Episodes

Show Notes

The eight sentiments:

1. “This product idea is awesome. Now off to the basement to build it; see you in 6 months!”
2. “I haven’t even finished the features I want to build yet and potential customers are already asking me to build X.” Translation: “I’m sticking to my product idea no matter what my potential customers tell me.”
3. “I’m halfway done with this idea…but that shiny new one over there seems so much better.”
4. “I plan to quite my job 60 days after I launch.”
5. “It would take me as much time to explain this task to someone else, so I’ll just do it myself.”
6. “I don’t want to bother with all that click through and conversion rate nonsense…I’ll just build a great product.” Translation: “Build a better mousetrap is not a good strategy”
7. “My idea is pretty hard to explain, do you have 20 minutes to spare?”
8. “I don’t want to talk publicly about my idea because someone might steal it.”

Transcript

[00:00] Mike: This is Startups For The Rest Of Us episode 98.

[00:03] [Music]

[00:12] Mike: Welcome to Startups For The Rest Of Us, the podcast to help developers, designers and entrepreneurs be awesome at launching software products. Whether you’ve built your first product or you’re just thinking about it. I’m Mike.

[00:19] Rob: And I’m Rob.

[00:20] Mike: We are here to share our experiences to avoid the same mistakes we’ve made. How are you doing this week Rob?

[00:24] Rob: I’m doing pretty well; I’m back off of 48 hours of being completely off the line. We went to the central coast to California around Big Sur area and went camping car camping with my two kids and then my brother and kids five kids, brother and his wife.

[00:41] Mike: What is car camping?

[00:43] Rob: You go to a camp site you pull your car in and then you park within a walk of that like there is technically a picnic table, fire pit setup and you setup a tent and you just have kind of this little camp spot there and it’s frankly before we had kids we always back packed right, you do a four mile hike up the hills seven mile hike up to some hill to a lake. But when you have a two and a six year old that’s just not as conducive.

[01:05] Mike: I see, yeah I’m outdoorsy in that I like drinking on patios.

[01:10] Rob: Yeah I know totally. It’s good to get out in nature and all that but it’s tough men, it’s tough with kids and trying to get all the, you know , it’s 40 something degrees at night and so I kept worrying that the kids were going to be too cold and had to lug air mattresses. Normally again I would sleep on, you know, a little mat. It was fun made smores, did some hiking and saw some waterfalls. But I was totally gone with no, you know it’s weird,  I’ve gone places with just my phone for several days at a time and you can just email and make sure no kind of no emergencies came through but men I was off the grid for a couple of days. From Sunday until Tuesday and frankly it was pretty refreshing.

[01:45] Mike: Really? I find it disconcerting when my cell phone just doesn’t work at all.

[01:49] Rob: Well here is the thing; it was disconcerting for about the first day. Because it’s like wow I need to check where we are where is the map? Oh you can’t map and then maybe someone mentions something oh yeah that movie I want to find out who it is. I go to look it up at Google and it’s like duh you can’t do that. But then I felt like I slowly started to adjust like adjust out of that. Actually the fast pace of life kind of goes away. I started feeling like just more calm. In that sense I would rather be away for a longer period because I think if I’d hang out for maybe a week offline, I would have gotten more used to it but it’s hard for me to get into work when I come back. Essentially I had five days off right? Do you find you have that issue when you come back?

[02:24] Mike: Yeah to some extent. I mean if I’m just completely disconnected for whatever reason it seems like it takes a couple of days to kind of work my way back into, I will say a mental state where I’m going to be actually productive. I think a lot of it has to do with just trying to figure out okay well now I’m back to work what should I do, what should I do first? Because there is a billion things to do and it’s just that because there is so much to do you’re just not really sure where to start sometimes.

[02:47] Rob: Yeah, I must feel like it’s a learned skill. The more I go away on these short trips these one and two day trips in addition to the weekend, I’m starting to do once a month, twice a month just I’ll go to the coast or whatever. I’m becoming better at being productive once I get back. I feel like certain people and I’m one of them has a real hard time getting back and other people come back refreshed right? You take four days off you come back and they are just chomping at the bit and getting all types of stuff done but I’m not there yet.

[03:16] Mike: Got it.

[03:16] Rob: What’s going on?

[03:17] Mike: I’ve just been reworking some of the backend database in AuditShark to support some fun stuff called bidirectional database synchronization.

[03:25] Rob: And what are you doing that for?

[03:26] Mike: The short answer there is a component in AuditShark that people will install locally and it needs to synchronize with the cloud database.

[03:32] Rob: A component that you install locally has a database built into it?

[03:35] Mike: Yes.

[03:36] Rob: Okay.

[03:37] Mike: It’s basically about making database calls back to my database to be able to be able to store that information, that’s really what it is.

[03:42] Rob: And are there any, I mean you’re going to dot net right?

[03:45] Mike: Mmmh.

[03:46] Rob: Are there any libraries that help with that kind of stuff or you have to write from scratch?

[03:50] Mike: There is a synchronization library that Microsoft publishes but you have to have certain database columns in place in your database. What I’ve done is I’ve basically shoe horned these new columns into the database. There is like 11 different database tables that I need them in and essentially what you should do is you have to put four column into each of the tables and then you also have to create like a tombstone table for each of those tables. So I had to add 11 tables and then put two new fields into each of these new tables and then in addition to that change I had to add four more columns to every one of the existing 11 tables.

[04:26] Rob: I love that phrase “tombstone tables”.

[04:27] Mike: Well, its’ because if you delete something and you’re trying to synchronize between two tables how do you know where it was deleted?

[04:34] Rob: Right, right.

[04:35] Mike: Or where was add it because it could be in either one, it could be deleted from one table or added to another and depending on which ways you do the synchronization first you may be adding it or you might be deleting it. It’s just you have to keep track of that stuff which kind of sucks. But it’s getting close to being done so once I get that done then I can move onto other things. I’m working with some people from Microsoft on helping get some of the other stuff in AuditShark set up for automated and testing and deployment. Because right now I’m not doing a heck of a lot of changes that I think need to be tested, but extremely strenuously but I can see it done in the future and I’m trying to get into a position where down the road I’m not going to have to worry about that as much because I’m going to have like a full blown staging environment that’s going to be mostly a copy of production like a true staging environment which Azure doesn’t really offer you that.

[05:20] Rob: You said you’re working with folks from Microsoft, like their support or their technical help?

[05:23] Mike: They are BizSpark developers.

[05:26] Rob: Developer liaisons or something?

[05:27] Mike: Kind of yeah I mean like they reach out to you and say, “Hey do you have any questions or problems or anything we cans help you with?” And then I have this problem, so I have gone back and forth with them a couple of times. Right now at first I was just working with one person he handed it off because he wasn’t technical enough. That’s person basically involved somebody else’s. Now I’m involved with like three different people kind of talking about it because it’s just such a giant issue.

[05:50] Rob: Got it, did you tell them about your tombstone tables?

[05:53] Mike: No I did not.

[05:54] Rob: Okay, I wanted to talk about a new iTunes review and it’s from RC in New York City. He says a great podcast like the title says for the rest of us. I discovered this podcast of Stitcher when I ran out of tech entrepreneurs to listen to and boy was I pleasantly surprised. I was used to the tech — I like this next phrase a very good tonal phrase — I was used to the tech luminary type podcast where people bask in the glory of their own light and speak in obtuse generalities. Sir you have quite a vocabulary. Being a non tech wanna-entrepreneur it was refreshing and informative to hear the tough examples, experiences and tips and tricks of Rob and Mike as they slog week to week to make the projects/businesses a success. So thanks for that review RC in NYC we are up over 200 ratings now, really appreciate a rating and or a review on iTunes if you get the chance.

[06:45] Mike: You know I got an email from listener who had also send me –he’d heard that I was talking about putting together documentation for AuditShark. Although I’ve hired somebody to do it who has a background in writing documentation for compliance and security products, so I don’t really need this. But the products point from me to was something called Screen Steps Live from Blue Mango Learning and it looks like it’s a SAS application where essentially you sign up for a subscription and they will essential host your videos and just kind of streamline the process for building FAQs and tutorials and things like that’s for your product. So if you don’t have access to developers that’s a great tool to leverage that. But they do aim it specifically at non developers and I know that we do have a number of non-developers who listened to the podcast. So I thought I’d share that little tidbit and then send over.

[07:36] Rob: That’s pretty cool. Man they need to get a better domain name. They are at bluemangolearning.com/screenstepslive. Probably not ideal. I searched for their product name expecting it to be dot com or something so product sure looks interesting for that niche. So I am working on a basically a bit of procrastination because I don’t actually want to do real work. Every month about this time, I’m looking at my HitTail dashboard and I’m trying to figure out, where am I going to be at the end of the month? There is revenue sources coming from a few different things I’ve old billing, I have new billing, I have article billing I have just a lot of stuff to add up and prorate for the rest of the month.

[08:15] I found that there is so many ups and downs during the month, there are just certain days where a lot of people signed up one month and so during a simple prorating of, hey we are X days into the month multiply that by out to 30 or 31 days is just not accurate. So I’m working on a more intelligent prediction query for HitTail but it’s surprisingly challenging. I know the conversion rate of how many go from trial to paid during a particular 30 day period, but if I’m half way through that period for them and they are still there, then they have a higher chance of sticking around.

[08:47] So I can’t just use this blanket percentage across everyone, I actually have to prorate the conversion percentage across people who are still there. So I’ve only spend about 15, 20 minutes on it yet but like I said it’s not super productive per se but I do feel like it’s going to give me some better insight, I know where I’m going to stand at the end of each month. I’m still trying to sort out if knowing that information is actually helpful or actually helpful if it’s just mentally helpful for me.

[09:10] Mike: Well I think it might help prevent you from becoming distracted and thinking about it more often because if you have a dashboard that’s accurate and shows you that information and you’ve already done the code behind it to know that it’s pretty close to being accurate then you won’t think about it as much to try and figure out all the different scenarios for, “Oh well, my conversion rate last month was this and the month before that was this” and you’re trying to figure out and do some mental interpolation between those and figure out what your conversion rate is going to end up bringing in for revenue this month. So if you’re not thinking about all those different things kind of frees up your brain to think about other stuff.

[09:45] Rob: Yeah that’s a  good point and that’s actually the way I look at it because every time I look at this dashboard I know that 90% of the numbers I’m like yeah those are on, those are on. But this one I’m just like, you know, because I have just a simple flat paraded prediction now and every time I look at it I’m like I know that doesn’t include this, I know it doesn’t include people who are currently in the trial funnel. I mean it’s just, it’s such a weak estimate that I’m not taking it seriously. Every week probably I do want to have an idea of where I stand this month and where I look to be by the end of the month. So I download an Excel file from PayPal and I go through some manual work and add it all up by hand just to see where it is and it would be so much better to have that for real.

[10:22] Mike: I have a question for you; I mean you obviously have all this historical data right?

[10:26] Rob: I do.

[10:27] Mike: Why don’t you go back to the historical data that you have and try and figure out develop an algorithm that will guess what it should be at the end of each month and then take a look at those and see how close it is at being accurate as opposed to trying to kind of guess because that’s basically what you’re doing right now is you’re guessing. Then you’re doing to have to wait a couple of weeks to try to figure out whether that’s accurate or not as opposed to going back and looking at the historical data and you already have that stuff so you can essentially run through the algorithm see if it’s right at different points along the month, see how close it is and just kind of do a percent gap and says oh it’s within 5% or 10% tolerance of this number and that’s good enough as long as it’s that close.

[11:07] Rob: Right no that would be what to do except for the historical data I have, these are live customer records and so the data is actually not in the form it was when I was in say the middle of May. So in the middle of May I had X number of trials, certain number of people had cancelled by that point but over the next 15 days in May as more people cancelled then they get set to inactive. So their records are actually different now. So I don’t actually have a snapshot of the database on that day. Does that make sense? So I can’t go back and rerun the algorithm based on what it looked like at that point.

[11:39] Mike: Oh I see.

[11:40] Rob: You know what I’m saying? And like it’s not like I have some huge data mining thing that I took snapshot of it everyday and I could run it. It’s live data that has changed since then.

[11:50] Mike: I see, you’re not tracking the historical events as much as you’re changing the records of the individuals that are in the system

[11:56] Rob: That’s right and if I were — a couple of things one if I was architecting the system I would of course have a cancellation date instead of inactive bit because then you have the actual information right then I could go back and do exactly what you’re saying. But I didn’t architect the system and it’s not worth me for this thing it’s not worth me going back in you know adding a bunch of code just to get a little better prediction of algorithm. I think even given what I have I could probably spend less than an hour right now and get within 5 to 10% without changing app code.

[12:25] Mike: I see, I see.

