changes. Which means they just don’t get done very quickly. They don’t get done very well because I’m in a hurry all the time because it’s not my primary focus. So, I’m just excited to be able to step away from this and just be able to, you know, when feature requests come through, it’s not a matter of me putting a day aside to try to code something up, but now I can delegate it to a developer.

[03:51] Mike: Yeah, whenever you’re the bottleneck like that it’s hard. Is there a wish or desire that you could read it or figure it out the architecture well enough to be able just go in and make changes yourself if you really had to. I mean, like I have some people who are working for me who are doing stuff. And I have no idea how any of it works so, like literally I’m hamstrung to the point that if I wanted to go make some of the changes I couldn’t. But the reality is like it would take me 5 or 10 times longer to do than it would to just say “Hey can you do this.” Even waiting for them two or three or four days to make those changes

[04:23] Rob: Yup, I have hit that point as well. That’s something I’m I’m okay with this point, Right?  Because I’ve hired a couple of employees and I feel good working with them and they’re doing a job and so I know that the team has kind of enough cross-pollination that the architectures are now the same between Drip and HitTail or very very similar and there’s enough knowledge between everybody that even if …The danger is always if you have one developer and he or she leaves that what are you going to do? Right? But I have three guys now who have reasonable knowledge of both apps. So, it’s also nice that I can move people back and forth based on what we’re focusing on. So I basically had one guy dedicated to HitTail for the past couple of months and the other two on Drip. Kinda looking forward to getting standardized. And we’ve learned a bunch of best practices with Drip. Like, how to host on EC2, bunch of the infrastructure stuff and we’re basically just replicating that entire process, you know, and the structure of that with HitTail. So I’m looking forward to that.

[05:14] I think we’re going to do kind of a dry run early next week of the actual migration. We’re going to move the whole database and then do a bunch of testing, but not do a switch over and so it’ll probably be within about…I’d say about two weeks for me getting HitTail moved.

[05:27] Mike: Very cool.

[05:28] Rob:  The other thing I had was I read a couple other books that I wanted to mention. One is called Hooked. And it’s about how to make your app or your game or you’re whatever  you’r ebuilding more like addictive. Kind of how to keep people coming back and using it and if you hear about this book I liked it reasonably well. What I didn’t like is almost all the examples were were consumer stuff. It is all about viral videos. It was about iPhone app games. It was about stuff like that and I really had a tough time trying to apply it to our space.

[06:02] Instead of reading Hooked, I would recommend reading a book called Contagious. And that’s more about why things catch on and how to make your things more viral. And that’s actually what we’re…That’s what the whole outline is pulled from Contagious. Unless you are doing B2C stuff I would stay away from Hooked. The other book that I just read is called The Hard Thing About Hard Things. It’s written by Ben Horowitz, who is, you know, a venture capital fund Andreessen Horowitz. This was a gut wrenching tale of him basically growing a company, having it almost go bankrupt multiple times. Not having funding and then selling. It’s  it’s a crazy crazy tale about his perseverance. I recommended if you just want to get into the dirt. It is a dark book because you feel his pain, like I actually got sad at several points. I got really tied into his story. So it’s gut wrenching. It’s not a feel good tale by any means but it definitely teaches you a lot about perhaps what it take to succeed at that level. And have a multi billion dollar exit.

[06:57] And frankly, I want no part of it. I’ve always thought that anyways. But in listening to this book…Yup. I wouldn’t of wanted to do that. I wouldn’t have wanted to put myself , my family, my friends just put your body mentally and physically through that ordeals, but it is definitely an interesting story about a big venture capital raise and exit.

[07:14] Yup, So today as I mentioned before we’re going to talk about how to make your SaaS app more contagious. And I pulled this from a book called Contagious: Why Things Catch On and it’s written by Jonah Berger. Mr. Berger is a marketing professor at Wharton. And he spent the last decade studying why things spread through word of mouth and social transmission.

[07:32] So, in his book he outlines six principles that he’s found in his studies, in his research that drive things to become contagious. He looks at consumer products, policy initiative , work place rumors, YouTube videos, there’s a couple B2B things. It’s really not a focus of it. But what I hope to do today is that in our examples of these principles of ways to apply it to more like B2B software, B2B SaaS and even some info products.

[07:58]The book is actionable if you make the effort to apply it to your product. We’re not going to discuss all six of his principles because two of them I was not able to apply to our space. I do recommend the book. But let’s dive into this first principle.

[08:10] The first principle he brings up is social currency. And what he says is that people share things because of social currency. They basically want to share things that make them look good. They’re three steps to increasing the social currency of something, so of a YouTube video or of your SaaS app and when you increase the social currency of something. That means when someone passes that along they get more benefit out of it for recommending it to someone else.

[08:36] And so these three steps which are kind of principles on their own but we will group them under here because he does, the first one is to find inner remark ability. The way I like to think about this is What is your purple cow? How can you find the purple cow for your app or your idea? And to throw out just one example of a B2B app that people are talking about one is BareMetrics. Right? BareMetrics.io. It’s Josh Pickford’s app that hooks into Stripe. And gives you a really nice kind of a SaaS dashboard. Something people talking about with BareMetrics, like it’s a B2B app. What could be remarkable about this? Well he has two things right off the bat that people are sharing.

[09:14] One is if you go to demo.baremetrics.io that is Josh’s live revenue data for his app. For BareMetrics. And so you can watch his app grow over time. You can see what his lifetime value is, his churn, his retention, his monthly revenue per user all that stuff. The other thing he did is he got Buffer, who many of you have heard of, to also to put their metrics live. So I am pretty sure that’s buffer.baremetrics.io. So, these two things, while not baked into his app, obviously when people see this. People sharing it on the Internet. And then you click through on a Tweet. It’s remarkable, right? This is a purple cow. This is a shocking thing. You say “Wow! These guys are totally sharing everything about their business.” And it has resulted in more traffic, more customers for BareMetrics.

[09:59] Mike: I think that part of that has to do with transparency, as well. And I don’t think that the inner remarkablility is a direct translation to, Oh that means you have to go out and be transparent. Just being transparent is one example of finding something that is remarkable about your application. Because you look at a lot of SaaS apps out there and it’s very difficult to get this kind of information from them. And that’s what makes this information that they’re displaying very remarkable. When you’ve got Buffer and Bare Metrics showing their own data, most people don’t show that. Most people don’t get a sense of that. They just see what they see on TechCrunch and all these other websites where they just send out a blast of “Oh this great company made tons of money!” And you don’t see all the stuff leading up to it. And this gives you that. This gives you that sense of, kind of, what’s going on today, what things looked like previously and how things are, kind of, shaping up to be in the future.

[10:53] And that is just not something you get a lot and I think that’s where the idea of the purple cow comes in and because you don’t see it. But I think that being remarkably transparent is one of those ways.

[11:02] Rob: Yeah, I would agree. I think another example I could bring up is with Drip. When we launched it, I thought there was marketability but it turns out people didn’t think it was that interesting. There was no sharing going on. How is it different from other apps? Well, it is similar to MailChimp but at that time it was similar to MailChimp but you could put kind of a widget on the front end of it. And then we tracked goals and we did all this stuff. But we did stuff that you could cobble together if you really wanted to using other tools. And so there was really nothing remarkable about it.

[11:30] What I found is that within the last month as we finished building the rules engine. Right, the email automation, behavioral email people have started talking about that. I’m seeing it on Twitter. I’m getting emails and saying “Hey! I saw what Brennan Dunn is doing.” or, you know, what another customer is doing with Drip now. I saw a screencast about what the rules do. And right away, that baked right into the product, we found something that people are remarking about. It is in a sense a purple cow. And I think that I can refine that a little more especially with improved marketing and encouragement for people to share. But at this point, that’s an example of an app that really didn’t have inter remarkability but by building some features and going towards a into a newer space. I’m pretty sure we’ve now achieved that. And that that’s going to be our push moving forward.

[12:12] The second step into improving your social currency is to leverage game mechanics. And this is essentially encouraging competition among your users or customers and encouraging people to reach goals. And this is often called gamification. And so a decent example of this of more of a B2C model is Stack Overflow. Right? One of the things that they did really well, that Jeff Attwood executed really well, was having people compete for these badges and answer more questions and get more points and that kind of stuff.

[12:41] I think another example is, that you could do, is to have your customers compare their results. Right? Maybe in an aggregated way or in an anonymous way. But have customers, have a leader board of like who has the highest conversion rate from their campaigns. And obviously people could opt in or opt out of this. But people take pride in, like, being on a leader board. And what would be interesting is if it was anonymous at first but then as people got into it and if you asked people, “Hey, do you want to not be anonymous and we’ll actually give you a link back, right.” So that people know what you’re doing. And the people with the highest conversion rate of their email campaign or the highest number of hits from their SEO campaign or whatever it is your app does. That getting people to kind of compete against each other with definitely will bring people together and hopefully get folks talking about it.

[13:27] Mike: Yeah. That’s definitely one way to do it. It’s something that I actually started out trying to do within AuditShark. And realized that I actually needed a lot more data and a lot more customers in order to be able to pull it off. And I think that’s one of those traps that you have to be at least a little bit cautious of because if you’re trying to do this and you’ve only got a handful of customers in there or one customer is very large in relation to the others. Then what you can have is that all of your statistics get completely get thrown out of whack when that one customer does something different. Or something fails in a dramatic fashion with regards to the stats. So you have to be a little bit careful when you’re doing that. But I think that there are definitely ways that it could work. I don’t think that it is a strategy that you can try pulling off on day one. It’s something you have to do down the road a little bit.

[14:13] Rob: I agree. Yup, you definitely need a little bit of critical mass if you’re going to aggregate stuff from your customers.

[14:18] So the third and final step to increasing the social currency of your app is to make people feel like insiders. And there’s a bunch of ways to do this with B2B apps. One way is to have a members only area and members only information. And training, whether it’s videos or blog posts or something that you’re giving them that you do not release to the public and that you value. And you let them know how valuable that is. The idea here is to actually perhaps an info product that you would essentially sell but you give it away to people on the inside. So, that’s one way that I am actually heading towards with Drip is to up the level of training, but not charge for it. Right. Just let Drip customers use it.

[15:00] Another way that I’ve seen work, and Mike, you and I have experienced this first hand is to only let in X number of people into your app per month. Now we do that with the Micropreneur Academy, Micropreneur.com. And the reason we started doing it was more because we wanted to bring in cohorts of people and we didn’t want 50 people or 100 people coming in all at once. Because we just couldn’t manage the onboarding. But what we found is by collecting emails upfront and not just having it open all the time that both the upfront conversion rate increased the people who did sign up. And people got more value out of the academy because they were more serious about it when they got in. They were able to focus the time. And people stuck around longer. They got more value out of it.

[15:39] Borrowed from that in a conversation I had with Nathan Berry about Convert Kit a couple of months ago. He took that and now he’s doing  a similar thing with Convert Kit. So he…It’s a SaaS app. Right? It’s like a landing page and email marketing SaaS app. He’s doing the same thing. So you can’t just sign up for that anymore. You have to sign up for an email list. And then he does a launch. And he only lets a certain number of people in. And he provides a lot of education and makes you feel like an insider.

[16:01] Mike: Yeah, and I think the surprising that you and I found was that our conversion rate for that was something like four times what it was if we opened it up. We ended up fielding and still probably field a lot of support questions about, “Hey, why can I just sign up anytime? I want to sign up now.”And we’ve run the numbers. We ran it for several months and found that the sign up rate and the retention rate was roughly 4x what it was if we just left it open at all times. So there’s some significant advantages to being able to limit the number of people who are coming in. You know, part of it is helping them as well. It’s not just about the revenue. It’s about making sure that what you’re distributing is actually being used. Because if they can sign up for it at any time. They’re going to come back some other time. They’re going to say “Well, I can put this off.” And you want them to sign up for this now. You want them to get the value out of it as soon as possible. And that’s one of the ways that can do that.

[16:51] Rob:To recap that. That was all a single principle, which is increasing the social currency of your app. Increasing the likelihood that people will want to share it. And those three steps were: find inter remarkablility, just like finding your purple cow; leveraging game mechanics and making people feel like insiders.

[17:06]  The second principle we’ll look at today is Public. And the idea here is, can people see when others are using your app? Is it observable? People want to follow a crowd, in general. There’s a lot to say for social proof. And so some of the examples he lists, which again B2C examples, he talks about the white earbuds that Apple released with their iPod. Now the Beats by Dre headphones. It’s obvious when someone’s wearing those because they have the flat sides and they have the big B on them. What about your app is observable by the public?

[17:38] Here’s some examples in the B2B space. Someone’s using Olark. You know they are because it says powered by Olark at the bottom. Someone’s using Drip. It says powered by Drip at the bottom. Now both of those apps allow you to upgrade to a certain plan and hide that but most people don’t. That right there is a nice viral loop. And a nice way to see if a lot of people are using it. So if you have any type of UI widget that people are installing on their site you’re in a good spot. Even if you don’t, I’ve seen apps that allow people to put badges on their sites. An example could be AuditShark. That someone could say protected by AuditShark in the footer of their site. If AuditShark had gone into the SaaS space and really going after SaaS users that could be something that much like a Verisign Certificate of security and that kind of thing. I think that AuditShark could be prime for that.

[18:24] Mike: I actually have that code written. [Laughter]

[18:25] Rob: Do you? That’s Awesome!

[18:27] Mike: It’s something that we basically put together in sort of like a little java script. It appears in the bottom right corner of the screen in the browser that you can enable on your website. And you could put that in there and it would pop up and say “This server is protected by AuditShark.” You’re absolutely right, there are a lot of other examples as well, if you have a customer facing website for support software for example, there’s companies like UserVoice. Where you can sign up and you get an account and you have a custom URL, for example, and customers can go there. And they see that that is that companies URL. So it’s not just widgets on your website, it’s also software that your customers might interact with as part of a support function or something like that.

[19:06] Rob: Sure.  And even imagine if you’re sending emails on your customers behalf. So let’s say you’re a MailChimp, even like Rueben with BidSketch, where he sends out proposal emails. At a certain plan level and it wouldn’t be your top plans but maybe it would be your bottom plans that includes a tiny thing in the footer that says, powered by BidSketch. This proposal powered by BidSketch. And MailChimp does have that, right? And I think, in their free tier one of the things is that you have to have this powered by MailChimp thing in the footer. It’s the same way Hotmail grew virally in the late 90’s was having a powered by Hotmail thing and I think it was under your signature or something. So, there’s a lot of ways where, especially these days if you’re sending things or having any interaction with your customers.

[19:45] There’s ways to get in front of them and ways to do it elegantly. Yes, you can go too far with this. So you have to use your judgment. In my opinion you should have a plan or kind of a step up where people can definitely opt out of this. Right. To where it’s truly totally white label. But what I’ve found is that most people don’t mind. And that they’re frankly, if you do the job and you’re actually helping them out, people don’t mind helping you out a little bit. Right. They don’t mind allowing you to have that little tag line. And if that means that you’re going to be able to stick around. That you are going to be able to grow as an app and that they will be able to use you longer.

[20:17] Mike: I that, for example, FreshBooks whenever you send out invoices, that people can login and see their invoices using FreshBooks website. And it’s clear that you are using FreshBooks software. I think a lot of other accounting software does that as well. I think Zero does it. You’ll see their logo in there and like the invoice and things like that. But again, as you said, you can pay to have that stuff removed. I think Basecamp when they send out emails, they come from the Basecamp domain. They don’t come from your own domain. Basecamp has made the effort such that you can reply to those emails and things go right back into Basecamp. Which is great. But it also allows them to kind of expand the reach and let people know hey “This person is using Basecamp.”

[20:56] Rob: So that was principle number 2, and it was observablility, Can people see when others are using your app?

The 3^rd principle of the 4 we’ll cover today is practical value. And what I love about this one is, since he talks so much about B2C a lot of the examples he gives are like viral videos they aren’t practically valuable. Right. They don’t have utility. They don’t provide useful information. For us, if we’re talking specifically about the B2B space it’s a piece of cake right. Because we typically do sell on value. We save someone money. We make them money or we save them time.

[21:27] And so, what he says here is if your product or whatever you want to go viral has useful information, basically do as much as you can to highlight how valuable it actually is. And I think the best example of this I can think of in the B2B marketing space is to include benefits on your homepage. Right. It is to have a powerful headline, that calls out exactly what you do. What your app does for people. And then talk about how much money it saves them. Or how much time it’ going to saves them. And really focus on the value that it’s going to provide.

[22:00] Mike: Yeah. I mean, this is just the basic value proposition for any given piece of software that’s going to take somebody an extra 15 or 20 minutes to put together a proposal or something like that and they have to do 10 of them. Then you’re saving them presumably, an extra 150 to 200 minutes a month. And how much is that worth of their time. And if you can put it in relation to the value of their time then you’ve got a solid mechanism for selling that piece of software. And again as you said, it’s a lot easier to sell to businesses than it is to consumers. Consumers are very much about I’ll spend my time to do it versus businesses where it’s worth it for them to spend the money to get things done faster.

[22:37] Rob: One other tidbit that I noted down, that someone has done a study, and he quotes it and he says, that if you’re giving someone a discount on something. Whether it’s signing up for annual or going moving up to higher plans so they get more for something. He said that if your product costs less the $100 and you’re giving them a discount, then use percentage. Meaning how large of a percentage discount they are getting. And if your product costs more than $100 then use the absolute dollar amount of the discount that you’re getting.

[23:06] Mike: That is interesting. I mean was there a specific amount of improvement over one versus the other. I assume there was some sort of A/B Test right?

[23:14] Rob: I think it was more of a research study with consumers. So it wasn’t like on a webpage. It had to do with getting real live people in an office and doing stuff. I don’t think there was a percentage improvement that he mentioned but my guess is if you went to look at the study we could figure it out.

[23:27] Alright, and our 4^th principle we look at today are stories. The idea here is that people remember stories. And an example of this and how you can do it in B2B marketing is not to aggregate data, to give percentages, to give dollar amounts, while that does work in certain cases you also need to couch that with stories of customer successes. That’s why case studies often work better than aggregate stats. Aggregate stats can give people an idea, an order of magnitude, but to really impact them and get them to remember and to potentially share telling stories. It’s a winner. I would actually recommend it. He had a good chapter on this in this book, but it pales in comparison to the entire book called, Made To Stick by Dan and Chip Heath. And that for me, that’s the seminal work on a way to describe ideas using stories in a way that gets people to remember them and in effect share them.

[24:21] Mike: There’s a lot of examples of this kind of thing going on but I’ve also seen through various blogs and Twitter websites where they talk about doing conversion optimization and they point out that if you call out specific numbers so instead of saying save $700 say save $684.35 because that’s a very real number. Somebody can look at that number and you know that it is not made up. It wasn’t just pulled out of the air. And you can probably relate that back to a customer who saved exactly that amount of money using your software. Yeah you’re absolutely right using those testimonials but being able to point to those specific instances as opposed to kind of aggregate because people I think a tendency to look at those aggregate numbers and say well I don’t believe that. And the reason I don’t believe it is because you see in all kinds of marketing material especially on TV.  You look at something like Weight Watchers.

[25:15] And they’ll pull out all of these statistics. Oh you know, so and so dropped X number of pounds. They almost never say on average people lose X pounds. They always pull out specific people and use testimonials to drive people to sign up for their service because it is more believable. It’s more relatable than this mass of people that you have no way to identify yourself with.

[17:13] Rob: Right and we see this in Presidential campaigns too right or any type of political campaign, where they will name some stats. It’s the epidemic of the “you know, Joe the plumber here. Here’s his story.” And whoever , who did this and that and they actually go into this whole story. That’s why they do that is to personalize it. You see it with charities trying to raise money. They can say a million people a month die in this country. But it’s when they actually start following a single story that you become engaged. Another way where I’ve seen this play out is in podcasts. There are podcasts that are mostly about the tips, trick and tactics. And then there are some that are mostly about the stories of the founders or of the people who are doing the podcast. And then there are some that are a mix. My favorites personally are the ones that are a mix. And here’s why. Because if it’s all stories and kind of just bouncing from one thing to the next it’s harder for me to justify spending a lot of time listening to it. And if it’s all tips, tricks and tactics then I don’t necessarily engage or feel empathy for the people or really get into their story. I don’t want to hear it every week and sometimes I’ll skip it if it’s not on a topic I want. But when it’s a mix and I feel both for the people and for the stuff they’re sharing that’s when I’m really into it. Like, Bootstrapped with Kids is actually a really good example of that because they do both. They share tips and tactics and even if I already know them I still want to hear what they’re up to that week. Frankly, this happened with us early on. I think the first 15 or 20 episodes of this show was much more about the tips and tactics. And we started engaging the audience and we started growing once we started sharing stuff that we were actually doing, sharing our experiences. And now people will certainly listen to it for the tactics but I bet there’s a lot of people who are listening to hear what’s next with us. To hear what we’re up to next. What we’re working on and how things are going in our stories.

[27:16] Mike: Yeah, I have definitely talked to people who have said that is why they listen. I mean they do get a lot of value out of the discussions of the different things that we’re talking about but a lot of them listen just for the weekly updates and stuff in the beginning. I’ve heard from some people that just say they listen just to see how long we’re going to run the podcast. Because it’s kind of amazing to them that we push out a podcast every single week like clockwork

[27:38] Rob: So to recap our 4 principles are: Social Currency, Observability, which is, Can people see when others are using your app? 3rd principle is Practical Value and the 4^th principle is Stories. And again, the book title is Contagious: Why Things Catch On.

[27:52] Mike: 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 Out of Control by MoOt, used under creative commands. You can subscribe to us in iTunes, by searching for startups or by RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening and we’ll see you next time.

Show Notes

• Eat That Frog by Brian Tracy

Transcript

[00:00] Mike Taber:  In this episode of Startups For the Rest of Us, Rob and I are going to be talking about the ABCDE method for setting better priorities, this is Startups For the Rest of Us episode 191.

[00:08] Music

[00:16] Mike: Welcome to Startups For  the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome in launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.

[00:23] Rob Walling:  I am Rob.

[00:24] Mike:  And we are here to share experiences to help you to avoid the same mistakes we’ve made, what the word this week Rob?

[00:28] Rob:  You know we have another success story, Mathew Paulson wrote in and he said I started listening to Startups For the Rest of Us shortly after it started in 2010, using the advice and strategies mentioned on your show, I have been able to build 3 profitable software businesses including an investment research software business called Analyst Ratings Network, a press release distribution service and a piece of fund-raising software for animals, shelters and human societies.  I am on track to have my first 7-figure year and I have just finished writing a book about the lessons I learned from building these businesses, the book is called 40 Rules For Internet Business Success it will be out on July 21^st, you can learn more better at 40rulesbook.com, thank you for your continued inspiration to the bootstrapped startup community.

[01:07] Mike:  Wow that awesome.

[01:08] Rob:  I love to hear stories of people who are even in the small way are impacted by what we are doing, it helps them build their business, and then they go onto build really cool stuff and then go on to teach others as well.

