Episodes

Show Notes

• The RivalFox post
• RivalFox’s follow-up post, on how to connect with industry leaders

Transcrip

[00:00] Rob: In this episode for Startups for the Rest of Us Mike and I discussed how a SaaS app called RivalFox launched to $2,000 a month in recurring revenue. This is Startups for the Rest of Us: Episode 177.

[00:11] Music

[00:18] 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.

[00:28] Mike: And I’m Mike.

[00:29] Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week sir?

[00:34] Mike: It’s getting close to MicroConf. One of the things that we try to do every year is to setup a website where people can connect with each other. This year we’re doing something similar and this year again we’re on a new one but I’ve been neck deep in technical issues with the new site so that people can connect with each other and there’s issues with permission where people are trying to log in and create their accounts and they can get in and they create their account but then they’re not able to access the site for some reason. It basically just says permission is denied. So it’s taken up a lot of time but it’s one of those things where it’s time sensitive, kind of eating up a lot of time right now.

[01:07] Rob: And this is one of the struggles of doing multiple things since you are doing consulting. You’re working on Audit Shark. You do the podcast. You’re doing MicroConf. I mean it just – it does stack up and some weeks I find that some multiple week stretches I’m just not able to really focus on my business and it’s obvious that this week is one of those weeks for you.

[01:26] Mike: I’ve made some progress here and there but then you’re just running the technical challenges and it’s not like you can carve out an hour or two and say okay, this is how long it’s going to take because you just don’t know. I mean it might take those two hours, it might take 6 or 7 and you just go no idea until it’s over and done with.

[01:41] Rob: I want to call out a couple of complimentary iTunes reviews that we’re up to 331 worldwide reviews. David Solberg from the US says wow, they give solid no hype advice about running a small lifestyle tech business. In addition they let you know what they’re up to which gives you a window in the day to day or how to run this type of business. What sets this podcast apart is a lack of winning the lottery philosophy a lot of people seem to have. I’m actually a little upset that this podcast doesn’t cost anything. It seems unfair to the value I’m getting.

[02:11] And then Gavin Hamar from the United Kingdom says the tips I’ve learned from rob and mike have helped me grow my bootstrapped startup sendable.com to six figures in monthly revenue and from just myself working in my spare bedroom to a 10 person company. Although I’m no longer a solopreneur, the excellent advice they give applies to anyone running a small SaaS business. Really appreciate the reviews guys and if you ever reviewed us in iTunes, that’s the best way to help pay us back if we’ve done anything that has helped you in your business or just kept you entertained. Log it into iTunes and giving us a five star. We’d really appreciate it.

[02:44] Mike: Cool. What else have you got going on?

[02:46] Rob: Well the other thing I wanted to call out some places. I’m going to be out and about over in the next few months. So if you’re coming to MicroConf in mid-April I’ll obviously be there for several days. If you’re going to the copy bloggers authority conference in Denver in early May I’m going to be there. Ping me on Twitter or something, we can setup a time just to hangout and then I’m going to be speaking at the small is beautiful conference in Glasgow, Scotland in June. If you’re listening to this, you’re going to be at any of those, let’s make sure as the date approaches maybe a week or two before, just ping me and we’ll figure out a way to hang out.

[03:20] Mike: I’m looking at kind of scaling back some of the consulting that I’m doing, see how that kind of impacts different things.

[03:26] Rob: Sure. So I want to dive into today’s topic. We’re going to be talking about how a Saas app named RivalFox launched in $2,000 a month in recurring revenue. And this is based on a blog post on their blog. We’ll obviously link that up in the show notes. The blog post is titled how we grew our SaaS startups MRR, stands for monthly recurring revenue from 0 to over $2,000 in under a month.

[03:48] Now, you might be wondering why would we be talking about a SaaS app that “only” and I’m putting that in air quotes, it only grew to $2,000 a month in the first month. Because it’s a super realistic number to shoot for. Even without a big launch list, even without a ton of marketing experience, that’s a very viable thing to hit. Now if you’re not able to hit $2,000 I wouldn’t throw in the towel or I wouldn’t be too disappointed. I know many successful founders these days who launched to 500 a month in recurring revenue in the first month and now they’re doing literally tens of thousands of dollars. It’s just that the long, slow, upward trend of a SaaS app takes time.

[04:25] But what I liked about their post, their post is in line with a lot of stuff we’ve said in the podcast in the past but I liked that it’s their story and I liked that they lend some of their own insight and thoughts to it and it’s really not that complicated the way they lay it out. I have it broken down into eight steps that they took, it’s pulled right from their blog post and then there’s six key lessons that they point out afterwards kind of afterthoughts. So I want to walk through these steps and then Mike and I can obviously give our interpretation, some of these I definitely agree with and others I feel like they could have improved.

[04:56] Step 1 RivalFox took was to setup a landing page. And they used launch rock. Other options that I’ve seen work really well that are super easy are kick off labs. There’s the WordPress coming soon plug-in from John Turner and frankly there are bazillion theme forest static HTML landing pages. What do I like about this? It’s what I do with all my apps. It’s what I recommend everyone do even if you’re not really in an online niche. If you see someone in person or you talk to them on the phone, I’m sure you can get their email address or get their phone number, that’s awesome. But it’s like maybe a little bit less of a confrontational or hard sell way to say you know what, make sure to check out the website…whatever and email and we can let you know or you can actually go into people’s email in there if they give you permission.

[05:41] There’s a ton of ways even if you’re not doing strictly online marketing. Having a landing page up and at least having a presence that looks attractive and it gives you a value proposition is frankly a really good way to get started building that list.

[05:54] Mike: Yeah. I think the real value here is in some ways you’re validating interest in the idea and obviously there’s a huge difference between what you ultimately deliver versus what you kind of promise and when you’re preparing people on your landing pages for what it is that you’re eventually going to be offering. But at the same time it kind of gets you that foot in the door to open up the dialogue with people and really find out some of the subtleties of what it is that they’re really looking for because you might have a general idea and for RivalFox, I mean their tagline here is monitor competitors create opportunity.

[06:25] So the idea here is that they’re going to be monitoring your competitors and if you’re interested in that kind of thing you signed up for and they can initiate a dialogue with you that allows them to start asking more in depth questions for example like how would you like to monitor your competitors? What sorts of things would you like to monitor your competitors for? Is it social engagement? Is it how many times they’ve updated their website. All sorts of different things. But the key here is that you really want to be able to open up that dialogue with people who are coming to your website and that’s really what the purpose of these is for.

[06:53] Rob: The second step RivalFox took was to setup a blog and they said that they received well over 10,000 page views within six months and to quote them from their post they said “the traffic was great but the conversion rate from blog readers was lower than we had hoped as were newsletter signups. We decided that we needed more prominent calls to action so we introduced a screen for newsletter signups and linked with Aweber. This was featured front and center and increased our newsletter signups 100%.”

[07:20] We also introduced a popup which opens after 10 seconds and asks if they want to check out the RivalFox page. This popup increased the number of people going from the blog to the trial page from 5 to 15% which skyrocketed the number of leads. So these are good suggestions and you can use them as you feel that they jive with your audience. Some people don’t want to do popup at all. So they either have like an ethical aversion to them or they feel like it’s going to drive their audience away.

[07:44] And pretty much all the test when I’ve seen people use some kind of popup, some kind of motion whether it’s just a little like a Drip opt-in widget in the lower right that kind of pops up or it’s an actual in your face div kind of modal popup, those things will increase your signups dramatically over just having like a static widget in your right hand side bar or something.

[08:05] Mike: Yeah. I think this is one of those classic things that you come from a developer mindset you don’t necessarily want to bother people because you wouldn’t want to be bothered and it’s sometimes getting in people’s faces and asking them explicitly to opt-in to something that you have to offer is really going to make an impact in your business because the signups are going to be dramatically higher than if you didn’t do that. And I’ll say it’s one of those balances. It’s a delicate balance you have to make between your developer mindset versus the marketing mindset and really in cases like this, your marketing mindset, as long as it’s not negatively impacting the image of your company you really need to lean towards those things that work better even though they’re not things that you would be interested in or you they’re not things that you’d like to do.

[08:47] Rob: And I think I’d also like to comment on the step is to setup a blog. I don’t think that’s necessarily the step number 2 you want to take in every case. I think that if you are a good writer and you’re going to hustle and put together sharable and super valuable content the people are actually going to engage with, then I think it’s a no brainer and I think it’s a great way to start getting traffic and getting social media shares.

[09:10] Social media, for what it’s worth is a decent way to share. It’s a decent way to spread the word. It’s also a decent way to start getting Google rankings pretty fast. If a lot of people start talking about you especially they do G+ shares, Google takes notice of that and they know that people are talking about it. So if you’re going to put in the effort or you have the funds to hire someone who’s a really good writer, not like a $20 per article person who’s kind of just going to slam something together but really good content then I think that blog is valuable.

[09:38] On the other side once you start getting any traffic, if you use a tool like HitTail and you install it and you start getting some suggestions and you do want to go with some less expensive $20 articles you can do the Ruben Gomez approach which is to have your main blog with really highly viral content that’s high quality and then have a separate article section that’s not linked to or visible in the main blog feed because you want that to stay super high quality and you get articles for $20 a pop that are valuable but they’re just not as high end. They’re not as long and they’re not as in depth and you put them in this article section that’s just a separate category on the blog and then you put an article’s link in the footer of your website.

[10:16] That article section will start to build up that snowball of long tail traffic and for that purpose I absolutely think that it’s almost a no-brainer because it’s so cheap and because it’s not a ton of work to do that. I think that most companies, if you’re going to do any type of online marketing or any SEO effort, I think that is definitely worth it. The content marketing side where you do have the blog and you have the highly viral content, that one, it takes either more time or more money than a lot of folks have so that’s one where I would think twice about it really before diving into it too hard.

[10:48] Mike: All that stuff’s a balancing act is about where you spend your time and if you have the money to outsource the creation of that writing for your blog or for your website then sure, definitely, go down that path because you’re trading your money for time that other people are going to spend building that stuff and obviously there’s still also the creative side that you don’t necessarily have to worry about. But it’s always a balancing act like how much time do you have, how much money do you have and what sorts of things are possible and feasible given the constraints on the resources that you have.

[11:18] Rob: I think the other thing I would add to this step is there’s often something that you can give away on a landing page that could potentially have more value than actually trying to – I’ll constantly crank out a series of blog posts because that’s kind of a flywheel that you have to keep up with if you want the blog to stay active. And so if you look at giving away sample templates or an eBook or a tools list or a screen cast or something and then you setup a landing page that it is targeted at a specific Google keyword, something that a lot of folks are searching for, that’s another way to think about this as driving this inbound traffic. Blog is one way but I think a landing pages and then long tail SEO are probably the other two ways that I would look at early on.

[11:58] The next step that RivalFox took is they say to consider guest blogging and to quote their article, they say B to B marketers who use blogs generate 67% more leads per month than those who do not. Building an audience and establishing trust takes time but sometimes this can be sped up through guest blogging. Now, they said that they had taken two stabs at guest blogging. They did not receive a ton of traffic but they still thought that you should at least consider it if your niche lends itself to that.

[12:26] And I like this approach. I think that if you start a blog on your own site, that’s great for that long tail traffic and that’s great for the long-term traffic of building up a flywheel but it takes time to do that whereas if you go out and guest post you’re able to get guest posts on affiliated sites or sites that are in the same niche as you that’s a really quick way to get several hundred clicks through to your website either to a home page or frankly a landing page that gives something away is so much of a better way to do it to actually in your byline where it says so and so wrote this post is the founder of this, if that blog will allow you to give something away and to say – to receive my free 20 page eBook or my top 10 tools that you need to – in this case of RivalFox, the top 10 things you need to know about your competitors then they click through, they give an email address and they’re able to download that, that’s a great way to build that launch list.

[13:14] Mike: I heard an interesting interview with Nathan Barry on the product people podcast with Justin Jackson. Nathan had talked a lot about doing exactly that where he basically was trying to tap into other people’s audience as opposed to relying on SEO and various other mechanisms for building up his email list, what he did was instead he started tapping into other audiences that were kind of overlapping because they already have a built in audience and building one from scratch is obviously a lot more difficult than it is to go out and tap into these existing audiences. And one of the things that he did which struck me as interesting was he didn’t necessarily just rely on that byline. What he did was he actually asked hey can I put in a little widget here or something that basically allows them to sign up directly for his mailing list.

[14:03] So in that way, he’s essentially helping to limit the number of people who are kind of falling out of that funnel which I thought was a really great idea. I mean if that’s something that you’re able to pull off when working with anyone you’re doing a guest post for, it sounds like that would be a much preferable way to do things just because you can limit the number of people who are falling out of that funnel.

[14:22] Rob: Yeah. I like that idea although if I were letting someone guest post on my blog there’s no way I’d let them put an opt-in widget on any of the blogs that I have. But if you can find someone to do it, sure, it keeps them from having to click through.

[14:34] Mike: I don’t think it was specifically an opt-in widget but there was something specific that he was doing. He wasn’t just relying on the byline. I think maybe he has something in there that said if you’re interested in hearing more sign up on this page or something like that. So it wasn’t like it was just using the byline to come to his site. It was essentially taking that byline and directing them to more of a landing page.

[14:53] Rob: Right and I think there’s another really good way to do it is if you’re able to naturally just mention your product inside the blog post and you’re not trumpeting it or trying to market it but you really mentioned it as a example or somehow get a link in there, if that post does get a lot of traffic, you will get a lot more clicks than just having something in the byline. The fourth step that RivalFox recommended was to take advantage of social media. And they said for us, as a B to B company most of our social media leads come from twitter and Quora. We have plenty of views from LinkedIn but they didn’t convert. The LinkedIn visitors were in the competitive intelligence industry and while they might be interested in what we’re doing, our product is not geared for them.

[15:33] But then they go on to talk about a single Quora post someone mentioned them in and they received quite a few clicks and I guess the conversion rate was 15% from visitor to trial which is a really nice number. So I’ve definitely seen especially in the B to B space Quora, LinkedIn and twitter, those would be my three – Facebook and Pinterest are obviously better for the prosumer or the consumer markets but these are all decent channels and as much as I’m not a fan of trying to build up that following, I don’t believe in building up that big Twitter following to try to one day convert people, I really think that works well if we’re going to do a lot of content marketing and going to be putting out your own content just building the audience for the audience sake I think is a very long way to look at it.

[16:15] So certainly being on Twitter and sharing your stuff and other stuff is good and obviously Quora and LinkedIn can bring in traffic as well. So there’s something to be said about social media. It’s not nearly as valuable as direct paid traffic to a landing page or obviously building up your own email list.

[16:32] Mike: I think the interesting thing about some of those things is when you’re looking at websites like Quora, there’s generally a discussion that’s going on that if you can find the right discussions, you can kind of gently pitch your product in there as a potential option. So people are talking about a specific problem that they’re having, you can talk about your products and say hey, just as a disclaimer, I own this product but it addresses this particular problem. And anyone who’s searching on the internet is inevitably going to come across that as one of the options in Google or ping or wherever they’re searching.

[17:04] If they click on 2 or 3 different links and then those links come back to your site because they’re talking about solving that particular problem. Your product that solve it and then they link through their to yours, it essentially widens the net that you’re casting for attracting traffic. So I can definitely see how that stuff can help. I think with regards to Twitter, I totally agree with you. it just depends on why it is you’re creating that following. If it’s just creating a following to have a following its probably not going to do much for you but you I believe have to have a specific goal and set of strategies in mind for what you’re going to do with that audience once you’ve got it. Because again just attract people and then either not do anything with them or hope that they’re going to convert because you have to have a plan in mind for that.

[17:46] Rob: Yeah I would agree with that. The fifth step is to have a private beta. So they gathered some users inside and then they gathered feedback. They let people signup and then after 29 days they sent them a survey. I definitely think that this kind of early access private beta approach is the way to go and to not do a launch, I guess they had 700 people on their email list and they only let a few into this private beta and if you’re going to figure out people who are actually going to give you good feedback that can somehow get that info out of a survey or just because you recognize names on the list, that is a far better way to go than just emailing 10 or 20 people randomly because you are trying to get folks who are going to have a high correlation with your perfect audience.

[18:26] The idea in the old days if you’ve built up this launch list of 700 we would really just email that whole launch list let everybody in then just scramble to try to keep them around and if you have the time to go through this private beta and not only test out your app but test out your on boarding process, your support process, tweak your app, add features, get it to where you really are providing a lot more value that by the time you email those 700 people you’re going to convert so many more of them than if you have just emailed them all in day one so I do like that RivalFox did this.

[18:56] They don’t say in here whether they charge during the private beta. I think it’s fine not to charge but to make it upfront apparent that people who are in their beta are not going to get a free lifetime account because you don’t want people who are in their who want it for free. The best feedback is going to come from people who are willing to pay for it even if they don’t have to pay for it during that private beta but as soon as it’s out of that that they’re willing to dive in and become a paying – maybe a discounted but a paying customer of yours.

[19:22] Mike: Yeah. I think when you’re going through the private beta, one of the things that you can do is you can look for the people that are signed up to your email list or have kind of signed up early on and just go through them and look those people up by domain names. And this works a lot better if you have a B to B product because then typically those people are signing up under their business account because it can be really hard to tell unless you’re using something like report of whether or not somebody’s Gmail account is kind of associated with any given business.

[19:51] So it helps to be able to filter those down and figure out who they’re working for and whether or not they are actually going to have the problem that your product solves. And those are the people that you really want to target as your early access or beta users because they’re the ones who are going to give you the most valuable feedback as opposed to as Rob said, the people who are just kind of looking for some sort of a freebie or a very steep discount on software that they may or may not necessarily use going down the road.

[20:17] Rob: Step six is now that you’re in beta, submit to startup directories and services. What’s cool is they give a list of here of who they submitted to and how many signups they got from each. So beta list which is betali.st is one that I’ve had a lot of success with. RivalFox said they’ve gained over 400 signups in two days with a 30% conversion rate from visitor to trial. Then they said they submitted to CSS mania and they got 15 signups and then killer startups, they paid $167 to I guess be featured within 48 hours because killer startups has a 3-6 month review window unless you pay. But they said they only got 4 signups. There’s plenty of other places. They list them all here. We’ll link over to it.

[20:59 But this is a no brainer. Right? You’re not going to build a flywheel here and you’re not going to make tens of thousands of dollars but for the time that it will take you or the few dollars you have to pay a virtual assistant to submit to these directories, it’s a no brainer to do it. And one of our listeners Robert Gram has posted a more extensive list over on his website.

[21:18] Mike: It’s at whitetailsoftware.com.

[21:20] Rob: He put a nice list together. I think he had his VA do it and I definitely recommend submitting to as many as you can to help build that list.

[21:27] Mike: And the nice part about that is that a lot of that stuff you can use AVA to go through that list and have them kind of filter out which sites are probably not going to be a good fit based on the types of questions that they’re asking or have them go through and kind of aggregate all the different things that they are asking so that you can figure out what information you should be submitting. But as Rob said, that’s a onetime thing. It’s not like you’re going to get a flywheel out of this and it’s not like you’re going to do it more than once but it can provide some decent inbound traffic just because of the way that those sites work.

[22:00] Rob: Step seven for RivalFox was to have an open beta and they said use mailchimp or your email provider to announce it. They had a list of 700 people and they said that they got 300 signups which is really high. That’s very, very impressive. They must have a very targeted list and a nice sequence of emails. They also talk a little bit about – they say do you pay in advance or not? Should you ask for a credit card upfront? And here’s the quote from the post. He says “at first we started with credit card required which lead to 20 customers who signed up but only 8 which remained customers after the trial. After one month we switched to no credit card required. Many more people signed up for the free trial and our conversion rate grew 5 to 10%.”

[22:39] So obviously they’ve gone without credit card. I would like to dig in through their conversion rate a little more because he doesn’t say what that 5 to 10% rate is if that’s visitor to trial or if that’s trial to paid. The recommendation I mean the pass is my default ask for credit card upfront I think there are cases when you shouldn’t or when you get down the line and you understand your funnel and you have enough data to actually test, you should absolutely test. But in the early days my default is always to ask for credit card for you want to get the feedback from the people who are actually willing to pay for it.

[23:08] But with that said, I mean you mentioned a couple episodes ago, you’re going to be pulling your credit card down. I know two other people right who are testing without having a credit card upfront because they just want to get more people into their funnel and see what they can do. So there’s a case to be made for both.

[23:23] So those were the eight steps that RivalFox used to launch to $2,000 in recurring revenue. Now then they break down six key lessons that they took away. The first one is they take about their traffic breakdown and they said that they received plenty of leads on a daily basis and the average breakdown was 32% organic search traffic 13% referral traffic 28% social traffic and 26% direct traffic. So that gives you an idea of kind of the four areas that they were really aiming at and then one of their recommendations is to start blogging as soon as possible and you can imagine that since it worked well for them, that would definitely be a recommendation.

[24:03] Then they say connect to industry leaders for opinions and basically said that they were using social media to connect with industry leaders who shared their content provided invaluable insight into their product. I’d frankly be interested to see an entire blog post breaking down how they did that, what they did and what the results from that were. It’s a very high touch and time intensive thing to do especially pitching kind of industry leaders or just people with big social followings who you kind of know of. It’s kind of an outbound sales like an outbound reach approach of getting people to kind of retweet your stuff but it can obviously work.

[24:39] And their fourth takeaway was to experiment in a controlled way and they said that while reading advice by fellow entrepreneurs is helpful, there’s no perfect formula for how to launch your product. Do controlled experiments to see what’s best for you. And they said that they reduced their trial period to 14 days instead of 30 and they used intercom.io to contact people and they concentrated on people who signed up for the trial. They increased their conversion rate from 4.7% to over 14%. That’s a really nice way to go.

[25:05] And see if they’re not asking for credit card, you almost have to do that high touch inside sales stuff. I don’t know anyone who’s making no credit card work without using intercom or using phone. Email doesn’t typically cut it. It’s typically not enough but you actually need to really be touching base with folks who are getting into that funnel if you want to close them if they haven’t entered their credit card.

[25:26] Mike: I think the key piece of advice here to takeaway is that experimenting in a controlled way such that you’re actually measuring things and I think I did it as well but I would try something. I wouldn’t necessarily take a look at some of the stats associated with it. I’ve just kind of ballpark it or try go from a gut feel to whether or not it was working and that’s really not a good way to go. It sounds reasonable because you’re trying to say okay I’m trying to save time so I don’t want to setup anything to measure things.

[25:54] But at the same time I mean if you’re not measuring, how do you really know especially over a long period of time if you’re trying a couple of different things and you may be able to pay attention to it for a couple of days or for a couple of weeks but after that time period, if you don’t have systems in place that are going to be doing those measurements for you then it’s really, really hard to look back from 3-4 months later and say oh, I wonder how that went. And then you have to go back and try dig up statistics and it’s so much harder to try and retroactively do that than if you just setup the systems and software in place from day 1 to start measuring that stuff that you need to measure in order to figure out whether your experiments are working.

[26:29] Rob: Yeah, that’s a good point. And even without having to do a complicated setup you can go into Google analytics and create a goal using URL and that used to be easier than it is. Now it’s pretty complicated frankly. It shouldn’t take you more than 5 or 10 minutes to do that and of course I recommend doing that as soon as you have a landing page up, you create the goal of someone subscribing right away you’ll start seeing which traffic source is your message resonating with. As soon as you get into beta and you have a trial, it’s obviously a no brainer to create a goal for people signing up for a trial so that you can really see which traffic is converting.

[27:00] The fifth key lesson that they pointed out was to concentrate on inbound leads and they said connect your sales team to inside leads and concentrate on making those first customers 100% happy. And this is basically the high touch model we talked about. Getting those first 10 paying customers or 20 paying customers is so invaluable that its worth speeding a lot of time because you can learn a lot from them and it really helps shaping your product if you have some good folks in there early.

[27:25] And the sixth key lesson that they mentioned before they closed up the blog post is to not be afraid to ask people to pay early. They said if you asked people if they like your product, most will say yes. The real question is do they like your product enough to pay for it? The earlier you can get this information and the earlier you can start making revenue the better. So I feel like this conflicts a little bit with their thing of like to ask to pay in advance or not kind of credit card mentality upfront about not asking for credit card but I think maybe they’re only talking about in the early days of their product rather than in the early days of a trial.

[27:56] Mike: They did switch over their strategies. I mean they started asking for credit card upfront and then later on they removed that requirement and they start having those discussions and following up with people with intercom.io and in those cases if they asked if they liked their product then people say yes then they ask them if they’d be willing to pay essentially early before their trial period is up and I think in those cases – what’s your take on this? I mean would you offer them some sort of incentive for paying before their free trial is up or what?

[28:27] Rob: Yup. That’s a really good way to do it. That’s a common way to get more people signing up. It can skew metrics down the line. It can skew churn metrics and all that stuff. Yeah, early on that’s probably what I would do. Either a discount or hopefully not a discount but some type of something you can give away to them that is really valuable.

[28:46] Mike: Yeah, I was thinking that it might skew your churn as well because if they’re incentivized to pay early in order to get that incentive and they’re really not necessarily a good fit for the product then your turn will go up down the road and that obviously throws a wrench into the system but I’ve definitely looked to give them something. I just don’t know what it would be. I mean I think it depends a lot on your product, maybe some sort of educational or informational product that helps them use your tool better or allows them to grow their business in a way that the tool isn’t able to do explicitly.

[29:19] Rob: Yeah. I think overall I like their approach. What I like is this – I’m hoping that the blog post really lays out everything. I’m concerned that they may have left some stuff out. It’s pretty simple approach. It’s the landing page. They blogged. They did guest blogging. They use social media then they did the private beta, they listened to those customers. They submitted a directories then they did an open beta and that was it. They launched to 2,000 a month in recurring revenue.

[29:41] So while it’s not always that simple for sure, you have to build a product that people are actually interested in. Build a product people want. You have to have your pricing in check. Your marketing, your message, I mean there’s so much more to it but just in terms of kind of driving traffic and getting people in, seems like they did a pretty good job and I think 2,000 a month in recurring revenue on your first month is absolutely nothing to sneeze at.

[30:02] I do wonder if they vetted the idea before hand, if they had some early adapters or some people before they put up the landing page that said yes I really want that or if they just went off on their own and built it because if they did, it feels a little bit like a luck thing that they launched to 2,000 a month that they kind of got lucky with the idea. I think without getting some feedback early on and just taking an idea and running with it, the odds are that you’re going to build something that no one wants. I’d like to hear about that, about how they validated or if the validated early on.

[30:31] Mike: Yeah that would be kind of interesting to hear. I mean if you look back through some of their blog posts I mean it doesn’t seem like many of them are related explicitly to how they got started and how they’ve done things. I mean maybe the really, really early posts are but a lot of the later ones just aren’t. I think that wraps us up. If you have question for us, you can call it into our voice mail number at 1-888-801-9690 or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt used under Creative Commons. Subscribe to us 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

• Vitamin vs. Aspirin

Transcript

[00:00] Mike: This is Startups for the Rest of Us: Episode 176.

[00:03] Music

[00:10] Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.

[00:18] Rob: And I’m Rob.

[00:19] Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Rob?

[00:23] Rob: Things are good. I got two good pieces in use this week. One is we confirmed our final speaker for MicroConf. Many of you know Brennan Dunn from Planscope and he had done an attendee talk last year at MicroConf that got good reviews and then he had one of the highest voted antendee talks of this year and we decided to kick him up into the main stage. So he’s going to be talking about six tricks that helped him triple his SaaS growth rate and he sent me an outline of it and it looks pretty good. So I’m excited to have that nailed down and of course to have Brennan up there. So we have a good lineup this year.

[01:01] And then the other thing that’s going on is HitTail has just been doing really good in the past three weeks since I was able to get kind of the rewrite or the revamp done where I pull a Google web master tools keywords and work around the whole not provided thing. So I pretty much had a solid uptick in all metrics across the board. Trials are up, trial to paid conversion is up. Number of paying customers is up. Churn is down, all the things that you hoped for. So it feels good to have a win. I felt like I hadn’t one in a while. Good growth projected this month after maybe 4 or 5 consecutive months of either flat or minor decline.

[01:37] Mike: Very cool. I saw that HitTail started having a lot more I’ll say relevant keywords terms that it was suggesting because I hooked up mine to the Google web master tools and it pulled out something like 80 or 100 different terms that it said that I should take a look at whereas before it’s just not turning out very many.

[01:55] Rob: Right because there wasn’t enough traffic that was provided. Most of your traffic’s not provided so wasn’t able – didn’t have any data to work from. So it’s definitely way more valuable. Like I said its way more valuable to me in my own sites so I know it’s more valuable to other folks using it. So that feels good. How about you? What’s been going on?

[02:12] Mike: I want to issue kind of a correction from a couple of weeks ago. There was a website that I mentioned that I came across where I discovered the momentum plug-in for chrome was Scott Watermasysk. So we’ll put that in the show notes but I wanted to make sure we give credit where credit was due because I’m fairly certain that he was his. He did mention it on Twitter so I apologize for not saying it but at the time I just couldn’t remember.

[02:32] The other thing is that the inbox pause plug-in, it went haywire on me today so I couldn’t unpause my email and I freaked out because I had the check box clicked where it says hide the label that we put on all of the folders. So I couldn’t even go there to find it and I had to dig through the Gmail settings to figure out how to get my email back.

[02:53] Rob: Were you ever able to fix it?

[02:55] Mike: I guess the way that it works is when you click on the pause, what it does is it creates a rule. It removes the inbox tag from all of your incoming emails and then it adds them to this other inbox-pause-whatever the date is and it applies that label to it. But it hides that label if you clicked the checkbox. So I was able to go in and find it just by looking at all the tags and I said okay well, first of all delete this rule that is moving things over there and then I went in and took everything that was in there, moved it back into inbox and then I deleted that label and then everything showed up and then it said oh its unpaused. So I don’t know what happened. It just went haywire and it would not unpause for some reason. It just kept giving me this error message in Gmail. It was kind of freaky.

[03:38] Rob: Sure. So a warning to folks using inbox pause, it may not work all the time.

[03:42] Mike: Yeah but there is a way to get it back so it’s not a total loss. And then last thing is in terms of the marketing stuff for Audit Shark I think I’ve identified at least part of my marketing problem and I think that part of the issue is that I need to niche it down a little bit. One of the things that I found in talking to people is that Audit Shark is really implemented as a compliance product. And I’ve been kind of pitching it as a security product but security and compliance aren’t exactly the same thing. I mean there’s overlap but security’s much bigger market and compliance is just like a really small subset of it but a lot of my marketing materials talk about security.

[04:19] I mean if you go to my website there’s a drip campaign there for talking about securing your severs and it’s not about compliance or anything like that. And really, security in general is not what Audit Shark is good at. It’s good at compliance. So compliance is the name of the game that my target market is playing and I’m not speaking the same language. So I have to dig in there and start fixing that is really what the issue is.

[04:44] Rob: Yeah and I think this cropped up because you’ve done like a market. Originally it was going to be more about bank compliance and then you started looking into SaaS and kind of online businesses that have servers and that market is like larger and potentially easier to access and so I think probably those two messages have gotten mixed up in your marketing as you have attempted to make that switch.

[05:10] Mike: Yeah. That’s absolutely right. And there’s a lot of my site that needs to be updated and I’ve gone through and looked at my metrics and stuff for the SEO and things that I’ve done and I get a lot of traffic for compliance but once you get to my site it talks a lot more about security. So the reason you would click around on the site would be different that the reason you ended up on the site. So my bounce rate is probably higher than what I would like it to be.

[05:33] Rob: Right. So you mentioned that you’re going to niche it down to compliance from the larger security and compliance. What brings you to that?

[05:41] Mike: I have prospects who I’m talking to right now and in fact I have a demo for one tomorrow that they’re specifically looking for a compliance product. I’ve had conversations with some people who are in my early access program and try to figure out why it is that they’re not interacting with their software as much as I would’ve thought that they would or they’re not taking actions on things. Some of those conversations have really kind of lead me to the conclusion that what they’re looking for is security versus what the product provides as compliance. So do I educate them? I need to kind of figure out what the direction is going to be there. And I have some ideas about exactly what I’m going to do.

[06:16] Rob: Yeah and we talked a little offline. It seems like we should dive into that a little deeper in a couple of weeks I think just an episode where we really dive into where Audit Shark is. Be looking for something here and sometime in April where we will actually dive into this stuff deeper and address – there’s been some comments posted on the blog people asking what’s up with audit shark? What’s the status? And we’ll carve out a whole 30-40 minutes and really dive into that.

[06:39] Music

[06:42] Mike: Today we’re going to talk a little bit about troubleshooting customer engagement. One of the issues is if customers aren’t engaging with your product especially when you’re kind of in an early access phase, you really need to find out why. And it’s not just about learning what sorts of thing that they’re having challenges with. It’s about understanding it and figuring out where those customers fit into your future plans because obviously you want to make money from them but at the same time learning information from them is a lot more valuable than any money that they could give you. So if they’re pointing you down the wrong path, its probably worth a heck of a lot of money to find that out before you go too far down that path.

[07:21] Rob: So this is troubleshooting the lack of customer engagement is that right?

[07:24] Mike: Correct.

[07:25] Rob: So you mentioned early stage customer engagement. Is that what we’re going to focus on with this or do you think it applies even later once you’re already scaling up?

[07:32] Mike: I think that it applies much more when you’re early on because once you’re scaling up, you’re trying to do more optimization of where things are at and what things you can do to improve some of the different conversion rates and the different metrics that you’re looking at. But when you’re early on, you’re really trying to figure out is this the right messaging at all and are these the right people who are in my target market because there’s a difference between getting 5 or 10 people to pay for something and getting 500 to 1,000 people to pay for something.

[08:01] I mean once you’ve kind of gotten to that point where you have a critical mass, it’s not really a question of are you talking to the right people because you’ve kind of got the proof that you are talking to the right people. But before that point, there is that open question is like what are these people actually interested in and what’s the messaging you can or you should be using for discussing it with them and attracting people to your website and push them through you sales funnel and all that other stuff.

[08:26] Rob: Very cool. So it looks like we have 10 points of discussion here.

[08:29] Mike: The first one is that even before you started talking to them you have to clearly identify the problem that your product is trying to solve. List the specific pain points that your customers are having and try to map out what your application does and how it applies to each of the pain points. Because if you can’t map your product and the solution that you have on to their pain points, then chances are good that there’s going to be some sort of disconnect that you’re going to need to be able to deal with.

[08:57] And when you identify what your solution does before you talk to the customers, then you kind of have it in your head exactly how it maps for you and when you start having these conversations with them you can figure out from their standpoint whether it does or doesn’t do that because just having that in your head doesn’t necessarily mean that its true or they may see it very different than you do.

[09:19] Rob: I think that’s something that a lot of us miss because we have a vision for our product. We have a vision for what we think it should do and the problems that we think it should solve. And that’s all good but you need to hold that very loosely, really view it as a hypotheses and always be asking is this actually the pain point it solves? Is this actually how its going to accomplish the end goal? If you have verbiage that you’re using incorrectly you can really drive people away even if your suffer does actually solve their pain point.

[09:50] If you niche it down to the point where you say hey this is more for salon owners and then you realize oh there’s actually this other market that’s using it and they’re being driven away, it’s really important to find out. So that’s where keep it as a hypothesis not until you really find that fit where you know your product is being actively sought by a market and you can start scaling it up that I think that’s when you lock it into place.

[10:16] Mike: So the next step is once you’ve clearly identified the problem, you reach out to each perspective customer individually and you start asking questions. And I think the email is good but if you can get them on the phone that’s infinitely better because you can ascertain certain things about how somebody feels about some aspect of their product or their solution based on whether they pause for example.

