Show Notes
Transcript
[00:00] Mike: In this episode for Start Ups for the Rest of Us, Rob and I are going to talk about when to look for investment money for your startup. This is Start Ups for The Rest of Us, Episode 211.
[00:06]Music
[00:14]Welcome to Starts Ups for The Rest of Us, the podcast that helps developers, designers, entrepreneurs be awesome at launching software products, whether you built your first product or you’re just thinking about it. I’m Mike.
[00:22] Rob: And I’m Rob.
[00:23] Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the good word this week, Rob?
[00:27] Rob: I am putting the real finishing touches on an audio documentary about the 9-month process of kind of getting Drip off the ground. So I mentioned this in a previous episode, but then I left because I had, you know, 11-hour flights between each of them. I spent a lot of time editing, and I took 9 hours of audio down to about 2, and I added music. Then we added – we just added an epilogue this week, kind of a summary discussion recorded a year after the final recording for that. The audio documentary itself will go live on my blog. How about you? What’s going on?
[01:01] Mike: Audit Shark Version 2.2 is officially released. And I got a few comments on Twitter. Somebody said, “If you’re not embarrassed by it, you know, then obviously you launched too late.” And my reply was, “I’ve been extremely embarrassed till now. My level of embarrassment at this point has dropped from 8 to about a 6.” I’m really excited about it. It’s, you know, there’s a lot of new enhancements. Not even really new features, just, like, stability enhancements, and adding an installer, like a lot of the cleanup stuff that just never got done earlier. And then there was some, you know, some things that people have been asking for that just haven’t been there, like reporting, and the scheduler. People were kind of pointing to is objections before, and they’re just like, “You can’t do this. You can’t do that.” But I’ve got most of those major things addressed. So at this point that becomes a much easier conversation to have because I could say, “Oh, well, it’s right here. And maybe it’s not exactly what you want, but, you know, it is there.”
[01:52] Rob: Yeah, it’s tough trying to sell your product when you’re having a conversation about it and everything they ask, you’re like, “Yeah, we’re going to build that soon. Yeah, we’re going to build that next.” It’s not mature enough to support the customers you’re talking to.
[02:05] Mike: Yeah, and that’s kind of what was happening in several cases. It’s a nice feeling to be at that point now.
[02:10] Rob: Yeah, and what we’ve noticed with Drip is that we hit that point, maybe, it was somewhere in the last six months, where I stopped saying, “Yes, we’re about to build that,” and I started saying, “Oh yeah, you can do that,” and then it was like, “Oh, you can do that in two different ways depending on your preference.” And now what we’ve noticed is that – Derek was just telling me this the other day, that we get these big groups of feature requests that are kind of all very similar. And so, people come in to the app and start using it, and then everybody realizes, wow, you know, this is working. But you need reporting. Like your reports aren’t there. And so we probably within a week, we got 4-5 people requesting the same thing, and so then the next week we built reports. And then after that, it was something else. But it’s crazy how the same people kind of progress through the app and as we launch the new feature, then they all realize that this next thing is not there yet, and we have to build it. So I definitely feel like Drip has matured to a place where it has fit with a certain market, but there’s always kind of that next thing.
[03:11] Mike: Well, I think it’s good that, you know, you get that group of people that are all asking for the same thing. And then when you implement it, they ask for, they all ask for like the next thing, which is kind of identical. I mean, maybe they ask in different ways, but it means that you’ve got that, you know, that product market fit, where you’re attracting the right people of a specific type, and they all have a similar problem. So when they come in, they use it, they all need that similar feature set, which makes those future conversations with people from that particular market much, much easier to have.
[03:40] Rob: And the other part that’s nice is you start to learn who your good customers are, your helpful customers are, who request the good features and request them well, meaning they give you an idea of what they need and they ask for it respectively, and they’re willing to wait for you to build it right. They don’t need everything today, you know. And they’re not threatening to quit, or they’re not kind of being jerks about it. Like the vast minority do that. Right, every once in a while, you get a customer like that. And it is nice because when you have this group of customers who’s requesting it, it makes it a little easier to figure out what you should build next. Right, because you have a pipeline and you have basically a weighting of how important each feature is, and it does, but it makes it easier to figure what to build next, rather than when you have no customers, as we know, it’s a big challenge to figure out what feature to focus on.
[04:31] Mike: So what else is going on for you?
[04:32] Rob: Well, I listened to the book “Zero to One” by Peter Thiel. I’ve now listened to it twice and the reason I did that is because it just contains a lot of pretty deep and insightful conversations and essays. And Peter Thiel, if you don’t know, he’s one of the PayPal mafia. He’s one of the founders of PayPal and then he went on to start – so that was a business that sold for $1.5 billion to eBay. Then he went on to found another business that is also worth more than a billion dollars. But Peter Thiel is so amazingly smart that I find that I just re-listen to these chapters that he wrote and he makes comments about, you know, where the world is headed, where he thinks technology is going, how to start a company that revolutionizes stuff. And I find that even though he’s not speaking to me because I am not starting a billion dollar company. I’m not starting a groundbreaking, you know, paradigm shifting, just completely world rocking company, and I never will. I have no plans to do that.
[05:30]Even though I’m not, I still find that a lot of the stuff he says has some application to me and my business and the way that I like to think about things. The book Zero to One is about building these massive ideas and trying to revolutionize. You know, it’s like trying to fix a massive technology problem of say, not having water, not having enough food, or something like PayPal, where they’re trying to replace a currency. It didn’t actually succeed, but that was their goal. It’s having a big view and being able to live up to it. Even though that’s the focus, I still think there’s some good nuggets.
[06:04] Mike: Very cool. I think last thing for me is LinkedIn has been irritating the living hell out of me because every time I get a new connection, it asks me to go through this ridiculous process of confirming all the possible ways that I might have an email account, like Gmail and Outlook.com and Yahoo, and asking if it’s okay to like for me to log into those things so that it can reach in and suck out as much data as it possibly can. I made the mistake of letting them do it with my Gmail account. They’re like, “Oh, we don’t do anything,” and it’s just like, ugh, it’s awful.
[06:32] Rob: Well it’s weird because it’s not doing that to me, so I wonder why it’s – why it would be doing that to you.
[06:38] Mike: I don’t know. I have a paid subscription, so I don’t know if that’s it.
[06:42] Rob: Ah, yeah, I do not.
[06:43] Mike: But yeah, maybe I should cancel it. Maybe it’ll stop.
[06:46] Rob: Exactly.
[06:48] Mike: So real quick before we get started, we got a email from Niles from MicroConf Europe, and he said, “Hey Rob and Mike, thanks again for all the information and inspiration at MicroConf. It was amazing and I really enjoyed and learned from the crowd. Also, you might enjoy knowing this: the money I spent on the conference is already back in my pocket with an ROI of greater than 100% because one of my customers heard about me attending MicroConf and is paying me for a workshop to summarize everything I learned. Thanks again, and keep up the great work.”
[07:13] Rob: That’s awesome. I love to hear stuff like that.
[07:16] Mike: Well thanks, Niles. Glad to hear that that’s working out for you.
[07:19]Today we’re going to be talking about kind of a topic that came up at an ask me anything session that Rob and I tried out at MicroConf Europe. One of the questions that was asked of us was essentially along the lines of, “Have you ever thought of going after angel or VC funding, and would you ever do it?” And I thought it was an interesting question, not just because Rob and I kind of have very similar views on it, but also because I think people do have kind of a mistaken impression that, you know, Rob and I are completely against angel or VC funding in any way, shape, or form, because there are definitely cases where it makes a lot of sense to do, but, you know, obviously that’s not really our platform. It’s not what we do. It’s not our background or anything. But I wanted to do was talk a little bit about the times where we think it would be warranted to go after funding and what sorts of things that we would look for.
[08:03] Rob: Yeah, you know, and the first couple paragraphs of my book, and I said, I don’t want you to think that I’m anti-funding, I’m just anti-everyone thinking that the only way to start a successful software company is to raise a bunch of funding and to get big. And that’s really the approach we’ve tried to take, right, is that you don’t have to go that route, that it’s one possible path. And it doesn’t even need to be the path up front. Like, some people have the connections to do it from day one, to raise a big chunk of funding, and other people bootstrap until they have traction, product market fit, and they start growing, and then they raise some funding. There’s a lot of different ways to go about it. And I guess to give one disclaimer: Mike and I have never raised funding, so there’s a lot of ins and outs to it that we’re not going to dive into. There’s actually a good book by Brad Feld called “Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist.” And if you really want to know the ins and outs of venture funding, then that’s the book you’re going to want to read about nuts and bolts. What we’re going to talk about today are kind of the considerations, the things you need to think through if you’re considering not raising, raising at a later stage, or, you know, maybe raising just an angel round or a VC round.
[09:11] Mike: So I’d like to start off with, what we’re going to do is we’re going to talk about some of the situations where we think that going after funding of some kind is warranted. And when we talk about going after funding, there’s a couple of different primary levels of funding. You’ve got angels, that are kind of at the lower end, and then you’ve got VCs at the higher end. And I’ll say that the estimates range. It’s hard to give it an exact number of what exactly constitutes of somebody doing an angel investment versus what dollar amount is qualified for VCs. You know, the ranges are anywhere between like half a million dollars up to, some people say 2 million, some people say 5 million for angels, you know, and some people will say, well VCs will go down to 2 million or down to a million. It kind of depends on who it is that you’re talking to. You know, you essentially do a progression from angels at the lower end to VCs at the higher end. And then you can also have people like family members or friends do lower end investments as well. There’s different rules for those kinds of things, so we’re not really going to talk about any of the specific rules because, you know, we don’t necessarily know what those are.
[10:09] Rob: And specifically we don’t know what those are for every country in the world. And since our listenership is worldwide it would just be too hard to even try to address them even if we could comment on the ones here in the states. I think of like friends and family as kind of being the lowest round because typically if someone has no funding and they want to raise something from friends and family, it’s typically a very small amount. It might be 50 grand or 100 grand. And then angels, I consider like a professional angel someone who is investing their own money. It’s not institutional funds, but it is someone who has had a large exit or who has just a lot of cash in the bank, and they are then divvying out their angel funds, their own funds, in typically in amounts of between 10 and 50 thousand dollars per investment. And you get a group of angels all to invest at once. And these investors tend to be what you might call smart money, right. You try to seek them out in an area of expertise where you’re entering so they can actually give you advice, whereas friends and family, if you’re going to do that, frankly, it’s not something I’ve ever done, nor would I recommend doing it, but you’re not going to get much good advice from your family. And then venture capitalists of course are folks who are investing institutional money. They’ve raised money from a bunch of limited partners, they’re called, and they’re trying to put a lot of money to work at one time. And so, you know, like you said, some VCs will come down into the million dollar, you know, two million dollar range. They typically have so much money in their fund, that that isn’t even worth doing for them. And that they want to do a series A, in the let’s say, 2 to 5 million dollar range, and a series B in the 10 to 20, and then, you know. When I’m saying A and B, these are the rounds, right. Series A is your first round of funding. Series B would be your second round after angel.
[11:51] Mike: So let’s talk about some of the different situations where we think it’s warranted for people to go after funding. And I think the first one that came to mind for me was essentially a land grab of some kind is necessary. So, you know, companies like PayPal or AirBnB come to mind just because if you’re their first, then it makes it a lot of easier to stifle all sorts of competition, you know, in that particular space. It’d be very difficult to compete with the likes of PayPal or Amazon or AirBnB at this point, just because they’ve dumped so much money and investment into that that they essentially crowd out all other contenders and are able to shove them out of the market, or just outright acquire them. And it’s not to say that being acquired by them is necessarily a bad thing, but you’re not going to have this massive, out-of-the-park success that you might’ve been shooting for initially. The reason you would go after funding in the case of a land grab is because you want to grab as much of the market as you possibly can before anybody else gets there.
[12:48] Rob: Right, and these land grab businesses are the ones that are super, super risky, and maybe 1 in 1,000 works, or 1 in several thousand works, so it’s not super repeatable. It’s not reliable. There’s not a high rate of success. But if you do succeed, then obviously you can be worth 100 million dollars or several hundred million. So not particularly the approach that I espouse, and it feels to me, I’ve always thought this was much more of a lottery ticket. And frankly, if you go and try to do a land grab business and you’re going to raise funding, you need some type of team that is really good. No one’s going to fund just some Joe Schmo nobody’s ever heard of to go and do a land grab business anymore. Like, the late 90s maybe, but these days you need to have either some kind of tractions, or some kind of team or both if you’re going to go after this kind of market, and then you’re going to have to commit to moving to wherever the venture capitalist is, and that’s maybe one of maybe 5 cities in the world, where you’re going to find somebody to give you this much money. And you’re going to have to work incredible hours. You’re going to have to grow a big team. You know, you’re not going to do it with 10 employees. This is the kind of business that goes to 100 employees in a year or two, if it succeeds, and then it goes to several hundred after that. So this is the one I agree this is where you need to raise it if you’re going to do it. But if you’re going to do that, then this is not the podcast that you’re looking for.
[14:09] Mike: The next time we think it’s warranted to go after funding is that you have problem solution fit and product market fit. I think the best thing to do here is to kind of step back a little bit and describe what both of these things are for all the listeners. So why don’t you talk a little bit about problem solution fit?
[14:24] Rob: As concepts, they are very powerful. And there’s something that I use in everyday conversation as I’m talking to other founders, as well as in my own business to try to gauge where I am.
[14:35] Mike: Because in my mind, the problem solution fit is like you’ve found something that people are experiencing as a problem that needs to be solved and they’re willing to pay for it, which is slightly different than the product market fit, which is you found an audience that is willing to pay for it. Because there’s a difference between finding a couple of people who want the solution, versus a lot of people, I think.
[14:56] Rob: Right. Right. And finding a lot of people, that group of people, and being able to reach them inexpensively enough that you can actually make a profit at, is part of profit market fit.
[15:05] Mike: Yes. Yeah. Because the first part is really about the customer discovery phase. And the next piece, which is the product market fit, which is more about like validation and somewhat scaling, I think, but, you know, making sure that you got the price points and everything else.
[15:18] Rob: Right, and I think the key part with that, that you just pointed out, is problem solution fit comes before product market fit, but first you have to solve a problem, and then you have to turn it into a product, and then you have to find the market for that.
[15:31] Mike: Next, I think, if you’re going after funding, you need to know all the important metrics that people who are going to invest are going to be interested in. And you need to know them cold for your business. So you’re going to need to know like your cost of acquisition. And you’re going to need to know the lifetime value of your customers. You need to know what your turn rate is. You’re going to need to know what your profit margins are. And you can use those calculations to figure out whether or not you’re going to be able to expand the business. I mean, has it become a machine where you can put a dollar into it and you get two dollars out, because that’s what the investors are looking for. They’re looking for a way to accelerate the value of their money, and your business is the mechanism for doing that. And they want to know if they throw money into it, are they going to get more money out on the other side. And I think that that’s probably the best position to be in. I don’t necessarily know that you need to be in that position always in order to get funding. But I think that if you are in that position, you can solidly demonstrate those metrics and those numbers to them, then you’re in much better negotiating position to be able to get the most value for, you know, the equity that you’re essentially giving them in exchange for the money.
[16:32] Rob: Yeah, that’s the key part of what you said there is that you don’t always need that. You don’t always need the traction, but that’s where you’re going to be able to give away the least amount of your company for the funding that you’re raising. You know, I don’t know of any venture capitalist that’s going to write a multi-million dollar check to someone who doesn’t have product market fit. I think it’s going to be a very rare instance. It’s going to be a repeat founder who’s already had a success. It’s going to be someone with an exquisite pedigree and a great team, or it’s going to be someone who has a real in, in a market or a patent or something like that. But if you’re just coming on the scene and you’re trying to solve a problem for a group of people, you’re going to need traction if you want to be taken seriously. If you don’t want to do 50 pitch meetings in order to find your one investor. You know, if you actually want to use your time well, you’re going to need to know these numbers cold and you’re going to need, basically, to be ready to scale.
[17:20]So you know, when I was getting started, like around ’99, 2000, I thought the only way to launch software products and startups was to raise funding, and I went down that road for years. And I’ve talked about that in the past. And around 2007 is when I really kind of switched and realized that I could do it with smaller products. And at that point, I really became kind of anti-funding, and I just thought it was all a big game. And then some time in 2008-2009, I was at Businesses Software and I was talking to Dharmesh Shah, who previously before HubSpot, I’m pretty sure he had bootstrapped his first company. And so, he was talking about raising funding. Or he’d either just raised it or was talking about it, and I asked him, “Why did you do that?” And it felt like kind of a betrayal of his bootstrapper ethic. And he said, “You know, we hit a point where we saw that you can put 1 dollar in and you can get 4 or 5 out, and it was a repeatable, scalable process, and so at that point, you want to put in as much money as you can in order to get 4 or 5 times that much, much larger amount on the other end.” And for the first time, it really clicked with me, that there, especially within our B2B space, once you’ve solved the problem and you’re able to scale, there is a really good time to raise funding. It doesn’t mean you have to, and doesn’t mean you always should, but if you are going to, that is the optimal time, once you’ve hit that place where you know how to scale a business up and all you need are the funds to put it in basically just grow faster than your competition because especially with SaaS businesses, if you can climb that long, slow SaaS ramp of death, and you can build up that large customer base by having a big influx of cash, it will just throw off cash for years and years after that. And whether you raise investment or not, whoever owns part of that company is going to be doing well.
[19:04] Mike: And I think that’s a very different story from a lot of the people who are kind of coming out of college, or going through Y Combinator, where, you know, people are investing in the people and an idea, but they have absolutely no product. They don’t even have a product yet, let alone product market fit or product solution fit.
[19:20] Rob: That’s a really good point. Like, we are talking about – we’re not talking about B to C stuff, like I don’t even think that’s on our radar, right. I’m not talking about the guy who’s going to start the next Uber or the gal who wants to start the next Twitter. That’s just a totally different ballgame. We’re really talking about repeatable businesses that solve problems for other businesses, and therefore are much easier to build and more predictable.
[19:41] Mike: Right. So I think if you’re trying to find that engine that’s turning that dollar into more than a dollar, then, you know, going after funding is probably not wise at that point.
[19:49] Rob: One other thing I wanted to add here is that typically if you take angel investing, you are implying that you are going to take a Series A, round of Series A from venture capitalists, then a Series B, and enough funding needed to get to a hundred million dollar or more valuation. That’s typically implied. It’s not always. But if you plan on raising angel funding, and you do not want to grow to that size company, that is something that you would need to be very specific about with your investors up front. And some investors will want no part of that. They only want to go after the big homeruns. And others are okay to invest in companies that may get to a 7 figure or a low 8 figure valuation. And, in fact, it’s becoming more common, to be honest. I heard the term fund strapping, and I really liked it. It was from Collin at Customer.I0, and they essentially raised, I think it was around, $250,000 of angel funding with the intention of making it to profitability and not raising a Series A, B, and C. And they did it. They succeeded. Raise some money in order to get your company to the point of profitability. And so that’s not everyone’s path, but I do think that’s a viable path. And I’ve talked to a couple entrepreneurs in the past six months, actually several people who are trying to do that, and they don’t want to go down the old rabbit hole of trying to grow into a bazillion dollar company. But they just want to, they’ve found that growth engine, they’ve hit the point of product market fit, and they just need some almost growth capital to get to that next level. So keep that in mind if you are at that point because I think it’s becoming a more viable option.
[21:21] Mike: So now that we’ve talked about the times that we think it’s warranted to go after funding, what are some of the things that we would look for when we were going after funding?
[21:29] Rob: There’s kind of two terms for investors, right. There’s smart money and dumb money. And typically, smart money is from an investor who is going to bring a lot of value to you, and a lot of advice and some guidance, and maybe some connections and some introductions. And then, the pejorative term is dumb money, and that’s typically when you go to the local doctor or dentist and they have some money in the bank, and they give it to you, and they’re not actually going to help your business at all. It’s just money that you’re going to use to grow. So my hope would be, you typically want to take smart money because that’s the one where their specific experience or network of connections are going to be able to be leveraged by you and hopefully, you know, there could potentially be introductions to acquires down the line. There’s just a lot more that they can bring to the table to help your business grow faster, rather than just writing that check.
[22:13] Mike: I think there’s also some rather obvious things you should be looking for as well, such as honesty and integrity, you know, kind of a history of not screwing over people that they’ve invested in. Those are things that, you know, I think in some cases may be difficult to find. But, you know, you should be able to find a list of the different companies that somebody has invested in and be able to ask the people who they’ve invested in, you know, what was it like to work with this person? How did they help you out? Are there any places where you ran into problems or disagreements and how were those handled? Because I think you want to know that you can work with the other person. Are they going to just railroad you into decisions that are not good for you or for the business? Because at the end of the day, yes, these investors tend to invest in multiple businesses with the attempt to get money out of at least one of them that’s going to make up for all their investments, but at the same time, you don’t want to get the short end of the stick here. I mean, yes, you’re taking money from them, but at the same time, you don’t want to be in a position where they’re trying to pull money back because they need it for something else that they see is going to be much more profitable for them in the long run.
[23:15] Rob: Yes, some advice that I was given once, was not to take money from a first time angel investor, to look at someone who has some kind of track record, because first time angel investors are going to be really gun shy, and if they only have one company, they’re going to be kind of be all up in your business, right? I mean, you really do – you want advice and you want help. You don’t want someone’s who’s emailing you once a week, asking you about the status, or really trying to offer advice, or going to your website and giving you feedback on the headline or anything. Not unless you ask for it, and you consider them an expert in that area. Typically, if someone is doing a lot of angel investing, then they know the boundaries and they know what’s good for the founder and the company, and they’ll give you the leeway to kind of go out and do it on your own, realizing that you’ll come to them when you need the advice and the help.
[23:56] Mike: The next thing I think you’d look for is somebody who’s got a shared vision for the product, the company itself, and your working arrangements, because if you’re listening to this podcast, chances are really good you’re probably bootstrapping your business. And you’re going to have a certain way that you operate the company, that you work with the employees who are working with you, so maybe you have a distributed team, maybe you guys talk once a week, or once a month, or something like that. Maybe you take long, afternoon breaks, and you work in the evenings or something like that. But, at the end of the day, you want to be able to continue working in whatever way has made you successful. You don’t want to have to conform to, I’ll say, arbitrary rules about how the business should operate just because they think that, you know, you should be doing things differently. But there’s a difference between having them make suggestions to you versus mandating that.
[24:44] Rob: The folks who I’ve seen raise funding well, especially that initial angel round, they basically were very deliberate about who they invited in, and they tried to stack their team with someone who knew a lot about, you know, maybe online marketing. And someone who knew a lot about growing a sales team, and someone who knew a lot about acquisitions and selling, and someone who knew a lot about some other piece. So they actually kind of built this team, a dream team of investors, who not only gave them money, and therefore have some type of, essentially an investment in your company, but they have an expertise that they can lend. And it wasn’t a bunch of overlap. It was complementary skills. And all of these skills are something you’re going to need at one point or another if you do actually make it to profitability and hope to, you know, one day get acquired. So, Mike, you know, the original question at MicroConf Europe was about funding and it was also for us specifically, and the question was, would you ever consider raising angel or VC funding, and I’m curious what your thoughts are on that?
[25:45] Mike: I’m not opposed to it. But I think, for me, I would have to get to that point where I do have, you know, the problem solution fit and the product market fit, and making sure that, you know, as I said, I’ve got all those numbers in place and dialed in, so that I know how much it’s going to cost me to acquire a customer. And not to say that I’m at the very beginning of a growth curve or something like that because I think it’s foolish to get to the very beginning of a growth curve where you know that you’re putting money into it, you’re going to get a lot of money out of it, and maybe trying to get that. You’re not sure whether, how long that growth curve is going to last for that particular channel that you’re trying to leverage. I don’t know what the hard numbers are for me for saying, “Hey, I’m going to go get money.” I’d have to be in that situation to kind of put the parameters around it. I’m not opposed to it. I don’t agree with the stance of going out and raising money to build a company because I think that you can get a lot more leverage out of it if you have something that you’ve built and are pushing forward and you’re being successful already, versus going out and saying, “Hey, I have an idea for this, or I have some small product that I’ve built. You know, can you give me money for it.” I think those are two entirely different scenarios. But I’m not opposed to it. I just haven’t been at the point where I think that it’s warranted it yet.
[27:00] Rob: I’ve definitely entertained the idea. I think ever since 2009, when I talked to Dharmesh about it, I realized that there’s a smart point at which it is perhaps a good choice to raise some funding. I don’t like saying never, but I don’t ever think that I would raise a venture round because I just don’t want to turn my life upside down. It’s not worth giving up the lifestyle that I’ve built over the past 15 years in order to try and go for some big homerun and go for 100 million dollar exit. Because what I have already is probably what I would do if I had a 100 million dollar exit. I mean, don’t get me wrong, my life would change, but it wouldn’t be so dramatic. You know, I wouldn’t go out and buy a yacht or anything. I’m already pretty happy with the choices that I’ve made, and kind of the life that I live. With that said, in recent years especially, you know, as I’ve built apps with larger and larger markets, and especially with Drip now that I feel that it’s hit product market fit or it’s very near that, and it’s starting to scale up,
[28:04]the question became for me, not should I raise funding, but under what circumstances and terms would I raise funding? And as I started talking to some folks I trust, who have gone down this road, they said, “Why wouldn’t you do it right now?” And I said, “Because it would really impact my lifestyle.” And they said, “Well what if you could raise from people who don’t care about that?” And that, you don’t need to move. And they don’t care that you take a month of vacation. You know, there is no board, right, so you don’t lose control of your company. And you don’t give away more than 15% of your company and it allows you to grow faster, and da da da. And suddenly, it was like how interesting that it’s not an either/or question, it’s under what circumstances would you or would you not raise funding, and that’s the question that I’ve mulled over. You know, that’s kind of – it’s been on my mind for, you know, definitely the last several years. Would that be an option? So I don’t know if I ever will. I think that funding allows you to get somewhere faster. So if you want to get to that 7 figure or low 8 figure revenue mark, funding is definitely going to get you there faster,
[29:04]but it’s all a matter of how patient are you, and do you think you could get to that even without the funding. Or are the competitors in your space too far ahead and perhaps better funded, and that’s, I’m asking these theoretically, but I mean, these are the things I’m thinking through with Drip, right, because I’m in market automation now. And there are some big players, and there’s some well funded players, and there are people who are definitely ahead of us. And so I’m trying to figure out, you know, am I able to build a really solid small business without funding and will I succeed in the long term? Or do I need a little bit of help getting to a point where I’m just a bigger player in this space? So I don’t have any decisions, but, for sure, I’m not anti-funding. So it’s an interesting question.
[29:44] Mike: I mean, even at MicroConf Europe, you gave a really great answer to the question, and I was just like, “What he said.” Because I didn’t have anything to add. I mean, it was just- it was dead on.
[29:53] Rob: Right. I would say though for most people that I know, like most founders that we deal with and talk with, I don’t think it’s the right decision. I just don’t think it’s helpful. I think building a bootstrap software company and self-funding it, and all the learning that goes along with that, even if takes a while to do so, I think that’s the right choice. It really is an epic time that we live in, that we are able to do that, because even 20 years ago, it was barely possible to do that. And these days, we know a lot of people who are doing very well just building self-funded little software companies. I think that’s really amazing.
[30:29]If you have a question for us, call our voicemail number at 888-801-9690, or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from Out of Control by Moot, used under Creative Commons. Subscribe to use on iTunes by searching for startups, and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 210 | Key Takeaways from MicroConf Europe 2014 & DCBKK
Show Notes
Transcript
[00:00] Rob: In this episode of Startups for the Rest of Us, Mike and I discuss MicroConf Europe 2014 and Dan and Ian’s DCBKK. This is Startups for the Rest of Us, episode 210.
[00:09] 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 Rob.
[00:25]Mike: And I’m Mike.
[00:26]Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. So weird this week, Mike, I haven’t seen you in a while.
[00:31]Mike: Welcome back, you know. I feel like there should be fireworks and balloons and kazoos and stuff like that to welcome me back on the show.
[00:37]Rob: What it’s been four or five episodes at least since I’ve been on, and you and I hung out last week at MicroConf Europe but what else has gone on that folks might want to hear about?
[00:45]Mike: There were some interests shown on Twitter about this, but I mentioned that I had let go a couple of developers. It was Friday at the airport, it was like 9 o’ clock at night, I was at the end of my rope and I’d just had it. I was just like, all right. That’s it. Both of these guys are done. And I let go two developers. Somebody had commented a while back and it just kind of rings in my brain that said, nobody ever got fired too soon from a job. Nobody says, oh, you fired them too soon. It’s always, hey, why didn’t you do that sooner?
[01:15]Rob: That’s tough, man.
[01:16]Mike: One of them had been having ongoing issues just keeping his hours up, and I just kind of finally drew a line in the sand. And then the other one had only been brought on about six weeks before but he was brought on to finish off version 2.2 and basically I gave him a three-week time frame. Three weeks stretched into six, and after six I just said, okay. That’s it, we’re done.
[01:38]Rob: So what are you going to do? Are you going to hire more or are you going to step back into engineering?
[01:41]Mike: Well, a little bit of both. I’m probably not going to hire because my other developer was actually out on his honeymoon. I’m really happy with his progress on all the stuff that’s been going on with AuditShark. Had he been there, I wouldn’t have been in such a rush to get rid of these guys, but I was just like, well I’m going to be at MicroConf for another week. These guys are not going to make any meaningful progress over the next week or so, so I may as well just draw the line in the sand and be done with it.
[02:04]This other guy was on his honeymoon for two or three weeks and I couldn’t hand things off to him. So things just kind of sat there for a little bit. He just got back today so hopefully I’ll be able to send things his way and then I’ll be free to do other things. I’m working on some stuff now just because I didn’t know when he was getting back. But once I’ve got a couple other things done, I’ll be handing stuff over to him and hopefully he’ll be tabled to take it from there.
[02:27]Rob: Nice. I’ve spent the last five weeks on the road. I took the family, my two kids and the wife went to Thailand for almost a month. Then I spoke at the end of that at Dan and Ian Tropical NBA, their DCBKK event which was awesome. Then I flew to Prague, wife and family flew home to California. All told, in Thailand I was only involved in one high-speed motorcycle chase with the police, ending with them searching me for drugs, which they found none. And we only had one trip to the hospital for stitches in the four year old’s finger. But other than that just your standard run of the mill vacation.
[03:05]Mike: The high-speed chase that you’ve alluded to, you downplay that very well.
[03:10]Rob: Being on the road makes you appreciate high-speed internet and having access to a washer and dryer. Especially when there’s four of us and we have three changes of clothes each, so we all fit in a single backpack. But that was really the only things that I missed.
[03:24]The real kicker was this high-speed internet and not being able to predict how fast it would be at the next place. You have no idea how much you rely on this, like we rely on it for our TV, for our movies, for my podcasts. I had a tough time keeping up with the podcast because sometimes I’d go to download and it would take hours to download all the episodes. It’s good to be back in a place where that’s more reliable and definitely if I was going to stay somewhere longer, like once I got to Prague I was in an Airbnb for several days, and the internet there was fast. So it’s not a matter of being in the US or not, it’s a matter of being in hotels or not. The high-speed internet is critical.
[04:00]So the good news for me is Drip had its best single month of growth ever while I was gone, which is encouraging me to take more vacations internationally. Obviously the seeds of that growth were sown in the months prior to the travel, not actually while I was away. I can see the trial funnel and how it all plays out, so I know it was basically the 30 to 60 days prior to leaving. But it does make a nice punch line. People in Prague were asking how Drip was doing and I was able to say, it’s actually been doing really well while I’m on the road. It’s nice to be able to say that, it makes vacation a lot more enjoyable for me because if things are tanking and they’re going sideways and I’m on vacation, I stress about it the whole time. I keep thinking about how can I turn this around and what do I need to do? But if they’re doing well, I can be freed up mentally like, ah. I just want to do more of the same.
[04:46]When I get back I’m really amped up to work and continue to drive trials which is essentially what I did when my family left and went back to California. I had four days in Thailand at the end and I basically went to co-working space in Bangkok, just worked long hours, probably 12 to 14 hour days and it was really worth it. I got a ton done; I was super fired up because I had been off for so long. You get reinvigorated when you step away from work that long. You get new ideas; you just kind of want to get back to it after a certain point. That’s how I felt.
[05:20]Mike: I felt the same way just coming back from MicroConf because I had put in all this time on AuditShark before I left and then for several days I didn’t get any work done at all on it. Of course I come back and suddenly I’m ready to get a lot of work done and I’ve been very, very productive over the last several days. I think part of that is also being able to catch up on my sleep.
[05:39]Rob: Yeah, it’s always tough. And you’re hanging out till 1 or 2 in the morning with everybody.
[05:44]Mike: Yep.
[05:45]Rob: Yeah. What’s up with you on AuditShark?
[05:47]Mike: I’m looking at different ways I can scale up the sales side of AuditShark and decrease the length of the sales cycle. Those are two things that I’m kind of fighting with right now. One is the length of the sales cycle and the other one is just generating enough leads that I can talk to on a regular basis. I feel like Pipedrive is filling up with a bunch of different leads that are in there but keeping track of them and keeping on top of everything and also trying to fill the funnel with people as other ones are falling out – I guess I’ll say the broader picture is that if I’m putting 100 people a day into the sales funnel to try and follow up on – whether I’m actually contacting them or not is kind of a different story. But if I’m hitting them on day one, and I go to a second batch of people on day two, day three, day four, etc.
[06:34]By the end of the week I’ve got 500 people kind of in queue. Some of them are just going to not be a fit, so they fall out very quickly. But there are other ones where you’ve tried to reach them and they stay in your funnel because you haven’t gotten a no yet. So they stay there and you have to come back to them later on. That’s actually pretty challenging to make sure that you’re staying on top of all of them. I don’t feel like I have a great system for that. Somebody suggested just using a spreadsheet.
[07:00]Rob: Sometimes that‚’s the best solution. The 100 a day sounds like a pretty high volume though, that would be tough to manage in software. That’s a lot of leads or suspects or whatever you want to call them coming through.
[07:11]Mike: Suspects‚ I like that word.
[07:12]Rob: Yeah, I read that in a sales book.
[07:14]Mike: Victims, maybe.
[07:15]Rob: Similarly, I’m also wrapping stuff up. I’m basically formulating two game plans for Drip for the next seventy days. That basically takes me through mid-January. Because the next two months, there’s more holiday time, things are starting to wind down. I know I can still drive trials and grow a little bit but it’s not going to be at the levels that it has been. So I know these next two months are going to need a nice roadmap and it’s going to be doing some stuff internally, I think. I’m working on a product roadmap and marketing calendar. The product roadmap is basically what features are we going to build? What are the next steps, after coming back from MicroConf Europe?
[07:52]I have some ideas after talking to a bunch of people about what they’re looking for. I’ve got a good sense of where I want to take Drip next. Then in terms of a marketing calendar, I just want to know what’s going on every week. I’m really going to be buckling down on marketing because things are ready to – things have already started to scale up with Drip and I’m ready to hit it even harder.
[08:13]Mike: Cool. This week we’re going to be talking about what happened at MicroConf Europe. We kicked off the conference with Rachel Andrew, why don’t you talk about that a little bit.
[08:20]Rob: Yeah, we’re just going to touch on a couple of the talks that we got the biggest takeaways from. Really we only have time to go through a couple of the speakers and Rachel Andrew, she really set the tone for the conference. That was the goal, right? Typically your kick off speaker, you’re hoping that they’re doing something that’s interesting enough that people are going to be really engaged. That kind of sets the tone.
[08:40]If you’re interested in more details about the speaker talks, as usual we have a recap site, it’s called MicroConfEuropeRecap.com, and we’ll look it up in the show notes. Christoph Engelhardt was so kind as to take very detailed notes and he‚’s aggregated slides and all types of stuff. We don’t have videos of the talks, but that’s the next best thing.