[12:26] Rob: But no I like your approach that’s exactly what, that would be the ideal approach to it.

[12:30] Mike: Yeah what I did recently is I hired a developer who built the web hooks for stripe and then whenever stripe does something it basically sends out information back to this web hook that is on my server. It sends just information about hey this is just what happened and it sends and I think it sends JSON over through that request. I hired a developer who built two different things one was to go into stripe and pull in pretty much every single web hook that has been processed over the past 30 days and the second one was to actually implement something so that there is a web hook out there that I can have live so that whenever stripe does something it will kick off, it will send something to that.

[13:12] All I do is I take the entire JSON query and send it directly into my database so that if I ever need to put new post processing on it later, I don’t have to worry about it because stripe only keeps track of the last 30 days of web hooks that they’ve basically send out the last 30 of events. So to get around that I basically just save every single JSON query that they send to my web hook and throw in the database and it’s not like I really care about the storage space or anything like that. Then if I ever need to run through and do any post processing on anything all the way back to the beginning of time I can do that.

[13:42] Rob: Interesting I haven’t done any of the web hooks stuff; I’ve looked at it as kind of…

[13:47] Mike: Neither have I.

[13:48] Rob: Premature optimization thing I didn’t even know they only held it for 30 days. What kind of information do they have that you could need? Because I haven’t had a need and I’ve been running on stripe for about nine months and I haven’t had a need to go look at that stuff. What kind of information that I don’t have right now would you have in your database?

[14:04] Mike: So they have whenever somebody signs up. They have whenever there is a cancellation they have, whenever payment was attempted but fails, whenever payment was succeeded, whenever they send you money. I mean pretty much any given like all that happens and they keep a record of it.

[14:21] Rob: So you’re looking at the logs right, you’re logging events is what you’re doing. Because I can get that data but I only get the data at the customers and look at the payments and look at this and that but I can’t look at the event of when that happened and that’s what you’re getting.

[14:36] Mike:Yes.

[14:36] Rob: Got it.

[14:36] Mike: I mean I don’t have any specific use for it right now but it was a task that I was able to, you know, send out there and I knew that once that that 30 day period time goes by I’m not going to have that data ever gain. So if I ever need it in the future it would be good to have it and if I don’t ever use it that’s fine it’s not like I actually did the work on it anyway I just scoped it and said here is what I need. It took me it was like literary five minutes of my time to say this is what I need.

[15:01] Rob: You realize that the phrase “If I ever need it in the future” is the very definition of premature scaling that we talked about in the last episode?

[15:09] Mike: You know but I think with the premature scaling you’re also talking about something that takes more than five minutes of your time.

[15:13] Rob: You’re right; right you said something to me shortly before we hit record.

[15:17] Mike: I had just said something like, “Oh I hate java” and you asked me if I was working with java and I said no I would shoot myself if I had to code in java.

[15:26] Rob: And why is that? Did you code java back in the day?

[15:27] Mike: I did for a while it just irritated me for some reason I don’t know why. Part of it was the IDEs that you had to work with and don’t get me wrong I haven’t worked with java in probably nine years.

[15:37] Rob: You’re still going to get hate mail.

[15:39] Mike: Yeah.

[15:41] Rob: And you know what people should send you? Java is not bad you work with .net you idiot.

[15:46] Mike: I don’t care, I just it rubbed me the wrong way when I was working with it and it just seemed like they were always making these weird changes that didn’t make a whole heck of a lot of sense. Then they came out with net beans and this and that.

[15:58] Rob: It was pretty gnarly. It was pretty complicated.

[16:00] Mike: What is all of this stuff? It just didn’t make any sense to me and so I just kind of got away from it.

[16:05] Rob: I coded java for about 18 months and it was I found it complex. It’s my memory of it, I remember the ring no-good IDEs for it and I remember it being extremely complicated even and that is coming I’m a dot net developer like dot net is not simple compared to php and ruby and python and you know those types of frameworks. Java really kind of pushed it over the top and maybe it was the documentation wasn’t good so it just seemed complex but it was definitely a struggle to build things that are easier to do in a lot of other languages. It’s also building web apps and I just don’t think it’s the ideal language to build web apps with.

[16:37] Mike: Yeah I don’t either. I would attribute a lot of it to the IDE.

[16:40] Rob: Right.

[16:41] Mike: And I think that the reason I think that is because at least with dot net if you’re typing something you get a little interface that pops up you’re starting to type a function and it just will auto complete it for you and it will show you all the command-line parameters for that. Whereas if you have a bad IDE for java you are not getting any of that but with dot net you’re typically you’re working with visual studio and everything is right there you don’t generally have to worry about it.

[17:06] Rob: Yeah most languages don’t have the intelisense that dot net does and you get so spoiled by that as a developer because it dramatically improves your productivity. But stepping into when I step into php I have I’ll just say it takes me a lot longer because I have to sit there and look everything up, it doesn’t auto populate it like it does with .net.

[17:23] Mike: Yeah the other issue I think I have with java was all the debugging.

[17:27] Rob: I remember spending like six hours just getting a step through debugging working on a JSP server

[17:32] [music]

[17:35] Rob: So Mike and I are going to be talking about eight sentiments that do not bode well for your startup. Realistically these are a bit tongue in cheek. But before the call Mike and I were talking about how each of us including us here on the podcast as well as most people out there and most entrepreneurs that we talk to make at least one of these mistakes and typically several of them during the time of building launching a product. So the first sentiment is, “This product idea is awesome. Now off to the basement to build it I’ll see you in six months”. Mike how many times have we covered that on this podcast?

[18:06] Mike: At least one.

[18:07] Rob: We’ve talked about this certainly with AuditShark you built it for quite a while before showing the actual app to customers, I think we see this everyday. We get questions from podcast listeners who basically say, “Glad I found your podcast, I’ve already build this app and about to launch it but I have no mailing list, I haven’t done any marketing”. But that might be the most common email I get these days actually is ,“ I have this product and either I’m just about to launch or I launched a month ago and no one is buying and I don’t know what to do now”. Typically my first thing is, “Well, does anyone want this? Like have you talked to customers?” If you didn’t do it before you built then you need to do it now so that you can determine if you should, you know, even continue with this product. There is no reason to throw good money after bad.

[18:51] Mike: Or good time after bad.

[18:52] Rob: Indeed. So our second sentiment that does not bode well for your startup is, “I haven’t even finished the features I want to build yet and potential customers are already asking me to build X”.

[19:04] Mike: I love this one because the translation to this is basically, “I’m sticking to my product idea no matter what my potential customers tell me”. I have this vision in my head of stuff that I want to build but people are asking me to do these other stuff and I’m not done yet I’m not done yet I still want to do this other stuff. What they are telling you is what they want and what they are willing to pay for and what you’re telling them is no I’m going to do this because this is my vision. You’re basically saying my vision is more important than what my customers want.

[19:31] Rob: Yeah and this is a really hard balance because as soon as you launch an app and as soon as you have people using it you’re going to get feature request especially if you launch when you’re still a little embarrassed about your product and I think most V I.0 are they should be launched when you’re still a little embarrassed about it. So you’re going to get a slew feature request and it’s up to you to figure out well which one of these should I actually implement, which one of these maybe lined up with my vision, which ones don’t but are still worth implementing and maybe even have a higher priority that the features I have in mind because frankly your product can go down an entirely different road than you imagined and it could be more useful to your potential audience if they are using it in a way that you never thought possible.

[20:11] Mike: Yeah and it’s interesting the dynamic here because I was actually having a conversation last night with prospective partner of AuditShark and he’s asking me he’s like, “ What do you see is the vision for this, you know, what do you envision this turning into down the road?” But I basically put it blunly and I’m like, “The product direction is going to be driven by what the customers want, and at the end of the day if I do what the customers want then I will make a metric ton of money, it’s not going to matter. But it’s really about what they want not necessarily what I want for the product.

[20:44] Rob: Yeah and again that is a really, it’s a hard thing to do to actually implement what you’ve just said. Because it’s hard to know when you get 20, 30, 40 customers all sending you a request you can’t do everything the customers want, you have to parse it out and figure out which on or which set of features is actually the thing that you can implement that is going to help the most customers and attract the most new customers to the product. So the third sentiment that does not bode well for your startup is, “I’m half way done with this idea but that shiny new one over there seems so much better”.

[21:19] Mike: Aren’t we all guilty of this one?

[21:21] Rob: Yeah absolutely. Every month yeah I’m currently evaluating ;let’s just say a couple other potential acquisitions and I’m in due diligence right now I’m signing an NDA on one and right away I told it to one of my mastermind groups and one of the guys was just like what are you doing? Like I feel like you’re taking your eye off the ball. You know he didn’t say it quite like that but in so many words.

[21:41] Mike: I’ll say it, I feel like you’re taking your eye off the ball.

[21:43] Rob: Yeah, no it’s definitely something in the back of my mind I mean if you listen back 10 episodes I’ve been talking about this you know about to shift focus because there is this thing that I’ve said over and over is that I never work on two products. I never try to grow two products at the same time. Anytime I’ve tried to that I’ve failed because there is just too much to do. I have a couple tricks up my sleeve that I’ve never had in the past — but the bottom line is it’s risky game and it’s always a gamble if you’re going to try to either do two idea at once or even worse just leap from one half completed idea to the next because that’s a good way to kill three, four, five years of your entrepreneurial career and never actually launch anything and launching is when you really start learning.

[22:25] Mike: Yeah I mean you can take a look at the hard drive of just about any developer and just count the number of unfinished products and that right there will give you a  good idea of, you know, how I guess pervasive this particular problem is. I mean there are people who just leap from product to product or projects to projects because they never actually finish anything and after two, three, five, eight years of working on this stuff they still have nothing to show for it. I think we are all guilty of that at some point I mean there is always these projects that we get involved in that you kind of bogged down, you loses your motivation to work on it and it’s no longer as exciting and sexy to kind of push through to the finish line because you don’t have customers yet, there is nobody really relying on it yet and you’re just like, “Well you know that looks really interesting” it’s very easy to get distracted and go on a different direction.

[23:13] Rob: Yeah and don’t get me wrong here I’m not saying don’t own multiple products because obviously that’s you know really the approach that I’ve taken on, I’ve had success with it it’s not to bounce from idea to idea without completing one and either getting it to a state of automation or of some type of semi autopilot state where you are not just having to really focus on it to make it grow all the time. Our fourth sentiment that does bode well for your startup is, “I plan to quit my job 60 days after I launch”. So why is that a bad sentiment?

[23:45] Mike: I think that is a bad sentiment because it places, I’ll say, unrealistic expectations on your launch and when you don’t meet those expectations it’s not only mentally draining but it’s also going to put you in a position where you’re starting to look for excuses, why didn’t this work? What didn’t go right? And you’re going to basically put blame everywhere except for where your expectation should have been. I just don’t think that it’s good for your mental health; I think that being able to quit your job 60 days after launch is just an unrealistic expectation to have for virtually anything. I mean I can’t think of anything where that sort of thing would happen. They are going to take some time to kind of get to the point where you have the steady stream of visitors and customers who are coming in and saying, “Yes, I’m willing to pay money for this.”

[24:31] Rob: Right the problem is that, if you set your expectations so high and then you fail to hit them and you fail miserably to hit them, which is really likely will if you think you’re going to have  may have a fulltime income after 60 days. It’s just very discouraging, you know, there is kind of these three dips that you hit when you’re launching a product. One is about half way through development, one is just after launch and then the other one is like three, four, five months after launch where the buzz has worn off the launch and this will just contribute that all the more and will encourage you to basically bail on the product.

[25:07] Our fifth sentiment that doesn’t bode well for your startup is, “It will take me as much time to explain this task to someone else. So, I’ll just do it myself”. You know Mike I think we should start startups for the rest of us drinking game because we talk so much about VAs and outsourcing and not even outsourcing to developers and designers that everytime we mention it everyone listening should have to do a shot.

[25:30] Mike: You know I think that is a great idea, I think that our listeners should start sending things in. So anyone who is listening please send us some stuff for to questions@startupsfortherestofus.com send us your thoughts about what should go into the podcast drinking game where anything we say or something somebody asks that should go in every time that comes up you take a drink.

[25:51] Rob: Right because we I mean that has been a recurring theme since episode one of not trying to do everything yourself and especially not using the excuse of, it would take me as much time to explain this task to someone else so I will just do it myself. I think the big, I mean there is many, but one of them I think the one that I found to be the most kind of impactful to me is that it always feels this way the first time you have to hire a developer, the first time you have to hire a designer, tier one email support. Any of those things it’s like gosh! Four hours, six hours, eight hours whatever to hire this person and this task is only a one or two hour task.