[10:36] If you ask them a very direct question and they say “well…” and they pause for a couple of seconds before really giving you an answer then you know that you’re off base. You know that there’s something wrong and you need to start digging. Your goal here is to just get information. You want to ask questions and shut up. Because I had a conversation earlier today with somebody and I was talking to them and I asked a question and they said well it does this but it’d be nice if it did something else. It was just a slight variation on it.

[11:03] And I could’ve opened my mouth and started saying well I can do this, this and this. But then at that point you’re kind of talking them into what your proposed solution is rather than really listening to them and figuring out what their problems are with the software, with the solution that you have. Because the fact is that you can probably talk them into thinking that you can fix everything. The reality is some people are just not going to be a good fit for your product and you need to figure that out. And the only way you’re going to figure that out is to shut up once in a while.

[11:31] Rob: Man, I got into long email conversations with several early Drip customers. Some of them were 20-30 emails long back and forth. I jumped on the phone with a few of them but I learned a lot about the ideal market or at least what I currently think is a good market for Drip. And I also learned that there were some specific markets that I probably wouldn’t have entered into but it was some folks that were recommended from another Drip user. This is when I had about 10 people using it. I let the guy in because he was a higher profile person.

[12:05] I had a feeling it wasn’t going to be a fit and sure enough the feature request that he made were stark contrast to the software and SaaS entrepreneurs that are already using it and getting enough value out of it that they were willing to pay for it. I think that one on one stuff especially early on it gives you such insight. Way more insight or way more value than any money they would pay you. I do think you should charge folks that are using your product in the early days because you want them to have some skin in the game because if you just comp everybody then you don’t know whose feedback is more valuable. You don’t know who’s willing to pay for it or not.

[12:35] But with that said, you’re not charging them for the revenue itself. You’re really just doing that so you know their feedback is valuable enough that you should consider it. The idea is that if you’re in kind of early access or you’re in a beta and you have customers that are using it but they’re not really using it, they’re not actually doing that much n the app and you kind of feel like everybody’s just drifting away, you’re not learning much, that’s really when you start working down these steps that we’re talking through.

[13:00] Mike: So the third point is that you don’t need to ask the same questions of every customer. And in fact, asking the same question in different ways to different people can yield different answers. It’s one thing to ask the same question to five different people because you will get five different answers but you can take what you learned from the first person that you asked the question and use that to tweak the question and ask the second or third person something that is a little bit different or dives in a little bit further.

[13:26] Because once you get to a point where you are learning the same things, then you can ask the fourth or fifth person a variation of that question. You can start drilling in to find out additional information. Because you don’t want to overload those people. You don’t want to go back to the first person and say well I talked to these other two people, let me find out some more information about this one piece. Because the reality is that the context of that conversation is gone so it’s going to take you a little while to kind of get back into it and you don’t necessarily want to overload any given person who was in your early access especially if you want to be able to keep them around as a customer.

[13:58] Rob: The questions you asked will depend on the answer to the very first question which will typically be something like hey, so is product name working for you? Right? And you’re just trying to find out kind of a general thing. If you’re on the phone, this works really well because then they can respond and you can dive in and they might say no I haven’t really had the time to check it out. Oh you haven’t. Did you know it only takes 5 minutes to get setup? Would you like to do it o n the phone or on Skype together?

[14:24] And then you’re going to start seeing where they say well I would love to. I’d love to see the value it provides and then you get them to that next step, they’re a little more engaged and then you can find out if there’s kind of a deal breaker down the line. But if they say no, I just really – I don’t really have time to invest in the next – then you know that it’s probably not an aspirin pain point for them. It’s not something they need so desperately. It’s a lower priority thing. On the other hand if you say is product working for you and they say yeah. It’s doing a great job. It does exactly what you said. And then your next question is cool. Is it worth X dollars a month? And x dollars is your price point obviously and then you get to see what they say to that. And that will take you one of two directions.

[15:01] If they say yes then bam, you have your first paying customer. And if they say no then you try to dig in to why not? There’s probably some alternative solutions that they’re coupling together that are cheaper or it solve a pain point but the pain point isn’t worth your price. Maybe you have to lower your price or consider at least for this person lowering the price. There’s a lot of different rows you can go down but that’s how it spiders out kind of as a decision tree and those are the kinds of questions that they work really well on the phone. The amount of learning you do, you can do it in a short period of time even with half a dozen or a dozen people answering these questions is just mind blowing.

[15:34] Mike: So one of the things that Rob just brought up which kind of leads into the fourth point is what types of questions you should ask them. Because obviously you’re going to start out with is the software working out for you? But if people are not using your software, the thing that I found that works really, really well is to ask why using you software hasn’t become a priority for them. And there’s a lot of different reasons that they could give you. I mean it might be because you’re not solving their problem. You’re solving a related problem. It’s not quite what they need or just not a present issue for them. Maybe they don’t understand your products and are confused and in which case getting on a Skype call could probably walk them through the product and then you can use that as a learning experience to figure out what sort of help and tutorials or maybe video intros that you need for them.

[16:16] There was a blog post that one of their biggest competitors for fog bugs was actually just spreadsheets and pencil and paper because people just have that stuff readily available and it’s easy for them. If they have that as an alternative then you have to figure out how you’re going to overcome those challenges. But that comes back to the marketing that you put forth and how you portray that to the people. The last thing that asking that kind of question brings to the surface is they may have realized that they just don’t need it. And as you phrased it it’s a vitamin. It’s not necessarily an aspirin for them.

[16:47] Rob: And point five is to identify common themes across the customers that you speak with. So things like the customer size, customer industry, there’s specific needs or used cases for your solution, how badly do they need it? Is this a required task they have to do everyday and you’re going to save them 50% of their time or is this something that it’s nice to have that every once in a while they might need to do and it would make them sleep better at night but it’s not a requirement.

[17:11] There’s a lot of different examples of this. I think with my apps drip has worked out well with SaaS providers and software companies that are selling downloadable software also some information product folks that are using it. And it hasn’t particularly worked out well with bloggers and people who are used to getting stuff for free or people who are really price sensitive and it’s not worth the convenience factor to use Drip and HitTail is in a similar boat but I can pretty well nail down size and the industry and the use cases for my apps.

[17:46] Now in terms of HitTail, since it’s so much more mature, I have a much more concrete idea of who that is. But in the early days it’s hard to know. It’s hard to know who to listen to and so trying to identify common themes of people who are having success with your app and really going down that road is a big deal. It just gives you a lot of insight into who’s using t, who’s getting value out of it? Who’s not? Who’s willing to pay X for it and who’s not?

[18:12] Mike: And that kind of leads into a couple of other things, not just identifying common themes across the customers but identifying common phrases they use, common terminology because when you’re talking to people you need to be able to speak the same language and if you’re not speaking the same language then you either need to establish that with them and say this is what I mean when I say X and this is what I mean when I say Y. But the reality is you’re probably better off changing your terminology to match what your customer’s is rather than trying to educate them about what your terminology is. It’s just going to be easier.

[18:43] Your SEO’s going to be easier. Your marketing is going to be easier because you don’t have to try and educate people in your SEO campaigns for example. And then the other thing is that does your solution meet a very specific paying point is a necessarily thing or is it just nice to have? And I think these ties back really well to the talk that you gave in 2012 at MicroConf about the different types of apps and you kind of gave four different I guess categories that they fell into. There was an aspirin, a vitamin complex or new or entertainment.

[19:16] And depending on where in those categories your app falls, people are probably going to be willing to pay more or less for it or they’re going to view it as something that’s absolutely necessary. So aspirin type products, they absolutely need them. They have to have them in order to run their business. Versus the vitamin type product which it’s nice to have but not necessarily. They can probably get away with it. So very similar to bug tracking software. You can get away without a bug tracking software if you’re diligent about it or if you’re the only person using it then you don’t necessarily need it. You can get away without it. But obviously as your company grows you kind of need something like that.

[19:50] And then there’s the complex or new solutions that don’t really have an existing competitor that you can map it against and they’re so new that nobody’s able to compare your product against others because there’s just nothing else there. And then there’s the entertainment where the people are using it to waste time. It could be movies or songs or it could be games, those types of things.

[20:14] Rob: And figuring out how to make your software product an aspirin product if possible is a big win. If you find out that you’re in the vitamin zone and you can somehow move it into the aspirin area, it can have a stark impact on not only your ability to market it, to get more people interested in it but your retention rates. Because if you’re an aspirin app and people are already using it, they’re just so much less likely to cancel.

[20:42] Mike: I think that’s something important because there are definitely cases. Basically the early access in customer development that you did with Drip which was you found that there were certain types of people that Drip was a really good fit for and for them it was more of an aspirin. And then there’s other types of people that you found that it didn’t work as well for and those people kind of fell into the vitamin area. The product itself is not different in any way, shape or form. It’s just that how they view it is different. And that kind of falls into making sure that you are pitching your products to the right types of people.

[21:15] Rob: Yeah and this holds true no matter what you’re selling, if you’re writing a book or creating a course or writing software or throwing a conference, certain people are just going to be right in your core demographic and they’re going to absolutely love it and need it and certain people are going to be on the fringe right? It’s that vitamin area of like they’re interested in it but it’s just not critical to what they do and then other people, it’s not going to be good for them at all.

[21:40] So the idea is how large can you make that inner aspirin circle? That inner circle of folks who really need access to this or who really need the information that you’re building. That’s really the art of all this is figuring out how to build something that enough people want really badly that you can build a viable business out of it.

[22:00] Mike: So when you’re talking to people, that’s something you need to keep in mind is that are the people who are in your early access program or in your beta program, are they the right people or are they the wrong people? And if they’re the wrong people, how is it that they ended up in there? Is it because of your marketing? Is it just because you were comfortable talking to them? Is there a right person that you need to target instead? You can do that in some respects by making customer profiles and I think there’s a lot of different companies who’ve had different ways of setting up customer profiles or customer personalities.

[22:32] I think that Atlassian uses like a monkey that sits at their table at every meeting. They’re like that’s the customer. What would they think of this? That can certainly apply back to when you’re talking about the things that you do for the early access customers and the things that you’re putting on your website or your marketing materials like are you talking to the right people? Are you targeting the right people? Or – and this is kind of the worst case scenario. Is the product that you’re building simply not necessarily for any of them and is it a dead end?

[23:00] Rob: Yeah. And there are a lot of roads to go down before you get to that dead end place. I tell people if you still have motivation and you’re still interested in this product, don’t give up yet if you’ve maybe launched and you don’t have a bunch of interest but you really haven’t pounded the pavement to find out if with just a minor feature tweaks to the product, you can satisfy a different market’s need for that or with a few tweaks to your marketing, the exact same product could satisfy a different market’s need.

[23:29] Obviously if someone’s done that over and over and still is not finding it then that’s at the point where A) if you’re losing motivation that you should consider throwing in the towel. But I have to admit like five years ago I didn’t really understand the whole kind of pivot thing where you pivot a product from market to market or you’d even add features to kind of try to find a new target audience but I totally see that now of how a single product can provide different amounts of value to different markets if you look for them and if you talk about your product using the right language.

[24:01] Mike: So some things to keep in mind when you’re going through this process though is that this is time consuming. It takes time to schedule calls with people and get the emails out and even sometimes just to get responses. I mean there will be cases where you can send an email to somebody 2, 3, 4, 5 times and not get a response at all. And then suddenly somebody emails you back or they give you call back. It’s definitely something that is time consuming but at the end of the day you really need that information if you’re kind of floundering in terms of getting people to use your product and figuring out why.

[24:35] Because if you do need to make a pivot, you do need to know what it is that turned them off and kind of categorize them as a prospective customer and say okay, how do I tweak my marketing to avoid that type of person or avoid attracting that person initially so that I don’t waste a lot of time with them and classify people kind of across your customer base.

[24:55] Rob: Yeah. You’re going to need at least I would say 10-15 hours a week depending on how many customers you have and how in depth you’re interacting with them. That’s what I was spending during that early access time. A lot of emailing and some Skype calls and a lot of thought. Because then you take that data and you have to kind of look at it and analyze and figure out what to build or how to change the verbiage. You’re doing a lot of talking so it’s not something you can cram into 2 or 3 hours a week. It really is quite a bit of effort to go through this process and really try to figure out who’s engaged? Who’s not? How can you make those who aren’t engaged more engaged or are they just not a good fit?

[25:34] I guess that wraps us up for today. If you have question or comment, call our voice mail number at 1-888-801-9690 or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for startups or via RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening. We’ll see you next time.

Show Notes

• Fizzle – podcast, membership site

Transcript

[00:00] Rob: In this episode of Startups for the Rest of Us, Mike and I have Chase Reeves on the show and we talk about how your product is not the hero of the story. This is Startups for the Rest of Us: Episode 175.

[00:11] Music

[00:19] 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.

[000:28] Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Mike?

[00:33] Mike: I’ve been going through spreadsheets and analytics and all sorts of stuff over the past week and kind of analyzing my conversion funnel for people who are coming into the Audit Shark site and kind of looking to see how many people are doing that versus going to the pricing page and then falling through with a trial for the software and I think I found part of the problem or at least what I believe is the problem. I think that there’s a big disconnect between why people end up on the Audit Shark website because I basically targeted all these keywords around compliance but then when you get there, product and the copy talks a lot about security, not necessarily compliance.

[01:09] So I think there’s a very big disconnect there where people are looking at that and saying oh well, this page maybe applies to me but the product doesn’t necessarily do so. Those are the things that I’m looking at right now and trying to address in the copy and I’m basically rewriting a bunch of the different pages that were out there. I just focus the marketing a little bit more.

[01:27] Rob: Right. And actually in this episode we interview Chase Reeves and we talk about that, about how hard it is to get that language right and to talk about your product in a consistent way you have like a single voice and a single tone and you’re still going after that consistent single message. I’m doing the same with Drip. I don’t have a consistent message because I’m still trying to figure out the right way that resonates with the largest block of folks who are coming to look at it so I feel your pain in that respect.

[01:57] Mike: How about you? What are you up to?

[01:58] Rob: Well I wanted to talk a little bit about the latest speaker we signed up from MicroConf. I’m super stoked. Her name is Annie Cushing. We’re lucky to have her. She’s speaking at Moscon this year and she’s just an analytics guru and this is what she does 24/7 is think about and act on and consult on and talk about analytics. So her talk is about secrets you can pull from Google analytics and she told me a few of the secrets and it will be on the speaker page in a few days because I’m going to be in her abstract.

[02:28] But there’s some crazy stuff that you can pull out of there. I have no idea. I mean I consider myself like an intermediate to lower advanced Google analytics user but there’s no chance like compared to her, she just thrown out all this crazy stuff so I’m excited to hear about it and I think there’s going to be a lot of value there. Then the other thing for me is I talked a little last week about how previous month or maybe two months I was kind of in a slump and what’s crazy is how quickly that’s turned around for me. I got the HitTail revamp live so that HitTail is once again providing all the value it used to, it’s importing keywords for people directly from Google web master tools and providing suggestions and within 48 hours of that, as a new customer started coming in and I’ve started sending emails to the list that are affiliated with HitTail and all the marketing lists and trial users and just kind of getting on boarding all we worked, my motivation has gone through the roof.

[03:19] And so I’m at that high again like manically rushing and helping and implementing new pieces of the support queue and new pieces of on boarding and everything but it feels great and I’m thinking about it at night and waking up every morning stoked to work on the project which is like the antiphysis of where I was 2 or 3 weeks ago. So it feels good to have kind of made it past that dip and back up into the place where I’m just excited to be doing what I’m doing again.

[03:47] Mike: Very cool.

[03:48] Music

[03:50] Rob: So today mike and I did an interview with Chase Reeves. We don’t do a lot of interviews but I wanted to bring him on the show because he just has such unique thoughts about how design impacts every aspect of your product and he made this great quote during the talk that I used as a title and it’s that your product is not the hero of the story. So I think he brings a unique insight. Our pack tends to be pretty left brain like Mike and I think about things in engineering terms. We talk about analytics and split testing and stuff. Chase is the exact opposite. He’s super creative, super smart. He’s just executing on this whole idea of how creativity and brand and tone can really build a business.

[04:26] And so I wanted to bring him on as –both  just to hear his thoughts on it but also to expose our listeners to different points of view. I mean that’s not necessarily be the way that you’re thinking about especially if you’re kind of the engineering mindset. So today Mike and I are chatting with Chase Reeves. I first heard about chase on the Fizzle show which is a solid podcast you should go check out. It’s about online marketing and starting an online business. Chase also works with Corbett Bar and Caleb Wojcik on fizzle.co which is like an online membership website for learning how to launch an online business. What I like about Fizzle, both the show and fizzle.co, Fizzle is one that I consider to be exceptional.

[05:08] Chase: Thanks Rob.

[05:10] Rob: And I’m really glad you gave me a log in so I could actually verify that before I said that on the show. But my impression of it was always that it was solid. It was the same thing with copy blogger Bryan Clark. Everything they do, I respect. Everything that Corbett has done – because I followed him for a few years on think traffic. I’ve always respected so and I heard he and you and Caleb talking on the podcast I’m like man, these guys are doing ending up legit. And that’s really why we wanted to have you on the show. So thanks for coming man.

[05:31] Chase: Thank you guys for having me. I’m thrilled to be here. I’m a fan. I feel like you guys and then also my friend Justin Jackson kind of introduced me to this world of this in-between world because my background is sort of in between like being a blogger and then the other is looking at the big startup world. I’ve always kind of shimmied between those two worlds, things that are on this week in startups like those companies and working in startups and then like looking at my little father apprentice blogs, my little blogs that I startup and try to build an audience right?

[06:02] And then I see this bootstrapper crew kind of develop over the last few years right in the middle of it and it really kind of feels like the home base I never had and just in the last year I’ve gotten so inspired and interested in everything. You know as a designer I’ve always been looking at 37 signal so I’ve heard the term bootstrappers. I know about bootstrap profitable and proud. But that was always still like this in week in startups crowd thing for me.

[06:26] Rob: Right.

[06:27] Chase: And so being able to see the way that you guys have started talking about this sort of world and the products that you make and all that kind of stuff, like I spent a whole like two weeks in the MicroConf videos from the most recent session. I basically cancel all my calls Judith and I just spend forever watching through each one of those videos and I just love them. I felt like I was finding my people. So I’m really excited to be here.

[06:51] Rob: Awesome. There’s a really cool term. There’s a blog post called the third tribe that was written on copy blogger and it talks about that false dichotomy that you’re just talking about where there’s like kind of the startup people over here and they’re all trying to launch these huge B-C funded businesses that never work that 1 in 1,000 actually makes money or 1 in 100. And on the other side there were the internet markets, the affiliate marketers who are just all about money, money, conversions, conversions not really forward with society.

[07:17] And on copy blogger they said there’s this third tribe and it’s the people who want to do stuff legitimately online whether that is starting a blog and building up a real audience or whether that’s launching small software product but they also kind of need to make money because we’re bootstrap. We’re self funded. Right? You can’t just go for three years and giveaway your products. So if you haven’t read that, I recommend it. We’ll link it up in the show notes.

[07:37] Chase: Here’s my question for you guys. What are a handful of entrepreneurs that you guys are paying attention to?

[07:42] Mike: I listen to the bootstrap with kids podcast pretty much every week whenever they come out and do episodes. So I pay attention to Brecht and Scott, pay attention to the things that Ruben Gomez is doing and then I also pay attention to pretty much anything that Patrick McKenzie does. And then there’s kind of a core of I’d probably say 30 or 40 people who I kind of keep tabs on but I don’t necessarily follow absolutely every move that they make but they tend to be the people who show up at MicroConf, just people like Robert Gram, Nathan Barry and Brennan Dunn and various other people who have been to MicroConf and seen what it’s like and are doing things on their own but aren’t necessarily high profile people. They’re people who are in the industry as Rob was saying, kind of that third tribe.

[08:26] Rob: Are you looking for who we look up to or just who we’re in community with?

[08:30] Chase: I guess a little bit of both.

[08:31] Rob: Yeah. All the folks Mike mentioned and several other MicroConf attendees, Dave Rodenbaugh and Patrick Thompson from Inc Stone Software, just folks who are making it happen but they don’t necessarily have the big blog and a big following. The entrepreneurs that I’ve been following the last several years who are really rocking it and I tend to use them in a lot of examples because I respect the hell of what they’ve done in both the bootstrap and the venture space is Jason Cohen and Hiten Shah.

[08:57] Chase: Okay.

[08:56] Rob: And that’s one of the reasons those guys have been at every MicroConf because they just kill it. Anything they do, if they moved into the email marketing space I would be so sad because one of my apps is in that space. They’re the few people like if a venture funded company moves into my space I’m not actually that scared. I think I can kick their ass just based on pure will and just experience. But those are the guys who have it. They have both the knowledge and you have funding at a drop of a hat and all that stuff.

[09:20] Chase: Yeah. Jason’s video in the most recent MicroConf. There’s a point his presentation where he said okay, so hands up if in the next month if you didn’t do anything on your business, it would still make at least $10,000 and that question and realizing that if I was in the audience I would have my hands raised. It was the actual moment I became a big boy in my business because I never had put it together like that before up until that point like Fizzle like you said I’m really enamored by the fact that you would say such kind things about it since you’re someone that I respect. We’ve worked our [Inaudible] to make this thing. I’m really, really proud of it and yet I still was in that mode where like look at this thing I made, it’s incredible. I was still just in like yeah we’ve got a little thing. We’ll see if it’s going to be okay.

[10:05] In my crew of designers it’s not cool to talk about yours successes. That had bled out into its not cool to feel confident about what you’ve made in some ways. So when Jason said that, it’s like the diaper came off. I’m still in pull-ups but it’s not a diaper and I can do it myself now you know what I mean?

[10:22] Rob: Yeah. I definitely think like the thing that the press reinforces kind of this societal vision of entrepreneurship is from Shark tank and  Inc Magazine and Fast Company and all that stuff and that’s one thing that we’ve tried to fight against and mention it often on the podcast is just like that’s kind of the fake reality. That’s the fake entrepreneurship in my opinion. I’m not saying those guys aren’t doing it because there are people on there that are doing it. But if you have to ask for someone’s permission to start your company, I think you’re doing it wrong.

[10:50] Chase: Though there are some businesses that just can’t be bootstrapped. If you want to start a new airline like it’s going to be hard to just try to roll your own in that way and I’ve got a buddy up in Canada who does a lot of big business and he’s always giving me BLEEP he’s like Chase, sometimes there are business where the idea itself in order for that idea to succeed it can’t be done on a bootstrap level just because I’m so one-sided about that, so I’ve learned a little bit from him in that capacity just because I mean to be able to be nimble and quick and live like we are, it’s sexy. It’s creative. It’s adventurous. It feels exciting. I really, really enjoy what it’s like to build businesses like this.

[11:26] Rob: And we do too. That’s why we’re here. I kind of want to guide us into the topic of today and what was cool was Chase you and I were emailing about it and you sent back I said hey would you like to come on the show? What would you like to talk about? And this was your exact quote. You said my honest to god wheelhouse is designed specifically how founders should be thinking about design, not conversion optimization or AB testing. That’s for people with spreadsheets and I don’t have those. I’m the creative director for Fizzle and that runs through a ton of writing, voice, tone, strategy, long term brand story etcetera. I lump all those in with design. And then you attacked on the end you said I also do a lot of teaching on defining audience and customer development.

[12:07] So that’s really what I wanted to get into is both of those things because I think they’re critically important to founders both bootstrapped and funded and I think both starting kind of a blog audience, just an online business that way or a software company. I think we can dig into why those things are important. So that’s what I want to kick it off is like you mentioned voice, tone and strategy so why should a software founder care about those when they’re launching a software product?

[12:32] Chase: There is a cultural momentum around design. I guess the aesthetics of a thing the way it feels in your hand, the message that it gives, the sense of cool or independent. Look at the difference between Apple and android. Android is like I want to be able to put my own apps on my thing. I don’t want to be in the walled garden so to speak and Apple’s like we control everything and that’s why it’s so good isn’t it? It’s never really been a satisfying answer to me. I think like I kind of said in the quote you read, design ends up being like the whole kitten caboodle. It’s like design itself, it’s weird because the design isn’t the thing. Design is nothing. Design is a container so you never would give someone like a piece of Tupperware and be like isn’t it amazing? Nobody’s ever said that about Tupperware ever. Right? So I think design is like Tupperware but what’s inside of the Tupperware, the leftover meatloaf that’s just sensation got better overnight, that’s the content.

[13:31] That’s the business goal in some ways and the whole purpose of design is first and foremost to get out of the way of the business. And then if possible, to amplify this sort of message of the business. What I mean by that is when you land on a site and you’re like this is good. I like this. You’re resonating with that thing. You like it. It’s speaking your language. You feel like it came from people like you or you’re one of the kinds of people who would pick this thing up or who would come across this website or who this thing was built for.

[14:10] Because I think of an intention that the designer or CEO or founder or whoever had to create that experience with you. So there’s an audience, we have pains, we have problems, we’re bored. We’re irritated. We have things we want to achieve, things we want to do. I have a rash on my rectal and I need a cream. And then I do a search on a cream and I land on four sites and these four sites could very clearly cater to very different audiences and it’s that point the catering to different audiences, that’s when I get really excited.

[14:31] Mike: Sounds to me more like a lot of the way you view it is not necessarily what I would term design. It sounds to me more like it’s about giving your company or your product a voice in a persona that resonates with other people because people who follows 37 signals tend to see things in a certain way. People who follow Microsoft tend to see things in a certain way. I think that’s reflected in the choices that they choose but also in kind of the positioning of those companies and the products that they represent.

[15:00] Chase: Yeah, very much so. That isn’t just design. But also you can’t separate design from the voice. So I kind of see three things. There’s the aesthetics. There’s the voice – so the aesthetics is like what color is it? And like just the general sort of look and feel of it, then there’s the voice, the way in which the thing was written, the tone and then there’s the actual content, the thing that it’s actually about. So I could write something about freeing slaves in a sort of happy go lucky way or in a super brute serious like this just has to change way. And then the kind of page that I’m reading that on, what types it sent in, how big the margins are, what the colors are, where I found this thing. Is it pasted up against telephone poll? Is it a website that I was searching for something else and found this? Was it on an advertising on Facebook?

[15:50] All of these things create this moment and my whole dream has always been to sort of engage the visitor in a moment of emotional authenticity. I want them to land here and be like oh my god yes, this is for me because it’s so incredibly hard to do that. There’s so much noise. There’s so much croft and crap on the internet that they try to reach through all these crap even though like any visitor who lands on your site is so well trained to hit the back button right? We come to sites with that posture. My dream, the challenge that I’ve always loved is how do I reach through that crap and that history that they have with websites and with salesman and all these sorts of thing and create sort of an emotionally authentic moment where they’re like oh my god I like these people. I like this person. I like this thing. This feels like it’s for me. I’m starting to trust this because that’s the other big thing about design is it crates trust.

[16:45] I think it’s getting harder and harder to do so but if I land on your site and it’s a typical WordPress theme and your copy is all about some big deal, look at this thing I found out, incredible – just not interested chances are. Unless you really, really, really nail it. And I think the copy is absolutely the most important thing on the site. I want to make sure that I definitely say that. Just like Justin Jackson’s words things, I did a course within Fizzle on the essentials of web design for business builders, so not for designers but for people who are building businesses. It’s the essentials. There’s like five hours of training. It’s crazy. And then we designed nerd fitness and while I was doing it I filmed most of the conversations that me and Steve Kim the founder of that site has.

[17:26] I brought in Justin Jackson’s words thing. I’ve never talked to him before. I just found the thing and I was like hey can I use this? I already made the video I hope that’s okay. And so then I put it out and luckily he was fine with it. Because that’s so powerful. The idea of this is – it’s really about words. It really is about words and words are the things that communicate and if you can tell me about my problem better than I can tell myself about my problem then I’m already trusting you. I’m already interested in the solution that you have to offer. I think that’s still the most powerful thing but now, why stop there? Why make it a black text on a white background when you can make the aesthetics of the page completely get that message across.

[18:06] Rob: I’m totally on board with that. I have my own thoughts of how to accomplish that. I’m curious how you go about it because you are obviously an expert in this. You’ve done it over and over and I’ve seen fizzle.co I’ve seen how coherent and cohesive that brand is that your aesthetic, your voice and your tone of that site, it matches up so well. So how do you do that? How can – again there’s a software developer listening to this right now and they’re thinking boy, I don’t know that I’m able to do that. So do you have a process? Is it just trial and error? Is it you have to do it for 10 years to get good at it?

[18:37] Chase: Yeah. That’s a great question. Here’s some notes that I have on this. First and foremost you got to care. You got to give a damn. If this is just another software product that you hope you don’t have to touch at all throughout the week or month and that it makes you a few thousand dollars a month and things like that, good luck. Kind of like you said earlier Rob, there’s this sleazy douche bag internet marketing folks who aren’t trying to push civilization in humanity forward at all.

[19:03] So if you want to make a little product that does a little thing that’s one of 10 things in you arsenal that you don’t want to have to touch, I find it very hard to try to create – I’ve worked with a lot of clients like that and I find it incredibly hard to try to create that. Not to be like you can’t make it good. Right? That thing is what it is. Like Drip Rob, what you have is what it is and the role of design is to make that thing the most what it is to everybody who lands on that page who’s right for that product.

[19:30] So it’s not necessarily just about making the world a better place but I do for me what’s always the center of what I get into, it’s like I care. I see nerd fitness and he’s got a few million people coming to his site every month and it is selling products but it’s this crazy Frankenstein of a brand and I really like Steve to say come up to my house. We’re going to spend a week. We’re going to redesign your site because this nerd plus fitness thing the way that story is kind of crashing together in my head makes so much sense and that’s not at all what I’m seeing on this page. So let’s try to make this thing what it actually is.

[20:06] That all came because I had a deep sort of intuition about this thing and really wanted to see that vision come to life and that’s kind of like my answer to everything, someone wrote a big post recently on personal branding and they interviewed me and I was like I have four steps. First one is care, second one is look at number 1 again and then do that for 2 and 3 or 3 and 4 as well. When your personality, when your humanity comes to the surface of any website experience, it’s at least interesting. So I always like that.

[20:34] Then, what else could we do? For me there’s this sense of story. There’s sense of a story and my friend Don Miller wrote a book called A Million Miles in a Thousand Years. He’s basically asking what would happen if we looked out are life the way that a director looked at a movie? And that’s always stucked with me because – then he gets into what is a story? This is a simple formula for that. A story is a character who wants something and overcomes obstacles to get it. So I always try to get myself in a story mode but here’s the big mistake that all of us founders end up making. It’s like so if the story of our business is like Star Wars. We always think of ourselves as Luke Skywalker but we’re not Luke. The audience is Luke. The person who’s using our software is Luke.

[21:20] Okay, they’re the ones who have to defeat the empire. They’re the ones who have some crazy DNA and back-story that they didn’t have any control or power over and now they’re thrust into this quest they couldn’t have helped it now. Who are we? We’re the Yoda or we’re better yet the Obi-Wan. There’s a scene where Obi-Wan gives Luke his dad’s light saber. I saw that and I was like oh my god this is the move right here. That’s the kernel of the whole freaking movie and that’s the scene that what I’m always encouraging founders inside Fizzle to do.

[21:47] So to take that posture of okay, I need to help look with this mission that he’s on because otherwise the whole universe explodes. It’s going to be horrible. It affects me when they don’t do it. So again kind of coming back to that care – but seeing them in that story, now there’s something at stake. Now it’s not just about how do I get them to use email better? Now it’s about these guys have to make money. They have to make money from the thing that they’ve made and I need to help them on that journey. So I’m going to help them in this little sliver of it just like Obi-Wan just helped one little sliver then there was Yoda and then there was Lea and Hans Solo and everybody plays their own roles.

[22:30] So for me that story, that is always what I get into and obviously there’s not like tactics in there. I find that I can empathize with the people in the otherwise more and that always – that’s what a lot of people would say design is empathy. So tell me what I’ve said so for because I feel like I’m not making any sense over here.

[22:47] Mike: You’ve said to know your audience and know them well enough that you can hear the internal conversation that’s going on inside their head and that you turn that around and make them the hero of the story that it’s a hero’s journey and that your product is not the hero. It’s the user.

[23:03] Chase: Yeah. Exactly. And you’re sort of the Obi-Wan. Your product is a light saber. The user is on this journey and if you care about that journey for them and realize they need to be successful in that thing for your product to be what it was meant to me, to be the light saber that is in the final climactic scenes of that movie that’s the story. But I’m the kind of guy – I just can’t help it. I always start there and from there normally there’s some inspiration that comes from it. There’s some sort of idea. there’s some little gimmick, some little thing so nerd fitness it was the comic book sort of elements that came to play for smart passive income they came just this idea of pat as the answer man. And as like the crash test dummy for trying a lot of things online.

[23:49] For think traffic it was making a huge big bold statement about what it’s like to have a website make it responsive because compared to the rest of the internet marketing world it was really, really bad. And so to put something on this huge massive 70 pixelled font size on the headline big broad sprawling pages, it really made an impression. All of those things serve those stories and so for Fizzle, our story, there’s another thing from Peldi, saw his Business of Software talk.

[24:21] In that he says don’t fall in love with your solution. Fall in love with the problem and you’ll be just fine. And that’s kind of I guess what I’m getting at here is if you fall in love with the problem, realize what’s at stake for the people on the other side who have that problem, it’s going to help you with your copy writing. It’s going to help you realize that you’re going to need to put together a design and test it over time. You need to see what works best. You need to hear back from your audience. There’s no borders between your design and the emails that you send your customer and the feedback that you’re getting from them and all this other stuff, it all shapes the direction of this thing so that in 8 months, 12 months, you’ve got a really, really strong understanding of what’s working extremely well for your audience.

[24:59] Rob: I’m glad you brought up Peldi because I think he’s a really good example of basically taking what you’re saying and he applies that in everything he does whether it’s his app itself, whether it’s the marketing, whether it’s his presentations or his Twitter background, everything. It’s about this design thinking but it’s a creativity and looking at every point of contact with his company or with his brand, he wouldn’t call it a brand but it really is a brand and you fall in love with Peldi and what he’s done with Balsamic because of that creative thinking and he kind of turns you into the Luke Skywalker.

[25:31] Chase: I have this video that I did on Ice To The Brim which is just my little personal blog where I’m talking about – call it the focus factor but I talk about how we all do this digging. This is just thinking personally. We do this digging where like maybe I’ll be this kind of good guy. Maybe I’ll do this for a living. Maybe I’ll do that. Maybe I’ll be a designer. Maybe I’ll be a copy writer. Maybe I’ll develop frontend. Maybe I’ll learn some whatever you crazy people get into, python or boa constrictor or whatever’s the coolest thing right now. And we’re slowly spiraling around, getting closer and closer and closer to our center to find out kind of who we are and what we’re here for.

[26:05] And then when we be it, that’s not actually like our landing pad. That’s not the destination. That’s the launch pad for what I call like the story ark that explodes off of there. And now everything we do falls on that story ark. So if my story ark within Fizzle is to serve the independent entrepreneur. I’ve fallen in love with that problem, the problem of the independent entrepreneur kind of like the word indie because we’re dealing with this identity crisis of if we’re not taking on big money if we don’t have millions of users then who are we? We’re nothing because part of this story is people are telling us that. That’s not true.