[08:59]One thing I like about Rachel Andrew is she runs CMS, it’s called Perch, and she runs it with her husband. They don’t have any employees. It’s downloadable self-hosted web based CMS. So it’s really the traditional Micro ISV, micropreneur approach with no employees and it’s even downloadable software. So she has some really good experience, she’s an experienced speaker and she has a lot of takeaways that she lent to the crowd. One of my favorites is her quote, “The missing features at launch don‚’t matter to anyone but you.”
[09:33]While I don’t fully agree with that, because when I’ve launched specifically Drip, we had missing features, and it mattered to everybody. But I think that depending on your product and depending on your competition, what features they have, this can go one way or the other. But I do like the sentiment of this because it reminds you that you are always going to be bothered by the stuff your product lacks. But that you need to ship it before you get to that comfort zone or else you’ll never ship it.
[10:02]Mike: I think that when she was referring to that, she really meant that the things you feel are important, your customers don’t necessarily value as much. As long as you’re meeting the core requirements of whatever it is that they need, that’s the important piece. That’s why they’re buying it. It’s not as though you need to go out of your way to include everything in, the kitchen sink. The set-up core requirements that your customers have, that’s what they‚’re paying for. All the other things you think are necessary, they think are nice to haves but are not critical for them to buy it. I think that was a very fresh approach to that sort of thing. In some ways it’s kind of a minimum viable product sort of thing, but it was a nice breath of fresh air to hear it put that way.
[10:42]Rob: Another thing she said was that the happy majority of your customers will be silent. This is something that I have definitely noticed with products that I own, but I hadn’t thought about it in those terms before. She basically said that a lot of features that you’ll hear requested over and over are really just being requested by three or four people who are kind of your loud minority. A lot of your happy customers, you’ll never hear from them. This is definitely helpful for folks who are just launching a product to give them some perspective on what to expect as you’re starting to deal with customers.
[11:20]Mike: The phrase I’ve always heard is “the squeaky wheels”. The people who complain a lot, there are going to be a few of them, and they’re going to complain a lot about certain things but unless you hear a lot of people complaining about the same things, you have to pay them a little less attention. You can certainly go down the road of implementing things that, one, people don’t use or don’t need or, two, are actually going to hurt your product rather than help it and make people a little confused about what your product does.
[11:46]Rob: Yeah, and you use the word complain. I don’t know that I would use the word complain as much as give feedback. Sometimes, the more irritating customers, they are complaining and they’re kind of a pain in the ass but a lot of the customers who are in the un-silent minority are the people who I think genuinely want the product to be better. I think the majority of those folks, while they may email you feature requests three times a week, I wouldn’t consider that a bad thing. I know it’s hard to deal with the onslaught of oncoming feature requests – of all people right now, I know this. I think I’ve received literally multiple feature requests per day for Drip. So it’s trying to get back to everybody and handle it well is a challenge but I think I’m pretty thankful in general for even the people who send us one or two per week. If they’re cool with realizing that we’re not going to build all of them, I think that’s where you’d end at the sticking point, right? Because if someone requests something and they’re nice about it and you can‚’t build it, sometimes that has to get done. Certain people are willing to accept that, certain people will get really indignant about it and they’ll say things like, well, you would get so many more customers if you had this. That’s pretty few and far between though.
[12:54]Mike: One of the things that she had mentioned in her talk was that the things you’re customers tell you that they’d love should be in your headlines. I thought that was not just an interesting take on it but a fascinating way to resonate with your audience. Because your audience is clearly going to think about your product differently than you are. In some ways it reminded me of other techniques I’ve heard from people going to Amazon.com reviews and pulling snippets of what people are saying about other products or about similar products and using that to help do SEO or to identify keywords that people are using to describe that type of product. It was just a very interesting way of taking your customers’ words and using them to your advantage on your website and in your SEO to help resonate with the rest of the user base that has already obviously bought into whatever you’re selling.
[13:40]Rob: Right. I love this one. I’m such a proponent of learning the way that your customers and potential customers are talking and thinking about your product, entering the conversation that’s already going on in they’re head. Most of the time when I sit down to write marketing or sales copy I will try to go and actually read emails or testimonials or somehow read something from my customers to start getting me in the mindset of how I should be talking about it. I think this is a really good tip.
[14:08]Another thing Rachel said was that you can learn a lot from the misuse of your features. So basically, you’ll launch a feature and you think everyone’s going to use it a certain way and then she gave an example of how some of her customers misused it. But what that really means is that they have another need, I’ve definitely seen this. At first, you think, ah, people are screwing things up! Right, they’re not using this correctly. But if you look at it from this other perspective it can actually lead to making your product better.
[14:34]Mike: I think a nice reminder that she threw out there for everyone was that your product is never done. Even if you’ve implemented a ton of things that were in line with your vision, there are always new requests that are going to come up, there’s always new ways to use your product. If your customers are coming up with new ways of using your product in their environment for new processes or new procedures as part of their daily workflows, you have to look at those and say, okay. Can I rework the product? Or can I reposition it in terms of the marketing to make it appeal to those types of people in a slightly different ways? The work’s never done. There’s never going to come a time where you can just sit back and say, oh, the work on this is completely done.
[15:14]Rob: Another popular speaker, who actually went last, was Lars Lofgren. He‚s in charge of Growth for KISSmetrics. He does a lot of work with their content marketing team; he runs a lot of split tests for them. He did an excellent session of teardowns at MicroConf Europe. His talk was titled “Unlocking the Four Gateways of Growth”. I really enjoyed this talk. My guess is it will be one of the top-rated talks.
[15:39]He had a great overview of depending on the phase that your product is in, what metrics to look at, how to build a better product, how to ask if it can grow, how to build a simple business model – he kind of went through the four phases, really good stuff. One of the first things he talked about was when choosing metrics – he said you have to have metrics that you’re measuring to figure out where you are and where you need to go, what you need to improve. He said when choosing metrics, always ask what is the biggest constraint right now.
[16:06]I feel like this is a really succinct way of basically saying, when you are early on in your product you just need data. Right? You either need one-on-one customer interviews when doing customer development, or if you want to split test market and copy you need traffic. You need some data to say which one’s going to perform better. Then when you get further on, maybe you’re starting to scale up, you don’t necessarily need as much data any more now. You need a lot of people coming and you need to optimize your funnel. I guess in a way, you do need data, but you just need that data further and further down the line of your funnel as it gets better. I really like this whole concept of thinking about what is the biggest constraint right now for your product growing? Figuring out how to measure that and then focusing on that for kind of a three month sprint.
[16:51]Mike: I think one of the things that does for you is that if you’re trying to fix all these different things all at once, it can be hard to fix any of them effectively. If you focus on the one biggest problem you have, and say you’re having problems getting people to click through and actually sign up for a trial. That’s your biggest problem at this point. Then by focusing on that and alleviating that headache as much as you possibly can, then you’ve essentially freed up people to move through the rest of the funnel.
[17:19]Then you get to see what’s going on. You don’t necessarily know whether or not there are other problems that are right after that or are six, seven, eight steps down the road. By focusing on that one biggest problem, you’re always focused on getting those people through the sales cycle. It trickles down.
[17:36]Rob: I also like that this makes you think about, depending on your stage, you need to look at different metrics. Because we’ve gotten questions in the past where someone says, well, I only get 100 unique visitors per month to my website, how can I run split tests? The answer is, you can’t. Because that’s not your biggest constraint right now, right? You need to choose a metric that is actually helpful. It’s more than likely that you need to actually go talk individually to customers and decide on what you need to build.
[18:01]But maybe your biggest constraint, if you only have 100 uniques per month is traffic. Then you can start trying to increase uniques and improve that. I’d recommend definitely checking Lars’ slides out up there on Christoph’s hub.
[18:15]Another thing I liked that Lars talked about is he had this section called Can You Grow? The takeaway I took from that is he said, pick one growth channel, one marketing channel, and focus on it for a three month sprint. Put everything you have into it and try to make it work. This is something that I have done many, many times. I’ve never systematized it like he was talking about, basically making it a sprint and making it official and documenting stuff.
[18:40]Mike: One thing I like that Lars talked about was whether or not you had a stable business model. I think that’s one of the things kind of neglected by most people because they’re so focused on trying to figure out, what should I charge? Not saying that what you should charge doesn’t factor into it, but they’re focused on all the details of trying to get people to pay for it and not necessarily focused on the big picture.
[19:02]He talked about a couple of different pricing models. One of them was for SaaS, and he basically said that for SaaS, you want a lifetime value of the customer to be essentially at least three times your cost of acquisition. You want to be able to recover that acquisition cost within twelve months. If you’re able to do that, you can establish a solid growth engine for that product and if your churn is above 2% then that’s something else you need to work on is to help drive that churn down below 2%. Obviously you get that by talking to customers, but I think that figuring out what your cost of acquisition is and measuring it against your lifetime value is really important. The one difficult thing is trying to figure out what your lifetime value is when you don’t have enough data to figure that out.
[19:46]I was talking to Jana, who runs HappyBootsTrapper.com, but she has a product called FirstOfficer.io and we were talking about how do you measure lifetime value of customers. Especially when you have people who are paying you on a monthly basis, versus others who are paying you on a yearly basis, and of course the question comes up – those people who are paying you on an annual basis, they only have one real opportunity to cancel. They’re given that opportunity to renew every year but that’s when they think about whether they want to renew this. Versus the people who are getting a bill every single month, where they look at it and say, well, do I want to keep paying this or do I want to cancel?
[20:19]There’s obviously difference between your lifetime value for the people who are paying you on an annual basis versus those paying you on a monthly basis. You can’t just arbitrarily aggregate them together, that’s not sound mathematics. We had a pretty extensive conversation about that. It’s just interesting how different people look at that particular problem.
[20:39]Rob: Right. I think it’s like trying to find the standard. The standard I’ve seen is that if someone does not have the option to cancel that month, then they should not be included in the churn calculation. You can break up into annual and monthly churn, or you can say on the month that they’re able to cancel, did they churn?
[20:53]To be honest, man, it’s really hard to get below a churn of 2%. It’s pretty rare that happens, but that’s what the really big companies when they really start to scale up, that’s what they have to hit. So I like that Lars brought that up and brought some real numbers. These are numbers that I have either found myself or have researched and always keep in my notebook; they’re my rules of thumb for things. It was nice to see them up there on the screen for everybody to see and kind of benchmark their own apps from that.
[21:25]So as I said, we had nine speakers at MicroConf Europe, we can’t talk about all their stuff. But I’d recommend you check out MicroConfEuropeRecap.com if you want to see some of the other talks about hiring a designer as a founder, how to build an app that you can sell, optimizing SaaS apps. There’s a lot of really good info there.
[21:24]I really wanted to talk, just for a few minutes, about Dan and Ian’s DCBKK event. DC is their membership website, their membership community called Dynamite Circle. BKK is the airport code for Bangkok, so it’s an annual conference that they host for digital nomads. I really consider the Tropical NBA as kind of a sister podcast of ours. To be honest, they have a lot of overlap, their audience and the folks who attended may have the most overlap with MicroConf attendees in terms of their interests and the conference in terms of its audience, size, and format. It was really cool to get an inside look at how another conference for similar audience and a similar size was run.
[22:25]The fun part was that a lot of the attendees listen to our podcast and it was really fun to touch base with them since we typically wouldn’t cross paths with them. They’re digital nomads, they’re traveling in Southeast Asia and other parts of the world. It was fun when I first got up to speak and they did a show of hands of who listens to our show. It kind of felt like it was a hometown crowd.
[22:44]Mike: Really? What was the rough percentage?
[22:46]Rob: I think it was maybe 40%, 50%? It was a good chunk. That’s my memory. Someone can correct me in the comments if I’m wrong. I just remember thinking, wow, a lot of people have heard of what I’ve been up to or heard of the podcast. It was nice and I kicked off the conference and it was fun to do that.
[23:04]One thing I did in my talk was, I’ve talked about this stair step approach a bunch of times on the podcast but I’ve never really fleshed that out. I really fleshed it out and dove into what I think the specifics are on how to stair step your way up to recurring revenue. Meaning, starting with a smaller product that’s typically a one-time sale and has a single marketing channel and then stepping up to multiple of those until you can buy out your own time. You own all of your time, then stepping up to recurring revenue. That really resonated with the DCBKK crowd, it was cool. I overheard several conversations later referencing it and saying, yeah, my app is a step one business right now, I’m hoping to get to step two. That’s a really good feeling for a speaker to hear a concept that you’ve outlined be used by attendees so quickly.
[23:50]Mike: That’s awesome.
[23:52]Rob: I also talked about it again at MicroConf Europe about a week later, so that’s again in our recap if you want to hear more details about it.
[24:00]I think the last point I’ll touch on, the event was very well run and I was impressed with it. A lot of conferences I go to, now that we’ve run a conference, when I attend conferences I’m pretty picky about it. I can tell when people are screwing up. If you go to a venue after the conference and the music’s too loud, I’m thinking to myself, real key mistake, man! We‚’re not here to club, we’re here to hang out and talk. We learned that the first year when the music was too loud at one of our venues. I was impressed, you could tell Dan and Ian had run it before.
[24:31]As usual, the hallway track is one of my favorite parts. Breakfasts and dinners were probably my highlights. Actually, in the Tropical NBA episode 268, it’s titled ‚”Getting More Out of Conferences, breakfast is a big deal”. They talk a little bit about this. But one thing I did this year at both of these conferences, DCBKK and MicroConf Europe, was I was really intentional about seeking out certain people I wanted to connect with. I made sure that we had some one-on-one time. Typically I will see people, like Derek Sivers was at DCBBK, or Nathan Barry was at MicroConf Europe, and I would see them in passing and I might catch up with them at a group event. But I’ve realized that the time is not – it’s tough to have an in depth conversation at a group event like that because you just wind up, especially as the organizer and speaker, you get mobbed.
[25:20]There are a lot of people who want to talk to you, and that’s okay. But I realize that you kind of have to have one-on-one time to do it. So I think that if you are attending conferences, that perhaps my number one recommendation, aside from being prepared to ask interesting questions and not just make small talk, my other recommendation is to look out for people who you really want to connect with. Make sure that you are able to find some one-on-one time with them, hopefully over a meal where you can really catch up and deepen those relationships. Because in my opinion, that’s really what attending these events is about.
[25:53]Mike: Yeah, that comes down to scoping out who else is going to be there. Then schedule in that time, either before you get there or while you’re there. If you haven’t had a chance to connect with them before the event, definitely make sure that you get on their radar and say, hey, I’d really like to sit down and talk to you for a while. This is what I want to talk about. Maybe you don’t have a set agenda that you tell them about, but just get on their radar so they know you’re trying to make time for them so hopefully they’ll reciprocate and make time for you as well.
[26:20]Rob: So thanks for Dan and Ian for inviting me to speak and congratulations to them for running a top notch event. So Mike, we’ve run six conferences now, four in Vegas and two in Europe. You feel like we’re getting a little better at it?
[26:32]Mike: A little bit. You know, it’s interesting going back and forth between Europe and Vegas. There’s certain things that I think we took for granted the first couple years at MicroConf and Vegas because we went over to Europe, the crowd over there is different. Then we changed some things over there that I don’t think we initially realized in the beginning helped to make us successful here in the US. The biggest one for example that I saw in the US, we chose to do it on Monday and Tuesday primarily for cost reasons and we never changed that. We never experimented with it, and first thing we did when we went to Europe is had it on a weekend. It’s interesting that actually might have torpedoed things for us if we had done that in the US.
[27:16]Rob: Yeah, the quality of the attendee overall tends to be less on average because it’s more people who don’t have to take off work and they’re able to come. You’ll wind up with a lot more beginners, I guess is what I’m trying to say. A lot more people who are just thinking about doing things, but if you do it during the week, you tend to have more people really serious about it. If they not only have to pay for a ticket and pay to fly, but they have to take time off work, then they’re probably pretty committed to this idea.
[27:44]Mike: Yeah, so that was one of the things I noticed up front. It’s interesting to see different perspectives from around the world about what sorts of things people have to deal with and obviously there’s this core set of problems everyone has. But it’s interesting to see that people in different countries deal with them in different ways, there’s certain laws that affect some people and don’t with other people. It’s a very mixed bag with the periphery problems that people have to deal with.
[28:11]Rob: Right.
[28:12]Mike: If you have a question for us, you can call into our voicemail number at 1(888)801-9690 or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We‚’re Out of Control by Moot , used under Creative Commons. Subscribe to us on iTunes by searching for Startups, and visit StartupsForTheRestOfUs.com for a full transcript of each episode. Thanks for listening, and we’ll see you next time.
Episode 209 | How to Run A Successful Webinar (With Brennan Dunn)
Show Notes
- DoubleYourFreelancing.com
- PlanScope.io
- BuildAConsultancy.com
- A summary of the key points from this episode was generously donated by Sweet Fish Media: 5 Steps to Hosting the Perfect Webinar
Transcript
[00:00] Mike: In this episode of Startups For the Rest of Us, I’m going to be talking to Brennan Dunn about how to run successful webinars. This is Startups For the Rest of Us Episode 209.
[00:07] Music
[00:13] Welcome to Startups For the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at launching software products. Whether you’ve built your first product or you’re just thinking about it. I’m Mike –
[00:21] Brennan: – and I’m Brennan –
[00:21] Mike: – and we’re here to share our experiences to help you avoid the same mistakes we’ve made. How you doing this week Brennan?
[00:25] Brennan: I’m good. I’m good. I’ve broke ground finally on my new course, so things are good.
[00:31] Mike: Excellent. If you’re not familiar with who Brennan is, I want to give you a quick introduction. He is the founder of Planscope, he’s written several books and courses on consulting, which you can find at doubleyourfreelancing.com, and he is also a former speaker at Microconf and will also be speaking at the upcoming Microconf Europe in Prague. Thanks, and welcome to the show Brennan.
[00:49] Brennan: Thanks Mike.
[00:50] Mike: So today we’re going to be talking a little bit about how to run successful webinars. Brennan, you’ve run quite a few webinars. I think one of the first things we should start out with is – when you’re first starting to look to put together a webinar and considering doing it, what are some of the first things you should think about? Are their target audiences you should have in mind? What’s the first thing they should start doing?
[01:10] Brennan: First, I think you need to realize what the goal of the webinar is, both for you and the audience. For you, it’s probably to promote or sell a product, in your case. With Auditshark, you’ll probably be wanting to teach somebody something about security, so that ultimately they can understand why it’s important to have a secure infrastructure, which will then ultimately lead them to Auditshark, right? I think you need to figure out both what the role of the webinar is, and on top of that, what the takeaways are for the attendees.
[01:40] The target audience, I think – It’s probably not that hard to determine if you already have a product in mind that the webinar’s for. If you have a info product, or a software product, or whatever it might be. Hopefully you already know who the ideal user is, right? That’s probably the easier part if you have a product in mind. But, a really good webinar is meant to – It’s kind of like an interactive blog post in that you’re teaching something and it’s interactive. People can ask you to clarify something, or have live Q&A, and do a lot of really fun things that you really can’t do traditionally through a newsletter or through blogging or through whatever else.
[02:17] Mike: Yeah. When I was putting together my first webinar for Auditshark, one of the things that jumped into my mind was – Obviously there’s a reason I’m doing the webinars because I want to help bring awareness for Auditshark and help drive sales, and things like that. But, the key thing that came to my mind first was, “What’s in it for the person who’s coming to the webinar, and why should they even care? Why should they spend the 45 minutes to an hour even bothering to come to the webinar, and what can I offer them that is going to” – especially to entice them to come and attend? It’s sort of “Marketing 101”, but “What’s in it for me?” is really the underlying question.
[02:48] Brennan: It should be. I think you really do need to be respectful of the person’s time and really understand that even if you are trying to sell something, I think the webinar itself should be valuable in its own right, even if you’re not selling anything. I think you really need to think: even if nobody buys, will they still walk away from this event thinking, “You know what? It was worthwhile for me to attend”. And that’s why I’m a big fan of a training webinar, or something like that, versus – Because some of the more seedier parts of the internet might have webinars that are more like pitching people on timeshares. I’m very big on having a very dense, educational webinar that coincides and aligns with whatever product I’m trying to up-sell.
[03:27] Mike: It’s almost the difference between doing an educational webinar, versus an education on how to use my product webinar.
[03:34] Brennan: No one cares about your product; they care about what it can do for them. I’m very big on the idea of: let the webinar demonstrate the “why”, and let the product come in as the natural “how”. Why is security important? Why does it matter? What are the implications of an insecure infrastructure, case studies, right? Then the “how” is obviously – the “how” is: if this is all resonating with you, and this makes sense, and you don’t want to have exploits or whatever else happen on your systems, then look at Auditshark. That’s the goal, right?
[04:04] Mike: Yes. There’s a couple other things on the educational side of things that help, because even if somebody comes to the webinar and they look at the product and they say, “Well that’s not really for me”, if you didn’t give them anything of value, they will probably never come to a future webinar. So, even if they’re not at a point right now or not ready to buy just yet, they may be down the road. I think if you turn it into too much of a sales pitch right away, they’re going to get turned off. They’re not going to come back to a future one. You’ve lost them as a future customer.
[04:31] Brennan: I think this is true of webinars, newsletters, really any form of marketing.
[04:37] Mike: So we talked a little bit about the fact that the target audience should come away and have learned something. But, one of the things you have to also ask is: why should you use a webinar? When are appropriate times to use webinars?
[04:49] Brennan: I think there are a lot of different ways a webinar can be used successfully. One of the ways that I think it underused is a way to learn about your audience and what they need. Let’s say before I wrote my course on pricing for freelancers, I could have hosted a webinar to my list; to my audience, talking about what I might even put in the course, right? Just a feeler to find out if this is something that resonates with people. Do people care about this product that I’m thinking about putting together? A webinar is a great way to do real-time validation, because you can talk to people about what it is you’re thinking about putting together and get feedback during the Q&A or even in real-time. I think it’s a really good way to scope out a product before you do the legwork needed to actually build the product.
[05:31] The second thing, which I think is the more used case, is using it to promote an existing product. If you have a software product out there, a webinar is a fantastic way of promoting it. I think the two real distinctions between a webinar and traditional forms of marketing like a newsletter or a blog post are: it’s interactive, meaning people can say, “Hey Brennan, can you clarify what you said about x, y, and z, and can you tell me more about that?”, and on top of that – another big thing – is that you can’t skip forward. The attendee cannot skip ahead. Let’s say you launch your product and you put together a really good sales page. A lot of people are just going to skip to the bottom and the pricing, and go there before they actually know what the products about, what the benefits are, and so on.
[06:14] The way that webinars are structured, because they’re live, is you can’t skip ahead, which I think when done right can really make them valuable. I’ve had webinars where 40% of the people who attended bought for me, because if they make it to the end, it’s very self-segmenting. Is this for them, or isn’t it? They know what it is and why they need it at that point.
[06:34] Mike: I really like the credibility aspect, because when you go to a sales page, it feels like you have to work a heck of a lot harder on the back-end to make sure that you’re putting the right information upfront to not only get the people who are going to read everything, but also to get the people who are just going to skim the content to figure out if it’s for them. But with the webinar, as you said, you get a lot more engagement and they’re hearing a live person on the other end of it, versus a website where it’s a little less personal. A webinar is very personal because you’re actually sitting there listening to the person who’s talking to you.
[07:06] Brennan: Right, you hear a human’s voice. A lot of them will have some sort of real-time chat where you can talk to other people who are attending. When I do a webinar I break the ice with asking everyone where they’re from. It’s really personal compared, like you said, to a static sales page.
[07:21] Mike: What are some of the disadvantages of hosting a webinar? What are some of the things that would actually turn you away from using a webinar?
[07:27] Brennan: First, you need to show up to make it happen. With a really great sales website, the idea is you can let it run on its own and if it’s effective it generates and drives sales to you. With a webinar, it still requires you to attend, like it’s a live event every time you do it. So, it requires time. On top of that, it’s one thing for me to blog weekly, and send it out to my audience, but they can read it and consume it on their own time. Whereas, typically with a webinar, you’re making people schedule, and asking, “Am I free on Tuesday at 2 pm EST?”, and especially if you have a lot of people from all over the planet, it’s logistically harder sometimes, and people really need to think, “Can I attend? Can I actually blank out my schedule for an hour on this day at this time?”. So that, I think, is one impediment – mainly for the audience, not as much for you.
[08:13] Mike: I think it is a little bit of an impediment for you because you have to think of where people are going to be attending from and what segment of your audience you’re basically going to ignore. We have this problem with the Micropreneur Academy where we’ll hosts an academy conference call. We’ll post a number and people can call in from all over the world, and we typically aim for an evening of Wednesday or Thursday. So it’s evening for the US, we have people calling in from India and it’s 2am or 3am there. It’s like, “Wow! You’re a trooper”, but when you have a worldwide community like that, it’s very hard to do those types of schedules without shunning some part of the world.
[08:52] Brennan: I’ve seen people who offer maybe two or three different versions of the same event. They might have one be at 7am EST and another one might be 2pm EST, and then you can choose which one is best for you. That’s one way to work around that.
[09:09] Mike: Let’s talk about some of the technical logistics. How do you go about hosting a webinar? What sorts of tools or technology should you be using? What should you at least give some consideration to?
[09:19] Brennan: There’s a lot of different options out there. My favorite – and it’s also the most economic – is using Hangouts on Air. A Hangout on Air is basically a Google Hangout, but it doesn’t have any limit to the number of attendees who can attend, and it auto-records everything that you do. What I do now is, I put together a very simple static page that has two iframe embeds basically. It has an iframe embed for a Google Hangout, and it also has an iframe embed for a service I use called Chatroll, which is a real-time chat widget.
[09:48] So I just put these two up and that is the entire – at least the hosting – that the viewing part of the webinar. There’s also GoToWebinar which is also an option, but I think that’s $100/month. It’s desktop software, but I just like how mine requires to just go to a webpage and as long as you can watch YouTube videos you can watch my webinar.
[10:05] Those are really the two main options. I think there’s Livestream also, I’ve never really used that. I would recommend for most people Hangouts on Air is by-far the easiest and most economic way to get started.
[10:17] Mike: I signed up for a GoToWebinar and I did my first webinar through there. My 30-day trial recently ended with them and they sent me this email saying, “Hey, your trial just ended. We’ll give you $10 off if you sign up now”, and it ended up being $39/month instead of $49/month, but that’s for their lower-end plan for only up to 100 attendees. The downside I saw with those was that the conversion rates were actually really low because they don’t give you any customization for the registration page. You can select which fields you want to get. Basically, just the user experience for signing up and registering for the webinar – it’s completely in their hands.
[10:55] Brennan: The registration flow is horrible; you can’t control it. Like you said, I don’t even think you can control the emails they send out. I think they send out a reminder email the day before, and then maybe one an hour before.
[11:06] Mike: You have some flexibility there you can set-up a bunch of different reminders. You can pre set-up polls and stuff like that for inside the webinar, and you can also customize the emails that get sent out afterwards. Once they get all of the registrations in, you can download them into Excel. From there you can do a MailChimp import. You can do your own things if you really want to. That initial registration page – it does not convert well.
[11:29] Brennan: The webinars I’ve been doing – the registration page gets about an 85% average conversion rate. In the show notes, I’d be happy to link to one of those as an example. I like having control over the entire registration confirmation flow, along with the emails that go out beforehand. I like being the one to send it. So I actually use my marketing software to do registration for me. I use Infusionsoft, but this can be done in Drip or MailChimp, AWeber, or whatever. But really, all you really need to do is create a list for that webinar, design a custom page, advertising the webinar, and then have an opt-in form, which is literally name and email.
[12:09] They get on that list, and you have an auto-responder that is scheduled to go out. I’ll send out a few emails before the actual event, and then I’ll be the one promoting, “Hey, the event is about to start”. Then after the event, I send out the replay mail, and any additional emails that relate to the pitch that I had. I think you can do a lot with a free MailChimp account with Hangouts on Air, and Chatroll does cost about $50/month minimum. Those three things plus some knowledge about how to glue it all together can basically give you what you need.
[12:40] Mike: Even if you’re paying $50/month for Chatroll, that’s only marginally more expensive than something like GoToWebinar – there you’re limited to just 100 people. Plus, people have to download their stuff, and I found this out the hard way. Their recordings don’t always work. I recorded my first webinar, and somebody emailed me, “Hey, I missed the webinar. Can you send me a recording of it?”. I said “sure” and thought this would be a good time to check and see how well the recording is.
[13:05] The recording was awful. It skipped all over the place, the transitions were terrible, and it just did not work. I had no choice to say, “Look, this recording didn’t come out well”, but I was kind of able to turn it around and say, “Hey, this didn’t work out well with the recording but if you would like a personalized demo or personalized webinar I can certainly do that”.
[13:23] Brennan: That’s what I love about Hangouts is that they come out as YouTube videos automatically – no matter what. You don’t need to worry about recording. It does it for you.
[13:30] Mike: So – Hangouts on Air from Google, a combination of Chatroll and a custom landing page for the people who you’re driving it to, and then in terms of getting people registered for it – very simple integration with like AWeber or Infusionsoft or MailChimp, or what have you.
[13:46] Brennan: Exactly. That’s it.
[13:47] Mike: That’s basically all you need to handle of all the technical side of stuff. Let’s dig a little bit into driving people to that landing page for the webinar. How do you drive people specifically to that page and get them to sign up?
[13:59] Brennan: If you’re promoting to your own lists it’s a lot easier. They’re used to hearing from you already – they know who you are. What I’ve done in the past is I will typically send out two or three emails spaced out where I talk about what they’re going to get out of it. I don’t actually say, “Join my webinar, here’s the link, cheers, Brennan”, I don’t do it like that. I’ll talk about an example of something that happened to me back before I learned how to price – this is what my life was like these are the kind of clients I was working with. Then I segwayed from that into: I’m going to be talking about all of this, what I learned over the years in building up my consultancy; if you’d like to join, there’s limited availability, but click this link – I’d also include the date and time.
[14:41] I did this one launch on doubling your freelancing rate last May, and I got quite a big turnout from my own list. I think it was really effective too because – It’s a way if you’re constantly talking to your list, it’s like a one-to-many. It’s you up at the top, and your broadcasting hundreds to thousands of emails to all of these people. There’s no two-way relationship.
[15:00] Mike: You’re not getting that interaction.
[15:02] Brennan: Yeah. But, it’s one thing if you can invite your list to a live event. They can talk to each other in the Chatroll, and they can also ask you questions and you can answer them live. You can say, “Yes Bob, great question, let me address this”. It’s just a great way to get to know who your audience is and help them get to know you better on a more personal level. That’s what I would do with my own email list. I would think: well, is this a launch or is this a meet and greet event, or am I really doing a formal promotion for a product of mine. It’s always going to be better for that. I get a very good conversion rate for my own list. I get upwards of 90% typically when promoting my own list. But if you’re going to look into paid acquisition or the typical social stuff, you’re definitely going to get lower returns, right? You’re going to get lower conversions. But, people like John Lee Dumas have done extremely well with paid ads when it comes to promoting webinars. I don’t know, Mike, if you’ve ever seen any of John’s ads in your Facebook feed –
[16:00] Mike: Yep.
[16:00] Brennan: – but he makes a killing. If you look at his income reports, he does most of his sales through webinars. I think it’s useful because traditionally, when most of us think of doing a paid advertising campaign, it’s usually: let’s drive people to the marketing site and let’s get them to hopefully buy. But when people are on Facebook and just browsing the web, usually not in a “pull out my credit card and buy something” mood. They’re just casually looking around. If you can find lower ways to convert people from a paid campaign through a webinar opt-in or an email course opt-in or something, I generally think that’s a lot more effective than just driving people to a product webpage.
[16:42] Mike: Part of the way you need to think about it is putting them at the first step of what your sales funnel looks like. Ultimately you want them to buy something way down the road, but there’s a series of other steps you want them to go through first, or at least start them on that path. Even if you get one touch with them, which is an advertisement of some kind, they’re probably not going to buy right away.
[17:03] But, you need to get them on that path somehow, and using a webinar says, “Hey, just give me your email address and I’ll send you a link to this webinar and you’ll get a bunch of free educational stuff that’s going to help you out. If it doesn’t help them out, they’re probably not coming back. But if they do find a value in it, then they’ve started on that path and they may start looking at you more. Eventually, they’ll say that they’re finding value in this, and paying money to get the product they’re offering is ultimately going to benefit them far more than just listening to free webinars.
[17:35] Brennan: I think it’s harder for you to promote to somebody who doesn’t already know who you are to ask them to blank out their calendar and attend a webinar. I’ve seen them offer something immediately too, like a worksheet or PDF report – something they get immediately upon opting in. That way – it’s not like when you see a Facebook ad, you click it, you opt-in and wait a week before you get anything – you get something immediately. But, you’re also hoping they can attend the real event, which is the webinar.
[18:05] Mike: Yeah. You’re kind of satisfying that need for instant gratification that we’re all used to on the Internet.
[18:09] Brennan: Right. A lot of people will say, “Fill out this worksheet before you attend”, because a lot of it will be in line with what they’re going to be presenting on. Say I was doing a webinar on pricing. I might give people a worksheet, “Now fill out these questions about your experience pricing, what fears you have around pricing”, just so they can get that emotional buy-in into what the webinar will be covering. So if you give them something of value immediately, that thing of value needs to coincide nicely with the webinar itself.
[18:37] Mike: What I’ve seen, I think LeadPages did this, when I registered for one of their webinars I went into it and looked at what they sent over, and it was actually a worksheet that went along with the webinar. Their webinar was going to walk through a bunch of things, and it was almost like a mad-libs thing. That is what the worksheet was. You had to fill it in, and it didn’t make much sense unless you actually attended the webinar to be able to connect some of those dots. So, it was kind of interesting, but at the same time I looked at it and said, “This is going do make me do some work”.
[19:08] Brennan: You could just offer a free report or a free eBook download or something too. That isn’t as intensive. Like you said, you have to rack your brain and think through stuff.
[19:19] Mike: You can tap your own email list, you can leverage some paid advertising or use social networks like Twitter, LinkedIn, Facebook, and various ads and stuff within those. Are there any other ways you can think of that people can use to drive people to a webinar?
[19:32] Brennan: I’ve had a lot of luck over the past few months with something called a joint-venture webinar. And what that is, is I will approach somebody in the complimentary audience, someone who has done the groundwork of getting an audience of consultants, and I will say to them, “I have a product that I think could be really valuable to your audience, but on top of that, I want to train your audience for free on a gist for my product”. There will be a soft up-sell at the end for the people who get a lot of my training and want to take it to that next step. But it’s not a overrated right, it’s not a hard sell. On top of that, I want to offer you, the audience owner – let’s do a rev-share of any sales that come as a result of that.
[20:10] So, I think there’s huge benefits for this. First off, if you go to an audience that has maybe tens of thousands of people, if they promote your event to their list, not only do you have a lot of potential sales that can come from that, but you’re also going to grab a whole lot of email addresses. You’re going to get a lot of new opt-ins, which is awesome. It’s hard, because unless you have a track record of your product and yourself being capable of delivering a large amount of value – if you have something untested. If you have a new product and nobody knows who you are, and you go to somebody with a list of 100,000 people and say, “Will you promote this?”, you’re probably not going to get very far.
[20:46] But, I would look out for people that are either in your immediate network that you know through conferences, or whatever else, and try to come up with something where you can say, “I want to provide value to your audience and make your look better to your audience by giving them something”, and then basically having a self-segmenting offer to them which is: if you want to take this product to the next level, I have a product that will help you do that. But if all your webinar is doing is trying to sell the product and nobody gets any value from it, no one will come back. And on top of that whoever promoted you is not going to be very happy with you.
[21:20] Mike: So this is more about credibility with these people you’re trying to tap into for a joint venture. You might be able to go to them – If you pre-record something that might help. But I think you’re right. You almost need to be making that pitch to someone who is at your level or even a little bit above. You probably don’t want to go down. If you have a list of 1,000 people you don’t want to approach someone who has 10,000 or 20,000 because the return for them is probably not nearly as big as it would be for you. So, baby steps up, but you’re not going to be able to make those huge leaps that you might have read are possible on TechCrunch.