Well, a couple of things. 1. You’re probably not very good at estimating so you’re probably underestimating the actual amount of time it’s going to take to do it. 2. Once you have that person and you find them and they are good at this, then the next 100 times you have this come up, it’s a five or ten minute email to send them a task. Right? A one hour a 30 minute tasks can be outsourced really easily if you don’t have to go through the hiring process. So there is this almost like these economies of scale, once you get these first several hours of hiring them out of the way then you can build on that. This stuff does not happen overnight but it’s about building a team of people you can rely on, even if you don’t use the all the time but you at least have them as resources and it makes outsourcing very easy and very cost effective and time effective.

[27:10] Mike: Well the other thing that comes up is that and I was talking to somebody last night about this which was the person I was speaking to has to do billing for a bunch of different customers and it has to be done in a very specific way and it’s a lot of it is recurring thing. He’s constantly just looking at this stuff saying I will just do it myself as opposed to sending it to so and so to do. I told him I was like why don’t you just create a video, you know, do a screen cast, walk through it, sign up for screencast.com and buy Camtasia studio and just walk through the process, record it once. Send it over to the person who needs to do it and if you ever need to replace that person or if both of you are busy and you need somebody else on your team to do it, because he’s got a team of like 10 or 15 people, I was like just send it over to him, send him the link to the video and say this is who it needs to be done I need you to do it.

[27:58] There is new customer they need to be added to the CRM package here is all the information that you need to do it and here is the video that explains exactly who to do it, please go do this and take care of this. Because they are employees of yours, they are working for you just go ahead and get it done. As opposed to spending all of your time doing these things when there are repetitive task that somebody else can be doing.

[28:18] Rob: Our sixth sentiment is, “I don’t want to bother with all that click through and conversion rate nonsense I’ll just build a great product”.

[28:25] Mike: I lovethat “ the click through and conversion rate nonsense”. I mean basically what you’re saying is you know build a better mouse trap and they will come and building a better mouse trap is not actually a good strategy. Mouse traps themselves have really not changed over the years. People have tried to build better mouse traps but if you look for building a better mouse trap there is pictures of all these really weird contraptions that just generally don’t work very well. Building a better product does not draw new customers, solving their problems draws customers.

[28:55] Rob: The challenge with this is that building a successful business requires an ongoing stream of people who are interested in your product. It’s over romanticizing building software, building web apps, building startups to say that the product is going to be so good that word of mouth is going to spread or that the virility is going to spread the word or that social media. These are the things that are fun that we do anyway right? People are on Twitter, on Facebook and so thinking that that’s going to be enough just having that good product is going to make people talk about it enough to build a sustainable business is wishful thinking bottom-line.

[29:32] And while you don’t have to be like ultra left brained about it and do hardcore click through, conversion rate analysis and just be all about the numbers you can move a little more towards the center. Every entrepreneur that I know who has been successful in the long term has a really good handle on what their conversion rates, click throughs, at what their numbers are for their business. I don’t know anyone who does it who doesn’t know that. Anytime someone has a business and I ask them where is your marketing and they say, ‘Oh its’ all a word of mouth”, hugely skeptical right away.

[30:03] I’m hugely skeptical that either a) is their business actually successful; and b) is it really word of mouth or is this person just attributing all these other things that are happening to word of mouth because they don’t know any better? This may be the one that I don’t think is talked about very much, I think it’s wishful thinking to believe that the product is enough to make a successful business.

Our seventh sentiment is, “My idea is pretty hard to explain, do you have 20 minutes to spare?”

[30:33] So this probably comes back to that kind of enterprise software, the high tech software versus being able to sell on the web. The problem with having something that is so complicated and you can’t explain it in a couple of sentences, is that it’s very hard to sell. It means that you have to educate your market which is very expensive and time consuming and you have to educate a lot of people and only a few of those people will buy. It also means it’s extremely hard to do with like paid customer acquisition because you have to send them through a long funnel. You can’t just have a headline that explains what your product does, if you can’t explain it in 30 characters which is I think is 32 characters is you know a Facebook headlin or 50 something characters is an Ad Words headline.

[31:12] If you can’t explain your product then you have to go a different route that is almost like a lead gen route and you have you have a headline that kind of addresses part of the problem and then either have them talk to sales people, go through auto responders, download reports all those are good tactics to do long term for any business and they will expand your sales. But if you can’t make sales without them, then you’re basically a medium to high tech sales all the time and that’s just a different business then. You knew I think as a solopreneur or a micropreneur than you want to be in.

[31:42] Mike: I think the other side of it is that, if you can’t explain it succinctly then it’s very difficult to convey that to new customers very quickly and when people hit your website they are just going to leave very quickly. I run into this problem I think a lot earlier on with AuditShark where it was very difficult for me to explain to people what it is that AuditShark does and why you would wants to do it. I still feel like I’m tweaking the response and what I’m telling people, but basically I feel like AuditShark is a product that brings clarity to the security posture of your web servers and that’s really it. It just tells you where your server stands with regards to security, how vulnerable they are etcetera.

[32:22] Rob: Right and I think there are, you know, with this one my idea is pretty hard to explain do you have 20 minutes to spare? I think there are two ways to look at time. One is either that your idea really is that hard and that’s obviously a danger sign or your idea isn’t actually that hard and you just don’t know how to explain it yet. That’s also a danger sign it means and you can correct that one right? You can learn the language of your customers, we talked about that last episode and you can just learn how to more succinctly describe it and that’s absolutely a requirement if you do plan to sell online like you said through sales or marketing website. So rounding out our eight sentiments is, “I don’t want to talk publically about my idea because someone might steal it”.

[33:01] Mike: This has got to be one take a drink.

[33:04] Rob: This is the other drinking game one I know. We’re getting quite a few emails with a question but the person won’t tell us their idea they just say, “Oh it’s in the kind of commerce space” and here is this question but the answer to it depends entirely on having more specifics.

[33:21] Mike: So the issue with this is that’s, if you’re not talking about your idea then it’s very difficult to find people who are going to basically tell you you’re crazy that it’s not a very good idea. If you’re not telling people what the idea is, then who are you talking to about what problems you’re actually solving? If it’s a known problem then people are presumably already talking about it and searching for it so it’s not like it’s this giant secret.

[33:44] The other side of it is that the second you launch it’s out in public I mean everyone knows about your idea at that point because the world is connected to the Internet so everyone can see it it’s not like you’re able to hide anything at that point. So if somebody really has tons of money and wants to come steal your idea they are going to do it. But the problem is that nobody wants to steal bad ideas. What they want to do is they want to steal successful ideas. So, if you have an idea you could tell everybody in the world and nobody is going to care but if it’s a good idea that you follow through with and you’re successful with it that’s when people are going to start copying you, that’s when people are going to start taking your idea and trying to implement it or come after you with more money. But it’s not until you’ve proven that that idea is successful that anybody is going to care.

[34:30] Rob: Right and there is a difference here between going on a podcast with several thousand people listening and saying here is what I’m going to build and here is exactly what I’m going to build and how I’m going to market it and all the steps I’m going to take, I mean that could be stupid, right? You’re basically giving away a plan of something that is actually valuable. But talking to people in person or over the phone mentioning it to some people, asking people and saying hey I would appreciate if we don’t tell everyone about this. But here is the idea what do you think and getting really in-depth about it there, is not much risk in doing that, right?

[34:59] Even going on the podcast Mike if you and I were to sit here and talk about and I always explaining a whole idea, I questions how many people would even move forward with that and how many people would be able to basically the out market you even if you gave them most of the broad tips of how to do it. Because everyone has their own idea and they all want to implement it, right? They don’t want to implement your idea they tend to want to implement their own because they are passionate about it and that’s probably another sentiment that doesn’t bode well for your startup, is being able to adopt other people’s ideas or acquire startups that are failing rather than just the traditional, I’m going to build a novel product and launch it like every other developer does.

[35:37] Mike: Well I think I have a perfect example for this is mean Jason and Justin from the TechZing podcast talked about the idea of AnyFoo. Their product idea was essentially providing a market place where if you need a expert on whatever the topic is sit can be a programming topic, it could be C Sharp, it should be you know Azure, it could be Ruby, I could be Rail whatever, I mean any of those topics there are experts out there. Their idea was to essentially build the website where you provide a market place for going and hiring these people. Now obviously you’re not going to hire them for an extended period of time because they are going to probably charge you a bare minimum of $100 and they talked publicly about this for a long time.

[36:20] They said somebody should build a website where you go there and I can pay $200 to talk to an expert on security for an hour. Just to pick his brain, to get some thoughts and figure out what I should be doing and you know what sort of things that I’m missing in the existing things that I’m doing. They talked about it for a year, they told their entire listener base, “Hey somebody please implement it” and nobody did. So they finally decided to actually follow through and start building it themselves because nobody else had. They are publicly talking about it and they are actually asking people to go do it and not one person steps up and goes to steal that idea.

[36:53] Rob: Yeah there is so much more that goes into building a business than the idea, basically the idea is a small piece of it and having a great idea is great but there is so much execution and work and expertise and development and marketing that goes into it, that just having someone know your idea is not enough for them even if they get there first it’s not enough for them to beat you if you can out market them. Well, that about wraps us up for today, top review our eight sentiments that do not board well for your startup are:

1. This product idea is awesome now off to the basement to build it. See you in six months.
2. I haven’t even finished the features I want to build yet and potential customers are already asking me to build X.
3. I’m half way done with this idea but that shiny new one over there seems so much better.
4. I plan to quit my day job 60 days after I launch.

[37:42] Mike:

5. It would take me as much time to explain this task to someone else so I’ll just do it myself.
6. I don’t want to bother with all that’s click through and conversion rate nonsense. I will just build a great product.
7. My idea is pretty hard to explain. Do you have 20 minutes to spare?
8. I don’t want to talk publicly about my idea because someone might steal. [Music]

[38:02] Rob: If you have a question or comment you can call it in to our voice mail number at 888-801-9690 or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt, used under Creative Commons. You can subscribe to this podcast on iTunes by searching for startups or via RSS at startupsfortherestofus.com where you will find a full transcript or each episode. Thanks for listening we’ll see you next time.

Show Notes

Transcript

[00:00] Rob: If you stick around to the end of this episode Mike and I are going to be talking about premature scaling. This is startups for the rest of us episode 97.

[00:07] [Music]

[00:15] 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 just thinking about it. I’m Rob.

[00:24] Mike: And I am Mike.

[00:24] Rob: And we are here to share our experiences to help you avoid the same mistakes we have made. This week the word is Audit Shark, early access.

[00:32] Mike: Yep.

[00:32] Rob: So what’s going on? Did you… Are people using it Mike? What you had talked about on the podcast was that yesterday people had started using it in September 10^th.

[00:38] Mike: Yep.

[00:39] Rob: Did that happen?

[00:40] Mike: Well actually I had somebody start using it last week so…

[00:44] Rob: Oh, nice.

[00:44] Mike: I had somebody install AuditShark on a couple of their servers and basically worked through some of the issues that they were having just to basically make sure that everything was usable and functional. And then from there basically to ran some more tests over the weekend and made a huge number of changes of the code over the weekend and then I waited until this morning actually to get my next customer on.

[01:07] So yesterday I touched base with, you know, somebody who was interested in using it as an early access customer and got him installed, he was up and running and you know once we started with the process it was maybe five or ten minutes tops. And most of that was working through some last minute code changes that I had made. So for example I dropped some columns and then forgot to pull out some of the error checking code so they were looking for it, but there was no way for him to enter in that information so I had to make some raw database changes. But other than that I mean things went pretty smooth I think.

[01:38] Rob: Awesome. And so you have two customers or potential customers using it? Well, so that’s an interesting question, are they customers, like are they paying you yet or are they under the understanding that it’s maybe a 30 day trial or how has that worked out?

[01:52] Mike: So one of them is a prospective partner who wants to resell it and the other one is a prospective customer who will be using it for his own servers.

[02:03] Rob: Got it, so he is checking it out, see how it works, see what it does. And is there a trial period you have discussed or you are just kind of going to say how is it working and touch base with them and that kind of stuff?

[02:13] Mike: Yeah that’s probably going to be more it than anything else. Most of—I mean the thing is one of the issues that have right now is because the product is functional but it isn’t necessarily complete. The primary issue is that it works and does what it’s supposed to do but because I don’t have the library populated with a lot of content yet, it’s not as useful as it could be. So essentially what I am doing is I am working with him to essentially do things on, I don’t want to say consulting basis, but in a way I am basically taking a look at his servers, you know, and I am going to be building the policies on his behalf and just I am going to let him know, hey this stuff is ready, you know whenever you what to run it., if you want to double check and watch your servers just to make sure that there is not going to be any major impact or whatever then he can do that and he can run it on his own schedule. It’s very simple to do that for him.