[26:40] All this DIY stuff, all these problems that are coming at us, not only do I have to know how to code and think about these sorts of things or know how to find coders but then I got to think about differentiation and I got to think about web design and I got to think about web design and I got to think about an email strategy and I got to think about all this other stuff and it’s just so overwhelming. So there are things that we work out over the course of the 7 years that we get started and try these things out but I’ve fallen in love with that person who wants to build something and support themselves and earn a living something they care about and trying really hard not to burn out on it.

[27:09] That’s the problem I fell in love with according to Peldi’s advice. So that’s the story arc. You can easily spot where the sparkline, the Fizzle glance, it’s the big circle that doesn’t have a whole lot of revenue going on. And then one step further is the Fizzle show which is a much smaller circle but still pretty big. And then just to the right of that is Fizzle which is a really small circle but really high in revenue. And then beyond that, who knows what it will be next right? maybe some sort of small group coaching, maybe some sort of get 15 people together in Cancun for a 3 day intensive, maybe a live event of 300 people or something like that. But everything serves that story of the indie entrepreneur and they have varying degrees of audience members or revenue that thing is capable of. And designing that story was the first place I started in developing the Fizzle brand.

[27:58] Mike: Really what you need to do is you need to figure out what the story is that you’re going to be telling to people and along with that story I mean you have to have kind of an idea of what your audience is. So how do you go about developing or defining what that audience looks like because as you said, your customer is really the hero of the story and you want to make your products as basically the light saber. You’re providing the tool for them but you want them to be great with it and you have to figure out who that audience is. And how do you go about doing that? I mean what’s the hard part about defining what that audience looks like and who the ideal person I guess in it, I don’t want to say customer because in some cases it’s not necessarily customer but who’s the ideal person who kind of fits into that audience. How do you define them?

[28:44] Chase: Yeah. It’s a really good question Mike because really, that is the hardest thing in the whole world. But there are some tools and tricks of the trade. First of all you got to realize do I know this person already or do I not? Half the time we’re all developing for ourselves. We’re creating our product to scratch our own itch and that’s a really good place to be if we have a little bit of taste and a little bit of style especially if we’re the kind of person who thought through this issue a lot, this problem. If we know it really well, chances are we’ll be able to create a pretty good solution for it.

[29:15] Now it’s a question of whether I don’t know, we’ll be able to really market it all that well to other people like me but your chances are better than if you didn’t know anything about those people in some way. But a lot of the times, you might start thinking that to you and then you end up over time learning more and more that you’ve somehow hit some vein of people that you don’t know anything about but they really love your product and they need these three features that you didn’t even think about before. I’m sure you guys have experienced that right? Where you’ve built something and then the audience starts kind of pulling it in a different direction.

[29:44] Mike: Yeah, definitely.

[29:46] Chase: Like being able to listen to them overtime is a big thing. So the first thing I would say is number 1, give yourself some time. Allow yourself to listen for a little while and be okay with not having the answer. You can do sketches. Weirdly your mind thinks different things when you’re doing different stuff. So you can just take a piece of paper, draw like four people’s heads and just their shoulders on just a big weird thumb but then I would put on hair and this one had glasses and he’s carrying a messenger bag and what’s inside a messenger bag? He’s probably got a moleskin and a Nalgene and this lady she was earring some sort of blouse. She had a Blackberry. Why? Because she’s enterprise. Weird. I didn’t know I had any enterprise people on my audience. Okay, that’s interesting.

[30:28] But of course you’re just kind of sketching but it gets you opening up, thinking about who would be in it and which one of these would I really like to cater this thing too? That’s a really good tip is just to be able to sketch and draw. Another thing is finding out where the conferences are that someone like this would go to. Just doing the research on for instance if you’re doing research on web designers, there’s just a million web design conferences out there and there’s a big difference between the event apart audience and the future of web apps audience. And that’s an instructive difference and you can read through some of their marketing materials. You can look at things on their site and hear testimonials that they probably have featured on their site and they’re giving you language that glues you into who these people are, what they really are hungry for.

[31:12] You can find forums where folks are interested in your topic and just get involved, just start paying attention, just start listening, get the email updates. Try answering some questions. Try getting more clarity about what their struggles really are. These are all things and again none of it sounds sexy. Right? It just sounds like work and I would say limit yourself. Give yourself time but limit yourself because you can spend the rest of your days researching before you launch this thing. And what’s important is you do a good preliminary amount of work like 2-3 weeks of research and development on who your people are which is the same thing as saying understanding who your people aren’t.

[31:50] And then you launch with that. You go whole hog with that and you try it out for a while and then you start hearing from people you do the things that don’t scale for a while. You’re reaching out to everyone. You’re getting really – hopefully kind of like what you guys have both done with your products where you’re getting all that big feedback from your small crew of early users. That’s all big stuff. And then with one last bit, just the language that they use is incredibly important. if they say I’m really struggling with or I have a problem with, just the little tweaks on language, if you see any patterns in that or if you get any sort of clues into that, first of all, the only way you’re going to get those clues is if you’re really listening, paying attention is sort of keeping an Evernote list somewhere where you’re keeping notes on that stuff. But the language that they use matters a ton.

[32:39] Even if you don’t use the exact same language on your sales page, using things that are like it, using things that feel like they’re going to interpret as the thing that they mean when they say I struggle X,Y or Z. that ends up being a really big deal.

[32:53] Rob: There was a lot going on there. The piece that I want to touch on is the language point. I’m not sure if you haven’t launched a product that you really understand how different it is to call your product say let’s take Drip for example. That’s the email marketing software that I launched. I could have a headline that says epic auto responders. I could also have a headline that says more leads and more customers. I could have a headline that says easy lead generation. I could have one that says emails that convert. Double digit jumping your conversion rate. I’ve used all of these. The reason I know this, because they’re in front of me, because I have like 19 different headline that I’ve tested and that I’ve talked to people about.

[33:28] And the interesting thing is where Drip is right now, it’s still early but I can already see the different groups using it in a different way and referring to it as a different thing so that is a challenge because all of my customers are not calling it the same thing. They’re calling it different things but it’s as you said, you try to look for trends. You try to slice it and figure out if they’re Saas or a software company. Are they saying a certain thing? Are they talking about leads or conversion rate or ROI?

[33:55] Chase: Yeah.

[33:57] Rob: If they’re more of the email marketer, are they talking about how good the tool is itself and not talking about the results. So that’s to be honest the phase that I’m in right now. I did it with HitTail. We’ve done it with MicroConf, we changed the messaging there. I mean kind of every product that you go through I think at a certain point once you do understand that audience and you’re able to have a dialogue with them you wind up honing that message.

[34:18] Chase: Yeah, absolutely. There’s this great quote from Victor Papanek, one of these old school designers and he says design as a problem solving activity can never by definition yield the one right answer. It will always produce an infinite number of answers, some righter and some wronger. So just like with headline and maximum amount of headline tests. There’s normally mostly a winner. Sometimes you get a really clear winner and sometimes it’s like yeah this is incrementally better let’s just stick with that. But still even there, who’s to say you’re not going to come up with something more right than this current winner. Sort of this organic development over time and that’s why it’s helpful that it’s not like just some little thing that you hope to sort of fart out and just never have to deal with again because these ideas develop over time.

[35:04] So I guess I’m sort of pre-disposed. I dream about making a brand and making something that stands right next to mailchimp and square space in terms of look at this, it’s from the internet. It’s for the internet. It stands for something good. It says let’s make a better internet together the way that square space is saying that. I’ve got a background in advertising and that has always been the most interesting thing about advertising to me is that you have so much money to do something meaningful and everybody [Inaudible] they’re not doing it in an interesting way when they could.

[35:37] And so you should take everything that I say with a grain of salt but that’s like that’s always what I’m hungry for. I’m always hungry for some spec of the sense that maybe we’re not alone or as lonely as we all feel we are. It’s certainly in my DNA to build a brand more like Fizzle like hey let’s do something matterful and meaningful together. Let’s create something of our lives. Let’s harness what we know of independent business of the internet of connection with other people of needs and desires and all these things and let’s earn a living independently doing something that we care about versus just making money.

[36:08] Rob: Right. I’m interested you said that advertisers, they have so much money and most of them are doing it wrong. They’re not doing it in a meaningful way. What does it look like to do it in a meaningful way? What’s an example or what is a way to describe how you envision that?

[36:25] Chase: I mean there’s a lot of examples of people doing it really well. Do you remember the Chrysler commercials that featured Eminem? One of them actually had Eminem in it and the other ones just had that song, that building sort of driving song. What they did is they told a story of the rebirth of Detroit and American Motors. They reframed the story of Chrysler as the story of Detroit, as the story of America as an underdog. And they did it all with this driving, moving Eminem song underneath it. And then they told a bunch of little stories. One of them was a Portland some NFL player something and it was like his homecoming coming back to Portland like driving through the streets, gray, foggy, cloudy outside and he’s driving through Portland and it’s just some really mellow kind of deep, meaningful monologue that he’s having. They told these stories for the underdog and they made the brand represent that. That’s sensational. I loved that.

[37:20] And then here’s this other example that I found recently. There’s an advertiser called Howard Gossage. He’s an older advertiser in the 50’s and 60’s and it was said of Howard Gossage – I can’t remember the exact words but the most well rewarded renegade of the advertising you. But I’m just looking at this ad right now in this book that I have of Howard Gossage. There was a stereo company called KLH and he made this just the silly ad. All his ads were funny. They were like conceptual art and this is what it says, a recent survey sponsored by KLH has proven beyond doubt that when you buy KLH stereo equipment, you will love your wife or your husband more.

[37:56] And then he says admittedly it’s like a lot of copy on this ad by the way. He only did ads in the New Yorker. He said they did a survey where they asked respondents to assume that he was for some reason deprived of his wife or husband and to assume that dollars could somehow prevent a catastrophe, how many dollars would it be worth to keep your wife or husband? Well gentlemen, the findings showed that owners of KLH equipment said on average they’d spend $541,616.23 whereas owners of other equipment said a mere $362,000. The difference is $179,000.64 worth of favor for the average KLH spouse. It’s just a silly idea of saying that he made up some stats that are just outlandish and crazy and said this stereo company is going to make you love your wife more but it’s cheeky.

[38:50] It’s funny. It’s interesting. It’s I think more than anything else, it’s human. That’s what I feel like advertisers are telling us like look at you, you’re the crazy guy who loves Taco Bell at midnight. You’re crazy. We love that about you. Come get a burrito wrapped in a taco with a thick candy shell or whatever.

[39:06] Rob: So that’s what you’re saying. You’re saying there’s an element of humanity. The word human has come up several times when you’ve been talking. It also sounds like there’s an element of humor. There’s an element of creativity and cleverness that goes outside of the way everyone else is doing it.

[39:21] Chase: Yeah and that’s classic good copy writing but there’s just so much room to actually make someone fall in love with your brand, with your product, with what your product represents. Mailchimp or like square space right? They’re a super bowl ad for like here’s to like let’s make a better web together but it’s something like that. Great [Inaudible] really good advertisement. Really good advertisement really good story at least for us internet people, it’s a great story to get behind. That’s what I’ve always been addicted to. I’ve always wanted to create that experience when someone lands on one of my websites or something that I’ve designed for someone else but especially when I land on Fizzle, when they watch the video and they see the little joke, it gets very intentional that we have that little gimmick in the video about 15 seconds into it because that’s right around when you’re probably going to click away.

[40:05] But those kind of little human bits I find that if I landed on Drip Rob and it was cheeky and it said listen of course you have an email problem just look at your fingernails or I don’t know, that’s not a good example but something like that wherein you drew me into the story whereas like people who use Drip love their wives more or I see that you’ve got humor. You’re interested and I got to be clear that’s not always right. Probably rarely right but that’s the kind of experience that I want to have. So I want to give the visitor that kind of experience with the stuff which is why in the training and the courses that we make, there’s always jokes. There’s always little one liners and little sort of things that we pull in with the learning to kind of keep it interesting because these stuff can be tough to learn. We like to really accentuate the humanity.

[40:51] Mike: I think that makes a lot of sense and I don’t know where the line here is. It would seem to me that when you’re doing advertising and promotion you’re your product that you could overdo it. And I don’t know where you would draw the line I mean obviously it depends on exactly what you’re doing kind of what are your thoughts on them? Because it seems like you could only tell the same story so many times or so many different ways before you get to the point where you’re no longer eliciting a positive reaction from people. It can turn negative.

[41:19] Chase: Absolutely. It’s a really good point Mike because first and foremost I just need a cork screw. I think a lot of people who listen to this show, a lot of bootstrappers, we’re trying to build a great cork screw, something that’s useful, it does what it’s supposed to do. Like email Drip, like these sorts of things. We want to create a cork screw and I’m fully willing to pay $10, $15, $30, $90 a month for a corkscrew if it really opens the bottle of wine the way that I need it to.

[41:45] And so at the same time, you’re absolutely right about that. There needs to be a balance because when I buy a corkscrew, I don’t want to hear some cute long whimsical tale. It’d be nice if there’s five corkscrews on the wall. I know they’re all going to do the job. But one of them is shaped like a pipi or something like that, look at these guys. But then they have another one that I would actually want to put my hands on. But you’re absolutely right. Because if you land on something and it’s too cheeky, it’s too cute like I said, whimsical almost, then I’m losing interest because you don’t understand my problem.

[42:14] But if you can understand my problem, tell me about it in a way that makes me go not only yeah, he gets my problem but he does it in a way that feels right, that feels human. That also was actually surprisingly interesting. There was a one liner in there somewhere or there was some little vignette or some interesting story or whatever. And again, it’s not always going to be humor. It could be like the Chrysler ad where it’s actually meaningful, it’s motivational, connects it to my bigger motivation which is not to solve my email problem. It’s to have a life that I care more about that I feel more at home in, that’s more authentically me.

[42:46] Sometimes it’s just connecting it up that level of why or down that level of why depending on how you look at it. And that in it of itself also needs to be done tastefully. So you’re right in that these things can be way out of whack and off balance.

[43:00] Rob: Well Chase, it’s been awesome having you on the show man. I’m wondering folks want to get in touch with you, follow what you’re doing, how would they do that?

[43:08] Chase: If you don’t care about who you follow, if you have low standards for Twitter I’m on there with chase_reeves but probably the best place is the sparkline blog. fizzle.co/sparkline you’ll be able to find it there. we work very hard to keep the quality of stuff that we’re putting out there quite high and I think it’s pretty good stuff that your audience would probably like.

[43:25] Rob: Awesome. Thank again for taking the time man. Really appreciate you coming on the show and I think our listeners would get quite a bit out of this episode

[43:32] Chase: Alright man, I’m glad to be here. I hope there’s something intelligible in there. I kind of feel like I just kind of ranted and raved but that’s no new sensation for me.

[32:41] Rob: Very cool dude.

[43:43] Mike: Thanks Chase.

[43:44] Chase: Thank you guys.

[43:45] Mike: If you have question for us, you can call it in to our voice mail number at 1-888-801-9690 or email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt used under Creative Commons. You can subscribe to us in iTunes by searching for startups or via RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening. We’ll see you next time.

Show Notes

• Momentum Chrome Plugin
• Facebook Ad Fraud Video
• Steve Pavlina on Becoming an Early Riser
• MicroConf Vegas Speakers

Transcript

[00:00] Rob: In this episode of Startups for the Rest of Us, Mike and I update you on our projects, HitTail, Drip, MicroConf and Audit Shark. This is Startups for the Rest of Us: Episode 174.

[00:09] Music

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

[00:27] Mike: And I’m Mike.

[00:28] Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week Mike?

[00:33] Mike: I was on a bootstrapper’s website and they linked to a chrome plug-in called momentum. I love this plug-in already. I mean what it does is you install it and whenever you open up a new tab, it gives you a photorealistic background of some picture that’s been taken some place in the world and it tells you what time it is and when you first open it on any given day, it asks you what your main priority for that day is. So then you type it in and the rest of the day, whenever you open up a new tab, t will remind you that is your main priority today.

[01:07] It essentially has acted like a deterrent for me wasting time going and doing just browsing new sites or hacker news or anything like that. It’s really cool. I’d really recommend it to anybody but it also gives an inspirational quote and tells you what the temperature is outside. Today’s quote is never let your fear decide your faith.

[01:24] Rob: That’s a really cool plug-in. I love the idea that you enter your goal and then it basically keeps shoving your goal in your face all day. That’s a nice feature.

[01:33] Mike: It’s awesome and I’ve only been using it for about two days now. I love it.

[01:36] Rob: Cool. Hey, have you seen that video on YouTube? It’s called Facebook fraud but a guy lays out a really interesting case on how buying Facebook clicks to get more likes on your page is kind of a racket?

[01:47] Mike: Yeah I did.

[01:48] Rob: The video is really well done and I love the guy’s presentation style is just kind of matter of fact, he talks through arguments of Facebook is – the clicks to get likes by paying the whatever it is, 30 cents or 50 cents a click are worth about as much as if you just go and pay a click forum like in the Philippines or in India, you can pay a tiny amount of money. I think it’s a penny a click in order to get people to like and that those are basically almost equivalent.

[02:12] Now, I thought all that was cool. The problem I had with it is I kept seeing people posting it with the name. It wasn’t Facebook fraud. One person posted with a case for the uselessness of advertising on Facebook or Facebook ads don’t work. When I saw that title, I clicked through because I’m like how is this going to play out? But it’s only talking about buying likes on your page. So if you don’t buy likes on your page, this thing isn’t really that relevant to you. It’s not some catastrophic damnation of buying ads on Facebook because obviously a lot of us do well with Facebook ads.

[02:44] If you’re selling software and you’re sending your clicks off of Facebook onto your website and you’re getting people to buy your product, then obviously it’s a very different approach than what this guy was talking about.

[02:55] Mike: I mean unless you’re involved in internet marketing, you probably don’t necessarily understand the subtle nuances of what you actually do with Facebook advertising so people look at that and they’ll see this video and they’ll say Facebook advertising doesn’t work. But having never gone in there and looked at it, they don’t realize that there’s like several different ways that you can advertise and there’s different things that you can try to get people to do. So if you’ve never done it before, you’re going to see that video and say oh, Facebook advertising is a giant scam and fraud and that’s not what its saying. It’s saying that this particular thing is no different than using a link farm and yeah that’s right.

[03:32] Rob: I think that he says it’s like it isn’t much better. Like you’re paying a lot more and it’s only a little bit better. So you know, there’s been stuff about this about Google ad words having all these click fraud at Twitter, I guess it was ad sense. So if you’re placing ads through ad words that people would have ads on their website trough ad sense and then hire folks to click them. And yeah that’s happened. And people a few years ago said Google is done. This is going to ruin Google that they were just doomed and yet here they are inviting flying cars. I’m not saying that you should dismiss something like this but really think about the grand application to this and how much of an impact it actually has on Facebook and really our efforts as marketers. So what’s going on with you in terms of Audit Shark stuff?

[04:13] Mike: I’m in the middle of testing out removing the credit card requirement from the signup page. I haven’t fully flushed out exactly how I’m going to be working everything and kind of following people through but really what I’m trying to do with it is I’m trying to get people in there and actually using the products so that I can get information from them and I understand it like there’s going to be this large number of people who are not necessarily interested in it. They’re just going to sign up because it’s a free signup at this point.

[04:40] But what I’m interested in doing is finding out information from them about 1) why they came in to begin with, kind of what that messaging was that drew them in and got them to the point where they wanted to sign up and then find out from them why they’re not interested so I can essentially find out what the disqualifiers are because I want to know why the product doesn’t apply to them.

[04:59] Rob: And the idea is to get 5-10 times more people because that’s typically what it amounts to if we’ve moved credit card. 5-10 times or people into your apps so that you can get more feedback even realizing that maybe 80% of it is going to be less qualified than someone who would’ve entered their credit card.

[05:15] Mike: And I’m not really concerned about the people who are coming in and the fact that I know 80% of those people I’m going to get information from are going to say oh, well I didn’t need it because of XYZ and that’s good to know because it means that other people who have those XYZ requirements, those are going to be bad qualifiers as well and I can find out what language they might’ve used and then use additional language to essentially push those people away in the future if I ever go back to asking for a credit card which I assume I will do at some point but I really just want to get those people in there and find out what those disqualifiers are so I can call those things out to kind of push those people further away.

[05:54] Rob: I am less excited about this idea. I am a pretty big proponent of having credit card upfront and the times when I’ve seen folks not have credit card upfront is when they either are way early on and they don’t have enough customer like you’re doing. Typically it’s folks who don’t know what they’re doing or its someone who’s way far along like let’s say Mailchimp or a SaaS app that is growing and they know their funnel so well that they’re doing this as a test and they also have things in place where they’re going to basically have kind of a inside sales team where you don’t even need to enter a credit card but they basically have folks inside who are either making phone calls or they’re doing quite a few highly tactical emails that really bring folks in to the fold, get them on board and get them getting experiencing value.

[06:39] Because if you’re getting that 5-10 times the prospects, you don’t need to close all of them for it to be substantially more profitable for you but you do have to have a ton of stuff in place and you really have to know your ideal customer in order to even close enough of them to make the non-credit card piece work. I’ve tended to say I would always default towards having credit card upfront. You’re deviating from that this point and the reason is you want to do more learning right now. Is that right?

[07:05] Mike: Yeah. I’m probably giving up revenue in order to gain that knowledge but the problem is I don’t necessarily know what I don’t know. So I want to get people in there who are not well qualified to learn for those people so that in the future any messaging like I don’t want to attract the wrong people inadvertently later on. So right now I’m only attracting a certain type of person with my messaging and what I want to do is get everyone in there and then from there, find out who essentially falls out because they’re not a good fit and talk to as many of them as I can so that I can learn what is the good messaging that brings people in? What is the bad messaging that brings people in and how do I kind of guide people through that funnel? And it’s all about learning what things I don’t know at this point.

[07:51] Rob: I think personally I’m skeptical but I always have an open mind to stuff like this because if you go through this and you find out that you learn a ton and you wind up with a couple of value propositions that you wouldn’t have otherwise learn, then you go back to asking for credit card, I’m open to this being kind of a tactic early on that if you launched something and that credit card field is basically keeping too many people out or you’re just not getting enough sign-ups that you can’t learn anything, maybe this is a tactic that people can use. Maybe you can prove it out with this approach. It’s not something that I’ve had to go through.

[08:22] Mike: So what about you? What’s going on with HitTail?

[08:25] Rob: Man, such a big weight off my shoulders. You know the revamp that I’ve been talking about, walking around Google’s not provided where they no longer send keywords to your website, finally got that live like a soft launch last week to existing customers and it was kind of an innocuous link where you could activate Google keywords. I didn’t tell anyone about it. I just wanted a few people to try it. And then yesterday I rolled it so that all brand new HitTail trials, that’s all they see now. They’re basically dumped onto an on boarding page that says let’s get you connected to your Google web master tools account and there’s no more tracking code.

[08:58] There’s no more JavaScript. There’s no more real time traffic because that’s not necessarily now. The real value prop HitTail’s always had is provide keywords and then provide suggestions based on those keywords. And with a direct link into Google web master tools like HitTail now does, there’s no reason for you to have actual tracking code on your site anymore. So it’s been an interesting 24 hours. There’s not even 100 people who have activated it.

[09:24] If you don’t know, if you add your website in the Google web master tools, you can see a bunch of information about it. And in there buried somewhere are the keywords people are using to find your website. And so this is the information that they’ve pulled out of analytics. You basically can’t get that anymore. And so HitTail now on a weekly basis will go into assuming you give us permission, will automatically go into Google web master tools. We pull those keywords into our database. We run our algorithm on it and then we rank them on a 1-5 scale of these are the keywords that you should target.

[09:53] That part is done and it really feels good to have that going because new trials can continue to come in. This point I feel like they can actually get the value out of it that they were getting and frankly, even a little bit more like I’m super stoked. I ran it on my own sites and it’s given me insight that the old HitTail wouldn’t give you because the old HitTail said it’s a suggestion or its not. Whereas now it ranks them on a 1-5 star level and so I’m reverse ordering and I’ve already started ordering articles through HitTail and I’m going to be publishing on a few of my sites.

[10:20] Mike: That’s really cool. So does that decrease the server requirements because I know before, you used to have some pretty serious issues with at least initially when you first took over the product to me, had all those issues with the server. It couldn’t cope with some of the things that it needed to do.

[10:35] Rob: That’s right. It was getting on 20-40 inserts per second which isn’t that much if you’re running node Js and you’re using redis but this thing is using a 13 year old classic SAP over a sequel server database, a lot of disk IO. Yes, overtime, that will decrease. I still have this big customer base of people who are using the tracking codes. So it doesn’t go away over night. Those people I’m not going to kick them out of the tracking code usage. I’m just going to let that out peter out.

[11:01] But once I start emailing customers, I’m probably going to email 100 at a time starting next week, I’ll email 100 and say look this is the direction HitTail’s going in order to provide maximum benefit from Google, just link it up to your Google web master tools account. It will download them and do the things. Hopefully, over time, people will uninstall that tracking code and basically stop using that side of it and then as you said I can dramatically reduce my hosting cost because hosting cost is it about $800 or $900 a month.

[11:27] Mike: That’s cool.

[11:28] Rob: Yeah, feels good man. It took a lot longer than I thought but I think these things always do. How about you? What else is going on?

[11:34] Mike: The desktop edition that I’ve been working on for Audit Shark, the development for that is actually going really, really well at this point. I was able to give an initial demo of it within the past couple of days to a security analyst. That went really, really well. He’d look at and he understood the value of it and just immediately you just kind of watch me go through it and you can point it to any machine on the network, you don’t even need an agent installed and he’s just looking at and saying wow, he was just totally blown away by it.

[12:01] And I’ve shown a few other people as well and as soon as they see that, the value proposition for Audit Shark becomes much more clear. And I need to figure out how to take some of those screen shots and create a screen cast or something like that of the desktop edition and put it on the website to help make the value proposition more clear and why you would use that. Because I don’t think the messaging on the website is particularly clear. It’s technically accurate but I don’t think that it’s clear.

[12:30] Rob: Right. And that’s what I was going to ask you is how is the desktop edition going to help sell you more Audit Shark?

[12:36] Mike: It works very, very well as a demo for what the product is capable of and essentially the cloud version of it is you would take the things that you’ve built in the desktop edition and you load them into the cloud and then the cloud basically acts as your scheduler. So basically you’re building the scripts with a desktop edition and then you’re loading them into the cloud and the cloud runs them in the background on a scheduled basis. You can run them on the desktop edition, just not really on a scheduled basis.

[13:01] Rob: Right.

[13:02] Mike: It just gives you a much more interactive view of everything that’s going on so when you’re going through and you’re developing it, you can do things very, very quickly. You can iterate on things that you’re building versus in the cloud edition, you really can’t. There’s a much higher latency I’ll say so you don’t see things right away. It will lie taking visual studio and putting it into a webpage.

[13:21] Rob: Right. And that makes sense. I mean that’s from a future perspective, that makes sense. I know it’s a better way to do it but is it because there are people who won’t buy Audit Shark without this or is it because a paying customer is going to cancel unless you build it? What brought you there? What brought you to building a desktop app?

[13:42] Mike: It’s always been in the road map to have a desktop edition and I just haven’t gotten there yet. Right now I’m talking to a prospect who they basically told me flat out that they need something like that that will work offline because they have networks that are completely disconnected. They’re not on the internet and they don’t have a way to get the information that they need. So that reduces them to doing everything manually because they don’t have software in place that can do it. The desktop edition allows them to do that stuff in an offline manner that my cloud edition just simply can’t do.

[14:15] Rob: Got it. So you do have a prospect? That’s what you’re saying.

[14:17] Mike: Yes.

[14:19] Rob: If you’re listening to this and you’re early in your product or thinking boy, you should be focusing on how to get revenue, that’s what I’m trying to say is at this point, even with this step I’m building I rarely build a feature unless either a customer has requested it and I think they might cancel or I think it applies to a lot of customers or a prospect has requested it and I think they’re not going to continue with their trial or if we haven’t built it or if it’s something that I really think is going to differentiate us in the market and really allow me to kind of change the core value prop of the app because I think adding one more feature, some people will just add this, add multi-user support. Add other random stuff that you can think of but just adding a list of features in your website doesn’t sell any more of it right?

[15:02] It comes down to actively explaining the value prop or having people who already know about her or waiting on something and I guess that’s what you’ve clarified is you have someone who you think is not going to buy unless you build this thing. And it’s been on the roadmap for a while.

[15:16] Mike: Right.

[15:17] Rob: And these enterprise I assume if you’re talking about to them.

[15:20] Mike: Yes.

[15:21] Rob: So one thing I wanted to bring up, I’ve just gone through probably a month of pressure like putting too much pressure on myself. I setup these goals for 2014 and as always happens, things come up, the HitTail stuff took a lot longer than I thought it would and I’m behind on most of my goals for 2014. And I take that really hard and I started working longer and longer nights. I started thinking about work more and I basically stopped enjoying what I was doing. I was feeling a lot of stress but the only reason is because I want to basically live up to these goals that I’ve setup for myself that are not critical.

[15:54] When I took my retreat a couple weeks ago I took a step back and I said I need to back off on kind of the time famine I think is what I’ve been feeling of like I don’t have time to do anything because I’m just rushing around and I’m late with everything and I can’t respond on the emails and I actually wrote down in my notebook be thankful and I wrote down all these things I was thankful for. The funny thing was the week or two after I come back from my retreat I’m listening to bootstrap with kids and Brecht Palombo said almost the exact same thing. That he went on his retreat and that he realize that he has a lot more to be thankful for than he doesn’t.

[16:26] But it’s easy to get caught up in these. Their goals but is almost this false pressure that you put on yourself. And so I’ve been working the last couple weeks to fight against that self imposed kind of stress and really trying to enjoy the journey more. This is the life that I build for myself right? You have apps that you’re working on. This is fun. This is what we’re all supposed to love doing and yet at times, I think it’s pretty easy for me to wander away from that sense of just how cool it is.

[16:54] Mike: It’s interesting that while you seem to have been going down the direction of getting down on yourself and having all these things to do and working more hours to try and catch-up I’ve actually kind of go on in the other direction where I’ve started working less hours and its actually helped me because then I’m a lot more focused during the time that I am working and I’m sleeping better at night and I’m not thinking about work as much. And I find that the more I think about work, the worse it actually gets. I’ve definitely been there.

[17:22] Rob: that’s good to hear. I would wish for everyone.

[17:25] Mike: I found that not sleeping well is one of those snowball effects. Losing weight I feel like it’s the same thing it’s very much a snowball effect where as you start the process like you lose a few pounds and then you lose more and more and it becomes easier. However, if you start gaining weight, that’s a snowball in the other direction. It just gets worse and worse than it is to try and reverse directions. And sleep is one of those things where if you’re not getting enough sleep, then your whole day just suffers and is wrecked because of it.

[17:53] My best productivity hours re probably between 6 AM and noon and I hate getting up early. I can’t stand it. But if I do, I get so much done and I’m so productive and I’m very amped up and ready to get that stuff done and then I’m ready to go to sleep earlier which means I can get up early again the next day.

[18:12] Rob: I agree with you on the snowball thing with sleep because that’s been part of it and I’ve been waking up at weird hours at night. When your sleep’s interrupted like that, you’re just not at full force and then I was drinking a bunch of caffeine during the day which then of course adds to your – clinically, you get more stressed out. You have more anxiety when you do that, then your sleep is interrupted because you don’t sleep as well. It’s totally this cycle. And I actually busted it at the start of the year and I went to no coffee no alcohol for 14 days and it was purely just something to kind of reset the system. The first three days were kind of rough on both ends and I was all jacked up but pretty soon my sleep became – I undid the snowball basically.

[18:49] To be honest, the other thing that I did, it’s funny you say early riser. I’ve never been in my life been an early riser. My peak productivity hours historically have been between 10PM and 2AM always. My whole life I started giving more thought about how little work I get done in the evenings now. I used to always make up the lack of work I would get done in a day, I’d go home and work in the evenings. But now with kids, we stay up later and later. I’m getting almost nothing done.

[19:11] But I Googled how to become an early riser and sure enough, Steve Pavlina had an article on it written back in 2005 that really cool. And so I’ve started getting up every day at 6:30 in the morning. I didn’t even know that like 6:30 existed because I am totally a scrape myself out of bed at 8:30 or 9 type person. I followed his article which is called how to become an early riser. We’ll link it up in the show notes. Those are the only days now when I do that I’m getting to inbox zero and if I don’t do that, I’m finding that I never make it to inbox zero during the day.

[19:43] And what’s a trip is when I get up at 6:30 my kids get up around 7, I only get an extra half hour. It’s not even much time but it’s incredibly productive and I just zip through a huge list that without interruption and so by the time I make my kids breakfast and by the time I actually get into the office and really start working, I feel like I’ve accomplished hours of work by that time and it kicks off my day in a very different direction. And if I scraped myself out of bed and drink a bunch of coffee just enough to make my kids breakfast and I get to the office and now I have to start with email.

[20:16] Mike: Yeah, a lot of the kid duty in the mornings is split between my wife and I. for me I think splitting the email, try to do some of it before dealing with the kids and then doing more afterwards, I can’t say I have a good sense of whether or not it helps. I feel like I get a lot of the unimportant emails out of the way but I don’t get any work done on the important ones.

[20:35] One of the other things that I guess I’ll update people on is the Twitter strategy that I’ve been following. I’m up to about 1650 twitter followers for my Audit Shark Twitter account and I’ve started really zeroing in on security auditors and security specialists and probably over the past I’d say month to two months I’ve started getting a lot more retweets and a lot more shares from the things that I’ve bee putting out there. And I think that has to do with the fact that I’ve started interacting with these people who are involved in the security industry specifically as opposed to just kind of blanket trying to find people on Twitter.

[21:12] So I think that zeroing in on the type of person who would probably be an ideal user for Audit Shark has really helped me bring those people in underneath the twitter account and start those interactions. I’ll talk a little bit more about my strategy at MicroConf but speaking of MicroConf, one of the things that we did for this year was we hired a conference coordinator.

[21:31] Rob: That was like the best decision ever. I feel like it’s been definitely less than half the work for me. I don’t know, it’s hard to quantify but it’s less than half the work that I spent on Vegas last year we’re spending this year.

[21:42] Mike: Yeah I’ve taken a ton of stuff and handed it off to him as well and a lot of its just like the follow-up with people and trying to get information and saying hey, I need this and there’s a field in the replies and everything and I’ve been able to hand a lot of that stuff off to him and that’s been really, really helpful.

[21:58] Rob: Yeah. I think the other thing is we did attendee talks last year which is where attendees can pitch their talk or they basically put it into a Google form, Google spreadsheet and then we allow all the attendees to vote on those talks and then we pick – I think it’s the top 8. We may stretch it to 10 this year but last year we did top 8. That whole process was extremely time consuming last year and I was debating whether or not to do it again. It was really popular and so he just allows us to make it a no-brainer like yes we will do that because it’s not a matter of anymore time off our plate. It’s just a matter of him doing it. It’s us paying him to handle it.

[22:34] What’s also nice, we have almost all the speakers locked down at this point. You and I are speaking. Ian Lanceman from userscape is speaking about slaying the customer support beast and then we have Nathan Barry, we have Jesse Mecham from youneedabudget.com who grew a software company from 0 to $4 million a year. It’s a onetime purchase downloadable software kind of a could story. And then of course Hiten Shah is returning and Sherry Walling PhD, my wife’s going to be talking about stress, anxiety, entrepreneur, mindset, that kind of stuff. So there’s couple more that are still maybe’s and we’re still working them out but I’m hoping to get people dialed in here in the next week or two.

[23:09] Mike: One of the things that I found interesting for the attendee talks was the number that we got this year.