[21:53] Brennan: Yeah, they’re going to want to see proof. If you’ve done this to your own list, and you can point them to recording, that’s much better than having nothing else before that. You should definitely do this first with your own audience and start there and maybe eventually doing a joint-venture.
[22:07] Mike: One of the things you touched on earlier was when you’re driving people to the lists and being able to give away different things so that whether it’s a white paper, various ways to entice people to sign up. What is typical for the registration rates? I think you said some of them for your own lists you’ve seen upwards of 85-90% for opt-in rates. What would be the typical range of other options? So if it’s paid advertising, what sorts of things can people look at to say “I’m doing well” or “These are areas where I obviously need to improve” because maybe somebody’s getting 20% and they’re thinking that’s great, but realistically they should probably be getting 40-50%.
[22:46] Brennan: I think you should definitely be getting upwards of about 50%. Everyone I know who has registration opt-in pages for webinars seem to be getting above that. The thing you don’t want to be doing is to have too much stuff that it’s keeping someone from opting in. It’s the typical squeeze-page set up where you don’t have much. You have a headline, a very basic sentence or two on why they should attend, the date and time it’s at, a type in your email, “click join”, then maybe under that, a bit about who you are and maybe four or five bullet points on what they’ll get from it.
[23:21] I think the more you add, the less likely someone is to opt in. At this point, you want to have as many people as possible opting in, because after they opt in is when you want to try to get them to actually attend. I think a lot of us will look at, “Oh yay, I got 1,000 people” to opt in or register, but then 100 people show up. Show up rates are very, very minimal. There are some things we should talk about how you can get more people to attend.
[23:48] But, one of the things I love about the joint-venture approach is that even if you get 1000 registrations but only 200 people show up, you still have 1000 new people on your list. This same thing applies for paid acquisition, doing social marketing, any sort of thing like that. You should definitely be aiming for above 50%. I think a really good squeeze-paged with not much you can do except put your email address in and click a button. You should be getting closer to 90%.
[24:14] Mike: I think those are great numbers for people to have at their fingertips. Now what about follow-up referrals and things like that? I’ve seen some landing pages where after you put in your email address and said yes you will claim your spot and confirm to attend this event. I’ve also seen pages where they’ll ask you to help promote it by sending out a tweet, or emailing friends. Do you see that those types of things work well? Or no?
[24:39] Brennan: I have actually. What I will typically do is on the confirmation page is I’ll have a to have a “Share on Facebook, Tweet this” link and say “thank you”, and I also have a widget that will let them add it to their calendar. Basically the confirmation page is: stick it on your calendar and why don’t you tell somebody about it. But in the email that I send out. So, immediately upon opting in I send a welcome email. And this welcome email it’s very simple. It’s basically, “Hey! I’m really excited. I can’t wait to see you at the live event. Can you do something for me?”. I have a form that will help me learn a bit more about who you are and what you need to get out of this event.
[25:14] If you’re going to give me an hour of your time, I want to make sure I cover what you need to hear. So click this link fill out this form, it will take you about a minute. And just tell me a bit about what you need to hear from me on whatever date the webinar is. That’s just a link to a Woofu form, or it can be a Google form. But it’s literally, “What made you want to opt in?” “What drew you to this?” and also “What are you hoping to get out of this event?” And what I found is when people filled that out, and I found about half of the people who have ever registered for my webinars end up filling out that form, I get a lot of raw data.
[25:46] But on top of that they’re much more likely to actually attend. Because now they’re vested. They’re engaged with the event before it’s even happening. If they’ve taken the time to say, “I’m hoping you cover x, y, z”, the likelihood they’ll attend is much higher. But on top of that after I link to that form, at the end of that form I say can you do one more thing for me “I want to do my best to make sure I address whatever it is you just put in that form. But can you try to get one or two new people from your network to attend that you think would get a lot of value out of this?”. I’ll usually have about three tweets that they can copy and paste.
[26:22] And I’ve gotten a lot of people. Like whenever I do these events I’ll have a lot of people on Twitter sharing the url which gets even more people into it. So, that’s typically what I’ll do for that first welcoming email that I send out immediately on opt in.
[26:37] Mike: So, this sounds like taking the corporate face or feel of the company that’s behind the webinar and putting a person’s face on it to say, “Although you’re getting a webinar with such-and-such company, you’re actually talking to me Brennan Dunn”.
[26:51] Brennan: That’s right.
[26:52] Mike: It’s just got that personal feel to it, so you’re creating this one-on-one relationship with somebody. Not necessarily, “I have a webinar with BidSketch or whatever the company is”.
[27:01] Brennan: Nobody wants to go to a webinar to talk to BidSketch the company. They want to talk to a person, so I think it’s important that whoever’s going to be presenting for the company is the one that needs to be behind these emails.
[27:13] Mike: Some of those emails obviously are aimed at increasing the likelihood that people are going to attend. What are some of the other ways? I think an email sequence and timing that email sequence leading up to the event is also a good way.
[27:26] Brennan: You need to get people excited. You really want to make sure to get people to attend. Mine would change depending on how far out the event is. I’ve done events where I’ve opened that registration a few weeks in advance, but typically those don’t perform as well. I’ve found that just sending an email starting to promote the event less than a week before it happens those tends to be the most effective in terms of turn-out and how valuable that event was.
[27:51] I’ll typically send a welcome email, and usually another email on a weekend – the Sunday before. Usually I’ll run events Tuesday or Wednesday. I’ll send this on a Sunday, and I’ll basically say “Are you ready?” in the subject. Inside, I’ll reiterate why I’m excited to have them to attend, but then I’ll copy and paste a few of the responses I got from people and almost use it like testimonials. Like, “I’ve struggled with pricing myself at $20/hour for years, I don’t know how to get out of that. I can’t wait to figure that out. – Laura” or something like that. I’ll do this for maybe four or five of the responses that I got.
[28:29] It’s really just a way to really not only have another way to promote that hey if you haven’t filled out the form. Fill it out so I know. But also as a way to showcase that first off there are other real people attending and secondly people are like dying for this info and I plan on sharing how to fix these different problems that I’ve just listed out. So it’s just a way to kind of again remind people “Hey! You got an event coming up”and on top that really just build that excited for them to attend. I usually send it the Sunday before the event and then again if my event’s on say Tuesday, and let’s say it’s at 7am my time, I’ll send out a reminder saying, “By the way, the event is coming out later today” and I’ll also give people the live-link for the first time. I’ll tell them to set an alarm on their phone, make sure it is on their calendar, they won’t want to miss it, and that even though there will be a replay, you can’t ask questions to a video. If you attend live, you’ll have an avenue to ask questions about what I’m presenting. So it’s really important that they show up live.
[29:29] Mike: Now these are all things you can schedule well in advance because people sign up for it. This is specifically for the mailing list that you’ve set up for this particular webinar. Do you go back to your primary email list and continue trying to get people signed up for the webinar? How do you manage the back-and-forth between those two lists? I don’t think you want to beat your existing subscribers over the head with your webinars, because if you’re doing that, it’s almost like you’re abusing the privilege of having their email address.
[30:00] Brennan: I agree. I will typically only send two or three emails max about a webinar. It’s easy for me to do this with Infusionsoft – I can filter out people who have already registered from getting those follow-up emails. So if you’ve already opted into the webinar, you’re not going to get that reminder email to the general list about the webinar. I do that.
[30:19] Mike: So when you are giving the webinar. Let’s talk about the different things people can do to keep people engaged when you’re giving the webinar, and the types of logistical things you need to deal with during the webinar. So I think the first one is Should you record it? In some ways this is a no-brainer. You’re using the Hangouts which automatically records it so you don’t necessarily have to worry about that, but the question is: now that you have the recording, should you do anything with it? Should you repurpose that recording? Should you send it to people afterwards? I think there’s some pros and cons there that you might want to talk a little bit about.
[30:52] Brennan: I’ve done experimenting on record, not record – obviously you always record it, but do you share the recording or don’t you? What I found works best. The beautiful thing about Hangouts on Air is that live page you send people to to watch the webinar. If they were to refresh that page or go to that page after the event, it will automatically start playing the recording. That’s just how Hangouts works.
[31:21]So what I’ll typically do after the event, and this is part of that auto-responder for the pre-event and post-event, about two hours after the event I’ll send out a replay email where I’ll say, “Hey you guys are awesome, thank you so much. For those of you who couldn’t make it, here’s the video. But there is time-sensitive stuff that I mention in the video, so I will need to take it down on this date at this time”, which is typically the end of your sales window.
[31:37] This way people who are geographically all over the planet can watch it on their own time. Usually it’s a day or two window period I’ll set up. But the benefit of this it’s not an open-ended, yeah you can watch it from a year from now if you want. There is still some urgency behind it. You want people to watch the video especially if you have a timed promotion. No one will act on that promotion probably until they’ve seen the webinar probably. So, you want as many people as possible to watch the webinar. So I’ll usually do a replay, but take it down after a certain amount of time.
[32:07] Mike: Yeah, I think that’s really really great advice. When you’re running the webinar, why don’t you talk about some of the objections some people have, and how you address those directly within the webinar.
[32:17] Brennan: We’ve been talking a lot about the webinar but we haven’t talked about what’s in the webinar – format-wise and everything. The formula that I use for putting these together – I’ll start with ice breakers where I ask people where they’re from, what they do, and livechat is great for this because they’ll just type it out and I’ll respond to people in real time.
[32:38] Then I’ll jump into the training. Within the training there are two schools of thought. The first is you can either gloss over your entire product. Let’s say you have a course. You could sum up the entire course in the event, but still make it so even if somebody doesn’t buy the course they can still learn something, or alternatively you can drive into one specific part of the product. So with my product, Planscope, I could talk solely about client communication and how important it is to keep your clients addressed on what you’re working on, progress, budget usage, and everything. The selling point could be that Planscope does this.
[33:13] It also does a lot more. I would have focused on one core feature. That would allow me to do future webinars that allow me to hop around the future benefits that the product provides. You’ll typically do this training, and I usually spend about 30 minutes doing that. You need to have a bridge. Let’s go back to Auditshark. Let’s say you presented on the importance of security and how vital it is to have a secure system. The bridge that ties the training in with the product is something like this.
[33:45] On one hand, you could do what I did with Auditshark. I manually went in to all of my machines to make sure all of these settings were set. It took a lot of time. I was manually addressing and diagnosing and running diagnostics all the time on my machines. It took a lot of time. Or you could do what I’m doing now, which is, why I built Auditshark which is, you pay for Auditshark and we’ll do the majority of this for you. Do you want to go the shortcut or the long road?
[34:13] The training should set people up so they are equipped to take the long road. You can teach them about how to do what Auditshark does automatically. You could train them on how to do it manually. Basically, the pitch is really: if this is stuff that matters to your business, and your time is valuable enough where you don’t want to do all of this manually, here’s the product for you. I’ve built the product that automates much of this.
[34:36] Mike: That’s exactly what I did with my webinar. I basically talked about how to implement a security plan, which was geared more toward: these are the things that you should be doing. Then walk them through that process on how to do that stuff, where to start, where to finish, and what are the different gotcha’s and what sources of authority you should be looking at. Then walk into the process of how to verify those things inside of your environment.
[35:00] Then it was like – by the way, if you want to not have to go to every one of these machines individually and check all of this stuff, this product will do it automatically for you. It will pull back on everything and you can report on it and you can slice the data however you like.
[35:14] Brennan: If somebody doesn’t value their time all that much, they can take what you train them on and do it themselves manually, right? But, The goal with Auditshark in this case is to remove that need. Remove that time spent. It’s like when I sell Double Your Freelancing Rate, the way I sell it is: this is stuff I literally spent years of trial and errors on writing proposals and qualifying new clients. How do I do all of this kind of stuff?
[35:38] I packaged that into a start-to-finish framework that is this product. it’s really like, yes. You can take what I just covered and practice and tweak things and everything else, or I have a product that will help you get to that finish line and goal, which is the reason your hear, which is a lot faster than how you would get there otherwise.
[35:57] Mike: That’s a great tactic in general because you’re talking about what they’re doing, what are the different ways they’re going to accomplish whatever the ultimate solution would be, and walk them through the pains they’re having. It’s actually reinforcing the problems that they have to go through to do this. Maybe they know some of the different things they’ve learned over the years to get from point A to point B a little bit faster, but the tool is really what drives the value. That tool automates a lot of it. You’re trying to walk them through to this point where they recognize where they are today, and they realize what the potential solution is for all of their problems with the service or product that you’re offering. At that point, it becomes a much easier sell to say: Hey if you give us your credit card, we can solve most of these problems for you very quickly. You don’t have to worry about them ever again.
[36:48] Brennan: After you do the training with that kind of pitch, I definitely think there needs to be some sort of urgency factor – whether that’s a discount, or some added benefit, or something like that. I’ve found that having a day or two to get it at that discount or with that extra benefit is typically ideal. I’ve found that 40% of people who end up buying do so within an hour or so afterward. The other 60% actually come with the emails I send after the live webinar.
[37:22] I already mentioned the first email which is the replay, which also includes a worksheet I put together that is actually in the course that I give away for free. It’s a worksheet that coincides with a lot of what I covered in the live event. So I give that away also for free along with the replay in that first email. The next day I’ll send out another email where I overcome objections. Somebody attended or they watched the replay, and they’re thinking, “Well this is all great, but is it really for me? Am I at the point of my life where I really need something like this?”.
[37:52] So I really just help people self qualify. I tell them “If this is where you are then yes you should do this.” But if this describes you then maybe you should do this first. So it’s just a way to really help qualify people into does this really make sense for them to adopt product which is being pitch and it’s also a great way to really further described on paper this time in writing with a bit about include sales copy on the value and benefits of the product.
[38:18] And that will typically be the second email I send. Then I’ll send a final email, which is usually a few hours before the sales wrap up. I say, “if you haven’t watched the replay yet, do it, because I need to take it off because in that replay I give out this coupon or this offer code that is going to go away. It won’t work anymore so I’m going to be taking down the video. So please watch it soon.” I’ll also include a link to the slide-deck that I used. I’ll also include a closing testimonial that really is meant to drive people to it.
[38:50] Mike: So, we’ve got the follow-up email sequence, the link to the replay, any additional documents or materials, a link to the slide-deck. There’s a very specific sequence that you go through that essentially winds down the webinar. You have the intro emails leading up to the webinar, the webinar itself, and then it winds down to whatever the end of that sale or promotion is for that webinar. Is that right? –
[39:12] Brennan: That’s right.
[39:13] Mike: I think that’s a very regimented sales process you’ve probably tested quite a bit. Correct?
[39:17] Brennan: Yeah. Like I said, I’ve done this 13 times to other peoples’ lists and about four or five times to my own list, and I’ve definitely iterated on all of this. The way I have just outlined, for what I’ve been doing it, is most ideal. I’ve seen people who don’t do replays, people like Ramit Sethi do not offer replays, so you either see it live or you don’t see it. I think that there’s a lot of pros to that, but you could also be missing out on some.
[39:42] There are a lot other interesting things you can do. Another thing Ramit does. Is he will do things like he will ask questions live. Usually not questions, more like things he wants people to agree with. Like, “Have you ever feared X?” “Have you ever feared that a hacker could get into your server?” or something. And then, “If you have, let me know in the chat”. Then he’ll get a flood of, “yes yes yes” and it’s kind of like a psychological mass-confirmation thing. So I’ve seen that work.
[40:07] There are so many different techniques and strategies. I think ultimately, you need to have a way to excite people to attend. You need to have an event that is informative, educational, and more importantly ties really nicely in with the product you’re trying to sell. Finally, you just need to close the deal afterward.
[40:26] Mike: I think that’s all really great, sound advice. One thing that might be in the back of people’s minds at this point is that they may have a fear of running webinars. What are some of the fears that people might come across in trying to set up their own webinars. One that comes to mind I’ve seen other people mention before, is “What if I host this webinar, and nobody shows up”, especially if you have a live chat there where people can see how many people are in the webinar. I think with your implementation of Chatroll then, if everyone can see what everyone else is chatting, then that might be a very valid concern. What are your thoughts about that?
[41:00] Brennan: I would use some discretion in that. If only ten people register, I would probably not put Chatroll up, just because that means probably one or two people would attend. I think that would be a little of awkward. I think there’s room to tell people to tweet questions instead of having a chat box. That’s another thing I have seen people do, especially when they don’t have a chat element.
[41:23] Chat elements are good, but if you don’t have one, no one really knows. You could have one person watching live, or 1000 people. To the attendees can’t discern how many are attending, right? You can’t really fail. One person attending is not failure. It’s not the goal you were hoping to hit, but it still gives you practice and helps you build confidence so you can do it better next time.
[41:44] Even if nobody attends, you can just try it again. Figure out why people didn’t attend, you can reach out to people. Email everyone. One thing I like doing if you have a small list – I used to do seminars for my agency where we would basically do this, but offline at our office using seminars and networking. One of the things that worked really well when you have a smaller audience is to email everyone individually who registers and say basically that first email I mentioned – do that, but don’t do it as an auto-responder.
[42:12] Do it as a, “Hey Mike. Googled you and found your website. Awesome! It looks like you’re doing this really cool! Can’t wait to have you here. Can I ask you a few questions? I’m still wrapping up on the material I’ll be presenting on, but I want to ask you specifically, Mike Taber, some questions. I want to know what you’re looking to get out of this so that I can really tailor this event just to you.
[42:31] If you have a smaller list and you’re thinking the reception won’t be as big as you want it to be maybe- I’ve had 900 people attend live, so I couldn’t do that with them – but if you’re talking about a list of maybe a few 100 people, it might be better for you to be a little more personable and to actually turn off some of the auto-responders and write people manually.
[42:51] Mike: And the other thing you can do which I actually did was I went through the list of people who signed up for my webinar and I picked out different people to see what companies they were in – essentially using their registration email address from. Even people who registered with Gmail accounts I was able to backtrack through Reportive and identify people through LinkedIn and there were people who signed up from 25,000 employee companies, like Senior IT Auditor at a public company. It’s like, that’s a really good lead. I want to touch base with that person. Those are the types of things you can also do.
[43:22] Brennan: Right. I think it’s very valuable, both for learning – You’ll get to learn who your audiences. It’s just a lot more than just knowing you have 500 people on a list. It’s so much better when you know actually who is on that list.
[43:36] Mike: That leads me to the very last question. After people have signed up for the webinar, whether they attended or not, what do you do with those email addresses afterwards? Do you essentially add them to your main list? Or what?
[43:47] Brennan: That’s what I do. I’ve seen it work really nicely by having a P.S. segway in your last email saying, “By the way next week I’m going to be writing to you on (whatever your theme is)” and I want to maybe say “if you’re not interested in getting my weekly emails on consulting, just click the unsubscribe link at the bottom of this email”, and then by default opt-in anyone who doesn’t do that.
[44:07] Mike: Very cool. Well thank you for coming on the show Brennan. It was very educational and I think a lot of people are going to get a lot out of this. Where can people find you if they want to hear more from you?
[44:15] Brennan: Awesome. So thanks Mike first off for having me. I finally have a new centralized website. It’s doubleyourfreelancing.com. It has three plus years of weekly blog posts on consulting, along with all of my courses and everything else. It also has if you want to send me an email. The about page there’s a link to email me.
[44:33] Mike: Excellent, we’ll link that in with the show notes. If you have a question for us you can call it into our voicemail number at 1-888-801-9690. Or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Out of Control” by Moot, used under creative commons. Subscribe to us on iTunes by searching for “start ups” and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening.
Episode 208 | How To Productize Your Service with Brian Casel
Show Notes
- CasJam.com – Brian Casel’s website
- Bootstrapped Web podcast
- Productize – a course on productizing your services
- Restaurant Engine
Transcript
[00:00] Mike: This is “Startups for the Rest of Us,” episode 208.
[00:02] Music
[00:10] Mike: Welcome to “Startups for the Rest of Us,” the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product, or you’re just thinking about it. I’m Mike.
[00:17] Brian: And I’m Brian.
[00:18] Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made.
[00:21] Well, Rob is still away on vacation, so I have the pleasure of having Brian Casel on. If you’re not familiar with who Brian is, he the founder of Restaurant Engine. He writes and teaches at casjam.com, and he’s the co-host of the “Bootstrapped Web” podcast.
How are you doing today, Brian?
[00:36] Brian: Doing great, Mike. Glad to be here. Thanks for having me on.
[00:39] Mike: The topic that you wanted to talk about was productized services, and this is a topic that Patrick McKenzie has brought up a couple of time at previous MicroConfs about how people can essentially move from more of a consulting model into a software model, where they’re selling software instead of selling just services. But, you know, there’s this gap there where you don’t necessarily have enough money to be able to just work full-time on the product, but you’re making so much money from the consulting, you can’t necessarily just drop everything and move over to product; because then you’ve got this mismatch between what your cash flow looks like and what your future revenue looks like. So, a productized service essentially kind of bridges the gap a little bit where you have this product that you’re selling, but it’s still a service on the back end.
[01:21] I wanted to have you on and discuss that quite a bit more, because I think it’s a very interesting way that people can essentially take their products that they’re working on, that is still essentially a more of a beta format, and not necessarily ready for the open market. Or, they haven’t quite figured out exactly how to address the marketing and use that as a mechanism for bringing in revenue while they’re still developing those products.
[01:43] Brian: Yeah, exactly. I mean that’s a perfect example of it. What’s really exciting to me about productized services is that there’re a number of different directions that you can take and kind of plug them into your business, whether you’re just starting out, or you’re in that transition, like you said, between consulting and moving into a products business; or, you know, what I’ve even seen as well is you already have a product – you know, some kind of software product, plugging in a productized service component to that – another trend that I’m seeing. I’ve been researching this quite a bit, writing about it, seeing it in my own business as well. So, really excited about talking about productized services.
[02:16] Mike: There’s two, different perspectives that I can see here. One of them is from your customer’s perspective, and then the other one is from the founder’s perspective, the person who’s actually putting together the service. So, why don’t you talk about those two, different things and kind of what some of the research you’ve done has come up with and what some of the different things you’ve done in these scenarios is.
[02:33] Brian: Yeah, exactly. And, you know, if you’re a freelancer and you’re used to billing by the hour, or working project to project, productized services work a little bit differently. So, from your customer’s perspective, a productized service offers a specialized, done-for-you solution with a compelling value proposition. And it’s packaged at a set price and scope, so there’s really no negotiation, or writing a long proposal, or going into these discovery meetings that often happen in consulting work. “This is the scope. This is the price. It offers this type of value. Buy now.” And then, you know, from the founder’s perspective, a productized service is one that runs systematically, and it continues to produce and grow with or without your direct involvement. And I highlight “with or without,” because there are so many different types of productized services. And we can kind of get into them in a minute, but whether you want to remain solo and do like a productized consulting, or actually grow it – grow your team and focus on systems, you could actually design your productized service to run without you.
[03:35] Mike: I think one of the most interesting pieces of this is – you know, from the customer’s perspective, they’re essentially paying you to do a particular job; but you are in some ways decoupling the hours worked from the service itself. So, you’re no longer billing by the hour; you’re billing for the project itself. And in many ways, you already have a good idea of what the billable hours would have looked like anyway, but you want to essentially decouple those things so your price is not tied directly to the number of hours that you’re working.
[04:04] Brian: Yeah, exactly. It kind of goes to that idea of value-based pricing – right? So, you come up with some compelling value proposition, a very specific service that really benefits one type of customer; and you price it accordingly, and you define the scope of that service accordingly.
[04:21] Mike: The other side’s interesting, too, because from the founder’s perspective, you can start plugging other people in and, as you said, you can essentially scale it. So, if you just want to be the person doing the work, then you can do it; but you can also substitute other people in. And there’s lots of people who are doing that successfully.
[04:35] So, let’s talk a little bit about some of the different scenarios where productizing a service might come into the picture? The two that you had talked about before the show were launching a new product and then if you’ve already launched a product. So, let’s talk about those a little bit.
[04:47] Brian: You know, productizing, again, it comes into play in so many different types of scenarios. But if you’re launching a new product, you’re transitioning from consulting into products, or transitioning from a full-time job into a product business. You may not have the time or the money to invest into building something really big like a SaaS app, like a complex mobile app or something. So, you need to launch to paying customers quickly, and a productized service is a great way to do that. You know, you can pretty much begin productizing a service that you’ve already been doing as a consultant, or something that you’ve done at your job; package it into, again, a value-added, productized service.
[05:26] If you have a product and maybe you’re struggling to gain that initial traction, or you just want to find ways to add value to what you’re doing – and this really comes from my own experience with Restaurant Engine. It originally launched almost three years ago as a SaaS, and technically it still operates as a SaaS, you know, from the monthly and annual billing standpoint. But over the last three years, it really has evolved into much more of a productized service as we began adding manual, done-for-you services at every level. So, we do web design for restaurants. My team manually on-boards every new client, and we manually set up their entire website, input all their content for them. We’ll even make ongoing monthly updates to their website for them. All this is done manually, but I’ve completely removed myself from the process, built loads of systems and processes. And I’ve delegated all these tasks so that I can remove myself. I can focus on the bigger picture, kind of focus on marketing and then even take a vacation once in a while.
[06:26] Mike: I think one of the best parts about that is you can take things that you’ve already been doing for your existing customers and essentially just repackage them.
[06:34] Brian: You know, what we’re just beginning to do now with Restaurant Engine is we’re beginning to add an option add-on service, which is we’ll actually manage their email newsletter for them. We’ll create the email newsletter and send it out on their behalf. And this is an optional, done-for-you service that we’re adding on top of it, and we’ve been offering that to our existing customers.
[06:53] Mike: So, essentially, all you’re doing is going back to your existing customer base and offering them either services that you’ve already been doing on kind of a prepackaged basis, or you’re coming up with new services that you’re offering to them on that packaged basis. And that way, you can substitute anyone in on the back end that you need to, based on whatever that service provides for them, or special customizations, or something like that that go a little bit beyond what the standard package offers. That gives you the flexibility to do that stuff.
[07:18] Brian: Yeah, exactly. I mean we’ve designed a service with certain limitations built in, but then there’s also some flexibility there. We have a platform and framework in place, and we’ve built in a lot of customization tools that make it fast and easy for us to set up a customer’s website. We also have the ability to customize to a certain extent, like we can add custom CSS to a site and make certain tweaks; but there are limits to that, and those limits are put there for a reason – because, again, this is a productized, focused service. This is not consulting, where we can literally just do anything and everything the client dreams of.
[07:54] Mike: So, I think that’s probably an important piece that we want to dig into a little bit – is what sort of edge cases do you need to identify as places where customers might try to take advantage of what the service is? And how do you essentially protect yourself from those types of things so that not a lot of back and forth? How do you go about identifying those types of things in your service offering, and how do you protect yourself?
[08:16] Brian: You know, you can just look at so many others who are doing this productized consulting, or productized service, to two that I’ll highlight here: Nick Desabato and Jarrod Drysdale. Nick Desabato launched Draft Revise, which is like a monthly A/B testing optimization service that will help you increase conversions on a monthly basis. And he very clearly spells out on the landing page for his service, Draft Revise, exactly what’s included; exactly what the client can expect; and the type of results that his other clients have seen. So, it’s really just laid out and setting those expectations right from the start. I mean before a customer even decides to purchase, or decides to get in contact with him, they’ve basically read through his landing page and seen all the terms.
[09:04] And then the same is true for Jarrod’s site, LandingPageinaDay. You know, again, the landing page does just a really great job of setting those expectations; and, of course, his service is what it sounds like. He’ll design and build a landing page for you in one day. Even in the title of the service, that basically defines the scope – right? Like, he’ll start in the morning, work on it throughout the day. He’ll write the copy for you, and by the end of the day, it will be launched. And I think it says somewhere on its site if you needed additional revisions, additional tweaks and things that go beyond that day, he’s available – clearly at an additional cost.
[09:40] Mike: I think those are very interesting examples, because they kind of highlight two, different sides of the spectrum. With Draft Revise, you’re essentially getting this monthly, ongoing service versus the Landing Page in a Day, which you’re essentially hiring somebody for one day of work. But in both cases, I think it’s very clear what you’re getting at the other end of it, so the value is very, very clearly defined.
[10:02] Brian: Draft Revise has been designed to offering recurring revenue, and that is a fantastic way of building a business, of course. You know, with productized services, you can go in so many different routes. You can go with, like, you know, a one-time purchase type of deal, or the recurring revenue route; and you can even do a combination of those. I think Nick, on his Draft Revise service, actually offers both. He now offers Revise Express, which is kind of like the one-time audit where he’ll give you a clearly defined list of recommendations, or tweaks, that he would recommend for you to increase conversions on your website; and then clients have the ability to upgrade to the monthly Draft Revise service. And I’ve seen that again and again in a lot of these productized consulting – what’s basically known as “the ladder,” where you offer a one-time service and then the option to upgrade to a recurring service.
[10:52] Mike: We’ve talked a little bit about exactly what a productized service is and the different places where you might use it, some examples of other people are using it and how they’re using it. What’s the first step to productizing a service?
[11:06] Brian: You know, it’s really all about focus. So, you want to focus on one service, and you want to focus on customer. That usually starts with the service. Ideally, you want to pick something that customers have paid you for, have paid you to do, if you’re coming from consulting. So, you could even look at the types of projects that you’re doing, or that you’ve been doing, and break those down into individual services. So, you know, for example, I come from a background as a freelance web designer, and I might – my background – you know, I – one component is setting up a WordPress site.
[11:38] Another component is designing mockups. The list goes on, but you can kind of pick one of those things to really focus on. And you also want to look for a service that somebody has actually paid you for, and that’s really important because that indicates that there is a real pain or problem to be solved. The other aspect of picking one service is you want to look for something that can really produce specific results that can then produce compelling case studies. So, you look at something like Nick Desabato’s Draft Revise, and his case studies show actual increase in conversions with hard numbers. You want to look for those things. And then you also want to focus on choosing one customer to sell your service to. Of course, you’ll have a couple variations of the types of clients that you’ll work with. You want to be as focused as possible, because that makes everything so much easier. You know exactly who your customer is, and you know how to tailor the service to meet their exact needs and help them be extremely successful.
[12:36] And as you go about narrowing down one customer to focus on, there’re a few things that you can look for. Number one, you should be looking for businesses with money to spend. From what I’ve found, all the productized services that I researched they all tend to be B-to-B services, working with businesses who have a monthly operating budget to spend. Niched verticals can be easier to reach. I’ve seen that in my business Restaurant Engine, so we’ve basically only worked with restaurants and food trucks, and that’s a very tightly niched vertical. That’s one avenue to explore. Or, whatever industry you’re in, maybe find ways to get more specific. And then you also want to consider the right audience for you. So, what type of people are do you like to associate yourself with? If you’re doing a lot of content marketing, or you plan to do content marketing, who could you actually content ? You don’t necessarily have to end up writing all the content yourself, but in the early days you probably will. So, you want to keep that in mind. Another thing that I like to think about is what kind of conferences can you see yourself attending. You know, would you go to a conference with this type of audience? So, keep these things in mind as you’re narrowing down on that one customer to focus on.
[13:46] Mike: I think one of the things that you said there that’s really important for people to understand is that you are looking to productize a service that you’ve already performed for people and that you’ve charged them for. And the reason that’s so important is you know that there’s already a business there. It’s not like you’re creating something out of thin air and you’re trying to sell it to people, and you don’t necessarily know if people are going to buy it. If you’ve already performed it for people and you know that they’re willing to pay you on an hourly basis, or a weekly basis for it, it makes it so much easier to essentially define the limits of what that service is going to entail, but also to understand and fully appreciate all of the different things that are going to go into it. So, if you’ve never worked with a customer before, and you go to try to sell them on a particular service, they may very well have questions for you that you have no idea how to answer, so you aren’t able to clearly talk about those different points inside of your service offering.
[14:39] But if you’ve done that before, you know the different edge cases that are going to come up. You know the different pain points that people are going to hit and how you’re going to deal with them, because you’ve done it before. And I think that being able to clearly and solidly answer all of those questions for people, even before they’ve asked those questions, is very key to being able to sell some of these productized services.
[14:58] Brian: Yeah, exactly. What I also like to look for are the types of questions that come up from whether they’re new prospects or existing clients. A lot of times, you’ll hear a lot of the same questions come up again and again, and those are really big indicators of a particular point in the service, or a type of service that’s kind of the deal breaker. Like, if that’s not included, then the project is not going to happen. For example, looking back when I was a freelance web designer, it got to the point around 2011, 2012 where almost every, single prospect that I spoke to asked about mobile websites. Will the site be mobile optimized? And that just became a deal breaker. So, if I were to productize that service, that would be something that I would think heavily about.
[15:42] Mike: So, let’s talk about scaling services like this. How would you go about scaling this? I think one of the big things that comes to mind is being able to clearly document not only the resources that you need to go into the project, but also what that output is going to look like.
[15:58] Brian: Yeah. I hear this question a lot: “Can a productized service actually scale?” We are talking heavily about manual processes, doing things manually, done-for-you services. So, how can that actually scale up? And looking back when I started Restaurant Engine, my dream was to build something that literally runs on its own. Over time, we’ve added more and more manual services, but at the same time, I’ve been able to remove myself. So, my answer to that question is, yes, you can scale up a productized service; and the key is to focus on systems and systemizing every process. What I’ve broken down here is a three-step process to systemizing so that you can get to that point where you can actually begin to hire and delegate those tasks and remove yourself from the business. And what this really is all about is working on your business and not in your business. So, if you’re used to kind of pushing pixels in PhotoShop or coding, you want to remove yourself and focus on higher-level systems and process.
[16:57] Here are the three steps to systemization. It starts with standardizing. So, you want to focus on one particular service, like I said before. And, really, you want to focus down on one method or way of doing things. Or, choose not to do everything. As a consultant, we often do everything, but in a productized service we want to standardize and focus in on one service. There are always multiple ways of achieving the same result. Right? But we want to focus in on one method and commit to one way of doing things, and that just makes things more standardized and predictable.
[17:31] Mike: I think that’s a very important point to make just because – you’re right – when you’re doing a consultant engagement, you get in there, and your job is to just get things done; because you don’t necessarily fall under the same constraints that everybody else does who works in an organization. But I think that when you’re doing a standardized service like this, it’s very important to not get involved in some of these quagmires; because there are some tasks that you can perform that are just going to be an absolute nightmare. There’s no way that you’re ever going to be able to come up with a one-size-fits-all thing for everybody – for example, reporting. Reporting is a big thing. Some people like to have lots of reports in all these different formats, and I think that if you standardize and just say, “Okay, all reports are going to be in Excel, and this is what you get, and if you want customization beyond that, we can talk about it; but what come with this particular offering is just” – you know, “These are the Excel reports, and these are the fields that you can expect to see,” I think that’s a much more appropriate way to handle something like that, because reporting could become just one of those huge quagmires.
[18:32] Brian: Yeah, that’s exactly right. Just coming up with that one, standard way of doing things – it really comes back to setting those expectations up front; and that begins with your website, your landing page, and then the way that you speak about the service. It has that predefined scope. That’s what it is.
[18:49] Mike: So, what’s the second step to systemizing?
[18:51] Brian: Once you’ve standardized and made things more predictable, the next step is to look for ways to streamline the processes and make them more efficient. So, that might mean, again, adding new limitations. For instance, I mentioned we’re adding email marketing to Restaurant Engine, where we’ll be managing email campaigns for our clients. One limitation that we’re adding to that is they have to be on MailChimp. Our clients – we want them to be using MailChimp, number one, because it’s cheap for a restaurant owner to get started on; and, number two, it makes it easy for us to set one process that my team can then follow. They don’t have to learn how to use AWeber and Constant Contact and iContact. We’re sticking only with MailChimp. So, we’re setting a limitation there.
[19:32] Another idea here is to use one, common framework, or template. I mentioned Jarrod Drysdale, his Landing Page in a Day. He’s a great example of someone who actually started with software and converted it into a productized service. A few months back, he created a design framework called Cascade.io, which is kind of a product in itself. But now he’s using that product to streamline his Landing Page in a Day service. So, essentially, he’s using his design framework to speed up his process of designing a landing page for clients.