[03:04] And then you know he can take a look at it and maybe later on he just decided, oh well you’ve got some new stuff, I have already seen it in action. It’s not hurting anything; it doesn’t have a very high impact, just go ahead do whatever you want whenever you want.

[03:17] Rob: Right. Sounds a lot like customer development at this point, right? I mean you are actually working with a real customer and basing your features, your new features on his needs.

[03:26] Mike: Yeah, I mean and that’s the nice part about this piece of it, because it’s content driven and I can just develop new content and add it in, it’s not like I am adding new features but I am adding—I guess in a way I kind of am adding new feature because they are new things that the software is going to be looking for but it uses all the same underlying code that I have already written.

[03:45] Rob: Right, you are modifying XML files that the code consumes, is that right?

[03:48] Mike: Yeah basically.

[03:49] Rob:    RUL files, yeah, AuditShark audits. Servers and the security audit scan stuff and you are basically adding more rules and more scans, more points of data by not modifying code but modifying some text file, I assume it’s XML or something so–.

[04:04] Mike: Yeah.

[04:05] Rob: Fantastic. So how do you feel? Does it feel good or is it like—are you as excited as you thought you would be you know because you finally, you are on early access, or is it like a letdown?

[04:14] Mike: I don’t think it’s a letdown. I feel good about where things are at, I mean I am a little disappointed that I am not further a long but I think that that’s going to be the case no matter what.

[04:22] Rob: Sure.

[04:22] Mike: You know I ran into some previously undiscovered scalability issues last week that took me quite a while to track down because I had some—some of my logging code wasn’t actually logging anything and I knew that a long time ago but I just said, well you know, it’s logging code, it’s really not that big a deal. Well, then I ran into an issue where connections weren’t being closed to the database and it became an issue because I couldn’t see where those connections were being opened and closed.

[04:50] Rob: Right.

[04:51] Mike: Now I had to fix the logging code and then once that was fixed then I had to go fix the connection issue.

[04:57] Rob: Right. And that’s early product stuff, right? I mean you are always going to see that at this early stage. So what’s your plan now, like today, tomorrow, this week? You are working on AuditShark almost exclusively, are you writing more code right now, are you building more rules for your two kind of customer development folks, are you looking for other people to do early access so you can get more feedback? What’s your game plan?

[05:20] Mike: So right now I am planning on, I am doing a little bit of code, just basically the bare minimum stuff that I need in order to be able to populate the database, beyond that I am not really doing anything that is code development related. There is a few minor features that absolutely need to be there that, you know, for them to be able to use it that I am still kind of working on. But you know those kind of go hand in hand with populating the library. So until the library is populated, those features are kind of completely unimportant and in order to test populating the library I need those features.

[05:51] So I expect those to kind of be hammered out in the next couple of days, probably two days at most. And then from there on it’s just a matter of, you know, running these policies against their machines, taking a look at the output, seeing what things come back as okay, what things come back as not okay, where I can drill in to find out more information and then essentially determining what other recommendations I can make based on what they have installed, because if by looking at their installation, let’s that they don’t have Apache installed, well why would I go out and build, you know, 100 rules that check what Apache is, how Apache is configured and what versions of everything are there and what vulnerabilities are there if they don’t have Apache. I feel like that’s important down the road but because it’s still early customer development stuff and they are not going to be using that, I don’t feel that it’s as important.

[06:40] Right. Do you have plans right now to get another potential customer or two on board, like as of next week do you think you will have more people using the system in order to vary the feedback that you get?

[06:51] Mike: I would expect that by the end of the week I probably will.

[06:54] Rob:    Okay.

[06:54] Mike: We’ll start talking to people early in the week and then trying to identify specifically who I am going to add in by the end of the week.

[07:02] Rob: Very good. Well sir, let me  join each person listening right and wish you a hardy congratulations on getting it out of the door and getting it on a real server, a few real customer servers.

[07:13] Mike: Thank you.

[07:15] Rob: So this actually ties in with a voice mail we received, J. Speaks called in and he thought I let you off too easy with our discussion about Altiris Training versus AuditShark because AltirisTraining you spent maybe a month, about somewhere between a month and six weeks, you outsourced a lot of it, you recorded the videos and you have had some early success with it. Pretty quickly people signed up and you know you have some demand. And then AuditShark you have been working on it for several years, people can go back and listen to the last 40 episodes to hear all that, but basically it’s just  much bigger project, it’s more ambitious and you know you are just now getting into the really—the focusing and doing customer development stuff.

[07:52] J’s concern was that when I asked you, I said hey you know how come you are going after AuditShark instead of just focusing on Altiris Training, just going after it and ten-exing your effort on that and leaving everything else behind. And you said because you are not that interested in AltirisTraining, it’s not that big of a market, you don’t have a passion for it, you know, some other stuff. He just said it seemed to him AltirisTraining is the obvious choice to pursue based on its early access. So I wanted to hear more from you, why aren’t you doubling down on AltirisTraining and why are you continuing to go after AuditShark?

[08:24] Mike: I think the primary reason that I am not really going after the Altiristraining.com website harder is because of the fact that I don’t see where additional traffic would come from. Looking at the searches that are done for it, looking at the current traffic that I am getting for it, I am still only getting, you know, four or 500 websites visits a month and that includes people who have already bought. And since I have launched it, I think in the first week or so I had several sign ups and since then I haven’t had one.

[08:53] So to me it looks like, you know, there is a market for it and it’s probably as small as I kind of thought it would be. I don’t see it as being something that’s going to just grow and grow and you know maybe that’s just going to take a little bit more effort on my part to try and, you know, figure out how to optimize that pipeline a little bit. But you know at this point I just don’t see any sort of substantial growth.

[09:19] Rob: Yeah tell me—so there is a market for this right, some people are interested in it, potential opportunities for expansion, I mean there could be partnerships, could be, not affiliate deals in the traditional sense but affiliate deals that are like high tech sales on your part, right? Of actually talking to consultants and talking to—and I guess you already have one of those in place, but multiplying that. They are all fairly, they are not really automatable and they are not internet marketing based, right? It will be more about building a real business, more about focusing and doing more medium and high tech stuff, whether it’s direct sales or selling to partners who can then resell it.

[09:54] And my take on it is the reason you don’t want to focus on that is because the idea is not that interesting to you and if you are going to spend all that time that you prefer to spend that time working on AuditShark. And it’s an interesting question, right? It’s like what are you optimizing for. And I think every person who is launching apps needs to ask that, what are you optimizing for? Are you optimizing for to make enough money to quit your job, are you optimizing to, you know, enjoy what you are working on, like are you really passionate about it? Is it some mix of the two? And I think that’s the question you are probably dealing with, is even if you could, let’s say you just stopped working on audit shark all together and completely focused in Altiris Training.

[10:33] Number one, it’s going to take you a heck of a long time to grow it, right, because it is medium and high tech stuff. And my guess is that with AuditShark, after you build a product people want, you are going to be able to get some of that automated—it’s more like the fly wheel traffic effect of getting online marketing going. Based on our conversations it seems like your desire is to go more of that route and you are just more interested in Audit Shark? Is that accurate?

[10:58] Mike: Yeah I think so, I mean I looked at it as something where I could probably build something that would have value in the future but not necessarily a substantial value now and that I wouldn’t have to sink a lot of time and effort into it to make a few hundred dollars extra a month. And at this point you know I had somebody who paid for six month subscription upfront, I do have the potential for, you know, an additional anywhere from 250 to $ 1000 a month in sales that, you know, very well could be recurring just through the partnership but at the same time the existing customer base is only paying a couple $ 100 a month for access to the site.

[11:37] So realistically I am looking at, you know, maybe close to $ 1000, maybe a little bit more. I don’t realistically see it going over $ 1500 a month anytime in the near future. The point was really to get it to a point where it was automated enough that I didn’t have to worry about it too much, but at the same time I may be able to just turn around and flip it. I was really looking for in many ways a project to vet a couple of developers that I was trying to identify.

[12:03] There was one developer who I had working on Audit Shark who was not really working out very well and I was very low to find another one and put them also onto AuditShark, at least right away. So in some ways it was a vetting process for finding those developers, you know, finding a developer who I can put on a different project, have him do something that, you know, may very well be meaningful and substantial to me but isn’t going to break the bank, isn’t going to necessarily either positively or negatively impact AuditShark, and that was really what I was more concerned about, was the negative impact to AuditShark.

[12:37] Rob: Yep, and I know where you are coming from because I own a number of websites, they are in the similar vein for me, right? It’s more automated income, automated revenue, and they are not in a niche that I particularly want to go and spend a bunch of time in and they have a traffic source or two that is recurring and that is a fly wheel and that I don’t mess with, but growing it beyond where it’s plateaued would be a lot of effort and I much prefer to spend that effort, you know, on something else.

[13:05] So hey I have two quick updates then we are going to dive into the premature scaling discussion. The first thing is, I don’t know about you but I am looking forward to episode 100. We have a special episode planned, we are stocked about that. Keep your eyes peeled, just three episodes away now. The other thing is I hired a half time contractor to help me with marketing and support and I already have a VA doing Tier one support, but I hired this—he is actually a colleague, a friend of mine who I have known for about a year and he is going to be doing tier two support. So I have been doing tier two for, you know, the last nine months.

[13:42] And so he is going to learn the ins and outs of the app and he is also already creating an email follow up sequence. He is doing a bunch of stuff that’s been on my list since I acquired the app but have not had the time to do. So he is doing a lot of content creation, he has worked on some ideas for info graphics, some viral blog posts, a couple of other things that are just, you know, they are too complicated to kind of outsource easily. And what I like is that I have a lot of task people, I have a lot of task Vas and developers and such where I can give them a task and they can do it. But he is much more of a project person where I can just say here, go do that, research it, proposes titles, and I say alright pick that one, there, now go gather data for an info graphic. Boom! Comes back, you now, it’s like that kind of thing where he is more of a full service person.

[14:21] So basically I had several agencies quote on doing this exact work that I am talking about and they outlines their process of how they would do it. And I am taking that process, and they were definitely going to be contractors, they work for an agency. And I took that exact process and gave it to him and said go do what they sad here. They didn’t give me any ideas, we didn’t steal anything or write anything, but I said here are the steps here are the steps we are going to go through because these are the steps I was going to go through with them. So I am pretty darn sure that going through these steps does not make you an employee.

[14:50] You know and I am  excited to have someone on board who can do a higher level of work with, you know, with less supervision who is more like a consultant, you know, it’s more like a  consultant  than a contractor.

[15:00] Mike: Right, yeah. And that definitely nice to have, my wife and I were having a similar discussion a couple of nights ago that was just about like our previous work histories where, you know, where she used to work at a graphics design company where there would be employees who come in and unless they were explicitly told to do something, they wouldn’t do anything and they would basically sit around waiting for people to assign them work. How does anything get done if you know nobody is there to tell you to do something then what gets done. And the answer of course is nothing, and that’s one of these–, I  would call that a hiring problem more than anything else, I mean you really need to identify those people who are going to be employees who can identify what needs to get done and get it done.

[15:38] Rob: And I think that’s the difference, you know when founders say like I want to hire great people, like great people are the ones who improve your business. You hire an employee improve your business even if you step away for two days, you come back the business is better than it used to be, whereas, average people maybe don’t do that. You know Kagan talks about that in his talks and he says there are minus ones, zeros and ones, and the ones are the ones that improve the business. Zeros keep it so, so, and you will need some of them and then the minus ones are kind of more the toxic people, the people who I actually degrade from the business.

[16:06] [Music]

[16:10] Mike: And this episode is based on some thoughts I had regarding a forum thread came up inside the Micropreneur Academy that popped up a few weeks ago. And essentially what had happened was that Facebook decided they were going to eliminate about 80 million fake Facebook accounts. One of the members of the Micropreneur Academy ended up with what was literally exponential growth because all these Facebook accounts got shut down and people were looking for another place to go and his site offered something that very much appealed to this particular audience and it was kind of a social networking site. And you know people just kind of flooded his server to sign up for accounts. And this wasn’t something that he had planned; this wasn’t something that he had actively gone after, it just kind of fell in his lap. You know obviously not everybody is in this kind of a position but it brought about a discussion about, you know, when is it the right time to scale out the systems.

[17:01] And I think that the obvious short term answer for him is,  you know, it’s kind of too late to scale your code at this point, you basically just have to buy a better server, buy more hardware, you know, throw hardware at the problem until you figure out how to deal with it. But you know the questions came up, well why didn’t you, you know, build for scale to begin with? I mean what’s preventing the site from being to handle this influx of people. So the basic question is, you know, when is the right time to scale, you know.