[23:13] Rob: It was 21 last year. 21 talks and then like I said, we picked the top 8.

[23:18] Mike: Well we didn’t pick. The attendees did.

[23:19] Rob: That’s right.

[23:20] Mike: But then this year what did we get? Like 42 or 43 something like that?

[23:22] Rob: Yeah, 43 twice as much, crazy ratio. Shows you what kind of crowd it is, its people. I mean our world, our audience in general and just the folks we hangout with, our colleagues, we are makers. We’re creators and people don’t just want to come and sit back. They want to participate and they want to make and they want to share as well. A lot of names I recognize in that list. I had a tough time voting because I vote for most of them.

[23:46] Mike: I did too.

[23:47] Rob: You could do like a whole another day of just short talks or something.

[23:51] Mike: Right. I had a conversation over Twitter with a couple about the sheer number of applicants and the fact of the matter is that the people who come to MicroConf, you can learn something from just about everybody there. So having that many people who want to get up on stage and share with everyone, I don’t think that’s a bad thing because almost everyone there has something they can share that other people can learn from and save themselves time or money or effort or make more money from their businesses.

[24:19] Rob: So I saw you, you put a nice little Drip signup form on the podcast website. I hadn’t seen this and I went to startupsfortherestofus.com and I see the Drip form there and I’m like how’d that get there?

[24:31] Mike: You know, the funny part was that I actually had a hard time finding in WordPress where to put it.

[24:37] Rob: Oh, we have a WordPress plug-in. All you have to do is install the plug-in and then cut and paste your user ID and it installs it for you.

[24:42] Mike: I was looking for that but the thing is I have Drip installed on my blog and so I went over to my blog and I’m like I know that they’ve got a WordPress plug-in or at least I’m pretty sure that they did but then of course if you go to install a WordPress plug-in then you should probably take a backup of the site and I didn’t want to do all that. I’m like okay, where did I do this over here? And I looked and unfortunately it was buried in the theme itself so I couldn’t do that on that. Honestly I’ve already forgotten where I did it. It took me 30 seconds to do once I found it but it took me probably 20 minutes to find it.

[25:12] Rob: Nice. Don’t do this at home kids. Use the WordPress plug-in.

[25:15] Mike: So if you haven’t had a chance to go over to the startupsfortherestofus.com website, go over there, there is a Drip campaign there. You can sign up for the podcast mailing list where we’ll keep people informed about anything that’s coming up that relates to the bootstrapper community whether it’s podcast or MicroConf or Micropreneur academy related. We’ll probably put some fillers out there. I mean it won’t be the primary MicroConf mailing list. Warning people now about that. But if there are things that are coming up like if we’re thinking about hosting another MicroConf or doing anything else then being on that mailing list is definitely the place to be.

[25:47] Rob: So last update for me, I reached a decision point a few weeks ago with Drip and the decision was around where to go in the market because Drip is kind of in between something like Mailchimp and Aweber which are for auto responders which are about 15-20 a month. And then on the high end, there’s infusion soft which is like $300 a month and it’s from what I’ve heard and see, it’s quite complex. I’ve gotten a lot of requests that people want just a little more email automation basically being able to move people in and out of lists based on things that they click in an email and being able to say well if this person has clicked on this link then now they’re tagged they have interest in SEO. So then you can kind of funnel them into an SEO campaign and then when they’re done with that, funnel them back.

[26:30] It’s just like I explained, email automation is basically a stripped down version of an infusion soft or maybe an office autopilot. And so we broke down on that feature and it changes the direction of Drip a little bit. It doesn’t change direction as much as it expands it. We still have the front end email capture. We still build the course for you. We solve the split testing and the goal tracking but we’re now adding in this kind of behavioral and rule and stuff which I admit was not at all on my radar when I’ve envisioned the product and wasn’t on my radar while we were building it and its purely come about because of customer requests. Wanting something that does more.

[27:08] The interesting thing is a lot of our customers are people, they’re kind of two camps. It’s either people who had never gotten an email course together because they just didn’t want to make the time or hadn’t spent the time to do it and Drip’s good for that of course because it’s fairly simple to get setup and we build that first course for you but then there’s also some experienced marketers who wanted the split testing and they wanted the email capture form and all the settings and stuff. And for these guys, we have a bunch of integrations they go out and keep it into their main email software. So they’re using other email software, another marketing software and then Drip is just kind of front end for it.

[27:40] But with both groups, we felt the push to move more and more into automating. The beginners, now that they have a course app are kind of stoked that they have this thing going and then they want to do more sophisticated things with it and they want to handle trial emails which require an automatic move in and out based on behavior or customer retention emails, I mean really moving through the space because right now it’s all about marketing emails.

[28:00] And the more experienced people know the power of email automation so that’s where it came about. So it’s definitely a huge undertaking for us. I bet it will be a simple, simple V1.0 its probably 2 maybe 3 weeks and then expanding on that, it could be easily but its 1-2 months of development. That’s really where we are right now and I’m feeling good about it. I mean I’m feeling like it’s going to expand the market substantially and it also allows me to change the marketing quite a bit, the whole value prop of Drip changes at that point. It’s not just this thing that increases conversion rate. It can actually do things that a lot of other tools aren’t able to.

[28:38] It easily answers that question how is Drip different from Mailchimp or Aweber which we get quite a bit. And I have answers to that already but if it’s not already painfully obvious then you’ve kind of made a mistake as a marketer if you get that question how are you different from X, if you get that over and over, then you’re not doing a great job as a marketer.

[28:54] Mike: One of the things that comes to mind when you were talking about that was essentially positioning yourself against the other products and it sounded just to me like you hadn’t really thought that fully through before you launched for Drip. You knew in your head what you wanted Drip to do but you didn’t necessarily think about it in relation to some of the other products that were out there and how you were going to position yourself against them kind of once you got the product out there.

[29:20] Rob: What’s interesting is I had thought it through. I made notes and I specifically have pieces in the FAQ and I have pieces in the marketing but I just don’t know how many people get it. Because there’s these nuances. There’s split testing within sequences and that’s something that you can call out but is that enough? There’s the email capture on the front end and there’s that we track goals that we allow conversion tracking and so you can see when someone hits your site for the first time, you can see when they sign up for your list, you can see every email they got and open and a timeline and you can see when they click on an email and then you can see when they purchase from you. So that’s pretty cool right? As a marketer, that something I’ve wanted for a long time.

[29:59] But some people, it isn’t enough. I have thought it through but I don’t know that it resonated with enough people and I think that’s what’s part of this whole being a founder thing is you just don’t know what’s going to resonate until you get out there and you take your best first stab at it and the value props that I set out converted well early on especially with the launch list.  And since then it’s just been kind of – it’s obvious that I want this thing to grow faster than it is. That’s where the decision comes of like do I figure just a new way to talk about Drip or have I explored all of those and do I need a real differentiator here that’s going to I think set me really noticeably apart from the other competition.

[30:44] Mike: It’s more about like you know how you have mentally positioned the product against the other ones but it may not necessarily be as clear to other people who are kind of on the outside looking in. When you’re on the inside everything is perfectly clear to you. But other people, they only see what they happen to come across. So if they don’t go look at your FAQ then they don’t necessarily see all those things like the things that you pointed out why it’s different. That’s what I mean.

[31:11] Rob: Exactly and that’s always our job as the founder. It’s our responsibility to communicate that to those people because they’re the ones that are called prospect coming across your website for the first time, they need to understand that difference right away or you’re not doing a good job of it and that’s where I find myself.

[31:29] Mike: Yeah, and I find myself kind of in the same position with Audit Shark. There’s definitely better messaging that I need to be doing and I’m just in the process of figuring some of that out right now.

[31:38] Rob: Very cool. You have anything else for this week?

[31:40] Mike: I guess one last thing. Remember how I put together that auto generated content strategy a couple of months ago?

[31:46] Rob: Yeah. I do.

[31:47] Mike: In December, it was a little off. I wasn’t quite sure how things were playing out and traffic was up but I wasn’t necessarily sure how much it was up. I kind of wanted to wait a little while so I got a little bit more data but at this point I can definitively say that based on the traffic alone, my traffic is up about 2 ½ times over what it was in November so it’s just ridiculous the amount of extra traffic that I’m getting from all these long tail keywords based on all that auto generated content. And there’s probably about 900-950 pages of additional content out there and if I go through and I look in Google analytics, I mean I can see that a lot of those pages are getting hit and they are very, very well targeted keywords terms that are coming in for those things.

[32:34] Rob: That’s awesome. And to be clear, when you say auto generated content it’s not like a computer spitting out garbage. I mean it’s actual data in a database that you’re using to create long tail pages that have information about very specific topics.

[32:47] Mike: So just to give you an example, one of the pages that actually has people who were looking for the time in seconds before the screen saver grace period expires. And I actually have a page on my website that pertains specifically to how to do that and tells you what register key needs to be tweaked in order to toggle that. And there’s people who are hitting that page and coming to my website specifically looking for that. And there’s just literally hundreds and hundreds of different searches that are in my site for all of these long tail things.

[33:15] Now I don’t expect most of them to translate into customers but what I am seeing is that I’m seeing that on certain pages, they’re coming in and they’re seeing the site and then they’re signing up for the mailing list which is it’s kind of nice to be able to correlate those pieces of data because then I can say okay, well if people are searching for X, then they are more likely to join the mailing list and maybe I should do a little bit more to try and push them towards it there because maybe they’re good fit for the product. Maybe they’re not, I don’t know. That’s something I need to explore.

[33:47] Rob: You know with all this long tail traffic, I don’t know you’ve looked at HitTail recently or if you’ve linked it up.

[33:53] Mike: I have not activated the Google keywords yet but…

[33:55] Rob: you should do it. I activated it for Drip because I didn’t have an account for it because it didn’t make sense to have to before. I got this stuff out and it was really enlightening. I definitely recommend you getting there and check it out. Go to the suggestions tab and then order by five stars at the top. It’s pretty cool.

[34:14] Mike: I definitely have to go in there and activate that and after we get off the podcast I’m definitely going to go in there and take a look to see what it says. The other interesting thing that I find is I‘m actually getting a lot of traffic from Bing.

[34:24] Rob: If that’s the case then you will want to install the HitTail tracking. Snip it on because that will still work for Bing and Yahoo and all those and obviously web master tools will work just for Google.

[34:35] Mike: Yup. I think that about wraps us up of the day. If you have question for us, you can call it in to our voice mail number at 1-888-801-9690 or email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt used under Creative Commons. You can subscribe to us in iTunes by searching for startups or via RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening. We’ll see you next time.

Show Notes

• Small is Beautiful Conference. June 4 & 5 in Glasgow, Scotland
• Brennan Dunn’s podcast – Episode 13: Establishing a work-life balance with Sherry Walling
• Book recommendations: Pitch Anything, The Year Without Pants (both are also available on Audible)

Transcript

[00:00] Rob: In this episode of Startups for the Rest of Us, Rob and I are going to be talking about hiring sales consultants, scaling offline acquisition and keeping data safe in the cloud. This is Startups for the Rest of Us: Episode 173.

[00:10] Music

[00:18] 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.

[00:25] Rob: And I’m Rob.

[00:27] Mike: We’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week Rob?

[00:30] Rob: I have a couple updates. I’ve just accepted a little speaking gig in Glasgow, Scotland in June and so if you’re near anywhere near Glasgow there’s a conference called Small is Beautiful that is looking at kind of staying small, the bootstrapping ethic and it’s not just going to be software people. It’s a lot of makers and even crafts people and like selling on  Etsy and that kind of stuff. So it’s June 4 and 5. It’s pretty inexpensive. Its 199 pounds. If you’re interested in coming, we’d love to hangout. I’m going to be there for a few days. So smallisb.com.

[01:04] Then the other thing is I want to call out Brennan Dunn’s podcast, its Business of Freelancing. Episode 13 had my wife as a guest and it’s called establishing a work life balance with Sherry Walling. So if you are interested in hearing more about work-life balance which I think all of us probably need, you’ll hear it there. and then Sherry is also just been confirmed as a speaker for MicroConf Vegas and she’s going to do basically a one hour session on that kind of stuff, on mindset on anxiety, depression, checkout the podcast episode 13. We’ll link it up in the show notes and then hopefully if you’re come to MicroConf, you can hear more about it there.

[01:41] Mike: I feel absolutely awful. I’ve been sick for probably four days now. I was all set to buckle down and actually get a lot of work done this week because I have a down week. So I mean we’ve talked about it before on this podcast where it’s some of the beauty of having people that you have working for you is even if you decided to take time off or you get sick, they’re going to continue working and one of the disadvantages of doing everything yourself or doing specific things that have to be done by you is if you’re not doing them, they’re just not going to get done. This week I’ve basically been in bed as much as I possibly can just because I felt so awful and a lot of the stuff that I planned on getting done this week has just not gotten done.

[02:21] Rob: Yeah. But like you said, it’s good to have folks that keep the machine running whether it’s you being on vacation or being laid up in bed. It’s nice to not be doing everything yourself. So I have a couple book recommendations. I’ve listened to a few audio books in the past couple months and each of these are kind of applicable to a different scenario.

[02:39] The first one is called Pitch Anything. It’s a really well written book. Specifically if you’re going to be doing in person either negotiations or sales or pitching, stuff like that, it’s fascinating about the dynamics of how to take the frame of a meeting and how great stories in there and just a great way of thinking about how to come into a room with other people and to take control of the situation if you need to, or to give it up if you need to.

[03:08] The next book is called The Year Without Pants. It’s by Scott Berkun. I read pretty much all the books that Scott has written. This one is about working for WordPress but frankly its working for Automatic which is kind of the parent company of WordPress. He worked for a year. There’s not a ton of actionable stuff. I think folks kind of in our circles will have heard a lot because a lot of it is about remote teams and working remotely and it is a lot of storytelling project management building software I mean that’s kind of cool thing.

[03:37] But with all that said there are some interesting characters in there. It’s definitely a nice story, Scott toes a good job of communicating it. So if you like stories like the Hatch of Twitter, startup stories of Amazon and that kind of stuff, The Year Without Pants is a good one to add to your collection.

[03:54] Mike: Scott talked at the Business Of Software and there were a couple of really good things that I took away from your sock which was kind of largely based on his book one of which was the way that Automatic hires new employees is they essentially give them a starter project and they always bring them on as a consultant first and one of the things that they do is they say here’s access to the repository where you can get all the source code and everything and here’s access to our internal IRC chat. And here’s you project. And that’s it.

[04:23] They don’t get code walkthroughs they don’t get anything and it’s basically up to the person who is being hired to go out and find everything that they need to do because that’s part of the culture there. You get things done or you’re not going to succeed. And I thought that applies relay well to a lot of the things that we’ve talked about in the past where you have a starter project that you bring people on to kind of vet them as a person who may or may not work out for your team and then based on how well they perform and the types of things that they do and how they interact with the other team members, that’s kind of how you decide to give them I’ll say an escalated project or do more with them.

[05:01] Rob: Yeah, exactly. That was one of the things that I took away from the book. There are a few other tid bits as well in addition to the fun story line of just seeing how the year pans out and kind of the insecurities of Scott, returning to work after basically being an author and a speaker for several years and wondering can I really hack it with kind of the new development culture that’s going on.

[05:20] Music

[05:23] Mike: Today we’re going to be taking some time to answer some listener questions and the first one comes from Alex. He says good morning Rob and Mike. I’d like to get your expert opinion on something. I just built an online B to B product for a particular industry. I have one customer ready to go live. The product is ready to be introduced to a wider audience. Offline marketing will work better for this product in the industry. I’m employed full time and I don’t have any sales experience. I was thinking about hiring independent sales consultants to resellers on commission but I’m not sure where to start. I can probably find people with background in the industry on LinkedIn but how do I make sure they won’t start approaching the same leads?

[05:57] I know it’s a pretty common thing to assign sales people to geographic regions to make sure that they won’t step on each other’s toes but in the beginning if I only have 1 or 2 sales agents, I don’t want to restrict them to a geographic area. I want them to start selling aggressively nationwide especially if they already have industry contacts all over. I don’t think I can just make independent sales agents or resellers to start using a centralized CRM and put their leads there. Want to know what your thoughts were on this. Thanks, Alex.

[06:23] Rob: I kind of feel like he’s putting the cart before the horse here. Alex, you’re worried about people having overlapping geographic regions when you only have one customer at this point. You said you’re not really a person with any sales experience. In my opinion, the CEO or the founder has to be the first sales person and so there’s a couple questions that I don’t feel are answered in this email.

[06:47] The first is is your product actually saleable yet? Does it solve a pain point? having one customer isn’t enough to convince me of that until you have personally sold maybe 10 and gotten them signed up, that’s when you’re going to know A) what the objections are when you’re trying to sell it, B) where your product maybe lacks features and where you need to invest more time in development because it’s not as if you finished the product and you’re never going to have to write a line of code these days. This stuff, it’s never done especially for a SaaS product.

[07:22] So I think that you need to spend quite a bit more time upfront getting more people on boarded and getting more people to say yes so that you have a better idea of what tat sales process involves because then you can take that and bring it to maybe someone you find in LinkedIn or craigslist, wherever you’re going to look and you’re going to have a much better idea if they’re going to be capable of doing this. Because just like when your non-technical hiring developers is really hard, if you don’t have a sales experience, hiring a sales person is pretty hard because you don’t know – you’re going to go with the guy who feels most salesy, the schmooze guy and he very well may not be the right person. He or she may not be the right person to sell your software.

[08:02] I’m dubious about the whole idea of trying to – you’re basically trying to outsource all of your sales effort and as far as I know, I have seen people tried this, I’ve never seen it work especially when it’s full commission because why shouldn’t that sales person just go take a salary gig somewhere, a commissioned sales job with someone who’s more proven. I guess what would really be the benefit why should they work with you?

[08:22] Because if you’re offering the same thing that some large company is, then the other people are going to go with a large company and only the people who can’t hack it there or who basically aren’t very good at sales are going to be the ones that you’re going to be able to convince to come work for you. I really question this thought of trying to just outsource sales from day 1 until you have a better handle on what that sales process looks like and have done it yourself multiple times and have enough experience that you can then vet someone who you’re hiring to do it.

[08:51] Mike: I agree with everything that Rob just said and in an addition, you’re worrying about problems that you don’t even have yet. So you’re worrying about trying to keep the sales reps from stepping on each other’s toes and in my experience, that doesn’t tend to happen a lot unless you have people who are located almost on top of each other. I think that if you’re finding these people on LinkedIn, chances are really good you’re not going to find five people all in the Boston area to go sell your product.

[09:18] In addition to that, there’s a lot of things that Rob said which you definitely need to pay attention to which are along the lines of the fact is you don’t have a proven sales methodology yet. So my concern would be that you’re going to start attracting the drags of the barrel of the sales reps who are willing to do just about anything that it takes in order to land the sale and those things may not necessarily jive with how you want to run the company, they may not even be true. I mean you may end up with people who are buying a product that the sales reps made all these promises about and the products just isn’t going to be able to deliver.

[09:51] Going back to the book that Rob talked about earlier, the Pitch Anything book, you pick up a copy of that, pickup a couple different books on how to do sales and do it yourself. You have to do this yourself at least a couple of times. You can’t just outsource things that you don’t like if you don’t understand them because they’re inevitably going to be things that slip through the cracks and you’re not going to know how to handle them because you’ve never done it before. So Alex thanks for the question.

[10:15] Our next email comes in from Carl Sutherman and he says hi Rob and Mike. I really enjoy listening to your podcast. You’ve given me so many things that are valuable for me while starting up Ingredient Matcher. You’ve been talking so much about mastermind groups that I’d really like to have one. So I started this meet up group in Stockholm and we’ll link to this in the show notes. But it’s at meetup.com/stockholm-micropreneur so if anyone out there listening is in Stockholm or a nearby vicinity, definitely go checkout that meet up group, I think they were going to be putting something together to kind of help people coordinate between different meet up groups and different people getting together at different places of the world.

[10:49] We don’t have anything setup just yet but that is something that we are working on, so kind of stay tuned, listen to the podcast, check the podcast website at startupsfortherestofus.com wherein we put together a mailing list out there in a little while people are going to be able to get more information about not just those meet-ups but some other things that we’re working on in terms of the micropreneur community. So thanks Carl.

[11:08] Our next email comes from Andrew and he says hi guys, just wondering if you have any recommendations regarding organizing your emails such as creating tasks from email etc. I seem to recall that you talked about this one in your podcast but I can’t remember which one it was. Thanks. Andrew.

[11:21] Rob: The best way that I found is to use Trello and then you get an email address that’s unique to a specific Trello board and from the Gmail, if I want to add something I can just forward it even from my phone is where I typically do this and I’ll just forward things off to that address. I have it as my Trello contact in Gmail and then it appears on top of my Trello board and the next time I can go and reorder it and work on it. It’s not ideal. As I’ve said in the past, I think that having a way to reorder emails within Gmail and then add additional tasks so that it really does become a to-do list in your inbox, that’s how I would prefer to do it but this way of kind of the emails into Trello is the best approach I’ve found this far.

[12:02] Mike: I think part of the answer to this question depends on what tools you’re comfortable with using and what tools you already use so I use a combination of half a dozen things. So I use pipe drive, I use Trello, I use Evernote and then I also use Fogbugs and I also have a pivotal tracker account. So depending on what you’re doing is going to dictate what you do with those inbound emails. Rob has a great idea there with setting up the different email aliases. You can do the same thing with Basecamp, that’s another tool that I use. And all those things, it depends a lot on your specific workflow of how you work.

[12:34] I think the one thing I would probably mention is that as you’re getting these things into your mailbox that need to be taken care of what I would do is I would pull them out of your mailbox, put them in that other location whether it’s another tool, there’s Trello, Basecamp or what have you and then get rid from it from your mailbox so that way you use your mailbox as things that you’re working on right this second that you need to kind of actively deal with and anything that doesn’t need to be there, just archive it or delete it or get rid of it. I use Gmail. I know that Rob does as well. But the search capabilities there are phenomenal. So being able to pull up your email from several years ago is very easy to do. So Andrew, hopefully that helps.

[13:13]Our next question comes in from Igor and he says hi Mike and Rob. I’m a graduate student and long time listener from Helsinki, Finland. I’m interested in applying the problem or pain identification process to find an idea for a B to B Saas app but I’d like to know your opinion on an issue I’ve been researching heavily for a long time. Here’s my question, can you really scale customer acquisition for an online app with an offline market or a vertical niche as its target audience. Examples would be a small hotel or hostel owners or photographers. A few sources say it’s not feasible since you would need to do some form of high touch selling but that wouldn’t be justified by the low price points that SMB’s are comfortable with.

[13:39] For example, Jason Lemkin writes that customer acquisition cost have to be almost 0 if one target’s very small business. But I’m curious whether things would be different if the target business have relatively few decision makers and the app is an aspirin type product. This way even if one on wood sales calls would be necessary, the number of sales per rep or founder might be higher than the traditional 8-10 closed deals per month estimate for enterprise great products. Thanks and really looking forward to hearing your perspective.

[14:15] Rob: I think you’ve stumbled upon a big catch 22 of trying to sell to offline audiences who are also price sensitive because if that’s the case then it is really, really hard to scale up customer acquisition. But it’s if they’re either online and price sensitive or they’re offline and not price sensitive where this can obviously work. And I would make one correction Igor mentions. Photographers and photographers are actually online. I know a number of people who make a lot of money selling software and services and other things to photographers and the marketing is solely done online. I haven’t done this and I don’t know anyone who has truly done an offline product and done offline sales on a low price point product but the mass just not going to work out.

[15:03] The thing that I’ve noticed, if you’re going to have to do high touch sales and make in person sales calls, I think your minimum price point has to be low four figures if it’s a one time sale and it has to be low three figures if it’s a monthly recurring product. And that would be my rule of thumb. If you think you’re going to be able to charge $29 a month that actually have in person feeling going around selling the economics of that just don’t work out. But the question of can one scale customer acquisition for an online app in an offline market, the answer to that is absolutely its once you get the low price point piece integrated, that becomes a real problem.

[15:41] Now, with all that said, Gail Goodman from constant contact did a talk at business and software a couple years ago and their price point is $39 a month and they did scale at offline but they did it in kind of clever way and they also had funding. They had a ton of money to kind of back it up. They got sales reps out holding meetings and training sessions and marketing of meeting up groups and all kinds of stuff and this massive infrastructure for that.

[15:04] You as an individual without funding are going to have a real tough time doing if not being able not to do it at all frankly. I think in general to answer your question is probably not unless you already have an in or you can always do outbound marketing that’s not in person so of small hotels or hostels, you can do lead gen using things like direct mail or one on one outbound email, that kind of stuff. But all that’s kind of require experimentation to see if it works in the niche.

[16:33] Mike: The question itself is yes it can definitely be done. Of course the follow-up question to that is well how much money do you have to actually make this happen because if you don’t have the money to make it happen and I think you brought up an excellent point with constant contact is they were funded so they had the money to be able to do that kind of thing and they were doing it early on when it was – I would say probably more cost effective to do it that way because they could probably do combination of offline and online marketing to help acquire some of their customers and back then, Google AdWords was still very early on. Online advertising was dirt cheap and the cost of acquisition for those customers was probably economical at that time especially for the online market.

[17:15] But in going offline, its labor intensive. You got to be able to schedule things. You have to be able to get enough people there to any given meeting so that you are able to close enough deals that is worth the time and labor investment. And that really takes funding. You have to have some sort of either revenue or cash on hand or something in order to be able to make ends meet while you’re doing that because it’s going to be a long slow slog in order to get those people and to achieve any sort of critical mess and I don’t know as you can do it without some sort of funding. So Igor, thanks for the question.

[17:50] Our next one comes from Carl and he says hi guys, what’s up? I love the show. I run a small SaaS business called clinic metrics and I launched it this year. I need an accountant. Question for you is it important for your accountant to be local? If you have a referral I’d love one. If not, how did you find yours? Thanks.

[18:08] Rob: This depends on two things. 1) Are you comfortable with your accountant not being local and 2) is your accountant able to work with remote people and if the answer to both of those is yes, then I don’t think you need your accountant to be local. I have had remote accountants for several years. Currently I have one who is local but if I moved away I probably would not switch but he happens to be really good at email and he’s a little bit of a techy-guy. Same thing with my bookkeeper, he lives across the country. All we’ve done is a video Skype or two, everything else is via email.

[18:34] Now but if you’re working with an old school accountant who is all paper and pencil and wants to talk on the phone and meet in person every time then obviously you’re not going to want to hire them. These days, I think you can find both accountants and bookkeepers who should be able to work remote without an issue. An in fact, that opens you up to basically being able to find the best person for the job rather than trying to find the best person for the job within your city.

[18:54] The way that I have found mien with the accountant I found based on a referral just talking to some local entrepreneurs figuring out who is startup friendly who knows SaaS, who knows software that kind of stuff and then went and talked to a couple of those people. But if you’re going to do your books specifically through Xero, I would actually recommend that you go to Xero’s website and there is like a Xero providers area where there’s a bunch of certified providers and that’s where I found my bookkeeper was through them.

[19:21] And so it sounds to me like you may want a bookkeeper rather than an accountant because a bookkeeper’s going to do it on a monthly basis and then the accountant would file the tax at the end of the year. I think you may want to start with a bookkeeper that’s probably going to save you more time on a recurring basis and for that I would definitely go to Xero and look through those certified folks and just pick one that you think looks good and you can give them a shot.

[19:43] Mike: There is a difference between a bookkeeper and an accountant. The accountant just files your taxes at the end of the year. At least that’s what I use mine for and then I have a bookkeeper who balances the budget, pays all the bills and then make sure that all the financial stuff is in order at the end of the year for the CPA. And I did that for two reasons. One is because a bookkeeper is significantly cheaper than having an accountant do it and then the second reason is you essentially have a double check at the end of the year because you’ve got your bookkeeper doing all the books and then at the end of the year your accountant kind of goes over everything to make sure that nothing’s been done that’s too far out of whack and is able to kind of point you in different directions wherein mistakes might have been made.

[20:21] So those are the differences between them but as Rob said I mean if you’re going to be using Xero which Carl had mentioned that in the PS is Xero does have a dedicated section where you can hire bookkeeper who are familiar with Xero. That said, Xero is not that complicated. My bookkeeper actually picked it up and was able to learn how to use Xero because she was familiar with other things. She started out with QuickBooks. She’s used less accounting for one of my business and she’s also familiar with outright. So between those things the basic concepts are fundamentally the same it’s just a matter of how do you do the specific things that she wants to do.

[20:56] And with Xero they have tons and tons of video tutorials. So just about anything that you need to know how to do, there’s portably a video for it. So you can go in there and worst case scenario, just contact their support and ask them questions.

[21:07] Rob: Yeah. I wasn’t saying that you should go to Xero certified because those people know Xero better than anyone else. It’s just a nice pool of reasonably competent bookers to start with. I think you can also go Odesk or eLance and these other places where I have looked for bookkeepers there as well but the Xero pool just seemed to be pretty competent people. I talked to a couple of them and anyone of them would’ve worked for me.

[21:32] Mike: So our next question comes in from Elliot Sykes. He left us a voicemail. Here it is.

[21:38] Eliot: Hi Rob. Hi Mike. My name’s Eliot Sykes and I’d like to pick your collective brain about guest blogging. In the last week or so, Matt Cutts announced that guest blogging is a promotional tool. it’s on Google’s spam team hit list. Given this, what’s your advice to people thinking about guest blogging as one of the ways to make their projects. And does this change anything for the way you’re going to handle guest blogs on your own site? I’d love to her your thoughts on this and thanks for continuing to make such a great show week after week. Bye.

[22:07] Rob: Yeah. Thanks for the call Elliot. It’s nice to hear from you after seeing your name online over these years. So Matt Cutts who is the Google spam team’s leader talked about guest blogging. Now he also talked about infographic six months ago and basically they’re going to go after anything that they see people overdoing and exploiting. So I think that question of how I’m going to handle it is until I see backlash, I’m going to continue doing what I’m doing because I’m not doing spam and guest posting and I’m not doing spammy infographic.

[22:41] I think that when you get to the point where you’re just doing them at high volume and it’s obvious there’s no social sharing is an indicator they’re probably going to look at, there’s going to be these signals that make these things look legitimate and signals that make things – it’s usually the lack of signal that makes these things look less legitimate and more spammy. So it’s always hard to tell to see how they’re just going to tune the algorithm.

[23:04] I’m not that worried about. I think if it was my number one way of getting the word out then yes, I’d be seriously looking at what I’m doing because let’s say you had 50 guests posts out there on a bunch of blogs, that might be a problem but I don’t think its just surely the number of them. I think it’s going to be these patterns that they recognize and so I think if you really are handcrafting good quality blogs whether your blog posts, whether you’re doing it yourself or you’re hiring someone to do it and you really are dealing one on one with reputable blogs that actually have an audience and things are actually being shared and you’re actually publishing them on these reputable blogs, I really don’t see how they can crack down on that.

[23:45] How did they not just crack down on kind of all links everywhere. I think what they’re going after is the people when they have 1,000 guest blog posts and a lot of them are on these really crappy almost link farms. There’s basically these link blogs where people can pay to guest post on and surely if you’re doing that, I would avoid it. But again if you’re doing kind of the handcrafted approach to it, my gut feeling is that’s going to be okay for the foreseeable future. And just like I said with infographic they talk about crack and done on that, I don’t know if that ever happened because I haven’t seen anyone that’s really gotten hit by that but I also typically see people doing pretty non-spammy infographics as well.

[24:23] Mike: I think that anytime Google issues one of these statements and the collective internet freaks out when this kind of stuff comes out because they’re like oh my god we can’t do this anymore. What are we going to do for our marketing? And if you go back and you actually look at Matt Cutts blog, he says flat out on there “there are still many good reasons to do some guest blogging. Those reasons existed way before Google and they’ll continue into the future and there are absolutely fantastic high quality guest bloggers out there. I’ve changed the title of this post to make it clear that I’m talking about guest blogging for search engine optimization purposes. I’m also not talking about multi-author blogs. High quality multi-author blogs like Boing Boing have been around since the beginning of the web and they can be compelling, wonderful and useful.

[25:07] I just want to highlight that a bunch of low quality or spam sites have launched on to guest blogging as their link building strategy and we see a lot more spammy attempts to do guest blogging. Because of that, I’d recommend skepticism or at least caution when someone reaches out and offers you a guest blog article.”

[25:21] So based on that, it’s not that they’re looking at this and saying guest blogging is bad and that’s just very black and white. What they’re really doing is they’re really coming out and saying look, if you’re doing these things where you are essentially spamming the internet with content, we will find out about it and we will shut you down. It’s not that they’re going after the people who are doing legitimately for exposure, branding or increasing their community size, that’s not what they’re after. They’re after the people who are trying to exploit the system and that’s really the way that Google has always been. They’ve always been going after those people who are trying to exploit the rules and the loopholes and I don’t think this is any different than it has been in the past. So Eliot I hope that clarifies a few things on what Matt Cutts’ announcement means.

[26:01] Our last question comes in from Zack and he says thanks for your wonderful podcast which is full of pragmatic gems. I’m now working to start a SaaS app. I’ve spoken to a business owner about my idea and he questioned how I can ensure that his company’s data is safe in the cloud and that no one has access to it. He’s worried about leaking his company’s strategic information to others.  He’s more comfortable installing my app on his server rather than storing the data in the cloud. How should I go about convincing him?

[26:26] Rob: My first thought is don’t convince him. He’s probably not a good fit for SaaS apps and that there are a ton of other people out there who if you truly do solve a pain point for them, are going to be fine putting their data in the cloud. Second thought is if you go to 10 other potential customers and they all have the same objection, then you really are going to need to figure out how to get around it or you’re in a bad market right now and you need to find a market that is more willing to go online or you need to kind of wait these guys out because over time everyone is going to move to the cloud. I think it’s inevitable and it’s just a matter of do you have kind of the time and the money to wait them out so that they are willing to go to the clod. Or you’re going to have to convince each one of them to do it and are you willing to do that?

[27:11] I think convincing some if their data is in a cloud frankly I would probably Google this exact topic and look what are the three elements of it there’s going to be security of data from a technical perspective. There’s going to securing the data at the server side, securing it from hackers, there’s a bunch of stuff like that and I think that it’s probably not something you’re going to get in a two minute podcast answer but it’s going to be something that you’re going to have to research. I think his inclination, he’d rather install it on his own server than storing the data in the cloud. I would encourage you that if you want to start a Saas app not even to entertain that idea in the least these days trying build an installable version of your web app is frankly more trouble than it’s worth unless you’re in a specific niche where you’re going to need that specifically.

[27:53] If you do need that, then you need to make a choice and it’s like are you going to be downloadable web and syllabus software or you’re going to be SaaS but as single founder which I’m assuming you are, I would not try to do both.

[28:03] Rob: I think when you run into these types of people, you almost have to dig a little bit to find out what the underlying issue is is really that they’re not comfortable putting their data in a cloud or is it that they’re not really aware of the dangers that they currently face or do they just not want to pay monthly subscription fee for it. So definitely hammer those out but at the end of the day if they’re not necessarily educated about the risk that they face today, I mean what’s to prevent one of their employees who on their way out going to the file server grabbing everything and then just emailing it out to everybody.

[28:34] Do they have software in place to stop that? Do they have technical controls? Are they actively checking for that kind of thing? My guess is to answer all those question is no they don’t. So realistically, they face that today. He’s using it as a way to essentially skirt the issue and in some way say no so you need to kind of dig a little bit and find out is that really the problem for him? Is he really actually concerned about it or is there something else and he’s just throwing that up as kind of a smoke screen to say I’m not really interested in doing that because all my other software is all in my servers.