[20:07] Mike: And I think that’s a great example of taking software that you are using and working on to be able to complement your productized service, especially to help that product make money in a way that may not necessarily be obvious. I think most people when they do that, their goal is to write a piece of software and then be able to sell it to everybody they possibly can. That’s the way that they’re going to scale it. But at the same time, when you first release your software, it’s not necessarily finished. It’s not in a format that is going to be easy for the mainstream masses to be able to use. So, if you convert that and say, “Okay. Well, I’m going to create this product. Maybe it’s not quite there, but I can live with the limitations, and I know what those limitations are, because I wrote the software,” then you can essentially use it in a services fashion to help complement your skills and the ability to get things done that, without that software, you wouldn’t be able to do anyway.
[20:58] Brian: Yeah, exactly. And having that software built in the first place, you can use that to your advantage when you’re performing that service. It just drastically speeds up the process and makes it more efficient. You know, I found that in my service as well. With Restaurant Engine in the very beginning, we built in all these fancy customization tools. We wanted it to be a do-it-yourself service. Any restaurant owner can come in and create their own website. But what ended up happening is today it’s a productized service. We’re using those same features, but we’re using them internally, and now we’re able to set up a new website in just a matter of one or two days.
[21:33] Mike: In some ways, this reminds me of the idea which was essentially concierge on-boarding, which is the idea that you are having people come and sign up for your product; but at the same time, you’re essentially hand-holding them. You’re doing things for them that you would like for them to do themselves so that you don’t have to do it, but at the same time, it’s more important to get them onto the software and using it than it is to make it easy for them to do it themselves. I mean that’s not necessarily your goal. Your goal is to make them a long-term customer, and if you have to do those things up front to help get them over the hurdle, then you will.
[22:06] Brian: That’s a great point. I know that there are a lot of people interested in doing SaaS products and SaaS owners out there today. So, in the beginning, it was a concierge service – right? We were kind of adding the done-for-you setup complementary – you know, just to get you onto the service. And that worked pretty well, but then we actually started charging for it, and today we actually require every customer to pay for the initial setup service. What we’ve found is that when we do that, yes, the rate of signups obviously goes down. You know, we’re asking for an up-front fee, and to your credit card and everything; but we’ve found that those customers who do that and go through our setup service they stay. The cancellation rate goes to near zero at that point. So, we’ve found that’s a good balance for us.
[22:51] Mike: Dharmesh Shah of HubSpot had talked about this at the Business of Software conference a few years ago, because their service has – there’s a couple of different tiers. I think their lowest tier is $200 a month, and then the next tier up is $800 a month, and then above that I think it’s $2,000 or $3,000 a month. At the lowest tier, even, you have to pay for what they call a training session. That’s $500. And the second tier is a $2,000 fee that you have to pay just to get set up. Some ways a consulting services engagement where they’re teaching you how to use their software. People get this idea, “Oh, well, I’ve already paid $2,000 to get set up on this. I really should be using it.” Because if they make that mental leap [and] say, “Okay. I’m going to plunk down $2,000 for my first month and then $800 a month after it,” you need to just move forward and do it.
[23:37] Brian: Yes, exactly. And we have seen that, and we see customers who have paid the setup fee are much more engaged. They’re invested in the process. They’re willing to go through the on-boarding steps, like providing their content, or doing whatever they need to to get going and start being successful on the service much faster.
[23:57] So, the third step as we get into systemizing our service is all about documentation. It’s really all about your documentation. Now, it is incredibly important to focus on standardizing and streamlining first, but then as you begin to prepare to potentially hire and delegate these tasks, you want to have your documentation in place. And what this really means is as the founder, you know, you’re still doing everything yourself in the early days; but you want to be spending and investing a lot of your time early on in writing out detailed, step-by-step procedures. And that can often mean spending up to three times longer on a particular task. So, what I see a lot of people running into who have trouble with delegating tasks to a team [is] they’d say, “I’d love to delegate this task to someone. But you know what? If I just do it myself, I can get it done so much quicker.” And you kind of have to break out of that way of thinking and work on your business and invest that time up front. Yes, you’re doing it yourself, but spend even more time writing out that detailed procedure so that, ultimately, you can delegate this and never have to touch that task again. Yes, it can be tedious, and it will take a lot of time; but you should just start simple. Start with just a really quick-and-dirty bullet list, step-by-step framework of what you’re working on, and then you can just continuously improve that over time.
[25:17] Mike: I think that’s a general-purpose skill that every entrepreneur needs to have – is to be able to document the processes and procedures and how the business is run, just purely from a logistics standpoint, to be able to step back from certain parts of the business, or to be able to hand them off. I’ve actually been in a position where there’re certain parts of the business where I’m handing off to other people and saying, “I need you to standard and streamline and document this entire process so that I don’t have to.”
[25:42] Brian: And that’s where it has come in my business as well. I mean literally just before we got on this call today, I wrote out a quick email to one of my teammates and said, “Can you turn this email into a procedure?” We actually have, like, a procedure for creating procedures. [Chuckles] You know, we have a standard template in Google Docs, and then they just kind of duplicate that. It has all the formatting and everything, and then he’ll just convert that into a procedure.
[26:05] And another thing that I see done quite often is doing a video screencast of a task and then handing that off to your virtual assistant or someone on your team. What I like to use video for is to document my process once, show that to my teammate and then ask them to convert that into a written procedure.
[26:21] Mike: What I’ve done is for documentation, I have a standard operating document in Google Docs. And whenever I bring on a new person to my team, I just share the entire folder with them so they have this whole folder structure of documents that they have access to. But inside of those, I will have one, main Google doc; and then it links off to all these other ones that are in the different sub-folders. For example, one of them is a procedure for dealing with Twitter. There’s specific documentation in there that’s written out about what to do at certain times and certain things that come up, but then I also have places where there’s a video that I just link to directly from there. And then I have the user name and password that’s stored directly in there, so I host everything out on screencast.com. And it just makes it easy, because if I ever need to change the password, I can just go into the Google doc, change it. If they need access to it, they just go in there, and it’s right there. And they can not only see the written documentation, but there are some places where it’s a lot easier to show somebody than it is to write it out. So, I use kind of a hybrid of that mechanism.
[27:24] Brian: Yeah, that’s a great point. I think I do a pretty similar thing. I give my team access to our folder in Google Docs. I do like to include both the visual and the written description. We also use a lot of screenshots, and we notate the screenshots. For that, I use Droplr. I’ll grab those screenshots, put the notations in, drop it into the Google Doc. In addition to that, I’ll actually describe the steps.
[27:46] Mike: Let’s move on a little bit to marketing a productized service. I know that there’s a huge amount of talk in terms of marketing a productized service. What are some of the things that you can think of that people might want to keep right at the edge of their mind when they’re looking to put together a productized service?
[28:03] Brian: For one, when you productize your service, you can begin to market it as if it’s a product just like any other product; and that’s kind of what’s so great about a productized service. You can really make use of all the other tactics that we’re constantly learning about. I think really the most important thing comes down to knowing your customer, really getting to know who that customer is. I spoke earlier about focusing in on one customer, one particular person. Since your productized service is focused on serving that one type of customer, you’re able to really research and learn everything that you can about them; because your goal is just to get lots and lots of any and every type of customer. Your goal is to find that one, focused customer and find more of that person. When you really understand who they are, or what they do, what their primary pain and challenge is, what are the hurdles that they’re trying to get past, you begin to see these patterns as you’re interviewing customers, talking to them on a daily basis, emailing with them. And when you really get to know them, everything else becomes easier – you know, writing landing pages, communicating your service, coming up with the perfect pricing or the perfect pitch, the value proposition, even designing the scope of your service: what’s included, what’s not included, how can we provide the most benefit possible.
[29:21] Mike: Yeah, I think knowing your customer, obviously, is a very important piece of this. It helps you to communicate your message to the customer and make sure that everyone’s on the same page. It also helps you if you want to do, like, SEO, or keyword optimization, or anything like that; because if you’re speaking the same language as them, in many ways that productized service is not really much different than an actual product. By clearly defining that, again, it’s just no different than selling an actual product versus selling a service. It’s just you’ve got everything prepackaged.
[29:51] Brian: It also goes back to speaking with your customers and listening to what they’re telling you, whether it’s your prospects that you’ve been speaking to as a consultant or your current and past clients. What are the things that they’re asking you? How do they describe their pain point? How do they describe the service or the product? And then you can use their language, literally take it out of their mouths and put it onto your landing page. When you truly understand what their core pain is through those constant discussions with that one type of customer, you know exactly what to lead with when it comes to your top headline, or the way that you describe the benefits that your service can offer.
[30:31] Mike: Brian, if people want to find you and learn more about the productizing services crash course that you’re offering, where can they find you?
[30:36] Brian: Yeah, so right on my site, casjen.com. On the home page, you’ll find a free crash course on how to productize your service. And then I also have the advanced training course called “Productize,” and that is at casjam.com/productize. I’m also “Casjam” on Twitter. [I’d] love to connect there. You can always reach me Brian@casjam.com.
[30:56] Mike: Well, Brian, thanks for coming on the show.
[30:58] Brian: Thanks for having me, Mike. It was fun.
[31:00] Mike: If you have a question for us, you can call it in to our voicemail number at 1.888.801.9690, or email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt, used under Creative Commons. Subscribe to us on iTunes by searching for “startups” and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening.
Episode 207 | SEO tips with Dave Collins
Show Notes
- Software Promotions
- Dave Collins on Twitter
- WebsiteTearDown.com
- – or – https://www.softwarepromotions.com/forms/website-teardown/
- Moz
- Dave’s direct email address: Dave@SoftwarePromotions.com
Transcript
[00:00]Mike: This is Start Ups for the Rest of Us, Episode 207.
[00:03] Music
[00:10] Mike: Welcome to Start Ups 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] Dave: I’m Dave.
[00:19] Mike: And we’re here to share our experiences to help you avoid the same mistakes that we’ve made. Well, this week Rob is Thailand so what I’ve done is I’ve decided to invite Dave Collins from Software Promotions onto the show. So why don’t you just introduce yourself a little bit, talk about who you are, what it is that you do, how long you’ve been doing it, kind of what the relevance to our audience is.
[00:38] Dave: Well I’m Dave Collins, I’ve been working in let’s say online software and marketing types of things since 1997 somehow. And over the years, the work that I’ve been doing has evolved quite a lot but it’s mainly concerned with Google side of things so we were doing SEO actually before most people knew what Google was – actually we were doing SEO before most people knew what SEO was. These were the days of AltaVista, HotBot, LiveCast, InfoSeek, so a lot’s changed but a surprising amount has actually stayed more or less the same in the core principles of SEO. As AdWords kind of became the big thing we started doing more and more of it and here I am today.
[01:23] Mike: Cool. So one of the reasons I wanted to have you on was because a few weeks ago I had mentioned one of the talks at Business of Software that was from Rand Fishkin and he was talking a little bit about what Google’s doing, why they’re doing it, and what other people should be paying attention to and what lies ahead for Google and for how the rest of online marketers should pay attention to what they’re doing and how they should be reacting to it. So since you’re firmly entrenched in this space I wanted to bring you in and talk a little bit about what Google’s goals are, why they’re doing the types of things that they are, and what the rest of us can do to respond to those things. Because, obviously, they issue an update, your search engine rankings can go up or down – for most of us I think those rankings tend to go down based on whatever it is that they’re doing, because something that was perfectly okay to do yesterday is now no longer okay so now the rest of us have to do a lot more work in order to keep up with Google. So why don’t you talk a little bit about what Google’s main direction is right now and why they’re doing it.
[02:19] Dave: Okay, so there’s been an awful lot going on in the last few years, I’d say the last two or three years or so have seen more by the way of dramatic change than all the other years I’ve worked in SEO put together. What it’s all about, people often get hung up on the different names of the updates and the algorithms and the filters – like Panda, Penguin, Hummingbird – if you sort of take a step back it’s actually pretty simple. It’s all about Google trying to get rid of what they refer to as “search engine spam,” and what they mean by that are basically garbage, low quality sites that show up in the search results. Google ultimately wants to provide people with what they’re looking for as quickly and efficiently as possible so what they’re trying to do is get rid of all of these – you know all the sites that you carry out a search and the first, second, third, and fourth aren’t so good and they’re not relevant, and some of them are junk, and some of them sell things totally unrelated to what you’re searching for? So that’s it, just about clearing up the mess, really.
[03:22] Mike: I assume that you’re talking in some cases, I’ll call them “farms” of websites and I’ll throw eHow and About.com into this bunch because I know that I’ve gone to those sites and they happen to have ranked very highly for something and you go there and it’s completely not relevant. One of the things that Google is doing is that they’re moving these things around a lot; those types of sites are simply not relevant. Why is it that Google is so bent on making sure that people are getting the search engine results that they’re looking for?
[03:50] Dave: Well, there are a few things to take into account here. The number one factor by far is that in a sense, Google is literally fighting for their survival. What I mean by that is that Google depends almost exclusively on their income from advertising; some of it from their partner sites, from the display of content network and a lot of it comes from the actual ads that Google themselves show. When you go to Google, the ads that show on the right hand side and usually two or three about the organic searches, that’s where the money comes from. So what’s happening here is Google is very aware that if they don’t start clearing up the quality of their organic content – the normal listings – after a while, people like you and I, if there are people like you and I and everyone out there, eventually we’re just simply going to get frustrated by the really poor results we get, by the number of awful quality sites that we have to wade through to find what we’re looking for.
[04:49] If that happens, the disaster scenario for Google is that people like ourselves think, “Maybe there’s something better out there. Maybe I should try Bing, maybe I should try Yahoo!” DuckDuckGo. When enough of us start doing that, the revenue that Google is going to get from their ads is going to fall at a pretty alarming rate – alarming for Google, anyway. It’s Google peering into what might be in the future, and I think it’s a really important point that a lot of people don’t quite get is that although Google don’t actually make money from the organic results – in other words, from the non-ads – although that they don’t make money from it directly, this is the base upon which everything else is built. This is why we go to Google to search. That’s what they’re defending here.
[05:40] Mike: So essentially what we’re looking at is Google is trying to pump up the number of searches that people are doing on a monthly, weekly, or even a daily basis, and they want those search results to be relevant because they’re afraid that people will leave, and if they leave that ad revenue goes down. And obviously, the difference between five billion and four and a half billion searches per day is a fairly large chunk of their revenue. And I think that is there’s something to do with the sticky factor as well – I’ve been using Google for probably at least ten years now, and the fact is, I don’t go anywhere else right now because Google provides results that are good enough for me. But I do see your point where if it got to a point where I would do a search, and then do a search, and then do another search, if I’m still not finding the things that I need, I might very well go elsewhere. But I haven’t really felt the need to do that because they are providing me good enough search results at this point.
[06:31] Dave: Exactly, that’s exactly the point. You actually more or less took the words out of my mouth. What I remember is back in the day when I first started SEO, there was a scenario where you had a number of big, main search engines like AltaVista, like HotBot, you had these various options to choose from and ultimately what it boiled down to is over time the more you used them you kind of knew that AltaVista, for instance, was quite good to find articles. You knew that InfoSeek was quite good when it came to finding things that you wanted to buy online – online shopping. And Google, I suspect, absolutely dread that scenario reoccurring. They don’t want Google to be an option, they don’t want people like you and I and everyone else to have links on their browser to Yahoo!, Google, Bing, whoever. They don’t want all these options, they want “this is the source of everything,” which is why they’ve added so many things to their search platform over the years; they want this to be a one-stop-shop, if you like, for everything.
[07:32] Mike: Yeah I remember at one point my favorite search engine was actually MetaCrawler because it would aggregate the top results from places like Google, and Yahoo!, and Bing, and Ask.com and About.com and all these other ones and I didn’t have to go to multiple search engines. I just went there and because it was aggregated from all the top results I didn’t really have to worry about it as much. And I don’t even remember what the trigger was for me to move over to Google, but eventually I just did full time and I haven’t really looked back.
[08:00] One of the things that I see Google doing, especially in the search results, is that there’s little icons that show up next to some of the different content results and I know that’s related to authorship. Why don’t we talk a little bit about some of the authorship because those things in the Google search results I think are going to be relevant to people who are putting new content out there, because just having the little icons of who wrote it or the company where that content came from, it draws your eye I’ll say. But I want to drill in a little bit and talk a little about that.
[08:31] Dave: Okay, so what authorship is about, ultimately, is Google is, if you like, joining the dots, connecting content that people wrote with the actual people themselves – authors with their actual content. So the idea is I write a certain blog post on something amazing that’s going on in the SEO world and when that shows up when you carry out a search in Google, instead of it just being the regular format, you’d see a tiny little photograph of me, which is quite eye-catching to have a photograph next to the listing and it makes it stand out. Now, what happened then in a way that was quite predictable, it’s almost like it’s an ongoing game of cat and mouse between Google and the people trying to squeeze Google for whatever they can, even trying to trick Google, just trying to work Google to their own needs, it’s this constant cat and mouse game. So the idea of authorship was, I think a very nice one, I’m sure it was in no small part, rather, down to Google very much wanting to push people onto Google Plus because that’s a really nice and easy way to do that and to push a platform.
[09:36] So what happened was, searches started to show up with the little pictures, obviously that catches your eye – which in an SEO world is magic, that’s what you want, you want people to look at your content – so what then happened was, all the other SEOs started going “That’s a great thing that we can do, look how this one stands out. What we should do for our content and our clients’ content is we should also start putting up pictures.” So everyone started doing it and for whatever reason Google then pulled the plug on it. Now, Google’s line is that ultimately it just wasn’t worth their while, in a sense; there was little to gain and nothing to show for it. What struck me about the whole thing is that for some reason a lot of people made a big deal out of Google pulling the plug on authorship; this is what they do the whole time, they try different ideas, they try different platforms and either they say “This works, let’s make it, let’s write it in stone, let’s adapt it as a norm” or they just discard it. And in this case it was just discarded and it’s a shame. We’re talk about SEO, but for all intents and purposes we’re taught by Google’s optimization, they call the shots, they decide what they’re going to pull the plug on and all we can do is follow.
[10:52] Mike: Well, one of the reasons that they initially gave for using authorship is to identify the original – I call it the source of authority – for a particular article. And I always felt like that was a great way to help keep people from scraping content from other people’s websites and then putting it on their own as if they were the original author. Is there still a way to do that and flag some content as “We wrote this original content so nobody else should be claiming it and posting it all over the place or syndicating it. I still should be getting the credit for this original piece”?
[11:24] Dave: You’ve touched on a really important topic which is that Google hates other website regurgitating content. So you mentioned eHow, for instance, there’s nothing original there, they just scrape other content, put it on their own site, draw in traffic, and what we do is, we search for something and we find ourselves in this situation where we might click the first five sites as they show up in the results and three or four of them or even five of them could actually have identical content. I agree that was definitely a factor. In answer to your question, bizarrely, there isn’t an easy way of you basically registering your content and saying, “This is mine. Hey Google, if you see it elsewhere, know that they’re copying us. We’re the original.” [12:10] There is, however, a kind of basic hack, if you like, on what we do with content like that when we really want Google to understand it’s ours and we created it. As soon as it goes live, we always have a Rel= canonical tag that points to the URL, but as soon as it goes live in the Google webmaster tools account, we simply submit the page – not the whole website but just that content – to Google and in a way we hoping that we’re saying to Google, “The first time you read this was here, we submitted it, we drew your attention to it, your robots crawled across it, it showed up in your index so you should know that when other versions of it pop up that we were the original.”
[12:53] Mike: Do you think that one of the other reasons why Google might have gotten away from identifying the original author is so that they themselves can scrape some of that information and post it up on the top of their search results? If you just go to Google right now and you just type in “weather,” for example, it will show you information for weather on where you’re currently located, but they basically scraped that from weather.com and you could type in “Boston” you’ll get information about Boston. But that stuff is obviously scraped from other places. I mean, could one of the reasons they got rid of authorship is so that they can scrape information themselves and not look bad?
[13:27] Dave: There’s a certain irony here that Google, in a sense, is cracking down hard – really stamping down – on websites that don’t have original content. But in a way, the website that’s now being the mother of all scrapers, if you like, is Google because, like you said, I typed it, I knew what I’d see, obviously, but as you say, I typed in “weather” and there’s information that I can see for where I live in the UK and it’s attributed, so they’ve got a little note underneath saying that it’s taken from the Weather Channel, but the fact is, as you said, it’s not their content. And if you think about it, when you have this content that shows up in Google’s results, a scrape of the content instead of a link, this is a nightmare, this is beyond a nightmare. Because we create great content, ultimately, to entice people to our websites, to demonstrate to them that we are genuinely experts in these areas – this is what a lot of online marketing is about, it’s demonstration of knowledge, entice people in and show them how good we are.
[14:30] And Google in a sense, they are sort of planting a very large bomb underneath that whole idea and they’re saying for certain types of information you don’t need to go to the website anymore, you can just come to us. Why go click on the link when they’re going to display that information right up there for you. So in a way they’ve gone from being a portal, if you like – you go, you search, you click, and you get taken – and they’re starting slowly to move over to the different model which is you go to Google and you find what you’re looking for and that’s it, job done.
[15:03] Mike: Yeah, I remember there were a couple of tweets back when Matt Cutts from Google announced that they had this new tool that would allow you to submit information to Google about when you found scraped content that was out on the internet and you could report it to Google. And I distinctly remember that there was a tweet saying “Found one” and it showed a picture of the Google search engine outranking somebody whose original content was there and obviously Google had scraped the content and put it up there as if it was their own. The pain point there for those people who have that original website is that they are no longer getting that search engine traffic which, quite frankly, kind of sucks for them because Google is taking essentially their search engine content and placing it up there on Google’s website so that you no longer have to go to that website to get the information which is essentially taking website visits away from them, which may very well funnel them into different marketing campaigns. So they’re no longer getting that traffic at all, so there’s no more of these entry points that people might be going through. In a way, I guess, you could say Google is essentially stealing revenue from these companies.
[16:11] Dave: Yeah, very much so. It sounds almost overly dramatic and everyone likes to hate the big company so Google gets a lot of flak. A lot of businesses and companies are doing – if you take for instance any tourist-based website, let’s say you sell burgers say somewhere nice like SoHo in London, that’s your thing you sell handmade, beautiful burgers that don’t give you food poisoning, that’s what you want to be known for. So what you’re likely to do in days gone by is that you put up knowledge that would be useful to people who might be interested in what you sell, so you might put travel information, you might put useful addresses, you might put train times and all that sort of thing. All those things were quite legitimate and there all based on this idea that people who come to SoHo will want to know this information.
[16:59] We’ll give it to them and while they’re here, they’ll know a really good place to get burgers that won’t give them food poisoning. Now in a sense, those things are working less and less, more or less on an ongoing on a daily basis even, because that information is just going to be there without having to click on the link and it’s a really huge, huge difference. And ultimately, what can you do about it? You can’t fight Google.
[17:23] Mike: I think we’ve talked quite a bit about some of the bad things that Google is doing, why don’t we focus a little bit more on some of the things that people can do to increase their search engine rankings. What things are important, what things are not, and where should we really be spending our time. We need search engine rankings, we need to be able to get people to click through those search engine results and onto our website, but even before that, you need to be able to rank up in the search engine rankings. So let’s talk about some of the techniques that people can be using. What sorts of things should we be doing?
[17:54] Dave: The single biggest threat to SEO for normal business is paralysis by analysis. It’s that we know that SEO really should be on our to-do list, in fact most of us probably have SEO on our to-do list and it’s been there for so many months if not years. And we’re in this strange position that, first of all, we’re not sure what to do and there’s also a great deal a fear that we all hear about the algorithm updates. The horror stories where people get banned or people’s traffic falling to minuscule proportions. And we even hear of people being punished for something they didn’t even know wasn’t allowed. There’s very much a temptation to stay parked and do nothing, and I think that’s a really dangerous thing to do because the whole ecosystem, if you like, of SEO is changing so much on an ongoing basis.
[18:50] People are now being penalized for things that, in the past, were absolutely 100% fine. In terms of practical things that normal businesses can do with limited time and resources – the first thing is simply do something. I always fall back on my, if you like, golden rule of SEO which is: if you create good quality and original, unique content that’s relevant to your target audience, you can’t go wrong. It’s so simple, don’t write, don’t create pages of content for Google and their spiders, but create pages of content that people are actually going to find useful. And obviously the people you’re aiming that at is the people who you actually want to come explore whatever it is you’re selling on your website. And it sounds so simple, it sounds too good to be true, and the “But I don’t know where to start” type of answer that I’ve heard many variations of, I think in terms of answering that issue, the biggest mistake that I see people make is they think of creating related content.
[19:58] So, for instance, let’s say that you sell ecommerce services, so you have something that people can simply drop on their website and start selling whatever it is they sell online more or less immediately. The mistake is to say, “What I’m going to do is write lots of articles and create lots of content about ecommerce services” because that’s actually not of interest to people who might be interested in signing up with you – they’re not interested in articles about your service. What they are likely to be interested in is “How do I sell my products online? What’s the quickest and easiest way that I can accept credit cards without setting up a merchant account? How do I accept PayPal transactions without a PayPal account?”
[20:39] Content like this is what people are going to be looking for and actually Google gives us a great tool, Google’s Keyword Planner, so the way that works, without getting into the depths of it, is that you put your keywords into it and it spits back a load of relevant and associated phrases – a lot of which will be wrong, and the numbers are certainly very wrong – but these are keywords that Google consider relevant to your actual search and that’s a really good starting point. Again, the golden rule is: good content, original content, and it’s got to, got to be of interest to the people who you want to reach.
[21:15] Mike: So essentially you can create articles that are directly related to your products but those are only going to be of interest to people who are already on your website and trying to find out information about it. Instead what people should be doing is “genericizing” it a little bit and saying, “Ok, well this is what our product is, but in general, how would you solve this problem if you weren’t using our product? What are the different options? What are the different things that you can do – for an ecommerce provider – how would you sell your products online?” Instead of talking about your products, you talk about – in general – what are the steps that you need to go through to put your product online and sell it. And those are the things that will show up in Google’s search results, correct?
[21:53] Dave: Exactly. I’m a big believer that most searches, ultimately people go there because they have a problem; they have something that needs fixing, something that’s broken, something that’s causing them pain. “Where can I find the cheapest X?” But people ultimately go because they have a pain point or a problem, and that’s the answer, that’s what you need to be providing the answers for very much: “How do I? How can I?” These sorts of queries.
[22:20] Mike: Now what about educational content like, for example, Rob has DRIP and one of the sales pitches for it is that you can essentially send out emails to people with an educational email campaign. Would it be advisable to not only use the content for those emails in the email campaign, but to also put the content of those emails on a blog, for example, or some other place where you’re posting content regularly to essentially walk people through? Because it seems like if you’re only putting it in that email sequence, then only the people who sign up for it are going to get it. But however, you could also leverage that as content on your blog or various other places in your website where you’re also going to rank for as a search engine. What are your thoughts on that?
[23:03] Dave: In days gone by, a good and effective approach would be to write content – it doesn’t matter whether it’s for a website or an email, whatever – create content, pay someone, some company twenty to thirty dollars and they then send it out to hundreds, or even thousands – even tens of thousands – of websites that would in inverted commerce syndicate the content. In other words, copy it. And that actually worked very well. Nowadays we’ve actually gone a full 180 degrees and the fact that you and I had this conversation just a few minutes ago of “How do I make sure people don’t copy my content?” that’s symptomatic of this complete reversal so now we want to have this content and we don’t want it to be seen as duplicate because even having a network of your own websites and having duplicates of the content is potentially very dangerous. The good news is, though, there are very, very easy ways to do it. So if you’ve got – in the example that you came out with, let’s say you’ve got your content that’s going to go out in an email newsletter like DRIP – you’re quite right, it’s a shame if Google ongoing spot this and it’s a shame if people who aren’t signed up for your content don’t spot this and if you think about it, this content is hidden away, it’s literally in its own little protective bubble and the only way to get into that protective bubble is to subscribe so Googleare not going to see that content at all.
[24:27] So I would advocate using that content somewhere on your website where you can put it to best use, but I very much like this idea of if you create some really great content, use it wherever you can, use it to the best possible use. Let’s say I write a very fascinating article, some of the finer intricacies of search engine optimization 2014, but I could also think it’s going to be quite good on this website, and then this website, and that’s where you have to be careful. If I’m going to put the content in two different places that Google are going to find it, the bottom line is that it’s fine to do that – it really is fine – but you’ve got to make sure that, in effect, you’re waving a flag to Google and saying “This content exists somewhere else and it’s here” and it’s using that tag that I mentioned before, the REL = Canonical. If you look that up on Google, it’s very, very basic and this kind of defines the source, the original version.
[25:28]So if you’ve got site1.com and site2.com and you have the same article on both, the correct way of doing it is to put your article on site1, put it on site2.com and assuming that site1 is the stronger, have the canonical tag on the site2 content pointing to the site1 version of it. So in a sense you’re saying to Google, “It’s ok, we’re not trying to trick you, we’re not trying to copy, we’re not trying to deceive you, this is a copy and this is where we got it from.”
[25:57] Mike: That seems like one of those details that you would know if you were kind of entrenched in this space but it doesn’t sound to me like it’s something that I would have ever searched for. Like, the average person listening to this is going to say, “That’s very interesting, it’s awesome that I could re-use content in such a way on the internet that I’m not going to be penalized by Google for it because I’m basically following their rules with this” but at the same time, how would I even know that? It sounds like one of those obscure details that, unless I’m entrenched in this industry and I’m spending lots and lots of time here, I just wouldn’t know that and I wouldn’t think to search for that. How would I even stay informed about these types of things?
[26:37] Dave: This is a very real problem. Five years ago, especially ten years ago, it didn’t matter, you didn’t have to worry about these things, you didn’t have to worry about doing something that you thought was legitimate and then paying for the consequences a year or so later when you get really hit by Google or InfoSeek or anyone. Today, as you’ve said, it’s a very, very real problem, and there are a lot of businesses out there using perfectly legitimate techniques and – I have to stress, this isn’t a moral issue. The whole white hat SEO that’s the type of SEO that if you like, doesn’t “trick” Google in any way it follows the rules and black hat SEO, that’s all about tricking and hacking. This isn’t a moral question; there are no rights or wrongs. Google seems to have somehow almost persuaded a lot of people out there that these rules are more or less moral or legal issues and there’s nothing illegal or immoral about breaking these rules.
[27:39] However, it’s a really good idea to know what these rules are because, unlike five or ten years ago, they can really, really hurt you. And just like in legal situations, ignorance is no excuse for breaking the law. And it’s a very big problem and, unfortunately, it’s a part of doing business online today that you do need to tune in to what’s out there. The easiest way is to follow some good authorities in the search engine world. So, for instance, if you go to Moz.com you’ll find a blog with some very, very good content talking about signal to noise ratio. There’s so much noise, there are so many people who don’t understand the whole cause-correlation-effect type thing at all. So you see people who stop advertising on Google AdWords and watch their rankings fall in the organic listings and immediately say, “Hey, there’s a link. If you don’t pay enough Google will pull the carpet out from under your feet on the organic listings.” It’s a really good idea to find the good voices that are out there: Moz.com is a really good starting point, as I’ve mentioned. If you search for names like “Search Engine Land,” Barry Schwartz, Danny Sullivan, these are people who really, really know what they’re talking about. You’ve got to find the right people to follow and listen to what they say.
[28:59] Mike: It seems like there’s multiple levels of knowledge that you have to have. Obviously there’s the broad knowledge that you want to have about the different ways to rank your website but it just feels like when you’re not focused on trying to increase your search engine rankings or increase website traffic, I feel like you miss a lot of things that are going on. A lot of the suggestions you just gave are really good. The other question I have, though, is how much time does it take for the average person to stay on top of the SEO that’s going on for their website. Is there a minimum amount of time that you should be spending on it?
[29:35] Dave: The answer depends on your website, your situation and your history, level of competition, what you’ve done so far, but my simple rule of thumb is anything is better than nothing. So if you pencil into your calendar thirty minutes every Tuesday morning and all you’re going to do during that time is log into your analytics account, set up a segment – so you’re only looking at the organic traffic – open up the date range to the last year, and just have a look what’s happening. Straight away, that whole thing will take you a minute, two minutes at the most, and straight away you’re going to see if there’s a problem.
[30:09] Is your organic traffic drying up? So that’s a pretty simple indicator. Google Webmaster Tools – I’m always amazed how many people haven’t set up Google Webmaster Tools accounts. If you haven’t, just go to Google, search for Google Webmaster Tools, it’s so straightforward to set up the account. The beauty is, there’s nothing to install on your website, you don’t need to put code on all your webpages – it’s not like analytics – and there’s some incredibly useful information in there, some very clear pointers from Google about “this is a problem, this may be an issue” and they will let you know in no uncertain terms if you’re being hit by a penalty or even if there’s a general big, serious technical problem. Putting those two together – analytics and Webmaster Tools – you can spend five minutes a week and you’ve got those two things covered. Now, that’s not doing SEO but what you’re doing is you’re at least aware if there’s a problem.
[31:03] I’d say for a small business – I mean, we’re a tiny business, our company we only have two full-time people – we have the same problem that any other small business has which is that we don’t have enough time to do it. So if you can be spending an hour a week, just an hour a week on creating new content, spend five minutes making sure everything is ok, the other fifty, fifty-five minutes purely on creating this good, really good content for Google, but primarily for your site visitors, that’s huge. That means at the end of the month, realistically, you’ll have two or three brand new pieces of content and that’s really, really important. You’ll make significant progress with that one hour investment per week. Also one other thing: bearing in mind, I’d say about sixty to seventy percent of the companies that come to us to handle their SEO come to us because there’s a problem, the other thirty forty percent basically want more targeted traffic from Google.
[32:01] Sixty to seventy percent some to us because there’s a problem, they’re checking their analytics at some point and they suddenly say, “That’s why we’re not getting as many sales. Our traffic from Google literally dropped to a tenth of the level that we used to get and that was two or three months ago” so a very panicky email, and very panicky phone call basically saying, “Please fix this quickly!” Another good, simple rule of thumb is proactive is very much the way to go. If you can keep an eye on these things, even on a really, really busy week, I guarantee you have five minutes to check your analytics and webmaster tools.
[32:39] You have, let’s say, another five minutes to just keep an eye on what’s happening on some of these blogs like on Moz, like Danny Sullivan, like Barry Schwartz. That ten minute investment could make the most enormous, enormous difference so you hear that there’s something out there: someone from Google, Matt Cutts from Google mentions there’s an issue, that this is something to be aware of. Every time he opens his mouth, more or less, it’s like holding up a sign saying, “This will become official Google policy within the next year or so.” And just monitor these things because being aware and taking steps to prevent getting in trouble is a whole lot more effective than trying to fix it once it’s broken.
[33:21] Mike: You mentioned that it only takes five minutes or so each week and I think that’s just one of those tasks that just kind of falls between the cracks and they just never seem to get to it and then you go a couple of weeks, then you go a couple of months, and then you just start never checking it. We’ve talked in the past at MicroConf before about the idea of having a Marketing Monday where you just spend all of your activities that one day a week concentrated on your SEO, making sure that you’re putting out good content, managing and building different marketing campaigns for your website, reaching out to people – whether it’s email newsletters, things like that. One of the things that I’ve started to find really helpful lately is to take those things and say, “Okay, this is what I’m going to do for task X.” So one of the things that I’ve started getting into is doing webinars, and there’s a lot of things that go into that so you have to create it in Go2Webinar, you have to advertise for it a little bit, you have to set up the landing page, there’s all these different steps that go into.
[34:18] For something like managing your SEO or just kind of double checking to make sure that things aren’t going wrong, take those steps and put them onto what I’m calling action plans. And, essentially, an action plan is a list of to-dos that you need to accomplish in order to feel good that you have finished whatever this particular task is. So, for example, reviewing your website stuff, those are the two things: go into Google Analytics, and go into the Google Webmaster Tools. Those two things and then just, say, check these five settings. That’s it. That’s all you need to do, but unless you write those things down and actually put them on a list that you’re supposed to go through that to-do list, it seems to me like those things just completely slip through the cracks at some point and then you just never get around to them.