[01:17] Mike:  Yeah certainly so my wife and I are starting to really follow through on cutting the cord cable and this past week we called up Verizon, and just dumped our cable itself, we kept our internet and phone but just cutting the cable alone cut more than a $100 a month, so we still have Neflix and Hulu Plus and Amazon Prime, that was the second night after we cancelled cable, and we are sitting there, just kind of looking at each other, and it is like well we could go watch a movie, but I am tired let’s go to bed.

[01:42] Rob:  Yeah you don’t just flip the fun and watch like HDTV or other kind of mindless shows.

[01:46] Mike:  Yeah we just went to bed and got more sleep instead.

[01:50] Rob:  You know we first cut the cord like 7 or 8 years ago, and it was a big leap then because there was no Hulu Plus, no Amazon Prime, it really was just Neflix but we still had DVD’s you know, so we watched a lot of movies, it was a sacrifice at first, but especially these days I think it’s something that unless you need live sports pretty much everything else including like the Super Bowl, you know like Academy Awards ceremony and that kind of stuff tends to be streamed online now, and so you really don’t miss out on too much, and I found the same thing as you, I don’t spend very much time watching TV I watch a lot of shows, like probably 4 or 5 shows I follow but aside from that I don’t sit down and watch TV, so I really only watch like let’s say 4 or 5 hours a week total and I never watch commercials, so it’s actually not that much time that I spent in front of the TV. Speaking of that I had a recommendation for a show, have you watched Silicon Valley, it’s on HBO.

[02:44] Mike:  I have not.

[02:45] Rob:  Obviously you either got to have HBO Go or you know some other way to obtain it, the first episode was in full on YouTube. It’s interesting you know, it’s fun to kind of see people poking fun into the space, and Mike Judge who did Office Space is the creator and I think that he wrote the first few episodes. It’s worth checking out. It’s pretty vulgar and if you can tolerate that kind of stuff, then it’s a good show.

[03:03] Mike:  So you say you don’t watch commercials, how do you deal with that when you are watching Hulu Plus?

[03:07] Rob:  That to be honest that’s the one place where we watch it and it’s driving me nuts now, and I think I am going to cancel my Hulu Plus subscription, and if I want to watch something that’s on Hulu Plus I am going to buy it. I prefer to pay two bucks for an episode rather than watch, what is now like almost as many commercials as that are on now like in a network.  What it started up is like 2 or 3 commercials for a 22-minute show and now it’s like 2 or 3 commercials per break, and then you have 3 or 4 breaks, it’s pretty ridiculous.

[03:33] I have been reading a lot of books lately, I am a big Audible fan and with that the, you know there were 13 hours of travel to and from Scotland and being in the airports and stuff, I just had a lot of audio time in the past month or so. So I want to run through a few of them and kind of give recommendations and my thoughts on them, there are related to just startups and then entrepreneurship in general. First is called Predictable Revenue, and it’s written by a guy or one of the guys who built the sales pipeline or the sales force at salesforce.com, and it’s an interesting book. I found that I got a little bit out of the first couple of chapters, but overall it’s about scaling a sales organization, so if you are not going to be scaling a sales organization, I would not recommend this book.

[04:12] He does have something early on and he hints at cold calling 2.0, and he talks about it and you are all intrigued and he really builds it up, and then when he gets to it, it’s cold emailing, it is getting a list of people and cold emailing them with a certain technique and I am like oh that was a big let down, I  imagined that they maybe partially responsible for all the cold emails I get pitching me different products now, it’s not spam technically right it’s not stuff that it is getting spam, but it is people sending it through like YesWare and Tout app and that kind of a stuff, overall probably for our audience not really worth reading.

[04:41] Two that I think would be interesting to our audience, one is called Hatching Twitter, I think I mentioned it in our previous broadcast and a very, very good story of the beginnings of Twitter, and just all the chaos, the soap opera that went along with that.  The other one that I just listened to is called Things A Little Bird Told Me, and this is Biz Stone, he is one of the co-founders of Twitter, it’s kind of his story, it’s a life story, and so his early stories aren’t as interesting as you know once he starts doing tech stuff, but he does a good job of kind of taking lessons away from different parts of his life, and linking them into his startup success.

[05:13] Rob: I have a lot of respect for Biz, he just seems to be, seems to be a hardworking legitimate guy, he didn’t stab much people in the back, I guess I have respect for him, so Things A Little Bird Told To Me is good, but I definitely would recommend you add it to you Audible list.  The last one I will talk about is another one that I would recommend, and when it started off it is called Contagious, when it started off, I was thinking you know this is just like every other book about virality, and it’s going to focus solely on B2C stuff, and it’s all about viral videos, and it’s about the blend tech, you know will blend videos and it’s about that kind of stuff and to be honest it did have a lot of B2C leanings, but what I found is that he lays out five discrete steps, that makes something contagious, but what I liked about it is that, just listening to it I almost turned it off but once I started taking each of the points he talked about, when I started specifically applying it to Drip. It really started making a difference, and I actually was able to take a bunch of notes from it, like actual action steps, that I am going to either think about with Drip, or that I am going to implement on Drip and it’s ways to make it something that is easier for people to talk about and makes it more interesting for people who are using it, so I think if you have a product and you can apply this to it even if you are not in a B2C niche. I think Contagious is good for you.  I think if you don’t have a product, and you are still kind of looking to launch or pre-launch or whatever I don’t think it’s going to necessarily give you a lot of value.

[06:34]  Mike:  I think that’s one of the big problems I have with a lot of business type books, it’s very difficult to find ones where you can get actionable stuff that comes out.

[06:43] Rob:  I know when I read business books I really try to stick to specific niches that actually relate to us, because most books are like for the Fortune 500 VP of sales, and when you start reading you are like this does nothing to do with what I am doing.

[06:57] Mike:  Yeah it’s just not relevant in any way, shape or form.

[06:59] Rob:  Yeah exactly.

[07:01] Mike :  But I think the only other thing I have is my wife finally opened up her own fitness studio in town, so I have been helping her through all of the “essential but unimportant aspects of setting up her business”….

[07:11] Rob:   What are those?

[07:12] Mike:  Well those are the things like filing the paperwork, and making sure that you get a checking account and things like that, you know it’s like the stuff that you need to do but doesn’t actually do anything for your business.

[07:20] Rob:  Yeah so how come she gave that to you?

[07:22] Mike:  It’s not that she gave it to me, she was asking for my advice on how to do different things and how to structure different stuff, and since I have done some of the stuff before, it makes it easy to…I’m east to access, I guess.

[07:31] Rob:  Sure, sure.

[07:33] Mike:  So just because I have gone through it a bunch of different times for several different businesses, you know I went down to the bank with her to help her out and just to help her ask like the right questions, and then in terms of the business paperwork going to the county clerk she actually did all that stuff, I didn’t, but then in terms of getting her lease straightened out you know I gave her some advice on that, and I think that the beneficial thing is that now that I am home all the time, it’s actually kind of allowed her to get herself in a position where she can open up a studio, because before when I was on the road all the time, it’s hard for her to have a studio because my schedules in flux which means that she can’t have a set schedule for her fitness studio. So having both of us at home is actually is going to be quite a bit more beneficial that I had probably thought it was in the past.

[08:13] Rob:  Yeah sure that’s kind of a side effect I wouldn’t have thought about but it totally makes sense. Nice to mean it’s extra income that you wouldn’t have had. It’s pretty cool, congratulations.

[08:20]Music

[08:25] Mike:  I guess we’ll piggyback a little bit on the book recommendations that you had, but this episode is kind of a summary of a method that I had picked up from Chapter 6 of a book called Eat That Frog, 21 Ways to Stop Procrastinating, Improve Your Organizational Skills and Get More Done in Less Time, the book is by Brian Tracy. And this episode is just gonna to be one chapter the book, there is another 20 interesting ideas that are in there which if you are struggling with time management or procrastination or anything like that, you know there is a lot of different things in there that could certainly help you out, but I primarily picked it up because I have been looking at a lot of different things on time management and getting more things done faster, and this was definitely a way to do that.

[09:01] Mike: So the specific techniques that we are going to talk about today is I have actually used a variation of it for quite some time, but it was really interesting to see a much more formalized structure of this mechanism, so I have kind of restructured a little bit of how I am handling it. But the basics of it is that what Brian Tracy lays out is that the Step 1 is to write out your to do list, so you lay down every single thing that it is, that you have to, you know anything where you can list them out, I actually use Trello for my variation of this strategy, and then once you’ve done that, Step 2 is to assign each item to a specific category, so the categories are labeled A, B,C,D, and E and we will go through each of them.

[09:39] Mike: The first one is A, A stands for Very important, it’s something that you absolutely must do and if you don’t do it, there are serious negative consequences, if you don’t do it, so examples of that would be, if you don’t pay your bills when it’s due in 2 or 3 days, it’s like that’s something that you really have to do, and if you don’t do it, like a mortgage payment for example then something like that, although it is not business related it is I will say life related, and because of that it falls into your to do list, so you have to pay the mortgage and it’s got to get done and it’s got to get done very, very quickly and if you don’t do it, then you are going to get into smack with late fees, and then on top of that it could end up on your credit report, if you don’t do it for long enough.

[10:18] Rob:  Right and I think another example probably dealing with business is like paying your taxes, or getting deliverable to a client, or getting someone who is trying to use your App to the next step of onboarding, if you are doing kind of intensive high touch sales type of stuff, I realize that one could be bumped to  B where it’s just important, but I would say if you are going to be losing revenue or having to pay a penalty or something then that would stand in A, like A is revenue driving stuff, but I would say that probably in A  marketing tasks would not go there, not unless they are super time critical, like it’s a Black Friday, promotion and it has to go on that day, and it’s Wednesday of that week, and then your Black Friday email drafting would go into very important, but if it’s not time sensitive if it’s just like drafting copy for a new ad or trying to run a new campaign or exploring stuff I would say that would go on lower priority stuff.

[11:11] Mike:  That’s right. So as you are kind of alluded to B stands for Important, it’s something you should do, it’s not as important as your A task. But you know there is relatively minor consequences for not completing it today, you know as you said some of the marketing tasks if you don’t finish rewriting your webpage today, then you can always come back to it tomorrow and it’s not that big a deal. Sure, you know it’s going to get pushed out and there are things that it would be nice to have it done today, but it’s not so critical, it’s not time sensitive in most cases, but as you said if there are times where, you know you’ve got a deadline of some kind. Let’s say that there is marketing materials that you’ve got to get out for a press release, because it’s coinciding with a launch event, sure those things will fall into an A task, but otherwise if you don’t have a lot of things that are kind of coming in together all at once, they would probably fall into the B category.

[11:58] Rob:  Yeah this is where the majority of my tasks fall, as a kind of day to day marketing startups and doing conferences, and doing the Podcast and all that stuff. I think the stuff moves into the A point, where A it is going to cost me money, B it is going to make me money, and I am going to lose that if I don’t do it, or C it’s a deadline like you and I are going to be recording the podcast at 2:00 o’clock and it’s 1:00 o’clock and I need to outline it. Right? So then it’s very important because otherwise I am really, basically have like a hard deadline that I really can’t push off, so I think B is kind of where the bulk of my stuff that I ever do is where I want to prioritizing it, and I to be honest I don’t use A, B, C, D, E, I don’t like but I really like the idea of it right now, based on your previous mention I just have two Trello boards one is my to do A, and then I have to do B, and A is not critical important stuff. It’s kind of everything I am working on and then B is stuff that I want to do long-term or that it is less important and I rarely get to my B, but I like the idea, you know once we get down to D and E and people hear about those, I think I am going to be adding those to my Trello boards as well.

[13:03] Mike:  One of the things you kind of mentioned was that you know a lot of the stuff that you work on kind of falls into the B category, what I found is that things kind of move from one category into the next based on how close you are to the deadline. So for example something might start out as a B task and then it moves into an A Task as the deadline gets closer because you push it off, because you got other things that are kind of more important, but then that deadline comes up and you move it from B to A because you’ve got to work on it now because you are not going to have time later on.

[13:32] Rob:  And you know I think this is why early stage startups are so hard, because there isn’t so much that has such a strict deadline, and there isn’t so much that is going to make you money, or cost you money when you pre-launch, and you are just trying to get to launch. Right? So it’s hard to prioritize because everything kind of falls into B, and then you need to go with your gut of what’s going to have the most impact, either to your motivation or to getting you closer to launch, and that’s where I do think it’s tricky and there is a lot of judgment calls, and to what task should you step to next.

[14:06] Mike:  Yeah, and I think a lot of those things you know for example things like the billing code, that’s something that typically you would say, “oh well I have got to get this done and it’s pretty important”, but at the same time until you start getting customers the billing code just doesn’t matter, so the reality is you could almost push that into the C category which stands for things that are nice to do but are not as important as A or B, and there is no negative consequences for not completing it, so if I don’t do the billing code today, and I don’t have any customers it really doesn’t matter. If I don’t do the billing code for 3 months, and I have 5 or 10 customers, the reality is that it probably still doesn’t matter that much. It’s only when going through the billing process is so cumbersome that it’s actually costing you a lot of time and effort to do it. That’s when it should probably progress into a B or an A task, because you want to be able to scale but that becomes a limiting factor in your business. So if it’s a time crunch or some kind or if it’s becoming a limitation on your business and how quickly you can move and how many things you can get done that’s kind of in my mind, when it can move from C to B to A and then there is things where you just completely miss the deadline, and it completely goes from A to okay well why am I going to even bother doing this.

[15:17] Rob:  Yeah we were at somewhere between 12 and 15 essentially paying customers with Drip before I had billing code rolled, and I was just doing manual billing, I had a bunch of calendar reminders that would pop up every 30 days, and I would bill a person for the next month and it wasn’t even that time consuming. I did it myself, I didn’t even delegate it to anyone. And that was my MVP for my billing engine was me sitting there clicking a button and entering a dollar amount, billing code definitely fell into C at that point. What else I think is interesting is how this applies to your email inbox as well, and I know emails are a form of to dos, but you know I have been traveling a lot over the past couple of years and when I leave for 2, 3, 4 weeks and I don’t answer anything except for an A email during that time, I find that a lot of the C emails disappear by the time I get back, and what I mean by that it’s still in my inbox they are irrelevant and I never needed to respond, either the person figures the stuff out, or it just wasn’t really that important. Whereas if I am sitting here in my office and I am checking email every couple of hours. I feel the need to respond to those but when you are on vacation, it’s like an excuse to maybe not even on vacation just traveling right, it’s kind of an excuse to not have to answer those, and I actually think that’s better for your time management overall, and I think it forces you into the time constraint of you know what if I could only work 1 hour a day, which was something I did all of October last year, and you know what it wasn’t actually that bad, we launched to 600 people because Drip wasn’t live yet, we launched to 600 people in October, and everything was in place to handle that, and there were no major fallouts not only with that launch but all the other businesses and all the other things that I am working on, it all turned out okay, so they really do have this kind of false sense I think of needing to work 8 hours a day or more on things, having more time really doesn’t make you necessarily more efficient, and if you choose which things to put in your A’s and B’s and you can ignore the others I really think that you can get more power out of the hours a day that you do work.

[17:13] Mike:  People use going on vacation as an excuse to not replying to emails. I was listening to the Tim Farris Podcast, it’s called the Tim Farris Show, he had a guest on, I think it was the episode where we had Neil Strauss on, who is the author of The Game, and he was asking Neil what his thoughts were on email, and how he gets things done, and one of the things that came out of it, was that he does not even actually have internet access, so he can’t check his email during most of the day, he has this software installed that it’s aimed at keeping your kids safe, and making sure that they can only access the internet while you are around. Well he has it in place but his wife has the password, and it only opens up during two hours of the day, so he literally cannot check his email or do anything online unless his wife is there, to put in the password for him during these two hours of the day, so he is kind of taking it to an extreme level.

[18:05] Rob:  I heard that too and what I really loved about it was his quote he said “It’s amazing how quickly you can get through email when you know you only have 60 minutes to do it.” And that’s it, you force that you put an artificial constraint on it, and you will crank through things, things that you would take 3 hours to do, you can get done in 60 minutes, if you just hustle through it.

[18:23] Mike:  So we’ve talked about A, B and C tasks so far, let’s talk about the D task, the D in this system stands for delegate, and these are the tasks that you can assign to somebody else who can do that job instead of you. And you know we are kind of big proponents on the show about doing a lot of outsourcing and taking things off your plate, recording screen casts, and setting up standard operating documents and procedures, and handing those things off to other people. But really if you are taking a look at your task, there is a lot of things that if you are looking through your task, before you even get started, and you are going to find that there is a ton of stuff on there, that you just cannot possibly finish all of it in any given day, and in fact most of it is going to take you a very long time, and I think one of the big fallacies or myths that I kind of got caught by very early on was that all if once I scale to a certain amount of revenue and have enough people working for me, I will have enough time to get all of this stuff done, I will never be in a situation where my to do list will outstrip my ability to actually get stuffed done because I got to hand these things off to people where I can get all the stuff that’s not important off my plate.

[19:25] But reality is that, you can’t I mean there is only so much that you can do no matter what. In order to get a lot of these things done, you are going to have to delegate it, you are going to have to outsource it to some people, and whether that’s accounting stuff or whether its’ programming or marketing or you know you can bring other people in to do some of that stuff for you, but the key is to be able to concretely identify what it is that you can outsource and what you can’t.

[19:50] Rob:  What I like about the system is, he is basically having you decide if it’s a D right when you come up with a task, and so you are kind of doing it in bulk, what I do is I just this A and  B list. I put everything in A that I am working on, and when I get to a task, I ask myself can I delegate it, can I eliminate this task, that means that I am processing each one individually and I don’t think it is efficient as what he has.

[20:13] Mike:  You know what I found out is that I tend to forget that stuff so like if I am going through my to do list I will get to something, and I just immediately think, okay I got to get this done and it doesn’t necessarily occur to me that oh insert this if statement and say hey can I delegate this, and if not, you know then do it but otherwise if I can then figure out how to delegate. I tend to get into the mode of getting things done and going through that list and I don’t stop to think at the beginning of each one to you know see if I can delegate it.

[20:41] Rob:  Right. Yeah, I think I have gotten into a habit, a pretty good habit of, every task that I get, every email I get and everything in my to do list that the first question I ask is can I delegate it, and it’s taking a while to get into that habit. There are two points this week one was I emailed you about it actually the audio player inside the Micropreneur Academy started having problems and our audio files were fine, but if you played it in the browser, it was all chunky and I went around tried to figure out what it was, turns out there is a new version of it that works in new browsers, we had to update 89 pages because of the way it is a WordPress thing, and it’s an individual post. So my first thought was “Boy! I am sure not going to go through it and update 89 pages,” even though it was a little bit of a technical thing where you had to update some java script and make a couple of changes but instead of going through and doing it, which probably would have taken me who knows maybe 20 minutes, maybe 30 minutes it wasn’t be another world instead of doing that I recorded a screen cast really quick, and poof it was just gone like magic right I mean I got it and emailed back 6 hours later whatever and Andy had taken care of it, and there was another point where someone emailed and they wanted an invoice for a MicroConf Europe ticket they purchased, and again how long does that take, you know it takes 5 minutes maybe to get a Word format up and we have a template already and you enter some info but instead shot off an email, and just had replied directly to that guy I don’t need to see this again you know, and both of those are small examples of delegation. They are not things that are going to save me, hours a week, but by combining a bunch of those together and considering I get 10 things a week like that come up, it actually does save me hours a week.

[22:13] Mike:  Yeah the bottom-line there is that all of those different things that you delegate they add up. I mean even if you are only saving 5 or 10 minutes for 5 or 6 different tasks, I mean if you just saved yourself half an hour out of the day, you know that’s a significant chunk of the day, that you just freed up to do other things. So let’s move onto E, E stands for Eliminate, if at any time if it’s ever possible to just eliminate something, because it’s not important, go ahead and do it, if it’s something that you deem to be qualified for elimination, then chances are that it’s just not good enough for you to do. I mean it’s not even worth your time to go through the effort of delegating it to somebody just to get it done.

[22:52] Rob:  I feel like in my system I do this before I add stuff to the to do list at all, I have a pretty itchy trigger finger, so when new tasks come up I will just fire them off to my Trello board via email, but before I do that I have a pretty heavy filter like do I actually need to do this, so I rarely go through my to do list and eliminate things, I feel like I eliminate them in advance, right and I don’t actually put them on the to do list.

[23:16] Mike:  I think one of the more interesting examples of where you could use this, this E step is if you are brainstorming with people on your team and you just, you know when you are brainstorming stuff you don’t want to throw anything away, you just want to throw ideas out there, write them down and get them out, and then discuss them after the fact. So I think that’s very key part of the process where you can brainstorm just throw the stuff on paper and instead of eliminating it before you add it to the to do list, you do it afterwards kind of that batching process.  Another place where that might come up is the customer suggestions that come in that are just so off the wall, those are places where I could see it being used as well.

[23:52] Rob:  Yeah I do have a list in Trello which is obviously a collection of the little Trello cards and it’s just called future, and it’s stuff that I think we want to do, but it’s some bigger picture projects that haven’t been flushed out into individual steps. And I would definitely want to track it, it’s not something should be eliminated it can’t be delegated yet, it will probably be delegated to maybe multiple people or it’s a pretty in depth spec that’s needed to give to a developer, and it’s stuff that’s not critical to get done now, but it’s kind of like a future marketing idea that needs some coding or an E-book written or something like that, so I do have a future board and I think that will probably fit into my I guess that’s like my C, but realistically I think that might be a combination of C and D for me.

[24:35] Mike: So we will just quickly recap on the ABCDE method: A stands for Very Important, and it’s things that you have to do, B stands for Important and something that you should do, C is something that is nice to do, D stands for delegate and E stands for eliminate, so if you are interested in hearing more about this particular book, again this is just chapter 6 of Eat That Frog, there is 20 other time management and organization management skills that you can learn through the book, it’s only $9 on Amazon. It’s a very, very short book but if you want to speed through it even faster which you can do is you can skip to the end of each chapter, and at the very end of each chapter there is probably 2 or 3 paragraphs, where it just summarizes the content of the chapter itself, and you can get a very quick overview of some of the different things are that they are talking about in depth, and if there is anything that you don’t understand, you can just flip back through the chapter and read it a little bit more, but the book itself I think is only about a 120 pages or so, it’s pretty short.

[25:29] Rob: If you’ve listened to this episode and you have a question for us, you can email us at questions@startsupsfortherestofus.com, we also have a voice mail number, it’s 888-801-9690, you can subscribe to us in iTunes by searching for startups or by RSS at StartupsFortheRestofUs.com where we also include a full transcript of each episode, our theme music is an excerpt from We’re Out of Control by MoOt and it is used under Creative Commons.  Thanks for listening, see you next time.

Show Notes

• MicroConf Europe Tickets Available
• Success story: LogoMaker.com and LogoDesign.com
• Music to get motivated: Noon Pacific
• FogBugz

Transcript

[00:00] Rob: In this episode of Startups for the Rest of Us, Mike and I discuss SEO across multiple domains charging before product market fit and more listener questions.  This is Startups for the Rest of Us:  Episode 190.

[00:10] Music

[00:18] Rob: Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it.  I’m Rob.

[00:27] Mike: And I’m Mike.

[00:28] Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. So, what’s the word this week, sir?