[29:09] Rob: Yeah, I would agree with that sentiment. I could also see let’s say you provide him with a ton of information and these are the standards of sales force and of the big Fortune 500 SaaS businesses and this is what everybody does and you can show him all the proof that you do exactly that and you have all these audits in place. You have all this checking that it’s still not going to convince him. So it’s kind of a decision you have to make for yourself and figure out if you really do want to convince this one individual or if you want to move on and find someone who’s maybe more open to SaaS software.

[29:39] Mike: I think my advice in this particular case would be move on and find somebody else because you’re essentially looking for the path of least resistance to success. You don’t want to make things harder for yourself than they have to be and trying to convince somebody who’s not real keen on the idea to begin with is probably not in your best interest. You’re better off finding people who experience that pain and who are comfortable with putting their data in the cloud and leveraging those people is kind of your beach head into the market in order to expand and get other customers on board.

[30:09] And then in the future when you’re better established, you have money coming in and revenue, you can start dedicating time more towards educating people about why their data is going to be safe in the cloud with you versus trying to convince person after person that it may not necessarily be the best fit for your software.

[30:26] The second question that Zack has is have you ever seen any non-US company successfully operate SaaS businesses as targeting US customers? I’m based in Singapore and planned to offer my SaaS app to US customers. So in terms of non-US companies, one that comes to mind is Xero. It’s the accounting software which we briefly touched on earlier in this episode. It’s Xero. I actually have two different business with all my accounting and financial information into here. So it depends on the person or depends on the person you’re marketing to and what sorts of data that they’re putting in there.

[30:59] Now with mine, I’m putting in financial information and they’re able to pull my accounts and see how much money I have and how much I owe but it doesn’t necessarily have the ability to issue checks on my behalf for example. It’s not like it’s banking. It’s not like they have the ability right now to send the money out of my accounts. Now, it is sensitive data theoretically but I’m comfortable enough with all the things they’ve done they are probably keeping it securely. But again that’s a mentality thing, it’s not necessarily going to apply across the board. You’re really going to have to find the customers who are comfortable with that sort of arrangement and I think at that point it doesn’t necessarily matter where you are based rather are you offering a good service that’s valuable that people are going to subscribe to and be interested in.

[31:43] Rob: I think some other companies that are overseas that do a really good job are Atlassian, Balsamic is in Italy and they have a lot of customers all around the world. Campaign Monitor is in Australia. 99designs not a SaaS app is also in Australia and there are quite a few. So big commerce is another one. I think that this is less of an issue than you might think. I think especially if you don’t call it out prominently, we are the Singapore based SaaS app, I mean you can have it on your about page for sure but when I go to look for SaaS, I’m much less concerned.

[32:17] Unless you’re dealing with Fortune 500 companies that are going to move slowly and have a bunch of objections anyway, I think you’re going to be okay with being located overseas. I think that’s becoming less and less important over time. And you can even look at Patrick McKenzie doing appointment reminder from Japan. He has a lot of US based customers.

[32:34] Mike: So Zack I hope that answers both of your questions.

[32:36] Rob: If you have question for us, you can call it in to our voice mail number at 1-888-801-9690 or email it to us at questions@startupsfortherestofus.com. You can find a full transcript of this episode at 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. Thanks for listening. We’ll see you next time.

Show Notes

• Rob’s most recent Mixergy interview – story of growing HitTail
• MicroConf 2013 talk videos

The 12 Signs

1. You have X customer who’ve committed to pay for it before you start building
2. You see competition in the space but they don’t appear to know what they’re doing
3. You’re have a concrete estimate of development time, and are making measurable progress towards launch
4. You have a launch list of contact information for hundreds or thousands of interested people who have signed up to hear about your launch
5. Your method for growing your list is something you can continue doing after launch
6. You have some kind of marketing plan
7. You’ve surveyed your launch list and now have quantitative data, in addition to the qualitative data you got from talking to your committed customers 1-10
8. You’re receiving emails or tweets asking when the product is going to be available
9. Your launch list is growing faster than you’re able to let people in
10. The first customer who uses your product tells you “This is a no-brainer, I would like to start paying right away.”
11. Many people are excited about your product and then cancel during trial, or within the first 60 days of use.
12. Your family/friends make negative comments, but you have so much traction you don’t care.

Transcript

[00:00] Rob: In this episode of Startups for the Rest of Us, Mike and I look at 12 signs that you should continue investing in your product. This is Startups for the Rest of Us: Episode 172.

[00:10] Music

[00:18] 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: We’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week sir?

[00:33] Mike: Word on the street is that you hate desktop application writers.

[00:36] Rob: I got tweeted at least twice…

[00:40] Mike: I got a few instant messages here and there.

[00:42] Rob: What did they say?

[00:43] Mike: Just to let you know that desktop apps are not dead.

[00:47] Rob: I guess they were giving you kind of encouragement huh? You’re building your desktop app and keep going with it.

[00:51] Mike: It’s an extension of the original product and it’s just more of a different mechanism for using it so…

[00:57] Rob: Right. And if it’s the best tool for the job then there’s no reason not to use the tool. So hey, I wanted to point folks into the direction of mixergy interview, I was on mixergy this week. So if you go to mixergy.com the interviews are only available for a few weeks before they become only available to premium subscribers. So I talk all about HitTail, about growing it. It’s parallel to the story that I told last year at MicroConf and you can see that video at microconf.com in the 2013 speaker videos but there’s just different questions. There’s more mindset and emotional things that I dive into because Andrew went into those areas, so if you’re interested in checking it out, it’s at mixergy.com. How about you? What else is going on?

[01:35] Mike: I was looking through some of my analytics and I was trying to figure out why conversions were so low from my email signups through to my pricing pages and everything on Audit Shark and I realized last month when I had redone the pricing page, I broke all the URL’s and I hadn’t updated the email sequences to point to the right pricing pages.

[01:57] Rob: So could people not get to your pricing page?

[01:59] Mike: It would 404 error out so that was bad.

[02:03] Rob: I did the same thing on software by Rob probably 2-3 years ago. You just make a switch. You don’t think about it and pretty soon you potentially lose hundreds of emails of people who wanted to sign up.

[02:16] Mike: Right. I think the killer was if things had gone like if the numbers had dropped to 0, it would’ve been really obvious really quickly but I just noticed it like the numbers were lower and I’m looking at them. I’m trying to figure out I was like I wonder why that is. It just didn’t dawn on me that I pushed a new set of pricing pages and changed the URL schemes and it was coming in from the emails. It just wouldn’t have got there. With zero it’s easy to figure it out or easy to see what’s going on. But when the numbers are a little bit above zero, it’s just hard to tell.

[02:48] Rob: indeed. So we got some good comments on episode 170 and I actually heard from Dan Felker on Twitter who kind of thumbs up my approach of almost infinitely looping a single song to get in the zone. And surprisingly because I thought I was going to get called out for being crazy on that one but surprisingly got a comment from Jake on episode 170 and he says I totally agree with the music thing. Try high energy protons by Juno Reactor and the whole transmissions album itself. And then he says trigger songs are great. I like that term trigger songs.

[03:20] There’s another comment by Wolf Scott who said this is his first comment ever on a podcast and that he’s been looping songs for a long time and everyone in his office thought he was weird so it was good to hear that there are other folks who loop songs a lot in order to do that. I’ve actually heard Matt Mullenweg talking about how he did a lot of song looping. I remember in his mixergy interview Andrew Warner was kind of surprised by that, it’s a couple years ago but that was when I realized someone else does this.

[03:49] Last comment, Jim Monroe he commented he says great show. Definitely something I struggle with in terms of shiny object syndrome and he says his problem is books. He says I currently have a huge backlog of books I intend to read. I’m sure I’ll get to half of them but I buy them anyway. Basically I’m an addict. One thing that helps me with online content that seems actionable or tactical as you say is using Evernote web clipper. I have a pro Evernote account which does all OCR and saving content you can want. With this, I not only have a bookmark but I can also file it into a specific folder and it saves the entire web page in case the article goes offline. I may never get back to the article but it gives me some satisfaction knowing it’s saved and it reduces the temptation to read it at the moment. Used early and often it will reduced wasted time on things I feel I should be reading. Best of luck.

[04:36] So thanks for the tip guys and you can always catch us on Twitter on @robwalling Mike is @singlefounder or you can obviously call into our voicemail line, drop us an email of questions @startupsfortherestofus.com or post a comment on an episode.

[04:51] Music

[04:54] This week we’re doing a little bit of a counterpoint to last week’s episode. Last week we talked about the top 12 signs you should walk away from a project. And this week we’re looking at the 12 signs you should continue investing in your product. I wanted to kind of look at some signs. Some of them maybe obviously positive signs that you should keep going. Some of them actually appeared to be negative but it can actually have a positive underlying message. And so first one is you have X customers who’ve committed to pay for your product before you start building.

[05:27] This is something that’s being bandied around. It’s been talked about quite a bit these days of getting purchase commitments or of actually collecting money upfront whichever way you do it, if you can find people who are willing to pay you money before you start building a product, even if it’s just a commitment that is one of the signs that you continue investing in your product. Because not only does it show you there is a potential market for it but it will give you kind of the internal confidence to start breaking ground on code and it also gives you a small subset of people to talk to about when you have questions about what features should I be building first?

[06:00] Mike: Yeah. I mean this is something that I did a couple of years ago for my Altiris training site and I didn’t want to dump all the time and effort into recording all these videos and then launching it and having nobody be interested in it so I created a sales website and put 3 or 4 pages together and sold it to people and they just refunded their money as they ordered it. I got I think 10 sales over the course of six weeks, something like that. And they were all for monthly subscriptions so I decided to go ahead and actually build it.

[06:26] If you’ve got the people who are willing to pay for it before you start building something. I mean all it says is that they have not found something else that is solving their problem or it says to you that the competition out there is just so terrible that anything that you come up with is probably going to be better than the other stuff that they’ve tried or is already out there.

[06:47] Rob: And I think a question someone might ask is what should X be? As I said you have X customers who’ve committed to pay for it and that number varies. I think Jason Cohen before he started WP engine, I think he found 40 people willing to pay him either 50 or $100 a month. I don’t remember what it was at the time. With Drip, I wanted to get to 10 people willing to pay me $100 a month before I started. That to me is the range. I’ve never heard of anyone getting more than 40 one on one purchase commitments before starting but you certainly could and I think anything less than 10 and you haven’t done enough leg word and you won’t have heard enough reasons that they don’t want to move forward for it to be worth your while.

[07:24] The second sign that you should continue investing in your product is that you see competition in the space but they don’t appear to know what they’re doing. I like to say that you don’t have to be a better marketer than the rest of the world. You just have to be a better marketer than the other people in your niche. Even if you’re not substantially better than the competition that you see, if you can tell that they’re not doing a good job then odds are that you might be ahead of them or that you can at least learn quickly enough to stay ahead of them.

[07:52] Mike: And that’s the implication right? Is that you look at what you’re doing and you know more than them and I don’t think you necessarily need to know more than them but recognizing that they don’t know what they’re doing in some ways can give you that little extra boost that you need because you can look at that and say oh I just need to learn faster than those guys and you probably out maneuver them. And that’s the important part is being able to out maneuver them because if you can do that and you can start winning whether you’re taking sales way from them or preventing them from getting sales and you essentially out market them, then you can become the number one player in whatever the niche is.

[08:28] I think that applies a lot more to places where you’re not going against funded competition because I think once you start going against funded competition and you’re a boot strapper, it can be difficult to win a head on challenge against them but there are definitely ways to kind of spin your marketing a little bit so that your product is positioned differently against theirs.

[08:47] Rob: And I do hear people coming on the scene and saying there’s no competition, that’s a bad sign. You shouldn’t enter a market with no competition because it means the market doesn’t exist or the market’s too small. And I think it depends on your goals. I think if you’re in that early stage of the stair step process and you really are looking for that first win of getting to 500 or 1000 or a couple grand a month and you’re launching the mobile app, the WP plug-in, maybe a niche site, just an add on to something existing, I think it’s perfectly fine to not have competition in that space because the market is probably really small and you’re going for that early win to boost your confidence, learn marketing and get some revenue.

[09:25] If you’re going after something that you want to be, a mid six figure, seven figure business, you’re really trying to up the level, then yeah. There probably needs to be some, at least overlapping competition in the space right? There’s rarely a blue ocean market that’s that big that doesn’t have other people going after it as well. So take this one with a grain of salt. When you hear people say markets with no competition are bad, stay away from them, think of what size, company are they talking about? Are they talking about venture funded companies because yes, for them, they really do want competition because everybody kind of knows what the hot markets of tomorrow are going to be and there’s going to be a lot of players in those.

[09:59] The third sign that you should continue investing in your product is that you have a concrete estimate of development time and you’re making measurable progress towards your launch.

[10:07] Mike: Does anyone really have a concrete estimate of their development time?

[10:10] Rob: When I say concrete, I don’t necessarily mean it’s correct. Right? I just mean it’s your best guess and there’s a real number on things. Like I actually mean broken down into chunks that are one day or less, into tasks that are one day or less because you can estimate those. If I told you Mike how long is it going to take you to build a web page that allows someone to do whatever login to this thing or resets their password, you can estimate that within probably 20% accuracy. But I if tell you build this whole subsystem that’s going to build a ton of stuff, it’s too much unless you break it down into its subsystems and break it down into a point where it’s about a day per task and that’s when you’re going to get what I consider the best estimates, concrete estimates.

[10:50] Mike: Yeah. I mean that’s the difference between saying I’m going to build a product versus these are all the things I need to do in order to build a product.

[10:58] Rob: Yup. I mean you can imagine estimating how long is it going to take me to build this house versus how long is it going to take me just to pour the foundations versus just putting in the studs for the walls, just the electrical. I mean you break it into subsystems and then you break it down as far as you can go. Most people don’t do this honestly. Right? Unless you’ve been forced to create estimates, estimating is really hard and it kind of feels like it’s wasted time but every project that I do, I will put together the simple excel spreadsheet. Getting those concrete numbers and at least being able to see where your progress is stalling and being able to see where your progress is moving towards really quickly, it says a lot for your motivation.

[11:37] This isn’t a requirement. Yes, you can absolutely build a product and market it and be successful without this but I think this is one factor that will absolutely contribute towards you making it to launch.

[11:48] Mike: I think the important thing here is just the fact that you have this measurable progress that you’re making. If you can actually see how much progress is being made, it’s a little different than if you just have this block of work to do when you have no idea how far along you are. I mean if you’ve got six months left of development time and you know you have six months left, it’s a totally different story than if you’re sitting there and you’re six months in and you’re saying how much further do I have to go until I actually get to launch?

[12:16] In some ways I think it’s partly motivation but it’s also to help you understand how far along in the process you are and how much time there is left to finish and help you make decisions about what whether or not you should continue or not.

[12:30] Rob: I think that’s a really good point. I think it’s as much mental as it is anything else. So our fourth sign that you should continue investing in your product is that you have a launch list of contact information for hundreds or thousands of interested people who have signed up to hear about your launch. Notice I didn’t say you have to have a landing page, that happens to be the way I tend to do it. I think you should always have a landing page. But that’s not the only way to do it. You could feasibly gather a launch list of info at a trade show or you could do it with in person interviews or you could do it at a conference.

[13:02] I mean there’s a number of ways that you could look at doing this but the sentiment here is that you get hundreds of people who have opted in to hearing about the launch because that’s what it’s going to take to really get any type of sizeable snowball going from the start. You can’t expect to get 50 people in a launch list who have not already committed to pay, who you haven’t worked with one on one who have just kind of opted in to hear about the launch and then except most of them convert because it’s not going to work out that way. you’re going to be lucky if you get…

[13:31] I mean it depends on what you’re launching price point and all this stuff but I tend to see around 5% on the low end and I see maybe 30% on the high end. And again if you have a relationship with the audience and you’re selling something that’s super valuable to them and super targeted yes, you can get it up into the 50% but I’ve never seen software product get there. It tends to be information that closes that much of the list. Think about that.

[13:57] Let’s say most software’s between 5% and 20% just as round numbers if you only get 100 people on that list, then when you start, you’re going to have between 5 and 20 customers aside from the folks who you initially got to commit. And while that’s good and that’s a great start, it’s better than 0, it’s not enough momentum probably to get you super motivated or to allow you to quit your job on day 1. So getting into digging into that hundreds and hundreds and potentially getting into four figures with that launch list is really a good motivational thing for you. It also will give you a good first day launch, first day revenue number and it’s a sign that people are really interested. This is a sign that you should continue investing in your product because people are interested in hearing about it.

[14:38] The fifth sign that you should continue investing in your product is that your method of growing your launch list is something you can continue doing after launch meaning it’s something that you think you could continue to drive traffic and actually turn into trials after you’ve done the initial launch to your list.

[14:55] Mike: And the important part about this is you’ve got something that is repeatable for acquiring new customers and it’s not to say that you can do these one off things that are going to help you for a little while and then you’re really never going to be able to do them again. So for example, submitting your website to a bunch of startup websites. That’s great. It will help give you boost in traffic and boost the number of people on your list but it’s not something that you can do over and over again. What you’re really looking for is those things that you can point to and say I created a landing page and then I was able to drive traffic to that landing page and get people to sign up by doing X, Y and Z and you’re able to do X, Y and Z over and over again whether its writing articles or whether its sending emails out to an email list or doing paid traffic acquisition. I mean there’s a load of different things that you could do.

[15:42] But as long as you’re able to do those things in a repeatable fashion and continue doing that over and over and not only refine the process ‘til the process gets better but also tweak it so that you’re more effective at it and it costs you less I mean because that’s really what you ultimately want to do after you’ve launched is you want to drive the cost of acquisition down. And as long as you’re putting those repeatable processes in place, you’re going to be able to do that.

[16:09] Rob: The sixth sign is that you have some kind of marketing plan. I hate plans in general and anytime anyone said marketing plan to me, maybe five years ago, I would turn the other way because I don’t like a lot of process. I don’t like a lot of plans and what I hated about marketing plans is what I learned is I hate all the BS that people would put in it. So when I was working as a developer, I would look at these marketing plans and it was a bunch of crap. It was fluff. It was paragraphs of pros. It was so ridiculous and it was prepared strictly to impress some executive about how much this person knew about online marketing these days. That’s not what I’m talking about.

[16:44] What I‘m talking about is these tight succinct bulleted list of marketing approaches that you have heard about that you have researched that you have ideas on that you have tried notes about them. It’s everything. It’s all the information gathering that you’re doing maybe by listening to this podcast and others, reading blog articles, all that stuff. That stuff will come and go very quickly if you don’t track it somewhere.

[17:10] The marketing plans that I put together have simply been a Google doc. I will have these in separate categories often it will be SEO and press and content marketing and paid acquisition and high touch approaches and I will put everything in there as I’m learning it. And so over time, I’ve honed that and every new app I get, I make a copy of that doc and I tweak it to the new niche and to the new market that it’s going to go after.

[17:35] Frankly, a lot of the high touch approaches that I’ve tracked and heard about, I have never done because I’ve never gotten to them because to me they’re lower priority. I want to find lower touch approaches that scale first. But having something, yours doesn’t need to be this 12 page extravaganza. Start with one page and put down the ideas you hear people talk about and make the notes so that you can keep them and implement them down the line.

[17:56] Mike: Yeah. The idea behind this marketing plan is really to give you a list of ways that you’re going to get in front of your customers and get them to try out your app and hopefully move them at some point along your sales funnel. I mean this isn’t about listing every single thing that you’re going to do. It’s about listing all the different things that you could do. And then when you get to a point where you say okay now I’ve got some time. I’m going to dig into this. I’m going to start going to my marketing plan and executing, you start picking off those things that you can identify as a high value or high return on the investment that you have to put into it.

[18:29] And again, I mean you don’t necessarily need to know everything about whatever that strategy happens to be. So if you’re going to leverage Facebook ads or you’ve never done Facebook before then that’s okay. I mean you can go ahead and try it. Just understand that your return on that particular thing is probably going to be a little bit lower than if you knew how to run a Facebook ad campaign right up front.

[18:50] Rob: I think that’s a good point. I had a lot of things in my early marketing plan that I had never done and what I would do, let’s take Facebook ads or ad words, as I would come to it, I would then right at that moment I would go and buy a course on it or buy a book on it and when I searched for strategy Facebook ads I think I bought 3 or 4 video courses and I bought 2 or 3 books and I kind of scoured the whole thing until I could get my arms around that trunk until I started hearing the same things over and over from the people so that I was sure that I had covered all the approaches. And I just dove knee deep into it, invested the time, I learned it, got it all in my head and then I just started cranking and trying the ads and learning on my own.

[19:27] That just in time learning which again is a concept that Jeremy of internet business mastery has talked a lot about, that’s the way to go with this kind of stuff. Don’t feel like you need to learn every approach upfront but at least, knowing that it’s there, knowing that it works for some people and then being able to give it a try because it’s very valuable.

[19:42] Mike: I think that helps kind of with information overload where people want to learn as much as they possibly can about how to launch a business or how to structure their business so they’ll go on this information overload where they’re just consuming all these different books and things like that but they’re not actually working on their business. They’re consuming information most of which they’re going to eventually forget anyway long before they’ve had a chance to apply it.

[20:05] Rob: Sign number seven that you should continue investing in your product is that you surveyed your launch list so now you have quantitative data in addition to the qualitative data you got from talking to your committed customers 1 through 10. Now obviously this is not a requirement. It’s just a sign but this is something that I did early on with Drip and what it allows you to do is match up those initial conversations with the first 10 people will give you ideas of what to build and you probably have intuition of what you want to build as well.

[20:32] Then as you start building up this launch list, let’s say you get to 500 or 1,000 people, you can now survey them and you have some pretty intelligent questions to ask them because you’re knee deep in this product. You know what you want to build, you know what you may not have time to build and getting another couple hundred people to weigh in on a survey not only gives them participation and makes them more eagerly anticipate your product but it can really help steer the direction of where you should go in order to hopefully get more of them to sign up when in fact you do your launch.

[21:05] Mike: This is just the difference between having an idea of what people are interested in versus knowing the specific features that are going to push somebody over the edge from this is an interesting product to where can I plug-in my credit card and get the full version?

[21:18] Rob: Our eighth sine is that you’re receiving emails or tweets asking when the product is going to be available. And then anytime you email your launch list you receive several replies letting you know that the product looks great and people can’t wait to use it.

[21:32] Mike: I think the primary thing behind this is people are still experiencing whatever the pain is that you’re trying to solve and if you’re trying to build a product that is geared for example around the holiday season or something like that, once that holiday has passed, the likelihood that those people are still interested in your products is going to be very, very low versus if you’re still coming up on it or if it’s a problem that they have continuously and they still don’t have an answer for it. That’s when people are going to be asking for your product, when it’s going to be available and when they can see more and when can they get their hands on it because that problem is painful enough to them that they want a solution and they’re still actively looking for one.

[22:12] Chances are good that they’re looking at your solutions saying I’m going to stop looking because it looks like this solution you’re coming out with is going to solve my problem and you don’t want to lose that. I mean you don’t want them to suddenly stumble across one of your competitors and start using them or following them instead.

[22:28] Rob: And I don’t think that receiving emails and tweets asking you when it’s going to be available is a necessity. I think you can launch a product successful without that. The businesses that I’ve launched that have had people kind of chomping at the bit are the ones that have that early success and it really boosts your confidence. Our ninth sign that you should continue investing in your product is that your launch list is growing faster than you’re able to let people in. I think this kind of goes without saying if your launch list is growing that fast, then it’s a good sign.

[22:58] Mike: The point about this is obviously this is much further along. You’re at the point where you probably have a product that is in beta or at very least alpha and you’re allowing people to use that whether its early access or whether you’re charging them for it, doesn’t really matter. I mean the fact is you’re much further along than the previous ones that we’ve talked about and most leads we’ve kind of structured in a way that are essentially in chronological order.

[23:22] So for this I mean obviously if your launch list is growing faster and you’re able to let people in, then you’ve got 1 or 2 problems either 1) you’re having trouble letting people in because you’re suffering from technical issues or your launch list is growing out of control and you just can’t satisfy the demand because you still want to give people that individual hand holding so that you do get some of the feedback that you’re going to need to make the product successful long term.

[23:44] And don’t discount how much that information can help you because even though you do have people chomping at the bit and signing up very, very quickly you do want to get that information back before you unleash it to everybody because you want to iron out the kinks. You want to make sure that whatever processes you have in place are solid enough that you’re going to survive contact with the enemy I’ll say.

[24:07] Rob: Our tenth sign is that the first person who uses your product tells you this is a no-brainer. I would like to start paying right away. Getting to the point where anyone will pay you money especially that first customer is a tremendous amount of work. And the earlier you do that, the better it will feel, the more motivation you have. But once you get to that point, to me that’s a big sign that you’ve solved that at least one person’s problem and now you just have to go out and find another and another and another and all of those are signs that you should continue investing in that product.

[24:40] Mike: Yeah. I mean this is about creating cookie cutter copies of your first customer and trying to figure out not only who they are but how do you find other people like that customer? How do you find other people who have that specific problem? And it involves talking to that customer and finding out as much as you can but you’re right. as soon as you get pass that hurdle of somebody willing to pay you money for a product then you know that you’ve at least solved part of the problem and it may not be the entire problem but you’ve at least solved a piece of it and that’s a very, very good starting point. That’s essentially your beach head for the product. And as you move that further down you can expand that beach head and you can grow that market to the point that is successful in the way that you want and need it to be.

[25:23] Rob: Our 11^th sign is that many people are excited about your product but they sign up and they cancel during trial within the first 60 days of use. This one’s a little tricky because you might think to yourself why is it a sign I should continue investing in it if people are canceling? The thought here is that if people are excited about your product then it shows that you have in fact hit a paying point that people want solved.

[25:46] But if they sign up and then they cancel, you have something wrong it’s not something that’s so wrong that it can’t be fixed. What’s either happened is your product itself lets people down and doesn’t solve the problem that you’re claiming it does. Perhaps your on boarding isn’t good enough to get people actually using the product and getting value out of it or potentially your pricing is too high. And all three of those are fairly easily fixable and it just requires having conversations with these people who are excited to sign up and cancel and figuring out which of those causes it is.

[26:17] Mike: When you run into this situation, it’s definitely a case where you want to start digging and reaching out to everybody. As a general rule of thumb, you probably want to reach out to anyone who cancels regardless and asks them why they cancel and if there’s anything that went specifically wrong that is something you can address? And there’s a lot of different ways to phrase it to them but realistically chances are good that if they canceled you probably aren’t necessarily going to get them back as a customer.

[26:43] So in general a good tact to take with those types of people is hey, I understand you canceled but I’d really appreciate some feedback from you to understand why it is that you canceled so that we can do better in the future. Not that you’re trying to win their business back but your main focus right there should be to learn from that experience and figure out what you can do better in the future.

[27:04] Rob: And our 12^th and final sign that you should continue investing in your product is that your family and friends make negative comments about your pursuits but you have so much traction that you don’t care.

[27:14] Mike: I think one of the things that’s probably difficult for most entrepreneurs to either understand or come to grips with is that your family and friends are not only your target market but at the same time they’re not really drinking the same Kool-Aid that you are. Their brains are not in the same places. So when you’re talking about building a business on the internet and making money selling your products online, they’re like that’s great. I don’t know how you’re going to do that but I’m going to go back to my 9-5 job and it’s just because There’s a difference between what you’re thinking and what they’re thinking, what your goals are long term and what their goals are long term.

[27:50] So for them to really understand what you’re doing and how you’re doing it, it’s not really going to jive because none of the friends and family that I’ve had over the years, except in people that I’ve met at MicroConf and various meet ups and things like that, none of them get it. None of them understand and it’s baffling to them how that could even possibly work.

[28:08] Rob: There’s a really good discussion of this conversation of kind of explaining the entrepreneurial world view to family and friends and that’s tropicalmba.com and its episode 229 of Dan and Ian’s podcast and it’s actually Dan and Damien Thompson discussing it. But it’s this exact concept. I don’t know that I’ve heard a better kind of discussion of it and thought process of what it’s like of just how different we are as entrepreneurs compared to the rest of the population.

[28:36] I would agree with you. The times when I feel most comfortable is when I’m at a place like MicroConf or another gathering of other entrepreneurs because we get each other and we understand where the priorities lie. They’re just these crazy comments that come out of these discussion. I remember at one conference, there’s an entrepreneur who said he had like a SaaS model and he’s made this kind of loud comment. He said I could give a crap about $70,000 in one time revenue. And all of us around were kind of nodding our heads like yeah, I agree.

[29:07] And then later on I quoted that to someone who isn’t an entrepreneur and that doesn’t make any sense to them like why would you turn down $70,000 but in the context of building up these recurring revenue businesses, one time fees, there’s this whole fake logic that goes with that and $70,000 yeah it’s a lot of money but it’s not that much money when you’re talking about this guy’s business. So it’s that kind of stuff that only other founders can really get their heads wrapped around and I think that’s what I liked about having a community. I think that’s one of the biggest benefits that we’ve gone out of this podcast.

[29:40] I don’t want to speak for you but one of the biggest benefits I’ve gone out of the podcast is having folks who I can talk to both in the mastermind group, MicroConf and then just Twitter and other places and the shared mindset makes me feel less crazy. I may be crazy but at least I’m in that subculture of other people who are as crazy as I am.

[30:00] Mike: I think that about wraps us up. If you have question for us, you can call it in to our voice mail number at 1-888-801-9690 or email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt used under Creative Commons. You can subscribe to us in iTunes by searching for startups or via RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening. We’ll see you next time.

Show Notes

1. You’ve lost motivation to move forward
2. You’re not making forward progress
3. You’ve spent a lot of time into working on it and still haven’t talked to customers (time to reevaluate)
4. You’ve had new competitors move into the space who are funded and you aren’t.
5. You have no idea how to reach your market
6. You’ve learned that many of your initial assumptions are incorrect and are having trouble compensating
7. Your beta users aren’t using the product
8. Your beta users are all saying that they would pay for it if it were $X, where $X is less than it costs to acquire a customer
9. Your life goals have changed
10. Your life situation has changed
11. Fear of judgment from peers/family (either to quit or that it fails)
12. You don’t have a good reason to continue, other than sunk costs

Transcript

[00:00] Mike: In this episode of Startups for the Rest of Us, Rob and I are going to be talking about the top 12 signs you should walk away from a project. This is Startups for the Rest of Us: Episode 171.

[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’ve built your first product or you’re just thinking about it. I’m Mike.

[00:25] Rob: And I’m Rob.

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

[00:29] Rob: Feeling good. I just walked in the door from a two day retreat. I went to the central coast of California. I barely checked email. I admit I cheated a little bit but I didn’t take a laptop really just hunkered down and focused on evaluating last year, evaluating things that basically gave me life and the things that kind of sucked it out of me. And then I looked at the goals that I laid out. I looked at those goals, asked myself are those still in line with what I want to do? How do I accomplish them? I asked myself a lot of questions about what the end of the year looks like and even into 2015 and thinking about bigger picture stuff like where am I aiming now?

[01:07] I actually looked back at all my retreat notes from the past 3 years. I started noticing some trends of interests and things that I did well, that I implement and it was crazy to look back 3 years and be like wow, I haven’t even done yet. Like I haven’t even bought HitTail at that point. I mean there were just so many things that I’ve learned in this past few years. So I’m feeling good. I’m feeling very focused.

[01:31] I also got to try a new work style. I used the approach that impossiblehq had laid out last week where he says go to three different locations during the day and so I went to literally to the beach because I was doing just pen and paper and so I would sat on the cliff and over the waves and the surfers for about an hour and then I went to a couple different coffee shops and at the end of the day at a bru pub, doing a little happy hour there. But the whole time, basically the continuity was me thinking through all of this stuff and making notes in my notebook. So it was life giving and I’m pretty stoked to get back to work and really crank on some things and as well as to make some changes with several little things in my business.

[02:09] Mike: So I’ve been working on a new desktop edition of Audit Shark…

[02:13] Rob: Desktop? Nobody releases desktop software anymore.

[02:15] Mike: There’s a very specific strategy that I’m implementing for it. And it does tie back into the cloud version. Remember I talked before about the policy builder and how I ran into a bunch of problems with it. Essentially what we did was we took the entire code base for that and we copied it and then we made it more standalone than anything else so we still have that other code base that we’re still developing on kind of side by side. But this is essentially going to be the cleaner version of it. So it will still tie back into the cloud version and like I said there a strategy for this moving forward in actually two different directions. One is more towards the enterprise market and the other one is more towards people who are using the cloud version.

[02:55] Rob: Yeah, obviously I was joking. You’re not building a desktop app. You’re just building a desktop add on to your Saas app. It’s just like building a mobile app that interfaces with your Saas app. You giveaway the desktop edition for free I would imagine but it doesn’t do anything unless you have this monthly Audit Shark account.

[03:12] Mike: Yeah and that’s exactly. It’s more of an extension of it than anything else.

[03:16] Rob: Right. And the reason you went desktop is because the policy builder was such a nightmare in the web right? Or try to building a browser because there’s a bunch of complex stuff.

[03:24] Mike: Yeah. And we started going down that road and it realized that it’s not just about building that in the cloud because there’s lots of things that you can do these days that you couldn’t do 5 or 10 years ago and I don’t think it was s much about building it in the cloud. It was about – part of it was maintaining it but the other part of it was the fact that in order to test something, you need a machine out there that can test against.

[03:49] Right now, the way things work that’s not easy to do and it has a lot of latency and in order to use the policy builder, you really want to develop things and test them very quickly because these things are very quick. I mean you’re basically just slapping a bunch of function parameters together and you hit the button and say does this bring me what I want to see? And the problem is that if you are doing that in the web, there’s just so much latency involved in the time that task is created and sent out and picked up because of all the queuing and everything else, it was just wasn’t going to work. The experience was going to be awful. So at that point it was just like okay, well I can take this and move it in a slightly different direction.

[04:26] It actually ties in really well with a bunch of other people that I’ve talked to who want to use it for going into new environments where they want to take a look at that environment and get some information about it so there’s services providers. There are auditors who want to be able to take it on their laptop going into an environment and then just scan the environment and pull back the information without deploying agents and they don’t want to do this more than once. They just want to do it more as of a onetime scan and that’s a different market segment that I’m also trying to go after.

[04:55] Rob: Right. I mean I think that’s the question probably on everyone’s mind who’s listening to this is did a paying customer request this or is there a customer who is willing to pay you money only if you build this?

[05:08] Mike: There are customers who’ve told me in the past that they’re willing to pay money for this and there are very slight tweaks that need to be done to make it work in that fashion versus more of the enterprise market which I’m also talking to and this what the enterprise market is saying that they want.

[05:22] Rob: Got it. So I have a recommendation. One is a podcast episode, if you are thinking about canceling cable, the best discussion of this, kind of from soup to nuts services and tools and hardware and all that stuff is cordkillers.com and its episode 5 of that podcast. I’m a fan of that podcast anyway. It’s Tom Merritt and Brian Brushwood. In episode 5 they did a better job of describing it and how you can actually do it better than anyone else I’ve heard. We’ll link that up in the show notes.

[05:51] Music

[05:54] Mike: In today’s episode we’re going to talk about the top 12 signs that you should walk away from a project. In this episode, I’ve talked to a lot of different people who they’re trying to figure out whether or not they should keep going with something or whether they’re just trying to overcome a momentary hurdle in the development or they’re also just trying to figure out is this project going to go anywhere? Can I see myself working on this for the next 8-12 months? And there’s a lot of questions about what sorts of things you should be looking at? How should you approach that? I think in this episode we’re going to be answering some of those things.