[35:02] Dave: Yep, I couldn’t agree more. I think it’s fascinating what you said because I hear this the whole time of people who say, “It’s only five minutes,” so because it’s only five minutes and this particular Monday or Tuesday is so packed and hectic – and I’ve got the meeting, and I’ve got the phone call, and I’ve got the content – because of this it’s so easy to just brush it aside. I think a good way to look at it is, look at it as brushing your teeth, it doesn’t matter how tired you are, it doesn’t matter what time you get in at night – or, for that matter, how late you oversleep in the morning – you never think, “Yeah, you know what? I’m not going to brush my teeth, I’m going to save that three minutes or four minutes and I’m going to get that extra three or four minutes sleep.” It’s a similar logic it’s just like you said, this process list is invaluable so if you have your three or four points, do you have a checklist, for instance, for any process that I can put into a list, it makes the whole lot easier. So, until SEO becomes burned into your brain, it’s a good idea to have “Tuesday 10:15, check the twelve – thirteen month overview in Analytics, check the Google Webmaster Tools, check some of the blogs that I look at, and start sketching out the next piece of content. And you hit that 30 minute point or the 45 minute point, whatever you’ve scheduled, but then it’s done. If you do get hit, the results of a so-called “Google slap” can be catastrophic.
[36:28] Mike: I think the other distinct advantage of putting them together in a checklist like that is that you can take that checklist and you can outsource it to somebody and document exactly what needs to be done and, that way, you are no longer doing it. I’ve been viewing my job as the entrepreneur to be putting together those checklists and saying, “These are the things that need to be done. I don’t necessarily need to do them but I need to figure out what needs to be done so that I can either outsource that or not forget the critical steps along that path.” Because, as you said, if you start forgetting those things, bad things will eventually happen.
[37:00] Dave: I remember one of your MicroConf talks that I think handled this exact podcast that we’re recording right now, if I remember rightly, there’s a step-by-step process that you and Rob go through and, if I remember rightly, other than the actual recording, everything else was outsourced. And I remember frantically writing this down or typing it into my Evernote and I just thought that was just fantastic.
[37:24] Mike: Well I think that’s a great place to wrap things up. Why don’t you tell us where people can find you if they’re interested in either having a website reviewed or talking to you a little more about SEO or just where they can find you.
[37:35] Dave: Ok, I’ll never miss an opportunity to plug myself so our website is SoftwarePromotions.com, you can find me on Twitter. I’m @TheDaveCollins – in other words, someone else got Dave Collins so I’m @TheDaveCollins for Twitter. Any questions about SEO, genuinely, depressingly I actually do enjoy, even love talking about it so Dave@SoftwarePromotions.com.
[38:01] Mike: There’s a website that you have called WebsiteTeardown.com, and if you’ve never had your website torn down before and are interested in having somebody who’s very, very good at it, go there, sign up, you can click on there and it’ll take you through to the Software Promotions website and you can sign up to have essentially have a website teardown done for you that will look at your website – Dave or Dave’s partner will take a look at it. It’s fascinating the types of things that you’ll learn from someone who’s looking at your website with a fresh set of eyes who also has that SEO background to it. They can tell you the things that you’re doing right, the things that you’re doing wrong, and where you can improve those things. And Dave’s done a number of them at MicroConf, he’s very, very good at them. He did some recently at the Business of Software as well. I would highly, highly recommend it if you’re having problems getting conversions on your website or driving people through to a sales funnel.
[38:54] So Dave, thanks so much for coming onto the show, we really appreciate it. If you have a question for us or you can call it into our voicemail number at 1-888-801-9690 or you can email it to us at Questions@StartupsfortheRestofUS.com. Our theme music is an excerpt from “We’re Out of Control” by MoOt used under Creative Commons. Subscribe to us on iTunes by searching for Startups and visit StartupsfortheRestofUs.com for a full transcript of each episode. Thanks for listening and we’ll see you next time.
Episode 206 | Drip, AuditShark, Enterprise Sales and Podcasts
Show Notes
- Drip
- HitTail
- AuditShark
- Zapier
- New Relic
- How to Build a Rocketship podcast
- Bootstapped Web podcast
- Big Snow Tiny Conf
- The Linchpin podcast
- The History of Rome
- Hardcore History
- Daily Tech News Show with Tom Merritt
Transcript
[00:00] Rob: In this episode of “Startups for the Rest of Us,” Mike and I update you on Drip, AuditShark and other things that have been on our mind. This is “Startups for the Rest of Us,” episode 206.
[00:09] Music
[00:17] Rob: Welcome to “Startups for the Rest of Us,” the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product, or you’re just thinking about it. I’m Rob.
[00:25] Mike: And I’m Mike.
[00:29] Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. So, what’s the word this week, sir?
[00:31] Mike: Well, I’ve been actively firing myself from virtually every job I have. [Laugh]
[00:34] Rob: That’s a good way to do it.
[00:36] Mike: Well, I’ve been bringing on a couple of developers, and I brought on somebody to kind of do, like, DevOps stuff for me. And I handed of the build server stuff to him. I had somebody reach out to me on Twitter, asking me some questions about it probably a month or two ago. And he actually offered to do some stuff with me, but I’ve already got somebody who could do that kind of stuff. The question was, “Would you be willing to pay for it?” And it’s like, “Well, yes, I would; but I also have somebody in-house who can do that kind of stuff.”
[01:02] Rob: Right.
[01:03] Mike: So, I handed it off to him. And he’s done a good job with it. He set up the build server. He did a bunch in conversions. He’s upgrading the software. The admin password on our server expired. It’s like, “Okay. Well, that’s something we should clearly probably be doing ourselves”; because, you know, it’s kind of a best practice for security purposes anyway. So, he wrote up a process on how to do it and then changed the password and, you know, we’re setting up a system so that it’ll start reminding us to go in and change those passwords on a regular basis. And it’s nice to be able to have those people on your team that kind of understand that the processes are really what help drive the business and create value behind the company.
[01:39] Rob: Right, right. And if you’re listening to this and you don’t know what “DevOps” means, it’s essentially keeping your developers productive, and it’s often doing stuff like performance testing and maybe performance tuning. It’s helping with keeping the servers running and patched and all that type of infrastructure stuff. It’s stuff that, if you’re not a developer, you typically think developers do; but, frankly, developers should be creating things and building and writing new code; and they shouldn’t be worried about the underlying plumbing. And so when you hit any type of scale, even if you get maybe two or three developers cranking pretty hard, one of them needs to be a part-time DevOps person. Or, you need to find one; because enough stuff starts to crop up with scaling and performance and all that, that somebody typically needs to take care of it.
[02:21] Mike: When I was on my personal retreat last month, one of the conclusions that I came to was that, as kind of the founder of the business, my job isn’t necessarily to do any specific thing – other than to identify the things that are most important and figure out how to do them and put a process in place so that I can essentially backfill it when I’m done figuring it out.
[02:40] Rob: Exactly.
[02:41] Mike: And that’s kind of what I’ve been focusing a lot of my efforts on over the past month or so, and so far it’s been working out really well. So, I hired a couple of new developers. I’ve got somebody whose sole job is to make updates to the website. I’ve got two people whose sole job is to work on AuditShark, and I’ve got one guy whose sole job at the moment is to basically just do the DevOps stuff. And then my sole job at the moment is just to do sales and marketing, and I’m trying to figure out how to fire myself from that as well at some point in the future – or, at least put processes in place for certain pieces of it. So, for example, like scheduling webinars and setting things up and then delivering the webinars. Once I’ve got the process down for how to do that and how to make it effective, then I can document the process, hand it off to somebody and do everything else –
[03:25] Rob: Exactly.
[03:25] Mike: – and move on to the next problem.
[03:27] Rob: Exactly. The key thing you said there is until it’s effective, because anything before that is premature optimization – right – and you’re trying to create a process around something that doesn’t work yet. I always plan when I’m doing things that I need to get it to effectiveness. And if it never gets to effectiveness, then I scrap it. But once you get to effectiveness, then you’re right. You have to find someone else to do that because, as the founder, your time is more valuable.
[03:46]I am almost wrapped up with a two-hour audio documentary of the process of building and launching Drip, and it was essentially culled from nine hours of audio. It was the conversations that Derrick and I had over the course of about nine months. And every week, essentially we recorded a podcast; and some episodes are, like, eight minutes; and some were up to 30 minutes. So, it’s a total of nine hours. Trying to get it to around two hours, and it really tells the story from just after inception until we launched last November. It was a trip to hear all the things that are really boring about it. Like, if I released the whole nine hours, there are just entire things we talk about that are really important at the time, but are completely boring to listen to. And then, frankly, it’s agonizing to listen to some parts; and those are the best parts. Those are the most interesting parts, where we hit these huge roadblocks, and you hear myself or Derrick just talking about how hard it is and how much of a struggle it is and how bad we’re feeling about it.
[04:44] Mike: If there was no conflict, then there’d be no story. [Laughs]
[04:47] Rob: Right, right. But the victories are also pretty cool, too – you know, getting through the struggles and then finally getting people in. And you can feel the excitement in our voices, and you can just feel the momentum build over time. And so it’s cool. It’s nice because it’s longitudinal – right? It’s, like, nine months; and it just flips. You know, five minutes, and then there’s a little musical interlude. And then – boom – we’re week later. And so you can instantly hear. You can binge-watch it. You know, it’s more like watching “House of Cards” rather than watching a season of “Breaking Bad,” where you have to sit there and wait for the next episode to come out. So, hopefully, I’ll have that out sometime in early November.
[05:21] Mike: Cool. Well, I started on a new section of the website that I’m kind of designing how I want it to go, but it’s essentially going to be a series of videos demonstrating how to use AuditShark to solve a variety of different IT-related problems. It was contacted by somebody who had had an employee quit. That employee was in the IT department, and they said, “Well, we need to know where this person had access to stuff.” You know, somebody leaves the organization, and you need to know what sorts of access rights they had on different machines around the company. So, at that point, it almost takes a security review to say, “Okay. Well,” you know, “where did they have access?” What sorts of sensitive information were they privy to? Do they still have access to that?” because that’s a really big one. Just disabling somebody’s account and active directory is not the cure-all that some people think it is. You know, there may be a VPN account that’s disconnected from that, and you might not know about it. Or, there’s local accounts on different machines that you can then use to escalate privileges, and there’s all kinds of different ways around it. But unless you have the ability to go out and look at your network and pull this information in, then you don’t know really what to do.
[06:25]So, the point is that I’m going to put together a series of videos on how to use AuditShark to solve a variety of security issues in the IT department. There’s a couple different reasons for that. One is kind of educational material so that people can understand how to use the product. So, if they come to the website, [and] they see this section of videos, they can take a look at them and see not only how the product works, but what types of problems it can solve. And then the second piece is that, if I’m able to do it right, then I could also leverage those pages for SEO; because the videos are going to show up a little bit higher in Google for ranking for different key terms. So, I’m going to try to experiment with those and try to figure out how to put that out there and achieve both of those goals at the same time.
[07:06] Rob: Right. Very nice. Yeah, you do need a video site map in order for Google to detect those. I like the idea.
[07:12]With Drip, I have the same thing at kb.getdrip.com, our knowledge base. And it’s just a simple knowledge base, and I have a section called “Rule Blueprints,” and it’s basically blueprints for different ways that people are using Drip. So, one is SaaS, registration and onboarding without trial. And you could, like, a four-minute walk-through of how I have all that set up and then send educational emails based on in-app? actions – right? And there’s a short video to show how someone could do that. So, it’s the same type of stuff. You’re trying to get scenarios into people’s head of how you can actually attack those and accomplish them with your app.
[07:49] Mike: They’re not interested in buying your app. They’re interested in buying a solution to a problem. And if you lay out those problems, that’s what they’re interested in. If you can map those problems on your website to the problems that they’re having and clearly demonstrate that you’re able to solve them in a way that’s acceptable to them, [that] builds trust; but it also builds confidence in your abilities to deliver something that’s going to solve their problem.
[08:10] Rob: Right. And you know what I want? For these videos to be able to be turned into almost a step-by-step thing with a few screen shots. And I would definitely pay money for that, because I have a bunch of screen casts in the kb that are really good, but I’m already starting to get requests – and I knew that I would. People want a full, text version of it, because they’re at the airport; or, they’re on a modem, or whatever, and they can’t get access to the video. Or, they don’t want to watch the video, or whatever. The thing is recording a video is five times faster than actually typing out a to-do and putting the screen shots and all that stuff in. I’ve timed it as I’ve checked it. And so for now, I’m more focused on improving the product than improving the docs. But if someone could save me the time, and I can put out screencasts and then have them magically turn into a well-written – not just a transcript, but a well-written, step-by-step thing, that’s worth some money to me, for sure.
[09:02] Mike: Well, funny you should mention that, but if you go to cascadecontent.com, you will find exactly that.
[09:08] Rob: Wow. Look at this! Drip is on the move. It feels good to get to this point, but it’s finally growing. It’s starting to grow at the rate that I want it to be. And, you know, if you remember my MicroConf talk from a couple years ago, I talked about building early on. There’s building, there’s learning and then scaling. And the building part is only minorly agonizing, because you’re impatient and want to get to where you can scale. The learning part is terrible, because the whole time, everything’s up in the air. You’re trying to figure out, “What are we building?” “Why are building this?” “Should we build this feature?” Who are we building it for?” “Who are our customers?” and every criticism that comes through, you’re really sensitive to; because you just don’t have a lot of feedback yet on your app, and you’re trying to get to scaling. And then once you start to scale up and you start the growth and you figure out some repeatable stuff and you’ve actually build some features people want – that’s really when things start to get fun, in my opinion.
[10:00]It’s a bit of a false dichotomy, because it’s not like, “Oh, we’re not learning anymore.” We’re definitely still learning and still adding features quickly, but we’ve built something that enough people want now that there’s been a noticeable drop in churn. It’s actually the lowest churn that I’ve ever had on any of my apps. And with growth picking up at the same time, it’s just noticeable. You know, it’s really time for me – I’ve started scaling up marketing, but the more people that I can get even to the home page, or just get interested in Drip, the faster the growth will happen. It’s got a bit of a vanity metric, because you can measure different months; but over the past 13 months, it’s averaged 19 percent growth month over month. But early on, like 11 to 12 months ago, the revenue was so small, that that number is kind of – you know, it’s like a triple-digit growth that month. So, if you go back six months, I think it’s like – I don’t know – 17 percent. So, that’s a little more realistic.
[10:50]So, it really is getting to a place where things are starting to pick up, and it finally feels good. It’s like things are paying off.
[10:57] Mike: Yeah, I think one of the reasons you find that your churn is so low is it’s difficult to move off of Drip. It would be a huge amount of work to take all of your marketing stuff out of Drip and put it into some other marketing platform. It’s a huge barrier to leave.
[11:13] Rob: It’s not actually that big, if you think about it. In fact, we make it as easy to leave as MailChimp or Aweber does, you know? It’s the same type of thing. You just need to copy and paste some emails and export subscribers.
[11:24] Mike: Sure, but mentally it’s a huge roadblock.
[11:25] Rob: Yes, that’s right. That’s right. It is. There was one customer who wanted to leave, and we helped him move his stuff over. It’s not an issue. But we have definitely helped more – several dozen people, frankly, move over from other services.
[11:37]The churn rate being low is a combination because, depending on your business, typically, your first 60 days, maybe 90 days of churn is pretty high if you ask for a credit card up front; because some people will stick around just because they don’t want to cancel and they kind of think they’re going to use it. And then once people are onboarded and they’re using it actively, then that’s your real churn rate. That’s what I consider your actual churn rate. But before that, you might have a 30 percent churn rate in your first 60 days, and then you might have a 3 percent churn rate per month after that. So, when I say that I’ve had the lowest churn rate I’ve ever had, I actually mean both – that initial 60-day period and ongoing after that. So, I think it’s a combination of getting more people onboarded and getting value out of the app. And I think that goes to all the time we spent on our onboarding process. I also think it’s that people are getting a lot of value out of the app.
[12:29] Mike: You know, part of that’s going to be the types of customers that you’re targeting, because obviously you don’t want to target customers who are not going to be a good fit, which means that they would leave earlier than they might otherwise. So, it’s kind of like people are investing in the platform because they think that it’s going to work out and help their marketing efforts. And if the churn rate is low, then clearly that is probably the case.
[12:51]Well, I’ve started using Zapier a lot more for automating various tasks, and if you’re not familiar with Zapier, it’s essentially a service that you can subscribe to that will leverage the APIs and the hooks between different applications. So, there’s [sic] things for Basecamp and Gmail. And I think there’re some things in there for Drip as well –
[13:08] Rob: Yeah.
[13:09] Mike: – but Google Docs. I mean they have a laundry list of – I think it’s over 100 different applications that they hook into, and you can send data back and forth between them using these things called “Zaps.” I’ve started using it to essentially start doing things that are I’ll say more tedious than anything else. So, for example, my bookkeeper – there was a bill that was actually missed the other day. I happened to catch it in time, but it was only because I happened to be logged into American Express at the time, so I made the payment. It wasn’t a big deal. What I did was I went in and set up a Zap so that on the 15th of the month, it would just go in and create tasks automatically so that when she’s done with each of them, she just checks them off. So, that way, one of them doesn’t get missed.
[13:49]So, I’ve started using that for weekly and monthly tasks that people need to be doing and then using it to kind of move data back and forth to help with automation of various things that a lot of times they’ll just get done when I get to them as opposed to just having them happen on a scheduled basis.
[14:09] Rob: Yeah, that’s a nice way to go. Anytime you can take advantage of that, automation’s a big win. I’m a big fan of Zapier, and you know what I found out? I talked to Wade, who’s the founder, and he said they pronounce it as “Zap-ear.” I think they have more than 250 apps now integrated, and you’re right. Drip is one of them, and it’s crazy that stuff that you can do without writing any code if you know how to utilize Zapier. The documentation page for Drip, actually – you know, we have our REST API, our Java Script API. We have API wrappers, and then one of them is Zero Code API. And I say use Zapier to connect Drip to hundreds of web services without writing code and just link over to the Zap on there for Drip. But that was per their suggestion. I actually think it’s kind of a clever thing, because if you’re a non-developer and you want to tie into our API, Zapier really is the easiest way to do that.
[15:02]So, scaling issues – they’re tough. It seems like every two months, we run into something that takes one of us out of pocket for a couple days. But I ran a big import last week that choked things for a few hours and, frankly, it was painful. And Derrick went and rewrote some code, and then we upgraded the servers the next day, and now we have – I think we’re up to eight production servers, maybe nine, because we have a bunch of job servers in a database in the front end and all this stuff. But it’s the real-time analytics, the real-time reporting stuff that kills you. And we’ve had to scale up faster than I thought we would and, luckily, we’ve been preemptive about it. We’ve had very few issues – no issues in months that have really affected any customers, but it’s about every two to three months [that] we’re seeing something crop up where we notice things are slowing down, and we have to implement caching, and we have to add a server to this, and we have to rewrite and optimize this thing.
[15:51]And this is actually where that DevOps thing comes in. The reason I’m also thinking about it is I have a DBA who is someone who optimizes apps. And I mentioned him a couple episodes ago. He’s at rubytreesoftware.com. His name is Creston. He, I think, is going to be helping us by looking through; doing stuff that, frankly, my developers aren’t that interested in doing; and I’m not in doing it either – which is finding those performance issues and either making recommendations for how to fix them, or actually going in and refactoring code to make things faster; because to date, I’ve been throwing money a the problem – right – just throwing more processing power: bigger servers, more servers, scaling up and out. And at this point, I think we need to find that 5X win, and I only think that’s going to happen by actually getting in there and rubbing elbows with the code.
[16:38] Mike: I know what you mean about having people go in and do things that’ll help make it more scalable. I mentioned in the past that I brought on somebody whose sole job is to write unit tests. And over the past five weeks or so – four or five weeks – he’s added, like, 200 unit tests to the system. It’s been really nice to see all those tests go in. The fact that the vast majority of them are still passing – there’re certain ones that are not passing just because I don’t have the back-end infrastructure to actually run the tests properly. But the rest of them, he’s finding things that probably shouldn’t fail, or wouldn’t be an issue in the production code, but they probably need to be fixed. And it’s nice to see that there’s that reliability that is being baked directly into the product. And infrastructure really isn’t any different. I mean if you have a DevOps guy who can go in there and really take a look at that real-time analytics and say, “Oh, well, did you know that at 3:45 a.m. yesterday, there was a spike, and the spike lasted for five minutes? We need to figure out what that was.” If you’re not actively monitoring all that stuff, you can run into those bigger issues down the road.
[17:43] Rob: Yep, totally agree. I have become a big fan of New Relic. Finally installed it on our servers, and there’s both, like, a Ruby gem that goes in the app itself and can report on some stuff, and then you install it on the server. And the server stuff is amazing. I mean it just gives you – all the reporting that you would normally get by defaulting graphs and stuff from a Windows server, like with PerfMon; but it gives it to you for all the LINUX servers, and then it’ll alert you if things go over 90 percent CPU usage, or running out of disk space, or all this stuff. And with eight or nine servers now running, plus however many – I think we’re running three for HitTail – it’s enough that you just can’t manage that all on your own, you know? And so having the alerts, even though some of them are false alarms, is really helpful. And so there’s a pretty beefy free tier with New Relic. And if you’re on LINUX servers and you’re not using it, I would recommend that you give it a shot; because it gives us a lot of data that we’ve used to troubleshoot things and to see, like you said, spikes. There’re CPU spikes. There’s RAM spikes. There’s all types of stuff that we just weren’t picking up on before we had it installed.
[18:48] Mike: Yeah, I think it’s things like the RAM and CPU spikes that are not inherently visible to most people. I mean I have New Relic installed on my Windows server. It’s interesting the sheer amount of data that you can get out of it and the granularity that you can get out of it as well, just being able to drill in there and see all that information. And it can give you insights that you wouldn’t necessarily have otherwise without that monitoring software. I mean without it, you’re really blind. You have no idea what’s going on. And the only time you do know when something is wrong is if a customer calls and says, “Hey, I can’t get to my data,” or, “The site’s down.” Your default assumption or belief is that the application and server are up and running, and sometimes they’re not.
[19:26]So, hey, I think you mentioned a couple of weeks ago that you still maintain Inbox Zero on a regular basis?
[19:31] Rob: I do. Well, I come close to it most days, yes.
[19:34] Mike: I’ve been failing more and more regularly to come anywhere close to Inbox Zero.
[19:39] Rob: [Crosstalk] – right? What’s the cause of that?
[19:40] Mike: I think it’s because I’m neglecting my email. The fact of the matter is there’ll be email that’ll sit there, and I just haven’t really decided what to do with it. Or, it’s stuff that I know that I need to come back to later on, so I’m like, “Oh, I’ll put this on my task list”; but I don’t necessarily take it out of my inbox, because it’s something that I need to – like, I need the information in there, as opposed to just the high-level task, to go do it. Know what I mean?
[20:02] Rob: Right.Yeah, that’s a bummer. You know, the way that I’ve handled that is, if you go into that email and you hit “Forward” and then forward it to your Trello board, it’ll take the body of it and forward it into the Trello issue. And so then you have all the information. And even if for some reason it gets truncated, at least you have the subject line, and you can always go search for it in Gmail. So, that’s what I’ve done, because I can’t stand having clutter in my inbox if I’m trying to get to Inbox Zero.
[20:25] Mike: I just need to figure out how to get some of those things out of there. Some of them are just bugs [and/in?] cases from from Fogbugz that people have done, and I just need to go back and review it to make sure that everything is functioning the way that it’s supposed to. Or, I need to go do a code review, or something like that. And it’s like, “Oh, well, I need to know where that email is.” And I suppose I could probably say, “Okay. Well, here’s the case number,” or whatever and just link to it –
[20:45] Rob: Right.
[20:45] Mike: – but it just sits in my inbox to let me know that I have to do it.
[20:48] Rob: To be honest, that’s been one of the biggest for me, too – is exactly that. It’s Fogbugz issues that I need to QA, or I need to get back to someone on. Those are the ones that I struggle with the most, because if I get five or six of them, do I really want to create five or six new Trello things and then reorder everything? Or, do I just want to crank through them in one batch at some point in the future?
[21:04] Mike: Yeah, that’s exactly the same issue with me. It’s easier to just leave them in my inbox and then come back and deal with five or six of them, or ten of them at a time than it is to create the five, or six, or ten different things in Trello.
[21:15] Rob: So, I have a few favorite, new podcasts I wanted to mention. Some of them are in the tech space, but of the handful that I’ve really enjoyed over the past several months, the first is “How to Build a Rocket Ship.” And this is by MicroConf attendees Matt and Joelle. And then they have another guy who works with them, named Michael. It’s 20-minute interviews with startup founders, and it’s really well down. It’s nice that it’s short, and it’s nice that it tends to cover one topic, and you don’t hear the same stuff that you’ve heard from people like Hiten Shah or Ruben, or me, who’ve been on other podcasts. They pick a topic, and they dive into it. “How to Build a Rocket Ship” is one of my new faves. Have you been listening to it?
[21:52] Mike: I have, yeah. Actually, I heard your interview with them a couple of weeks ago. I heard Hiten Shah’s as well.
[21:57] Rob: Yeah, it’s good stuff. The next one I like is “Bootstrapped Web,” and this is Brian Casel. And he’s switched formats, and he now has a co-host named Jordan, and they’re talking about their businesses, and they’re giving tips. I mean it’s a similar format to “Startups for the Rest of Us,” where they give their own story, but they also share tips. And so far, I think it’s a big improvement over where they were at, and so I’ve been listening to that.
[22:18] Mike: Yeah. I haven’t listened to that one, but Brian is putting on a – it’s called “Big Snow, Tiny Conf” up in Vermont. And that’s in January. And I think last year they did it, and they only had – it was, like, five people. But it’s basically like a ski or snowboarding vacation for a couple of days, and you just go up there and talk about business. And in some ways, it’s kind of like a mini mastermind group, but it’s a very compressed schedule from, like, a Monday to a Thursday. And then they do attendee talks and stuff like that. But it’s limited to, I think, eight or ten. He also puts it on with another guy named Brad, who is also at MicroConf, but we can link that up in the show notes.
[22:55] Rob: A couple more that I’ve been listening to. One is “The Linchpin” podcast, and that’s from Damian Thompson over at linchpin.net. And he also changed format from interview to he and a co-host discussing stuff. And then the last two are pretty nerdy. One is called “The History of Rome.” It is really the history of Rome, and it’s a dude who’s obviously a Ph.D. It’s ten- to 15-minute episodes. It’s really cool. What I like about it [is] it’s just really palatable. You know? It’s a little bit like Dan Carlin’s “Hardcore History,” if you’re ever listened to that, except it’s super short. It’s, like, ten- to 12-minute episodes. There’s 176 of them, and it’s done. Like, he did the history of Rome. There’s no more to be done, so he ended it. I’m like maybe 60 episodes in, and at times it’s a bit dry because it’s the history of a civilization; but fascinating just to hear the rise and the impending fall of this – and to understand it at a deeper level than I ever have, because I never really cared about this stuff in the past. So, it’s [as] good as, or better than, any audio book I could get on the subject, I’m sure.
[23:51]And then my last one is “Daily Tech News Show.” It’s with Tom Merritt. I’ve been a fan of Tom Merritt for years. It’s my favorite daily tech news show, and it helps me keep up-to-date with stuff that’s going on. It doesn’t help me in my work at all, but it is that thing that helps relax me on my drive into work or on my drive home. So, I just wanted to mention those in case folks are looking for new listens.
[24:12] Mike: Well, I think the only other thing that I have is that I’ve been a lot of personalized and one-on-one discussions for AuditShark. And I found that those seemed like the best way to close sales. I think there’s [sic] a couple different reasons for that. One is you get somebody on the phone, and if they clearly know what they’re talking about and, you know, it’s easy to talk to them about the different problems that you’re having, and they can walk you through how they can solve those problems, then it’s easier to buy into what the solution is. And the other thing is that getting to the point where you’ve got that one-on-one discussion with somebody, you’re getting a lot more – the focus of their time. If you send them an email, they might look at it for, like, a minute or two. But if you have an hour-long discussion with somebody, you’re getting a lot of in-depth information not only to them, but from them. And that’s been kind of the basis for a lot of the changes that we’ve been making internally within the products to make it do different things. And it’s not necessarily somebody says, “Hey, could you do this?” It’s more like, “Well, I like the product, but these are the types of things that I’m doing,” and you have to read between the lines a little bit to figure out what it is that they’re actually trying to do versus what they’re telling you they want to do; because sometimes what they are doing and what is the right solution for them are not the same thing.
[25:21] Rob: Right. And often they will state a solution that is very limiting. They’ll request a feature that only they would ever use. But if you’re thinking from a higher-level perspective of “how could everyone use this?” you can often make it more configurable. Or, you can build a feature in a different way that’s more flexible and that can fix their issue, but also perhaps implement another feature that you’ve already had requested. So, there’s definitely an art to this, to trying to interpret what users are asking for and figuring out if you should build it and how to build it.
[25:51] Mike: Yeah. The other thing I’ve noticed is that the sales cycle for this is probably a lot longer than I’d like it to be. It’s several months long. So, I’d really like to try to start identifying ways to bring that down. I feel like part of it’s features, and as much as I hate to say that – but in some cases, there really are. There’s [sic] certain things that people have said, “Yeah, this is great, but we really need it to do this in order to move forward.”
[26:13]The other thing that I’ve found is that people need customization, which is a kind of interesting piece of it; because in some cases, that can just be services. So, doing services engagement where, if they buy the software and they buy these services to go with it, we’ll build a bunch of stuff for them in the policies itself; because it’s different than writing code for the products; because the policies are more applicable to their environment, but the product is built to have these policies, that you create them and then plug them in through the engine, and then it pulls back the information that you’re requesting. So, that’s more of a customization piece, but it’s custom for their environment. And it’s been an interesting to position that as sort of an upsell opportunity as well.
[26:51] Rob: Yeah, I was going to say that. I mean I think that could be a great way, especially early on, to make a good chunk of money and try to fund it – maybe not something that’s scalable, but maybe it is. I mean you’ve heard the term “consultingware,” which is where you have the big, $300,000 enterprise product. And then you sell – or, maybe it’s a $100,000 enterprise product, and then you sell $900,000 of consulting services on it, you know, to make it this seven-figure deal. And while you don’t have to get ridiculous like that, starting off with a $5,000 product, you know, with $10,000 or $15,000 of customization is an interesting way to increase the initial sticker price there.
[27:25]The thing you said about sales cycles being long – that’s not surprising to me, because it’s enterprise sales. Right? I mean you’re essentially selling into companies that are going to be moving slow. So, two to three months doesn’t even feel that long to me.
[27:36] Mike: Yeah, most of it’s about just kind of getting their attention and getting on their schedule, because they have to get it on their schedule and say, “Okay. Well, why should I even pay attention to you?” because these tend to be the upper-level people that I’m talking to in companies, and I’ve found that a lot of the companies that I’m talking to are under 500 employees. I just need to find ways to reduce that time period, because if I can’t reduce that time period, then it’s hard to scale up revenue without just stuffing the funnel with tons of people and running around like a chicken with my head cut off, trying to follow up on everybody.
[28:07] Rob: Well, that’s what I was going to say. I think that’s what most enterprise sales people do is they stuff the funnel and run around like a chicken with no head. I don’t know how you’re going to reduce that sales cycle. I mean those companies are just slower movers than we are. And I would think it’d be more like six months if it’s truly an enterprise that has to get budget approval and get their IT department to prioritize it and that kind of stuff.
[28:28] Mike: The enterprise ones I would expect no less than six or eight months; but, like, that’s why I’m trying to target a lot more of the smaller companies, because they tend to have smaller budgets, for sure; but they also have a lower number of resources. So, any tool that you can bring into the environment which allows them to automate some of the things that they’re doing and make it less tedious or expensive for them to do it in terms of resources and time – that’s kind of a no-brainer for them. So, those are the places where I’m seeing a lot of traction and a lot of success. They take one look at it, and if they have a need for it, it’s a no-brainer. They know exactly what they want, what they’re looking for; and they kind of have an idea of what the next steps are, but even in those cases, a lot of what I find is they’re just so busy doing their existing work, that they don’t have a lot of time to dedicate to actually doing the evaluation. They love the idea. They like it, and they want to move forward; but finding time for them to actually commit to looking at and moving forward – that’s where the challenge is. I can certainly schedule webinars and things like that and go over things with people one on one, but that doesn’t necessarily free up their time commitments for all the other IT-related stuff that they’re doing.
[29:36] Rob: Right, yeah. And that’s a struggle of one-on-one sales – right – of enterprise sales. And that’s what the good salesmen that I’ve known – I mean like Steli I’m sure if you talked to him about it, he would have a number of thoughts about how to get around that. Actually, Damian Thompson, from linchpin.net, he’s a very good sales guy. And he – we should have him on the show at some point to talk about this, because I think what you’re asking is a common question. And having never done a lot of enterprise one-on-one sales, I don’t necessarily have the answers; but I do know that these are the ways that good salespeople are different. It’s funny, because we can identify good developers, and I know a good developer, and I know the difference between a good developer and a bad developer. It’s harder with salespeople aside from bottom line. “Well, how much did they sell?” But I think there’s some subtle things, and they kind of get this intuitive sense of how to do exactly what you’re saying. Like, they find ways to get past those roadblocks, and there’s a certain amount of natural ability in doing that; but I also think that there’s definitely a lot that can be taught.
[30:33] Mike: If you have a question or a comment for us, you can call it in to our voicemail number at 1.888.801.9690. Or, email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control,” by MoOt, used under Creative Commons. Subscribe to us on iTunes by searching for “startups,” and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening, and we’ll see you next time.
Episode 205 | Trust Signals for Your Website
Show Notes
- Inspired by Moz.com post from Cam Secore called A Comprehensive Guide to Building Trust Online
- Don’t Make Me Think by Steve Krug
- The Non-Designer’s Design Book
- StackOverflow.com
Transcript
[00:00] Mike: In this episode of “Startups for the Rest of Us,” Rob and I are going to be talking about trust signals for your website. This is “Startups for the Rest of Us,” episode 205.
[00:07] Music
[00:14] Mike: Welcome to “Startups for the Rest of Us.” It’s the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product, or you’re just thinking about it. I’m Mike.
[00:22] Rob: And I’m Rob.
[00:23] Mike: And we’re here to share experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Rob?
[00:27] Rob: We have some new iTunes reviews, a couple of five stars, and then we have a comment from a Trevor 1 in the U.S. He says, “Top-shelf knowledge on b-to-b apps. Rob and Mike are very knowledgeable in SaaS in the b-to-b app world. I learn something new from them every episode. Really like the acquisition stuff lately. Great job, fellas – and keep it up.”
[00:43] So, if you haven’t left us a five-star review in iTunes, you don’t even have to leave a comment, you can just click in there and click on the five star. We’d really appreciate it.
[00:52] Mike: I’ve finished the rest of the designs for the upcoming version of AuditShark, and I think that it’s going to resolve most of the issues that people have been complaining about. So, there’re some performance issues with the product if you have a lot of machines that you’re going after or trying to gather information from. I don’t have a good handle on exactly what the underlying issue is. I have some theories about it, but I’m hoping that some of the changes that we’re making are going to solve those performance problems and then add the additional functionality, like the reporting, a better scheduler and things like that that people have been asking for.
[01:21] Rob: And you said the designs for the upcoming version. This is the desktop version. Is that correct?
[01:26] Mike: Yes.
[01:27] Rob: Okay. And so what are the design? Is it like code? It’s, like, mock-ups?
[01:30] Mike: It’s like a functional spec, more or less.
[01:32] Rob: Got it. Okay.