[00:31] Mike:  MicroConf Europe is not yet sold out, so if you are interested in acquiring some tickets to that, you can get your tickets over at Microconfeurope.com and sign up for that mailing list, we have some emails going out shortly.  There are some advanced emails that have gone out so far, I believe next Tuesday when this episode goes live is when we will start opening up the doors on that list, so definitely head on over if you are interested, hopefully we will see there.

[00:54] Rob:  Come hang with us in Prague in late October.  So hey, kind of a milestone for me today, Drip email automation that we have been working on since January, we released it to an early access group, I think it was about a month ago, I mentioned it on the podcast when we did, but we launched to all of our customers, new and old, all new sign ups, everyone as of just a few hours ago, everyone has access to it, so it feels pretty good to get that out.

[01:20] Rob: I recorded a bunch of screencasts, because I found email automation is simple enough its bunch of rules where you can move people in and out of lists, you can do stuff based on whether they click a link or whether they make a purchase or whether they do something else.  They sign up for a trial or whatever, but there is so much more complexity to this that needs to be explained.  That’s what I spent the last several days doing.  Before we announce it, I mean the feature has been ready for frankly 3 or 4 weeks.  We haven’t made any changes to it since early access except from adding new stuff but I really wanted to get enough, a couple of case studies and I have some blueprints for different rules that we are using internally, on our SaaS apps and that I am seeing other people use it like e-book downloads, that it’s having the idea of how to use this powerful tool rather than just saying here is this powerful tool, go use it, right?  So that’s what, I really wanted to help folks get on board with it, so we will see how that pans out.

[02:11] Mike:  Neat, well, and news on my end, I have got half a day left of consulting work and then after that I will be on AuditShark full time at that point.  Around noon tomorrow I will be a “free man.”

[02:19] Rob:  How does that feel?

[02:20] Mike:  A little disconcerting to be kind of back in that position, but I am looking forward to it, my schedule has backed off significantly, so I have been working kind of part time and I have been laying out like what my days look like working on it full time so far, so it will be an interesting change, I have definately been splitting up my mornings and afternoons considerably more than I ever did when I was consulting, so.

[02:40] Rob:  Right, I remember when I kind of quit consulting that I suddenly had way more time than I knew what to do with but I really had to convince myself to focus and to take that time and put it to good use to move the product forward, because I was no longer forced into this artificial two or three hour a day thing, of evenings and weekends, and so I had to be more mindful of my time but it was fantastic, I remember the day vividly, I hope you celebrate, go to a coffee shop.

[03:07] Mike:  I try to coffee shop last Friday and didn’t go so well.

[03:09] Rob:  Didn’t go well, yeah.

[03:11] Mike:  The issue was that they didn’t have a place for me to plug my laptop in, so at around noon I was almost out of battery power.

[03:20] Rob:  Oh! Yeah, that’s, you can’t do that.  So we got an email with the subject line of Music To Get Focused and it was from Michael Koper.  And he says “Hey, Mike and Rob, love your podcast, I am a new listener, and it helps me a lot with the creation of my first SaaS app and he goes on to reference the, when we talked about music to help getting you focused and he says, “I found this iPhone web app called Noon Pacific and it’s noonpacific.com, every week they release a new playlist with 6 to 8 songs for free, the music is handpicked from different music blogs, the type of music really helps me to focus, it’s very relaxing and nondisturbing.  You can loop on the playlist for the week over and over and you can listen to other playlists, hope it helps the others same as it helped me.”

[03:58] Mike:  Yeah, speaking of sharing good news and tips, we got an email from Rob Marsh who says “Hi, Rob and Mike, just wanted to drop you guys a line and say thanks for the podcast, it’s definitely the top of my listening list, and as a non-techie I find much of the advice you guys give very useful.  I found the podcast about the time I was asked by my corporate boss to downsize my entire division of 40 people.  I was the last person on the termination list.  Your podcast gave me ideas and information, that made acquiring my first app much easier, that app logomaker.com is an online logo design resource for people looking to start a business or prove a concept with a professional looking but inexpensive logo design, although I didn’t build it, I have learned a lot as I have been trying to grow it over the past two years, this week I am launching my second site logodesign.com which has a different focus.  Helping designers connect with potential clients.  Just want to say thanks for the ideas, information, and encouragement, you give your listeners each week, you guys have been a great resource.”  So that email comes in to us from Rob Marsh.  Keep up the good work, Rob and let us know how things go.

[04:50] Rob:  So last update before we dive into some listener questions.  Drips growth is just starting to pickup to a point like, I have been on that learning phase, remember on my MicroConf talk we talked about building, learning and scaling.  We have been in the learning phase trying to figure out what people need, getting email automation out the doors is a big step in that process, probably not coincidentally within the past 1-2 months, growth is just starting to creep up.  So I can’t tell yet if it’s a blip, if it’s a coincidence but I have some aspirations, some high hopes that, a, it’s going to continue and, b, now that automation is out, there will be more of a compelling reason to keep people around.  Trying to hit product market fit so that people come in, use the product, get a lot of value out of it and then change their behavior, you know, and actually continue to stick with it.  So I will obviously update in future episodes as things go with that, but so far so good, last couple of months.

[05:44] Mike:  You know, there were some people on Twitter who were asking me about how things were going with Google because of AuditShark’s experience with the panda update and things have actually not only reverted back to normal, but they have actually been better than they were before.

[05:56] Rob:  Nice see that typically happens with sites that aren’t doing anything, gray hat, black hat that when these updates come the gray hat, black hat guys get booted, right, or just get downgraded and then the other I say, more legitimate SEO sites are able to move up, so that’s good news.

[06:14] Mike:  It is disconcerting in the fact that it happened at all.  So it means that I am kind of in that, I am probably in that gray zone, so that means that I need to kind of revisit a lot of those pages and make sure that I move, I guess into more of a legitimate territory in Google’s eyes, which kind of sucks because you don’t necessarily know everything that they are looking at, I have been looking through the moz collateral that they publish every year, basically kind of indicating what they believe, the Google’s algorithms are based on, and how much weight each of those things carry, so I have been going through those, and taking a look at them and trying to match them up with what I am doing on some of those pages to make sure that hopefully this won’t happen again.

[06:49] Rob:  Very cool.  Well, let’s dive into some listener questions today, we have several backed up and I want to cover them, our first one comes from Jay Adams and he has two questions, he says the first is I received a different amount than what was invoiced to an enterprise customer overseas, it turns out that an intermediary bank charged a wire transfer fee, I have no way to track these fees and wondered how other startups are doing with it.

[07:13] Mike:  Banks are just such a black box, I don’t even know how they calculate some of the fees.

[07:18] Rob:  To be honest, I have never heard of an intermediary bank charging a fee on it and I would question the legality of that because typically it’s the sending bank and the receiving bank, right? And the sending back will often charge a fee, it’s like a $35, $45 fee for an international wire transfer depending on what country it goes to.  The receiving bank sometimes has fees for receiving wires, and that’s a whole other deal.  I have never heard of like an in between bank, I would personally call your bank and try to figure out how that happened, why that happened, there has to be a schedule of fees somewhere, that’s how I would look to handle it, the way I have handled this in the past when I have had international contractors that I have had to do wire transfers to, is if the payment is broken up over multiple payments, I will cover the wire transfer on one and then make the contractor cover it on another or just split the fee 50:50, sometimes I ask them to eat it, I mean it kind of all depends.  Not knowing the fee in advance is probably the more disconcerting part of this.

[08:15] Rob: Jay’s second question, he said it’s an unrelated question but he says, I currently have two websites, noxigen.com for the main company site and systemfrontier.com for the product landing page.  I may offer a few other products in the future but I really want to push my primary product’s brand as well as simplify site management.  I plan on relaunching the sites soon with a fresh new look and more content.  Am I hurting my marketing and SEO efforts by having multiple sites?

[08:42] Mike:  I would say you are probably not hurting your marketing efforts.  The thing I would wonder about is how related are these products that you are going to be launching, how much overlap is there between them, could you do any sort of cross sales or up sales to people, because if you are selling into similar markets, there is the potential that you could bundle it and so if there are complimentary features between the two products or any sort of integrations that you could build and especially if you are going to go down the road of offering 3, 4, 5, different products and then bundle them together as a suite, if you look over companies like Red Gate where they have got all these tools around databases so they have got all these SQL server tools, SQL developer tools, dot net development tools, and they start bundling them together, I mean you can buy any of them for their lowest and at one point it was $30 but most of them are anywhere between $100 and $800 or $900, but then they start bundling them, if you were to buy just one of – every single one of the products individually it will cost you $4000, $5000, $6000, but they bundle them together and it will cost you $1500 or $2500 or something along those lines.  So I would look at what you are doing and see if it kind of fits that model and if so, then you probably want to have one site for everything where you have this hierarchy on the pages, where you are doing all of your sales and marketing and trying to figure out on that main page, whether people are interested in one thing or another and then kind of pushing them down the tree but it really depends on what your outlook is for those future products and how much integration there is going to be.

[10:08] Mike: Now in terms of being able to maintain them, it depends on whether or not you are going to be the one maintaining them, that might be something that maybe you put together the initial architecture for that site, and then hand that off to somebody to actually implement a lot of those things, because implementing the look and feel can be extremely time consuming on an ongoing basis, especially if you are going to changing all right lot of that stuff.

[10:29] Rob:  My take on this would be you should have a product site, you don’t need a company site since you already have one, I would tend to make that a thinner smaller site and not have a bunch of product info on it, because then you are competing with yourself for search terms and you really want the product site to rank for your main terms.  So I do think that in terms of SEO, you are going to want to, you know, have more links pointing to your product site because that’s where people are going to go, research it and buy it, whereas if they come to your company site and see a bunch of products, it’s just a much harder path for them to actually get to a purchase.  With that said, I think there is some value in having a company site that does list all of your products, if you go to the numagroup.com, you can see an example of that, I think Wildbit has a similar website, where they kind of list all their products and it gives you an idea of who is behind the company and what they are up to.  I think there is value there but that’s not something that I would push a lot of traffic to, and I think if you are looking at having multiple products and you want to integrate or have upsells between them and bundle them with Mike was saying, I think you do that on the individual product sites that you still have systemfrontier ranking well when you introduce your second product then you can have like a little side bar in systemfrontier and you can have a checkout option where it’s an easy add on, a check box to also get this other piece and that you educate them on each of the individual product sites, you can also mention this on your company site, and again the company site in my opinion is more about information rather than commerce and each of the product sites are about product information with always a push towards a call to action of buying.  So I hope that helps, Jay, thanks for writing in.

[12:12] Rob: Our next question comes from Ben Porov [ph] and he says, “Hey, Rob and Mike, I am just curious to get your thoughts on the test driven approach to development.  Is it better to incorporate this principle into your project from an early stage or is it more of a hindrance to progress?  It seems there is a lot of pros and cons to consider, if you were starting a new project today, would you test or not test?  And for those who aren’t aware of test driven development or don’t know what it is, if you are really going to be strict about it, you would actually write a test first before you write any application code and you always start a new feature by writing a test, having it fail and then writing code.  That’s the strict adherence to it.  I know a lot of people who do “TDD” and they don’t actually write the test first, they just write a feature and then write a bunch of test to kind of test suite to test that feature before it’s every released into production.

[12:57] Mike:  That’s how I do it, I will write the function and then make sure that it’s working and then write a bunch of tests after the fact in order test edge cases and make sure that it’s working and then when you have your build  process kick off, it runs through all those tests, and you can make sure that nothing else that you did broke anything core, it’s a hard question to answer.  I think it depends a lot on the product and how much you are going to be involved in the development process because I think that as you start outsourcing software development those tests become more and more critical, especially for a lot of the core pieces because you are going to have people in there and making changes that they don’t necessarily understand why the architecture is the way that it is and there maybe some very, very subtle nuances to how it’s put together that they are just not familiar with or they don’t know or maybe it was documented and they just didn’t read that part or it didn’t stick in their head, so there is advantages to that but the downside is that it takes you extra time to put these tests in there.  So it kind of depends on what I guess, stage you are in terms of customer development to figure out, are you actually solving right problem because the worst thing in the world would be to go out build the products and have all these unit tests in there that are going to make sure that it’s functioning correctly but then if you are not actually solving problems for the customer, then it doesn’t really matter, you have written all this, not only have a written a product for nothing but you have written all these extra tests for nothing as well.  So I think it depends a lot on how sure you are of that market and your ability to sell into it and as time marches on you really want to make sure that you are putting some of those tests in place.  I am at a point right now where I am actually looking into potentially hire somebody to just write unit tests because there is a lot of–there are some core libraries that I wrote that I have some unit tests in because I knew that those would not change and then I kind of backed off from unit testing for a while and now I am at the point where I am revisiting it and going back to it, maybe that’s the right answer to my situation but it may not necessarily be the right answer for your situation.

[12:56] Rob:  Yeah, I have written a lot of code without tests just because we didn’t used to write tests, right, I mean it wasn’t until 2006-ish that I started really hearing about TDD and started implementing it around 2007.  It is a learning curve.  Like when you first start it takes a long time just to figure out how to write tests, what to test, you become effective at it, you get faster at it the more you do it, it s a learned skill and so that first uphill learning curve is pretty steep but then you get better at it.  I have heard estimates that its around 20% additional development effort.  So if a feature is going to take 10 hours, it will probably take around 12 hours if you write tests.  For me I will never have another piece of software written without tests, especially not a SaaS app, we have full test suites literally in the thousands for Drip and it has allowed us to make some major changes to the app without too much worry that things were going to go bad and trying to go back now and write the Drip test suite would be an enormous amount of time, it probably would be a developer or two for a month and I don’t think they would do as good a job as Derrick did as he went through the code, because you know, once it’s all fresh in your head, it’s easier to write the test.  With that said, I do agree with Mike that it could be viewed as premature optimization by some.  If you are building a prototype, you are entering a really uncertain market, yeah, it can be faster to release software without tests, but for my money anything I launch I am going to probably stick with it until it works and if you are going to have multiple developers working on a project over time, if you are going to keep it around for multiple years and if it’s going to be a somewhat complex and critical app that you are going to make your living on, by my vote I will never have another one that does not have a full test suite, and in fact we are in the process, we are almost done, rewriting HitTail in Rails, I am going to moving it to over to Amazon ec2, so I don’t have to deal with classic ASP anymore and that was one of the reasons that I wanted to do that.  One of the pros to it is that we have just a massive test suite now.

[17:03] Mike:  One of the other benefits of having that test suite as you write it and this is kind of one of the clear benefits of test driven development is that when you start making changes in your own code, you can know whether or not you broke stuff in the core that you may not have tested fully and I will give you a very specific example from AuditShark is when I was writing all of those unit tests because the core of AuditShark uses this essentially a scripting language that I wrote, I test a lot of things in the scripting language to make sure that it still works and there was one point where I was making some what I thought were relatively minor modifications to how the engine was operating essentially make it more efficient and I ran it through the test suite and it broke like 200 different things and it was not obvious that it broke them.  This very, very small piece that I thought was just an edge case, I literally didn’t even think too much about it.  I was like, Oh! I will get to that and then I forgot about it and it was that edge case that bailed me.  And there were couple of hundreds of these things that just failed and I wouldn’t have noticed it unless I had that test suite because I was doing some very small tests and saying, okay, does this work or does it not, and it does but as soon as you start running it through all these edge cases which test suites tend to exercise those edge cases and they will do it a lot more efficiently than you ever will by hand it will catch all those things.  So it could have been almost disastrous had I kind of rolled that out, and not really thought about it, I just threw it in here and then 3, 4, 5 months down the road, I found out that there is all this stuff that just doesn’t work, it would have been so much more difficult to find that.

[18:34] Rob:  Thanks for the question, Ben.  Hope that helps.  Our next question is from Jim Monroe and he says “Hi guys, as always fabulous show.  I went back and listened to an older episode, I can’t remember which episode, where Rob was talking about a funnel to convert a mailing list to a group of customers who are interested enough to pay for early access.”  So I think Jim is talking about as I was going through the Drip process.  Jim says “I am not sure I understand this transition process, can you elaborate on, #1, how to identify the best target customers you’re your list?  Do they self select?  #2.  Assuming the  product is a minimum viable product are you just having them pay via PayPal, I don’t have any payment methods setup, and #3, how do you go from asking if they would pay for the product to actually agreeing to drop money and get early access to what is probably not a complete product yet.

[19:19] Mike:  So I think there is couple of different ways you can do this.  If you are using something like MailChimp and I assume that Aweber and Constant Contact have very similar mechanisms. But with MailChimp you can actually see who is opening the emails and who because they rate them with a star system to see kind of how engaged those people are.

[19:37] Rob:  You can do that in Drip too I will just note.

[19:39] Mike:  So you go in there and you take a look at those and you can essentially eyeball it and that’s how you select those people because if people are skipping over your headlines and not even opening up the rest of the emails that you are sending to them, then chances are really good that those people are not your “best” target customers on your list.  In terms of targeting those people and trying to find out more information about them to kind of really see who is and is not a good fit, because if you talk to any of them one on one, they are going to seem like a good fit but what you can do is you can find those people who according to the statistics  say, hey, this person is actually opening the emails or interested, send those people a survey of some kind and ask them some very specific questions and you can almost cross-section the people who are on your list to find out what criteria they match.  How are these people similar to these other people over here, what are the differences between them?  So maybe one person runs Windows, another person runs Linux.  Maybe somebody does SaaS development, somebody else does desktop development.  There is a lot of different ways you can kind of  cross section them and once you figure that out, you map those back to essentially figure out who your ideal customers is, who is going to be the best person and the most likely to pay for your product, those are the people that you want to go after and those are the ones you want to ask, hey, would you pay money for this right here?  Whether the product is complete or not, if you are actually solving their problem those are the ones you want to try and get to pay for it.

[20:58] Rob:  So when I was working with the launch list for Drip I really had two lists, I had this list of about 17 people who I knew in some form or fashion had committed to at least trying Drip out and they were willing to pay for it and those people I communicated with individually one on one and each one of them I onboarded manually.  I told them they would have to pay for it eventually, the price would be X, and I named a specific price, but told them that they could try it as long as they need it without paying until they gotten value out of it.  Then I had this launch list of 3500 people by the end and that launch list is more something like Mike said you have to start looking into and start trying to see patterns.  Opens is one good metric to be able to see how people are interacting with your stuff.  The other thing I did was I emailed a survey that we discussed in an episode, is around the 130s or 140s where I talked, I called it a customer development survey, it essentially asked what their biggest pain points are, what they were hoping Drip is going to solve for them, now anyone who responded to that instantly becomes a much more interested party to me and I think around that time I had somewhere between 1500 and 2000 on the list and I got just under 200 responses, so that was a nice chunk and then from there based on the responses I could sort even further and actually have real data individually and I asked them for the email in the survey email with just a Google spreadsheet with a Google Form over it.  So it’s very simple to set up.  Now that I had their email again I could then map it to individual people and I started talking to those people one on one as needed and the people with whom Drip was going to have the most resonance based on what we build, those are the folks that I contacted sooner, and by the time I contacted them I was already through 3 or 4 months of early access of these other 17 people and so I did ask for credit card upfront and at that point I did have like 21 or 30 days trial by the time I got down the line with the bigger list.  Jim, I appreciate you writing in and I hope that’s helpful.

[23:01] Rob: Our next question is from Margo Kaypax [ph] and she says “Hi, Rob and Mike, I have been a long time listener of your podcast and you have motivated to bootstrap my own businesses.  It’s more than motivation, I have been taking little bits and pieces from you every week, thanks for that.  I am writing because I have started to work on having someone produce content for my sites and most important an email newsletter.  What is your favorite newsletter tool to handle email newsletters from start to finish?  Over the last 24 months, I have seen so many businesses that offer this service and I am unclear which is better than another and why.  What is your criteria for choosing a tool, is MailChimp still the best?  Which is your favorite and why?  Thanks for everything, Margo.”

[23:37] Mike: I will tell you what I use.  I use a combination of MailChimp and Drip and there are two reasons for that, one is because MailChimp was around long before Drip ever was.  So I needed a newsletter tool and essentially MailChimp fit the bill very, very well, they will give you couple of thousand emails subscribers up front for no cost, if you want to get rid of their logos and stuff you have to start paying it around the 500 mark, but even then once you start paying, it’s only, I think their pricing starts at like $10 or $15 a month or something like that, it’s fairly inexpensive.  The problem that I see with MailChimp is that they don’t necessarily give you the fancy things to put stuff on your website to drive people into the list and that’s partly why I use a combination of Drip and MailChimp.  I will say the line is starting to get blurred but obviously Rob is kind of going in a different direction than MailChimp with his marketing automation.  So I think the two of them serve, I will say, different purposes and obviously there is different price points as well.

[24:32] Mike: Some of the stuff that I do in Drip I actually take those and hand them off over into MailChimp and then there is other things where I just leave them in Drip, depends on what I am doing and which is the lists that I am working with but I do use a combination of both.  I don’t think that there is a best one out there, there is no best one, it’s really which one meets your needs and which one is simple to use.  I mean you may very well start off using one particular product because it’s easy to get into but then as you use it more and more you start to find that there is limitations around it and you just can’t use it for everything.  So for example, very early on, one of Drip’s limitations was that you couldn’t really put in any sort of template and then that got added in.  So over time, a lot of these the downsides and the cons of going with a particular piece of software can go away, unless you have gone back and reevaluated them, probably not going to see those.  So for example, if I were to look at AWeber today there are probably things in there that I didn’t know they could do or they added in there that I never noticed before because I am just not a customer of theirs.  So your needs change over time, the tools change over time and what’s best for you today may not be the best for you in 2 or 3 years.  That said, you can sort of end up with little bit of vendor lock in just because you get on to a tool and you are there for so long, you have got all these processes and procedures in place for using that tool.  It’s integrated in all your different websites and applications and then it can be hard to get out of that because it takes so much engineering effort to walk away and use something else even if it is a better tool for you at that time, I would say especially if you are early on pick one that is easier to get started with and just understand that your needs very well may change and the tool may not do what you want it to do later on and that’s just life, every single tool is like that, whether it’s email newsletter or whether it’s a CRM package or database, doesn’t matter, I mean your needs change, products change.

[26:26] Rob:  Yeah, I think if you are just getting started and you are going to be building a list probably fairly slowly and you just want to send a few broadcast emails I would go with MailChimp because it’s free to 2000 subscribers, it’s perfectly fine for sending broadcast emails, it really works for beginners and I think don’t waste time paying for a tool for six months while you kind of figure this out and build your list slowly.  I do think that MailChimp it is limited, you may hit a point where you want to do more exotic stuff with your list and if you even get auto responders going it’s kind of a fiasco with MailChimp, the UI is not clear, there are just some issues there, so that’s where you look at a tool like a Drip or AWeber’s UI is not great either, but there is like Vero and customer.io and companies like that that are doing some to there things and help you send auto responders and the UI is much easier to use.  We all have more advanced automation stuff but if you never get there then MailChimp could certainly service your needs well for quite some time.

[27:32] Rob: Our next question is from Boris and he says, “I have developed a SaaS app, its skyfeedback.com.  It allows businesses and customers to communicate instantly and privately via SMS, I just launched about a month ago, I ran a Google AdWords campaign and so far no customers, expect it was only used during a church conference and it worked great.  I have a question, what is the strategy to advertise something that businesses are not searching for?  I find that SMS customer feedback is something people do not search for and I feel like this service has to be explained and sold through a sales agent, am I correct in that assumption?  Thanks for you advice, Boris.”