[17:27] And there is different aspects to that question, I mean the first is engineering your software to scale. And I think that I was reading Dharmesh’s website on startups.com and he actually a blog post that was specifically about this and the direct quote is, “ don’t fall into the trap of spending limited resources on planning and preparing for success, instead spend them on times that will actually increase your chances of success.”

[17:51] Rob: You know I have seen this over and over especially with businesses that I have acquired where the previous owner has invested literally tens of thousands of dollars into either hardware or into bullet proofing software and making this exotic admin area or just automated incredible amounts of things to where their app could handle 50,000 paid customers, but when I buy the app it has four paid customers. They either didn’t know how to market, they ran out of money before they were able to market or it just wasn’t a good idea for an app at that scale.

[18:26] And then you know I will take it over and downgrade everything and go to a—I mean I went from a $ 500 a month hosting plan with one app and I moved it to a shared hosting account that is eight dollars a month and it has never had a glitch, just incredible stuff, right? So that’s definitely premature scaling and I have seen that a lot when I was—I also saw it a lot when I used to consult especially for the government.

[18:47] Mike: Well the government is totally a different story, but so basically you increase your profit margin by $ 500 a month or $ 492 a month just by moving it to a different server?

[18:57] Rob: Yes. It was crazy I know. That might have been the single most profitable move I did that year. It is very common especially for some reason as developers and I am the same way, I have to fight off this urge but when I—I think coming through the enterprise software ranks you have to think a certain way. And with enterprise software it tends to make sense that you would think that way. You know, you are trying to avoid these massive outages, you are trying to avoid of manual labor, you are trying to avoid one off things, all of those things need to happen because you have hundreds of thousands of users or your system is absolutely mission critical, it cannot fail and so you learn to engineer things a certain way.

[19:36] So it’s really hard to then come away from that and sit down to build invoicing software SAS app or a keyword tool SAS app and to think differently, right? Because you think about every edge case and then you spend months building this software that can handle every edge case. Whereas handling those edge cases manually is going to save you those months of development time.

[19:57] Mike: Yeah and if the application itself changes significantly enough, those edge cases may just completely go away.

[20:04] Rob: I agree. And I mean even this morning I was recording a screen cast for kind of a new edge case we discovered with one of my apps and I sent it to the virtual system and I told them if this happens a lot and you feel like you are doing this too much, let me know and I will write the code to fix this, but it’s about 10 hours of work for me. And I know that doesn’t sound like a lot but that’s a bigger time investment than I want to make when this is literally—it’s about a five to seven minute process for him each time he has to do it. And my guess is this is going to happen once a week and I think that’s what has been happening for a few weeks.

[20:38] And so, hey that’s a nice trade off for now because I am going to take that 10 hours, invest that into actually getting more customers which is basically what Dharmesh said, don’t spend the time actually preparing for success, actually increase your chances of success. And so I am going to invest that 10 hours right now into increasing the success. The other thing that people shouldn’t over look is I am not just saving time, right, I am saying it’s 10 hours and he is going to spend five to seven minutes per, but I am saving my time. So him spending five to seven minutes for several months is still worth me saving a few hours of time so that I can push the business forward.

[21:11] Mike: Yeah and I think that’s, you know, that’s really what a lot of  people over look when they are trying to figure out what they should do next and you know people get hang up on these little details where, oh well, this is taking too long to do or oh I can write the code for this. And the answer is not always code, I mean as developers our brains kind of naturally gravitate in that general direction because we like to solve problems and get things done. But sometimes you have to look at the bigger picture and the bigger picture in many cases is Identifying when it is not cost effective to do something, you know, when is it going to save you more time by, you know, skipping over that and just dealing with it when that piece comes up. And there is all these different things that you have to maintain in addition to that once you have written that code. So you write that code and then you own it for the life time.

[21:58] Rob: Yeah I think the big question you should ask yourself anytime you think about sitting down and not building a feature but doing scaling type stuff or handling edge cases with code or admin tasks that could be handled manually is what is the danger of this actually happening and what is the consequence if it happens. And so you can take an example like, you know, some edge case, someone clicks a button in Hit Tail and they are on the old billing instead of the new billing and it can’t do it. And so I can write a bunch of code to go back and you know mess with scripts and mess with data, or I can just pop up a message and say you know what, you are on old billing, click here or you know our Admins already been notified and they will go on and do this manually. And that is like a three minute change, right, to just ping off an email and give a message.

[22:46] Alternatively, I could spend four or five hours and solve this thing for this one person, but the question I have to ask myself is, what is the chance that this will happen again? The consequence is oh, that someone sees a message? That’s a bummer, if 100 people a week saw it then yeah I don’t want my app to function like that, but if it’s once a month then you got to be willing to put up with that in order to save like I said even four or five hours a time because our time as entrepreneurs is so valuable, it’s more valuable than having perfection.

[23:16] Mike: And I used to be extremely guilty of that one, I worked at Pedestil because we would ship the product and we would ship it with this list of known issues and it just buffed at the time, I mean looking back on it I was kind of young and naïve but looking, you know, at the time I am looking at that saying well we know about these issues, why are we not fixing them. And you know of course it’s all about getting the product out there and making sure that people are using it so that you can charge more money for it and so that you can pay the bills and you know pay my own salary which, you know, I should have been able to realize that stuff but I just didn’t and I was too focused on the code itself as opposed to the bigger picture of the business.

[23:55] Rob: As a software craftsman you want the code to be the most important part and you want it to matter, right? You want it to be what matters and what makes the difference and  you want your product to be perfect because that’s what you are good at, you want your be proud of what you are building if you are a craftsman. But when you are an entrepreneur, even if you are still that technician, you have to balance these two things out.

[24:16] Mike: So let’s kind of go onto a slightly different topic in terms of scaling. What about scaling marketing and paid advertising and things like that? I mean it seems like especially when it comes to paid advertising, the last thing you want to do is start dumping money into that and scaling it before you even know it works.

[24:34] Rob: There is some pretty obvious steps that you need to follow before you try to scale a marketing spend, and by marketing spend I don’t just mean paid advertising, I mean investing your time or money into having info graphics made, having viral blog posts written or writing them yourself. Any part of partnership where you do an integration, like this all costs either money or time whether you hire or do it yourself. So before you know that you have a product that people want to use and that will actually convert when they hit your marketing website and that they will stick around for a while until you have a reasonable lifetime value, then you should not scale your marketing, period.

[25:14] The first one is do you actually have a product that people are interested in and that you can communicate pretty quickly because that’s the core of going on marketing on the internet, right? If you have a product that’s so complicated, whether it’s an enterprise product or it’s just such a new idea that putting up a Google Ad or a Facebook Ad or building an info graphic isn’t going to really get people to come in and buy, then you know you have more medium and high tech sales stuff.

[25:37] So the first step is getting a product that people want, the second step is having a website that actually sells it well and that gets a decent conversion rate and gets enough people through the funnel that if you do go out and buy, whether you do the info graphic or paid Ads, you know if you send a bunch of traffic to your site are they actually convert. And then the third thing is plugging that funnel, making sure that people who start your trial actually convert to paid and after they convert to paid they don’t just churn out in the first month or two because then all that money you spend early on is just going to go away.

[26:12] So that’s you know one of the–, there was a startup survey and I wish I could remember the name of it, but it basically said that one of the, if not the most common causes of startup failure, was premature scaling. And what they meant was it was trying to go out on just market, market, market, before they had done those three steps.

[26:33] Mike: It’s interesting because, you know, I am kind of in that position right now with Audit Shark where I don’t necessarily specifically know the product market fit is the yet, I mean I am sure that there is, you know, a way to tweak Audit Shark so that it s the right product and you know it just needs to find the right market for it. In some ways I am having a hard time kind of identifying the terminology that people would use to like search for it. How do you translate what people are thinking into words that they would actually use to go search for this type of product and that’s, you know, that’s the stuff that I am struggling with.

[27:05] Rob: Absolutely.

[27:07] Mike: It takes a little bit longer, I mean I feel like I am going about things a little bit slower than I would like in many ways but at the same time I feel like it’s the right path because I don’t necessarily know all of the fine grain details. So you know I would like to make sure that, you know, once I find that, you know, test it out, make sure that it’s right.

[27:25] Rob: Right, I mean I just ran through this over the last nine months, right, because I had HitTail, I know the old marketing wasn’t working very well. And so I had to figure out what do people call this, is it an analytics package, real time analytics, is it a keyword tool, is it a Long Tail keyword tool, is it Nassio keyword tool, what are the ramifications of this thing, you know, and what are people going to search for, what’s going to make sense in their mind. So that was a lot of—there were some research, I did some competitive research, looked at what Analytics—what people think of when they see Analytics versus Keyword Tool. And then also it was honing copy and I wrote the first version of the website and since then I just tweak and tweak as I find that certain Ads convert well and get a lot of clicks. Then when they come to the website I will start borrowing copy from my Ad and putting it in the website because I know its compelling headline and compelling Ad copy.

[28:18] So it is an ongoing process but you certainly optimize, you kind of optimize up as you do it, right? Your first version is your best guess and then the more you talk to customers the more you get people to come visit your site and the more you do, you know, advertising or even info graphics and blogging. You just learn the verbiage that people used to talk about it and it becomes part of your kind of vocabulary as you speak about it. And then it becomes much easier. If you go back and revisit a page you wrote six month ago, whether it’s the home page or any page of your sales site and you haven’t seen it since, you will realize like oh my gosh, I can’t believe I called it that it’s not that at all, you know, no one called it that. And you will revise it, so definitely a process but the key part of that is starting to talk to customers pretty early.

[29:00] Mike: You know I came across this book on Amazon called Nail it then scale it-The entrepreneurs guide to creating and managing breakthrough innovation. Have you come across this book before?

[29:10] Rob: I haven’t.

[29:10] Mike: Okay. It has 31 reviews and the vast majority of them are five stars.

[29:16] Rob: Oh yeah.

[29:16] Mike: It’s like 28 of them are five stars and I think I am actually going to pick it up and take a look at it. I guess the third piece that I wanted to talk a little about was scaling the business itself and you know how do you go about scaling the business. One of the things I read a while back was this thing called the lily Pad Strategy. The basic idea was to treat your market as if it was a pond and you know you are addressing this little tiny piece of the market and that’s represented kind of by a lily pad. And in order to address the entire market space, what you need to do is you need to jump from your lily pad to an adjacent lily pad. And instead of trying to go to a lily pad that’s clear on the other side of the pond, you want to go to an adjacent one because that is much more reflective of what your product currently looks like versus something that’s on the other side of the pond where their expectations are completely different and the product that you currently have is not going to even remotely resemble something they are looking for.

[30:11] Rob: So does the Lilly pad strategy mean that you should just make small tweaks to your product, is that what it’s saying? I guess I am missing out on what the adjacent pad–.

[30:20] Mike: Oh, so let’s say that you have a product that is like a CRM package for a dental practice and you’ve got this CRM package but it’s specifically for dentists. Well an adjacent market might be a CRM package for like a chiropractor practice, you know, some sort of physical therapy because it’s still in the health care but it doesn’t branch out into things like mental health where there might be other, you know, logistical hurdles in terms of regulations that you need to deal with. Maybe there is laws that deal with how that data is going to be stored that are radically different from the mental health perspective versus physical health.

[31:01] Rob: Right, okay. So this is about growing your business, like growing your market and taking over new adjacent niches.

[31:08] Mike: Yeah, so I thought that, you know, the article it was very interesting about discussing it in terms of these Lilly pads which are market verticals which are right next to each other and some market verticals are going to be really close to each other and then there is other market verticals which are much, much further away. And you start branching out and you start addressing all of these different needs which you start ending up doing, is you essentially morph your product into more of a generalized solution that addresses a much, much larger portion of the market as opposed to the niche product that you started out with.

[31:39] Rob: Right and you see that like with Fog Bugs, right? Fog Bugs originally started as a bug tracker and then it moved into like a project management tool, and then it added like estimating and you could do Adgil development with it and it had built in estimating algorithms, and then they added a Wiki so you could so specs and roll that right in. so it kind of expanded into a larger tool, I think that’s pretty natural.

[32:03] My experience to be honest is with smaller shops like you know one to five person software companies, is that most markets they are going to be in are going to be large enough that there is low hanging fruit that people leave behind and they expand too quickly. I guess that’s what we are talking, premature scaling. It’s if let’s say I am a one person software shop and I have a product like Hit Tail, there is still a lot of the market that I could reach that has never heard of my product and so if I were to right now start going after—I have had suggestions like you should get it localized and globalised, do both. And so get it into other languages and handling other currencies and you should just start going after Western European markets and all this stuff. And it’s like, yeah okay that could work, but to me that’s way too premature to branch out into other markets.