[01:33] Mike: So, say this is the subsystem that needs to be implemented. This is how it’s got to be done. These are the things that you should do, and these are the things to be careful of, and this is how it’s going to interoperate with the rest of the application.
[01:42] Rob: Got it. And these were requested by early-access customers or folks who’ve used the product?
[01:47] Mike: Yeah, people who were using the products and saying, “Hey, how do I do this?” or, “How do I do that?” And it’s like, “Oh, well, that’s coming,” because I’m getting to the point where there’re certain things that are going into the next release that I know are going in there, because we had a release two or three weeks ago, and we’ve got another one slated for the end of September/early October. And there’s stuff that I know is a problem; but, it’s like, okay, I can’t push them off anymore. We’ve got to do this.
[02:11] Rob: You know, I remember several years ago Joel Spolsky had a post, and he said that when customers request features, that they wouldn’t write them down internally because they found that the features that people really wanted were requested so much, that you just remembered them. And I’ve always been kind of fascinated with that. I wouldn’t say I’d take that approach directly. We actually do track everything everybody requests, but then certain ones, it just becomes painfully obvious that the product is not going to serve people’s needs without, you know, this fundamental feature. And so when you hear it over and over and over, that’s when – we have some features that I haven’t wanted to build; and we’ve, you know, finally capitulated when we get a lot of folks who are really into using that.
[02:52] Mike: Yeah, and I think that’s the interesting thing, because you have this vision of what your product is supposed to be, and then there’s reality, what the customers actually want. You have to kind of balance between those two things.
[03:00] Rob: That’s what it is. It’s balance. And, you know, for every feature that we implement, we probably get ten feature requests; and we don’t build a lot of them, because people will see your product in relation to other things, maybe, that they’ve used in the past. But you may not want to build that. You may not want to add a shopping cart to your auditing software. You know? Or, want to add landing page functionality to your email marketing app, which people have requested; and you just have to decide what are we really building. But then hold that loosely enough that you are willing to respond. If you get people who are paying you money, and if you know enough about them, and you know enough about their experience to know that their needs will probably be shared along a large group of people – that’s the root thing you’re looking for. Right? You’re trying to figure out which of these needs are really for this one person – because a lot of feature requests you get, people are just asking for something that no one else will ever use, and that’s where that judgment call comes in really handy to be able to differentiate, “All right. Will a lot of people need this? Or, is this really just a unique snowflake scenario?” I call them “snowflake features” – right? It’s ones that no one else is going to use, and you’re basically going to spend a lot of time – and complicate your UI. It’s not even development time anymore, but it’s like I don’t want to bloat this app with these random features that are not going to be used by at least 20 percent of the users of my app.
[04:16] Mike: The other thing you have to keep in mind is that you have to implement certain things that seem on the surface to be things that would not be used very often, and those are the types of things that are barriers to entry. So, if it’s painful for somebody to get up and running with your application, and that’s why they’re not using it, and that’s why they’re not paying for it, then those are the things that you have to implement, even though they’re only going to probably ever use it once. So, those are the types of things that we’ve been looking at as well. So, part of the application – we implemented like a ping sweep functionality initially just so you could say, “Okay. Let’s scan the network [and] see what’s out there.” And the next level was essentially going directly against active directory and showing them what’s there so that they can drag that into their collections and say, “Okay. Now I’m going to go after all of these machines that active director knows about.” There’s two, different sides of it. There’s what you know about, which is in active director; and then what you don’t know, which is available through ping sweeps and S and P and things like that. It’s taken time to get to that point, but that’s a barrier to entry for some people, because they’re like, “I need to audit everything in active directory. How do I do that?”
[05:16] Rob: Right.
[05:17] Mike: And they haven’t been able to until now.
[05:17] Rob: Right. I think it’s about finding that minimum path to awesome. It’s basically about how we heavily, heavily scripted the onboarding process and how someone getting set up with DRIP is heavily orchestrated; and we spent a lot of time on it. We spent a week or two on it the first time around, and then we redid it when we moved into automation; but it gets our onboarding percentages really high. And it sounds like you’re in the process of that, too. And that’s what you’ve got to figure out – is what’s that first moment where a customer says, “Wow. This is awesome”? They get payback for it. And how can you get them there as quickly as possible?
[05:52] Mike: So, today we’re going to be talking about trust signals for your website. And the idea behind this is that people don’t buy things from websites they don’t trust, and they don’t give information to websites that they don’t trust. When you’re browsing around on the Internet, the “BACK” button is very easy to use, and so many people use it, that even Google measures when somebody clicks on a site and then uses the “BACK” button to go click on another site. And they use that. In analytics, it shows up as your bounce rate, but they look at that and say, “Okay. Well, how useful is this page?” And it’s not necessarily about just how useful it is, but how sketchy the page looks as well.
[06:24] So, this was inspired by a moz.com post from Cam Secore and the idea behind this is you have to establish trust on your website, and there’s a lot of different ways that you can go about it. So, the first question is really, “What does trust mean?” And trust is essentially a state of being where someone exposes some form of vulnerability, or accepts some risk based on their positive expectation of the attentions or behavior of another person. So, if somebody comes to your website, and they trust that you’re not going to spam them, then they might be willing to give you their email address. So, behind this, trust is really grounded in the evaluation of two, different things. The first one is ability, and the second one is your integrity. So, ability is your demonstrated skill, or competence, or knowledge around a particular topic. The second piece is integrity. Do you adhere to your principles, and are those principles known?
[07:15] And a trust violation occurs when either of these things proves to be false. So, if you’re going out, and you are billing yourself as some great conversion expert, and you go in, and you do some work for somebody, or you offer them free advice, and it turns out that they can pretty clearly see that you have absolutely no idea what you’re talking about, then that’s considered a trust violation. Another thing is if you are gathering email addresses on your website, and suddenly they start getting spam. Then their trust has been violated, so they’re not going to trust you as much in the future. So, you really want to be careful about those types of things. But we’re going to be looking today about some of the different, major trust signals for websites and how you can go about addressing them.
[07:56] Rob: Yeah. And I think trust probably falls into two categories, even. There’s instant trust. It’s like I come to a brand new website that I don’t know, and it’s basically a cold look at this website. What are the factors that are going to help me trust or not trust it? And then there’s that long-term trust – right? Once you get to know a company, or a person, or a service, trust builds over time. And then there are thing, like you said, where if they get hacked, or if suddenly they send you spam or whatever, then you get a ding. You get a withdrawal from that trust bank. And, typically, you can withstand a couple of those before people start bailing on you. So, I think there’s really two things. I think we’re going to be talking about that initial impression and building trust quickly when someone comes to your website.
[08:41] Mike: Now, before we get into these things, there are some things that you should keep in mind, which are essentially heuristics about how we recognize and establish or associate trust with people. And there’s a few different mental shortcuts that people take in order to figure out whether or not you’re trustworthy. So, the first one is an authority. If an expert believes in something, then it’s probably what you should believe as well. So, if there’s a Ph.D. from MIT who comes out – he’s a physics expert – and he tells you something that’s related to how the starts are aligned in the galaxy, chances are really good you’re probably going to believe him; because he comes from MIT. He’s got a Ph.D. in physics. He’s an authority on the topic. And if he tells something to someone else, and they tell it to you, the source of the information is that authority, so it becomes more trustworthy just because of that.
[09:27] And the second thing is social proof. If other people like me are doing something, then I should probably do it, too. So, anything on Twitter, Facebook. But at the same time, having some of that social proof behind it is one of the ways that we essentially shortcut some of these things.
[09:43] Rob: Right, and a big way to do that, typically, on a website is to have testimonials, or to have logos of big-name customers that someone might recognize.
[09:51] Mike: Right. And another heuristic that people will use is familiarity with something. So, if you’ve done something before, then chances are that you’re familiar with how to do it, and you’re going to go through the same process again. And people tends to gravitate towards things they are familiar with. So, if somebody comes out and says, “Oh, well, this is the way you should do X, Y and Z,” and you’ve done that before, you are going to inherently trust other things that they tell you because they have proven that they think in the same way that you do; so, [they are] thereby more trustworthy.
[10:21] And then some other ones: things like length. If you write a report, or a white paper, or something like that, if it’s longer, then it has a higher impact on it; because it took a lot more effort to create that. Things that are much shorter tend to have a lot less credibility or a lot less trust associated with them when there’s no external, influencing factors.
[10:41] And then the last one is more of an opposite effect. If other people are publicly bashing something or saying, “Hey, this is a very bad idea,” you essentially get that opposite effect. And, again, that’s just a mental shortcut that a lot of people can take.
[10:54] So, now let’s get into the different trust signals. The first one that I want to talk about is a visual design. So, when you’re looking at a website, the design itself tends to strongly influence what you feel about that website and how trustworthy it is. If it’s a very well-designed website – you know, it uses good color schemes, has a visually appealing layout to it – that’s the type of website that you’re going to gravitate toward and say that it’s more trustworthy. And there’s different security studies out there that have shown that people will inherently trust a website more if it looks nice versus things that, for lack of a better example, look like Craigslist. Wikipedia is another prime example that is more of an exception than anything else, because their designs are not that great. It’s very text-heavy. It doesn’t have a lot of design around it, but you know what you’re getting when you go there, and you expect that because it’s been there for so long. But if you go to, like, a corporate website for, let’s say, Exxon Mobil, and if it looked like something like Wikipedia, you probably wouldn’t trust it nearly as much – except for the fact that it says “Exxon Mobil” on it.
[11:56] Rob: You can overcome the lack of trust that you get if you have a crappy design or kind of just a template design. You can overcome it with the other things we’re going to talk about today, like the social proof and having good content and good architecture and all that stuff. But if you’re at the point where you can get a good theme, or you can hire a designer, you’ll notice that people will trust you more when you come out with something that looks really sharp. I notice this from the old HitTail design. That was in 2011. And then when I relaunched it in 2012 with a new design from Ryan Scherf, that you’ll see today at hittail.com, it is noticeably more trustworthy. It has a higher conversion rate and instantly had a lower bounce rate, because it went from looking like something that was built in the late ’90s, early 2000s to something that was built in this decade. And it’s some anecdotal evidence with a little bit of data, but over and over, I see this happening. And I see it in myself, too. If I landed a blog and it looks really nice, and it’s obviously professional, I instantly will at least give the content a shot. Right? I’ll at least give it a shot. I’ll at least consider subscribing to the email. But if it looks like crap, it’s going to take a lot for me not to just click the “BACK” button.
[13:07] Mike: If it was recommended to you by somebody, or if the reason you ended up there was because you were hearing a podcast talk about it, or if you had received a white paper or something like that that had recommended that site to you, you’d think differently of it than if you randomly landed on it because you clicked on a headline.
[13:23] Rob: Yeah, that’s right. If someone recommended it to you, it’s a piece of social proof. Right? I’m definitely going to give something more benefit of the doubt if someone had told me about it. Or, let’s say I was reading your blog, and you linked over to it and said, “Hey, this is something you should check out.” So, maybe you didn’t tell me directly, but it was just a blog post from someone I trusted, or a tweet, or something like that. You’re instinctively going to work through it a little more, but if you get the combination – you know, the way to really blow it out of the water is to get the social proof and the recommendation and have a good design and have good content – right? Then that’s when you’re going to really maximize the number of people that stick around and start to become engaged with what you’re doing.
[14:03] Mike: So, in addition to the visual design itself, there’s a lot of different aspects of visual design. So, things like making sure that there’s not a lot of white space, or clutter in the design. You have to be consistent among different sections of the website, so between your navigation – like, you don’t want your navigation to change from one page to the next. It just looks terrible; and it doesn’t put a lot of credibility on you to be able to build, for example, a web app or a piece of software, if you can’t even do the basic things required to make your website look consistent from one page to the next.
[14:33] Rob: Yeah. These are kind of fundamental aspects of design and a web design. There’s a couple of books. If you haven’t read these, [they’re] definitely worth it. They’re not too long. One is called “Don’t Make Me Think,” by Steve Krug, and that’s a little bit more about app design, but there’s also some good stuff in there about just architect and websites. The other one is called “The Non-Designer’s Design Book.” While it talks a lot about print, layout and fonts and that kind of stuff, it applies both to web and print design. I found it super helpful, because I never had a design education. When I see something, I can say, “Wow. That looks really good,” or, “That looks crappy”; but I often don’t know why, and I often don’t know how to make it look better. And both of those skills are things that are worth learning, and that’s where a book like “The Non-Designer’s Design Book” can come into play.
[15:16] Mike: [A] couple other things that kind of fall under the idea of visual design are things like ads and stock images. So, if you have a corporate website, and you’re serving up ads on it, ads, I think, are generally expected on news websites; but not on a corporate website. I wouldn’t expect to go to Exxon Mobil’s website, or to the NASDAQ website and see advertisements all over the place. And then in terms of stock images, you really want to be careful about using stock images in place of people who you might actually have pictures of. One of the examples that’s given is the idea of plumbers. And if you have a stock image of, like, a cartoon plumber versus an actual picture of people who are on the team of a plumbing company, the plumbing company that’s using a real photograph of the employees is going to do better than the one that’s using stock photography.
[16:05] Rob: Yeah, absolutely. There’s an example in this article – and they’re right next to each other and you totally get more confidence in the folks when you actually – it says, “The Team,” and it shows everybody there. And it’s like, “Oh, these are real people” – right? It just gives you confidence that they’re not kind of hiding behind this stock cartoon image. This is one of the reasons I think that “About” pages are hit a lot more. If you go look at your Google Analytics and see how many times your “About” page gets hit – and this is one of the reasons that I include head shots of everybody, and on the Drip “About” page, specifically. It’s just one more way to build confidence that there’re real people behind your app.
[16:40] Mike: It’s funny you mentioned that, because I was surprised at that as well – that the “About” pages tend to get a fair amount of traffic, more than I would’ve reasonably expected them to get.
[16:49] So, beyond the visual design, what other sorts of things can affect how people view the website and whether or not they’re going to trust it? Well, the next one is website architecture. So, how easy is it to use the website? How easy is it to get around? How quickly can you find the information that you’re looking for or that you need? And this isn’t necessarily about doing great SEO. It’s about organizing it in a way that, from any page, it only takes a couple of clicks to get to any other page. You know, you go to these massive websites like IBM, and it is impossible to find anything that you’re looking for. And most people try to avoid going to those websites if they can, because they just can’t find anything. And then when you do find the page that you’re looking for, it generally doesn’t tell you what you actually want to know anyway. You have to call somebody and talk to them on the phone. So, from an ease-of-use perspective, those websites just completely fall flat on their face. The only reason that they have trust is because they’re such large companies, and people tend to work with their sales reps. That’s why people go to their websites, is to try to find more information. And then when they can’t find it – maybe that’s a sales strategy that they have. You know, they make their websites intentionally terrible so you have to call them.
[17:55] Rob: I think it’s so easy to make bad websites. It’s so easy to let things get complicated, because if you take an app, for example, if you take every user’s feature request and you build it, your app will suck. You have to be that gatekeeper, and you have to only build certain things that fit your vision. And the same thing happens with a marketing website. You’ll find people saying, “Hey, I couldn’t find your FAQ,” even though you have a link in the footer, and so you move it up into the top navigation. And then someone says, “Oh, well, you know, the about page gets a lot of visits. Let’s move that up into the top navigation.” And then on and on and on, and pretty soon, you have 50 links in your top navigation. Just because someone made a case for it at some point, or some user complained they couldn’t find it, you’ve tried to remedy everything. And that just builds kind of a kluge.
[18:37] And so if you look at a lot of sites that are easiest to navigate, they edit like samurai warriors, basically. They really have a strong sense of what they are, and they’re opinionated about where things go. But, I have my own opinions about, on a SaaS marketing website, what I think should be in the top nav and what I think should be in the footer and what I think should be in a site map somewhere and doesn’t even belong in the footer – you know, that’s kind of buried even beyond that. And, yes, every once in a while, you’ll find someone who can’t find things, but for the most part, the other 99 percent of people who are using it are going to get more benefit out of your site if you choose the things that are important, you put them in the top nav; and then you move everything else down below the fold, into the footer and into other pages.
[19:19] I think the other thing you touched on is page load times, and it’s a big one – not just for SEO, but there’ve been tons of studies that find that people will bail on websites. Subconsciously, they will bail on websites that are taking more than a second for pages to load, because they just feel like it’s too much effort, and their subconscious just kind of takes them out of it really quickly. And so getting your page load times down is super important. It’s something that I don’t know that people spend enough time on. It’s something I always respected about Jeff Atwood with Stack Overflow when they were building it. They spent a ton of time optimizing it, and it really shows. When you use Stack Overflow, you never once think about how slow the pages are. And, in fact, I think that’s an interesting thing. If you’re using a website, you never think, “Wow. Look how fast this is loading.” You never think that. But you will think, “Wow. Look how slow this is loading.”
[20:07] Mike: Yeah, I read something that essentially had Google quantifying how much money they would lose if they were to increase the page loads by, like, half a second. They actually tested it. They could prove kind of beyond a shadow of a doubt they were losing money, and they could quantify exactly how much money they were losing based on how much they increased the load time for different pages. It was kind of crazy to see that kind of detail.
[20:29] If there’s broken links on your website, those are killer. If there’s internal pages where you’ve got crosslinks and stuff – and, sure, it’s easy to screw some of them up, but there’s tools out there you can use to essentially crawl your website and look for those broken links. Those are the ones that you[‘ve] got to find. And if you haven’t put together, like, a custom 404 page – I actually heard the other day that using your 404 page as essentially a landing page: “Oh, we’re sorry. We screwed up; but, hey, here’s a free giveaway” – that’s an option. I haven’t actually pursued that, but I thought it was an interesting idea to use a custom 404 page as something of a landing page as well. But I think, in most cases, you could also use a 404 page to log that information back someplace. On my websites, there’s a log-in mechanism that, if you ever try to go to a page that doesn’t exist, there’s a log-in mechanism that logs that stuff to a database and says, “This is the page that somebody was trying to go to. This is where it was referred to.” And that way, you can hopefully cut down on those. So, if there’s other people linking to material of yours that is – you’ve moved it, or it doesn’t exist anymore, you can redirect them under the covers so that the end user doesn’t have to see that experience of clicking on a link, and they end up at a 404 page.
[21:39] Rob: Yeah, that’s a big one. Everything that you just mentioned, I think, is something people should do. The reporting of the 404’s is important as well, because even if you crawl your site internally and you take out all the 404 links, and you fix everything, people can still be finding you through Google at old pages. And you want a notification when someone hits that page so that you’re able to either get a redirect or get the page back there, because you don’t want to lose that Google traffic that you’ve worked so hard to get.
[22:04] Mike: And just because you go onto Google and you search for a specific page and you don’t see it, it doesn’t mean that one of Google’s other data centers doesn’t have a link to that page. So, that’s the one thing that you kind of have to keep in mind, because different Google data centers have different data about your site. And it’s kind of screwy that you have to even deal with it, but having a mechanism in place that can log any sort of 404 pages is really critical when you’re trying to eliminate those types of errors.
[22:29] I think one of the other things that, whenever I got to a website that just kills me is if you go there and there’s popups that try to get you to give them information right away; or, if you try to scroll up and down, and they just throw something up in your face and say, “Hey, would you like to subscribe to this?” And it’s like, “Yeah, I was already leaving because I wasn’t interested in what you have. You’re not going to get me with an email popup at this point.” And then there’s those websites where you go to them, and they just automatically start playing music or videos in the background. Sometimes, it’s even hard to find where to turn them off because there’s so much stuff all over on the page.
[23:05] Rob: I’ve never been a fan of either of those. The popovers over and over – people say they get more email sign-ups, but I’ve never been a fan, and I’ve never used one myself. But that’s one of the reasons we developed the DRIP Toaster widget that’s down in the lower right, and it’s just much less intrusive. I also am not a fan of the exit intent stuff, you know, when your mouse moves up to hit the back button, or to close the tab, or whatever, that it jumps out and tries to get you to subscribe. I’ve never once – I’m not saying they don’t work, because I know they do. But I’ve never once entered my email after that. It’s almost a principle thing at that point.
[23:41] Mike: So, let’s move on to the next section and discuss the written content itself. One thing I see: using ambiguous messaging in terms of trying to get your customers to work their way through your website. If you’re not direct about what it is that you’re trying to get them to do, or why they should stick around, people are going to leave. They’re not going to stick around and try to figure out what it is that you’re trying to say. And that’s one of those big things where you come to a website, and there’s this wall of text – neglecting blog posts, because I think those are in a different category. But if you’re going to a product website and you look at the website and you’re really not sure what it’s even for, that messaging really needs to be tightened up. You can figure that out. You can figure out whether your website is having issues there if you show it to some random person that you meet at a conference and say, “Hey, can you take a look at my website?” Don’t even explain to them what you do. Just have them look at your website and see if they can figure it out. And if they can’t figure it out from the home page, then chances are you’ve got to rework that home page a little bit.
[24:38] Rob: Yeah, you have to think about all your content as if new visitors – first-time visitors – are looking at it, because I see some sites that cater more towards their return visitors, and they do it on the home page. And, typically, you have an enormously higher ratio of new visitors hitting a lot of your pages than you do returning. And so one home page that I saw, the headline was “V3.4 Now Released.” And it’s funny, because if you just arrive at that as a brand new user, you have no idea what you’re talking about. “V3.4 of what? And what does it do? And why do I care?” and all that stuff. Now, V3.4 release could be a subject line sent in an email out to your existing customers, because then they’ll have some idea of your app and what it does. They have some indication. But doing that on your home page is a big mistake, and I think it’s not only ambiguous, but you’re leaving a lot of potential on the floor when you’re doing that.
[25:29] The other thing that you should think about is you should have a lot of you’s and your’s in your web page – right? So, you don’t want to say, “We are this,” “We are that,” “Our app does this.” You want to show the person who’s there that you understand them. And so if you go to getdrip.com and you look at the first five paragraphs, almost all of it talks about “you,” “you” and “you.” And you’ll see it, and it’s me being in the head of people who potentially want to use DRIP, and it’s me understanding them and showing that I understand them. You know, it’s an age-old copywriting technique, and then they’re just more likely to follow your logic and listen to you as you continue to talk. But if you start off with “we,” “we,” “we” and “I” and “me” and “my product and this and that, it’s not that it never works; but it works much less often.
[26:17] Mike: And that kind of leads into the language and the claims that you’re making about the product as well and about the problem space itself. And if you say, “You can save a lot of money,” or, “This is trusted by thousands of customers,” it doesn’t necessarily break trust; but if you make very specific claims, those things are a lot more compelling than when you’re more generic about what it is that you’re claiming.
[26:38] Rob: I agree. if it said, “Our average customer saved $3,420 last month,” or, “Our average customer saved 8.2 hours of time for every dollar they spent,” or something like that, it really has a lot more impact than just throwing out platitudes and clichés that a lot of people – “We are the best email marketing software on the market.” It’s just a such a big difference.
[27:03] Mike: Yeah. And along those lines, the specifics of it are really what get people. So, if you say “under ten hours” versus “8.2 hours,” 8.2 is almost certainly not made up. I mean nobody’s going to say “8.2.” But if you say “under 10,” it’s not to say that it’s a deal breaker; but if you just say “under 10,” it seems, “Well, okay. Somebody just kind of estimated.” But 8.2 seems like a real number that somebody had to measure. I think you also have to be careful about typos and grammatical errors and things like that, because if you have grammatical errors or spelling errors, any sort of careless typo – especially when you are tasked with building software that addresses critical data or sensitive data – then if you’re not careful about the copy that’s on your website, it kind of invokes a little bit less trust in your products; because if you can’t keep spelling errors out of your website, how are you going to keep bugs out of the product? How are you going to keep that data secure? How can they trust you to do a good job with the software itself if you can’t even write good copy for your website?
[28:04] Rob: Yeah, and it sounds petty, but I do think it’s a subconscious thing. I think that if I see typos, instantly there’s a little ding. It’s not that I’m going to bail on it, but there’s a little ding to their credibility. And the more that I see, the more of an issue it becomes. And I’ve, frankly, had a couple typos pointed out. There’s one in the FAQ of DRIP, and I fixed them right away. Now, if there are typos on my blog, and it’s more of personal brand stuff, I don’t mind that as much. It’s me writing on my blog. It’s a little more casual. But in corporate stuff, where you’re trying to sell software, trying to sell an app, I do think that it’s worth the effort to make sure that your grammar and your spelling are really in line.
[28:45] Mike: I think the last two categories are essentially independent verification and then self-verification. So, in terms of self-verification, talking about the type of audience that you serve, or the experience that you have, any sort of guarantees or commitments that you have to people. Those are the types of things that are essentially the self- or first-party verification type. You know, you can tell people about what it is that you do, how many people you’ve helped – those types of things. And then in terms of third-part verification, you can think of things like reviews, testimonials, comparisons between you and other competitors, where you’ve been seen, any sort of affiliations you have.
[29:22] Security seals. For example, one of the things that a lot of people will do is they’ll put Visa, or Master Card, or American Express logos on their websites and say, “Hey, we accept these credit cards.” But in addition to just letting people know that you are accepting those credit cards, you’re also essentially borrowing trust from those symbols; because Visa and Master Card and Discover have presumably given you permission to accept their cards, so clearly you must’ve gone through some sort of approval process to be able to do it. And that’s a way that you can essentially borrow trust from those organizations to help boost your own.
[29:54] So, when you’re looking at a website and trying to figure out whether or not it’s going to be trustworthy, especially when you’re trying to evaluate your own website, you need to look at it through the eyes of the customer. And the first thing that you look at is the core tenets of trust. The first one is, are you credible? Is there any sort of social proof? Can you prove that the information that is out there is up-to-date? So, for example, if your copyright at the bottom says “2010,” and it’s 2014, that’s probably going to be a problem to people, because they’re just going to say, “Well, this information is old and outdated.” Are you transparent? Are you showing contact information for your company, ways to get in touch with you, any sort of disclosures or privacy policies? Are you telling them flat out, “Hey, we will not spam you. We do not share your email address” – those types of things? Are you talking to the customer and letting them know how they should expect to be treated?
[30:42] And then the third thing is, is your site easy to use? Does it load fast? Is it easy to navigate? Does the user have a clear set of expectations on any given page where they should go next?
[30:54] So, those are the things that you need to keep in mind when you’re looking at a website and trying to evaluate whether or not it’s trustworthy. And those are the types of things that we’re trying to really harp on for this particular episode so that people look at their websites with a little bit more of a critical eye.
[31:09] Rob: And, realistically, you only have a couple of seconds before people make that snap judgment, and I think visual design is a big part of that. And then I think that the tone of your written content, which we touched on a little bit – that’s one of the other, biggest stumbling blocks I see; because it’s so easy to write generic, crap, marketing speak that you kind of feel like you should write, and that’s very safe to write.
[31:31] And, typically, if it feels very safe to write, it’s junk. And trying to break out of that mindset and write something that’s really risky, that feels risky, tends to be what’s successful. And I would challenge you, if you’re going to sit down to try to write copy for your website, that you don’t start thinking about what your product is and what it does; but that you start by thinking about who your prospect is and who the person is that’s going to buy your software. Try to get into their mindset and then talk directly to them.
[31:56] I would also say go look at some websites that you feel like have done an exceptional job of communicating their value proposition. So, look at copyhackers.com, and you can go and read the tips in the blog and everything; but look at the home page. Do you feel like a person wrote that and you get a pretty quick feel for who that person is and what her voice is? And the answer is probably you do. You know, there’s personality there. And there’s a number of other examples, but go to, you know, a Patio11. Go to his home page of his blog. It’s not a blog post, but right away you feel like there’s a person there writing behind it. You can use that same tactic to write a marketing website – and I’ve done this with my own apps as well – to where it doesn’t feel like someone recycling the same, old, marketing jargon and platitudes and clichés; because none of that works. And you may as well not be doing it. Trying to find our own voice and writing like you speak and trying to identify with people as another person, instead of as a corporation, I think, is a really big step towards making this all work.
[32:57] If you have a question for us, call our voicemail number at 888.801.9690, or email us at questios@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control.” by MoOt, used under Creative Commons. Subscribe to us on iTunes by searching for “Startups,” and visit Startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 204 | 9 Tactics for Aggressive Time Management
Show Notes
- Sweet Fish Media wrote a nice recap of this episode in their post 9 Insanely Effective Time-Management Tactics.
- ConversionCast podcast
- GoToWebinar
- RxRemindMe iPhone app
- GTD – Getting Things Done
- Trello
- SimpleNote
- AnyList
Transcript
[00:00] ROB: In this episode of Startups for the Rest of Us, Mike and I discuss nine tactics for aggressive time management. This is Start Ups for the Rest of Us episode 204.
[00:08] Music
[00:15] Welcome to Startups for the Rest of Us, the podcast that helps, developers, designers, and entrepreneurs be awesome at launching software products. Whether you’ve built your first product or are just thinking about it. I’m Rob.
[00:24] MIKE: And I’m Mike.
[00:25] 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?
[00:29] MIKE: Dear Skype, you’re not actually improving my Skype experience when you just randomly upgrade in the middle of the day for an hour.
[00:35] ROB: Oh, and then the UI is different every time they do.
[00:39] MIKE: It drives me nuts. I mean I understand there are certain types of software and there’s time where you need to do it, but it seems like every single time I fire it up it’s just like, “There’s something new! Here you go. Learn it all over again.” It drives me insane.
[00:53] ROB: Yeah, that’s not cool. On a lighter note, we have pictures from MicroConf 2014 in Vegas and those are live at microconfpics.com. So if you want to check out some of the fun, speaker photos, attendee photos, and all kinds of tasty goodness, it’s over there microconfpics.com.
[01:09] MIKE: Cool. I’m upgrading my iPad to iOS 8. I read the other day that iOS 8 adoption is apparently really low and I think it would be a lot higher if it didn’t take forty-five hours to download and then midway through it decides it can’t finish the connection so it just dies.
[01:24] ROB: Did it?
[01:25] MIKE: So you have to start over.
[01:26] ROB: Forty-five hours seems like an unusually long connection. So I haven’t upgraded because I’m heading out of the country tomorrow and the last thing I needed was to either be in the middle of an update or to get an update and have it break something. And I bring multiple devices, you know, this year we decided not to bring – we pretty much aren’t bringing any physical books. Trying to bring as little paper with us as possible, just purely because we’re moving around so much in Thailand and don’t want the weight.
[01:51] MIKE: Yeah I don’t blame you. It’s nice with the Kindles, you can just put lots and lots of books on there and if you get bored you’ve got your whole library. It’s awesome.
[01:57] ROB: It’s crazy, yup. And they don’t take up much room and then the nice part is you can also put PDFs in there as well. And you can download them in advance and you don’t have to worry about – Because sometimes Dropbox will download something but then it’ll restart and nothing will be there. Whereas with the Kindle if you’ve download it into your library it should be there when you get there so that even if we don’t have internet access we should be able to practice music and do some of the independent study stuff we’re doing with one of our kids who’s in school. That should all be in tact.
[02:24] MIKE: Do you do that through the Kindle app or just through an actual Kindle?
[02:29] ROB: No we have Kindle app on iPhone and then you email the PDFs to your Kindle app address that you can get from Amazon.
[02:37] MIKE: So, the only other thing I’ve got is that I held my first webinar this past week. You know, it didn’t go nearly as well as I would have liked. I didn’t get much in terms of attendance. At the same time, I had a very short time window to promote it and I’m still trying to figure out how to promote it. That’s one of the big things that’s kind of on my list is to figure out how to start promoting the webinar because over time, I don’t want to saturate my list with the same webinar over and over again so I’ve let them know and told them and I have to figure out how to scale that up. Try to do that.
[03:05] ROB: I’ve heard a couple of approaches; the one that I hear most often is to use the Facebook newsfeed and you can actually put a short video in there. There’s one recent recording – I think it was ConversionCast – and I would listen back a couple of episodes and someone talks about promoting webinars directly using Facebook newsfeed ads which kind of talks through the process that they use and that’s where I would start if I was going to do it. I have not actually done it, but they have a lot of success with it.
[03:29] MIKE: I’ll have to take a look at that. I did try to record it using GoToWebinar’s built-in recording and they just completely mangled the entire thing. I don’t know what happened. The webinar itself went fine but then the recording itself, it was all messed up. All the transitions and stuff, it just hung up –
[03:44] ROB: Oh no.
[03:45] MIKE: And then I tried converting it to other formats thinking that was it but it’s the source that’s messed up. This past week has just been a total bust for me.
[03:52] ROB: Yeah, that’s a bummer. Do you have an alternative for recording your webinars? Are you going to try to do it through Camtasia or something?
[03:59] MIKE: I’m just going to try to do it again. If I do it again the next time I do the webinar and it doesn’t record again what I’ll do is I’ll give the webinar separately and just record it through Camtasia and that way I can polish it up a little bit. And there are services that you can use where you can send them a webinar or a podcast or something along those lines and you can have white papers and eBooks and stuff created out of them. So I have to take a look at that; I learned about it at the Business of Software so I’m going to take a look and see if I can generate some content out of that kind of thing.
[04:28] ROB: Very good. Well let’s dive into our topic for today. We’re going to talk about nine tactics for aggressive time management. A listener of the show emailed me and he said: “I just read a good article in Entrepreneur Magazine on time management in an age of information overload. This is a topic I’m very interested in because I think I lose a lot of time in my effort to be responsive. I suspect that this is something that a lot of folks in the startup tech community struggle with.” So I gave this a bit of thought and what I didn’t want to do was record an episode where we say the same things you’ve already heard about time management which is: don’t check email in the morning, only reply twice a day, take notes, and have a to do list, and all that kind of stuff. So I really wanted to try to get a little more aggressive with it and maybe talk a little deeper about some of the ways that you and I manage our time in a way that I’ve found to be more effective over the years.
[05:18] So we have nine points here and I think I’ll just dive into the first one. The first tactic is to answer email in the morning even though everyone says not to. The key here is to have the willpower to prioritize, to move things out of your email into your to do list, and to not sit there and kill two hours managing your email. Because if you lose the morning – which tends to be most people’s most productive time – then you’re doing this wrong. But over the years I’ve realized that not checking it in the morning doesn’t work for my particular work scenario because I have urgent support requests that are sometimes there, I have issues that come up that I need to triage and I need to be able to prioritize and if I try to come in and do something first that doesn’t involve email, I will often leave the most important thing until lunch time at which point it’s too late.
[06:03] MIKE: Yeah, I answer email first thing in the morning as well. I have a tendency to have a lot of emails come in overnight that I have to deal with and if I don’t deal with them then somewhere in the back of my mind there’s this little voice saying, “Hey you’ve got a ton of email that you have to do something about.” And then I’ll check it kind of periodically throughout the day but I don’t spend a lot of time on it. I do the same thing as you: I spend some time first thing in the morning, get most of my email cleared kind of out of the way, and then deal with it as it comes in throughout the day. But there’s also times when I’ll just pause my email and just ignore it for several hours at a time before I need to come back to it.
[06:35] ROB: Yeah, that’s what I do as well: I check it first thing in the morning, I triage everything, if it’s a quick reply, I reply instantly. I delete most of it, frankly, I put some of it into Trello, I try to get to inbox zero – I don’t always. And then I will just close the Gmail tab. I have no pop-up notifications, nothing that notifies me when a new email is sent. And then I’ll sit and try to get – now that I have my day prioritized and laid out, the agenda set – then I try to get at least a couple of solid hours of work in before lunch.
[07:05] MIKE: Now, do you answer emails in the evenings too or no?
[07:08] ROB: I do answer emails in the evenings but not every night. Typically if something requires a quick response, I will do it on my phone if I’m out and I’m able to check email. When I’m with my kids in the evening, I typically try to put my phone in another room so I don’t check it for a few hours, but then I will check it, let’s say eight or nine o’clock after the kids have gone to bed and if there’s something that’s either a quick response or that’s urgent I will reply. But if there’s anything that requires more thought or a little more work, then I try to triage it, get it out of the inbox so it’s set on the agenda either for the next day or for down the line. And I do use the A and the B priority stuff in Trello, so if it’s something that can wait I will kind of kick it down the line and expect to get to it in a week or two when I have time.