[06:28] So the first sign that you should move on from a project is that you’ve lost motivation to move forward. If you’re spending too much time talking to people about the product but not actually trying to move things forward in terms of customer development and let me differentiate that a little bit. If you’re telling people what it is that you’re building versus soliciting information from prospective customers, those are two different things.

[06:52] If you’re just telling people all about what you’re building, if you’re talking about the developers and saying this is how I’m going to do to this and this is what I’m going to build and this how it’s going to work, that is more explaining what it is that you’re doing but you’re not doing customer development yet. You’re not learning from other people whether it is that they’re going to pay for it, whether it is that they use it unless developers are your target market.

[07:11] Rob: I think the question to ask with motivation is this temporary loss of motivation? Is this just a little bump that you’ve hit? For a few weeks you’re not motivated to work on this particular project or is it something that drags on for months and you just can’t get back at it. You aren’t interested in writing any code. You aren’t interested in writing copy and you kind of feel like maybe you don’t know what to do next or you know what to do next, you don’t feel like doing it. The biggest signs of that are I keep planning other things or making excuses why you can’t sit down and just crank into it and get it done. Or when you do sit down to dive in that you find yourself wondering and checking email and getting on the social network instead of actually getting things done.

[07:52] I think another element to this is people tend to be really good at either starting things or finishing them. People who are good at starting things tend to have a bunch of unfinished projects and they really don’t finish any of them. People that tend to finish, they have a real tough time either starting up a new project or getting back into a project they’ve kind of let go. Knowing that about yourself and looking at your history will also help you realize if you’re following your own natural inertia or if you really need to fight against that natural inertia and get back and try to get some of that motivation back. And we frankly talked about that in episode 170. It was about avoiding shiny object syndrome but part of shiny object syndrome is being distracted and maybe not having motivation.

[08:39] Mike: The second sign you should walkway from a project is that you’re not making any forward progress. And this is a little bit different than just losing motivation because you can still have motivation but you don’t necessarily know what to do. And you’re still doing things but nothing seems to be working. And a lot of times, that can boil down to the products is just not going to work out or you just have so many things that you have to do that you’re not sure what to work on so you don’t do anything and I think that’s extremely common amongst entrepreneurs as well.

[09:09] Rob: Yeah and we should probably take a step back here and say not any one of these 12 signs is an absolute red flag yes you should walk away from it but these are kind of – they add up. And so maybe having a lack of motivation is one thing but also a lack of word progress and then a couple of these others, they really start to stack up and point you towards walking away from a project.

[09:32] I think in terms of this sign, of not making forward progress, this will eventually lead for anyone. It will eventually lead to number 1, the lack of motivation. And for some of us, lack of word progress for two weeks leads to lack of motivation. For other people it may take six months of lack of work progress but eventually you will get to the point where you lose motivation so forward progress is definitely a sign that something is not going in the right direction and at this point, if I have like extended periods of not making forward progress or I see entrepreneurs who aren’t, I typically ask them to get a sanity check and to go outside of kind of their own head and talk to people either in their mastermind group, knowledgeable people, just someone that they trust that might have insight, not your friends and not your family who don’t understand what you’re doing but someone else in this world whom you’ve met hopefully at a conference or you have some relationship with that you can explain the situation to and get some kind of realistic viewpoint from the outside because I think good suggestions can come out of that.

[10:30] Mike: The third sign is that you’ve spent a lot of time working on the project and you still haven’t talked to customers. It could just be time to reevaluate what it is that you’re doing and where in the projects you should be focusing because if you’ve gone for too long without talking to any of your customers even if you talk to them upfront, their needs may have changed or you may have misunderstood things and then when you come back and you revisited, you may get a slightly different story or may get a completely different story based on the things that you have implemented so far.

[11:00] So make sure that you’re keeping in touch with people not just throughout the course of development but also making sure that you talked to them upfront to begin with and I’ve talked to a lot of people who have said while I’ve been building this for six months or eight months, I should’ve been building a mailing list and I should’ve been doing marketing but I haven’t done any of that yet so how do I go about selling this product? And we get a lot of comments from people listening to this podcast who email us in with questions like that and there’s really only so much you can do but at the end of the day you have to go talk to those customers. You have to find out if what you’re building is really what it is that they need.

[11:34] Rob: That might be the number one email that I receive asking for advice is hey, love the podcast. Enjoy the book. Unfortunately I didn’t read it and I went off and built, spent a year to building an app and now I’m here, how do I market it? And that probably is the biggest mistake that I see people making when they’re trying to get into this space. So yeah, I can’t agree with you more. Talking to potential customers. Every 6 to 8 weeks actually is there rule that I set for myself when I was working on Drip. I didn’t quite live up to that. I think I had a 3 month period where I didn’t email my list and didn’t keep them kind of apprised of the status of the project.

[12:15] But this goes all the way to landing page, collecting email addresses, that list I ideally would be emailed every 6 to 8 weeks with just a quick update, maybe a screen shot, something to build excitement. Then if you have early access customers aside from that list, that handful that agreed upfront to pay money for what you’re building then those I was sending personal emails to all 11 of them every few months and saying hey, still working on. I just want to give you an update. Those were almost – I didn’t even send screen shots. I just said I want to give you an idea that I’m still working on it. Just so people know that you’re alive and there’s some type of interest being maintained because when it takes you six months to build and launch and app, it’s a really long time and people tend to forget about what you’re doing.

[12:57] Mike: The fourth sine is that you’ve had new competitors move into the space who are funded and you aren’t. This could turn out to be a death blow for you but if you’re losing motivation or you’re not making a lot of work progress and then something like this happens then you could have serious problems. I mean you may as well throw in the towel at that point. Just because competitor moves into your space who is funded and you’re not funded doesn’t mean that you can’t proceed to move forward. You may very well be doing things that they’re not. Or they may burn through all of their funding very, very quickly trying to solve the wrong problem.

[13:26] But it’s something to definitely pay attention to because when funded people who are coming into your space have all this money to burn, they have the ability to run a lot of different experiments very, very quickly whereas you probably don’t especially if you’re running things on the side. On the other hand, this in some ways could be a good sign because it means that somebody out there with a lot of money decided that the niche that you’re going after is valuable enough to go after with some sort of funded company. So there’s two ways to look at that but again, if you’re having other problems, then it could be a sign that you should walkway.

[14:02] Rob: Yeah but this one depends on your situation. Obviously if you are an experienced founder and you have some marketing skill under your belt, you’re a decent developer, you have at least a little bit of money, I think you can outmaneuver even some funded competitors. But if you’re doing it right and you are maybe a first time entrepreneur and you’re just trying to get out of the day job, you should have picked a niche that really isn’t interesting to funded competition. We talked about it in our very early episodes probably in the first 5 or 10 about how to pick a niche where there really isn’t going to be a ton of competition to go pretty vertical with it just to cut your teeth out.

[14:39] So if you listen to that and you build a niche website or a WordPress plug-in or some folks who’ve built mobile apps and had success or you just go vertical with a smaller low maintenance Saas app, those are going to be so uninteresting to VC back companies that the likelihood of this one happening is very low. But if you made the mistake and you chased the Inc magazine dream and you build something, let’s say today you’re building something involving Google glass or bit coin or it was Twitter clients and Facebook apps a few years ago, Facebook games. It was so obvious that the venture funded companies were just going to flood into their spaces, that’s just not something I would do as a bootstrapper right now unless you really have the wind at your back and you have several of the items from our founder test at your back to kind of push you forward and give you a competitive advance.

[15:24] Mike: The fifth side is that you have no idea how to reach your market and this can just be a lack of marketing experience but it could also be that you haven’t talked enough to your customers to really understand where it is that they would potentially find out about your products. So if you’re pretty seriously into your development cycle and you still don’t have any idea how to reach your market, it could be a time to re evaluate things and stop the development and focus more on the marketing side of things because if you’re not marketing a product, it doesn’t matter how good it is if nobody hears about it.

[15:55] Rob: Yeah you don’t have to know for sure how you’re going to reach them at a cost that is going to be profitable for your startup but you do have to have some ideas and you do have to have those sketched out I would say in a Google doc even if they’re just a bunch of bullet points but its simple tactical approaches. It’s blocking and tackling of online marketing and software marketing. These are things like SEO content marketing, paid acquisition, joint venture partnerships, email marketing. There are several main stays that everybody talks about but you need to look into specifics and learn how to do these things well before you launch a product.

[16:33] Because if you build this product and you launch it to crickets and then you’re sitting there scrambling, trying to get these things together, it really isn’t that helpful. There’s too much pressure on you to learn these things in real time. You want to absorb them over time and that’s why we talk about getting those early wins with maybe a smaller product to learn enough that you can then parlay that into a larger product.

[16:53] Mike: The sixth sign is that a lot of your initial assumptions are no longer correct or were never correct and you’re having trouble compensating. In some ways, this is good to have because it means that you’re actually learning about your target market and you’re understanding what it is that they need because there’s a difference between learning about it and truly understanding what their needs are for the product. But if you’re going back to your initial assumptions and let’s say that you laid out a bunch of things in terms of how many customers you were going to get and you estimated you’d get 100 new customers a month and it turns out that realistically you’re only going to get 5 or 10 then that’s something that you need to look at and say is this business sustainable?

[17:31] Am I going to be able to continue this business or is it something that you’re still going to be able to work on even if it’s only for 5 or 10 customers a month? Is it still worth it for you to continue? Because at some point, there’s going to be a time where it is not worth it to continue but you have to understand based on which assumptions were faulty as to whether or not it’s worth continuing.

[17:54] Rob: What are some examples of initial assumptions being incorrect that you can think of?

[17:59] Mike: I’ve talked about this little in the past but one of the ones that I ran into with Audit Shark was that my initial target market was going to be banks because I did all the research and I figured out how many banks there were and what the approximate branch sizes were and everything. And I went and started talking to them and initially everything looked like it was good but then later on as I started building things and started talking to them a little bit more, I came to realize that what happened was I didn’t ask enough of about their accusation process so what turned out to be a situation where I thought I was going to be able to go to these banks directly and sell them the software turns out that was not going to be the case.

[18:34] What I would need to do is I would essentially need to go to consulting companies who then resold to the banks and I would essentially have to have some sort of reseller network and I’d have to sell through the consultants and I would have to sell it to the consultants who would then sell to the banks. And they may not even want to do that. Eventually I ended up coming to the point where I just said this is not the direction I want to go. Let me find a new direction. So in that case I didn’t completely walkway. I just said let me pivot. Pivoting is perfectly acceptable but that was one of the faulty assumptions was that I thought I’d be able to go direct to the banks and sell them the software. The other assumption that I had was that the banks actually cared about security. That turned out to be false as well.

[19:13] Rob: Apparently they don’t.

[19:14] Mike: No they don’t.

[19:15] Rob: There’s like a market pivot where you keep basically the same product and you just find a new market for it. I never called that pivot. I just called that learning like learning my marketing, honing my marketing. But yeah, I would agree with you. I don’t think a market pivot is that big of a deal. I probably done it with most of my apps.

[19:30] Mike: The seventh sine is that your beta uses aren’t using the products and if you have invited a bunch of people and they’re just not taking you up on the offer, then you need to find out what the fundamental problem is. Is it because they weren’t qualified well enough out-front? Is it not something that they’re actually having a problem with? Is it something that they can’t justify the time to spend on? Is it too complicated? Do they not just understand what it is that they’re supposed to be doing or what your expectations are for them?

[19:58] So there’s a lot of things that could be going wrong but at the end of the day you have to figure out what those things are and truly understand why it is that they’re not using the product. Because if nobody’s using the product and presumably in a beta, they’re probably using it for free. But if they’re not using it when it’s free, they’re definitely not going to use it when it’s paid so you have to find out what the problem is.

[20:17] Rob: I typically see this as being one of two things. Either you are not solving your user’s problems or you are not convincing them that you will solve their problem well enough for them to go through the effort of getting setup. And that’s two very different issues of whether you need to focus on building out more features or focusing on specific part of your product. The first one is pretty easy to figure out right? Because you just ask everybody is this solving a problem and then they’ll tell you why it’s not and you can build more features.

[20:48] The second one’s a little harder because if you’re not able to convince them that you are solving their problem so they can get over that setup hump, that initial on boarding experience is just too painful, then you need to think about alright, so do I need to make my marketing better? Do I need to convey the value proposition differently or convey it better? I’m not a good enough marketer to do this right now? Do I need to pivot it? do I need to not pivot the whole thing but just pivot the message to a different message or do you need to sit down and spend a lot of time on your on boarding process and try to either automate that or try to do a concierge on boarding to reduce the friction of folks getting value out of your product.

[21:25] Needless to say I have recent experience doing the latter, a lot of the latter, improving the on boarding process with Drip. We spent a lot of time on it both clarifying the value, I’m still in the process of that and then making the on boarding process both a simple wizard in the app itself and offering the concierge service. I know all of those things have contributed towards a pretty high number of our folks getting fully activated as we call meaning that they’re actually at a point where they should be receiving value from the app.

[21:59] And if they aren’t, then there’s something else of play either once they’re on board, if they aren’t getting value then it typically means that your app isn’t giving them all they need and that’s when you again go back to number 1 and you start looking at which features or what elements do I need to add in order to really solve the users problem?

[22:17] Mike: A somewhat related sign is number eight in which your beta users are saying that they would pay for it if the price were X and X is probably a lot less than what it is that you’re asking for the product. So at that point, it kind of ties back into one of your initial assumptions which was people will pay X dollars for it and they say well, I wouldn’t pay $50 a month for this but I might pay 10. If that number starts to dip too low then you have to evaluate whether the person who’s saying that is even a good fit for the product or whether they are a good fit and as Rob just said, if you’re not solving their problem in a way that they need or you’re not solving the problem the way that they need or that it needs to be solved for them so that it actually justifies the value, maybe there’s some extra steps that although you do solve part of the problem, there’s some other things that if you did those as well that it would be exponentially more valuable to them.

[23:0] There’s a lot of different things that go along with that but ultimately if they are coming back to you and saying that there’s a price issue of some kind, you may need to reevaluate what that price issue is and look at whether the price needs to be lower, do you need to modify your pricing tiers a little bit? That’s actually something that I’m looking at and evaluating right now is that the pricing tiers in how I offer Audit Shark. It’s a process you have to talk to the customers to find out and you have to talk to enough of them. You can’t just to talk to 1, 2, 3, you got to talk to a lot of people to figure out whether or not you actually have a pricing problem that is just too related versus the amount that you’re asking is not justifiable in their minds.

[23:49] Rob: Yeah. That’s where pricing is a tough one because you can either be priced too high or you are going after the wrong market because if you go after bloggers as an example, they don’t want to pay very much. They expect everything to be free. Whereas if you go after small businesses or enterprises, they tend to be willing to pay more and say you can have a higher price, you need to provide more value to them. So it could just be a market thing. You’re always going to have some people telling you that you’re priced too high but it should be a minority as soon as you get a lot of your beta users telling you that you know you have either a market problem or potentially a pricing issue. I think both of these last two signs that we’ve mentioned, the fact that your beta users aren’t using the product or that they’re all saying it would be too expensive.

[24:31] Neither of these is a reason to walk away from a product. I think only if these become unsolvable. Only if you iterate on them multiple times. They aren’t using the products so you redo your on boarding event features, still not using the products so you take another attack, you add concierge, still not using the product. I mean this takes some iteration. It’s not a first time it happens you turn your hands up and walk away. Same thing with pricing. It’s really about moving quickly and making changes and testing and figuring out what you can find that works but only after numerous tries and still nothing’s working then this does become a red flag.

[25:03] Mike: The ninth sign is that your life goals have changed and by life goals, I really mean if you decide at some point that you don’t necessarily want to own your own business anymore, if you’ve been building a product because you felt it was the direction for you to go and then you wake up one day and say well, you know what? There’s other things that I want to do in my life and I’m perfectly content having a full time job. Then bravo. I mean there’s nothing wrong with that. It’s perfectly okay and acceptable to say you know what, I’ve changed my mind. I don’t want to do that anymore or whether it’s living a location independent lifestyle or getting married and settling down at a given location something along those lines or if you decide that you hate computers because they change every two minutes.

[25:47] There’s plenty of reasons to decide that you don’t want to go in that particular direction and it could be that product just doesn’t fit in with your life goals anymore and that’s definitely one of the better reasons is think to walk away from product development than anything else.

[26:02] Rob: Yeah. I would agree. I think if this were to happen that you wouldn’t want it to happen just one day. You’d want it to be this feeling that comes at you overtime and that you probably have a realization one day and like wow that’s why I’ve been feeling this way about the product. I would then, if it were happening to me, I would then try to take a step back and get some time alone even if it was just for a four block one day but ideally be for a day or two to really clear your head and try to take a look at what it is that you want to do instead if you just want to simplify your life and if you can figure out ways to be basically be happy without a product that’s kind of what you’re feeling.

[26:43] There are a lot of ways to go about it and there’s a lot of stress trying to get a product launched and I think that could make you feel like perhaps it’s not in your life goal but I think it takes really some hardcore soul searching and some evaluation of which direction you want to go. And I think realizing that the decision is not permanent as well is probably a good thing. But putting a time frame on it, I would say hey, I can be happy without a product or one year or two years not a bad thing for a lot of people especially if you’re just at a point where it’s causing more trouble than your life is able to handle at that point.

[27:17] I think that leads us well into the tenth sign you should walk away from a project and that’s that your life situation has changed. I think this is a pretty common one that causes people to either want to start a product or want to close down a product is to get married or to have a child or to move or to sell a house, by a house, have a death in the family, there’s all these things that can happen to you and it changes your situation so dramatically that it’s time to almost reevaluate most of your major life choices and frankly launching a product can be one of those things that you need to reevaluate. So I can see this being a very solid reason for walking away from a project that you’re in the middle of.

[27:59] Mike: Yeah. All the things that you just listed, getting married or moving or getting a new job, all those things, they’re very stressful things and when you throw in launching a product on top of it or something eventually’s got to give. And if it’s the product, so be it. I don’t think There’s anything wrong with walking away from those things and I think that Rob made a very, very good point which is it doesn’t have to be permanent and that’s something you have to recognize. You can walk away from development of a product for a while and then once you cleared your head, once your life has kind of calm down a little bit, you can reevaluate that and say is that something that I still really want to do and come back to it in the future.

[28:38] Because if you’ve been working on code and the sales and marketing and stuff, it’s not like that stuff just magically goes away overnight when it comes to your mailing list and stuff, it might be a little bit hard to restart those things especially if you’ve grown one very, very large but presumably if you’ve been doing that, then the products is well on its way to success but if you’re struggling with the product in any way, shape or form and then you have these life situations that drastically alters where you are, you may want to walkway and at least for a little while and then clear your head and then come back to in the future.

[29:11] That takes us into number 11 which is fear of judgment from your friends or family or peers if you quit. If the only reason that you’re still working on that product is because your friends or family may think poorly of you because you quit something, it’s definitely something to take into mind when you are deciding whether or not to quit but it could be affecting your motivation as well because if that’s always in the back of your mind you’re going to have those thoughts, you’re going to have a lot of doubts about whether or not you should be continuing or whether like I said, the only reason you could be continuing is because you’re afraid of what your friends and family are going to think if you do quit.

[29:47] Rob: Yeah, the emotional parts of any decision are always the hardest. They complain to you, I mean this is like when you’re in high school and you’re considering whether to breakup with someone, it’s like you can write a pro-cons list but there’s always that relationship that really ties you to it and makes you struggle internally if you know it’s the right decision. It’s hard. Fair judgment is something that I think we all live with. What I found is the less that I judge other people in my head, the less I fear others judgment because I just forget that people do that. It’s always going to be an issue of course but I think it’s a good point that if the only reason that you’re sticking around that you can’t write any other pros down for continuing the app is that you’re scared that people will judge you then that’s probably a bad sign.

[30:28] And actually I think that leads us into number 12, our final point. And it’s that if you don’t have a good reason to continue working on your product other than sunk cost, other than the fact that oh I’ve spent six months working and I’ve spent two years working on it, if that’s it, if that’s the only reason you can think of, then you kind of have a problem. Right? There needs to be some other pretty prominent positive reasons for continuing to do this, some positive prospects for it other than just avoiding sunk cost.

[30:57] Mike: I feel like sunk cost get a lot of people because seems like it goes against human nature to put a lot of effort or time or money into something and then just walkway from it. It’s incredibly hard to do I think. I think that’s why you end up with these people who have gambling addictions for example. It’s like if I just do a little bit more, I’ll get out of this hole. It doesn’t necessarily workout that way. Similarly when you’re putting all this time and effort into something and you’ve gotten several thousand or tens of thousands of lines of code written and you look at it and you really don’t necessarily have anything to show for it except for all this code that you’ve written that either half works or the product mostly works and you still don’t have a market for it, it can be difficult to justify why you spent all that time and energy trying to build a product and ultimately it’s just not going to work out.

[31:47] And no matter how hard you try it could be that it’s just not going to work out and at those times, it’s better to cut your losses and walkway and either try something new or just kind of go down a different path than it is to continue sinking good time and energy after that.

[32:01] Rob: Yeah and this is hard to do. I’ve had to do it myself with multiple products I think 3 or 4 different ones come to mind. One of them was an eBook I wrote myself and tried to sell probably in 2006-2007 from my blog. It was about how to become a programmer and tried all types of crazy things and really it just wasn’t a good market. But I kept going after that and pivoting and iterating and doing all this stuff and just nothing really ever came of it and I eventually had dumped it and I certainly felt bad about the time I invested. And then I have a couple others, they were a couple two software products. One was a niche website, one was a software product and then eBook and those I acquired and so there was a real sunk cost of actual money. Luckily none of them was substantial. It was in the few thousand dollar range but eventually I wound up closing all of them.

[32:49] I’ve chalked it up to learning since then. Those were in the midst of I’ve had some success. Everything’s not a success and I’m still figuring things out in retrospect. I don’t think any of them would’ve ever been a real earner and really worth pursuing. So I know that this is a hard decision to make especially in the moment. If it’s the only reason you can think of to continue with your product then that’s not really a very good reason to do so.

[33:13] Music

[33:15] If you have question for us call our voice mail number at 1-888-801-9690 or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for startups or via RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening. See you next time.

Show Notes

In the moment

• Site blockers – Chrome extensions called StayFocused, ProductivityOwl
• Pause your email – InboxPause –  same guys who make Boomerang
• Use triggers to get in the zone – loop the same song or playlist and work. That playlist will become synonymous with getting into the zone. Rob mentioned he’s recently been looping Lonesome Dreams by Lord Huron, and he’s also been known to endlessly loop pop punk songs.
• Pomodoro technique. Taking it even further: http://impossiblehq.com/workstation-popcorn 
• RescueTime
• Timeboxing – Marketing Monday

Long-term

• Make an annual plan. Then break it down by quarter. Then by month. If you say “yes” to anything not on the plan…realize that you are bumping something.
• Weekly reflection on what you’re doing and why.
• Mastermind group accountability
• Focus on 1 thing at a time, and maybe (big maybe) a secondary, less important, side project. Anyone I’ve known who does more is chronically not completing things.
• Learn the difference between productivity and entertainment – examples: HN, Seth Godin Books, Malcolm Gladwell Books
• Temporary information diet

Transcript

[00:00] Rob: In this episode of Startups for the Rest of Us, Mike and I discussed 12 strategies for avoiding shiny object syndrome. This is Startups for the Rest of Us: Episode 170.

[00:09] Music

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

[00:26] Mike: And I’m Mike.

[000:27] Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Mike?

[00:32] Mike: I was looking through some of the comments that are left on startupsfortherestofus.com and there’s a recent one there from Mark Studebaker who says another solid episode guys. One thing I do to help get myself going with just coding is to always leave or find something easy to do. Sit down. Knock it out, it puts me in gear.

[00:49] Rob: I find that if I have an easy task that it will be a good on ramp for me to kind of get working and get focused but I’ve never intentionally left an easy task at the end and I think that’s a pretty good tip. That was to assist with a question that we answered a couple of episodes ago about staying focused and being motivated.

[01:07] Mike: So what’s up with you this week?

[01:09] Rob: I’m still struggling with this having too much work to do and having too many simultaneous tasks on my plate and I think we’ll touch on that in this episode when we talk about shiny object syndrome. I’m looking to see how quickly I can get out from under these I think. The fact that MicroConf is hopefully the planning begins to wrap up here in the next month or so and then my never ending quest to revamp HitTail and get it working again at full capacity is probably still a week maybe two out but I’m making a lot of progress on that over the last couple of days.

[01:40] And if I can get those things off my plate, I will be a much happier person because right now I’m frankly not very pleasant to be around and so kind of just labeling it as the struggling me I’m not nearly as say happy with work like I was even six months ago.

[01:56] Mike: I think part of the problem is you tend to be distracted at all times as well because you can’t even just sit there and have dinner without your mind wandering to all the other things that you have to do. You can’t necessarily focus on whatever the task is that you’re currently working on just because your brain is constantly thinking about all the other things that you also have to do.

[02:14] Rob: That’s right. And there are people who live in that perpetually and I’m not one of them. Most of my time, I am focused in one or two tasks and in general I don’t feel this way. So when I get into this kind of chaos, this mental chaos, definitely a shock to the system and it’s something I want to get out of as soon as possible because I find it being frankly not that productive. And the sooner I can get out of it and kind of get back to the old more controlled way of doing I think the better off I am.

[02:42] So we have 325 worldwide iTunes reviews now across looks like about 18 countries and thanks to comment cast for giving us the ability to see that. But we have a review from Bar Assam he says great focused podcast on starting your own business without venture capital. I’ve learned a great deal by listening to all the episodes. And our other one is from ASDF0987 he says weekend, week out these guys deliver the gold. I love following along as they talk about their experiences developing their businesses. Thank you so much guys.

[03:12] So we really appreciate these reviews. If you have not logged in to iTunes, left us a five star review, we’d really appreciate it. It helps us out. It helps us grow our audience, we’d appreciate your help if you can.

[03:23] Music

[03:27] This week are going to spend a whole episode answering a listener question. So listener Ryan Belong from Redding, California writes in and he says I’d love to hear some productivity or shiny object syndrome recovery tips on a podcast episode. As you know, entrepreneurs and startup folks are notorious for that especially in the tech space where not keeping up with the latest and greatest can cost you. So most of us have already formed bad habits that are counterproductive to building and growing a company.

[03:54] And when he says shiny object syndrome he just means seeing the next shiny object and basically walking away from what you’re doing now and putting too much on your plate. And as soon as you have 2, 4, 8 projects that you’re working on simultaneously, you can’t possibly be that efficient at it because you’re just splitting you time up too much and it becomes such a headache to manage.

[04:12] So today we’ve broken these 12 strategies for avoiding the shiny object syndrome into two sections. The first one is going to be in the moment. So it’s like how to get focused in the moment? And then the second half is going to be talking about longer term focus strategies, motivation strategies and that kind of stuff. And these are taken almost exclusively from our own experience. A couple of them have been referred to me and I don’t use them but I know they’re popular and a lot of people do. And so we’re going to kick it off with our first in the moment strategy and is to use a site blocker.

[04:46] So there are a ton of these out there. There are chrome extensions. There’s stay focused and productivity owl. There’s a bunch of them that are free but it allows you to block websites either at specific times or for specific durations. The notorious ones for us would probably be hacker news, Twitter, it might be your Twitter client. it might be Facebook. Anything, Reddit, anything that draws your attention away and allows you to accidentally wander. You click one link and you’re reading something for work and suddenly you spent 30 minutes watching a bunch of YouTube videos or reading a bunch of the latest post about how jQuery can do this and that.

[05:21] That’s bad. It really impacts your flow. It impacts your productivity and so the use of site blockers is something that I know is pretty prevalent and finding one and getting it in place if you have this issue of wandering off I think is something that can help with your focus.

[05:36] Mike: I’ve always thought that the idea of a site blocker would be helpful but the actual implementation of them, what I would like to see for them is just kind of like a warning that just pops up that says hey you’re about to do stuff that is probably not your best interest, are you sure you want to go on? So that way it’s more of like a click here to continue and it kind of disrupts your flow of going off into the weeds as opposed to just blatantly stopping. Maybe it’s more of a gentler way of saying hey, more on you’re doing things you shouldn’t be.

[06:05] One that I found recently that I just love this thing already, I barely used it and its called inbox pause and it allows you to pause the email that’s coming into your Gmail account. What it does is it takes all the incoming email and automatically sets it to a specific label. And then when you unpause, it will take all of those things and will put them back into your mail box says unread basically removing that label. And it comes from the same guys who make Boomerang.

[06:32] It’s just a little Gmail plug-in. You click pause and you can click unpause and your email has been queued up. It pops back to your mailbox. And to be perfectly honest, an email from me is probably a much bigger problem than going off to random websites because I really do need to be in my email and do a lot of stuff in there and it’s very distracting to know that there are emails that are probably still coming in that I have to deal with. So for me, to be able to just block my email for time periods of say a couple of hours, I know that if I go back and check my email, there’s not going to be anything there unless I go and unpause it.

[07:05] Rob: I like that one as well. I haven’t used it but it’s something I’ll be installing when we get done with the show. Next idea, and this is something I’ve used a lot and I’ve ramped it up and actually gotten better out of it over the years but it’s to use triggers to get you in the zone and to get you focused at the start of the day. About 5-6 years ago, I used to start everyday when I’d sit down to write code and I would turn on either a podcast or NPR, some type of talk radio and that always shifted my focus. It became synonymous with me starting to work.

[07:35] These days, since I’m doing a lot of stuff where I need the language center of my brain because I’m writing copy or writing emails, I need to do it via music. But what I found is that if I found a new song, if I hear a new song that I haven’t heard a bunch and I really like that song, I will sit down and loop that song, just that song, not a playlist but just that song over and over for a couple of hours while I work and I find that especially if I’m doing some coding or something and I can kind of get into a real heavy zone with, that song then becomes a trigger for me to get in the zone and it will last for weeks if not months depending on it. At a certain point you do just get sick of the song and you can’t listen to it anymore.

[08:12] but taking a new song and using it in that fashion will trigger parts of your brain that will allow you almost instantly to go into work mode. And I ran into some issues where I did this with a couple of songs. There’s a really good song called lonesome dreams by Lord Huron that I did it with and I probably listen to this song 600 or 700 times in a course of a few weeks. And we were at a friend’s house hanging out listening to Pandora and the song came on and I no joke totally started thinking about work and my to-do list came up in my head and it just triggered even though we’re sitting around having drinks and chatting. So use this one with caution for sure.

[08:46] I’ve also found this works with certain playlist of the music is all of the similar style. So I’ll put songs back to back to back with heavy driving drum beats or heavy driving guitar. You can have different playlists of these things and loop these. I find that it’s not as powerful as that single song but it does last longer because that playlist won’t burn itself out because you have a little more variety.

[09:08] Mike: Yeah. In iTunes I have a specific playlist called programming music and it just allows me to get into the zone and just really focus on whatever it is that I’m working on. I can use it for just about anything where I need to really think in depth about a particular problem. I feel like it works much better for things that are I’ll say not as creative because with creative stuff I kind of need to not be as driven. So if I’m doing coding, I’m actively thinking about a very specific problem that probably has a very specific solution versus being a little bit more creative with creating emails and stuff where that tempo has to be turned much further down so it doesn’t help me as much for those types of tasks. But for program it works really, really well.

[09:50] Rob: I’d agree with that. Yeah my playlist, I have a couple of them but I call them working.

[09:55] Mike: So the fourth one is using the pomodoro technique and I’ve talked about this a little bit before and the pomodoro technique there’s a lot of different iPhone apps that you can use or there’s even probably desktop apps or chrome plug-in that you can leverage but it’s really just a matter of picking one and it sets aside a time block for you to really get in the zone. And then after 25 minutes or so, and you can adjust the time a little bit but the default is typically 25 minutes you work and for 25 minutes then you take a 5 minute break and you work for 25 minutes, take another 5 minute break.

[10:26]And then after four of them, you take a much longer break which is usually 15 or 20 minutes and then you kind of go back into that so that way you’re doing blocks of work and about two hours at a time but you’re trying to squeeze as much as you can into these 25 minute increments called pomodoros. And I found that it works really well.

[10:43] Rob: Yeah and there’s a bunch of website tomato-dashtimer.com is a free one and it has just a 25 minute time where you can stop and start with a space bar. There’s plenty of options here for that. I’m seeing an interesting article. It’s actually just on hacker news right now. It’s on impossiblehq.com and he kind of takes this even further where he talks about how to become uber productive while working for yourself and he sits down at the beginning of a day and he breaks things up into three equal chunks of about 2 or 2.5 hours a piece and then he finds three locations to work from.

[11:16] So then he goes to this really killer coffee shop. He works there, just sprints for that 2.5 hours and I’m trying to see if he actually does pomodoro and just does 30 minute sprints or if he does the whole 2.5 but either way he gets that group done, then he puts on his iPod and he cranks up loud music and he goes to the next station. He says it’s ideal if you have to walk, ride a bike, do something physical to get do that next place that it’s actually not just another seat in the same coffee shop but it’s another coffee shop block or two up the road. And then he does that three times and he says it’s just incredibly productive for him.

[11:53] I’ve never tried this but I’m really interested to try this. I have accidentally or kind of just by virtue of schedule I have needed to bounce around to different work locations the same day a few times and I have found that it does make my mind not get stock in a rut. It adds to like the creativity or at least the ability to kind of see problems with a new view and not get stuck in the demotivational thing of sitting in the same bedroom for 8 hours straight.

[12:20] Mike: So the next one on our list is rescue time and rescue time is a Saas application that you can install and you put it on your desktop or your laptop and essentially what it does is it looks at the processes that are running on your machine and it will figure out what it is you’re doing and what you’re spending your time on. And then at the end of the week it will email you a report and will show you essentially where you’ve spent your time throughout the course of the week. So if you’ve spent a lot of time in visual studio, it will show you that. If you spent a lot of time on hacker news it will show you that as well.

[12:51] And then based on the type of takes that you are performing, it will assign a score to the task that you are doing because there are certain tasks that are considered very much work oriented. So for example, sitting in your compiler is probably very, very much work oriented. You’re not doing that too much outside of things you’re supposed to be doing. And then there’s things that you’re doing for example inside of a web browser that it could go either way. So being in your compiler might be worth say 2 points per minute and being in your web browser on a programming website might be 1 point, might 2 points, it kind of depends on the website.

[13:24] And then there are other websites where if you’re on that website its very, very bad and its definitely not work related. So things like YouTube are probably minus 2 for example. Hacker news I probably minus 2 but if your job is to do social media for example you might spend a lot of time on hacker news because you have to as part of your job and that’s you’re trying to get social traction on your website and different stories that you’re trying to promote. So you can customize it a little bit but what I found was it tended to be a little bit of work for me because of all the different things that I do I ended up kind of adjusting the different point values quite a bit based on the weeks that I was working just.

[14:07] Because some weeks I would be doing a lot of promotion so if I‘m doing those types of things then I have to bump up to the points that lean on those different websites as work. And then if you’re doing things like Facebook ads for example being on Facebook should theoretically be minus 2 but at the same time if you’re doing Facebook ads, you kind of have to be on Facebook in order to run them. So it can be a little bit of a struggle or a challenge in some of those cases but for the most part, if you’re really looking for a good cross section of where you currently spend your time, rescue time is definitely a good place to start looking because it will give you that snapshot.