[32:56] Well I think people need to use caution and thinking, well since I have tried some marketing and I am pretty much tapped out I am going to branch into this other market, because that’s that—it’s that downward cycle I would say of constantly thinking you need to build new features when you really you don’t know how to market yet. And you don’t know how to market your app yet and you haven’t optimized that part of it and you are expanding too quickly.

[33:18] Mike: Yeah I mean all of those things are great things to think about, but I think that maybe some of the listeners might question, you know, what are the things that you can look at in your business to figure out whether you have reached the market potential for a product versus, okay I have kind of saturated this piece of the market, I really need to start looking at either adjacent markets or complimentary products or just an entirely different product.

[33:39] Rob: Right. Well I think you can look what traffic sources you are currently harnessing, and I don’t just mean online traffic but you know if you take inbound phone calls or whatever other types of stuff you are working on, I think that a product that people are actually interested in using and that totally clicks with them and you have a high retention rate, I think that a product like that has a much larger market and a longer life cycle than most people have attention for.

[34:07] And so I would ere on the side of if you have an app that people are actually paying for and saying wow this is fantastic and offering to give you testimonials, which I have seen happen, then you need to double down and really look at where is all your traffic coming from and what have you not even touched, because I can almost guarantee you that if we sat down I could point out five areas that you haven’t even thought about, five places you haven’t even thought about marketing.

[34:32] So I would almost say, as a rule, don’t expand out until you are way, way down the line. I feel like you are going to have so much experience and so much knowledge as an entrepreneur you are going to know when the time is right that you should scale it out. If you are hesitant or wondering, my app kind of isn’t really taking off, should I just add more features or go onto other verticals? I think that’s the wrong time to do it. But if you do a full pivot, then that’s one thing, right? If you realize wow this other market really needs it more and I am just going ditch and leave the other one behind, but if you are thinking about expanding and just building a bigger and bigger product, trying to capture a few more crumbs from other verticals, I don’t think you built something that people want.

[35:10] How about scaling like internal business stuff, like if you know in terms of building the product and maintaining it and then supporting the product and then marketing, what are your thoughts on scaling those areas in a business?

[35:23] Mike: You have to find either employees or contractors, consultants even that you can essentially hand those tasks off to that have some sort of a measurable goal that they can measure the results against and they have to have a process to do that measurement. And I think that’s probably the most important thing to figure out whether or not they are making progress or not and make sure that the time lines are short enough such that they can measure those results and figure out whether they are making progress. And if they are not, how can they go backwards a little bit, take a couple of steps back and then maybe come at the problem from a slightly different angle in order to actually move things forward again.

[36:00] Things get to a certain point where you just can’t manage everything yourself, at least not all in your head or, you know, there is only so many hours in a day. You are going to have to have other people that you rely on that you hand some of these things off to.

[36:14] Rob: If you want to go to the next phase then you do, otherwise stay where you are if you are happy. You know and that first phase is that solopreneur, it’s the micropreneur we have talked about over and over and doing everything yourself and that can work for a while. Step two which I do actually think or phase two which I do actually think people should move into, that’s where you are outsourcing and you are outsourcing mostly to task based contractors and we talk a lot about that here in the academy, hiring VAs, hiring developers. But you are still the entrepreneur and the manager and you are handing off just some of the technician aspects of it.

[36:46] And then phase three, this is where you know a lot of people don’t want to go and actually historically you and I have not gone here, but I feel like I am slowly being pulled into this as I want to grow larger and larger, that’s where you do hire that consultant level, the project level  person. And like you said whether they are an employee or a contractor it’s kind of irrelevant, it’s can you hand off an entire project to them. And they go handle it and they are just at a higher level and they go based on goals rather than here is the process, you know, that you plug this into. And then past that I think is hiring like full time employees, but I think early on you really need exceptional employees to really push the business forward and then I think when you get to five or ten employees then you need to start having a little bit more process in place because you are just not going to find 20 phenomenal employees.

[37:33] You are going to get some people who are just kind of average and you need to have processes that help the whole thing function and you did get more process oriented. And obviously growing up from there requires even more process and that’s typically the time that a lot of founders sell and leave because it’s not necessarily fun anymore if you like early stage startups. To be honest I typically haven’t stuck around with companies as they have grown past teams of about 15 or 20 developers. That’s when I historically I have just found out that it’s like this is way too much headache, you know. But what’s required for that size business is not a bad thing, it’s just it’s not a good fit for everyone.

[38:06] Mike: Right.

[38:07] [Music]

[38:10] Mike: If you have a question or comment you can call it in to our voice mail number at 888-801-9690 or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt, used under Creative Commons. You can subscribe to this podcast on iTunes by searching for startups or via RSS at startupsfortherestofus.com where you will find a full transcript or each episode. Thanks for listening we’ll see you next time.

 

Show Notes

• Cold Calling Early Customers eBook

Transcript

[00:00] Mike: This is Startups for the Rest of Us: Episode 96.

[00:04] [Music]

[00:11] 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.

[00:20] Rob: And I’m Rob.

[00:21] Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. How are you doing this week, Rob?

[00:25] Rob: I’m good. I just took four days off for Labor Day weekend. So of course instead of actually taking four days off, I got this bug in my ear over the weekend and rewrote my churn, not algorithm but my report. So I have this one page dashboard I use in HitTail, and has all these numbers lifetime value and I’ve talked about it before. But what is bothering me is that when I got a big spike and new customers my churn 30 days later would spike way up. And the reason is with typical SaaS businesses any type of recurring you have the highest churn in your first 30, 60, 90 days and then it settles down after that.

[00:59] And so if you have an imbalance, you know, people who are in their first 30 days and you have a ton and then you’re overall churn is not a good measure because you need to break it down. And so I was like no problem. I’m just going split that out. It’s the weekend. I had a corona with a lime in it. I’m sitting there writing a little bit some SQL queries. And 5 hours later, no joke, I finally, I just it kept not working the way I want it. Now granted my data model is not the most elegant and normalized data model. I inherited it from the previous owner. So there were some challenges as well as some dirty data. I have to kind of code around in the SQL statement. Don’t include it if that string field includes this underscore. I mean this crazy stuff like. But once it all got done now I’m very happy that I spent almost an entire day over Labor Day weekend to split out my churn into 30, 60, 90 days and beyond. All right. So, how about you? What have you been up to?

[01:52] Mike: I spent the last week or so working pretty hard on AuditShark and I’ve churned out more than 5,000 lines of code over the past week and a half or so. A lot of it was of I’ll say copy and reformat type of code. So basically I have a component that I had built and then I needed to build another component but I also needed to reuse or I wanted them to share the same kind of web services on the backend. So essentially what I did was I wrote a generic version of the component code and all the classes that go along with it.

[02:23] So essentially I had to refactor a lot of the code in order to make it generic enough that I could use it again for other components that I have that are coming down the line a little bit later. So most of it as I said was copy paste. But I had to tweak a lot of it and make sure that the logic still work. And that took a long time to get done but I’m really happy with how it all came out. And as of yesterday, I’ve had the new agent installed on a couple of servers. So that’s been running. I haven’t seen any problem so far.

[02:49] Rob: Well good. Is it true that as of today we are 6 days away from the AuditShark early access?

[02:56] Mike: Yes, it is true.

[02:57] Rob: And so when this goes live it would actually be the day after. So yeah, early access is on September 10^th.  You’re going to hit that?

[03:05] Mike: I think so. I’m looking at my list of things that still needs to be done on my end for the early access and it says that I’ve got 36.5 hours worth of work left. I went through everything that I have in five bucks and assigned a time estimate to it. And I was pretty conservative for most of my time estimates. So I think that it seems reasonable and the 36.5 hours from today would realistically leave me about a day short. But as I said I was conservative with those times and I think some of them will just take a little bit less time that I’ve estimated. I fully plan on spending some additional time probably this weekend to make sure that everything gets done.

[03:42] I won’t call it a concern but the one thing that I’m not terribly happy about is that I know that some of the content is not going to be done. So I’m not going to be able to launch it with the policies the way that I want them to be from the server. So there’s not going to be enough content that people are [auditing] for on day 1 but that’s also something that’s going to take time anyway. I mean it’s not like I can just launch on day 1. Like if I was doing a vulnerability scan I would launch on day 1 and say okay we’ll I’ve got 3 million vulnerabilities that I’m scanning for. It just doesn’t really work that way.

[04:12] Rob: I think that’s why they called it early access.

[04:13] Mike: Yeah. Yeah. [Laughter]

[04:16] Rob: So August was a good month for HitTail. I was actually worried because internally because July was the best month ever. But there was that $1,000 article order, remember. And I was concerned that I was actually going to decrease, you know, have less revenue but I wound up making it passed that and another several hundred bucks. So I made it to another milestone. And some things in terms of marketing are not working at all but the ones that are working are working quite well. And so it’s driving a lot of new trials, you know, it continues to grow. So it’s been good to be hitting on a few cylinders that I’m trying.

[04:51] Mike: That’s really good to hear and that’s part of why I’m working on AuditShark cause it kind of reposition it as more of a SaaS application more anything else and I kind of made that decision a long time ago. But in talking to some of the webhosts this past couple of weeks, I found that they are more than willing to pay for a product like AuditShark on a subscription basis. The price points that I kind of talk to them about they don’t really seem to blink at down there. Just like a couple thousand a month, that’s no big deal, whatever.

[05:20] Rob: Yeah, I would expect that would be a huge sticking point. Speaking of couple thousand dollars a month, do you have a billing mechanism in place if I sign up?

[05:29] Mike: [Laughter] No and actually I have a contractor who’s working on that right now. And that’s one of those things that, wait, why are giving me crap over this. Aren’t you the one who that waited until three days before you have to bill somebody that…

[05:42] Rob: Indeed, I did. But the funny part is he put it on the outline. And I’m like wow he’s working on it already. This is way ahead of schedule in my mind. Early access you’re like at least minimum of 30 days away from billing somebody. Do you have a 30 day trial? Is that what it is?

[05:57] Mike: Yeah. Well the thing is this is just to get the thing started for them to sign up. It isn’t the actual billing code itself. It’s just you know as part of the initial registration for customers, here enter your billing information,  in the backend so that I can bill you later. But I’m not actually building the billing code yet.

[06:15] Rob: Right. That made sense. And that code actually it’s not as simple as it sounds because they do the cool java script thing where you don’t need PCI compliance. But as a result it’s a new unique experience that no one else does. So you really do have to dig in and understand what they’re doing in order to implement it.

[06:32] Mike: Yeah. I really don’t because this contractor has already done it and he did it for altiristraining.com which is why he’s doing it for this product as well.

[06:40] Rob: Awesome.

[06:41] Mike: Definitely. Not only code reuse but contractor reuse.

[06:44] Rob: That’s a best way man. I mean that’s something, every time I talk to someone about outsourcing I say if you find a good whatever developer, virtual assistant, designer any of these things, you keep them around. I have people who work for me for five years. They may be part time. They may be hourly. They maybe halfway across the world but it’s like all the knowledge that they have from my various businesses helps me moving forward cause I don’t have to redefine everything. It’s so valuable to train someone like you’re doing on one or even multiple of your apps cause you’re going to tend to use the same billing systems. You’re going to tend to have the same approaches and it’s great if someone is up to speed. It’s similar to having an employee who is just around and kind of understands the legacy of how you do things.

[07:24] Mike: Uh-huh. The one thing I have found that’s a challenge in working with some of these guys though is when I go to reply to some of their question and stuff that the Google, so when reply to somebody, the height of the box that you type in your message into it’s like 240 or 260 pixels tall. So it makes it difficult to see what somebody else has said in line with what you’re typing which is kind of pain in the neck. So I went out to search for some Chrome extensions that would actually allow you to expand the size of that. I tweeted about it and somebody said, well in Firefox you can just drag it and make it whatever size you want.  And I’m like yeah stupid Firefox. But I went out and I found these extensions and I went to install them and you can’t install them anymore. You have to go to Google Chrome web store in order to install them.

[08:13] Rob: Google is doing crazy stuff. I mean I don’t know why they’re doing that. Maybe it’s a security thing but it seems like they’re making things hard on a lot of people with a lot of their choices that they’re making with their tools.

[08:24] Mike: Yeah. I read up on it. There is a way to do it. You can basically drag it on to the extension. Like if you have to download the extension on to your hard drive and then you have to drag it from there onto the extensions page in your web browser and then you can install it. But it’s a manual effort and they said that they’ve done that intentionally to help increase the security of the web browser, which is fine but is in no way shape or form obvious that that’s what you have to do in order to get it installed. They just pop up this little thing that says you can’t install this. You have to go download from the web store instead.