[28:10] Mike:  It would seem to me that something like a SMS customer feedback mechanism, software service is probably going to be something where you can’t justifiably charge a heck a lot of money for, it seems like it would be a relatively low price point, by low I mean less than $30, $40, $50 a month or possibly a year, it kind of depends on what customer segment you are going after, and why it is that they are using the service, what problem is that they are actually solving.  So your example of using it for a church conference and it works great, it seems to me like the price point for something like that maybe either free or something that maybe they pay $10 for it, that’s not something that you are going to be able to use sales agents for.  I mean you are not going to have a sales rep come and start making all these cold calls and trying to sell it for $10 a pop or $20 a pop.  It’s just not going to work, especially if it’s one time fee.  So I think you need to little bit more digging and find out who is actually having these problems and dig a little further than that to figure out what is the value of getting answers to those things, why do they want that feedback?  Is this the only way to do it because I think what you will find is that for example on a church conference or any given conference for example, the way to get feedback is one is to send him an email and point them to a Google Form which is great, what is this SMS tools have over that, what are the advantages of using your mechanism versus something like that and really try to position yourself against them and figure out whether this is even viable because from my standpoint I am looking at it and saying, well, if I were to use this at a conference, I don’t know is a SMS message out to people is really the most effective way to get information back from people because you can send it out to a bunch of people, you are not going to get it back in real formatted mechanism and you are going to be limited in the number of characters that people are willing to type on their phones. So those are the things that kind of come to mind and I know that that is not a direct answer on it but it seems to me like customer development around the actual problem itself is really where you need to go with this.

[30:10] Rob:  Yeah, I would agree with Mike, this feels a little bit like a solution in search of a problem that’s not ideal now that you have launched but it’s not the end of the world and you have to go find people who are having this problem and niche it down.  That’s what I would start with.  Because your home page says this is for businesses and customers to communicate and that is just way too broad, so if it’s conferences or conference organizers that are going to put this on or if it’s churches themselves or if it’s meet up groups, or if it’s SaaS apps, you figure out who needs this, where this really is a pain and this really improves their experience find those people.  Yeah, you are not going to be able to advertise to them because they are not looking for it, but once you find who they are then you know where they are.  You can look in on LinkedIn groups, you can find them on Facebook and post ads there, you can post ads through something like BuySellAds once you find out what types of sites they frequent, you can go directly to trade sites and buy ads there, you can go to trade shows.  I mean there is all these ways to do it but you have to know who your customer is.  It is a big advantage if your customer is actually searching for the thing you offer in a generic way and you can just do SEO and do AdWords and get to the top of Google and get clicks but in your case, that’s not the case and a lot of business don’t have that and instead they have to target a market rather than targeting the customer as they are searching for it.

[31:32] Mike:  Something like this it might be best to kind of figure out who your ideal customer for it would be, and the one that kind of pops into my head would be radio stations and for something like that you could presumably use a sales rep of some kind because it would be easier to track down radio stations and find somebody in there but as people are talking on the radio they have got this giant audience of people that they are talking to and they could ask them stuff.  They could poll them for information, so they can run contests like very, very quickly using this type of tool but you would have to explain to them the benefits and maybe put a working prototype in front of them and let them use it for a month or couple of weeks or whatever and teach them, you would have to onboard them but that seems to me that might be a better fit and that kind of goes towards a profile where you have got this one business to many customers relationship, it might also work for companies like Dunkin Donuts where they have got a coffee shop on every corner and they want to send an SMS message to people, maybe to integrate with geo location, maybe not but those are some things to think about.  I mean you need to find out who is actually going to use this and what problems you are trying to solve.

[32:37] Rob:  So hope that helps you out, Boris.  Our last question today comes from Mark Stevens and he says, “Hi! guys, I was interested in your comments on FogBugz.  I think I probably signed up for the same business software conference as Rob, I wondered if you could expand on what you think it now lacks and what newer tools are offering.”

[32:55] Mike:  I think for me there are a couple of things that I would say FogBugz lacks, and the first one is on the service desk side.  So using FogBugzas a customer support mechanism is passable, it does work.  I wouldn’t say that it’s the best tool in the world for it, so it’s just not as nice as I would like it to be from a customer perspective.  I can’t really integrate a widget onto my website or into my SaaS app and allow people to interact with that and essentially talk directly back to FogBugz.  Now they have APIs, I could do it, I could engineer something but I don’t want to have to.  I mean I am already paying for their software, I don’t want to have to pay for this add-on and I would have to engineer it probably from scratch.  Couple of other things is their Kiln integration I think is pretty good but I would also like to see something where you can get – you can either subscribe to or get notifications of some kind, maybe their web hooks or something along those lines, for when check-ins happen.  For example, I mean I have a bunch of people working on things.  I actually use BitBucket in some cases because I want an email notification whenever somebody checks something in and I want to see information about that check in who did it, which repository it went into and those kinds of things.  So those types of things I think are very, very helpful and I think that they could take those things there, I am not allowed to switch just for the sole reason of getting some of the things because then I lose a lot of history and I lose a lot of other stuff as well.

[34:17] Rob:  Yeah, I have several in mind as well.  We use FogBugz a lot. I use it for both driving development like product management as well as for customer support and there are few things that I found are like limitations these days.  One is there is no mobile app and really the mobile web interface is terrible, and so I often check email on my phone and whenever I have a FogBugz issue, I am kind of screwed because I can click through, I can kind of read the issue but then try to do anything with it is a pain and I know that if someone built a really nice web app I am sure Zendesk or Desk or Snappy or somebody has a good mobile app and makes this actually usable.

[34:55] Rob: Another thing is I would love to be able to and I don’t know if anybody does this one, but I have thought of this a lot.  I get the issue in my queue and in my email to be able to reply to it and actually reply have something appended and then assign it to someone would be amazing via email because I can do it all within my gmail app on my phone.  That’s something I found just to be a limitation is that when I am on mobile it’s kind of a fiasco.  Another thing is it is pricey compared to other solutions.  Check out a solution like Snappy, at besnappy.com, that’s from Ian Landsman at  UserScape and I think they would be 10 bucks a user, 15 bucks a user, so quite a bit cheaper than FogBugz or half the price and a lot of the other helpdesk systems are similarly less expensive.

[35:41] Rob: I find that not having a knowledge base built in is kind of a pain because I would love to be able to resolve an issue and then just move it into a knowledge based article kind of beef up my response and migrate that in to have a searchable knowledge base but instead I have a third party knowledge base that I am using and I have to migrate stuff manually over there.  The UI of FogBugz, I think is out of date.  It’s kind of slow, it’s kind of Ajax, but it was built really what? 10 years ago and they added Ajax onto it, so it’s just not as usable, not as fast as like a more modern system would be and there are a couple of other things mostly around CRM stuff.  Like we use it for support.  I would love to be able to attach notification like attach an email to an issue so that often times five people will request a feature and I am just adding them manually into the issue itself and then I go in manually and email each of them but I know there are systems where they request a feature, you add them into a notification list and when that thing is resolved then they all get emailed and it says, this has been built and it is done per your request.  So it’s more of an automated process, it’s more strongly typed.  And also really in terms of CRM type stuff and unless I see someone’s name and recognize it, I have no concept when I get a new support request, all I see is an email and a name and so I don’t know like, is this person a customer, what plan are they on, how long have they been a customer?  How many campaigns do they have?  How long have they been using their app, all of that stuff, and I know that there are apps that will integrate with it.  They will give an easy API and I could pipe some of my customer data in to make it just – give me a bit more of an intelligent view of who I am actually supporting, and what they mean to my business.  So those are actually 4-5 things mostly off the top of my head.  I would guess there are systems out there that are doing most of the things I have said but since we use FogBugz, I don’t really have a recommendation but surely if you have one, it would be good to see it in the comments for this episode, episode 190.

[37:40] Mike:  Well, I think that about wraps us up for the day.  If you have a question for us you can call it into our voicemail number at 1-888-801-9690 or email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Out of Control by MoOt, used under creative comments. You can subscribe to us in iTunes, by searching for startups or by RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode.  Thanks for listening and we’ll see you next time.

Show Notes

• ZipGrade – iOS, turns a teacher’s iPhone into a scantron grader
• Use Twitter Lead Gen Cards to Boost Your Drip Campaign
• David Hehenberger’s WP Plugin business, FatCatApps
• Our hot seat guest was Matt from Quote Manager Pro

Transcript

[00:00]Rob: In this episode of startups for the rest of us, Mike and I have our first ever founder hot seat with Matt from Quote Manager. This is Startups for the Rest of Us, episode 189.

[00:08] Music

[00:16]  Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you built you first product or your just thinking about it. I’m Rob.

[00:25] Mike: And I’m Mike,

[00:26] Rob: We are here to share our experiences to help you avoid the same mistakes we’ve made. So where we at this week sir?

[00:30] Mike: We have another bootstrap list in our success, his name is John from Zip Grade and he says, ‘I started listening to your podcast about two years ago while having a fulltime job in a commodities trading firm, each day I on my two plus hour roundtrip train commute, I started building an app that turns a teacher’s iPhone into a grading scanner. Last week I gave notice at my job so I can spend the summer focused on building the product and the company in time for the new school year in the fall. It’s a leap of faith, but with support from my family and friends, I think it’s a viable approach based on sales growth and research.’ And he goes on to say that he’s graded 1.6 million tests with his app and 15,000 installs and several thousand paying customers.

[01:05] Rob: Awesome, congratulations John. That’s really cool. We have another one. When I was in Scotland last week I met David Hamburger; he has a WordPress plug in business also a podcast listener. He quit consulting a while ago because of this WordPress plug in business, said he’s followed a lot of our advices about doing WordPress first, wants to do SaaS ultimately but he’s taken a bite out of it early and so he’s making enough revenue now. He’s kind of travelling the world, he’s in the tropical MBA crew, so he does a lot of perpetual travelling but I added him to our success stories page as well and he has a WordPress pricing grid plug in. You can check that out at fatcatapps.com.

[01:42] Mike: So in other news, Google hates me

[01:44] Rob: Why do they hate you?

[01:45] Mike: Well I have evidence in my Google Analytics account that they hate me. The panda update went out a couple of weeks ago and I apparently got hit by it.

[01:53] Rob: Yeah, Panda 4.0, yeah

[01:54] Mike: AuditShark seems to have been hit by it, but on the bright side, it seems like it’s coming back. About three or four days ago things went back to the way that they were and they’ve been there ever since there, since Friday

[02:06] Rob: You weren’t doing any funky SEO stuff there, were you? Did you build links or anything?

[02:10] Mike: No, I wasn’t. I think that what happened is that they pushed out an update and then it probably, you know, kind of like similar to some of their other ones where they push on an update and it goes a little bit too far and then they make some tweaks and then it pulls back a little bit and then puts some people from the red zone, back into the black zone.

[02:25] Rob: Right, Google hates me on any given month as well. So I wouldn’t feel too bad about it. I need a Postgres DBA. Do you know one?

[02:32] Mike: You know what; I don’t even know anybody using Postgres.

[02:36] Rob: Really, so they’re not easy to find. But if you’re listening to this and you are Postgres DBA, or I mean if you are a systems admin with heavy Postgres DBA experience, I need someone to help with. We are migrating an app from one system to Postgres and needs some optimization help with it and then get backup set up and then just monthly backup monitoring, so. I’m looking for someone freelance.

[02:55] Another thing I wanted to note is guest post went live today on Drip’s blog and its blog.getdrip.com, It’s a really interesting hack for building your mailing list for free using Twitter lead gen cards. I won’t go into the approach too much but it truly is a free way that if someone’s on Twitter, you can put this lead gen and pin it to the top of your feed and then if they click the Join Us, all they have to do is click the Join Us button and since Twitter already has their email address, it opts them in right away and you just paste certain amount of code in and this dude  the guy who did it, put the submit URL for his Drip form right into Twitter and so it just posts it right to his Drip campaign and so just with one click, you can get people in there. And I’ve already seen a few tweets, someone said it was actually Derrick Bailey, he said that they received like a thousand opt ins in the last month. Really cool hack and it’s written up like in grave detail on the drip blog, I wanted to call attention to it.

[03:51] Mike: Very cool.

[03:52] Rob: Last thing I have, have you seen the TV show Halt and Catch Fire?

[03:57] Mike: I have not.

[03:58] Rob: Okay, so it’s a new show on AMC, it’s two episodes in and its basically, it’s very similar to Mad Men but instead of advertising execs, it is set in like 1981/82 right around the time that IBM PC is being developed and so its all about the people who are trying to reverse engineer the IBM PC. Basically make the first PC clone. So far it’s pretty good, it’s pretty well executed and they’ve invested in the writing and the acting for this show, so, very good show for our audience. Very good show for the nerd in me, the geek in me who likes to see a high quality show based on stuff that you are familiar with because they are showing all types of chips and they are talking about operating systems and using acronyms, VLSI and I’m like, ‘Hey I know what…I learnt about that in college,’ So I don’t know if it’s for everyone but I would recommend it

[04:43] Mike: Well the real question is, is it accurate? Because I’ve seen some of those shows where they try to act like they know what they are talking about and for 90% of the people on the planet, they wouldn’t know anything otherwise, but then they’ll get some of the acronyms wrong and you are just like, ‘Oh, dear God’..

[04:57] Rob: From what I’ve heard and what I’ve seen, they have a couple of consultants on the set at all times. There’s like an IBM thing at the very beginning and they got the exact same font and they wanted to replicate that in the display. So I think that they, as far as I can tell, they are holding pretty near and dear to that. They knew that it would be a bunch of computer people watching it, and they knew that we’d nitpick it. So I think they are being kind of cautious in that respect.

[05:18]  Music

[05:22] Mike: So today we’re going to have a hot seat style interview with Matt from Quote Manager Pro and if you want to get in touch with Matt, his email address is Matt@quotemanagerpro.

[05:32] Rob: Yeah, I guess the other thing is that Matt mentioned after our interview that he is interested in finding a person or two for a Skype mastermind and so if you hear his story and it resonates with you, and you feel like you are working either slightly ahead or slightly behind him in a similar niche, like a related app idea, I would consider emailing him at the email Mike mentioned earlier because certainly getting together in a mastermind would be a good idea.

[05:58] Mike: So this week, what we’re going to do, we’re going to have sort of a hot seat style interview with Matt from Quote Manager Pro and what we’re going to do, this episode is going to be a little bit different than most of the episodes that we do and we’re going to have Matt talk to us about what his application is, how it works, what pain points it solves and what market he’s going after with this. And then we’re going to start asking him some questions, he’s going to ask us some questions about how he’s going to attack this market, and how he can take his product to market.

[06:24] Rob: Matt is prelaunch. He’s working on a product called Quote Manager Pro, it solves a pain point of his, and he emailed us out of the blue. Mike and I had been discussing it for a few months

[06:34] Mike: So Matt, I guess we’ll start off and how are you doing today?

[06:37] Matt: Doing well. I appreciate this opportunity to speak with you today. I’m really excited about it.

[06:41] Mike: Great, I think maybe you should give us a little bit of short description of the app and kind of what problems it’s solving.

[06:47] Matt: Sure, so Quote Manager Pro is targeted at the manufacturers around the world really. I’m focusing on the US, but really what it does is it allows for companies who are manufacturers that build assemblies, might be electrical assemblies, pneumatic assemblies, liquid fluid distribution assemblies, these types of assemblies when their quotes are put together for their customers, the process of going to get quotes for the line items, the components, the build to print items that go into that build is very manual. So it’s usually done through email. So it’s a process of emailing multiple suppliers for every line item.

[07:26]  And then that estimator as it’s called in the industry, is waiting on that supplier to feedback information to them so that they can then make a decision about which supplier they want to award that business to and then they have to take that over and put it into a spreadsheet where they can add it all up, put it together, by multiple quantity breaks and then they have their total material costs. So Quote Manager Pro is going to effectively automate all of that. So the industry is a bit old school in its ways, so it’s going to be a bit of a challenge to educate the industry about this automation

[08:00] Mike: Based on that, what is the current status of this. I mean obviously as Rob said, you are pre-launch but is the application built, do you have any early access customers that you are working with, where are things right now?

[08:11] Matt: The application is in development. I’ve been working with a developer, and I outsourced the development to a company in India, that was mostly driven by cost. It’s about a month into development right now, and we’re targeting a release in, a beta release sometime in the August time frame. As far as who we’re marketing it to or who I’m speaking to or have been speaking to in the way of customers,  I really really wanted to focus, before I even started any development, I wanted to focus on validating the idea with multiple customers. It solves my own pain because truth be told I have a day job to work, and I work for a manufacturer and I’ve had this pain. I’ve suffered with this pain for eight years, believe it or not, so it’s taken me this long to really realize that I should do something about it and I can do something about it. So, I went out and I contacted a lot of different companies in the industry, a lot it’s initially about eight or ten companies and just asked them, just by cold calling or people that I had in my network, I asked them, I educated them on the software and made sure that it was going to be something that would suit their needs like it did mine. So, it’s been validated and I’ve got a great response, there’s going to be some people that it doesn’t work for but I’m anticipating a large market that it will solve a problem.

[09:30] Rob: I’m curious, when you spoke to these eight companies, was it easy to explain. Are they all on the same page in terms of everybody using, I think u mentioned they used Excel to manage this right now. So when you called them up and you said, ‘Look the estimating process is this, I’m going to have software that’s going to automate that’. Was that enough or did it require an in-depth conversation where you really had to explain to them how you were going to automate this?

[09:56] Matt: It’s a pretty in-depth explanation, like I mentioned earlier, it’s kind of an old school mentality, so it’s a little difficult to pull people from that manual way of doing things with Excel and simple email to a SaaS solution. I dare not mention the phrase SaaS because nobody’s going to know what that means. It’s a good in depth conversation to have because they are experiencing the same pains. Like in a lot of cases, you don’t know you are experiencing a pain until somebody lets you know that there’s a different way of doing it. So those conversations have been successful.

[10:29] Rob: Okay, so if you spoke with eight or ten companies, how many of them told you, ‘Yes, this absolutely fills a pain point and solves something for us and we’d absolutely be at least willing to give it a look’.

[10:41] Matt: I’d say it’s at least 80%

[10:44] Rob: Okay, did you talk price, did you talk a specific price when you spoke with them

[10:48] Matt: Some of the customers I have, about four of them I had and they…something of this, it’s easy to demonstrate an ROI so, I did talk price with them and they said absolutely, that would be something that we would be interested in at that price point.

[11:04] Rob: Got it. And you have price plans from that. I see you have like a free plan, it’s pretty low usage, and then you have like 139 and maybe a 299 and up, right, so it’s enterprise-ish. Not true enterprise, but it’s kind of like it’s above the tiny little SaaS pricing which is warranted because this is obviously a high touch sales market. You’re not going to put up a learning page and gather emails and then run Facebook ads and automate split test your way out of this one. This is definitely a very time consuming sales process, long sales cycle and so the high price point based on what I’ve read about the product is definitely a requirement in order to just justify the time that either you or someone else is going to spend. Given that, how did you come up with the pricing?

[11:46] Matt: I can easily, like I’ve said, do some ROI numbers and say, if it saves a person…if it increases their efficiency by 10%, meaning it saves them 10% of their time, then I can easily calculate that on a monthly basis and therefore I have a value that I can put on it. There was a little bit of guessing, I’m kind of walking around in the dark here a little bit because I’ve never done this before. So I’m trying to use as much as an analytical well thought out model as possible. So I tried to use a mathematical formula like I mentioned to come up with something, but I also wanted to have a price that is low barrier to entry. There’s companies out there that have…I talked to a company a few weeks ago that’s got fifteen estimators, so that would be fifteen seats. In my plan that would be an enterprise level sale, but there’s others that are just mom and pop type of operations where they have one. So I didn’t want it to be a barrier entry to them either, because I think, like I said, it’s going to provide a lot of value to them as well.

[12:45] Rob: Sure, now I know we’re going to dive into marketing stuff. In terms of your pricing, it’s always in the dark. Every time we come up with pricing, you really- no matter how many times you do it, you’re kind of just taking your best guess to start with and then as you get feedback, you’ll be able to- as you get feedback and as you become more of a name, right? You’ll become a brand name at some point. If you launch and everyone going to start using Quote Manager Pro, then you can raise prices. So I think you’re fine for now. I would consider, and looking at prices, you have five plans. I would consider getting rid of the free plan just because I’m not a fan of free plans, and especially in this enterprise market. You can easily offer a long trial, right? because you can say 30 day trial or you can say 60 day trial or you can even get people in there and continuing to extend their trial as you work with them through the sales cycle. But I don’t know if many higher priced apps like this do a free plan, per se. It’s kind of off the books. It’s like call us, and they’ll give you a free plan while you’re adopting it, but once you start using it in production, you’re paying a hefty price for it.

[13:50] Mike: Yeah, I was going to mention that as well. I would kill that free plan. And part of the reason why I would kill that, I think Rob made some good points about being able to extend somebody’s trials for as long as you need. But the fact of the matter is that, because this is such a manual sales process, you’ve got to do a lot of hand holding for these people because most of them- you said yourself already, just in talking to people, there is a hefty amount of explanation that needs to go into it upfront. you don’t want them to say, ‘Oh, well this is great, but what I’m going to do is I’m going to use your product and because I can use the free plan and I don’t need to have files and stuff uploaded, I can just have them email me those files and then manually enter data or whatever’, they can kind of get around those things anyways. So I think that maybe you just want to kill that free plan to kind of by pass that issue. But also just kind of simplify your pricing because you’ve got five plans down there and I look at it and it’s just like, wow, you’ve got free, and then you’ve got pro and enterprise and enterprise obviously is going to be much north of a thousand dollars a month but then you’ve got zero on the other end, and it just- it looks awkward. It puts a weight on what the value of the product actually is.

[15:03] Matt: Yeah, that’s an excellent point, I hadn’t thought of it that way. The whole reason, my whole thought process of having- adding that free level there is to really hook people in at a low level. I am going to offer a trial, I was thinking fourteen days there and that’s just an arbitrary number; I’d love to hear your thoughts on that, I think you mentioned a longer trial period might be beneficial but again the zero dollars per month was going to be, as you see there’s a limited amount of disk space and a limited amount of bandwidth, so two things. One, it would hook people in to get people to use it, even if they think that they don’t need it. And then number two, once they reach those limits, they would QuoteManager Pro would probably be integrated into their processes and then they would want to- they would go to that first paid level.