[07:54] Second tactic I want to talk about, which is something that I’ve already touched on a little bit, is to turn off email, Facebook, and Twitter notifications and any other social network or any other thing that can interrupt you during the day. Text messages are a big one as well. I think a big exception, of course, is if you’re kids’ school is going to call or there’s something you really have to be alerted to. But, frankly, I turn off all notifications and people know that they should text me or they should call me if it’s urgent.
[08:22] MIKE: So by Facebook and Twitter notifications you mean, you have these apps installed on your phone or your iPad or whatever and you have the notification to pop up to the screen turned off? Like the banner?
[08:33] ROB: Exactly. I know people that every time they’re mentioned on Twitter, their phone buzzes like it’s a text message. And every time that someone likes one of their posts or does something on Facebook – shares their post, I don’t know what it is, but they do something – then they get a buzz on their phone. Frankly, if you’re trying to get work done that is awful.
[08:51] MIKE: Yeah I know what you mean. I actually got to the point where I turned off a lot of them. I still have one, that prescription app I think it’s from Walgreens – Rx Reminder or something like that – and what it does is it just reminds me every two hours to drink a glass of water and the primary use of it is actually to remind me to drink eight glasses of water a day.
[09:08] ROB: Yeah, well that makes sense. And every two hours isn’t actually that bad. I have things like, obviously calendar reminders if I have a call, or if I have something where I need to be somewhere, yes, those are going to buzz because I need the reminder ten minutes before. And then if you’re doing a Pomodoro technique where you’re working in twenty-five minute stretches, obviously you need a timer or some kind of alert to alert you to the end of that. So I wouldn’t say turn off all notifications of any kind, but it’s the things that are interrupting, the things that take your focus away. What I find is that people slip in and out of this, I do as well, where sometimes I find myself just leaving my Gmail tab open because it’s like my lizard brain wants me to get distracted and it doesn’t want to sit down and do the hard work. And I have to actively think, “Close this down. Shut off the notifications, really get to work” and force yourself to do it. Because your mind doesn’t want you to do it because that’s the hard work and you’re kind of trying to trick it into focusing.
[10:05] MIKE: I’ve found myself doing that sometimes where I’ll be flipping over to my email every once in a while – every couple of minutes – and it’s like, “Wait.” If I’m working I’ll actually close down the tab, like you were just saying, and put a pause on the email box so that even if I go to my phone the stuff just doesn’t show up.
[10:21] ROB: Third technique I want to talk about is to stop watching, listening to, reading, or otherwise consuming mainstream news. If something important happens, you are going to hear about it – someone’s going to talk about it, someone’s going to mention it – you’re going to hear about it. Instead of news, I choose to focus on listening to audiobooks or podcasts that actually educate you, or listening purely to fiction. Stuff that’s actually going to relax you and kind of get your creative juices flowing. Instead of news of your phone, instead of sitting there and thumbing through news stories from the day which is just… It’s strange, it’s similar to Facebook and Twitter where I’ll find myself… I’ve actually deleted Facebook from my phone. And the reason is because I would find myself going to Facebook and the top two posts are interesting and relating to me: it’s my wife saying something or my mom or something. So I read through it and then before long I’ve been on there for ten minutes and I’m looking at people from high school and I really don’t care what they’re up to; I don’t care what their kid’s doing, or whatever. And yet, you get sucked into this thing. And that’s what I feel like the news on my phone turned into; the New York Times alerts and it would have news that was interesting at the top but then I’d spend fifteen minutes reading it, and it’s just a way for your mind to kind of try to occupy itself instead of actually being calm and actually either centering yourself for the day or thinking about things that are important.
[11:39] Instead of reading news on your phone, think about being productive like answering emails, or write a blog post, or write notes for a blog post, or schedule a Tweet for that matter, engage with your audience a little bit. There is very, very little value that you will get from mainstream news whereas you can actually get some value out of certain audiobooks, podcasts, and, potentially, listening to fiction.
[12:01] MIKE: I totally agree with you. I notice different people have their favorite news websites and stuff like that, and I do as well, but the one I’ve sort of gravitated towards is CNN.com and MSN.com and I’ve found that just by not going there ever, it’s wasn’t as if I ever missed anything. And you’re right – other people will mention it to you if it’s important. And the reality is that most of the stuff you see on mainstream news is just clearly not important to you. It just doesn’t matter. It’s not going to materially affect your life. And I’d say that’s the real problem with them; they’re sucking away your time and not really giving anything back to you.
[12:35] ROB: That’s the issue I have with it. I’m not saying that news is not valuable, I’m not saying that being informed about the world, and politics, and what’s going on is not valuable. But doing it every time you’re standing in line or every thirty minutes compulsively checking the news – and I’ve got friends who are news junkies – it winds up being a tremendous amount of time and it’s a bit of a crutch or an addiction of sorts, just like Facebook and Twitter and social networks and all that stuff can be. Or email can be for us, where we actually want to seek that interruption and it kind of relaxes us. It’s getting away from that stuff that you’re doing impulsively and I think news is a big one.
[13:09] So the fourth tactic I want to talk about – I mentioned already – is to put your phone in the other room when you’re with your family. And the reason I say that is because when you’re working, you should be working. You should be working really hard. And when you’re not working, when you’re with your family, you should be with your family. And you should be doing that really well. So you either need to figure out a way to not take your phone out of your pocket – which I do almost instinctively every ten or fifteen minutes. And so putting it in the other room, out just getting it out of arm’s reach, is a good way to really step away from something for a few hours.
[13:41] MIKE: You know, when I carried my phone around in my pocket a lot I had this natural tendency to pull out my phone and check my email and Twitter and all this other stuff just because I had my phone with me. Even if the phone is just not in your pocket, if it’s somewhere else – like if it’s on the microwave, or it’s on a shelf, or something like that – it doesn’t even need to be in the other room. As long as it’s inconvenient for you to go get it, that’s generally enough of a hurdle for you to not do it.
[14:05] ROB: Tactic number five is: don’t say “Email me” or “Call me” unless you really mean it. And what I mean by that is, at the end of my talks, I used to say, “Here’s my email address. Email me if you have questions.” Or when I’d meet with founders, we’d have a discussion over lunch and I’d do something to help them out and at the end I’d say, “Email me if you every have questions.” If you do that long enough, suddenly you are going to get too many emails and you’re not going to be able to answer them all and you’re going to feel guilty. So I’ve now taken a little more of a strategic approach to this and when I’m at the end of a meeting with founders or with people asking me advice, I typically say, “Well, I wish you the best of luck with it.” And, you know, if they do email me, that’s cool. And if they ask, “Can I email you with questions?” I’ll always say, “Yes,” because I still answer a lot of these emails. But I’ve stopped putting it out there because at a certain point, it just becomes a little too much to keep up with.
[14:59] The sixth tactic is to say, “No” a lot. This requires quite a bit of discipline, actually. I get multiple requests per day for my time for different reasons: people want to jump on calls, people have questions, people have… there’s just a ton of different things it could revolve around. Whether it’s MicroConf or any number of projects or apps that I’m working on, and the way that I’ve found to guard my time is to say “No.” And I have to say no to stuff that I want to do, even stuff that will help people out, there’s some local stuff where people have asked me to speak and I really have wanted to, and it would be fun, and it would give back to them, and sometimes I do do it. But other times, you just have to say “No.” And you can’t just weigh the time. If somebody says, “Hey, can you come do a twenty minute talk somewhere,” or “Help us out by just writing a little bit of code or doing two hours of tech support for this local Nonprofit.” If you have the time, that’s awesome, but you also have to think about the greater ramifications of that. A twenty minute talk means you then have to prep it, you have to practice it, you have to show up, you have to be there for whatever, the full hour, you have to talk to people afterwards, you may get invited to do other things. It always turns into more time than you think it’s going to. And, I’ve always made it a point to donate quite a bit of my time and money to charities and Nonprofits and I value those things. At a certain point, you do have to learn to say “No” to people that you really want to interact with.
[16:21] MIKE: Yeah, I think that most of the time your default answer should be “No” unless there’s a very compelling reason to say “Yes” to that kind of stuff. I think one of the underlying reasons for that is that if you start saying “Yes” to a lot of things, then what tends to happen is that you get asked to do more things. And it’s not to say that those aren’t helpful for other people but, at the same time, at some point you’re probably going to find yourself overcommitted. And when you’re overcommitted, that’s when you start to feel guilty because then things start to fall on the floor. And you feel more guilty about letting other people’s stuff fall on the floor than your own, so what will happen is that you will end up helping other people instead of doing the things that you really need to do, and you’ll start pushing those off.
[16:59] ROB: I also think this depends on where you’re at in your career. I think early on in your career you should say “Yes” to more because you tend to have more time available and you are seeking opportunities. You’re looking for ways to interact, to be around more people, and to build a network and all that stuff. But as time goes on, I see people overcommitting themselves. Actually, most people overcommit themselves in general, both in their personal lives and in their professional lives, and I think that learning to say “No” – I like what you said about making it the default response and then only reconsidering if there’s a compelling reason to do that. And that compelling reason doesn’t just need to be a selfish reason. It could be a compelling reason like, “Wow, this is a really good cause” or “These developers are really going to get a lot of value out of it.” I drove up to Mountain View – which is three hours from Fresno – and I gave a talk at the Googleplex to a Google developer group or something. It was a long drive and stuff, but I realized A) I really wanted to do a talk at the Googleplex, that was kind of fun. B) there were a lot of folks there; like, if there had been twenty-five people there, I wouldn’t have gone, but there wound up being 100-150 people. And the third reason: my parents live up there and my brother, so I was able to tie all that in and convince myself, “You know what, this is a good cause, I’m going to donate my time, it’s going to be fun, people are going to get value out of it, and I’m going to be able to work a family trip into it too.” So there are compelling reasons to do it but, especially as time goes on and your time becomes more and more valuable, I think leading with “No” and figuring out if you should say “Yes” is the right approach.
[18:27] Seventh tactic is to schedule time for Twitter like a mad person. Either don’t do Twitter at all or, if you do it, schedule it and do one, maybe two times a day. Schedule your Tweets in bulk. There’s a bunch of systems and ways for doing this, I’m not going to go into them here, but I find that Twitter can be – just like Facebook – a real time suck and a real default thing. If you’re not able to block yourself from doing it, there are tools you can download that will keep you from doing it. But I’ve found that just getting on there once in the morning and once in the afternoon, looking through, responding to everyone, and then scheduling some Tweets, personally, has been a really good approach for me and it keeps me from thinking about it all the time, it keeps me from interrupting myself with it, but it also keeps me engaged. It’s not like I log in every three days or four days and then people feel like you’re ignoring them.
[19:16] MIKE: Yeah I’m a little bit worse at this than you are, I think. I’ll log onto Twitter kind of when I get bored. Anytime my email hits where it says “So-and-so sent you a message,” that’s when I tend to go and look at Twitter. I like your approach of just hitting it once in the morning and then once in the afternoon, because that way you’ve got scheduled times for it and you can dedicate that time for it. But I know a lot of people will use it for, essentially, conversations back and forth. To me I find that extremely interrupting, I’d rather just use email or just use a phone call or something like that.
[19:46] ROB: Yeah I rarely do the conversation thing. Every once in a while it will happen but, when I schedule time for it, I try to keep it to less than ten minutes – and that’s both for the reading and responding and scheduling stuff. And I’m managing multiple Twitter accounts so I’m moving pretty quickly when I do that.
[20:01] Tactic number eight is to remove the mental burden of remembering things and let the cloud handle it. So this is similar to if you’ve heard of GTD, getting things done. Basically it’s to use a written to-do list of some kind, whether that’s on paper – I recommend using something in the cloud, like Trello, is what we use. Shopping lists I used to have on paper; we did away with that and now we have a doc in Simplenote and it’s shared between the two of us and any time any of us brings up something at the store, one of us adds it. There’s a system in place, basically, to capture that information. Let’s say I’m at dinner, I’m in a conversation and someone mentions something that needs to be an action item for me, they’re like, “Oh hey, did I mention I saw a typo on your website the other day?” or “There’s this fantastic new movie or this new iOS app that you need to download.” I never try to remember it, I always say, “I’m totally going to email that to myself right now.” Pop open email and I just have Trello as the contact name, and that’s my Trello board, and it goes to the top of the board and the next time I go in there I move it to the appropriate board and I actually have an iOS app queue and I have a movie queue and I have all this stuff that I do. One step beyond that is to actually have different email addresses for each of those boards so I don’t have to touch it twice, because realistically I shouldn’t have to touch that issue twice.
[21:14] MIKE: Similar to you, I think you said you use Simplenote? We use a program called AnyList and my wife and I are both signed up for it. That way if we’re at the store or something like that and the other person thinks of something they can add it and it pops up right on the list so that we need to go get whatever it is. So if we’re missing milk, or eggs, or whatever, if for whatever reason it didn’t end up on the list, you can check it and it will show you what is crossed off so you can almost see where in the store somebody is based on what they’ve checked off. We have a process in place where once you’re done shopping, before you go and start adding other things to it, you delete the list so that way you see all the deleted entries get removed as well. It’s just a process and as long as you have that process in place, to manage that information you don’t have to think about it anymore. And that’s the key thing, not having to think about it or try to remember stuff that you really have no business trying to remember.
[22:09] ROB: The ninth and final tactic that we’ll talk about is to eliminate meetings. There’s this concept of the maker’s schedule versus the manager’s schedule, something that Paul Graham talked about in an essay. The idea is that makers need long stretches of quiet productivity and managers tend to chop their day up with a bunch of meetings. And I think salespeople are like that too, they need to have a lot of meetings and they have to work around client schedules, so they will have very interrupted schedules. In my opinion, trying to be both a maker and a manager at the same time is incredibly unproductive and if you can avoid it at all cost, I would do so. This is one of the reasons that I have slowly weaned myself away from development, because as much as I love developing and I love creating and building, you need a maker’s schedule to do that and I just have too much going on with all the projects that I’m working on and everything that I’m doing. So I’ve had to hire people who can have maker’s schedules, and I respect their maker’s schedules. There are no meetings ay our company, the only thing we have a weekly lunch that we all go to and talk, but other than that we interact and we take care of things as they come up. But I never want to time box these guys’ time because I know what it’s like to be a developer and be working on something and realize, “Wow, in fifteen minutes I have a meeting and I have to stop what I’m doing.” It’s incredibly bad for productivity.
[23:27] MIKE: Yeah, I’ve been trying to wean myself away from that as well so that I’m not doing any more of the development tasks. I would say I have more of a manager’s schedule. How do you resolve the discrepancy where you’ve got to do a maker’s schedule in order to do things like Ad Words and things like that? Because, obviously, there’s content creation, there’s website tweaks, and maybe you’re not making anything but you’re doing things that do require some concentration in order to do it.
[23:54] ROB: Absolutely, like writing copy. The long-form homepage on Drip took me an hour to do the first round and then like four hours of revising and then I’ve written a couple of blog posts recently that have been several hours in the making. And when I did those, I basically went off the grid. I turned off all notifications, I blocked out about two hours to get the initial round done, and I did my thing where I drank some caffeine, I turned on loud music in the headphones, and I just went into the zone, and I totally cranked it out really as fast as I possibly could, and I totally blocked things off. If I have any type of call or anything scheduled, I can’t do that because I know that if I’m time boxed on the outside that I’m going to get interrupted, there’s something in the back of my mind that won’t let me get into flow because I’m thinking about it. So when I say I blocked off two hours, what I actually mean is that I put two hours on the calendar, I mentally said, “Alright, I’m going to try to sprint for two hours,” but I had nothing scheduled for three or four so I knew that if I ran over and I kept being in the flow, that I would just continue to crank on that. In fact, one day I got so motivated that I wrote the complete blog post and I still had another thought and I started another one and got a complete draft done, and then I went in and revised my sales letter all in one day. And, typically, I just don’t have enough good glucose that is available to create that much content, but some days you’ll find that if you do, in fact, get in the zone that it can carry over like that.
[25:14] MIKE: So, to clarify, this isn’t necessarily about maintaining a maker’s schedule or a manager’s schedule, it’s being able to interleave them between each other such that maybe on one day you do one and on a different day you do the other. It sounds like it’s not strictly about eliminating one and just doing the other instead.
[25:31] ROB: Yeah, perhaps. If I could help it I would not have meetings ever. I would not do Skype calls, I would not do the podcast interviews and stuff, but I enjoy them and they help me in my business. So I do, In fact, find it a necessary thing that I have to balance. I don’t know that everyone has to, though. I think that, if at all possible, if I didn’t have these podcast interviews and the other stuff that I do via Skype that I would try to have much, much more of a maker’s schedule. But I think if you are forced into it then, yes, it’s the ability to switch between them quickly, because to try to block out that time and to get into the zone quickly is hard, it’s a learned skill and you need to figure out what your triggers are for that. We’ve talked about that a little bit in the past; I’ll often loop a song over and over and over and listen to it straight for two hours and then, for weeks, anytime I play that song it will trigger me into the zone. And that’s the way that I’m able to sometimes get into the zone in three or four minutes, which is kind of unheard of. Typically it takes you fifteen or twenty minutes to really get into the flow, but if you figure out your triggers, you can switch back and forth between makers’ and managers’ schedules faster.
[26:34] MIKE: I like the idea of just scheduling two, three, or four hours or whatever on your calendar so that you’re not interrupted for other things. But obviously that’s also going to take – You have to start turning off your phone and doing various things and schedule that in such a way that you know you’re not going to be interrupted. Because the second you’re interrupted when you’re trying to establish that maker’s schedule, everything just goes right out the window. You take such a hit in your productivity that it almost wasn’t worth even scheduling that time to begin with.
[27:02] ROB: That’s right, that’s exactly right. And you really have to do most of the previous eight tactics we’ve talked about in order for this last one to work, and that’s why I put it last.
[27:10] So to review, our nine tactics that we talked about are to answer email in the morning; number two, to turn off email, Facebook, and Twitter notifications; number three, to stop watching, listening to, reading, or otherwise consuming mainstream news; number four; to put your phone in the other room when you’re with your family; number five, don’t say “Email me” or “Call me” unless you mean it; number six, to say “No” a lot; number seven, schedule time for Twitter; number eight, remove the mental burden of remembering things; and number nine, eliminate meetings and figure out if you’re going to have a maker’s schedule or a manager’s schedule.
[27:39] MIKE: If you have a question for us or a suggestion for a podcast episode, you can call it into our voicemail number at 1-888-801-9690 or you can email it to us at Questions@StartupsfortheRestofUS.com. Our theme music is an excerpt from “We’re out of control” by MoOt used under Creative Commons. Subscribe to us on iTunes by searching for Startups and visit StartupsfortheRestofUs.com for a full transcript of each episode. Thanks for listening; we’ll see you next time.
Episode 203 | How to Build A Marketing Calendar
Show Notes
- MicroConf Europe
- Business of Software Conference
- Rand Fishkin of Moz.com
- Noah Kagan – Quant Based Marketing
Transcript
[00:00] Mike: In this episode of “Startups for the Rest of Us,” Rob and I are going to be talking about how to build a marketing calendar. This is “Startups for the Rest of Us” episode 203.
[00:06] Music
[00:14] Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at launching software products, whether you’ve built your first product, or you’re just thinking about it. I’m Mike.
[00:22] Rob: And I’m Rob.
[00:22] Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Rob?
[00:26] Rob: You know, things are going well. Just been ramping up Drip, looking to have another good growth month here in September, and I took off in a week for about five weeks on the road in Thailand, and then in Prague for MicroConf Europe. So overall feeling good about things with the ability to still check email and do a little bit of work on the road. I think things should go well while I’m traveling. You know, I have four full-time guys here, aside from me. I did this last year when I went to Prague and then to Italy for a month, and things, frankly, went pretty well. We actually did a launch while I was on the road last year and launched to like 600 people, so this year there’s nothing fancy or exciting like that going on. It’ll just be kind of maintaining the status quo. I got guys here who can handle support really well. Feeling good. Just kind of ready to get on the road at this point.
[01:10] Mike: Well, I went to the Business of Software Conference this week, and I had a really good time. I met quite a few interesting people. A lot of good conversations in the hallways.
[01:18] Rob: Sure. Were there any speakers who were highlights for you?
[01:21] Mike: It was awesome listening to Rand Fishkin from Moz talk about kind of the future of what Google was doing and what directions they were heading and what his thoughts were on what they were doing now and how you could kind of leverage marketing efforts inside of the context of the things that they are doing, because, obviously, they’re shutting down a lot of things. But he also pointed out there were places where he showed an experiment that somebody had run, and they found that a lot of their direct traffic, there was a lot of things that Google was sending them as organic search traffic that was being counted as direct traffic, which I found interesting. It was a very high correlation. Like they did something where they basically turned things off then turned them back on, and a lot of their organic search traffic is actually being counted as direct traffic even though that it’s not.
[02:08] Rob: I have to be honest, with Google Analytics – when they redid the left navs to where it’s like acquisition and behavior and something else now – I have the toughest time finding anything, and with the loss of keywords anyways- it’s been six months or a year since I’ve gotten anything actionable out of Google analytics, and I used to be a big proponent. I used to be in analytics daily. Literally daily, and these days it’s just not worth it. So I’m either looking at advertiser dashboards if I’m running ads, or I’m in a tool like KISSmetrics, which can actually show you some stuff. Or I’m in Drip looking at how my stuff’s going, but I don’t know if that’s common for everyone these days. A couple other founders I’ve talked to are experiencing the same thing, but Google analytics has really A: They’ve made themselves, in my opinion, too complex and too hard to find, and then there’s not a ton of good data coming out of there anymore. You find it similar?
[02:57] Mike: Yeah. I don’t get a lot of it – a lot out of there anyway, because ninety percent of my traffic it says “direct” or “not provided.”
[03:04] Rob: That’s the problem, and so yeah. So there you go. That seventy, eighty, ninety percent that is either direct or not provided, which is like, “This is not helpful at all.” Right?
[03:12] Mike: Yeah, and that sucks. He did talk a little bit about how to use adwords to your advantage and use that for at least a little bit of keyword research. But even some of that’s going away. He said that there’s some upcoming changes where they’re going to be eliminating I think its exact search matching through adwords, so you won’t be able to control it as much and get as much information out of that either.
[03:32] Rob: Awesome. Can’t wait to talk to Dave Collins about that one at MicroConf Europe. Hey, you know I’ve always really respected Rand and enjoyed – I’ve heard him on Mixergy and other interviews. Seems really genuine, you know, and he shares kind of what’s going on with him. Super smart dude. So it’s no surprise to me that he was one of the standouts to BoS.
[03:51] Mike: I would probably say he, almost without a doubt, he was one of the favorite speakers of mine.
[03:56] Rob: Very cool. So we have new iTunes comments. We got a 5-star review from Joris Joppe from Netherlands, and he says “Great source of information. Running a web application myself and there’s so much information in there that I can take on board. Simply not enough time to act on it. Thanks, guys.” Got another 5-star review with the title “Awesome” from Miekeru from the US. He says “Your podcasts were instrumental in growing my SAAS business. Thank you, and keep up the good work.” So we would love a five-star review. If you haven’t given us one in iTunes – you don’t even need to write a comment like these guys did. Can simply log in, hit the five-star button, and we would greatly appreciate it.
[04:31] Mike: Well, I hired a couple of new developers, and I’ve been spending some time on getting them up to speed on our development process, and so far things are going pretty well. They’re following process. Obviously they make some mistakes here and there, but they’re doing really well. It’s nice to be able to kind of give them design documents and have them just take it and run with it, and then do whatever they need to do and not have to worry about the results nearly as much.
[04:53] Rob: Where’d you find them?
[04:54] Mike: Just through oDesk. Just kind of went through the natural process of weeding people out and telling them what is expected and trying to give as good a description as I could of the development process and what was expected of them and how many hours and everything else that I was going to expect. And what the timeline was, because obviously this is something of an initial review process for them, so if it doesn’t work out for them they kind of know that they need to be on par with what my expectations are and adjust. But they’ve been doing great.
[05:21] Rob: Very good. So what are we talking about today?
[05:23] Mike: Well, today we’re going to be talking about how to build a marketing calendar. This kind of came up because I’m starting to switch my efforts over a lot more from the development and, as I mentioned just a few minutes ago, I hired these couple of new developers, and I’m trying to remove myself just completely from writing any code. I’m trying to focus much more on the marketing efforts, and right now I’m in the process of building a marketing calendar to try and figure out what sorts of things I should be focusing on, and not only what I should be focusing on, but what order and when things were going to come out, and what sorts of things are going to come out. Think I mentioned a couple weeks ago that I started scheduling webinars, but that kind of fits into this greater strategy that some things have to be timed, and you want certain things to go out at the same time, and you don’t want to have, for example, too many emails go out in the same week, and if some things get pushed around that’s not really a big deal. But the idea is really to use it to establish a consistent approach to the marketing efforts so that there’s things getting pushed all into one week, and then you’ve got nothing in the next week.
[06:22] Rob: You know before my most recent app, Drip, I was always basically flying off the cuff, and I would wake up one week and say, “What do I want to do this week? Can I – am I going to continue running ads and then maybe I’ll publish a blog post?” but with Drip it’s had to be more orchestrated. One: because I’ve worked with other people, like I had a marketing intern for a while. I’ve had other people helping me with it, and so a calendar is actually necessary. And two: there’s just been so much going on that I’ve felt like I can’t keep it all in my head anymore. I’ve used some of the approaches that you’ve listed in here, but I also think that since I tend to be process-lite, but I am interested to see what some of the heavier process and note-taking stuff you outline in here how people can apply it.
[07:00] Mike: The big thing that I noticed was that a Monday would come around, and I was like, “Okay. What have I got to do this week?” and because it wasn’t planned out I would just kind of shoot from the hip more, and it felt like it wasn’t planned out very well, and it wasn’t. That’s really the bottom line, and that’s kind of what a marketing calendar’s supposed to help out with. It’s to make sure that you’re no longer shooting from the hip, and you know exactly what is supposed to be done that week, and you can work towards it, rather than you get to the beginning of the week and say, “Okay, what am I going to do this week?” and then you have these fires come up, and you kind of run around like a chicken with its head cut off because you just don’t have any consistency from one week to the next.
[07:36] Rob: This is the hard stuff, right? It’s like we all want to be on Twitter and Hacker News. That’s the easy stuff that your brain relaxes. The planning in the morning, if you get up and say, “What are the three things that I need to get done today?” and then you sit there, and you just make transition from one task to another, and you crank on them, and you get them done. That’s putting in the hard slog. Yeah, it’s fun to fly by the seat of your pants, and to just wake up and say, “What marketing parts do I feel like doing?” but it’s just not what professionals do. That’s not the way to develop a consistent approach to this stuff and actually grow a business well.
[08:08] Mike: The key goal behind it is to make sure that you have a consistent approach, but one of the other things that this helps to do is it helps you plan around key events. So there’s things like holidays and product launches, even vacations and birthdays and things like that, you know days that you know you’re probably not going to want to work – you can plan around those things. You can make sure that on your marketing calendar those things show up and you take them into account when you’re doing that. Another thing it lets you do is it lets you identify some of the gaps in your marketing that is going to impact your sales funnel or at least has the potential to impact your sales funnel. You don’t want to have too many of the same function or activity in a single week, but on the flip side you don’t want to have not enough of it either. So if you schedule emails and you decide to work on email marketing for a couple of weeks, what happens if you start neglecting your webinars or your paid advertising and things like that? There’s lots of places where that stuff can fall through the cracks because you just didn’t think about it. Then you get to the end of the week and you’re like, “Oh shoot! I forgot to do that advertising campaign.” Or “I forgot to run that PPC campaign, or have these infographics created.” And then it pushes other things off, and then you end up with these gaps. This is designed to help eliminate some of those gaps.
[09:18] Mike: So to get started with this stuff, it is extremely simple. The quickest way to get started is to just use Google Spreadsheets or Excel. You can, if you want to go for an advanced option, you could use like smartsheet.com where it’s similar to Google Spreadsheets, but it also allows you to do things like Gantt charts and things like that. So if you want to get a little bit more in depth with it and a little bit more process oriented where some things are much more dependent on other things, you can use smartsheet.com. But for the most part Excel or Google Spreadsheets is going to be able to do what it is that you need it to do.
[09:49] Mike: So to get started, the first thing you need to do is you need to write down all the marketing activities that you want to try and engage in or try out in the future, and it should be comprehensive. You’re not really thinking about timeline yet. You’re just listing the possibilities at this point. All the different things that you could possibly do that you might want to try.
[10:07] Rob: Right, so the first note I’ll make is I am a Google Spreadsheet person, although with this marketing activities thing you’re talking about right now I’ve tended to use just a Google Doc and do a bulleted list that’s broken down by category. So there’s the prelaunch, the during launch, the SEO, the content marketing, the personal brand and relationship. There’s the viral, there’s the integration marketing. You know, I break it down into the marketing categories I’m going to do, and then I put some tactics, some ideas, some approaches. It’s more than a brainstorm, because I want to filter it a little bit. I don’t just want it to be a big mess of things, but I definitely want a large list to draw from that I can then build a tighter list and actually start putting dates and date ranges on things.
[10:50] Mike: Yeah. And to be clear, this step doesn’t need to be done in a spreadsheet. You can absolutely do it in a Google Doc.
[10:55] Rob: Frankly, if I had my druthers I would do this part hand written in a notebook, but there’s a bunch of drawbacks to that. Number one is this document, this marketing game plan, this thing needs to live for a long, long time. Like several years as you’re marketing this app, and so having it in a notebook just doesn’t tend to be practical, because then you wind up – you’re traveling, you’re on an airplane, you’re somewhere and you just don’t have access to it. So that’s a bummer. The other thing is this thing is living and breathing, and you’re going to be adding, editing, you’re going to be deleting, crossing things out, and it becomes a real mess if it’s on paper and you can’t to the dynamic stuff that these fancy computer these days allow you to do. So that’s why I do make this electronic, even though personally I prefer to brainstorm it on paper, but as you’re listening to a podcast, you’re reading a book, you’re listening to an audio book, you hear a talk, and you take some notes from that, I will then take those and apply them to this master kind of marketing game plan doc, and then later I will draw off that to build my one to three month calendar from.
[11:53] Mike: So that’s step one. Brainstorm your marketing activities. Now step two is to identify between one and five target audiences. I don’t think I would actually go over three, but you want to be a little bit specific. You wouldn’t want to just say people who are in technology. You’d want to say IT administrators. You’d want to say software development freelancers. Try and narrow it down as much as you possibly can. And even in something like IT administrators, you might want to say IT administrators who are managers or who have been in that field for X number of years. But the idea is to make it as specific as possible so that you know exactly who you’re marketing to. What that’s going to do is that’s going to help you when you’re actually trying to develop your messages so that you can target your copy at that type of person, and you know exactly what type of problems they have, because there’s a difference between an IT administrator and a senior IT administrator because they have different problems. They have slightly different job functions, but the senior guys tend to have additional responsibilities. So they may have management functions that they also have to do.
[12:54] The lower level IT guys may not care nearly as much about reports, for example, but the senior IT guys – they’re the ones that have to interface with management and provide them the information. Do have to niche it down as much as you possibly can so that when you’re writing your copy and writing any sort of marketing materials for those people, you’re able to speak directly to the pain points that they’re having.
[13:15] Rob: And at the beginning this is going to be a guess because you just don’t know until users start using your app. But once people start using it, it becomes pretty obviously quickly what they’re up to and how they’re using it, and you’ll notice that the IT administrator versus the IT administrator’s boss versus the software development freelancer versus the blogger how differently they use your app, and you’ll suddenly hear them using different words and different verbiage to describe what they’re doing. And they get different value out of it. So that’s where you can start refining this message, so I would consider this definitely a 0.5 at this point until you actually start having interactions with customers, and you can refine and update this list.
[13:57] Mike: So, that’s step two is defining the target audience that you’re going after. Step three is to decide on a timeline, and for this I’d recommend at least three months, but probably no more than six. If you don’t have enough of a timeline, then it’s going to be hard to measure some of the things that you’re doing, and if it’s too much then you’re trying to plan so far in the future that it’s really just going to mess up the timeline for anything that you identify during this process that works really well that you want to double down on.
[14:21] Rob: So I typically plan this marketing calendar ninety days out, but then I kind of micro-plan the next thirty days, because I found that things change so quickly month to month that if I try to plan six months out, that last two or three months is just completely shattered. It’s so different by the time I get there. So I think it depends on how quickly you’re moving, how quickly you’re iterating, and at what phase of your product. If you’re before product market fit, you may only want to plan a month or two out, and if you’re at scale, and you’re starting to really scale up, and you know your audience, and you know your message I could see planning three to six months out, although the latter three months I would do it just a little looser, and not put exact dates on everything.
[15:02] Mike: So step four is to go back to the list of marketing strategies that you came up with and essentially order them in either a top five or top ten format. And starting at number one for each marketing strategy, break that strategy down into its component tasks. We talked about this a little bit in a previous podcast episode where you really want to include the build to deploy, measure and fix timelines for each one. Once you’ve ranked these things, you want to go into your spreadsheet, whether it’s a Google spreadsheet or and Excel spreadsheet, and you want to put the weeks on the left-hand side and the target audiences along the top, and those marketing activities that you picked out, you want to fill in the marketing and the component tasks that need to be done essentially using the dates as the Y axis and the target audiences across the top as the X axis.
[15:48] So what that does is it essentially gives you the ability to say, “Well, okay. These are all the things that I’m going to do, and these are the rough time periods that I’m going to do them.” Yeah, it’s going to take a little bit of tweaking because some things are going to take longer than others, but what this is going to do is it’s going to give you the ability to see at a glance where some of your marketing activities are happening and give you the ability to kind of eyeball things and say, “Am I going to be able to do this in this approximate time period? Are there places where I’m going to have giant gaps? Are there places where there’s overlaps between these things?” and you can take a look at those things, and you can fix them as needed. You can either add things, or move them around, change them. And there are definitely places where you’re going to have to start something, and then you’re going to have to come back to it later on, because maybe you’re outsourcing some of the email campaigns or the content generation, and you hand it off to somebody else, and you don’t expect it back for a week or two weeks. Those schedules need to be taken into account here.
[16:43] Rob: Yeah, and this is big because without this high-level view you really can’t anticipate when you’re going to run into something where you either have too much marketing going on in one week, like you said you’re sending your lists five emails, or where you have big gaps where you have multiple weeks where you’re not producing anything. It’s just hard to play it by ear and wing it and make it even. When you step back and you plan out ninety days or 180 days it’s a lot easier to do it.
[17:08] I think one other thing I’ll mention is how to prioritize. You said brainstorm the marketing strategies, and then pick the five or the top ten. A bunch of different ways to do that, and if you recall a couple episodes ago we had Gabriel Weinberg on the show, and he co-wrote a book called Traction. If you read his book he talks a little bit about how to prioritize in there, and there’s another approach from Noah Kagan. If you search for Noah Kagan Quant Marketing, and it’s Q-U-A-N-T he does it quantitatively. He actually uses an approach very similar to what I’ve done for years. It’s similar. You put it in spreadsheets, and you figure out what you want to do. I’ve often gone with, “What’s in my tool belt that I know I can execute on?” and “What do I think is going to work for this ad based on my previous experience?” and that’s typically where I start, and then as that stuff fails, or succeeds, then I’ll pick off the next thing that maybe I haven’t done, and that’s how I’ve always expanded my marketing tool belt. So there’s not no science to prioritizing these, but it is a bit of art, and a bit of science, and a bit of choosing what motivates you, and what you’re excited to do in prioritizing these things and getting them into the spreadsheet.
[18:10] Mike: And keep in mind, the other thing that you need to do when you’re doing this is take into account where in your sales funnel some of these marketing activities fall because obviously you need to get people into the beginning of your sales funnel, and doing things at the end of it is not going to help you very much if you’ve got nobody in your funnel at all. So you do want to spread things out a little bit based on where some of these marketing activities are going to impact your sales funnel, but just keep it in mind when you’re putting these things together.