[08:54] Rob: And the trippy thing with Chrome is on most of the websites I visit if there’s a text area it has the draggable thing in the bottom right. But it doesn’t have that when I’m looking at Gmail and Chrome. I wonder if it’s in the Google apps. Did you see if there’s just one an enabler? I guess our listener will let us know if that’s the case.

[09:12] Mike: Yeah. I just remember searching for a quick fix to it and the chrome extension was one of the first things that came up and I’m like that’s a very quick fix. It’s simple. And I went to do it and it just didn’t work. So I thought I mentioned they change their security model on Chrome.

[09:25] Rob: Well this is one of; like I said so many things they’re doing lately that I’m just it’s like making it harder on people in general. They did the penguin update which made it harder on SEO whatever. That’s fine. Although, they did kind of hose me with the badges, they went back. Stuff that used to work doesn’t work. They have shut down their API. They had a search API that all the rank trackers used to use. So if you’re trying to track your rank of keywords you can hit the search API, get the result back, and search for URL. My URL rank this high for this keyword. They shut that down. They’re like deprecated it. So now any rank tracker you use is scraping, screen scraping Google. And they have to have this bank of servers with multiple external IP or Google will shut them down. They have to make it look like they’re a bunch of different computers.

[10:12] Mike: Funny that you mention that because my webserver in Rackspace is hosted on a subnet where they’re doing that. And whenever I try to go to Google and search when I’m on that server if I need to get something, Google pop up this saying that says please confirm that you’re a real person cause we received too many searches from this IP subnet.

[10:31] Rob: Bingo. So they’re doing that. You know they have a reason but it stinks. It makes it crappier for end users or people who used to use the Google API. I actually have an app that used it at one point. Luckily it’s not in production anymore. And then they’re taking keywords out of the searches. You know if you’re looking in your Google analytic account. I mean this is about a year old now. But anytime anyone could log into Google and they do a search and they found your website for a particular Google won’t tell you what that term is anymore. It just says not provided which is that stinks. I have a lot of website where that is very important information for me to know and to know how they’re getting there, and what terms of converting and stuff. The trick is if you pay for clicks, if you pay for AdWords clicks they will tell you the keywords even if someone is logged into Google.

[11:14] Mike: Is that what it is?

[11:15] Rob: Yes, isn’t that crazy. So it’s really a trip to watch these companies. You know the reason, [hubbub] with Twitter and what they’ve done with their API and they’re really hurting developers. And then you look at Facebook and they changes, some of the changes there making with privacy and all that stuff. You look at Google. These companies are like clawing. They’ve gone public. Twitter hasn’t yet but you know they’re on the road to it. And they’re like clawing for this revenue. They really start to do stuff that it isn’t, I don’t know if it’s necessarily in line with the don’t be evil thing anymore.

[11:44] Mike: Well they canned that whole statement a while back they rework some of their pages and somebody noticed that the don’t be evil slogan had basically been removed.

[11:54] Rob: Yeah. I mean so I’m not saying certainly not a conspiracy theory. Oh yes, shocker. Companies are going to, you know, if you’re not paying for the service then you are the product right? You’re not paying for it, Facebook. They obviously are marketing you. The same thing with Twitter and Google. None of this is shocking. I’m not saying Google is the worst thing on the planet. We used a lot of their tools. I like it. But it is a boomer when it impacts our usability, our ability to basically support our businesses as we use their tools. I don’t know. How things turn around but I don’t necessarily see that in the future.

[12:25] Mike: Well I think that they’re just going to continue to do whatever, I mean I don’t expect them to work any different than any other company. And they’re going to do whatever is best for them. You know that’s going to fit in line with their don’t be evil. And the face of that is going to well if it’s bad for us, we can’t do it. If it’s evil for us, it must be evil for the world. So if you’re doing something that negatively affects us then we’re going to shut you down because it hurts us which ultimately turns around and hurts everybody else. Which isn’t necessarily true but you know that’s the line of thinking that I feel like they’re following. There are certain things that they’re doing that I just kind of shake my head.

[13:00] Rob: Right. I mean even the not showing the keyword when someone is logged in that is absolutely impacting too. Like I’m able to, my service is able to provide less value to people because I have less information on how people are finding the websites so I can’t offer as many suggestions.

[13:14] Music

[13:17] Mike: So what are we doing today?

[13:19] Rob: We are talking to Robert Graham about cold calling and not cold calling in a tradition sense. He’s done a lot customer development and vetting business ideas using cold calling, and he’s a software developer. I don’t know, not someone who you would think that would really be drawn to this. So today, Mike and I are going to be having a chat with Robert Graham, native of Austin, Texas. How are things today Robert?

[13:41] Robert: Going pretty well. How are you guys doing?

[13:44] Rob: Doing all right. Robert Graham is a software developer. He’s actually a long time member of the Micropreneur Academy. He’s gone to both Microconfs and he’s just a friend of the show. Robert has kind of carved out this niche probably by mistake, I think he told me once. He’s gotten really good at cold calling and he’s a believer in the customer development, a lean startup approach and so he started doing cold calling for some of the ideas he had. And he wound up writing an eBook on it. The eBook’s selling well and you know I’m just fascinated by this concept because it’s never something that I’ve done to great scale. And Robert has done it so many times that he’s become kind of startup expert on it. So welcome to the show Robert and if you could of kind of just give us a little more background about kind of who you are, what you do and how you fell into cold calling.

[14:32] Robert: Okay. Sure. I kind of came to this totally by accident like you said. I’ve been a software developer forever. You know like in 8^th grade I was writing basic on my calculator to solve quadratic equation formulas in class. I guess I got into a niche from my background I grew up in southeast Texas, hunting and fishing. My dad and pretty much all the red blooded males that I grew up with all did. I knew a bunch of guys that had land or big hunters so I jumped in at some point whenever I made some of my first product to wildlife management. It turned out that they were not as online as I had hoped.

[15:12] And so it was kind of my one last ditch ways to connect I tired cold calling. And really just kind of stumble into some success after calling a lot of people with phone calls that maybe I get to talk to someone but it wasn’t taking me anywhere. And other one where I know on the first couple of calls if I got a voicemail prompt I was happy like it was a success. So I didn’t start in a place where I was very good in this or even excited to try but eventually after a little bit of success it went to the other direction for me.

[15:46] Rob: Right. And have you used cold calling both to vet ideas like in the customer development sense as well as to make sales or what you used them for in the past?

[15:56] Robert: So this gets a little under the semantics of what you mean by cold calling. I don’t know if I’ve ever sold something directly over the phone where the person I’m calling I’ve never spoken with before, but I’ve definitely used cold calling to starts relationships that ended in sales.

[16:11] Rob: Got it. Okay. As well as to vet product idea, is that right? To figure out if someone would be willing to pay for a product and you try to figure out if you’re going to build it at all?

[16:22] Robert: Yeah. I mean that’s probably the no. 1 thing I’ve done with cold calling. And I think the two things are tied up together if I were kind of starting over today how I would approach it.

[16:32] Rob: Right. Mike you’ve also done cold calling. What capacity did you do it in?

[16:35] Mike: That’s from Moon River Consulting and it was back in probably end of 2007 and early 2008 and when I tried to scale up the company. Essentially, I was trying to generate leads for some of the products that we were selling and doing consulting on. They were primarily Altiris and Symantec products. And essentially what we’re doing is we would get this list, they called them unqualified or semi-qualified leads from Symantec.

[17:02] So whenever an enterprise customer download something from them, you give them their email address and they will add it in to their database and try and match it up with any phone numbers or names that they might have. And then they’ll take those leads that if they don’t think that they are worth their own sales rep’s time to follow up on they’ll basically divvy them up and send them out to their partners. So what I was doing was going through this list of leads and trying to talk to people to figure out what it is that they were looking for and whether or not there is anything that we can help them with.

[17:35] Rob: Got it. So you really were doing then outbound cold calling for sales.

[17:40] Mike: Yeah.

[17:41] Rob: Okay. So that’s cool. That’s good to know. So it sounds like we have a variety of experience here. Robert, you wrote an eBook on this. What’s the URL?

[17:49] Robert: It’s www.coldcallingbook.net.

[17:52] Rob: Okay. So talked to me about how cold calling and cold emailing maybe complement things like contact creation and list building and traffic generation. Like why would someone do cold calling in addition to those other things?

[18:06] Robert: Right. So I think the biggest answer is because they can be extremely complementary. One of the things that you need to do as part of any contact creation strategy is have good sources for that content and good places to continue getting new ideas. And I think whether part of say an interview series with some of your customers or your potential customers where you could highlight themselves, their facilities, how they do business, best practices. You could invent awards that you give out and do all kind of different things where you have readymade content for the web.

[18:40] I know the award I did I kind of stole from Rand Fishkin who talked a lot about it. He said there’s one like Seattle startups or top 100 or something page that, you know, it’s just someone’s complete invention. And it doesn’t even matter how the ranking get generated or why, but everyone that he knows and had seen visit the page cause they want to see the rank. And I think that’s true you know everybody experience with post and ranking across all kinds of different things.

[19:10] So it’s a good way to have content to put out there. It’s a good way to have goodwill with your customers and also start relationships with new people. And that means a lot of different things. But cold calling if you’re mostly online or you’re mostly in magazines or wherever your main channels are, if you’re going to cold call you can really tap into network that you’re not a part of. And even a small foot hold in a new network can have an exponential effect once you make some people there really happy.

[19:42] Rob: I see. So you’re saying you use the cold calling to build a relationship, to get into a network that you otherwise wouldn’t be able to.

[19:48] Robert: Right.

[19:49] Rob: I’m curious Mike. I’m curious to hear yours sense of like back in the day when you were doing cold calling, why were you doing cold calling instead of other types of whether it was like online marketing or other approaches.

[20:02] Mike: I started doing cold calling more in part because it was forced on me. Their previous relationship that had been in place between Altiris and Symantec and their partners was that you would work very hand in hand with the sales reps. And then Symantec started pulling in a lot of leads they were getting and started bringing in partners a lot less. And basically said, well instead of us giving you leads you’re going to have to find your own. And they ended up torpedoing most of their partner network at one point because of that.

[20:33] And in about a year they shifted their strategy and kind of came back around on it, but by then they’d already killed about half of their partners in that particular space. So for me, it was more of I’d say a force direction than something I said like oh this seems like a great idea. And one of the things that I’ve found was that when you actually get in and you start talking to somebody especially when it comes to enterprise sale they expect you to be there.

[20:56 ] And they expect somebody, they expect to be able to put a face of a name is really what it comes down to. And doing any sort of inbound marketing efforts those tend to yield a lot less because at the enterprise scale these customers are used to having sales reps kind of walk in the door and introduce themselves and say here this is what I’ve got for you and this is how it can solve problem X, Y and Z.

[21:19] Rob: Right. Okay. We’re really talking about two different kinds of cold calling here. Mike has done mostly or entirely outbound sales cold calling. What we would traditionally think of as that kind of stuff. And Robert has done mostly costumer development cold calling which is calling people to figure out if they would buy an app before he builds it and then often like he said that does turn into a relationship later on that he can then go make a sale because the person has probably followed his development for several months while he got the product going.

[21:48] So we’re going to keep those two things. So I think my first question is as someone who is obviously much more of an online marketer and I bet there are a lot of folks listening to the podcast who feel the same way. There is this aversion to cold calling. In your book Robert you say how to get over the fear. So you use the word fear or you know a lack of desire to do it. What are some strategies and some thoughts on how you’ve done it, how you recommend people do it and then Mike we’ll toast it over to you when he’s done.

[22:14] Robert: You’re specifically asking about overcoming fear?

[22:17] Rob: Yeah.

[22:18] Robert: Yeah. So overcoming fear is a big thing for a lot of people with cold calling. I mean I kind of look at it a little bit in the rear view mirror which I think is both really good for giving advice and really bad for giving advice. Sometimes hindsight is 20/20 but it’s not quite right. I think the really bad cliché to answer that everyone will give is just do it and it will get better. You know practice makes perfect. The better answer is we need to figure out exactly what it is about cold calling that bothers you.

[22:46] Are you unconvinced that it will help your business? Are you scared of rejection? Are you scared of talking to people you don’t know? Are you scared do humiliation? Are you scared your product isn’t good enough? You need to really think about and isolate those factors and then kind of come up with things that you can do whether it’s role playing friends, calling old friends out of the blue, maybe some of that pickup artist techniques that see where people try to get rejected in the mall by people they don’t know.

[23:17] There are lots of different things that you can try to experiment with to get over some of those fear and then I mean eventually you just have to take the final step and make some calls. And know that the worst case on a bad cold call is that you get rejected, maybe someone yells at you. Honestly in all the cold calls I’ve done, the worst I can say that I’ve had is someone say that they weren’t interested in a less than friendly way.