[15:49] Mike: The thing is, though, I’ve seen like my uncle does stuff in the manufacturing industry. And I’ve seen some of the files and stuff that he deals with and you can have one file that will literally chew through 20 Megs and like three, four, five those and you could chew through your entire bandwidth very very quickly. So that free plan at that point kind of goes out the window. It’s not useful for those types of things, whether they are CAD drawings, some of those things can be just massive. You want to be very careful about some of those limits as well. I’ve seen people get scared off just by those limits, because they are like, ‘Oh, I’ve got these files that are huge, so I’m not going to sign up for this plan because it only gives me 10 gigs of disk space and I know that I’m going to need 40 or 50 and there’s nothing that kind of talks them through saying that that’s not going to be an issue because you can buy extra disk space or anything like that. And that’s not on here but that’s something to kind of think about or keep in the back of your mind. It depends on what specific niches that you are going after and what types of files they have, what size those files are. So I almost might back off of those limits until you kind of get enough customers in there to kind of figure out what the averages are. Because it seems like what you are trying to do is put the cart before the horse where you want to say, ‘I want somebody to move from 139 dollar plan to the 399 plan if they go over 100 gigs of space but reality is you might have these customers coming in and they might be chewing up either significantly less or significantly more.

[17:13] Rob: You are selling the not truly non-technical users they are not going to know what 100 gigs really is. Or what that means. I think that you’re pricing looks more complicated that it needs to be. It looks more technical than it needs to be to a non-techie. We all know what gigs are and I totally get it. But the storage is fairly cheap especially if you are using something like S3 or a server with a bigger hard drive. So I would agree with Mike at this point, I would probably remove the limits until you get ten customers in there using and paying it. then you’re going to be able to see the curve and you’re going to be like, ‘Wow, these guys are using a tremendous amount’ And even then, I don’t know that I would put limits as much as I’d just raise prices across the board. Unless you feel like they really understand what these limits mean, if you were to have these phone conversations with the eight people that you’ve already talked to and say, ‘Hey, you can have 100 gigs a file’, if they were to say, ‘Oh, I know exactly what that means’, then you’re safe doing it, but my guess is that’s not the case given the folks you’re dealing with.

[18:11] Matt: That is great feedback. Not to belabor this point, but the point of that was to number one to have a tipping point so that they would get over a hundred gigabytes and then they would have to go to the next level. Number two it’s a limit, just kind of as a safety precaution before we roll out in case they start using a huge amount. Then they would have to- because I don’t want the cost to be prohibitive. If its unlimited, and somebody’s using it- just blowing it way out of proportion, a terabyte, then I don’t want it to be eating away at the profit and cost more than it…

[18:45] Rob: That makes sense. I think initially, I think I would handle it- your first ten customers, you are going to personally be handling them the whole way to get them on and get them using it and I think during your discussions this is something that can be handled with nuance, because you can say exactly what you just told us. Right? Like you can say, ‘Look, there’s no hard limit’ or you can say, ‘Hey, the limit on all the plans is 500 gigs. Just kind of make up a number that you feel comfortable with. They are not going to know what that means upfront, and then you’ll be able to see pretty quickly as they start using it, ‘Oh, these guys aren’t using anything’. The limits may be irrelevant. Everybody may use less than ten gigs. Or if you get in there and it really is an issue, then the pricing needs to adjust to that, but I feel like you don’t know yet and getting your first five or ten customers in is not going to be- even if you are underpriced, it’s probably not going to take you under if you have maybe some kind of limit that you communicated to them at some point.

[19:38] Matt: Okay, great

[19:40] Rob: I’m back and forth on this. But I would consider not doing tiers to start with and just doing a per user pricing, to keep it really simple. And seeing how that goes. If you look at…

[19:51] Matt: Just a quick question if I can interject, Is there any industry data that talks about- that measures the effectiveness of projects, SaaS projects like this that have done on a per user basis or on a limits basis?

[20:06] Rob: No, I haven’t seen it. And the idea is that the per user, if it really is a per user thing, like that the more user who use it within a company the more value they get out of it and everything else doesn’t really cost you money, then per user is simpler and per user is better for your customer. It’s just because then they can come and they don’t have to get auto upgraded to a tier where, like right now you have a one user and then the next year is three users and the next year is five users, so when they go up to that second tier, it’s not ideal for the customer. You’re making more money, but they are not getting the value out of it, because they may only have two users at that point. So that’s kind of the push and pull. I don’t know any data about this or any studies anyone has done with it, that’s just how I think about it as I’m going into it. So early on before I have a brand name, before everybody loves my product and before it’s something that’s easier to sell, I would lean towards making it simpler especially for the initial customers. And thinking about not doing tiered pricing and making 99 dollars or 149 per user and then put a flat limit on usage and then allow them to buy extra disk space if they need it, it’s probably how I’d do it

[21:13] Mike: Yeah, I think if you talked to Patrick McKenzie, some of the consulting that he’s done in the past, he’s basically shown outright that if you- generally speaking, if you go more towards a tiered pricing model, you’ll make more money. In the early stages I don’t think you should necessarily be concerned about making as much money as you possibly can and optimize for profit; you need to optimize for figuring out what your marketing plan is and getting people on boarded and figuring out all the hurdles and the objections that they have and the way to do that is to remove as many possible things as you can so that they are not asking questions about stuff that’s totally irrelevant. So for example, when Rob and I were talking about the bandwidth and disk space, you remove those things and those questions don’t even enter their minds, just like, ‘what does 300 gigs mean? How much stuff am I going to have that I can upload?’ If don’t even show it, they are not even going to think about it.

[22:01] Matt: Right, got it.

[22:03] Mike: So we’ve talked a little bit about the application and what it does. I think the next place we want to go is to start talking about what sorts of marketing have you done so far. It sounds like you’ve talked to some early prospects; gotten some feedback from them about the fact that they do have these issues and they are willing to pay for it. What sorts of marketing plans have you put together and road maps have you laid out as to where you think you’re going to be going next with the product and how are you going to reach out to people?

[22:30] Matt: This has been an area where I’ve struggled in the past. I like to think that it’s coming together a little bit better with this project but I’ll just let you know where I’m at. So I’ve kind of segmented the marketing approach into stages. And one is prelaunch, and then post launch and then onboarding and then retention. Really the marketing for reasons that we’ve already talked about, the most effective marketing that I’m seeing is calling. Is talking to people. I’ve done some emailing using my ISP, but then I’ve recently started to use a CRM package to do some emailing and that’s not been effective. [23:08] There have been a few people that have responded but generally people either don’t open the email or maybe 20-25% open it and I get very very few responses. So, it’s been a challenge. I think a lot of the marketing plan that I have, I’m finding that it really is intertwined with the tools that you use. And that’s CRM tools and also marketing automation tool. So this is an area that I’m having to quickly learn about and how to utilize the tools that are out there, they are relatively new tools to me since my last start up which was iPhone apps in 2009, I think. So since then, a lot has changed and I want to utilize those as much as possible.

[23:50] Rob: Yeah, I think before we dive into marketing or as we go into it, I guess the question in my mind is, have you solved a problem yet? I feel like we’re still- you know that you have a problem and you know that you are building a solution for it. How can you validate with those, you said you called eight to ten people, 80% of them said they were interested, so let’s just say  they are seven people. Seven people that said yes, they are interested in this. What’s the quickest way or easiest way to talk to each of those seven now and figure out if what you are building is going to solve their problem? Because we don’t know that yet. Is there a way to get them screenshots of what you are planning to build or what you have built, have they already walked through that? Or is that all done?

[24:35] Matt: So yeah, I get what you’re asking now. So no, the answer very quickly is no, its not- the development is not at a level to where screenshots are ready. I do have some wire frames that I just made out in PowerPoint and they are really kind of awful to be honest with you. I’m not much of an artist but they get the point across to a developer. I’m hesitant to send those wire frames out to potential customers because I just don’t want it to look bad. I don’t want them to get the first impression that it’s going to look horrible like this and then that’s it for them. So I’m actually waiting to the point where those screen shots are available and that will probably be, I’m hoping six weeks or so, six or eight weeks and then I can use that as a tool in my marketing efforts. As of right now, I’m just smiling and dialing as they say, when I can I’m calling people and I’m really introducing myself as a software entrepreneur and getting feedback and letting them know with words here are the features. That’s all I have right now.

[25:33] Mike: You said you work in this industry, the manufacturing industry, correct?

[25:38] Matt: Correct.

[25:39] Mike: So you have seen, not competing products, but other types of software products that they generally use, right?

[25:46] Matt: Not really. As I mentioned earlier, it’s very manual. Its email and Excel and some people have given me feedback or sent me screen shots of their own systems of doing it and I’ve validated that they are doing the same thing that we do.

[25:58] Mike: Okay, I guess what I wanted to concentrate on was not sending them screen shots and things that you have so far because I’ve done some work in the manufacturing area and I’ve seen some of the stuff that they use and some of it is just God awful ugly. And that’s being nice.

[26:15] I don’t know as I’d be too scared about that, sending what things you have, because what they’re ultimately end up seeing is going to be better. And I know you said you did these in PowerPoint, I might recommend using something like Balsamiq Mockups to build the UI and present those to them, because then it’s very clearly a mock up and it doesn’t give them the impression that it’s done. And that’s one of the key advantages of using something like Balsamiq. And it’s only I think 80 dollars or something like that for a license. But you need to just build these screenshots and send them over to them and say, these are the thing that you would use. And you don’t have to build everything, you can just build the pieces that you think are going to be most interesting to them and show them generally how it’s going to work.

[26:56]  Because they are going to want to know, ‘what is the process for using this product going to be like, how is it going to integrate into my system and how is it going to integrate into the process that I currently use. As manufacturing, they are probably not going to want to change the way that they do things and you need to know that upfront. you need to know what processes they are currently going through, you know generally what they do, but there’s probably a lot of nuances that you’re not necessarily aware of between the different companies, You’re going to need to account for those. And my concern would be you spend the next couple of months building this thing and it matches for you but they may do things in a slightly different order or just different enough that it makes it difficult for them to sign on because now they have to change their process. And as you said, they are old school, they don’t want to change but that’s going to make it difficult for them to say, ‘Hey, let’s drop what we’re doing and sign on to this.’ Because they don’t want to change what they’re doing now. They want to make it as seamless as possible.

[27:53] Matt: Right, okay. That’s great feedback. The bigger problem is how do I manage my time? How do I accomplish things with a limited amount of time? Because I’ve got a day job, so, I’d love to hear if you have comments there.

[28:05] Rob: I think you have three risks that I see. The three biggest risks are have you really solved the problem. And you don’t know that for sure yet. I know that you know you’ve solved your own problem, but it’s going to be another month or two until you know if you’re able to solve every one’s problem, the seven people you have on the list. So that’s something I think you want to answer and eliminate as quickly as possible. The next thing is, just the adoption rate of non techies, non-technical folks don’t jump from app to app, it’s going to be an enterprise sales process and it’s going to take months and months of working with each client to get them to sign on.

[28:42] Now, the good side of that is if your pricing is structured accordingly, it’s not going to matter, because you’re revenue is going to grow. Even if you want to sign up one new customer a month, if they are paying 300 bucks a month, that’s actually, a decent growth rate for a really early SaaS app in a market like this.  In a non-hockey stick market. That’s your second risk. And I think you’re probably well aware of that, that you’re not going to be able to put up a landing page and get people to sign up directly from it. I would take some hints from companies like Hub Spot or like MoreAware software. I don’t know if you’ve been to MoreAware software but Ted and Harry are friends of ours, longtime MicroConf antendees, and they sell software to countertop installers. And it’s a similar audience, it’s more of the construction of the industrial area, People do not buy from the website. Ted and Harry don’t do SEO as far as I know.

[29:32]  If you go to their pricing page, there are some pricing grids, but then its call to buy. Because the almost always, not almost, they always have to walk people through it and tell them what it does. There is like a pdf order form but the reason they don’t have the try online or anything like that and the reason that I’m not wild about you having a free plan or even having a defined free trial, is that you’re going to be dealing with each person one on one and so you’re going to be able to decide what they need and give them that individually. That’s much more of what this is going to look like, so, I think that’s the second risk, is just figuring out how to optimize this sales process and I think taking hints from Hub Spot and MoreAware where you’re trying to get people to do a webinar, do a phone call, do a demo, that’s what’s going to sell this. Not them reading a sales page and clicking a free trial, because they are not going to take the initiative to do this because what they have works now, it works well enough and it’s a pretty big commitment for them to get into new software and then try to sell their company on it, their boss on it and all that stuff.

[30:34] So I really do think it’s going to take time with you or someone that you hire truly sitting down and doing a sales gig. Those are the two big risks. The third one is exactly what you just said, your time on a weekly basis. You have a full time gig and so you’re going to be trying to tackle this market that is going to require a lot of time for each sale and you’re going to be trying to tackle it on nights and weekends, presumably. And I think there are a number of ways around it. So, I’ll throw one out. I read through your emails because you talked about this at length and it was helpful for me to think about it today. I think you have two options. One is that if you have money, if you have some money saved up, that you need to hire someone to do this. Someone how is experienced enough at sales and who is hungry and who is willing to learn about your product and really take this thing forward.

[31:26] I think this is a risky approach. I don’t know anyone who has made this work, who has  not been- typically the best sales person is the CEO, it’s the founder, it’s the first person, because they know it, so no one’s going to sell it as good as you. And especially in these early days, it’s going to be really really hard. So even if, let’s say you found a top- a really good software sales person, and don’t get me wrong, software sales people they make a lot of money. There’s a lot of money in software, so you’re going to be paying top dollar. You’re not going to find someone on Odesk for fifteen bucks an hour to do what you need. You may be able to piece some of it out into just doing a demo of it; you can farm that out to an assistant or to someone but you’re not going to sell software in these early days unless it’s someone who’s really hungry for it. I just don’t think it’s optimal at this point.

[32:10]  I think the next best solution is for you to either have the time to do it, to make the time to do it or for you to find a cofounder. I’m a single founder and I’m not often telling folks to find cofounders but someone without equity in this venture, it’s going to be hard in these early days unless you think you can scrap it through. Because here’s the thing, if you scrap it through and you do this early customer development on your own, get those first ten customers in, at that point, you may have a sales process that’s down and that you know well enough. And the product may be mature enough and by then let’s say you have ten customers, and average monthly is 300 bucks and now you have three grand a month to play with in addition to whatever extra from your salary, you have a little bit more. So if you can scrap it out just for the next x months, let’s say takes you six months or nine months to get the first ten paying customers in there, I do think you’re in a better position at that point. You’ve also reduced risk, so then the equity you have to give away is lower. That’s kind of my initial thoughts

[33:06] Mike: One that I found helpful is targeting customers who are not in your time zone. If you have a full time job that you’re working eight to five or nine to five or something like that, then presumably everyone else is kind of working on a similar schedule and what you can do is once it gets to the end of the day, you can go up to your car, go on your way home or if you live close to the office, you get home quickly and you can start making calls into customers who are in different time zones. So I’m on Eastern Time and if you go to Google and you just search for manufacturing in California or manufacturing in Oregon, or manufacturing in Washington State, search down there’s probably a handful of links that you’ll find one from Wikipedia that lists a bunch of manufacturing companies that are based in each of those states.

[33:51]  Now on Wikipedia, there’s literally a category that’s called manufacturing companies based in x and it’ll show you whichever state. Go through those lists and start targeting those people. Because what that’ll do is that’ll give you a couple of extra hours where you’re at the end of the day, you’re off hours for your company and there still working because it’s still three o’clock there or four o’clock there and you can make those calls which is still very regular business hours for them, but it’s not for you. And they’re not going to care one way or the other. So that gives you a good starting point to be able to get in front of those people and talk to them in a way that fits everyone schedule

[34:27] Matt: Yeah, I agree, great feedback and that’s actually something that I’ve had success with. I do- I have been doing that where I get to the house at 5:15 or so and then start calling and it’s 3:15 on the West Coast, so that has been successful for me and some of these customers where I’m generating interest with have been on the West Coast. What about hiring- I’m kind of concerned about your comments that you can’t find anybody on Odesk for fifteen bucks or whatever. I’ve dealt with people oversees the whole time I’ve been doing startups which is probably ten years or so, but there’s only been two startups but anyway, I think it’s more prevalent now and available to us now as a group of entrepreneurs but are you really sold on the fact that there can’t be somebody in say the Philippines that would be able to do a decent job for appointment setting or something.

[35:17]  Because, if I’ve got a huge list of potential clients, I need to weed through those and categorize them out, the ones that are interested or the ones that have zero chance

[35:26] Rob: Got it, yes, I definitely think you can find someone to do that. Just to do the initial call and just train them to answer some very basic questions and do a pitch, yes, I do think you could find someone. I have not personally done it. I know some folks who have hired people to do that – assistants and such, I do think that’s probably a viable way, is to figure out what can you strip away. There’s the core sales gig and you kind of need to handle that right now, but what else can you strip away. And there’s actually a service, there’s a couple of services that have cold emailed me and maybe when we’re off the call I can look for that because I have them in a marketing doc somewhere, but they’ve cold emailed me and they said they are like an appointment setting service.

[36:04] Matt: I try to be as realistic as possible with my situation and realism is that I’m busy all day long, so I’m trying to find resources and ways that I can work around that. So I’m actually already using a person in the Philippines to do some web research and find companies. That list that I’m calling off of, she’s doing a great job with that and that’s very inexpensive to do. But the next level I think is that verbal communication with a potential customer, so yeah, I would appreciate any type of service or something that you might recommend or if anybody could recommend a service that I could use, or they have used that would be fantastic.

[36:42] Rob: Sure, feel free to post that in the comments for this episode. It’s episode 189.

[36:48] Matt: One thing that I hear a lot in podcasts is sort of the theoretical things about how to set up marketing programs and the different stages of marketing and the ARRR model and the get keep and whatever, I can’t even remember anymore, but I don’t hear a lot about the tools that are used- that companies use successfully to make that happen. I’ve heard marketing automation is something that I’ve just in the past few days started to do some research on and there’s things like InfusionSoft and there some other ones that can be fairly expensive, so I want to try to avoid that expense as much as possible. What recommendations do you have for integrated CRM and marketing automation tool to get the word out but also to help manage the existing customers and the potential customers?

[37:39] Rob: I’ve got to be honest; I think you’re getting ahead of yourself by thinking about marketing automation. Split testing, all of the marketing stuff that comes with scaling, you are months and months away from that.

[37:51] Matt: I don’t disagree, I like to be- take a systems approach towards a project as much as I can so I like to set up early for that, so I don’t have to come back later and set up. And now since the project is in development I figured that that’s one area that I can try to set up or at least have an idea of which direction I might want to go. But I don’t disagree with you on that.

[38:13] Mike: I think the issue though is that by spending the time on that now, you’ve already said flat out that you’re strapped for time. If you’re going to spend time going after that aspect of it, what are you not getting done that you could have spent that time on? Because six months, nine months down the road, once you get in a better position, your needs may very well change and chances are really good that they will change which means that all the time that you spend now is completely wasted.

[38:38] Rob: yeah, and I can throw out some simple recommendations that will help you in the present day because even if you only have ten people you’re talking to,  having a very simple CRM just to weave people through the funnel I think could be helpful. And there’s something called Pipe drive, pipedrive.com that I would take a look at. It’s probably stripped down just enough that it’ll work really well for your solution. Certainly something like Sales Force is going to be way overkill, its way expensive and it’s complicated. But you’re doing a sales job now for probably the next six months, rather than a marketing job. I think building an email list, you could sign up for MailChimp and throw a form there, you could sign up for Drip, and put a drip email capture form, probably worth doing, might take an hour or two. I’m building marketing automation into Drip right now; we’ve just launched some of it, so that could be a less expensive. Because InfusionSoft is about 200 bucks a month, Drip is like 50 bucks a month and we’re going to raise prices soon, but all of that really just feels too early. I don’t feel like you know yet if you’ve built something that people want. And the premature optimization and the losing of even a few hours a week is not something I would recommend at this point I think.

[39:48] Matt: Okay, so maybe focus more on continued validation and then just potential sales.

[39:54] Rob: Sales, yes. Because marketing and sales are obviously two different things and you’re talking about marketing automation, which is down the line. You need to just start that marketing- that funnel optimization and all that stuff once you’re starting to scale. And who knows when that’ll happen. You’ll know when it happens but you may never get there.  A lot of apps never get to that point where they can actually retain someone, retain enough customers to make it worthwhile. I think sales and investing into sales and investing into lead gen, you’re already on that track. You know where you need to go with this. Everything you said indicates you know that you have to do high touch sales and you know you’re going to have to spend a lot of time to do it, the more leads you have in your funnel, that would be great. So if you can figure out a way to easily do that I think the way that you found that works is the cold calling for now.

[40:38] Obviously in bound marketing is going to be something but is very time consuming to do that. And are your people going to be online? Are they doing any types researches? Is it worth doing SEO for some of these terms? You don’t know yet. It could be worth some research, but I don’t think it’s going to be a high volume of leads, but if you’ve done some keyword research at all and seen if there are any searches for your software, you would have to know what that term is. It’s kind of estimate software but it’s very specific for manufacturers. I think there’s perhaps some value in there but I would hate for you to go down the rabbit trail of writing a bunch of articles and setting up a blog and then not getting any traffic and cold calling would have yielded you several thousand dollars a month in revenue by that point.

[41:22] Mike: So Matt, I think that about wraps us up. Do you have any final questions for us?

[41:26] Matt: I have millions of questions but we don’t have that much time, so what you’ve offered has been fantastic information and getting your perspective is very helpful for me so thank you very much. That’s about it I can think of right now.

[41:40] Mike: Well thanks for being our guinea pig

[41:43] Rob: I appreciate you coming on the show Matt

[41:44] Matt: Glad to be here. I hope it’s useful to some people out there

[41:48] Mike: If you have a question you can call it into our voicemail number at 1-888-801-9690 or email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Out of Control by MoOt, used under creative comments. You can subscribe to us in iTunes, by searching for startups or by RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening and we’ll see you next time.

Show Notes

• Bose QuietComfort 20i Acoustic Noise Cancelling in-ear Headphones
• JeffBullas.com
• 6 Simple Tips to Grow a Large Email List
• LeadPages

Transcript

[00:00]  Mike Taber:   In this episode of Startups for the Rest of Us, Rob and I are going to be talking about Six Hacks for Building Your Mailing List. This is Startups for the Rest of Us, Episode 188.

[00:07] Music

[00:14] Welcome to Startups for the Rest of Us. The podcast that helps developers, designers and entrepreneurs be awesome at launching software products whether you’ve build your first product or you’re just thinking about it. I’m Mike.

[00:23] Rob Walling:  I’m Rob.

[00:23] Mike: We’re here to share experiences to help you avoid the same mistakes we’ve made. What’s the word of this week, Rob?

[00:28] Rob:  Yeah, I got some good comments on Episode 185 about moving from Windows to Mac. Robert Graham specifically laid out a bunch of really cool keyboard shortcuts. He says that he’s been exclusively on the Mac since 2000. He talks about something called AlfredApp.com which helps with their command space search. It helps improve it even more. Command space allows you to search anything on your box, but Alfred allows you to  configure out even more.

[00:51] Then, Jumpcut which is Jumpcut.SourceForge.net. It creates a history and a buffer for your clipboard which obviously would be pretty cool. Windowing is improved by Shift It, he says, and he could just link this all and the comments for 185. Just a lot of good tips for some other stuff that we didn’t cover about text editing and taking screen shots, and that kind of stuff. I want to send a thanks out to Robert Graham for that.