[18:36] Rob: Yeah. I think that’s a really good point is a lot of people will look too far down the funnel too early, and until I have a really high visitor to trial conversion rate, then I know that my marketing’s – either my value prepetition or my marketing site is not cutting the mustard. And then once that’s done, now I need to work on trial to paid conversion, right? And that’ going to be done with on-boarding and with emails, and that kind of stuff. Then once people are in there I wouldn’t go back and start marketing before I got my churn way down, and that’s one of the ways you can define product-market fit is that people are sticking around, getting on-boarded, and then not churning out. And so that’s the path I would take, then I circle back. Then if you drive traffic through an optimized funnel, that’s when you’re getting the most value out of your marketing spend, right out of your marketing time, because until that point you’re basically bleeding people out of the bottom of your funnel as they churn out either during their trial or after they’ve paid you one or two payments.
[19:28] Mike: And that’s another reason why you don’t want to make your timeline too long because if it is months then you can iterate through some of these cycles very, very quickly, and you get a lot of traffic, but it’s all falling out the bottom of the funnel, and you’re not paying attention to it because you’re trying to execute on your marketing plan. So it is kind of a balance that you have to strike. As I said, too much and you’re doing all these marketing activities you’re really not taking a look at your entire sales funnel, and if it’s not enough then you don’t give it enough time for these marketing activities to work.
[19:56] So at the end of this process, essentially what you end up with is a targeted activity list in a timeline of when those things need to be accomplished. And there’s a lot of benefits to this. The first one, and I think this is probably the best one is that you don’t have to think, “What do I do?” either every day, or even every week. You have your spreadsheet to work from. That’s the battle plan that you’re operating from. This is the strategic document that you’re going to move forward with, and sure it’s going to change over time. You’re going to adjust a little bit. You’re going to tweak things based on the information you’re getting back and the measurements that you’re taking, but you generally know what it is that needs to be accomplished and roughly when, and you can adjust from there.
[20:33] Rob: Yeah, I think that’s a big thing to remember is there’s a lot of adjustment that goes on. I was just in my content calendar yesterday. I have a separate spreadsheet for what content is going to be published when, and I realized that I screwed up last week. I either published the wrong one, or I missed a week or something, and so sure enough you edit the doc, you move things around. I had committed a post as a guest post somewhere else, that’s why I had to, not un-publish, but I had to remove it as a draft in my blog. I mean there’s stuff that’s going to happen, and this having a content calendar and a marketing calendar like this helps you catch those things, but also don’t be married to it that it’s this rigid document that’s set in stone, because once a week I’m going in there and moving things around, and either moving dates, changing titles, committing things elsewhere. It really is a fluid document. It’s more of, “I’m just trying to track what’s going on so that I have a high-level view.” But this view it as a fluid, moving, living, breathing doc.
[21:29] Mike: So the next advantage is that when you’re using a weekly format like this with the dates along the left it automatically separates the activities from one another, and it gives you time to implement them. And it’s not like a bug-tracking system where you’re giving each thing a number of hours or anything. You’re really just setting kind of the high-level tasks that need to be accomplished that week, and which of the weeks during that three-month timeline that you’re trying to implement them. Make sure that you’re building all of the different stages into your marketing plan. So for example, the measure and fix stages – make sure you’re separating those, because it’s going to prevent them from being dropped on the floor. If you’re doing a lot of content marketing or pay-per-click advertising, those things can cost a lot of time and money to put in place, and if you’re not paying attention to them some of those things are going to get thrown on the floor, and especially with PPC ads. If you’re doing those types of things, you can definitely be flushing a lot of money if you’re not paying close attention to them and actually doing the measurement stages. So you have to make sure that you’re building in time to do the measurements and fixing the things that are not working.
[22:30] Rob: Yeah, and that’s why you need this calendar so that you can block out time because if I’m running paid acquisition, and I’m doing it heavy, I am probably in there – it depends on the day – but I maybe average thirty minutes a day, and on heavier days I’ll do a full hour swapping out adds and stuff. And I’m always tracking what my cost per acquisition is and really looking at the funnel, and so it’s a time intensive thing. If you think that content marketing is definitely time intensive, right? Even just managing writers if you’re not doing it yourself. If you’re doing it yourself it’s incredibly time intensive. But paid acquisition, while maybe it doesn’t require as much time, it still requires a lot of your focus, and you can’t just set and forget. Any of these things. The way to set it and forget it is to find someone knowledgeable in it who you can pay to run it, or to train someone up to use your approach to doing it, and that’s where knowing how to do it is helpful. But very, very few marketing approaches aside from ranking in a search engine, very few of them don’t require some type of ongoing work.
[23:31] Mike: So once this plan is in place, you could theoretically outsource some of the specific implementations, and then manage the process. I mean obviously you can outsource the whole thing. If you have enough money, you can hire somebody dedicated to do full-time marketing you could. But for most of us, we don’t really have that budget, but there are certain things that you can outsource. So for example, writing articles. You don’t need to write the articles, for example. You could outsource that, and then as part of your job for that particular piece, you can then post them. And as I said you would have the time so that you hire somebody to write the article, and then you pad the time, and then you have another task in there where you have to post the article. So you have to make sure that you’re getting that information back or anything that you’re outsourcing. Make sure that you’re putting in leeway times in order to get that work back, but you’re essentially removing that from one of your lists of tasks so that you can focus on other things and get more done quickly.
[24:25] Rob: Yeah, and I think this is the goal is to get to the point where you’ve developed a process well enough that someone who is not a founder can do it, right? So whether that is content marketing, hiring a couple writers, and you become the editor first, and then you hire someone to basically be the editor and kind of the person who’s creating the content calendar and driving the writers and kind of managing that whole process. Same thing with paid acquisition. It’s like at first, yeah, you’re probably going to have to manage it and get in there, figure out what works, figure out your process for swapping things out, but then you look for someone who has the skills and the analytical ability to sit there and do what you’ve done. And it takes you out of the loop, so you can build that flywheel so you can step away to take care of more important parts of your business.
[25:07] Mike: So we’ve talked a lot about some of the benefits. What’s one of the biggest drawbacks to this kind of thing?
[25:12] Rob: So one of the biggest drawback I see is it might impinge on your flexibility, right? It might feel like, “Oh, I’m building big company process, even though I want to be a small agile founder.” So I could see it feeling like that. Like you want less process if you’re just one person doing something. I of course have a counter to that. I guess we’ve already talked about that, why you should do it, but I can imagine someone feeling like, “Yeah, creating another document, putting a bunch of stuff in it. It’s going to take all the fun out of this.”
[25:39] Mike: Another thing I can see is that it’s time consuming to actually do the work, and essentially what you’re doing is you’re creating a schedule of all the additional work that you need to do.
[25:48] Rob: And that’s depressing. I think another one is that that feedback is not immediate. So you’re going to spend time, you’re going to create this doc, you’re going to lay all this stuff out, and then it’s going to take months, right? To run the ads, and to create the content, and to gather your results, and for those of us who are impatient, which is probably almost all of us as founders who want stuff immediately, it does basically lay out that you are not going to find out about these things for several months. So I could see that being frustrating to folks who aren’t used to this type of thing.
[26:17] Mike: Another frustrating thing is that some of these things are just not going to work. I mean you’re going to put these things on your calendar, and you’re going to try and go execute on them, and some of them are just not going to work out at all, and you’re going to say, “Well I just wasted three, four, five weeks trying to do something, and it’s just not moving the needle. It’s not doing anything.” And that’s a process that you’re going to have to go through. There’s different things that you’re going to have to try that they’re not going to work today. They might not work tomorrow or even six months from now. They may never work. It depends on what your product is, but there is the chance that right now it’s not working, but in six months you’re going to be in a different spot, and it will work.
[26:50] Rob: I think another drawback to this approach is that really it’s just a starting point, and that if you do have a really complex marketing calendar, that it isn’t going to cut it for you, right? So you can go significantly further with this, and it can get a lot more complicated. So that could be another drawback to the approach we played out here, is it may not be able to handle the most complex scenarios.
[27:10] Mike: And one thing I do want to add before we kind of wrap things up is that when Rand Fishkin was giving his talk at Business of Software, he actually mentioned a little bit about marketing calendars. And one of the things that he kind of cautioned people was that if you have a content calendar that you’re following, for example, and you’re trying to push out content on a regular basis, he pointed out that there’s less than ten percent of the content that gets created which gets greater than eighty percent of the traffic. So if you’re pushing out bad content just because you have a content calendar, it’s probably not worth it. I mean you really need to focus on creating good stuff, and if you’re not, you’re wasting your time. You’re wasting your effort.
[27:48] Rob: That wraps us up for today. If you have questions for us call our voicemail number at (888) 801-9690 or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Out of Control” by Moot used under creative commons. You can subscribe to us in iTunes by searching for “startups” or by RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 202 | Outbound Sales for Startups with Guest Steli Efti
Show Notes
- Steli’s outbound sales book
- Use Code awesomesauce for 50% off
- MicroConf Europe
Transcript
[00:00] Rob: In this episode of “Startups For The Rest of Us” Mike and I discuss outbound sales for startups with special guest Stelli Efty. This is “Startups For The Rest Of Us” episode 202.
[00:09] Music
[00:16] Rob: Welcome to “Startups For The Rest of Us”, the podcast that helps developers, designer and entrepreneurs be awesome at launching software products. Whether you’ve built your first product or you’re just thinking about it, I’m Rob –
[00:25] Mike: And I’m Mike.
[00:26] Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. So what’s the word this week, Mike.
[00:31] Mike: Well, I totally forgot that I’m going to the “Business of Software” conference next week.
[00:35] Rob: And are you going downtown and staying in a hotel, or are you driving in from your house?
[00:39] Mike: I’m just going to stay at a hotel nearby, so that makes it easier.
[00:42] Rob: Any speakers, in particular, you are looking forward to seeing?
[00:45] Mike: You know, I haven’t even looked.
[00:46] Rob: I’m feeling a little bit the same way. In two weeks I fly to Thailand with my family, so my two sons and my wife and I jump on an airplane. We’re going to Thailand for four weeks and that’s culminating with Dan and Ian’s DC meetup in Bangkok, where I’m doing a talk. Then my family flies home and I go to Prague and meet you so we can pull off Microconf Europe at the end of October.
[01:12] Mike: Very cool. Hopefully, the political unrest won’t get to you.
[01:15] Rob: Indeed.
[01:17] Mike: Well, the other thing going on is that I’ve started doing some webinars. I signed up for a “Go To Meeting” account. I send out some emails today, some Tweets. At least do some testing around that area and see if using some webinars is going to help push AuditShark out there and kind of fill the sales funnel a little bit. That’s kind of what I’m working on right now, for the most part, is just making sure that I’m stuffing as many leads into that sales funnel as I possibly can, and making sure that I’m following up with everybody.
[01:41] Rob: Very cool. I’ve heard a lot of good things about webinars. It’s been on my list forever to do, and I just haven’t had the bandwidth to do it. From what I’ve heard, the results you get from them are exceptional. This is from people I know who are in the same space that we are. And there is just a lot of value there. And this is just based on my experience recording screencasts, without even the interactivity of a webinar. Those have really made a difference in my sales effort for “Drip”. So, I’m definitely interested to hear how it goes for you.
[02:07] Mike: Yeah, I’ll definitely keep you posted. My first one isn’t until next week, so it will be after the “Business of Software” conference. That’s how I even realized that the Business of Software conference was next week, because I went to schedule that and said, “Oh, shoot! I can’t do it Monday, Tuesday, or Wednesday.”
[02:19] Rob: Nice. We’re rounding out our Microconf Europe speaker list. We’ve landed Brennan Dunn, Ryan Delk from GumRoad – he’s been on the docket for a while, but I’m really excited about his talk. He has so much data from all the launches that Gumroad has seen and he’s bringing that into his talk. Then we just landed Jane Portman from “UI Breakfast”. Jane is a UX designer and developer from Russia. She came to MicroConf Vegas. She’s done some pretty amazing UI work. She worked with Joanna Weeb on their new “Disco” product. I don’t know it you’ve seen that UI, but it’s really impressive. I’m excited to hear from Jane. She’s going to be talking about design for founders, and how to minimize the effort of getting a good design out and not breaking the bank while you’re doing it. So, I’m excited about that. We still do have a few tickets left for Microconf Europe which is in a little over a month in Prague. And if you go to MicroconfEurope.com you can find out more details.
[03:13] So today Mike and I have the pleasure of having Steli Efty with us. Steli is the cofounder of Close.IO, which started as a sales-as-a-service company called “ElasticSales” and pivoted into the SaaS company that many of us have heard today called “Close.io”. Steli, welcome to the podcast.
[03:31] Steli: Hey Rob and Mike, it’s a pleasure and an honor.
[03:33] Rob: Awesome. So both Mike and I have read your book, “Ultimate Startup Guide to Outbound Sales : How to Turn Cold Leads Into Hot Customers”. We will include a link to that in our show notes, and folks can use promo code “awesomesauce” for half off of that book. So you’ve done a lot. I was telling you before we started recording that I hadn’t heard of you before a month or two ago when someone Tweeted us and said, “Hey, you should have Steli in our podcast.” So I put you in our list – I have a big list of people who want to come on the show – but right away, after I heard your name, suddenly you’re everywhere, I see a bunch of talks, you’ve written this book, you’ve done Close.io – which I started hearing about Close.io from people like Brennan Dunn.
[04:10] You are kind of building yourself a really good name – a good personal brand in this outbound sales world. I guess I want to kick it off by saying, ” Why outbound instead of inbound?” It feels like a lot of the world – in our web SaaS world – a lot of people are doing inbound – myself included. But you’re a proponent of outbound, and you’re obviously making it work. So talk to us a little bit about that.
[04:31] Steli: That’s an excellent questions, because I’m not really a pro-inbound or pro-outbound kind of guy. I’m not religious or rigid about this. I’m a “whatever works” kind of guy. We’re actually writing a 2nd volume of “Startup Sales” book, and it’s going to be about inbound sales. Because with elastic sales, primarily what we were doing for Startup, we basically didn’t work for over 200 venture-based startups – most of them, if not all of them were SaaS businesses. And the majority of our work there was outbound sales. So we just built a lot of knowledge, a lot of expertise, a lot of do’s and don’ts, and wanted to share that with the world. But with Close.io today we actually do zero outbound sales. It’s all inbound – our growth today. Not to say that we will never do outbound – we will. But up to this point we’ve been growing quite dramatically purely through inbound sales. So I like both.
[05:25] Every time I give an audience of founders the choice of what to talk about, I’m surprised that people always vote outbound sales as something. I think it’s because we all struggle with it. A lot of technical founders and engineers have kind of – the whole cold-calling and cold-emailing has a lot of stigma to it. I think it’s just a topic people struggle a lot more with than the inbound one, and that’s why we started focusing on teaching that first.
[05:52] Rob: You probably have an idea of our audience. You’ve said you’ve listened to the podcast. It’s a lot of single founders, web, mobile, WordPress plug-ins, a lot of software guys. There are some info product guys, but the specialty is software in terms of the audience. By nature, as a software developer myself, outbound is a little intimidating. How have you approached that? How have you helped bridge that gap for folks who say, “Boy, I don’t know that I’m cut out for it. I don’t know if I have the personality, or I don’t know if I can pull this off”?
[06:19] Steli: First of all, I think it is about de-mything the whole topic, and just killing a few bad idea or misconceptions which have been around for way too long. I do think that the first thing we have to kill is the idea of what a salesperson is, or what makes good salespeople and bad salespeople. I’m not a sales guy. This is not my thing. I can’t do sales. I think most people think sales is all about talking. Are you the type of person who loves to hear yourself talk? Are you super outgoing? Are you a super charismatic personality that loves the limelight and loves to be charming, and talk people into doing things they don’t want to do? Honestly, it sounds like a douchbag to me, and I don’t want to be that person, and I don’t think most people, most founders, most product people ultimately want to be like that. You don’t have to. Sales is really not about talking. Sales is a lot more about asking questions, and practically listening, and actually truly understanding who is the customer and what are their needs. Can I, with the solution I’m building, actually solve their problems in an effective manner? Once you truly understand somebody, ask the right questions, you listen really carefully – then selling is easy. All you have to do is, now that they’ve convinced you that your solution is the right one, you have to tell them why they convinced you of that.
[07:38] Typically, it’s easy to get them on board and actually close the deal. We’ve built our sales software by having engineers sitting next to sales people and actually watching over their shoulder what they are doing and saying, “Well this is stupid. Why do we have to do this all day long?” But also just listening in on conversations and things that are going on. I’ve discovered that engineers are pretty good at asking questions. They’re pretty good at not staying at the surface level of information, but going really deep. Not just taking the first answer at it’s surface, but saying, “Well, why do you want that? What are you trying to accomplish with this?” And actually really asking questions until they arrive at a good understanding. Once you recognize that it’s more about asking the good and right questions and truly understanding somebody and then telling them that you can help them. Then sales is not this big mythical, difficult thing. It’s just asking questions, trying to understand your customers, and then servicing them in a really good way.
[08:35] Now, having said that, there are things that are really hard about sales – especially if you want to do outbound as a single founder. The hard things are more psychologically hard – you don’t have to do anything that is truly, physically hard. It is all just mental. It’s all just emotional. The hard things are the showing up piece. When you do cold sales, what that means is you are proactively reaching out to people who didn’t ask about you or your solution, and you tell them, “Hey, I have something that might be of value to you and I need a few minutes of you time and a little of your attention so both of us can explore weather this will work or not. This is uncomfortable because there is a high chance of rejection. A lot of times people are going to tell you “No,” or they’re not even going to respond to you if you send them an email. People take that really personally, and I think that there are ways for all of us to learn to deal with rejection, embrace it, and understand that it is part of trying to build something of value.
[09:33] The second thing is going for the close. For the exact same reason, people a lot of the times have good conversations. They understand the potential customer prospect really well. They do believe their solution would be really great, and they talk about it a little bit, but they are just afraid to pull the trigger and ask, “Hey, would you buy this? Hey, do you want to be one of my first customers? Hey, can I have your credit card number?” They are just afraid of pulling the trigger. Again, for the same reason. We don’t like to be rejected. We don’t like to here “no”. We’re afraid of it and try to avoid it. When you do sales, you can’t avoid it. You have to embrace that. I think the emotional piece is really hard. I think that’s the reason why most of us don’t do as much as we could. Then there is this ideal myth, “Yeah, sales is this thing that I am not. You have to be a certain personality type to be great at sales.” I truly don’t believe that. Patio11 is a really good example of somebody many people might know of somebody who is not a salesperson – he doesn’t look or walk or talk like one – but he is pretty dangerous. He gets the basics of sales, and he can do that really effectively in his business and it’s propelled his consulting and all his other businesses forward. So I think everybody can learn the basics of sales, and then we all have to relearn to manage the rejection that comes with that.
[10:50] Mike: One of the things you talked about very early on there was the idea that it can be scary for people to go out there and start making those outbound calls. I listened to the podcast where you were on with Patrick McKenzie talking about outbound sales a little bit. I think one of the techniques you talked about is something that I definitely want to highlight to some of our listeners. One of the things that you had said was, “Don’t focus on all of the rejections.” Obviously, when you start focusing on all the negatives it can drag you down. It really wears on your mental abilities to continue. And what you had said was that although you maybe you’re only getting one sale out of a hundred, your metrics should not really be tied to that one sale. It should be tied to those one hundred calls. Could you talk a little bit more about that?
[11:33] Steli: You know, there’s many different little hacks. This is one of them — to try to reprogram myself on how I felt about the outcomes that I produced. Early on when I started doing sales with my first business, I realized, “Hey, I’ve arrived at a point where I’m able to create pretty predictable outcomes.” When I call 100 people, I get to talk to 20, and out of those 20 I get five new customers and another 5 tell me “Not now, but it was a good conversation” and 10 of them tell me no in one way or another. So once I realized that out of a hundred I’ll closed five deals, I made the math – how much money does that mean, and is it really that productive? – then I realized that, yeah, this is really productive and really profitable for me.
[12:17] What I realized also was that if I focus on those five closes, sales is not really – there’s highs and lows – not every single day are you going to create the exact same outcome. On the average you are, but not every single day. So what happened was, when I had good days maybe the first five calls I made I made five sales. That felt amazing, right? I was like, “This is amazing. This is awesome. I already accomplished my goal.” So what did I do? I stopped making calls, because I was like, “I accomplished my goal today.” But if I had continued I might have made another five sales during the day. Then the next day – the bad day – I would make my hundred calls and have zero sales, and I would be devastated and destroyed emotionally. And maybe even the next day it would have moved my mood to actually not want to make any calls, and kind of mess with my head. So I realized that when I focus on success, number one, it kind of influences how consistent I am in putting in the work. And I realized that every time I got failure, or I got rejection – which was a lot more than I got success it would make me feel really bad – like a failure, like I’m not accomplishing anything, I’m not worthy, my business is failing.
[13:25] So I tried to come up with a way to make myself feel good by creating failure, and one hack of doing that was to actually make the goal every day to get rejected 15 times. So, I would show up in my office and my goal was not to close five deals. My goal was to get 15 people to tell me no, that I can’t convince otherwise. Because I knew that if I could actually endure that, on average I’ll get my five closes. But I’m actually going to feel like I’m accomplishing things when I hear “no”, and I’m going to be able to check that off my list. I have a little list and I’ve put on there 15 “nos”, and I would know that once I had checked off all these 15 nos I’d got my job done for the day. It kind of made me feel good when I got rejected and reprogrammed the way that I was emotionally able to handle it, and it made me more productive at the end of the day. So yeah, that’s one way to hack your own brain and make yourself feel like you are accomplishing something when you are actually getting rejected, versus feeling like you are failing at what you are trying to accomplish.
[14:21] Mike: Yeah, I thought it was very insightful to see that you’re tying your success to the wrong metric in that case. You want to be able to say, “Check off the 99 boxes or 100 boxes a day and say I made a hundred calls.” versus “I made five sales.” The sales will come as a result of making those 100 calls, and you shouldn’t be tying your success metrics to the sales themselves – back it off a little bit.
[14:43] Steli: Absolutely
[14:44] Rob: It seems like a cold email as an outbound sales tools has become more and more popular. I’ve been hearing about it from folks. “Predictable Revenue”, the book from the Salesforce.com guys, talked a lot about cold email. There is also cold calling, and we know that there are two different levels of effort and two different markets where that works. But someone listening to this podcast right now is probably thinking, “Should I cold email? At what point is it worth it?” If I’m selling a $20 ebook obviously it’s not worth cold emailing. If I’m selling a $20/month SaaS app, I don’t know if it is. If it’s $200/month then it probably is. In your experience, what is the metric? Is it a customer lifetime value? Where is it that cold email is worth exploring for you or your company.
[15:52] Steli: There’s two distinct stages of a business, and depending on which stage you’re in the answer is different. In the very early days, when you are pre-product market fit, when you’re still trying to figure out your idea, and you’re still trying to figure out how to market your idea successfully or not. I actually believe that at that phase you want to go through all the available channels to actually interact with potential customers and learn from them. So in the very early days I would actually drive to customers, and actually show up at people’s offices or businesses or wherever, and try to interact with people in person, because that’s not really scalable. Even if you have a $20 ebook, you know that this is not the way we want to grow this business forever. But in the early days it’s more about learning, and if you can actually look somebody in the eye and get the context of the business and see how not just what they are telling you on the surface, but how they react, their body language and tonality, the other people they work with , their challenges at work, their environment. That can teach you so much that can go back into the way you write that ebook or develop that software. So in the early days I would try to be as close to the customer as possible and actually go and meet some and just show up at some businesses to get feedback. One level that scales a little further, but gives you a little less context, is cold calling. So after you’ve visited a bunch of businesses and learned a bunch of things, you might want to talk to a few more people and a few more business and scale it up a little bit. Then you start calling people, and there again you have not just the content, but also a little more context through tonality in what they are saying and how they are saying things. Then one level further that scales a bit better, but again is missing some more information, is actually emailing a lot of people. I would go visit a bunch of people, cold call a bunch of people and the email.
[17:09] Ramp up the volume. It’s different things you are going to learn through these different channels, different feedback you are going to get from individuals. With email you may more metrics : open rates, click-through rates, you can experiment more with the wording and copy. On the call you can interact, ask more follow up questions, keep people engaged. Then when you actually visit them you learn more about who they are, their challenges, and their natural habitat. In the early days I wouldn’t worry about what does scale or not, or what are channels that I’m going to be using forever for my business. I would focus more on how I can learn as much as humanely possible about my customer.
[17:44] And I do think that cold email plays a role there. You can cold email a lot of people. You can pick a lot of people on LinkedIn and just cold email them, or even Tweet them or whatever it is. Reach out to people as much as possible electronically and see what they tell you. You can use that to either schedule calls or in-person meetings, or just to ask them to fill out a survey or just reply and tell you what they think about something. So that’s that. That’s more of the exploration phase. When it comes to, ” I have a business that works, a product that’s launched, a customer base I understand, and now it’s about how can I scale? When does cold email then play a role? I think that cold email in a more established business that has some product market fit, usually works best for companies that are selling either to large organizations – if you are selling SaaS to an enterprise. Your goal is not necessarily using cold email to sell or convince somebody to buy, but to actually get connected with the right individual in the organization and then schedule a call or demo or something like that. There it is almost an inevitable tool to success.
[18:47] Everything that’s below the enterprise – everything that is maybe not an enterprise client, but still a customer lifetime value that is in the thousands and not the hundreds. It may or may not make sense, but it gets harder and harder. So cold email, to scale a business is usually a really good tool when you do large customers with high customer lifetime value. If you are in the middle market it may or may not work, you want to play around with it. And if you’re in the very small market – like if my customers bring in $20, $25, or even $100 customer lifetime value- it’s going to be probably not a sustainable channel to keep cold emailing people. Then again, you might not want to cold email people to buy your ebook. You might want to cold email people to get on their podcast, or get some press, or do a joint venture promotion deal, or something else. You might still use that channel for partnerships that are more multiplication factors. But you probably will not want to send individual cold emails to people who may or may not buy your $20 ebook. That probably will not make sense, and will not scale really.
[19:52] Rob: That makes sense. In terms of cold calling, would you say it is a similar kind of metric you use? Or is it less scalable?
[19:59] Steli: I would say cold calling actually works better sometimes in the “S and B” market than in the enterprise market, funny enough. It’s just so hard to cold call into Coca-Cola and route your way into the VP of Marketing department. That’s just never going to work. But you can easily cold call a restaurant and get the manager or the owner on the phone, or something like that. So in the “S & B” market I’ve seen a lot of companies succeed to various degrees with cold calls. But I still think if you are doing cold calling, you don’t have to have hundreds of thousands or millions of customer lifetime value. But it should be $2000, $3000, $4000. At a minimum it should be a few thousand dollars in customer lifetime value. It’s going to be really hard if it is just a few hundred to ever make the economics work. It’s going to be brutally hard. So, that’s the way I would think about it when it comes to when would cold calling be a sustainable channel for you to grow.
[20:58] Mike: What I’ve found in doing some cold calling is that even if a business is several hundred employees, depending on the type of business, you can still get pretty far up in the chain to the VP of Sales and the VP of Engineering and people like that very very quickly, because they’re the ones inbound calls are directed to. So if you email somebody and say, “Hey, how do I get in touch with so-and-so?” you’re going to be able to do that pretty easily because they’re willing to just say, “Hey, you’re supposed to go talk to my boss.” Because they don’t want to talk to you. Whoever that tech is – so they’re more than happy to turn you over to their boss.
[21:30] Steli: It really heavily depends on the industry. Sometimes you can actually just call somebody and they will pick up the phone. Sometimes it’s the type of business where the decision maker is either used to picking up the phone or it is so rare that somebody calls that they pick up the phone. All kinds of different combinations can work. Some people have figured out a way into the industry and vertical that they are selling into. They truly understand the gatekeepers. They have gotten to the point where they really understand that when the secretary picks up, how do I sell her on why this is valuable to her (or his) boss, and they really make that work. And many times in Fortune 500 setups the larger the organization the harder it is a lot of times for people to even know who would be the right person for this. Then you end up at calling trees and voicemails that people don’t listen to. So it really depends on your vertical.
[22:19] I would always test a few hundred calls, or maybe fifty calls today, to see if I can validate what I just heard in a podcast, or read in a book, or heard from some other person. I would always just go out and try it myself and see if the market you are selling to, if it is truly that vertical that market, mirrors what you’ve learned or heard from somebody else. So I’m telling people a lot of the times large organizations, you may not want to do cold calling. But then there are always exceptions to that rule so we always test it out.
[22:46] Mike: So one of the things you talk about is essentially having an “objection management document”. Can you talk a little about this and what its purpose is? I really think this will be helpful for some of the listeners.
[22:57] Steli: Oh yeah. I love that, because it’s such a simple thing to do but it can have a really profound impact on how you interact with people. So with most/all businesses, the objections that you will face, the things people will tell you as reasons why they are not yet sure if they want to buy your solution or your product, or why they’re against it. It’s not going to be a list of tens of thousands of very individual objections. It’s going to be a list of 10 to 20 objections you hear every single day. There’s going to be a top ten list of the main things you hear again and again and again. A simple thing that you can do that anybody can do is just sit down take 20 minutes and write down what are the core objections I hear again and again. “It’s too expensive.”, “We don’t have the time.”, “We already have a solution like this.”, “It doesn’t do HTML email.”, “It doesn’t have this feature or functionality we want.” Whatever it is for your business. You know best. Just write down, the top ten questions or ten objects that I hear a lot. Then once you have written down these 10 objections what you do is take another 10 or 15 minutes and write down an answer to each and every one of them. That answer doesn’t have to be perfect. You don’t have to stress yourself out by thinking, “Oh, I need to write the perfect answer.” No, just write an answer. The only restriction or goal that you should have with that answer is that it should be short – two sentences or three sentences max. Answer to each or reaction to each objection you have. Write them down, and do it quick, don’t over-think things, but just write them down. Once you have that, you basically have a document that you can reuse and edit and have different versions with, that is going to help you increase your effectiveness when you deal with customers, when you are trying to close deals, when you’re interacting even with investors or the press or whoever. This “objection management doc” can work in any kind of setting where you have to interact other people and influence them.
[24:51] You have something that you can use to have clarity and be able to respond and react in a really professional and effective way with people. You can do all kinds of things with it. Once you have the first version, why don’t you send it to five of your friends, or five of your best people you admire or people who are really good at what they do and ask for feedback. Why don’t you send it to your five best customers and say, “Hey, here’s the objections I deal with everyday. Here is the way I would respond to them today. Do you think these are good answers? What do you think?”. You try to improve it over time. The core thing is to have simple, concise answers to the main objections. Because here’s the thing, too many times we as founders we know everything about our business and we don’t think we need to write down anything or create a script or anything like that. So what happens is that every single day when we interact with customers – or potential customers – we compute answers to their objects in real time, and that’s just stupid. The problem with that is that the quality of your answers and responses will heavily depend on your daily performance, mood, state of mind. Are you having a good day or bad day? On a bad day your answers will suck, and on a good day your answers may be brilliant but you are not going to be consistent.
[25:58] The other thing is that usually when we compute answers in real time we tend to speak for way too long, because we’re not editing. We’re thinking on the fly, and when you think and talk on the fly you usually talk for way too long. All that does is it wastes time, it’s inconsistent performance, and usually when people take way too long to answer an objection that a customer has, it doesn’t leave the customer with a high level of confidence that this is something that’s simple and easy and that they feel confident about it. The cool thing when you have a two sentence answer to any objection you face is that you can actually answer in a very concise way, with a high level of clarity. If you’re in an in-person meeting, even by keeping eye contact. It’s not just what you say – the way that you respond to that objection will make the other person feel like, “Oh my god, this guy or gal seems pretty confident and comfortable in responding to my big objection.
[26:50] Maybe I should also get comfortable with the idea of buying.” People like confident people. People like people who have clarity. It kind of suggests that you are smart, that you are an expert. People want to buy from businesses like that. So just by having the top ten objections written down. Write two sentence answers to them. Even if they’re not the best answers in the world, just by having that level of clarity so that you are able to answer these objections with a certain level or certitude will actually make a big difference.
[27:17] Rob: One of the questions that we get asked on the show fairly regularly is, “Should I outsource sales?” In your opinion, do you think a startup can outsource sales. I know there are different stages. There are different stages to the startup : before the product market fit, then after. In addition, there is just this cold prospecting that is used to set appointments. Then there is the actual sales effort. So what have you seen work and not work, in those scenarios in terms of startups trying to outsource them?
[27:47] Steli: That’s a question I get asked a lot, because I was running a very larger – probably the biggest SaaS outsourcing sales business that existed up to this point. So my answer is “Yes”, but only if it is about replicating results you have already, in a predictable way, delivered yourself. So what I mean by that is, a lot people want to outsource sales because they don’t know how to do it, or because they’re not seeing success with it. That’s kind of like saying, “I want to outsource engineering for my product. Can I outsource and find some developer or company in the world, or a bunch of freelancers to build me something?” Of course you can, but what is not a good idea is to say, “Well, I’m going to find this developer, and I’m going to tell him or her, “Hey I want to do this app. It should be a SaaS app, and it’s in the analytics space, but I don’t really know what it looks like, I don’t have any specs, I don’t have any ideas that seem to be good. So why don’t you just write me a SaaS app in the analytics space that’s awesome?”
[28:46] How good of an idea does that sound to the developer audience out there? No developer will think that’s a good idea. That will never work. So what you have to do when you want to outsource the development of your product is you have to have a very high level of clarity of what that should be. You have to have specs, and user stories, and you really need to know exactly what you want. When you can tell them exactly what you want, step-by-step, then an outsourced team might do a really good job for you. It’s the same thing with sales. If you want to outsource your entire sales process – or even just parts of it – it can work. But it only will work, and it only makes sense for you as a your business, to do that once you have actually mastered that part of the sale. Once you can in a repeatable and predictable fashion generate high quality leads and prospects, then you can go to a outsourcing firm and say, “Hey, here’s what we’re doing. Here’s how we’re doing it. Can you replicate these results at a lower cost or at a higher scale?” You have now the knowledge, you have control of your business. If at any point it does not work out with that outsourcing firm you can bring it back internally. You know how to do it. You don’t outsource the actual core knowledge of how to run your business. And you can tell that company exactly what to do and you know how to actually judge their performance.
[29:59] What’s never going to work, and what has never worked in my experience with my own business and our clients, as well as all the other outsource sales businesses I see, is when you say, “Hey, we struggle with sales – or this specific part of sales. Can you fix our problem? Can you find a solution to that?” That’s usually not what outsourcing sales firms are good at. They will tell you they can, but more often than not they can’t. It’s not a good idea. So, once you figure things out you can outsource, but not before.
[30:29] Rob: Very good. Well thanks so much for coming on the show today, Steli. We really appreciate it. We have another half a dozen questions at least, along with bullet points about how to cold email. You have your “Pitchology 101” framework. There’s a lot of stuff that we didn’t get to that is in your book : “Ultimate Startup Guide to Outbound Sales”. And as I said I said, if people want to check it out we will link it up in the show notes and they can use the code “awesome sauce” for 50% off.
[30:54] Steli: Awesome. Hey guys, it was a pleasure. And one other thing to people who are listening. As I said, I’m a huge fan of the show, and so I super-empathize with the audience. If anyone reads the book, or reads any of the blog posts or anything else that I write about and wants to connect, say hi , ask a follow-up question. Whatever it is, just send me an email. It’s steli@close.io . I am more than happy to help anyone I can with anything that I know. So feel free to reach out and say hi.
[31:20] Rob: Perfect
[31:21] Steli: Thank you so much.
[31:22] Mike: Well, I think that wraps us up. If you have a question for us, you can call it in to our voicemail number at 1-888-801-9690. Or you can email it to us at questions@startupsfortherestofus.com . Our theme music is an excerpt from “We’re Out of Control” by Moot, used under Creative Commons. You can subscribe to us in iTunes by searching for “startups” or by RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening and we’ll see you next time.