[14:38] Rob: Our next strategy for avoiding shiny object syndrome is time boxing and I actually just did one of these. I had a task that I thought was going to take me an hour and I sat down 30 minutes before you and I had a deadline to talk and I just cranked on this thing and did it very fast like way faster than I thought. I’m pretty pleased with getting it done.

[14:59] And there’s other ways to do this time boxing. You can time box on a calendar. You can just look at 4 to 5 things you need to get done in a day, the larger picture things and put in 30-45 minutes, 1 hour for each of them. You do a quick estimate and you just pack out your calendar for the day and you only give yourself that much time to do it. Unless it’s absolutely critical that it be at a certain level of quality, I mean you crank until the time is up and then you send it off. I’ve used this for just success. I don’t use it all the time. I use it when I feel like I’m bloating my tasks and when I feel like I‘m in that rut and I am losing focus. I will resort to basically one or most of these tactics that we’ve named so far.

[15:41] Mike: One of the time boxing techniques that I’ve talked about in the past is using marketing Monday and just dedicating all of your marketing tasks for one specific day of the week. I think that helps a lot of people just because of the fact that a lot of the marketing tasks take time to see the results so if you kind of box all those in to one particular day of the week and then you don’t come back to it for another week, then by that time you’ll have presumably started to see some of the results and you can act on those the following week. But marketing Monday is definitely an example of one of the time boxing techniques.

[16:15] Rob: Now we’re going to take a look at a handful of more longer term ways to avoid shiny object syndrome and to stay focused. The first one that I‘m going to talk about is something that I’ve done every year for the past 3 or 4 years and it’s to make an annual plan. Look out at the next year and figure out what is it that you want to accomplish. What handful of things high level big picture goals do you want to accomplish? Then break it down by quarter and then if possible, if necessary, break it down by month.

[16:44] What this does is makes you realize that your year is packed with really interesting stuff that you chose at the beginning of the year. And it’s not that you can’t change from this. It’s not that you can’t say yes to something else but if you say yes to anything that’s not on that plan, you need to realize that you’re going to be bumping something else on your list and that becomes a deliberate decision because I see a lot of folks who especially us, founders and entrepreneurs, we start doing one task. We start doing one project and then either we hear about a new technology or someone brings an offer to hey, you want to be a cofounder of this? You want to just help me out? You want to do some consulting?

[17:19] These things come up and if you don’t have any type of say a time boxed year or any type of annual plan where you’re really trying to get stuff done that’s going to move your forward, you will wander all over the place. That’s just our tendency. And so making this annual plan is something I think is very important. It’s something I think a lot of people do not do and think it’s been a big mover for me to take – I typically look back at the previous year. I look at what I enjoy doing, what I didn’t enjoy. I look at what revenue it was. How much it grew, where I wanted to be in next year and then how I’m going to make that happen, try to make it as realistic as possible.

[17:55] Because I do this during typically a two day retreat that I take away from the family and it allows me to purely focus, I don’t check email during this time. I try to do paper and pen. Sometimes I use my iPad for things but in general I spend the days at coffee shops walking, thinking, I have a list of questions I’m trying to answer for myself, looking backwards and at the coming year. By the time I come out of that, I tend to have a really tight vision of what the next year is going to look like, what I want out of it, I say no to a lot of things after that. You might think oh that locks you in not taking advantage of opportunity. That’s not true. I have taken advantage of opportunity and you still can but that opportunity better be really, really good that one of the other 4 or 5 things that you have on that annual plan is going to get bumped and that it’s worth it to you to do that.

[18:42] Mike: But when you do that, do you kind of assign time blocks to each of those things that you kind of estimate that it’s going to take or do you just kind of wing it in terms of ball park like oh I think this will take about one quarter to finish. How far down do you go in terms of blocking it out or trying to make sure that the time estimates for a lot of those things are accurate?

[19:02] Rob: I don’t go that deep into the time estimates. What I do is I know that certain things like MicroConf have a tight deadline. It’s a definite deadline and then other things I will say – you know last year I said I want to get Drip out in the spring and I think I even said it was like by April 1 because MicroConf was at the end of April. And so I’ll throw that out as a deadline and realize whoa, suddenly I’m planning MicroConf and building Drip and I was still growing HitTail and realized that’s a lot. I really can’t take on anything else.

[19:28] Now Drip was pushed out. I didn’t launched ‘til quarter 3 that’s okay. I can live with that. I mean there are other reasons it didn’t launch. It wasn’t because I lost focus. it was just coz there’s a lot of work to do. But I’m in the same position again this year. I have four things going on right now and that’s not really not ideal but I’m seeing that two of them hopefully will be off my plate in the next couple of months and that it should free me up for the remainder for the year.

[19:53] But when I say month by month, I do try to plan which month something’s going to be done and then the month to month typically is if I’m talking about revenue goals, there’s a few other goals that I do break down and it just helps to not say I want to be at $50,000 a month by the end of the year. But it helps to break it down into how fast do I need to grow in order to get to that $50,000 goal.

[20:11] Mike: I think an approach that I’ve kind of gravitated towards is doing kind of a weekly reflection of what it is that you’re doing and why. And at the end of any given week, maybe this is more of a reactive strategy than a preventive strategy. I kind of look back at the previous week and previous month at the end of each week and say is this what I’m supposed to be doing? is this actually helping me? Is this moving things forward? And if it’s not, look at the things that need to be done in order to change that. I think it was Steve Jobs who at one point basically said I look in the mirror everyday and decide if today was the last day of my life, would I be happy doing what I’m doing today? And if there’s too many days in a row where the answer is no, then something’s got to change.

[20:56] Rob: Our next strategy for avoiding shiny object syndrome is mastermind group accountability. It’s having other people who are invested in your story who you’re talking with fairly frequently, keeping you accountable to not wandering around and not jumping on other ideas and objects. I got to be honest. I’ve had several points over the past say 3.5 years since I’ve been part of mastermind groups where I have had to convince the other people in my mastermind group that I was going to do something and that they pushed back and said why are you doing this? Give me a reason. And I did and I was able to – it helped me think it through. It helped them understand really why I had to do that. Why I wasn’t just going to sit there and work on that singe app for the next 10 years like other folks had.

[21:41] Mike: I think the mastermind group accountability, I think this really, really helps when you’ve got things going on that are not necessarily obviously to the average lay person because 1) you just can’t divulge certain types of information. In a mastermind group, you can. You can lay down all your cards on the table and you could say this is why I’m doing X, Y and Z and although it doesn’t make sense why I’m doing Z right now when I get done with X and Y then its going to make sense.

[22:10] The next one is to focus on one thing at a time. If you have a smaller secondary or less important side projects then you might want to take those and push them to the side a lot more and focus on your primary project. If you have a salary and a side project then you could kind of couple those together if you’re doing consulting or you’re building a product. There’s lots of different ways to combine kind of like your primary source of income and then something else that you’re building on the side or doing on the side but if they are competing too much with one another, one of them has got to give. And it’s okay to set aside your full time job in favor of a side project that you’re working to build up in an effort to supplant your full time job but you have to do that as a conscious effort.

[22:53] And when you start taking on more than one or two major tasks at a time, something’s got to give. So as you start going down the road where you’re building two side projects or three side projects, it’s ultimately going to end up a scenario where some thing’s going to fall on the floor because you can’t reasonably sub stand those for too lengthy a period of time before things just start to fall apart.

[23:18] Rob: Everyone I know who takes on more than one major project plus a small side winds up chronically not completing things. They just have a bunch of stuff sitting around that never gets done, never gets launched and winds up being a huge waste of time. If you abandon something because it’s not a good idea, then that’s okay. That’s justified. But if you abandon stuff because you just don’t have time because you just wander from one thing to the next, you’re never going to make any progress towards your goal. It’s pretty sad to be honest because I know some talented people who aren’t getting there and it’s not because they couldn’t get there if they focused but it’s because they’re just taking on too many fun things frankly.

[23:59] Next strategy we’re going to talk about is learning the difference between productivity and entertainment. I think there’s a lot of confusion. Some people think that let’s say being on hacker news is actually being productive or reading Seth Godin books, Purple Cow, Linchpin, love all these books. they’re not productivity though. you’re not actually moving your business forward. You may be learning something, maybe learning a lesson but I never once kidded myself that I was being productive while I was listening to it or pushing my business forward or even learning a lesson that was really going to make that much of a difference in my business.

[24:32] You might learn something ancillary but it’s so different than either sitting down to write some copy, to make a cold call, to setup a new ad campaign, to build out SEO, those are the things that push your business forward or even learning about those things in a very specific and defied way. Jeremy from the internet business mastery podcast calls this just in time learning. I’ve always liked that phrase. When I sit down, let’s say I’m going to take on a new ad network or I’m going to try a new SEO technique. That moment, that’s when I’m going to learn that technique.

[25:04] I have stopped listening to highly tactical podcast or reading highly technical blog articles that I’m not going to put into use in maybe the next week, maybe two because I can always find them later. Search engines are pretty good these days and what I found is that I was consuming so much information about putting 1/10^th of it to use and by the time I put it to use, I had forgotten what I had read anyway because I had put so much information in my head.

[25:30] So I think the bottom line for this one is to not consume tactical information until you’re ready to use that tactic and to really learn that difference between productivity and entertainment and its okay to do entertainment. I listen to a lot of podcasts but I know that I’m doing it for fun and I read a lot of business books and I know that business books are not going to push my business forward. It’s much more of a form of entertainment than of actually being productive and driving my business forward.

[25:56] Mike: One of the things that I’ve found that kind of helps me differentiate and draw solid line between productively and entertainment is to gravitate more towards books that are clearly not productivity. I don’t tend to read business books anymore. I used to. I used to read a lot of them and then I got to the point where I realized that a lot of these things are more entertainment than education. So it’s not helping me move my business forward so why am I spending my time on that? Why don’t I spend my time doing stuff that for example would help me sleep at night? So what I’ll do is I’ll read science fiction novels at night on my kindle.

[26:31] And what it does is it actually helps me sleep better because then I’m reading stuff that is – I’ll say in some ways mindless because it’s not like I will think a lot about it. It’s not like I’ll try and glean some lesson from the story that I’ll try to apply to my business. if it’s just some science fiction novel that I’m reading, I can close a chapter and go to bed and I’m not dwelling on it a lot.

[26:52] Another strategy you can use is going on a temporary information diet and kind of like the difference between knowing what is productive versus what is entertainment, you can take a look at the website you’re reading whether its hacker news or Twitter pruning down your RSS lists, pruning down your podcast list. I’ve actually pruned my podcast list down to about half a dozen and I will alternate back and forth between them because quite frankly I don’t necessarily get a lot out of most of them anymore. So there’s only so many lessons that you can learn. There’s so many different ways that you can hear a specific piece of information before you’ve kind of really understand it.

[27:28] If you need to prune back on that stuff especially if you’re doing it temporarily because you really need to buckle down, then put a hard limit on what your RSS looks like or your podcast looks like. Maybe it’s a 5, maybe it’s a 10 maybe it’s a 20 but make sure that you put a limit on there so that you don’t feel like you have to go listen to them. And then one of the things that you’ll find is when you start limiting these types of things, part of the reason you want to put a hard limit on those is coz you’re going to start to feel pressure if you just let them build up. And this happens especially with RSS feeds. I found that this happened to me when I started to neglect my RSS feeds and not mark things as red and not actually go through them.

[28:07] I actually felt pressure to go in and read those because it almost felt like my to-do list was expanding. And it was in a weird way it was kind of stressful because I’m like oh, I’ve got all these things that I’ve subscribed to. I really should be reading these things and instead of letting those things build up, just trim them. Just get rid of them completely so that they’re not there and contributing to your to-do list.

[28:28] Rob: Yeah. I’m a big fan of information diets and when I’m on a big push like this quarter as an example, I backed way off on the amount of stuff I consume. And then at other times like let’s say I have a quarter later in the year that’s more relaxing and I hope to get there and intentionally make it just a more relaxed three months, I will push in and I’ll lean in to the stuff that’s coming out through my RSS feed and my podcast list and anything else. I’ll listen to a lot more books and such because I feel like that’s the time when I’m going to recharge and get new ideas and new concepts into my mind but I see it as an ebb and flow. So I like the concept that it’s a temporary information diet. I don’t feel like I need a permanent one.

[29:07] The other thing is I’m a little different than you with the podcast subscriptions. You have six and that’s pretty impressive. I probably have somewhere in the neighbor of between 50 and 80 that I subscribe to. But I’m listening to them every day at different times when I’m making dinner and doing dishes and such and anything that doesn’t look interesting or anything that’s not keeping my attention, I’m deleting. And so my actual queue of unlistened to episodes tends to be less than 5 because I keep that thing really prune. And even if I go away for a few days and don’t listen, I’ll come back. And the longer shows that are really just more entertaining I’ll just nuke those things and I’ll just keep the ones that I really want to follow the story of. Those are the two ways. It depends on your personality I believe.

[29:50] I’m able to kind of manage it and go in. now, I don’t do that with RSS though. RSS I just want to keep the list small and I pretty much ready everything that comes through. But with podcast I feel like I’m picking kind of the gems, the diamonds in the rough that may come through in this big swarm of new episodes just coming out every day.

[30:08] Mike: Yeah. I’m completely opposite when it comes to podcast. I feel like I’d rather stick with a couple that I really enjoy versus trying to sift through them and figure out which episodes I want to keep and which ones I don’t. Sometimes it’s really hard to tell. I feel like there’s certain episodes that you may very well get a lot out of but it’s hard to know until you’ve already listened to it I guess.

[30:28] Rob: I can typically tell. Assuming it’s going to be a single topic, it’s not a new show that’s going to bounce around, I’ll give some 3-5 minutes and that’s at time and a half speed. And if I’m in doubt, I delete it. The odds of me missing some gem that’s just going to change my business is very, very low. Typically I’m listening to it to figure out the continuity of the story and to hear some news and that kind of stuff. So I think either way will work and it’s just about knowing yourself and knowing what works best for you.

[30:56] So to recap, our 12 strategies for avoiding shiny object syndrome are to use site blockers, to pause your email, to use triggers to get in the zone, using the pomodoro technique, using rescue time, and time boxing. And our long term strategies are to make an annual plan, have weekly reflection on what you’re doing and why, have mastermind group accountability, focus on thing at a time, learn the difference between productivity and entertainment and go on a temporary information diet.

[31:25] Mike: If you have question for us, you can call it in to our voice mail number at 1-888-801-9690 or email it to us at question questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt used under Creative Commons. You can subscribe to us in iTunes by searching for startups or via RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening. We’ll see you next time.

Show Notes

Transcript

[00:00] Mike: In this episode, Rob and I are going to be talking about getting testimonials, getting inspired and competing on price. This is Startups for the Rest of Us: Episode 169.

[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’ve built your first product or you’re just thinking about it. I’m Mike.

[00:25] Mike: And I’m Rob.

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

[00:30] Rob: The word is don’t focus on more than one thing at a time. So I have a lot of apps. I have a portfolio of both training courses and the conference we run and the podcasts but I don’t tend to focus on more than one time. The exception is when MicroConf is coming up and I’m working on a single app. But for some reason I’m finding myself doing four things at once right now and it is nuts like it is really hard to keep up. I am either dropping the ball on things or I find myself staying up ‘til 1 in the morning just trying to keep ahead of the flow of tasks and emails and approval and stuff.

[01:08] Initially it was just supposed to be Drip this whole year. 2014 was going to be Drip and then planning to do two MicroConfs, one in Vegas, one in Europe. HitTail snuck in there because Google made exchanges not provided about 3 or 4 months ago and so now I’m trying to do a bunch of work on that and get the code written there and get things fixed up. And then we decided to do basically a revamp of the Micropreneur Academy. This has lead me down a path of doing too many things and so that’s kind of my thing for this quarter is to get out from under this and get back to a more sane working schedule because taking on too much is really just not fun.

[01:45] Mike: I totally know what you mean. I’m kind of in the same boat. Some of those things that I’m doing overlap because I’m obviously also involved in MicroConf and with the academy prelaunch and then there’s Audit Shark on my side of things plus I’ve got some consulting work that I’ve got going on right now. And you’re right. It’s an absolute nightmare. And I wonder how much of it has to do with the fact that don’t happen in December that you would normally except to happen, they kind of get dumped into January.

[02:08] Rob: Yeah. I’m wondering that too. If it’s the time of year and if it will be gone in a few weeks. Since none of these things, I guess only one of my mine – hopefully HitTail is going to be fixed here in the next week or two and if that’s the case then I cross one off my list and things will ease up but aside from that, or things on your list, you expect them go away soon or are they going to be around until April?

[02:29] Mike: I think most of them will go away soon. Maybe it just feels more like I didn’t necessarily work on them as much in December. I kind of was aware of some of them but I just didn’t necessarily put any effort or thought towards them because I had other things going on. I think that they’ll start to go away in the next couple of weeks but it’s just hard to juggle it all right now is really the issue.

[02:48] Rob: Right. So word on the street is you lost a “bet.” What we bet, and I put bet in quotes because we didn’t actually put anything on it but I think you owe me baby sushi and steak dinner. So the bet was about MicroConf and last year we had sold out the early bird tickets in about 50 hours or so and this year we were doing the over under was 24 hours, it turns out it sold out – Twitter was saying 15 minutes. I calculated 26 minutes when I was looking at my stuff that was coming in. it was definitely somewhere under an hour, a lot faster than we had thought.

[03:22] Now we did two launches right? We did a launch inside the academy first. We sold out a block of tickets and then we sold the rest of them to the early bird list but it went fast. And you had mentioned there were some folks that were basically saying they were refreshing their browser just watching the number tick down.

[03:36] Mike: Because I clicked the button to make the tickets go live and I could’ve scheduled it but I wanted to actually just sit there and do it so that I know when it took effect. It was three minutes in and there were 30 tickets gone and 10 minutes in there were 50 that were gone and that’s from the public availability. But they do get locked for about 15 minutes so it’s hard to say exactly when they were purchased versus when somebody went in and kind of claimed it because there were tickets that would pop back out. And I did catch some of those. About after 20 minutes, that stopped happening.

[04:05] Rob: There was also discussion mostly on Twitter about well, you get a larger venue and grow the conference or you should raise your prices and we’ve talked through all of those things. None of that is news to us. I think the end result is that we will probably bump the price up again next year. We did not do that this year. Odds are go little, we’re trying not to make it unaffordable. We want new entrepreneurs, new founders to be able to come. We also want experienced folks. I find that mix is a positive thing for everybody.

[04:33] In terms of growing numbers, we definitely don’t want to grow past the point where it feels intimate and so that’s where we haven’t increased the numbers but demand has obviously increased. With that said, we are talking with the hotel about getting just few, maybe another 10, 15 seats in the room that would allow us to basically start to dig into the wait list. I think we’re approaching triple digits on our waitlist in November right now. So if we could get even a handful of tickets and lots of more folks, I think that would be a good thing.

[05:00] Mike: So we have a follow-up question from one of our previous podcast in episode 167 where we were talking about masterminds and it’s from Andrew Connell and he asked what’s your take on having your cofounder in the same mastermind group that you’re in?

[05:13] Rob: I would lean towards not because the idea behind a mastermind is that you can say almost anything about your business, about your employees, about cofounders, kind of a 360 view and that’s your place that’s very safe that you can come and you don’t have to feel guarded about something. I think if there was ever an issue with your cofounder that you couldn’t bring up in your mastermind, that who is it that you go to with that issue? You kind of cut off that avenue.

[05:45] I guess the odds of that happening are not something super likely to happen but I lean on the side of caution on these things so my gut feeling would be that I would want to be in different masterminds. I also think splitting you up will bring in more – if you’re in two different masterminds, it will just bring in more points of view. Because think about it, we said a mastermind should be between 2 and 4 people and so if it’s two of you guys in there for the same company, at most, you’re going to get 1 or 2 other opinions. Whereas if you split up, you’re just going to have more variety of possible solutions.

[06:16] Mike: The standpoint that I took it from was I wouldn’t want to be in the same mastermind group as a cofounder just because your stories are going to be very, very similar. They’re going to be just like the discussions you have any other time and you’re really not getting an external point of view from your cofounder in that mastermind group. So if you split up and you each go to your own mastermind group, then you can essentially distill the ideas from those and when you talk to each other, then it gives you that much more insight into your business or that many more ideas that come from outside that you may not necessarily have gotten if you were both in the same mastermind group. But that question was left on the comments section of that podcast episode. So just wanted to say thanks Andrew.

[06:57] So that’s kind of outside the realm of the questions that we’re going to be answering. The rest of these questions came in through our questions@startupsfortherestofus.com. If you have a question, you can send it into that email address and our next question comes from Gifford Hanes. He says hi Rob and Mike. First I love the podcast. It’s the highlight of my week. I read start small, stay small and was a member of the academy. I‘m working on a product for pet sitters. My question’s about the early phase of the product. And let me give you some quick background. I came up with the idea because my wife does operations and is a sitter for a pet sitting company. I saw a lot of inefficiencies in her workflow and she was getting frustrated.

[07:32] Then I looked around at the web for competitors and only two seem to be Saas based. From there, I did an ad words campaign and got a few sign ups of people to stay informed on the products development. I plan on calling some more prospects and talking to them about the features they need and the pain they feel in their business. My question is should I focus more on marketing the site or the product right now? I have a simple page with launch rock for the signup and landing page and this is where I point the traffic for the ad words campaign. Your thoughts and opinions on this would be greatly appreciated. Thanks, Guildford.

[08:00] Rob: You should focus on vetting and validating this idea. I would not write line of code, not write a line of HTML, not write – well maybe I’d write along a copy. That’s what I’d start thinking about and I would definitely start talking to more prospects either on the phone or via email whatever works for them I guess is going to be more phone conversations. And I would do that early vetting that we talked about, get that list of 10 who are stoked to pay whatever price it is you’re asking, I’m assuming since it’s Saas its going to be 19, 39, 49, 99 somewhere in that range per month and you got to figure out that price point through these conversations and get 10 of them who are super excited that you’re going to be building this for them.

[08:41] Then, once that’s done, and that can easily take 6 weeks to do because you’re not – probably not going to be doing full time, it’s hard to get a hold of people. You need callbacks, I mean there’s so much stuff that you run into. Once that is done and even as you’re going through it you can consider – I would think about starting to write some copy, write some bullet points of features, even just in a text document based on the conversations you’re having and based on the paying points that you’re solving, try to focus it down to a single paying point for that big headline and then think about the other things that you’re adding and hearing from this folks.

[09:14] And to be honest, I think that updating your landing page which is great, it’s simple. Just updating that with a headline and one or two bullet points at most is going to be good for the time being.

[09:25] Mike: I tend to agree with you. I think the one thing that people tend to overlook is what sorts of ideas that they’re actually trying to – I’ll say validate. And when you start looking at say the lean startup methodology whereas build an MVP and kind of iterate from there, the thing that I think most people tend to heavily overlook is that an MVP is really not necessarily like a minimum viable product for your product itself. It’s you’re trying to figure out the least amount of work that you can do to validate what your assumptions are and currently your assumptions are people will pay for this. And the question really is what proof do you have of that? What is the smallest thing that you can do? What’s the least amount of effort that you can put into it to validate it? And that’s exactly what Rob put forth. It’s like that’s what you should be working on. That’s what you should try and validate. Will people pay for this?

[10:11] And you can kind of look to see what the other people are doing. Are there competitors in this space? And if there are competitors, that’s great. I mean it kind of validates that people are willing to pay for it but what it doesn’t validate is are you able to connect with these people and get in front of them and in front of enough of them so that they will pay you. And that’s really the part that you’re trying to solve.

[10:31] Rob: Right. And I think in general, I am a proponent of doing copywriting and building a marketing site before you build a product because it helps you think through the benefits and the points that you’re actually going to want to communicate. And so it helps you realize what the most important parts of the app are so then as you go to build it, you know what to invest the most time in. And with this, I would consider doing the same. Like once you vetted it and you have figured out that short list, sit down and either write a short or long form sales letter or sit down and try to put together that homepage, that Saas homepage with the screen shot and the benefits and the headline and that kind of stuff.

[11:08] Once you have just that singe page built, even if you go and buy a $10 themed forest template and put it together using that, that can work for you for quite some time. And if someone asks, if you’re on a phone call and they’re asking tell me more about this product or I’d like to see something of it, you say well it’s not finished but we do have this detailed description of it. And you can give them a URL to that, a link to that and it starts to give people an idea that it is something tangible. So I think that even before I really broke around with code, I consider doing that. That’s actually what I did with Drip. I really had the whole marketing side flushed out with most the copy written. It was really as the developer just started, the very early stages of code.

[11:47] I did have to change that later on because things did change as we developed it and I started on boarding people but that’s the process that I went through and I found that to be pretty helpful. It’s the whole market first. Right? It’s the marketing and market first approach rather than focusing on the product which we kind of all know that we can build.

[12:04] Mike: There are plenty of products out there that have all these features that very, very few people use yet they’re still there because nobody wants to delete them. And then if you go to competitor’s product, you’re going to end up copying all these features and you got no idea whether or not people are using them. That is the other side of the value of doing the marketing first is that you get to figure out from your perspective customers what it is that they’re finding valuable and you just implement those things as opposed to wasting your time doing things that nobody looks at and nobody uses. So Guildford, thanks for the question. Our next question comes in to us from Ryan Higgins and he sent us an mp3 of his question and here it is.

[12:39] Ryan: Hi guys, happy 2014. I am at a point now in my online endeavors where I’m making more money online than I am in my day to day work which is exciting and I’m hoping to leave my job sometime this year. My problem is that I for whatever reason have lost motivation. I don’t know how this happened or where it really comes from. It should be in an exciting time for me but I’m finding I don’t feel very inspired. And my question to you is how would you guys get into the zone? What are some of the strategies that you follow when you feel uninspired or demotivated? Thanks very much and have great year.

[13:16] Rob: Yeah. This is a good question and I think it takes two forms in my head. 1) They’re kind of these lolls that you’ll go through and if a dip or a lol or a lack of inspiration is lasting a month or six weeks and you find you can get out of it, I think that’s natural. I see those times where I’m just less motivated to crank and get a bunch of stuff done. Other times where I’m more motivated at the higher end of the curve. During those times, what I do is try to just attack the problem. You focus on the actual issue of just getting inspired for the next three hours.

[13:51] How do I get in a rhythm and break out of just my lack of desire to do the work and really the three things that I found that have helped me do that are 1) to drink a bit of caffeine. I’m pretty measured in the amount of caffeine I drink. The more caffeine you drink, the more focused you’ll be until you get jittery and can’t work. That is clinically proven. I think used in the right quantities and not abused, can be really helpful and it’s something that I definitely use in my times of low motivation.

[14:17] The other thing I do is I will meet and work with other friends. I’ll meet at a coffee shop or meet at an office, have them come up for my house and work there. Sometimes I find that helps with motivation. I also find that music is going to be your pick. For me, late at night, and the headphones is really loud. There’d be punk music and there’ll be metal, that, or almost always puts me in that zone and it can get me through those little lolls. And then the pomodoro technique I also like which is where you set a timer for 25 minutes and you do a sprint, you get as much done as you can and you typically, you can often pick a single task and limit it to 25 units, even if you think it’s going to take logger. When the timer goes off, you stop, you stretch, you get up or five minutes, you walk around and then after that five minutes you do another 25 minute sprint.

[14:59] Each of those is a mechanism for getting over that. It’s that little onetime thing. It’s kind of like imagine yourself as a car and if your car has a flat tire, you’re really just trying to patch it. That’s what this approach is. The next thing is if you have a longer term broader sense of really being uninspired and that’s when maybe – imagine your whole car like the frame is bent and you can’t just patch a tire. There’s really a deeper thing going on there and that’s where it takes I would say talking with trust friends, a mastermind group, asking yourself a lot of questions about what is giving me life and what is not, I think its Saint Peter – someone has a prayer called examine and its basically this thing you ask yourself what has given me life over the last week? What has not given me life? Some people do it over an entire year and take notes.

[15:46] It can shift the way that you approach your work and it can shift the work that you want to do. So if you find yourself being uninspired specifically with your product, then maybe it’s just the product. If you find yourself uninspired of work, it’s probably something else going on that is the leaking into your work. This has been in my experience kind of the two levels of uninspiration that I’ve encountered in my career.

[16:08] Mike: I really do think there are the two different levels and the shorter term stuff you can definitely – I’ll say lie to yourself in some ways to help make your brain do things that you wouldn’t otherwise think you should and the pomodoro technique is just one. I’m kind of partial to that one. And there’s a bunch of phone apps that you can use to basically help you manage that process. And I really like the ones that will show you kind of a graph of exactly how many you’ve done in any given day so that way you can try to match or beat what you did the day before.

[16:36] So at that point, it becomes something of a game not necessarily to do the work but to play the game. And in order to play the game, you have to do the work. So in some ways you’re tricking your brain into making the numbers and the timer go up and down but at the same time, as a byproduct of that, you’re getting worked on. So what that does is long term, it helps you get things moving along towards your goal and hopefully that helps break you out of the rut that you’re in over time.

[17:03] If this is the type of thing that’s been going on for a long time, it could be medical issue, it could be any number of things. One thing I’ll point out is that since this question came in recently, If you’re anywhere in the northern hemisphere, this is a bad time of year. There’s a lot of seasonal depression that goes around and it can be very easy to especially lose steam at the end of the year just because the holiday season and now its January and it’s like I’ve got all these work to do and I don’t know how I’m going to get it done and you look at just a sheer amount of stuff that you have to do and it’s so disheartening you don’t want to do any of it and so you’re now feeling unmotivated, so some of the techniques that Rob talked about can help get you through those, those are the types of things that I would think about.

[17:43] Rob: Yeah. I had a real tough time I did two New England winters when I lived in New Haven in Boston. I had a real tough time in the winter and I felt myself have a pretty sever lack of motivation and I had to buy the – there’s the happy lights, you know, to get your skin having the vitamin D, just had a tough time at the cold and being inside all the time. I think overall, what’s helped me the most during my entrepreneurial career is having these masterminds. That’s the one that most consistently has impacted my motivation and has given me that air space that I can talk about this in a way that I know I won’t be judged.

[18:14] And I know that other people will understand because they’ve probably been through it before or they know that they will go through it at some point and just being able to discuss it and have some folks help give feedback, even in terms of like well, let’s set one goal for the next two weeks. I’m uninspired but let me just try to achieve a minor thing. That kind of thing is stuff that can feasibly get you back on track.

[18:36] Mike: So Ryan, thanks for the question. The next one comes from Cal Damansky and he says hi Rob, quick question for today. When you’re running a few products, how big of a problem was collecting sensible testimonials from your clients and customers? I find myself in a heck of a lot of email exchanges about getting them since I started working with international companies and I was interested if you had a solution.

[18:56] Rob: The easiest way I found to get testimonials is any time someone emails you with a compliment. Right? So if someone says wow your support was amazing or wow I just love this product or you’ve done such a great job so far on this contract if you’re a consultant and I don’t always do it but if I happen to need testimonials I will just reply and say thanks I really appreciate that. It would help me a lot, would you mind if I just quoted you, link to your website the next time we update our testimonials or something like that? If they say yes, then I copy them to a Google doc with product name and testimonials and I pretty much always have kind of a cash of testimonials that way. And I find it, I almost never get into an email thread so I’m not sure if there is something else going here. Mike, have you had trouble getting testimonials and find yourself in email exchanges?

[19:41] Mike: I think the issue is really – I mean he specifically points out international companies and when you talk about international companies, the tendency and certainly not the rule, but the tendency is for those international companies to be large and they have rules in place that say they tend to be public companies. They tend to have rules in place to say what you can and can’t say publicly on behalf of the company and that I think is probably where this is coming from because if you go to a public company and you do any sort of work for them and then say hey, can I have a testimonial? They’ll probably give you a patent answer of no, they would have to go through their legal department because otherwise you’ve got a public company that’s endorsing some small firm. And that I think is the challenge that he’s running into. I could be wrong on those things.

[20:22] Rob: If you’ve gotten email exchanges and it’s a similar problem that each of them is saying like well, we can only give it if you have a specific testimonial for them, we’ll then create the testimonial for them or if they need a legal release in order to do it, then draft one up and have it ready for everybody or something like that. I don’t have any specifics beyond that because I haven’t experienced this kind of thing trying to get testimonials. I’ve gotten testimonials from large Fortune 500 or Fortune 1000 companies and didn’t have an issue with it or perhaps that was an exception.

[20:50] Mike: I wonder if having just a very generic form that you put together to have somebody fill out would be sufficient or just those email exchanges hey, can I use this in a testimonial? I think that Rob’s suggestion of using any sort of compliments that you get and just say hey can I quote you on that in a testimonial on my website? I think that is probably the way to go. Thanks for the question.

[21:10] Our next question comes from Jim and he says hi guys, love the podcast. It’s still number 1 in my pod catcher app. You espouse and rightly so the method of finding your market first then building a product to suit that. Sadly I wasn’t listening to this podcast before I spent two years building my first Saas app which is called solopracticemanager.com. I built it on some suggestions and encouragement from several people in my primary target market life coaches. Since listening to these podcast, I’ve basically gotten my MVP done and have stopped any have stopped any new development work in favor of marketing and growing the user base.

[21:40] But I’m nervous that I’m not going to find a good market for this. I’ve been doing keyword research and coming up pretty much dry as far as popular keywords. I can even buy ad words for which is what I’d like to validate it first given the start of organic search traffic. Rob, since you’ve bought a bunch of existing apps, do you have any suggestions on ways to market a product that already exists? Thanks for your time. Jim.

[21:57] Rob: I have a few thoughts on this. I think the first thing I see when I come to this site is solopracticemanager.com looks like it’s built for freelancers or just kind of for everyone. It looks like a horizontal document management product and that doesn’t jive with the – I get the feeling it was niched towards life coaches. That’s a decision that I think you’re going to want to make even if it’s just your first crack at it like yes, this is for life coaches then the headline should be document management for life coaches or saves life coaches 20% or $500 a month or something right? You got to figure out what the value is for them and then gear the whole marketing approach towards it as well as all the features you’re building.

[22:34] If life coach is not the market you want to go into, figure out which one you want to do. But staying horizontal like this and trying to apply it to everyone, as a first time bootstrap and entrepreneur, not the best approach in my opinion. I guess Jim’s question actually said you bought a bunch of existing apps. Do you have suggestions on ways to market a product that already exists, almost all the apps I bought were not already successful. They were all apps that were built and had a tight vertical niche typically and that I then had to make successful and the way I did that was through applying marketing approaches pretty systematically through each of them and growing them. And that’s why I was able to buy them for such little money because the technology itself is not worth very much. It has real value once you actually have revenue and paying customers and all that. Most of my apps were not successful when I bought them.

[23:18] With this app the first thing I would do is to figure out who is going to really, really need it and who it’s going to save a ton of time or a ton of money or a ton of pain from. That’s really your job at this point. Keyword research, it’s definitely one signal but there’s so many other ways to approach this. Like if you decide to focus on life coaches, you can find and target life coaches demographically using Facebook ads as an example. Whereas you’re looking at Google ad words then it’s always intent driven. Right?

[23:45] It’s what did someone type in? What did they intend to do right now? Are they looking for life coach document management software? The odds of that having many searches are very, very low and I can understand why you aren’t seeing a lot of volume. So think in terms of a demographic that has buying capabilities and it has its paying point. And so again, if you focus on life coaches, my next step would be to start emailing and or cold calling a bunch of life coaches and talking to them about the solution and just ask and say I’m not selling anything. I’m a software developer. I’m an entrepreneur and here’s what I built so far. Does this help you? And listen to their feedback. And then say okay, consider scrapping this whole thing.