[01:13] Mike: Very cool. Thanks. I think we talked a little bit in the past about getting a good set of headphones for listening to  podcasts or working out and just trying to get in the zone but I came across Bose QuietComfort 20i Noise Cancelling In-Ear Headphones. I already have a pair of noise cancelling headphones that go over your ear, and I always wanted in-ear headphones that were noise cancelling but I can never find them. I guess, Bose came out with these in-ear headphones, and I was using them the other day when I was mowing the lawn. I couldn’t hear anything. I was just listening to the podcast. It was great. It was fantastic use of like an hour-and-a-half of my time.

[01:48] Rob:   Wow. In-ear headphones that blocked out the lawn mower.

[01:52] Mike:  Yes. It was awesome. I couldn’t believe it. I didn’t expect it to work as well as it did and I also have in-ear headphones that don’t have noise cancelling but I tried this out. They’re expensive.  They’re like $300 but they work really, really well. I couldn’t hear the lawn mower, I couldn’t hear the weed whacker. It was just everything in my ear was crystal clear.

[02:09] Rob:  Yeah, that’s impressive. That’s the kind of stuff, when I talk about listening to 50 or 60 podcasts, it’s because I am listening to them all the time when my brain is not occupied. It is when you’re mowing the lawn or when I am out doing yard work, all that kind of stuff. It really is a nice way to get some time back.

[02:26] If you do have room for the bulkier over-ear headphones, I use the Sennheiser HD280s. I think they’re about 80 or 90 bucks on Amazon. What were the ones that you got that are in your ear?

[02:37] Mike:  It’s the QuietComfort 20i.

[02:39] Rob:  I got it. A few hundred bucks, so it’s an investment. We have several new reviews in iTunes. They’re from Cozy200. He says, “Just another fan. Fantastic show. As a new bootstrap startup founder, I rely heavily on my developers and shows like yours for guidance through the process. We’re extremely bootstrapped. Well, more like strapped than anything else, but a quick shout out to you both. Thanks for helping the entire community improve.”

[03:02]  A Son Watcher from the UK says, “This is an undiscovered gem. I only recently discovered the show after reading a post on Hacker News about useful podcasts for startups, and it’s awesome. I listened to it consistently for a couple of weeks and it’s reinvigorating my motivation to push some niche-SaaS apps to market.”

[03:18]  Tyler Bandfield from the US, he says, “This is the only podcast I am subscribed to. I think the title says it all. Well, I enjoy listening to a variety of podcasts. This is the only one I view as a can’t-miss. Not only is there always something actionable and relevant in each episode but Mike and Rob’s initial discussion of what they’ve both been working on with their own projects is always a nice dose of motivation. If you’re running your own business, working on a side project, or just want to start creating something, this is the podcast for you.”

[03:42]  As always, thanks a ton for the reviews. If you’ve been listening and getting value out of the show, we’d really appreciate it if you would log in to iTunes, and give us a five star. You don’t even have to write the full review. You can just do a five-star rating without having to spend any other time and we’d very much appreciate it. What are we talking about today?

[03:58] Mike: Back in Episode 72, we had talked about eight tactics for building a pre-launched mailing list. We talked a little bit about leveraging your existing audience and doing some SEO, and trying to rely on some viral content like infographics and things like that. Then, where to try and pick up people to add to your mailing list, whether it’s Hacker News or Facebook Ads or a variety of other places where you could do advertising, Twitter, Facebook.

[04:42] What I think we’re going to focus on today is specific hacks that you can use to grow an e-mail list, and this is based off of a blog post by Jeff Bullas who provided six simple tips to grow a large e-mail list. We’ll link back to this in the show notes but we’ve got our own take on some of this and modify at least one of them substantially.

[04:44] The first one is to turn your price and page into a lead generation page. This is something I am actually in the process of doing for AuditShark for the pricing page. Something I’ve seen somebody do is request contact info before showing pricing. This is an interesting idea because it gets you people’s contact info and allows you to follow up directly with them before they even really start looking at pricing or signing up.

[05:07] If you have any long sales process or it’s a complicated sales process, I think that this is something that can work really well. There’s definitely cases where this is not going to work. If you look on anyone’s websites now, for example, I don’t think that it would work very well for Drip because the sales process and the value proposition for that I’d say is probably fairly straightforward for the most part but for something like AuditShark, compliance is a complicated product. It’s a complicated proposition to make to somebody. I think that getting that contact information from people so that you can follow up with additional marketing is a much better way to go in cases like that but as I said, there’s definitely cases where doing something like this is not going to work.

[05:48] Rob:  Yeah. For lower price, obviously for B-to-C, it’s probably not going to work very well and for lower priced SaaS, the odds are you’re going to be able to get someone to sign up for a trial round and didn’t happen to get on the list but I agree with enterprise, more complex stuff, a new product that needs to be explained, any of that stuff.

[06:05] That’s why you see the Hub Spots and the KissMetrics, and a lot of the more expensive apps out there, they really have a lead gen form right there. They really want you to call and talk to someone, or to do a demo, or to sign up for a webinar. That’s the call to action rather than actually getting you to sign up directly on your first visit because they know that it’s such a big decision that you really need more information before you can do that. That is where doing lead gen on your pricing pages instead of trying to push people towards your trial is obviously a win.

[06:35] Mike:  The next hack is to use pop-overs on your website and more specifically use something like an exit popup. The way an exit popup works is while they’re on the page, and viewing it, and working through the content, you’re not going to show any sort of popup but as soon as they try to move the mouse cursor off of the website, maybe up to the browser bar so that  they can click on the back button, it will show  a popup to the person and ask them to either subscribe or provide their name and e-mail address, or take some sort of other call to action.

[07:02] There’s a lot of variations of this type of thing that you can find at WordPress.org like WordPress popup or Popup Domination but at the end of the day, the idea is pretty similar. You’re really trying to drive them to a call to action to get them on your mailing list or get some contact information from them so you can follow up with them later.

[07:18] At the end of the day, it actually works. People use them. Internet marketers use these types of things because they work. Other things that are a little bit less intrusive I’d say is something like Hello Bar. The real key to using a popup successfully is to not be a jerk about it. You really want to measure what works and what doesn’t, and anything that’s working to drive people on to your mailing list, you want to use those things and anything that isn’t that’s driving people away, you want to avoid those things.

[07:43] Rob: Yeah. I’d throw out another nonintrusive popup is the Drip widget. It’s in the lower right of your screen. It’s like an Olark chat window and it just pops up unobtrusively after x seconds. You can configure it to do that. The reason with that is because I agree, I am not a big fan of the really big, take-over-the-screen popups.

[08:03] With that said, you have to ask yourself what you feel comfortable with. I think each person’s decision as to how much they want to optimize something, how much they want and they’re comfortable optimizing it. I will probably never have and I never have had basically a light box that comes over my blog website to try to build my mailing list. I know that it would build it faster but I also know that over-optimizing it creates a negative experience for some of my users, and I am not willing to do that.

[08:31] You have to ask yourself that. Just because something works, do you want to go to that point? If you think about selling something. Let’s say, you’re trying to sell something in a presentation or sell something on TV, the maximum amount of optimization is to do an infomercial. All the stuff that they do in those infomercials, where they, say, “Only three low payments of this but wait, there is more,” and all that stuff, it really works; but at a certain point you have to ask. Do I want to go to that extreme and to eke out every last percentage point? I think it comes down to a personal or a brand decision at that point.

[09:02] Mike: The third hack is to follow a strong writing formula for your blog posts and for the content that’s on your blog. You can definitely do these types of things in landing pages as well but for your blog post, you want to have a clean intro to a specific problem. You want to include some story because statistically, people remember stories significantly more than they remember actual numbers and statistics. They’ll remember that story and they’ll relate it to statistics, and they will go look it up; but they won’t remember the statistics themselves. They will remember the story. They just won’t remember the exact numbers that went with it.

[09:34] The other thing is to make sure that there is value for your target audience. When you’re looking at the value that you’re going to provide to that target audience, you want to know who that target audience is. Are they a beginner in your field? Are they intermediate? Are they advanced? Who is it that you’re actually talking to because not every blog post is going to be able to talk to everybody who is at each stage of using the type of product that you’re offering. You want to make sure that you’re talking to a very specific audience and know what it is that you’re offering to them.

[10:01] Then, the next step is to make sure that you’re crafting a great headline for that blog post, and then publish it with a call to action of some kind. You want people to take an action after they have read the blog post and whether that is a popup of some kind or just a little footer at the end of it where you say, “Hey, if you want to hear more information, subscribe to this newsletter.”

[10:19] Rob: Something interesting. I started writing an experiment on SoftwareByRob.com which is my blog. It was that in terms of getting folks on to the e-mail newsletter, the right-hand side, upper right, which is my sidebar, that widget got way, way more and I don’t remember if it was three times or four times but it was substantially more signups than did the signup thing at the end of the blog posts.

[10:44] I thought that the signup thing at the end of the blog post would be it because that’s where a lot of the individual traffic comes to. If someone reads the post and at the end, it says, “Did you like that? Do you want to hear more? Like this.” It just seemed like the natural place to be asking someone for their e-mail address. It was good enough to keep around but nothing compared to that upper-right position.

[11:04] Obviously, your milage may vary depending on your blog but it was nice to be able to test that and know for sure. Then, what I noticed is that I put it at the bottom of my about page and a couple of my pages that are non-post, and those got almost zero signups. Pretty confidently, I could take those off and not feel like it was hurting my subscriber growth, but at the same time, I felt like it was cleaning up my site. It was simplifying and actually improving the user experience without hurting the newsletter signup process.

[11:31] Definitely in terms of that call to action and all the stuff, you do want to test as much as you can. You don’t want to go overboard with it if you don’t have a ton of traffic but I get enough traffic that it was worth figuring out the difference between those two.

[11:44] Mike: The fourth hack for building up your mailing list is to use landing pages that provide incentives to subscribe. Whether you’re offering an e-book, or videos, or screencasts that you can offer interviews, cheat sheets, case studies, any of those things are good things to offer people in exchange for their e-mail address. Most people would be incentivized enough to provide an e-mail address because what’s an e-mail address worth? They can always come back and unsubscribe.

[12:08] Obviously, you have to make sure that you’re going to let them know upfront you’re not going to spam them and they can unsubscribe at any time because nobody wants to give away their e-mail address to somebody who is just going to hand it out to everybody or sell it off. There are definitely things that you can use like those e-books, and screencasts, and things like that to help incentive people and give them something in return for that e-mail address.

[12:28] Rob:  The nice part is that you can reuse content especially if you do have a blog, a lot of people don’t go back and read early posts but they can still be very valuable. At one point, I had a virtual assistant go through and I told her some posts that I wanted her to gather together, she put them in a big word doc. Then, I paid a designer to format it. I, now, have a 170-page PDF e-book and that’s like a 12-point font. It really is almost a full-sized book. It’s all writing that I had done over the past seven or eight years. I had it packaged up really nice, and that is one of the incentives that I hand out.

[13:02] Just because you have older content that you already published somewhere doesn’t mean you can’t go back and use that as an incentive if it is in fact something that someone is going to want to read. I’ve also seen something  working lately or I’ve heard really from Clay Collins of LeadPages but he said that having something that is very specific to the actual post, assuming that that post is getting enough traffic to make it worthwhile but having something specific to the post really escalates how many people will opt in.

[13:30] If you write a blog post about a specific kind of landing page, then LeadPages will give away that landing page template as HTML at the bottom, or if you’re talking about how to write, craft specific types of e-mails, then giving away an e-mail template at the bottom, or giving away an Excel spreadsheet that has something to do with it. That will accelerate your opt-in rate. It makes sense because it’s in context. It’s not a generic giveaway. It’s actually something relating to the post.

[13:54] I think you’d want to probably publish the post and either know that it’s going to get a lot of traffic before you create that giveaway or watch it as traffic builds overtime through SEO and other viral stuff, and then create the lead magnet because to be honest, you probably can’t do this for every blog post. You need to pick and choose, and you want to put your effort where you think there’s actually going to be enough traffic.

[14:16] Mike:  The fifth hack is to run A/B tests on critical elements once your webpage or your blog reaches a critical mass. If you are drawing enough traffic in to be able to run this test, and you definitely want to start testing your headlines. Google Analytics will help you identify which pages are getting the most traffic. Obviously, if you have any other type of tracking software on your website where it’s able to track webpages that are getting the most traffic, you can use those as well.

[14:42] There are also WordPress plugins where you can use them to automatically do A/B testing on some of the different headlines. For example, I think AppSumo has one but there’s other ones as well. Those are the types of things that you want to start testing. If you’re not using WordPress, then it’s not terribly difficult to code your own but you definitely want to figure out which ones are resonating with people and which ones aren’t, and use those headlines.

[15:04] Another thing that I’ve done in the past which has been helpful is to use something like Bitly, for example, where you are going back to a particular webpage and creating those URLs. Then, on Twitter, if you’re posting those URLs using very specific headlines, people see the URLs but they don’t necessarily see where the link goes until after they click on it. You can test the same URL with different headlines in Twitter and see which ones are resonating with people.

[15:31] The sixth hack for building your mailing list is to essentially keep your subscribers happy because you don’t want to have people on your mailing list if in two weeks, three weeks, or four weeks down the road they leave because you’re abusing them as subscribers.

[15:45] You want to provide relevant content to them. You want to think twice before you start hitting that publish button, and really think about what is it that you’re sending to them and are you providing value to them. The last thing to keep in mind is that you have to understand that not everyone is going to read everything that you write.

[16:0o] And as Rob mentioned earlier, a lot of his content from his blog repurposed into an e-book for his website to give away as an incentive but you can repurpose a lot of that content into your mailing list because not everyone is going to go back and read everything that you’ve written. Repurposing content has its place but it doesn’t mean that every blog post should go into your newsletter.

[16:20] You shouldn’t go all the way back to the beginning of time and start sending those out to everybody because there are going to be people who have read those and if they start seeing things that they’ve already read or they see too much of that slanted in that direction, they’re probably going to unsubscribe and you’ll lose them as subscribers. You do want to keep your churn rate down.

[16:36] Rob:  I think another part of keeping your subscribers happy is sending stuff that is super, super relevant and obviously really valuable to them. There’s this movement and this change that I see coming in e-mail now that I am knee-deep in the marketing space with Drip is that people are … In terms of folks who have successful newsletters, the thing that they are doing differently is they are using this behavioral e-mail that sends subscribers different e-mails based on behaviors they take.

[17:04] If someone makes a purchase from you and they buy a specific book, then you now know that they have an interest in that and that they’re a customer, and you can start them on a different sequence based on them clicking that button. If they click on a lot of links that involve SEO, you tag them with the SEO tag and then you start sending them more SEO links and less about conversion rate optimization or whatever.

[17:24] This behavioral e-mail stuff and I am talking about this because at first, I wasn’t a believer. This is even a year or a year-and-a-half ago where I didn’t quite get it yet but I am really understanding the power or the ability to go from one to many, which is what e-mail marketing is today, to going down the one to a few. To where you’re really talking and customizing your newsletter, your list, just your whole movement through your funnel and your relationship building, and you’re able to customize that for multiple people, and that is why we launched this rules engine in Drip, the automation rules, the behavioral e-mail aspect.

[17:58] I am still trying to figure out exactly how to talk about it. It’s amazing, the stuff that you can do and the stuff that you can build with this, and I am not just talking about Drip. There is InfusionSoft, and there is Office Auto Pilot, and there is other ways to do it but just that entire concept. I think that’s where we’re all going to be moving and I just think that’s the future of personalizing this e-mail stuff so that I think that heavly ties in to this keeping your subscribers happy point.

[18:21] I also wanted to add, I think maybe a bonus seventh tip, and it’s just based on my experience building my mailing list. It’s really all embodied. I’ve done some split testing and then it was just some best practices but it’s all embodied in the subscribe form at SoftwarebyRob.com in the upper right. If you look at it, I want to call out a few elements.

[18:39] First thing is I don’t call it a newsletter. I did it at one point but I quickly realized like that feels generic and it feels like something that a corporation is handing out. It’s their quarterly newsletter. I call it Growth Secrets for Self-Funded Startups, not a newsletter. It’s not  an e-mail list. It doesn’t say join the list. It doesn’t say anything like that. It just talks about growth secrets for self-funded startups. The call to action which is the button, it doesn’t say, subscribe, it doesn’t say sign me up. It says get the Book. That’s what it says because that’s what people want.

[19:07] Then, I have a couple of bullet points. The bullet points I have are what you get for signing up, and the bullet points are: a 170-page e-book collecting my best startup articles from the past five years. Then the next one is, previously unpublished startup-related screencasts. You’re getting stuff that no one else is getting. The third is, exclusive techniques I don’t publish on this blog. Lastly, I have a quote. It’s a testimonial.

[19:28] It’s all in a pretty compact space. It sounds like a lot of information. It’s really tiny and like I said, I have tested some parts of this and seen this iteration of it performs the best. I think having a quote is a big deal and I think having multiple things really describing what people get for signing up and putting a lot of value there, like a 170-page e-book filled with startup articles is actually pretty interesting. As I am reading this, I’d probably change it to, say, startup tricks or startup growth secrets instead of just articles.

[19:57] I want to throw that out as a framework of a descent way to really describe that if you’re going to get someone to buy in the type of information that you’re going to want to give them in order to get them to get over that friction of giving in their e-mail address.

[20:10] Mike:  I think those are all really great tips. I do something similar on my blog. I don’t have anything there for my mailing list where I say flat out, you’re going to be getting these things but I basically tell people that they are going to get actual advice, tips, and stories.

[20:24] Rob:  I think that about wraps us up for the day. If you have a question for us, call our voicemail number at 888-801-9690 or e-mail us at Questions@StartupsForTheRestOfUs.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups or via RSS at StartupsForTheRestOfUs.com where you’ll also find a full transcript of each episode. Thanks for listening. We’ll see you next time.

Show Notes

• The slides
• 1 hour youtube video of Andreas presenting these slides
• AARRR discussed in episode 112

Transcript

Rob Walling:  [0:00] In this episode of Startups For the Rest of Us, Mike and I discuss a six‑hour Lean Analytics workshop put on by Andreas Klinger, called “Startup Metrics, a Love Story.” This is Startups For the Rest of Us, Episode 187.

[0:14] [music]

Rob:  [0:23] Welcome to Startups For the Rest of Us, the podcast that offers developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product, or you’re just thinking about it.

[0:31] I’m Rob.

Mike Taber:  [0:31] And I’m Mike.

Rob:  [0:32] We’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Mike?

Mike:  [0:36] A few weeks ago, we put out a call for people to email us in their stories and let us know if they’ve quit their jobs based on listening to this podcast. We got one in from Jerome Samuels.

[0:46] He says, “This is Jerome Samuels, founder at www.goalreports.com. I wanted to let you know that this week I quit my day job to focus fully on growing my two bootstrap startups. Thanks for all the great advice. I could have not have reached this point without your show.”

Rob:  [0:59] Awesome. Congratulations, Jerome.

[1:01] When this podcast goes live, I’m going to be in Scotland speaking at the “Small is Beautiful” Conference and they actually emailed Sherry a couple of weeks ago and she’ll be speaking as well. They saw her MicroConf video for her attendee talk from last year and they wanted her to talk about anxiety and pressure and all that stuff and entrepreneurship.

Mike:  [1:18] Very cool, so free trips to Scotland.

Rob:  [1:19] Exactly. Seek me out at the conference. I’m having a little Micropreneur Meetup, a little dinner on Thursday evening at a local place in Glasglow. Lastly, we received a lot of good comments on the podcast recently. In episode 184, we talked about hosting recommendations and Andrew Connell brought up some other options aside from just the VM side or aside from virtual machines.

[1:43] Because you and I talked about using Amazon Web services and using EC2 stuff, where you have your own virtual machine that you’re able to control and you talked about Azure as your virtual machines. Andrew Connell brought up what’s called PAAS, platform as a service. Which is things like the true Azure, where you’re just uploading your code into this bucket and it’s executed.

[2:03] Heroku is the same way and the Google app engine is the same way, where you don’t have a VM, everything is taken care of for you. You don’t need to do backups. You don’t need server patches and server maintenance and all that stuff. Andrew’s a proponent of that and he mentions several options. There’s obviously Azure, Google app engine, and Heroku, like I said.

[2:23] I’m still not a fan of these platforms as a service providers or at least the way it’s being executed. Because what I noticed is that you don’t have a ton of control and if you need anything that’s nonstandard, you aren’t able to install it.

[2:35] I know we had looked at using Heroku for Drip, but you don’t have enough control to install some of the more exotic gems that we wanted it. For me, that it’s just a deal breaker to not have that control.

[2:45] I think these things may expand to the point to where they are able to better serve the needs of maybe more complex apps. At this point, it’s not something that I’ve used, so I have a tough time recommending it to other people.

Mike:  [2:58] Yeah. AuditShark actually uses the Azure Platform as a service. I’ve used it. It’s got its pluses and minuses. Somebody who has like a lot of systems administration knowledge, I’m perfectly comfortable just firing up a VM and using that.

[3:13] I also build it on that platform knowing that I’m probably not going to be the one who’s going to be managing things long‑term. I don’t necessarily want somebody to have to hire somebody to manage virtual machines if I don’t have to.

[3:24] The plus side though is that if you go that route, you can always scale back and go over to a virtual machine at anytime. If you are on a virtual machine and you want to go to platform as a service, you have to re‑engineer some stuff.

[3:37] It depends on where you’ve started, and where you ultimately want to end up as to what is going to be the right choice for you, and what’s going to give you the most flexibility.

[3:45] All of that said, I think that there’s definitely large learning curves in terms of deployment and managing deployments, and pushing out new code bases, and being able to roll things back.

[3:56] It’s not nearly as simple when you get into platform as a service, because there’s all these different individual components. You have to manage each of them separately.

[4:05] If you want to roll back, it’s not as easy as just taking a database snapshot. You have to make sure those things are done in the right order, and it’s not just about doing them in the right order. It’s about making sure that you do them in a very tight time window.

[4:21] The problem is that none of them are necessarily fast when you want to do certain things. Like if you’re in SQL Server, you can go in, you can go onto the Command line, and you can actively kill a lot of the incoming database connections.

[4:33] I don’t know if you have that option with the Azure version of databases. I think it’s called “SQL Azure.” It’s a little bit harder to disconnect people in order to do a backup.

[4:43] Now, you can still have it do a backup, but it just feels like you have more control when you have direct SQL Server installed on the machine. That’s the way I feel when I’m using it.

[4:52] I feel like I have more control over everything and all the individual pieces when I’ve got a virtual machine. Plus, with a virtual machine, a lot of times you can just install everything all in one box. You take a snapshot of that box, and you’re done.

[5:05] When you’re using all these individual services, it’s not so clear cut. You can’t just take a snapshot of that one machine. Which is a benefit for redundancy purposes once you start scaling up really, really high, but it almost feels like going with a virtual machine.

[5:16] It might be a better fit for entrepreneurs when they’re dealing with much lower numbers of customers, because it’s going to take you awhile to get to that point.

[5:23] I’ve heard a lot of people say, “Oh, well, it takes six months, a year, or two years to get to the point where a SaaS application is bringing in enough revenue for it to fully support you and possibly one or two other developers. Do you really need all that stuff up front? And the answers is probably not.

Rob:  [5:38] I think lock‑in was my other concern. If you built something specifically for Google App Engine or for Azure, and you wanted to put it somewhere else on a VM, my understanding is that you, after, then go make code changes to it, that it’s not actually as simple as just moving it over.

Mike:  [5:51] Not necessarily, it depends on exactly what you’re doing and how you’re doing it. For the code that’s executing on Azure for example, if you’re writing an MBC or Web Forms applications, you’re going to essentially extract those pieces of it and just install it onto a VM, and you don’t have to worry about it. Basically, you’re just ripping a code out and you’re ripping configurations out.

Rob:  [6:11] I got it.

Mike:  [6:12] Versus, if you’re going from a VM over onto the Azure platform as your service, then you have to add these configurations in.

[6:17] For the back and storage, for example, you’d have the same issue. If you’re using blob storage or Azure tables, which are different than sequel tables. It’s basically no sequel system. You’re going to have lock‑in if you do that versus, if you’re going to go back to…Amazon’s got their key value pair storage, which is basically the same thing.

[6:38] There’s MongoDB, I think. There’s Redis. You choose any of those technologies, you’ve got vendor lock‑in, whether you like it or not. It’s all the same type of thing, it’s just a matter of which vendor you’re choosing.

Rob:  [6:47] Right. And Andrew Connell also points out some benefits, though. He says you only pay for what you use, like a VM. You can have a VM with only 15 percent utilization, but you’re paying for the whole thing, whereas the platform as service stuff is really, truly a metered thing. Then there are some…Both AWS and Azure have the start‑up plans and allow you to do it free for quite a while.

Mike:  [7:09] I think that that’s the big sales pitch for those, but at the end of the day, it’s probably not significant enough to actually matter in most cases, I don’t think, at least not at the small scales that we’re talking about.

Rob:  [7:19] It depends on how big your VM is. If you go with someone like DigitalOcean or Linode.com, it can be really inexpensive. Cost may not be that big of a deal. I don’t think that scaling would be easier, that’s the last thing Andrew points out. Is that if you’re in Azure, scaling up should feasibly just be rotating a dial, whereas…I’d been surprised on EC2, as we’ve had to scale up. I mean, you basically need to instantiate a new VM, re‑install everything.

[7:43] We’ve always had a deploy script that does that, but it’s still…There is definitely time to move up. If we’re moving the database, there’s some downtime involved as we move the data over. If we’re moving code, we can round‑robin it. It is more cumbersome than I’d thought. It’s more like having physical boxes, than being on platform, as the service would be.

Mike:  [8:03] If you go with your Azure, Rackspace, or anything like that, you can…I believe you can just redeploy those images and just give them more resources. I mean, I can sell them on the platform as a service on the Azure site, so I don’t really notice, but I know that with Rackspace, if I need a bigger machine, I just bring the thing down and add more resources and bring it back up again. It literally takes seconds to do.

Rob:  [8:24] Right, yeah. EC2 has fixed instances. You can’t just add RAM to something. You have to move up to the next highest one, from what I understand. If you try to take your image and just change it to the next size one, it doesn’t work.

Mike:  [8:39] They actually have it separated, probably on different hardware for the instance types.

Rob:  [8:43] I got it.

Mike:  [8:44] With Rackspace, I think they have this cloud infrastructure in the back‑end, and they bring it up on whatever hardware is available. It’s meant for that purpose. If I want to add more RAM to a machine or decrease the amount of RAM and hard‑drive space, I can just do it. Unlike on the Windows site, you can’t decrease it [inaudible 09:00] . Once you go up, you’re done, but with the Linux images, you can go up or down.

Rob:  [9:05] Thanks, Andrew Connell, as always, for the insightful comment.

[9:09] [music]

Rob:  [9:12] Today, we’re talking about a six‑hour Lean Analytics workshop put on by Andreas Klinger. This slide deck caught my eye. It’s on slideshare.net. We’ll link out to it in the show notes. It’s called, “Startup Metrics, a Love Story.” It is so in‑depth. It’s one of the best examinations of early start‑up metrics. Not just SaaS metrics, but he talks about some BDC stuff, marketplace, metrics.

[9:35] I really just wanted to take a few points out of it. Obviously, since it’s six hours, it’s a 170‑something slides. There’s no chance we’ll be able to cover even 15 percent of it. We’re going to start with an opening thought. As I went through this, I was debating whether his slides only applied to deep innovation or whether they work with some tried‑and‑true just launching a new app.

[9:56] What I mean by that is, a lot of times when you read the “Lean Startup” book or you hear Steve Blank talking about stuff, his stuff doesn’t necessarily apply to a smaller niche app.

[10:05] Let’s say you just have a SaaS app that wants to help, electricians manage their projects, you’re not going out and trying to build the next Uber, or you’re trying to build the next Twitter, or the next Facebook, like some new idea that doesn’t exist. You’re really just applying an existing app idea to a new market, to a new niche.

[10:23] Something I don’t like about a lot of the start‑up talk, is it leaves out all the bootstrappers. What I liked about “Startup Metrics, A Love Story,” is that the more I got into it, the more I think it applies to stuff that we’re talking about. It applies to smaller SaaS apps. It applies to niche SaaS apps. He also does a good job of applying it to communities and marketplaces, like I said.

[10:42] I think it applies more broadly than you might think. Let’s dive into the first point. Andreas talks about, he says, “missing the mark.” He says, “The biggest risk of a start‑up is not the risk of time or money that you’re investing, it’s building almost the right thing.” And he says, “The pain is in seeing a successful competitor who does what you do, but has one little detail that you never focused on.”

[11:07] This is a fascinating point. To see how many people…You look at how MailChimp approached the market versus AWeber. That AWeber have been around for years, so is Constant Contact. And when MailChimp came on the scene, I remember thinking, “What, another one? Really, how are they going to do any of that”? And now they are, as far as I know, they are the biggest.

[11:26] They did a couple of things different that AWeber and Constant Contact had done, and that’s made them the leader. I think Buffer did the same thing. There were a number of competitors in the space that Buffer is in. When they came on the scene, I felt the same thing. “Really, these guys are going to do this? Aren’t there already this places that can buffer it? I already used Hootsuite that can do it.” And yet, they rocketed to the top.

[11:45] They’re like a low seven‑figure business and they’re doing great. The other one I was thinking about is Square. Square really made it a lot easier. They tweaked one or two little things, and they have just kicked the crap out of all the merchant accounts, even PayPal Web Payments Pro, which was the one I used to use, because it was easier. I really see what Andreas is saying. I like what he’s saying here about building almost the right thing, might be the most painful thing of starting a start‑up.

Mike:  [12:08] I think that’s because you look at the things that somebody else’s done. You know how much time and effort you invested into it, and you just miss one detail. That’s just the most frustrating and aggravating thing. They’re successful and you’re not.

[12:20] I think that there’s probably a lot of people who are listening to this podcast who have built something, who have gone through that pain themselves. It’s Steve Jobs who said that’s easy to connect the dots looking backwards, but you can’t do that looking forward.

Rob:  [12:32] Next thing Andreas talks about is product/market fit. I like this concept. This concept was coined by Marc Andreessen, who obviously was one of the co‑founders of Netscape. He’s a brilliant start‑up strategist. He’s in the realm of a Paul Graham. His quote…He said, “Product/market fit is being in a good market with a product that can satisfy that market.”

[12:55] As soon as he coined that, it was like a revelation in the start‑up space. Of all of us building stuff, whether it’s that revolutionary thing, or whether it’s just building another email marketing app or another SEO app, until you’ve found a product/market fit, you can’t scale, because you hit this point, and there’s actually a bunch of graphs in the slideshow that I think it’s pretty interesting.

[13:19] He basically shows, just bumping along, that your churn is too high, and people either aren’t signing up, because your value proposition isn’t there, or they’re signing up and churning out. I’ve experienced all of these things in the past couple of years, by the way, with the apps I’m building. Then there’s this line, and if you hit product/market fit, that’s where you start scaling up, and that’s where that magical hockey stick starts.

[13:39] I think the thing to think about, instead of thinking of product/market fit as a buzzword, is to realize that if you’ve built something that people are really not churning out of, that people are sticking around, and you see your churn go down, you just start to see growth. You have to be blocking and tackling.

[13:54] You have to be doing the marketing, driving people into your funnel, and optimizing things, but this is really the only point at which you can start to scale up the business, is after you’ve built a product that this market really wants and you start realizing how to reach that market.

Mike:  [14:09] The most difficult piece of this is that you don’t know that you have product/market fit, and you don’t know what it’s going to take to get it, until you’ve already got it. People can think that they’re going to have product/market fit.

[14:20] They can talk to all the different potential customers and actual costumers that they have, but until they get to the point where they’re actually growing and their company is not churning out costumers, then you have to look backwards to figure out whether you’ve got product/market fit. You can’t look forward, and I think that’s probably the most difficult piece.

Rob:  [14:38] Andreas points out, he says, “Early stage,” ‑‑ and he puts that in quotes ‑‑ “Early stage has nothing to do with how long you’ve been in business.” He’s defining it as being before product/market fit, and that’s when you’re in an early stage. You’re still iterating. You’re still trying to find that point at which you build something that people really, really want. He quotes a stat from a study.

[14:57] He says,”83 percent of start‑ups are pre‑product market fit.” That totally resonated with me. It’s like four out of five, basically, are pre‑product market fit. I totally see that. It’s like when you talk to somebody who’s just struggling to drive traffic or keep people around, or they get sign‑ups and nobody sticks around, that’s what’s happening.

[15:15] It’s like they haven’t built something that people want to where you can get to that growth. Remember, Paul Graham talks about with Y Combinator they’re looking for 5 to 10 percent weekly growth. They’re talking 20 to 40 percent monthly growth, month over month.

[15:31] That’s what, once something has product/market fit and once you’ve actually built something that people really want, that’s the kind of growth that they would expect. That’s what’s a no‑brainer to raise‑funding. That kind of growth is really the hockey‑stick of what people are talking about. Andreas points out, like 83 percent of start‑ups are before that point, they just haven’t found it.

Mike:  [15:51] This isn’t to be confused with the problem/solution fit, either, because those things, they go hand in hand. You do need to get to both of them, but product/market fit is, obviously, a little bit different than problem/solution fit.

[16:03] With problem/solution fit you try to make sure that you’re solving the right problem that people are going to pay for, but product/market fit is really about identifying the people and the types of people who need that particular product. You do need both, but I don’t necessarily think that everyone truly understands the difference between them and is able to focus on both of them.

Rob:  [16:24] It is challenging. I think I would define problem/solution fit as being before product/market fit, I think, almost in all cases, because you have to find that problem. You have to build a solution that works to solve that problem, and that’s what problem/solution fit is. Once you’ve done that for one person or for five people, then you now have to say, “OK. How do I make this into a product”?

[16:48] Problem/solution fit doesn’t imply that you really have a full‑fleshed product built out. Maybe you’re still doing stuff really manually. Maybe you’re still doing consulting, you’ve just found a problem that you know how to solve, now you have to then build a product and hope, and not just hope but iterate it and ask. Then, as you said, you have to take that next step, find the market for it, learn how to market to that. That’s when the whole business model stuff comes in plan.

Mike:  [17:13] The issue that I see is that, just because you have solved the problem, doesn’t necessarily mean that people are willing to pay to have that problem solved. That’s where the product/market fit comes in.

Rob:  [17:22] Absolutely.

Mike:  [17:23] One does come before the other, but I think people focus too much on solving the problem and not necessarily enough on finding that market for it, where that will scale.

Rob:  [17:32] The next thing Andreas points out, and I like this, is he talks about when analytics are not applicable. He says most web analytic stuff we talk about, including split testing, funnels, referral optimization, et cetera, is meant for after product/market fit.

[17:50] He goes through several slides where he points out how Google Analytics is not relevant at this point. Analytics, they just don’t do much for you before product/market fit, because you can’t optimize and aggregate at this point because you don’t know what you’ve built yet.

[18:05] This ties back to a couple conversations we’ve had. Remember? We answered a question that Andrey Butov had raised on Bootstrapped.fm podcast. He was talking about this specific thing about how to do really early stage stuff before you have even 500 unique visitors on your website. How do you do split testing and funnels?

[18:23] We basically came on and said you don’t. All that stuff is for after you have a critical mass. I hadn’t thought about it as being pre‑ and post‑product market fit. I just thought about it having enough traffic to do it, but I think Andreas brings up a good point here. It’s not worth optimizing these funnels until you know that you built something people want.

[18:41] I realized that I had been doing this intuitively with Drip. I don’t want to drive a bunch of traffic and optimize a bunch of funnels. I really haven’t because we’re still trying to find that thing that really applies to this product market and really keeps a lot of people from churning out.

Mike:  [18:56] There’s a quote from Ash Maurya, who says that “We need to pivot before products’ market fit and optimize after,” which is totally true. If you’re not familiar with him, he’s the founder of Spark59, and he’s author of “Running Lean.” He has a blog called “Practice Trumps Theory.”

[19:12] It’s totally true. You have to make sure that you’re paying attention to analytics when they’re applicable and just completely ignoring them and throwing them out the window when they’re not because there are times when, no matter what the analytics say, they are wrong.

Rob:  [19:25] Your question is probably, what would be the alternative to analytics? In this early stage you can’t look at Google analytics, don’t want to look at split tests and funnel reports and stuff. This ties in. I think why I like this, because it resonates a lot with stuff we’ve talked about on the podcast.

[19:39] If you look back at the slow launch that I did with Drip, I talked to every customer as I went through it. I didn’t look at any of these reports. You don’t need many people coming through your funnels in the early days. You just want them to stick around.

[19:52] The advice is don’t look at averages. Talk to customers individually. That’s really what the slow launch embodies, right? It was like getting one person in at a time, building what they needed, not just getting them on board but figuring out, do we have the features that are going to make you really want to stick around and really continue paying for this product?

[20:11] If not, let’s build those before we continue. That is the alternative to analytics. It’s literally talking to every customer, doing high‑touch sales, handling them, and getting them into your app in the very, very early days. Then the next step, still pre‑product market fit, is just start looking at things using cohort views.

[20:32] It involves looking at groups of people in as small of a group as you can because anytime you’re talking about averages at this point and looking at things in aggregate it tends to be really inaccurate. You want to look at the most granular level possible so that you can actually see trends with…instead of seeing that your overall churn average is 25 percent. It’s not helpful.

[20:53] What you want to do is you want to say, “What’s the overall churn for people in their first week, in their first month, in their second month, after their third month”? These things all will give you a completely different picture, especially at this point before you have enough critical mass to really have some smooth averages.

Mike:  [21:09] Looking at those types of things, using the cohorts to view the trends, is really after you’ve got enough data and you’re in a position to start looking at the analytics themselves. As you said, the good news is you don’t need that many people in the early days to figure it out.

[21:21] You want people to stick around, but you also want to do that customer development and talk to each person individually. That’s really what you’re talking about, saying, “What is the alternative to analytics”? It’s customer development. If you don’t do that customer development, you’re not going to get the information you need to be able to mentally aggregate people.

[21:38] Our brains are wired to match patterns and recognize patterns. Sure, we can program that stuff, but it’s a lot more difficult to take those conversations and translate them into some data that we can look at.

[21:51] You have to rely on your brain a little bit to say, “Oh, this person said this thing. This other person said something else, but it was sort of similar. Oh, they’re probably talking about something that is very closely related. Let me dig into that a little bit more, and let me mentally group those people together.”

[22:06] Maybe you use those people as a cohort because they’re in the same industry or because they are trying to solve the same types of problems or have a similar size business, something along those lines.

Rob:  [22:17] Early on with Drip right after the slow launch as soon as I started getting enough people using it that I could get some members, we built a dashboard where I could see the churn and see the lifetime value. Right away I knew that it was completely almost nonsensical. It wasn’t helpful at all.

[22:33] It didn’t help me guide the business because the numbers moved so quickly because of our low number of actual trial users. When you have 50/60 trials in the queue and just not that many paying customers, it’s not helpful to look at stuff in aggregate. The basics that I typically would look at is a customer’s lifetime. You just take one, and you divide it by your churn rate.

[22:56] If you’re losing six percent of your people per month, you divide 1 by 0.06, and you get just under 17 months. That would say on average people are sticking around for 17 months. Then you can look at your average revenue per user, and you multiply those two things. You can get your customer lifetime value, but that stuff isn’t helpful at this stage.

[23:14] The real question is, so what should you focus on in this pre‑product market fit stage? We actually discussed startup metrics for Pirates in Episode 112. The startup metrics for Pirates are acquisition, activation, retention, referral, and revenue. It’s AARRR, and this is coined by Dave McClure.

[23:35] This is in line with any type of funnel stuff that we would have talked about. The answer to the question, what should you focus on? If you look at this AARRR, you’re supposed to focus on retention. Retention is a function of user happiness.

[23:48] It describes not only someone visiting again but actually doing a core activity again, that they’re sticking around and using the app. If you’re thinking, “What should I focus on”? You have to build something that people are using and continuing to use. Again, that comes back to this idea of the slow launch.

[24:07] If I got someone in there and they’re using and they decide not to, then I need to figure out, A, can I build stuff that will help them use the app over and over that will make it a critical part of their workflow? Or do they happen to be in a demographic or group that I’m just not going to cater to for?

[24:25] That’s where you’re trying to figure out product/market fit because you may not be building a product for the blogging market as an example, which I wasn’t with Drip. When I did have a blogger come in and I had a couple, and I wasn’t able to retain them, I realized that, oh, it’s that I’m not going after that market.

[24:43] Whereas if I had an info marketer or someone with a SaaS app come in, use Drip, and then cancel, “Well, I have a real problem,” that’s what I was focusing on ‑‑ how to retain people that are in your target market.

Mike:  [24:53] I think the one thing you left out there is that you really need to focus only on one core metric at a time because if you’re trying to change two different things at the same time, any actions that you make to instantiate that change, it’s going to be difficult to draw a correlation between whatever the action was and those end results.

[25:12] You may attribute some of those things incorrectly, and you don’t want to do that. You want to make absolutely sure that any changes that you’re making to the product or the marketing are explicitly coming out with one concrete result.

[25:24] If you’re not able to do that, then it’s going to make it a little bit more difficult for you to make decisions moving forward because you can change two different things that had one result over here, but maybe it was a combination of those two things that you changed that created that result. You doubled‑down on something, and it doesn’t work.

[25:41] You just wasted a ton of money because it was those two things in combination with each other, or you chose the wrong thing to double‑down on. You want to make sure that you’re only focusing on one thing, and that’s one reason why.

[25:50] Another reason is that it can be difficult to try and focus on more than one metric at a time. If you’re not focusing on just one of those metrics, then you can just easily do the wrong things.

Rob:  [26:01] As a startup you’re obviously limited by time and money, especially for bootstrapping. You do it on the side like a lot of our listeners are. Trying to focus on even two metrics, you just don’t have the time to attack both of those things at once.

[26:17] When I’ve launched apps or when I’ve started to grow apps and I see that I’m not retaining people and that I’m bleeding out of the bottom of the funnel, I will stop all marketing because I don’t have the time at that point and the multitasking ability to be able to handle all the marketing that’s coming in, optimizing those funnels, and trying to retain people.

[26:36] That’s where I would go into this operation retention thing where I would try to find every reason that people were cancelling and just spend 30 to 60 days just taking care of that.

[26:45] Then I would circle back and focus again on the marketing and the funnels because I do believe that it’s virtually impossible to do both well. That’s really what Andreas is saying here. A startup should focus on only one core metric at a time.

Mike:  [27:01] That wraps us up I think. If you want to find out more about this particular presentation, come to the website. You’ll find a link in the show notes that links over directly to the presentation over on SlideShare. If you have a question for us, you can call it into our voice mail number at 1‑888‑801‑9690 or email us at questions@startupsfortherestofus.com.

[27:19] Our theme music is an excerpt from “We’re Outta Control” by MoOt used under Creative Commons. You can subscribe to us in iTunes by searching for “startups” or by RSS at Startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening, and we’ll see you next time.

[27:32]

Transcription by CastingWords

Show Notes

• SuperNBack – An implementation of the NBack brain training algorithm
• Sama Vritti Pranayama – Equal Breathing
• Greek Yogurt substitution chart
• PB2 – Peanut butter substitute

Transcript

[00:00] Mike: In this episode of Startups for the Rest of Us, Rob and I are going to be talking about life hacks for entrepreneurs. This is Startups for the Rest of Us: Episode 186.

[00:06] Music

[00:14] Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.

[00:22] Rob: And I’m Rob.

[00:22] Mike: And we’re here to share experiences to help you avoid the same mistakes we have made. What’s the word this week, Rob?

[00:26] Rob: Drip email automation is done.

[00:29] Mike: Oh, congratulations.

[00:30] Rob: Fantastic. Yeah, thank you. We have some early access folks in using it. I have to check a box in the admin console to give folks access to it but just trying to get some more feature requests and figure out what use cases we can and can’t implement at this point.

[00:44] But I’m currently in the process of basically building out Drips entire trial email sequence that I send out which is pretty complex. There’s a lot of dynamic fields. We’re building that out inside the drip email automation engine. It’s pretty interesting just to see this. I’ve never seen this done.

[00:59] Because it’s not just about moving people here and there based on behaviour but we actually have dynamic pieces inside each email. And since we use a Liquid templating engine I can write little snippets of code inside the emails and based on if this custom field is set then put this message. Otherwise, tell them they need to get on board with this other stuff.

[01:17] So it’s been really fun and interesting to dog food it ourselves and we’re just diving into that right now. It is a big weight off my shoulders. Drip email automation is finally done after literally months of toil and work. Now it’s just time to get some folks in using it and get the marketing ramped up for it.

[01:32] Mike: That’s always scary when you’re like manipulating stuff in that production environment and it could potentially impact the guys who are currently using it. Even just inside those emails and things.

[01:41] Rob: Yup.

[01:42] Mike: It’s just a little disconcerting.

[01:43] Rob: Well, and I think that, specifically with making dynamic stuff inside the email, there’s a lot of room for people to make mistakes so we kind of have to help folks out a lot. It’ll be increased support burden, right? There is just more complexity in this. It’s probably why more email providers like MailChimp or whatever wouldn’t allow people to do it.

[01:57] I think there’s a need for it. I think the direction that we’re all headed with email is that we’re becoming – it’s not one to many anymore. It’s like one to a few or one to one at this point and you really have to be customized and customizable based on the things that they do in order to really get impact from it. So that’s the goal with all this.

[02:13] So as I’ve said before, we’re kind of entering this market of on the lower end of Infusionsoft or Office Autopilot. It’s kind of exciting times. We have to do so much stuff though. All the marketing is now – it’s not completely non-usable but it really is a market that we’re entering into anew, so I have a lot of copy to write, trial emails will be new, onboarding has to be all redone because now there are different goals. So we still have a bunch of work ahead of us but it feels good to get the feature out there and have folks using it.

[02:39] Mike: I think that’s one of the hesitations that some people have for launchings. It’s just that they know that if they have to change stuff then they don’t want to have to do a lot of that marketing stuff over again. Especially when it comes to pivots, it’s like I don’t want to pivot because I’ve got all this stuff that I’ve done. I won’t throw it away.