[24:24] If everybody says no, but they say but, I really have this pain or problem with managing client appointments and invoicing or something like that, well then perhaps this wasn’t the right choice for life coaches, and then you have to evaluate do I try to pivot this document management thing into a different niche or would I prefer to stick with the life coaches because certainly if you have more of a knowledge of that market space or you have several friends in that space, that might make sense to stay with and dissolve a different paying point. And those are the two major approaches I would look at.

[24:54] Mike: Rob’s really hit the nail in the head here with identifying who this is for. I mean based on the name alone, to me, it seems like it should for dentists or massage therapists or something along those lines. And maybe it’s just because of the word practice and it makes me think of some sort of medical field. To me, a life coach does not indicate a practice. I look at it and even if you’re driving traffic to this, I don’t see how it would help me out. I don’t even see if I were a life coach or even if I were a dentist, I don’t see how this would help me because the headline itself says I spent more time managing documents than seeing clients. And it’s really focused on the problem itself as opposed to presenting itself as a solution to that particular problem.

[25:37] So talk to these people, as Rob said, figure out who it is your target market is and then adjust your marketing messages to basically tell them that you solved that problem and whatever that problem is that you’ve identified and discussing it with them, tweak your marketing messages to tell them I solved this problem with this particular product and here’s why you should sign up and use that to essentially help you gather new users. So Jim thanks for the question.

[26:02] Our next question comes in through Luigi and he says I work in a company that operates in the energy sector and quality of INC Engineer. Over the years I have developed applications for the AutoCAD environment better known as AutoCAD add-in applications in order to automate the engineering process. I didn’t invent the wheel since a lot of the software is already out there but the software is quite expensive and its not available for other CAD platforms such as BricsCAD further more there’s a lot of headroom for improvement by adding other features.

[26:29] Since the applications I’ve developed have had a lot of success in my company with several instillations of various kinds, I’m well aware of the fact that there are tens of thousands of other CAD users around the world. I’m seriously considering leaving my full time job to develop professional packages and launching them thus beginning my startup activity. I was wondering if offer my software at a lower price and including special features that other software doesn’t would be a good way to sell my software. In addition, the possibility of going more vertical with my software and other CAD software applications that don’t have that functionality might be a good idea. What are your thoughts? Thanks in advance.

[27:03] So I think what you’re basically asking is you work in developing AutoCAD add-ins and there’s other CAD applications out there that also have kind of a plug-in infrastructure and what your real question is can you build the plug-in that basically are already built or can you take those and go into other CAD applications and essentially add them into those other application and make that successful? I would say that you probably can. The other question I think is a little bit more concerning to me which is should you be dropping your price on those to be competing with other plug-in manufacturers? I would say probably not. I would use their pricing as a basis for comparison but I don’t know as I would start taking your price and just tanking it in order to start landing business that you might not otherwise get.

[27:50] Because if these companies are already paying tens and thousands of dollars for CAD applications, they clearly have the budget for paying for some of these add-ins especially if there are other vendors out there that are making money from their plug-in. I see it as very similar to the WordPress community where you got all these plug-in or you can go buy plug-in for WordPress and just add them into your website and the website will do glorious things at that point. And you’re kind of in the same situation. You want to sell these plug-ins.

[28:15] But the real question I think is can you get in front of them? Do you have the ability to market your software in such a way that it’s going to be seen by them? I think that price is much less of a consideration than whether or not you’re going to be visible to them and be seen as legitimate in their eyes. And I think that if you drop your price too low you’re going to be seen as an illegitimate competitor to some of these other products even especially if you are better than they are.

[28:40] Rob: Yup. I would echo what Mike says. Eric Sink where he said if I were to build some type of niched down version of Microsoft office or even just word, he said Microsoft’s selling it for $100. Your intuition will be well Microsoft certainly does more than mine. Mine’s a niche so I’m going to sell for $35 and he said go the other direction. Go 10 times that if you build a niche version of excel, sell it for $1,000 when Microsoft sells it’s for $100. So I would do a similar type of thing. I’m not saying necessarily 10x the price but I would say go for the premium route because it’s going to set you apart and that the way to build a larger business rather than trying to discount.

[29:16] The other thing I’ll add is that I love add-ins as a stair step product approach. Add-ins to WordPress, to Drupal, , add-ins to CAD, any of this stuff where you have an existing ecosystem is such a nice way to get that initial bump because if there are folks using CAD, the odds are that they run into problems with a need expansion. And so if there’s a CAD directory of their add-ons and you get listed in that thing, you have that nice channel of traffic.

[29:41] Also, if people are going in and they’re searching for AutoCAD fix this problem or AutoCAD had this feature and yours does that, you need to rank for those things because those types of intention driven queries, getting in front of them will result in very high conversion rates because you’re solving such a desperate focused paying point for people. I wouldn’t expect this to be some huge business that you’d be able to figure on but it’s that great business to get out there, you learn your marketing chops. You learn how to write productions software, how to sell it and really stair step this up into the future ideas that get bigger along the way.

[30:15] Mike: So Luigi, we hope that helps and thanks for the question. Our next one comes from Nadias. He says hi Mike and Rob. My question is regarding building a web business around a community of X and I know this idea is geared for much more specific niche market for the sake of a question. Let’s say it involves building a site for artists to show their work. Aside from artists friends I know personally I’d be starting this community with zero users. My question is is it a good idea to go out on the web and gather established artists work and create a profile for them, then invite them via email to let them see how their work would look in the community site and how it would benefit their work or business? I’d give them the ability to join the community or delete their profile if they didn’t want to be part of it. Is this approach too invasive or is it a good way to get initial users engaged with a brand new community? I hope my question’s clear enough and thanks in advance.

[31:00] P.S. just out of curiosity, I’d love to know what you guys have to say about building a business that requires a community to function. I’d imagine that the community site takes a lot more ramp up time to get going and product revenue because you need a healthy number of users to bring in income.

[31:12] Rob: I think his P.S. is really the most important question. Building community sites is super, super hard. And anyone who’s actually done it, there are not that many that are actually that successful. And even the ones that are successful like the old school forums that picked a niche early and got it in before everyone else did, those forums have trouble monetizing. The ad rates are really low, the CPM’s they can charge are low. So community sites are a real challenge. You probably have a clear monetization path of selling prints or selling t-shirts or whatever it is. Even then, it’s tough to just take a cut. When you’re bootstrapped, taking a cut of transactions whether it’s a market – did you say a market place or whether its community is a really long way to go. There’s definitely a much more of a long haul than someone just paying you for it.

[31:57] I would never start a community site. I tried to do it once and it was a tremendous amount of work and didn’t pan out. That’s not a reason not do it. It’s the hundreds of others that I’ve seen that have also failed and how few of them actually make it. So there’s a lot of talk about how in the early days Reddit was just hacking their front page because it was all the dudes inside Reddit were doing fake folks just to make it look like people are there because until you have people there, it’s a ghost town. And getting over that initial hump, I would say if you really want to do it seriously, then go start either a blog or a mailing list or something and start creating content or writing original content and build up that mailing list.

[32:32] And when that mailing list hits 1,000 people who are devoted and ravenous fans of yours, then go instruct this site. Then, bring them in because then you’re going to have that community. But until you do that, I mean starting from scratches are a really, really tough way to go. So that’s your PS. The other question was pulling someone’s heart off their site and building their profile, if you did that to me, I would be pretty surprised. I would probably be taken aback and not appreciative of but I think artists are really sensitive about their work being stolen and even though you give them the ability to delete it and all that stuff, this basically public facing web page where you have taken their art without permission, my opinion is that if you do get a little bit of momentum and you want to start doing this is that you do a pitch and say hey, here’s our community. Here’s what your profile could look like. Here’s my profiles and stuff.

[33:17] So you put up your profile with the art and said would you allow us to do this for free to grab your art, build our profile for free and then you can look at it and you tell me or you can delete it at that point or you can just have a look at it so at least you get their permission out front and you have much more opt in rather than more of a opt out approach.

[33:36] Mike: Yeah. With regards to the two questions I agree with Rob. Building a community site from the ground up is pretty difficult. There are a lot of different hacks that you can do to help grow a community site and just one of them as Rob said, guys over at Reddit were uploading the stuff that they were posting just to make it look like there was more activity. The illusion of activity is going to help. I remember I started a web based game back in ’99 or 2000 and I grew it to a reasonably successful size of people using it. I think the first 40 or 50 people that site on looked at I and I’ll say it was sort of a ghost town but I’d say probably a quarter of those accounts that were logged in at first, they were all mine. I mean it was basically just interacting with people as 10 different accounts to make it seem like there were more people playing the game than they really were.

[34:24] And eventually got to the point where I didn’t have to do that because there were hundreds of people playing it and they were logging in every single day. So you get to a certain point where it will avalanche into a more successful venture but I think Rob’s approach of gaining a mailing list and gaining a following and trying to get people all in one place so then you can say hey I’ve created this site where we’re going to have a community. Then you start seeding that community. You’ve picked people out of the mailing list who you’ve had interactions with. You talk to them individually and say hey I’m going to invite 15 or 20 people in here and you basically have them use it for a little while and then later on down the road, then you start inviting people in.

[35:02] So that way, when people will go to log in on day 1, the place isn’t empty. There’s a bunch of posts already there and you’ve kind of seeded the community with people who are going to be interacting there. So those are a couple of different hacks that you can use. In terms of going out and gathering established artist’s work, I would not do that. I agree with Rob. I think what you’re going to find is people are extremely sensitive about their work and artists in particular I think are exactly that way and you may very well come across the people who are much more organic and they sell the experience with what it is that they do.

[35:35] So for example musicians, if you’ve ever looked at the history of the band Phish for example, they’re very successful. They’re probably one of the single most successful bands that you’ll find that has very, very organic roots but they don’t sell albums. They don’t sell their music. They sell the experience of coming to their concerts which is why their concerts sell out. So unless you find those types of people, you’re probably not going to have very much success with it because they’re going to look at it as if you’ve just gathered up all their stuff and you’re going to profit from it in some way, shape or form by displaying it somewhere else and they’re just going to be pissed off.

[36:11] I think that it’s going to leave a very bad taste in their mouth. I think that if you were to ask the upfront and say hey, can I do this for you? And then I will show it to you and if you don’t like it, you can delete it. That’s probably a better approach but I think that’s still going to be a very labor intensive endeavor. So we hope that helps and thanks for the question.

[36:26] Rob: If you have question for us, call our voice mail number at 1-888-801-9690 or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt used under Creative Commons. You can subscribe to us in iTunes by searching for startups or via RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening and we’ll see you next time.

Show Notes

Do things that don’t scale by Paul Graham (July 2013)

1. Recruit users manually
2. Expect to be Fragile
3. Delight early customers
4. Start in a niche
5. Consult
6. Human automation
7. The Big Launch Usually Doesn’t Work (and neither do partnerships)

Transcript

[00:00] Rob: In this episode of Startups for the Rest of Us, Mike and I talked about things that don’t scale and why you should do them. This ladies and gentlemen is Startups for the Rest of Us: Episode 168.

[00:10] Music

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

[00:27] 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. What’s the word this week Mike?

[00:33] Mike: Well we had a listener write in earlier this week named Denis Hennessey and he suggested, he was listening to the episode where we talked about some of the different apps we used and I mentioned that I was doing Commit to make sure that I do certain things on a very regular basis. And he actually suggested that I try out Goal Streaks and I really liked Goal Streaks because I checked it out and essentially the idea is very similar to Commit except that you can put in what are basically skip days which I think would work out actually a little bit better for me because there are certain days of the week where I know that I’m not going to do those things.

[01:06] So for example, working out on Friday is just never going to happen. Commit doesn’t allow me to put that in and say no, I’m not going to do that so I can’t schedule those sorts of things. I’m going to give it a shot and see how things go.

[01:17] Rob: Very cool. Well first of all, this is an IOS app is that right?

[01:20] Mike: Yes.

[01:21] Rob: Okay. And then what kinds of things do you have in there? I guess working out is one?

[01:24] Mike: I have working out. I have writing and then I also have working on Audit Shark.

[01:27] Rob: Good. So yeah, give Goal Streaks a try.

[01:30] Mike: What about you? What are you up to this week?

[01:31] Rob: Well I was pleasantly surprised this week. We started selling MicroConf tickets to Micropreneur Academy members. They get a slight discount and then they get early access to the tickets before the general public. We sold out their allotment pretty quickly and in fact we got a few emails from academy members wanting to buy kind of after all the tickets were gone and so it looks to be a sold out crowd again this year. And by the time this airs, we’ll likely already be sold out.

[01:58] But some tickets do become available so if you’re still interested in going to MicroConf, you can always go to microconf.com and click on the ticket link. We tend to have a pretty hefty wait list and if you get in that early, you do have a high likelihood of getting contacted because we have some tickets that become available as the conference approaches.

[02:17] Then the other thing I’ve been up to, my wife right now is on her two day annual retreat and I’m gearing up for mine here in about two weeks and that’s where I go off and don’t check email and look at my goals for the year, figure out really verify those are the things I want to do and then map out as closely as I can over the course of two days exactly how I’m going to achieve them and figure out what it’s going to take on a monthly or a quarterly basis and basically setup my game plan.

[02:42] The reason I do this, I’ve talked about it before. But it’s because I like pursuing too many things. So once this list is locked, I will do almost nothing else that is not on this list for the next year and that’s the only way I’ve found that I’ve been able to stick to things and grow them without wandering all over the place as the next new fun idea comes my way. So needless to say I’m looking forward to that. Looking forward to the quiet time, the thinking time and really getting down to business in 2014.

[03:12] Mike: I’ve been working on Audit Shark and talking to a few different customers getting some ideas about what their needs are for moving forward with the product. It looks like I’ve got a little bit more work to do. There’s a couple of demos that I’m trying to schedule but in order to actually do those demos there’s a few more features that I need to implement because I know there are things that they basically already told me that these are things that they need. So in an effort to kind of make the demo align very well with what their needs are, then I’ve got a little bit more work to do on the product to make sure that can do those things before I can show it off to them.

[03:44] But the demos are for more in the enterprise space so I’m really hoping those go well but again I think that it can definitely go the route of software plus services to make those things work. So I’m pretty excited about it and just kind of looking forward to banging out some of that code and seeing what comes out of those demos. How are things working with Drip?

[04:03] Rob: Drip’s going good. I’ve really started diving in heavy to paid acquisition and just in the learning phase, as usual I’m pretty impatient with things and I don’t know how many months it’s going to take for me to find the Drip flywheel but I certainly haven’t found it in the past maybe 7 to 8 days since I started and yet I’m already wondering why I haven’t. They’re just trial and error at this point to get into the marketing plan, have a bunch of different things going on, an eBook that’s already been written. It’s being designed. I’m working on an infographic. I have a bunch of blog posts in the hopper, stuff that’s just things that I’m going to be experimenting with.

[04:39] But really over the past 7-10 days I’ve wrote some long form sales copy cranked out several variations of landing pages and then basically testing those the traffic that I’m able to generate via the various advertising venues.

[04:53] Music

[04:56] Today we’re going to be talking about doing things that don’t scale. And this phrase has been bandied about quite a bit. I think Paul Graham since he has the largest kind of platform, he wrote an essay on it on July of 2013 so that’s seven months ago. The interesting thing is Paul Graham has such a larger view right? Because he’s invested in hundreds of companies and he thinks very critically about this stuff.

[05:20] The first time I’ve read this because I’ve heard about this essay for the last seven months since it came out but the first time I read it was preparing the outline for the interview and I was surprised at how many things not just the title of do things that don’t scale but how many specific things in his essay align directly with things that we’ve said in the past on the podcast. So that was kind of a nice confirmation that when multiple scientists do multiple experiments and they all arrive at the same results, its multiple confirmation that this theory may at least be more correct than the things people have been saying for the hundred years before that.

[05:55] So that’s the idea here is that multiple people coming up with things independently helps reinforce it and makes me believe that these things are not just our thoughts or our opinions but they’re actually things that multiple experts are starting to embrace. So I think to kick us off, we have seven things that you should do that don’t scale. And to kick us off before that, there’s a little intro piece I want to bring up and Paul kind of attacked this on the end of the episode but he says that people should start thinking of startups as two dimensional objects instead of just one dimension and what he means by that is most people think of a startup as an idea. It’s what you’re going to build.

[06:29] He says the idea of doing things that don’t scale is so important that we need to start thinking of startups as two dimensional objects. Basically the first dimension is what you’re going to build and the second is the unscalable things you’re going to do to get that company going. Now what that means is that when you come up with a startup idea, he’s saying that’s incomplete. That’s not actually a full pledged startup idea that you actually need not just a product idea but the plan to get those initial 100 users or whatever it’s going to take to kind of get you out of the earth’s atmosphere and into orbit. I thought that was kind of a fascinating thought that he thinks this concept of unscalable things is so powerful that he’s actually saying that a startup idea is incomplete unless you’ve fought those early days through.

[07:13] Mike: Well we’ve talked about that as well though. I mean we didn’t phrase it as like a two dimensional thing but we’ve also talked about and say there’s the idea itself and the second is how are you going to bring it to market? How are you going to get in touch with your target customer base? And in a lot of ways, in order to do that, you have to do those things that don’t scale.

[07:31] Rob: Very good. So let’s dive in. Our first point of seven is to recruit users manually. So Paul Graham says that the most common unscalable things founders have to do is recruit users manually. Nearly all startups have to. You can’t wait for users to come to you. You have to go out and get them. And then he gives a few examples, Stripe, Airbnb and a couple others.

[07:54] Well it lines up with two phases of stuff I’ve talked about recently with Drip. There was that initial phase of just vetting the idea where I emailed 17 founders and I’ve got 11 go ahead of yes I would buy this. I mean that was a very manual user recruiting process. And then the second part of it where once I had a launch list in the end it was about 3500 emails and I basically handpicked some early users and started inviting them in but it was that slow launch. It was the heavy on boarding heavy customer development time of basically walking users manually through your app, manually boarding them, finding out what they like, don’t like. If they’re going to stick around and if not, why not. I view that a lot as relating to this concept that he’s saying about recruiting users manually.

[08:38] Mike: I think there’s a couple of different things there. In the early days, you really have to do that because if you just setup a website and you have people sign up and you don’t really know anything about them, what you’re essentially doing is you’re basically taking a stab in the dark at what resonates with people and you don’t get any of that feedback. And they may come to your site and they just leave and you have absolutely no idea why versus if you start a mailing list and you get people – you kind of give them a one or two sentence description of what it is that you’re building or you’re talking to people and you’re giving them invested in it as well that you get to close that feedback loop.

[09:16] So it’s no longer this open loop system where it’s just hitting the gas and you’ve got no idea whether you’re going in the right direction or not. And I think that’s really the important part here is that you have to be able to get that feedback loop closed so that you understand about what direction it is that you’re going in.

[09:33] Rob: The next point that Paul Graham makes is he basically says expect your startup to be fragile in the early days. He says the question to ask about an early stage startup is not is this company going to take over the world? But the question is how big could this company get if the founders did things right? And he brings up Microsoft as an example. He says Microsoft can’t have seem very impressive when it was a couple guys in Albuquerque writing basic interpreters for a market of a few thousand hobbyists. But in retrospect that was the optimal path to dominating micro computer software.

[10:05] And then he also brings up the Airbnb founders and how earl on they were just manually taking professional photos of their first host apartment and that they were just trying to survive. So you couldn’t see them taking over the world at that point. It was very fragile and it was basically a 30 day swing where he says going out and engaging with users as the difference between Airbnb taking off and completely failing.

[10:28] Mike: I think this thought from Paul comes from a little bit of a different perspective than kind of where we come from because most of the stuff that we talk about generally speak in a lot of the people that I talk to and interact with tend to be starting stuff on the side. So this idea of like a 30 day swing before you go out of business just isn’t there because we don’t have investors to account to. Yes there’s these few people who’s decide that they’re going to burn the bridges behind them, quit their job and they’ve got 6 or 9 months worth of money in the bank and that’s it but that is probably the exception rather than a role. So I think to people like us, this is a lot less of it in issue than it is for funded companies where they’ve got to get to a certain point and they have a very, very tight timeline to do it or they’re toast.

[11:14] Rob: Yeah. I’d agree. This one doesn’t apply as much to bootstrappers. The piece of this I do think applies is I would change the world fragile to unstable. And what I mean by that is in their early days as they’re recruiting users, trying to turn them into customers, trying to retain them, you just don’t have enough information to have any kind of stability in your metrics or even in confidence in your sales process, confidence in your user retention, confidence even at sometimes unfortunately in your app.

[11:42] Bottom-line is if you’ve launched and you’re in the first 60 or 90 days and a customer emails and says wow there’s a major bug and there was some issue when I clicked the button and did this, if you’re in the first few months of your app, you really don’t know if you’ve introduced a bug. If your app’s been running for years and its mature and all this stuff, you know that there’s stability there. But I would say expect instability in the early days and expect a lot of uncertainty when there’s any type of challenge. If someone says your pricing is too high, that creates uncertainty because suddenly like oh man, is my pricing too high? You just don’t know yet. Once you’re successful and once you have a lot of people using it, you know that your pricing is fine. If anything, it’s probably too low.

[12:21] The other thing that I’ve seen is in the early days of Drip, someone email and said I would totally try this out but you’re asking for credit card upfront. You shouldn’t do that. And tells me why I shouldn’t do that. Now I know that I want to ask for credit card upfront for a bunch of reasons and for all my trial and error with all my apps, this is how I’m going to start. And yet at that moment the uncertainty and kind of the instability of that moment made me question and think oh, should I take the credit card wall down? I had to think about it. And of course I didn’t because I went back to all the research and the data on this and decided not to. I actually asked someone in my mastermind and he told me I was crazy for thinking about it. Instead of thinking about fragility, I think its more about instability and uncertainty is something that you should anticipate especially in those early days.

[13:06] Mike: Yeah. I’ve definitely gotten already I mean I’ve gotten people saying that the pricing of Audit Shark is too high for them and for some of them I look at their situation I’m like you’re really not in my target market but then there’s other people who are kind of are and it definitely does make you think about it and it does give you that level of uncertainty about whether or not you’re doing the right thing. And part of it’s just because there isn’t this giant history of customers or people that I’ve interacted with to be able to say one way or the other.

[13:36] Rob: Paul’s third point is about delighting early customers. And he says you should take extraordinary measures not just to acquire users but also to make them happy. And he says this whole concept of doing things manually to delight early users is counterintuitive for founders and then he gives three reasons why that is. 1) He says because a lot of founders are trained as engineers and customer service is not part of our training as engineers. Another is we’re worried that it won’t scale and then the third is that we’ve never received attention like that from other companies and so we just don’t feel like it’s something that you can do or should do as a business because frankly when you go into the Sprint store or call Verizon customer service you’re not going to see that kind service so naturally we think that it’s not something that we need to do off the bat.

[14:25] Mike: I agree that I think that this is not something that is widespread but I’ve seen it before. I’ve seen companies do it before and it makes an impression and I’ll give you an example. When I signed up for male chimp, after I had sent one of my first campaigns and made a payment with them, they sent me an email and said hey we’ve got a special gift for you. Click here. And I clicked there and I went to a page and it opened up just a form that I was supposed to fill out where I put in my name, address and everything else and then they would send me something. They sent me a mailchimp t-shirt. That kind of gave me the idea to do something similar for Audit Shark and it’s something that I’ve had kind of down the road.

[15:02] But I definitely wouldn’t say that those types of things couldn’t scale because I think one of the examples he uses is Wufoo sending each new user a handwritten thank you note. I think that if you start acquiring a thousand customers a week, that’s not going to scale as well but you can certainly – like if you’re sending people t-shirts for example, there are services that you can integrate with where they will print the t-shirts and send them and really all you need to do is give them an XML data feed that says hey, send this t-shirt here and here’s our information that says who to charge it to. There are ways to make other things scale but there’s definitely things that you can do that surprise and delight your customers that would not and I think it’s just a matter of hosing the right things it will.

[15:40] Rob: Yeah. I think delighting early customers ties back in with a lot of the manual on boarding stuff we’ve talked about. I do like the idea of t-shirts. I’ve been doing that with HitTail, with certain users when they hit a milestone they get it. Also people blog about it, they get a HitTail t-shirt. Drip, if you get your first conversion, you get an email that says roll out the red carpets. Your first subscriber converted to a paying customer because you can setup a goal in Drip and you can see when they convert and then we give them a link to a form where they can get a t-shirt. So that stuff does scale pretty easily. Once the t-shirts are printed it’s just like slapping an address label on it. So I think that all that rolls into it.

[16:17] Another piece of this and this is a little further down the essay but Paul Graham says over engaging with early users is not just a permissible technique for getting growth rolling. For most successful startups, it’s a necessary part of the feedback loop that makes the product good. Making a better mousetrap is not an atomic operation. Even if you start to weigh most successful startups have by building something you need yourself, the best thing you build is never quite right and so is conjectures that you need those early users to give you feedback on how to improve it.

[16:47] The fourth point we have from Paul Graham is to start in a niche. And he actually has an odd subheading for this. He calls it fire because he says it’s like keeping a fire contained before you go horizontal. But this actually lines up with the very fundamentals of the Micropreneur approach. What’s funny is he uses Facebook as the example of starting in a niche because it was a Harvard student network and then it was a university student network and then it went to everyone. I think more in terms of B to B startups so I think of like Kiss Metrics and how they really started as Saas metrics back in the day and now they’re much more all web and metrics and analytics.

[17:25] Another example that’s happening right now is Drip. Drip has started in kind of the Saas and software space and we’re building out some features that are going to move us more broader into the email marketing space. It’s more become marketing automation tool where you can move people to and from different lists based on their behavior. That is – it’s not completed yet but that’s kind of in the works right now and is the next couple of weeks we’ll be rolling that out.

[17:49] Bidsketch is another example I can think of. Ruben’s app. Remember when Bidsketch was proposal software made for designers? Well that for designers went away a long time ago because there was just so many consultants in a number of niches and designers and developers and all types of people are using it. And so he eventfully went horizontal and opened up this market. But what that niche allows you to do is it allows you to take advantage of those early niche things like the fact that the market’s small that you can out market everyone else in the niche that you can provide a tool that is so good just for that group of people that you could beat out a broader horizontal product.

[18:23] Obviously this is one that I definitely agree with and especially with a startup that doesn’t have early funding, I don’t know how else he would do it. I don’t know many if any horizontal startups that come out guns blazing without funding at their backs.

[18:38] Mike: I think this is one of those things that for people who are launching something on the side, they have this idea in their head that if they make it too small or if they go after too small of a thing then they’re not going to be able to get enough customers to support what it is that they’re doing. And the other challenge that kind of goes hand in hand with that is that when you start thinking of a product and then you go through the process of building it, you always have these grand plans for what it’s eventually going to become. And it’s incredibly time consuming to make those plans come to fruition but at the same time you’re always thinking in the back of your head I want to do this and I want to do this and I want to do this and because of that, you end up with a lot of scope creep in your products. It starts making it larger and larger and you take more and more time to develop it as opposed to taking it to market and really nailing it for one small group of people.

[19:31] This is something that I’ve struggled with Audit Shark because I have thoughts and plans for the product 3, 5, 8 years down the road that I know are going to take a very, very long time to implement. And I’ve got to focus on today, not five years down the road. And it kind of sucks because I can only do so much in the next two weeks or eight weeks or whatever but in the back of my mind I always have these thoughts about oh, what am I going to do for X when X is really something that’s not going to be implemented for probably another three years?

[20:00] Rob: The fifth point that Paul makes about doing things that don’t scale is about consulting. He says sometimes we advice founders of B to B startups to take over engagement to an extreme and to pick a single user and act as if they were consultants building something just for that one user. The initial user serves as a form for your mold. Keep tweaking until you fit their needs perfectly and you’ll usually find you’ve made something other users want to.

[20:26] I have a bit of a tough time with this one. I think it’s dangerous unless you really know that customer number one and you know that they have a clear vision of what they need and that you somehow have other inputs in especially if it’s a domain that you don’t understand or that you’re not familiar with. Taking direction from just a single client I think could be pretty dangerous and could get you into a pigeon hole where basically you’ve built a super specific app for a single client and the one that doesn’t generalize to other people. And that the second side of that is just validating that there’s a market for it. Because finding that one person or one company needs an app is really not enough. You have to go out and verify that need expands into a full pledged market and that’s something I would definitely do before taking this consulting approach.

[21:15] Mike: Yeah. I think the consulting approach can definitely work if you have a product and you have knowledge of that particular space where you already know the space. It’s not that you’re trying to validate a market or doing MVP. You know that there’s money to be had there and you know what types of products are going to be successful. The problem that you have is maybe cash flow or something like that or you don’t have enough of the products built to be able to sell it as a standalone product so you essentially need to couple some services with it. That’s the place where I see consulting working really well but if you’re still trying to validate the market because you don’t necessarily understand it and it’s not some place you’ve worked before, I think this really starts to fall apart because it’s going to be hit or miss depending on the company that you end up working with.

[22:01] Rob: Yeah. That’s a good point. The other thing he points out, I think it’s kind of cool with this consulting. He says another consulting like technique for recruiting initially lukewarm users is to use your software on their behalf. His startup that he sold back in the 90’s was called via web and it was an early shopping cart software. And he says when we approached merchants asking if they wanted to use our software to make online store, some said no. But they’d let us make one for them. Now this is concierge. Right? That’s really what we’re talking about here is essentially a free concierge service to get everything setup and to go beyond and do really manual things that don’t scale to get those early users involved. And if you show them that they’re a success then hopefully they’ll stick around with you.

[22:42] And I love this quote. He says we felt pretty lame at the time. Instead of organizing big strategic e-commerce partnerships we were trying to sell luggage and pens and men’s shirts but in retrospect it was exactly the right thing to do because it thought us how it would feel to merchants to use our software.

[22:58] The sixth point that Paul brings up is he calls it manual and he says there’s an extreme variant where you don’t even write software. You just do all the manual leg work behind it. I’ve called this human automation. I talked about it in my book. We’ve talked about it in the podcast in terms of if I were to launch something like HitTail, I would just do manual keyword research and manually email reports back to someone instead of having any type of software do it and frankly probably hire a VA to do it as well.

[23:22] I think that if at all possible, that’s how you start a startup. That’s how you vet that there is in fact a need and you can get so much information out of working with customers without writing a line of code and without spending anytime. If you’re not a developer, finding a developer and so by the time you do in fact go to find a developer you have so much more information not only about what you want to build but you have the validation that this is in fact going to work and that you can get money from people for it and that it provides enough value that you’re willing to do the cash outlay or the time out lay to go and build it yourself.

[23:59] Mike: I think one thing to keep in mind about that is it’s really about vetting the idea. It’s about testing your hypotheses and that’s really what lean startup is about as well. It’s doing that MVP. And the reason you do an MVP is because you don’t know what the answer is. And if you don’t know what the answer is then you have to figure out a way to test it. And what’s the least amount of work that you can do to test that? And this really falls under that umbrella but again it goes back to the idea like if you know that there’s money there and you don’t necessarily need to prove it to yourself then building software might be the right thing to do especially if you already know how to solve those problems.

[24:38] Rob: The seventh and final point we took away from Paul’s essay is that the big launch usually doesn’t work and neither do partnerships. This one made me pretty happy when I read it. I mean he’s basically saying the tech crunch launch doesn’t work and I’m sitting there squealing with glee because we’ve said this so many times and I get halfway down and he says partnerships too usually don’t work. They don’t work for startups in general but they especially don’t work as a way to get growth started. It’s a common mistake among experienced founders to believe that a partnership with a big company will be their break. Six months later they’re all saying the same thing. That was way more work than we expected and we ended up getting practically nothing out of it.

[25:16] I’ve run into this a number of times and this is why these days partnerships are last on my list for growing things unless I know the founder, unless I know that they have a lot of customers and experience and they’re going to be easy to work with. I would almost never partner with a much larger and impersonal Fortune 500 company as a way to try to stem growth. The partnerships that have worked for me have typically been when I’ve gone and sought them out and when I actually have something to offer. So I already have a large enough customer base that I’m able to cold email or try to get a warm introduction to a founder or somewhat high up in another organization but it tends to be a smaller organization.

[25:55] Even if it’s a multimillion dollar in sales organization it’s still run by one or two decision makers and there’s not a big group at the top where it’s all corporate. I can talk to a single person and they can make a decision as to whether or not we want to do a joint mail and or whether or not we want to do an integration and promote it to everyone or one of these things. I mean these are the partnership things that I’m thinking about that I’ve seen win and unless they bring a lot of traffic and or existing paying customers to the table, it’s almost never worth pursuing.

[26:26] Mike: I think if you look back at the growth curves for I would say probably any successful company, there’s very few where you can look at their growth curve and you see these giant spikes in there from pretty much anything. You’ll see these gradual curves where thing start to work and they figure them out and then they double down on them and you get what’s called the hockey stick growth curve. But there’s never a hockey stick growth curve that I’ve ever seen where things will be going along and then suddenly they vault up like by a magnitude of 3 to 5 and then they level out again and that just doesn’t happen. The great big launch as you said, it doesn’t really work. It helps you get customers but it’s more of a gradual thing. It helps get things started. And the same thing with partnerships. They will help get things started. I think with partnerships, there’s so much work and so much effort involved that early on it’s just not worth the time and effort.

[27:21] Rob: Yeah. This is why with Drip I didn’t go for a big launch. Really didn’t get mentioned via mini press outlets the day that the Drip launched but I’ve been marketing it for what? Maybe 10 months before that and during that 10 months, it was building the email launch list. Right? And then gradually doing that slow launch over 90 days was almost the opposite of the big tech crunch launch where you want to get mentioned on Mashable and the next web and tech crunch and 20 other places all in that one day but that creates A) a lot of headache B) it’s a huge time investment to try to work with all those venues. It’s kind of a crazy thing. People’s sites go down because they get linked to by so many things.

[27:59] If you haven’t already spent time on boarding and figuring out if your software even works and if it’s going to retain people, you can get let’s say get 100,000 uniques in two days and everybody poof goes away then what do you have? You don’t have any assets after that because you haven’t built up something over a longer term. Suffice to say that I agree with Paul’s assertion here that the big launch usually doesn’t work and neither do partnerships.

[28:22] Mike: Well the other thing about that is if you do get at that giant influx of traffic as you said, even if you get a bunch of sign ups out of it, you don’t really know what to over them next and you don’t know how to capitalize on those people who did visit but didn’t sign up to bring them back. I think Joel Spolsky at one point had a blog article where he put it out there where if you have this giant launch and tons of people come and they look at your app and they say it sucks, then they’ll never come back and that’s going to be a big problem especially if you try to make a huge splash in the market about an app that quite frankly is really still in the very, very early stages.

[28:59] So that gradual build up over time is the better approach anyway. I mean you don’t want to go too big too fast because with any given startup, if you grow too fast in too many directions well I mean there’s several directions you kind of have to grow in. But if you grow in a way that is skewed in one direction and it goes much, much further than any of the others, so let’s say that your revenue scales much, much faster than the number of employees. Well, you’re going to have some serious growing pains because you have to grow quickly which means you’re going to drop your standards to bring people on faster. Bringing in too much traffic all at once is very similar. You’re not going to be able to capitals on that in a way that is going to be effective for your business long term.

[29:42] Rob: So to recap, the seven points we pulled out of Paul Graham’s essay do things that don’t scale are number 1) recruit users manually. 2) Expect to be fragile or unstable as we put it. 3) Delight early customers. 4) Start in a niche. 5) Consult. 6) Try human automation and 7) the big launch usually doesn’t work and neither do partnerships.

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