[02:53] Rob: I have to admit it’s daunting to think of redoing stuff we just did six months ago. But what’s nice is the stuff we did six months ago worked well enough to get a critical mass and to get enough revenue to make it worth our while. I mean, it’s not like we’re at $500 a month in revenue and now we’re trying to pivot again. The revenue is coming in justified those initial effort so now it’s just time to kind of step up the game.

[3:12] Mike: Cool.

[3:13] Rob: How about you? What’s going on?

[03:14] Mike: Just wanted to make a couple of announcements here. If you’re a listener who was inspired to quit your job and you’re working full time on your own stuff, let us know. We’ve got a success stories area of the podcast website and we’d be happy to give you a mention and a link back to your site.

[03:28] Also, if you haven’t been to the website lately, our mailing list as well. So we haven’t sent too much to it yet but with the upcoming MicroConf in Europe and a few other things that we have in motion, that’s probably going to change pretty rapidly.

[03:38] Rob: Well, I have some exciting stuff coming down and of course you get to try out Drip if you use that because we are using Drip to collect the emails.

[03:43] Mike: The other thing I have is I unloaded a ton of computer equipment this weekend. Guess how many computers I offloaded out of my home office?

[03:49] Rob: First of all, when you say “unloaded,” do you mean trashed or sold?

[03:52] Mike: I recycled them.

[03:53] Rob: Okay.

[03:54] Mike: I still have some things left that I’m actually going to sell outright but there’s a bunch of stuff that I just took it to the recycling

[03:59] Rob: Yeah, and over under is at ten computers.

[04:03] Mike: Double that.

[04:03] Rob: No! Oh, my gosh! What are you? A pack rat? You had 20 computers?

[04:09] Mike: Yup. I have a server rack and there were all these servers in there and I’m just like there were ten servers in there I just did not need and then there’s all these old desktops and stuff that I’ve kind of gone through over the years and I just kind of left them around for parts and stuff. I got to the point where I’m just like I’m never going to do anything with any of these things. Let me just take it to the recycling, get rid of it all.

[04:27] Rob: Anyway, on to some podcast reviews. We have a bunch of new reviews. This is awesome. We have 217 reviews worldwide with a 4.9 star average. We have a review from Tyler Dow and he says “It’s a pivotal part of my week. Rob and Mike provide outstanding content each week and have found a way to become a regular part of my week. I can’t thank you enough for putting out the great work you do.”

[04:47] Next one is from Ryan Battle here in the U.S. He says, “informative, practical, and to the point. I’ve been listening to this podcast for several months now and it is one of the few that I consider a must listen. The length is perfect, and I love that Rob and Mike don’t waste any time getting to the point. It shows that they are organized and respect the time of their listeners.”

[05:04] And the last one I’ll read today is from our very own Patrick McKenzie, patio11, and he calls us, “one of the best SaaS-focused podcasts. Simply the best, most consistent podcast about running a software business. It’s focused on solopreneurs and folks just getting started in their businesses, but I regularly find things which are useful to me 8+ years in, and I’ve recommended individual episodes to senior folks at companies with tens of millions of dollars in revenue and up.” And then he includes a disclaimer. “I know Rob and Mike in real life, and would consider them friends.”

[05:31] So thanks to all of you for leaving us a review on iTunes. It definitely helps keep us motivated to continue doing the podcast, helps us build a listenership which means that we can just provide more value to everyone. If you haven’t left us a review that would be the best way to pay us the back if you can log in to iTunes and give us a five star.

[05:47] Music

[05:51] Mike: Well, today we’re going to be talking a little bit about life hacks for entrepreneurs. I thought we’d go through and take a look at some of the different things that could be useful to some of our listeners which are a little bit outside of the realm of technology and marketing and more applicable to life in general.

[06:04] The first one is a life hack for relieving stress and anxiety. It’s essentially a breathing exercise. I think that your wife, Sherry, had given a little bit of a brief demonstration about this at MicroConf which was really cool. There was a room of about 200 people who were doing this very thing. I went through it and I glanced up at the time to kind of look around to see who else was doing it and virtually the entire room was doing it.

[06:27] Afterwards, you do this breathing exercise and I really felt a lot calmer and a lot less anxious. It’s called Sama Vritti but essentially it means “equal breathing.” The basics of it are that you inhale for a count of four and then you exhale to a count of four all through your nose. While you’re doing this, you concentrate on paying attention to the motion of the air. You repeat this ten times.

[06:47] So as you’re breathing in, you concentrate on the air coming in, and then as you’re breathing out, you concentrate on the air that’s going out. And if you do this ten times, because you’re only counting to four, it’s about four seconds each way, it’s really less than a minute and a half. Afterwards, you feel much more at ease. Your stress levels seriously drop after doing this and you can really focus a lot more on the things that you’re doing.

[07:10] Rob: This is one of those things that I think you can hear and say, “Oh, what a bunch of crap.” People have mixed feelings about this stuff. In my experience of this kind of stuff, this breathing and exercise and yoga and all the stuff we’re going to talk about today is tremendously undervalued, like taking care of yourself. It has crazy long-term effects, not just healthwise but like on your motivation and it’s things that you don’t even notice until you get six or 12 months down the line and then you realize you’ve been driving yourself into the ground, eating fast food, not exercising, being stressed out.

[07:41] And so this kind of thing, like you said it, it’s 90 seconds. The one we did at MicroConf, I was actually particularly stressed out at the moment that Sherry said we should start doing it and it did have a noticeable impact. I felt my pulse go down. I felt my stress go away for the time being. If you haven’t heard of this or you haven’t taken this kind of thing seriously, I think this can really do well if you do have anxiety and/or stress going on in your life, to just take this breather and kind of reset everything for the moment and even if you have to do it every hour or every two hours to kind of get rid of that stress.

[08:10] Mike: What I find is that if you’re considering doing something like this and you’re using any sort of time tracking techniques, whether it’s Pomodoro or anything like that, if you set aside time explicitly to do this, either in between work sessions, it’s much more effective in helping you because it becomes something of a habit. You work for a little while and then you do this, your stress levels drop and you’re able to really focus on the things that you need to get done as opposed to worrying and stressing out about them impacting your productivity. So definitely try it out. Let us know how it goes for you.

[08:40] Our next one, it’s essentially a way to increase the amount of working memory that you have. There was a semi-famous blog post by Joel Spolsky where he said that he can only ever keep so many variables in his head at one time and if anything comes in and tries to take up more space, it rolls off the desk and gets eaten by the dust bunnies. Just the fact that you can only remember so many things and after that you really just have to start archiving them someplace.

[09:06] Well, there was a Wall Street Journal article that was coupled with a University of Michigan study that talked about this learning technique called SuperNBack. Essentially, what it is is it looks like a game. You can get various implementations of it. There is one that you can get at supernback.com. You download it. You put it on your Windows or OS X machine. You can run this program and you dedicate a little bit of time to it and you just do it a little bit each day.

[09:33] Essentially, what it does is it works on increasing the available working space that you are able to process and hold in your brain. So essentially what you’re doing is you’re trying to remember sequences of events that are going on on the screen. When you’re first doing it, you can only remember one or two or three.

[09:50] It gets real easy after you start to figure out what you’re supposed to do, but then you kind of top out at like three or four and it’s really hard to kind of break through that. You’ll look at it and you keep trying it and trying it and you can’t remember more than three or four of these sequences of events. Then you get to a point where your brain just kind of breaks through that and you’re able to remember so much more substantially faster. Like I said, this is all backed up by the University of Michigan study and there’s anecdotal evidence that it improves your IQ, improves your ability to process complex tasks.

[10:21] But it is something that you have to dedicate time to. It’s not something you can do a little bit of and then come back to it in three or four or five months or something like that. You really kind of have to keep on it. But once you’ve done that, after you’ve kind of made those breakthroughs, your brain will maintain the ability to remember all of these things in the future. So even if you stop for eight months and then come back to it, your brain will still be functioning at a very high level as opposed to where it was when you first started. A lot of the applications that you can use to take these measurements that you used to leverage the SuperNBack technique, it will show you your progress over time.

[10:53] Rob: Right, and all of us can use something like this but I think it becomes especially important as you age and your brain loses its elasticity. Typically, late 30s, as you move into your 40s you just start losing a little bit of an edge. It doesn’t happen by accident, right? It’s not people who sit around for ten years watching TV and then come back and try to do it. And so this type of stuff is what can keep you sharp.

[11:13] There’s another one called Fit Brains and it’s by Rosetta Stone and I’ve used it. What’s nice about it is it feels a little bit like a game so it does kind of take your mind away but the idea is that it’s supposed to be helping keep your brain fit and keep those elastic pieces moving around and I think as you get older that’s important.

[11:32] Mike: Yeah. I was going to say it’s kind of like exercises for your brain. Obviously, physical exercise helps your body but mental exercises will help to kind of keep your brain in shape. The other one that I’ve heard a lot about is called luminosity.com.

[11:44] So we’ve already talked a little bit about mental exercises but then we get into physical exercises so getting into exercise routines and general fitness. One thing that I found really helpful is to – if you hire a personal trainer and I know that personal trainers can be expensive but if you hire a personal trainer to essentially build a workout program for you and not necessarily go to the gym with you all the time. Because, really, the personal trainer is there to kind of help motivate you and correct your form and things like that but if you’re already comfortable with that stuff and you don’t necessarily need the motivation to go to the gym, what you really need is a workout program that works for you.

[12:17] When you’re first getting into fitness and trying to get your body in shape and you can work with a physical trainer and say, “Hey, I need an exercise program and I would like you to develop one for me,” so you can have, you know, if you’re going to go to the gym two or three days a week, you can have two or three different programs.

[12:31] I’m in the process of actually having five of them done right now so I can go to the gym five days a week. It’s working out pretty well for me. They’re pretty intense too. They don’t take a whole lot of time to do. I think that my first exercise program was about 20 minutes but it’s hardcore 20 minutes. It’s very exhausting to do. I need to take care of my body so I think that doing that upfront investment in something that you can kind of put into a process to move forward then that will really help you out.

[12:57] Rob: Yeah. If you’re like me, it’s not the exertion of the exercise. It’s the time that’s so hard to carve out. I grew up playing sports and lifting weights six days a week, and then I ran track for nine years. I played football. I mean, that’s what I did. It was a huge part of my identity was working out, being fit, and that kind of stuff.

[13:15] And then after college, I got a knee injury. I had surgery and then I just kind of stopped doing it. So after 20 years of a semi-sedentary lifestyle, it’s really interesting to try to get back to that. Every year, for the past several years when I go on a retreat, I will put down kind of a goal of start exercising again at all. I should try to do something. The time has been a challenge.

[13:35] So whats finally worked for me and I’ve been doing this for four or five months now. I decided not to try to do any type of stuff that I used to do because all the stuff I did was intense. I mean, I would do two hours a day six days a week. I just had the time. I started with, “I’m going to do 30 push-ups a day.” That was it. That’s all I was going to do and not in a row even. I would do as many as I could. And so the first day, I did five push-ups in one set, and then I did six sets of five push-ups.

[14:01] But over the course of even a week, I was able to do ten at a time, and now I’m able to do more than 30 at a time. So I’m going to start upping that. But what’s nice about that is for me it takes almost no time because I can fit it in around other things. Like if I’m going to think about a program in our marketing problem, I will just go on the floor and do enough push-ups. Do 20 or 30 push-ups. Crank them out.

[14:21] It’s crazy how quickly my body has adapted. It’s crazy how that little piece, that little in to that habit has started it so that the other night – this happens a couple of times a week – it’ll be 11 o’clock, I’m getting ready to go to bed, and I remember that I haven’t done the push-ups and I will just go down and do them right then just to get them done to make sure that I’ve done them every day.

[14:41] But what that’s led into is that I’ve started running on an elliptical and this is not something I’ve ever done. I’ve always been a runner. I’m actually running on ground and even if I only do 30 minutes, the great part is I’m motivated because I typically will watch a show that I’m drawn to doing that if I can multitask. I think not everyone’s like this but that’s how I am. I have such tight time frames that I’m the guy that double speeds podcasts and so for me to be on an elliptical for 30 minutes not working my mind somehow is too much of a time investment every day for me. But if I can somehow do something else at the same time, it has made it much more palatable and, for me, much more sustainable.

[15:21] I’m on this elliptical now I’d say about three days a week and it’s been consistent for several months. I know that I am on to something, at least kind of a regimen that works for me and if you’re similar to me, it might work for you.

[15:31] Mike: The other thing you can do when you’re on an elliptical is either listen to podcasts or you can also — if you have a Kindle, you can read books on a Kindle as well so you get two different things going at once so you’re kind of multitasking there to make good use of your time while you’re exercising.

[15:44] Next on our list is increasing the quality of your sleep. If you increase the quality of your sleep, it increases your overall wellness and you are able to think more clearly, you’re getting enough rest such that your brain is able to kind of put all the pieces in the right places while you’re in deep sleep and you’re able to remember things better and you generally feel better.

[16:01] If you look at general advice out there, they essentially consist of things like no caffeine after certain times of the day and no screens within a couple of hours of going to bed and things like that. What I found is that that “no screens” does not apply to my Kindle Paperwhite. And I think that’s because it doesn’t have an LCD screen. It has essentially a backlighting capability so it doesn’t really create the same effect in your eyes and it doesn’t cause your brain to kind of go haywire just before you’re going to bed.

[16:31] The other thing I do when I’m reading books at night is I avoid any kind of business or self-improvement books. I exclusively read science fiction or fantasy books to kind of get my mind away from the rest of the day. And I’ve really noticed some considerable improvements in my sleep quality when I’m doing that, especially if I’m doing it before bed.

[16:48] What I’ve started doing is making a habit out of going to bed at a certain time every night. I have found that by setting aside that half hour or 45 minutes for reading a book that has absolutely no relation to my life in general, it helps reduce the stress on my brain and it helps keep my mind off of the things that would otherwise keep me up at night because then I’m focused on this book which, as I said, has nothing to do with reality. I can just read the words and kind of pay attention to the characters and I don’t have to think about solving any particular problem that goes along with the content.

[17:19] Rob: I think the tip about not having screens, especially LCD screens in front of your eyes right before you go to bed is a big one. I don’t think a lot of people heed that. I know that when I work on my laptop and so right before I go to bed that I do have squirrely sleep patterns and that I wind up thinking about work. That’s a good tip.

[17:36] I think another one is called F.lux and it’s justgetflux.com. F.lux makes the color of your computer’s display adapt to the time of day so basically it’s warm at night and it’s like sunlight during the day. It’s a pretty interesting thing so as you move into the evening, it will lighten up.

[17:54] The thing I found myself doing for years is once the sun sets, I will actually walk around the house and dim all the overhead lights or turn them off. So I use uplights so that no overhead lights are kind of blaring down because we’re not doing task-based stuff anymore. So I found that that actually changes the mood and it kind of enters us into this cycle of the day that’s like, all right, you’re easing out of all your productivity and you’re kind of easing into an evening of relaxation. And so that’s another approach that I hadn’t even realized I did and then Sherry pointed this out to me.

[18:24] Mike: Yeah, I used to use a Zeo sleep tracker to help kind of monitor my sleep and I did find that, based on what the sleep tracker was telling me, if I read before I went to bed, I definitely got better sleep. I just felt better in general the next day as well but it gave me kind of a number to look at. That number, I kind of tested it over time and it seemed like it worked out pretty well. Unfortunately, they ended up going out of business so I’ve kind of been looking around for a new sleep tracker, kind of an updated one but I still have my Zeo around and it still works pretty well.

[18:51] The last hack that we have is around food and nutrition. There are several hacks that kind of fall into this category. The first one is to plan your meals and snacks so we can advance. What this does is it helps you to avoid having to make choices throughout the day.

[19:03] We’ve talked in previous episodes of this podcast about how, if you limit the number of choices that you have to make, then it helps you to increase your brain glucose levels during the day and helps maintain them at higher levels so that you’re not wasting valuable mental energy on certain things. For example, if you’re trying to get a lot of things done, don’t check your email first thing in the morning because then you’re using up valuable energy on that where you could be using that decision making power for things that are much more important like your marketing or your sales funnel and things like that. So if you plan things in advance during the day, you don’t have to make choices about that stuff. Your choice would actually be: do I follow the plan or not?

[19:42] Rob: Meal planning is something that I’ve found to be way more valuable than I thought it would be, to actually plan dinners and then have stuff thought in advance and have stuff kind of in mind. It’s crazy to not have to go into the kitchen, whether it’s breakfast or dinner, and look around and kind of salvage and put something together. It really has made a difference for me.

[20:03] Mike: Another one is that when you’re eating dinner, one of the things that a lot of people who are kind of leading a sedentary lifestyle like entrepreneurs are, especially software entrepreneurs, is that you tend to eat a lot and especially because you’re sitting down and you don’t really think about how much it is that you’re eating especially if you’re not tracking it which most people don’t track.

[20:21] There’s tons of apps out there that you can use to track. I would advice using one of them. I’ve tried Lose It before, and I’ve used Fitness Pal. Both of them are actually pretty comparable in my opinion. The real key here is if you’re not tracking those things, use smaller plate for dinner and for lunch.

[20:35] There’s actually been studies shown that people will eat nearly 50% less when they’re using nine-inch plates versus when they’re using 12-inch plates which is why, when you watch a dinner, people tend to eat a lot more than they otherwise would or should because at almost any restaurant I’ve ever been to, they tend to give you very, very large plates. Unfortunately, of course, that adds to the amount of calories that you’re intaking, especially if you’re not watching.

[20:55] Rob: Yeah, this is one that I had heard before and we started doing it about maybe a year ago and now I always default to the smaller plates and it totally works. I need to piggyback on this. Derek, who I work with, he is doing things where he’s like not eating out at restaurants as much because just restaurant food tends to – they tend to give you bigger portions and they tend to be higher in calories and fat and all that kind of stuff.

[21:19] Mike: Yeah. One thing that a lot of restaurants will do is, to help make their food better, they add fat to it. But aside from that, most of them add a significant amount of oil or butter to help increase the flavour and of course that adds calories and, as you pointed out, it just increases the portion size and increases the calories and you end up eating too much.

[21:38] So when you’re eating at home, one of the things that you can do is that – and I know not everybody’s a big fan of this but Greek yogurt can be used as a substitute for a lot of different things. You can substitute Greek yogurt for things like sour cream, oil, butter, mayonnaise, cream cheese, buttermilk. There’s a whole list of different things that you can use Greek yogurt for. So if you do like Greek yogurt, then you can use it to kind of increase your protein intake and decrease the amount of calories that you’re intaking because of using Greek yogurt as a substitute for some of the ingredients in the foods that you’re making for lunch or dinner.

[22:12] Another one that you can use as a food substitute is something called PB2 which is a little bit more expensive than peanut butter. It’s essentially a peanut butter substitute but it has about a quarter of the calories of real peanut butter. It comes in a powder. You have to make it yourself but you make it in these tiny little batches of a couple of tablespoons at a time, and it has about 50 calories instead of 200 calories for the same amount of peanut butter.

[22:35] Another one that you can use for substitute is, instead of using bread for sandwiches, you can use giant lettuce leaves. So if you’re making a wrap or a sandwich or something like that, use the lettuce itself as your bread for your sandwich instead of bread and that’ll help to cut down on the amount of calories.

[22:50] Rob: But what I found is for every ten of these life hacks that I hear, there’s about one or two that really resonates with that I’m like, “Huh, yeah, I don’t really mind it that much.” I like a good piece of French bread. I’ve started doing a lot of lettuce wrap hamburgers. I haven’t really gone back. On occasion, like a nice restaurant and there’s some place for some awesome gourmet burgers, I will have a burger with a full-on bun and it’s amazing. But when I’m cooking now, I’ll give our boys the regular buns if they want them and then Sherry and I typically do lettuce wrap burgers and it just goes along with the kind of cutting down on your carbs thing.

[23:21] I found that I personally haven’t missed it as much as I thought I would or as much as I did early on. You kind of get used to it, you know, weaning yourself off of things. I don’t eat ranch dressing anymore. I love ranch dressing but at one point I switched over to like an Italian or a light balsamic. The less I eat something, the less I really crave it.

[23:39] Mike: Another little trick that you can use is if you’re hungry because you are planning out your meals and maybe you’ve reduced the amount of food that you are eating and you find that you are hungry is that you can just drink water. And if you drink water and then wait 15 or 20 minutes, the feelings of hunger tend to go away. They tend to be reduced enough that you can essentially prevent yourself from going out and binging on that bag of potato chips especially if you still have those in the house.

[24:05] The last thing that I found – this is one of the things that I’ve had trouble with in the past which is snacking after dinner especially while I’m watching TV. For me, watching TV is sort of a conditioned response. It’s like if I’m sitting down, I’m going to watch TV, oh, I should get some popcorn and then of course I binge on popcorn and, depending on whether you got the microwave stuff which isn’t necessarily good for you, or the pre-popped stuff which who knows how that was made, the issue of course is that you’re eating a lot of things after dinner when you’re not necessarily hungry. You’re not eating it because you’re hungry; you’re eating it because you’re bored and you feel like you need something to do.

[24:40] So those are a couple of things that you kind of watch out for them and understand that your body is sort of conditioned to have this response to a certain stimulus which maybe it’s watching TV, you feel like you need to eat. Do you really need to? Probably not. But if you’re watching out for that stuff, it can really help with the calorie intake.

[24:57] Rob: See, this is what – remember how I said like out of every ten of them, there’s one or two that I adopt? This is one I had not adopted because nothing pleases me more than this: sit down to an episode of The Walking Dead with a bag of tortilla chips and some guacamole. Like that. That is it for me.

[25:10] Actually, to be honest, that’s why I finally decided I need to start exercising again because there are certain things that I don’t want to give up. One of them is having dessert. I love eating dessert. I love ice cream. And so I realized I either needed to cut those things out as I’m getting older or I need to start some exercise so that I can then not feel guilty or not feel bad about the times when I do indulge. And so I think it’s up to each person to decide for themselves.

[25:35] Mike: It’s interesting the way that you put that because you said that you want to be able to eat the chips and guacamole so you work out in order to do that. I’ve read some interesting quotes from athletes and the general gist of them is that they don’t necessarily work out so that they can eat more. They eat more so that they can work out. We want to be able to eat more because we have this more sedentary lifestyle so our rationale for doing it is a little different.

[26:03] Rob: Right, and back in the day when I ran track in college, I ate an enormous amount of calories. And you hear about these athletes, the swimmers who eat a dozen eggs for breakfast or whatever and it was that kind of stuff. I mean, the food bill was – I remember eating entire pizzas on my own. I mean, I think a lot of us did this and then burning it off the next day and still being very fit and everything. Those days, unfortunately for me, are now behind me.

[26:26] Mike: Just remember, Rob, every pizza is a personal pizza if you try hard enough and believe in yourself.

[26:30] Rob: There you go. If you have a question or a life hack for us, you should call it into our voicemail number. That’s 888-801-9690. And also email us at questions@startupsfortherestofus.com. You can subscribe to us in iTunes or Stitcher or Downcast typically by searching for Startups. Our theme music is an excerpt from “We’re Outta Control” by MoOt and that’s used under Creative Commons. Thanks for listening. See you next time.