[23:43] Rob: Right which is not that bad. So when you were vetting say I know you ran kind of a tracking service for a whitetail deer and did you make calls before that to find out if people were interested or you build it first and then call.

[23:59] Robert: That one actually, there were two products in that space and the first one I build before I called anyone and the second one I build after I had done some customer development. And each of them kind of had varied level of success and it’s a long story. But that’s the answer.

[24:15] Rob: Got it. And so if someone listens to this and they’re thinking I don’t have a whitetail deer startup. I have a startup where people are online. It’s an analytic package or something dealing with social media. I know my audience is online and I know that I can do some SEO or Pay Per Click or get on Hacker News or TechCrunch or any of these things, build a landing page, get an email address and then email some people and starts some conversations. In your opinion, do you think they should consider cold calling and what do you think the benefits would be over the approach I’ve just mentioned.

[24:45] Robert: I think it does depend a little bit on your market. I think you need to gauge what people’s expectations would be and if receiving a cold call for that type of business would be an absolute shock then you probably don’t need to engage in cold calling. But there are a lot of businesses that while they have an online component or they can get significant online traffic, it’s also a traditional B2B scenario where it’s definitely in balance to make calls to people and see what they would be interested in doing.

[25:16] I know a lot of different things come to mind. I would say I was in wildlife management. It’s a big agriculture industry. I know a couple other people writing software in that space that are making full time livings and cold calling is kind of a part of it for them. I would say proposals for designers is another place where it seems like a lot of those companies wouldn’t be totally out of balance to give a call. It may not be the fastest way to scale in every context, but I think it’s a great way to jumpstart and it’s a great way to jumpstart sort of new areas that you’re not well established.

[25:49] Rob: Right. So, Mike back to you. I mentioned earlier there is this fear or aversion to cold calling. You obviously did it.  How did you get over that?

[25:56] Mike: It took a while to be perfectly honest. And I came to the realization, thankfully it was kind of early on, but it probably took a week or two of calls before I kind of got over it. But it was exactly the fear of calling. And I couldn’t quite figure out why it was that I was afraid to call. I finally ended up narrowing it down to the fact that I didn’t want to make the mistakes in the calls that I was making because I didn’t want to get rejected. And it wasn’t so much getting rejected it was the fear of losing you know whatever sales I was trying to pursue. It’s like if I say the wrong thing, this person will hang up on me and there’s a $30,000 sales that I just lost because I said the wrong thing.

[26:34] And that’s one of those risk that you’re just going to have to take. And you have to learn what works and what doesn’t. So what I ended up doing was I actually invested in a product called [AX]. And what I would do is I would take detailed notes about who I was calling, when I was calling them, and when I got through exactly what I was saying to them. And that I would essentially cross reference what I was talking to each person about with the other person I was talking to about hat particular topic. I also seem to find that there were certain times of the day that made it easier to get through to people.

[27:06] So first thing in the morning, at the very end of the day was usually a good time to call. Sometimes in the middle of the morning you know 10 a.m., 11 a.m. wasn’t so good. You tend to interrupt people and run into a lot of issues there. It really just took a lot of practice. And getting over the fear of I’m going to lose something by calling this person or I’m not ever going to be able to talk to this person again. And usually I can’t think of anybody who I called and they were just rude upfront but it was definitely a learning experience throughout the course of making all those calls.

[27:37] Rob: Yeah. Sure. So what was your worst? Was your worst response also something like I’m not interested in a rude voice?

[27:43] Mike: Yeah. I’d say that was probably. I mean I never got profanity. I mean I’ve gotten profanity from people in person consulting before, never over the phone. Yeah. I never got anybody who just swore at me and just scream don’t ever call me again. It was just look I’m really not interested.

[28:01] Rob: Yeah cause it’s different then the cold calling I think that we as consumers think are the people who are calling at like 6 p.m. right at dinner time and they’re to sell you long distance.

[28:12] Mike: Yeah.

[28:13] Rob: At least targeted. You know both what Robert has done and what you’ve done is at least like I work for this company, we provide this service. That’s a cost of business like that. I mean I’ve been in that position where I get inbound calls or I was managing teams at the development houses and people want to sell you tools or they want to sell you services or whatever. And yeah I was always respectful and I feel like most people are going to be.

[28:34] So it really does. I do hear that from of you that it almost sounds like this fear of doing cold calling is probably overrated. You’re not likely to get people yelling at you. It might also be the time thing. Like Robert said maybe people just don’t think it’s going to work or don’t think it’s going to be time well spent. Now, Mike you did cold calling to make sales, did you find it was a reasonable use of time or I mean did it generate sales or did you eventually abandon it and just kind of say this isn’t working right now in this niche.

[29:05] Mike: No, I did. I actually landed one of my largest sales by calling people. One of them was $169,000 sale. So it was not small by any means. I mean it was definitely worth in that regard but the problem was that and it sort of came back to the fear of calling people. I was afraid to make mistakes and part of it was that was one of the early experiences that I had with cold calling was I made this really really great sale but it just came out of the left field nobody in Symantec or Altiris expected it. It just kind of landed in my lap.

[29:39] So I was constantly afraid of making mistakes going forward. And looking back on it now I realized that most of entrepreneurs who are doing online marketing are doing the exact type of thing that I was doing then it’s just in a different mental category. When you drive people to your website, you only expect to convert like 2 or 3 or 4 out of a 100. And that’s kind of the status quote. That’s no big deal.

[30:07] But the same thing, you know, not those exact same numbers but there’s going to be similar ratios of some kind where there is X number of people that you call out of a hundred that are not going to respond to what you say. And I think the fear is for me it really derived from okay well how many of these calls do I have to make before I get to one that is actually going to yield any sort of actionable thing that I can go after.

[30:28] Rob: Right. And do you have a rule of thumb at all base on your experience?

[30:31] Mike: Specifically for what?

[30:32] Rob: For what you’re doing like outbound. It was a cold list to you. You didn’t have relationship it was at least a targeted list. It wasn’t very targeted? [Laughter]

[30:40] Mike: No. I learned after the fact that it was much less targeted than I would have thought.

[30:46] Rob: So with that in mind, with that description do you remember any idea like how many calls you had to make in order to get to the next step.

[30:53] Mike: It really depended on how targeted the person was that I talked to. I was pitching a specific type of products. If they happened to submit an email for a webcast that they may or may not have actually been interested in, they maybe just saw the headline then it kind of got categorized in a specific way and Symantec just said this person is in this bucket and go ahead and call them and see if they’re interested.

[31:14] And a lot of times it just wasn’t well qualified traffic. I have very much related to the same type thing like get it on the front page on TechCrunch and getting a 100,000 people to your website but how many of those people are targeted and actually interested in what it is you have on your website.

[31:29] Rob: Right. So there’s a lot of people walking up at a conference to your booth and saying I want to enter the iPad competition or the iPad contest to win it. So they scan your badge and it got on the list. But you don’t really want the product. You want the iPad.

[31:40] Mike: Yup.

[31:42] Robert: Yeah. I was going to piggyback what Michael was saying about conversion rate and talking about seeing that in a different way. I think it’s more personal when you’re actually making the calls as to whether or not you feel like you lost the sale in comparison to you get visitors to your website all the time that don’t convert and you don’t give it a second thought. But one big difference between having people hit a landing page and talking to people is something I brought up you can take notes and get feedback instantly on every person you talk to. And so you can A/B test and change what you’re doing with every call.

[32:18] And that doesn’t mean that you’re going to get your conversion rates to skyrocket because you always are still fighting, you’re still calling someone relatively cold and you may not be hitting them at the right time. But you can do a lot of moving toward how the costumers think and what kind of language they use really fast. Where if you even add a survey to a landing page that really hits your conversion rate a little bit because you have another call to action on a page. You have more things going on. It detracts from what you want people to do. So I think cold calling can give you a big leg up there and you can get a lot of feedback really fast.

[32:54] Rob: Right. You get a lot more of the why a lot faster than if you have a thousand people hit your site. You can tell they’re not converting but you don’t know why.

[33:02] Robert: Right.

[33:03] Rob: That make sense. Do you have any comments or thoughts on that? I mean I realize it was kind of a broad question but it was like what are the approximate conversion rates given your experience of calling to doing some kind of customer development calling for an idea. Like is it 1 in 20 calls someone actually talks to you or is more than that?

[33:23] Robert: No. For me, it was a lot higher than that. I usually try to have really targeted list that I’m going after. I do a lot of different things to target the list. You know picking people that are entrepreneurs. Making sure that I’m talking to someone who can make something of a purchasing decision, someone that has a stake in whatever it is that I’m trying to do the problem that I’m trying to solve, businesses that are close enough that I do something face to face if that’s an option.

[33:48] So all those things like just bringing you closer to the target and they realize kind of instantly as you get them talking. My percentage for doing cold calling for customer development are close to like 25% or 50% depending on the market and how good I could come up with the targeted list, how targeted the list was, and exactly how sure I was of what the product was too. That made a difference.

[34:12] Rob: All right. That make sense. I mean Mike was trying to sell something, right. People know that when you call. Whereas you as I recall had a good opener where it was like I’m a local entrepreneur and I’m thinking about building some software. Could you help, I mean it wasn’t like I’m selling you something. It’s totally different opening.

[34:31] Robert: Yeah. Well actually the opening that was most successful I wrote about close to about 100% conversion rate and that was true that happened for several weeks for me where I was calling people and I basically pitching to say hey I’m going to come out to your facility, do a tour, take some pictures, talk to you about how you handle X, Y and Z. It was people that breed whitetail deer like kind of a farm setup. And every one of them was like totally into me coming out and doing that. I mean it was free publicity for them. None of them know a lot about online marketing but they were all excited about having more of it done for them.

[35:03] Rob: Right. Cause you were going to interview them and do a little bit of case study or talk about their thing and publish it on your blog.

[35:08] Robert: I had a blog that was inside of the whitetail management niche. I mean it was really a win for everybody. And that was what got me super high conversion rate. But I’d also done calls where I don’t really have a value pitch. I’m just kind of threading on people’s willingness to help out someone getting things started. Even then the conversion rates are a lot higher.

[35:32] My brother-in-law is in heavy equipment sales and rental and I have a good friend that did door to door an commercial security system sales and they have times where they have to go to the office and make a 100 or 200 calls a day and I know their conversion rates are closer to maybe 5%. And a lot of times especially in the like residential security system space the 5% is he gets to convert 5% to let him show up and do a presentation.

[36:00] Rob: Yup. It’s next steps.

[36:02] Mike: I know some people who work in the high tech sales area for basically doing cold calling for enterprise sales. And they routinely make at least 50 to 60 calls a day and they might get 2 or 3 a week that they are able to basically hand over to sales reps to go after for the next step. I mean it’s not unusual to make that many calls in a day and have to continue making that many calls and not just getting very many that they’re able to turnover. In the past couple of weeks I’ve been doing cold calling or warm calling for AuditShark and as Robert said the conversion rate of that type of question or that type of call is significantly higher. I mean I haven’t had anybody in the past 2 or 3 weeks that I try to talk to say no I don’t have time, I don’t want to talk to you.

[36:52] Rob: Right and I think we should be clear here. The reason we’re talking about cold calling again is it obviously has a place in customer development, a place before you have a product is going to be super helpful for touching base with people who aren’t necessarily online and they’re a huge amount of niches that are not online. And even if they are online, they’re still instant way to get better feedback, to [iterate] quicker. There’s some value there. I don’t think any of us are espousing, you know, leaving online marketing behind and going out and having me stop my SEO and HitTail and just cold calling a 100x a day. That doesn’t make sense.

[37:24] We have these online marketing skills for a reason that we can bring a lot of people to our site and convert them. It’s kind of like one more approach that you can try out and obviously it’s especially good for some very specific instances. And I think I haven’t done out on cold calling, I have done some very specific emails to some companies that I know could really use some of my products. And it’s not like I get this list, a buy a list. It’s nothing like that. It’s I would pick out a single person and hand send them an email and be like hey, it’s almost like you can call cold email. But of course unsolicited cold email and spam in the US. But it’s like a personal note for me and it’s commenting on how I think this product can help them.

[38:06] So I can totally see the value of this outbound approach just what cold calling and cold emailing you know postcards and all that kind of stuff really is more of an outbound approach that we have been talking about. But there’s definitely some value there. It opens up a new market. So Robert earlier you mentioned that your conversion rate often depended on how well you were able to generate a list, like to get the call list. If I were to generate a call list I would go to Google and search for companies. I would have my VA do it then I would just put them in spreadsheet and kind of order it by some criteria. Is that how you get it or you have other recommendations.

[38:43] Robert: Yes. I had a professor in college that used to always say the answer is it depends especially when you ask marketing question the answer is pretty much always it depends. But that it’s usually a good approach to start with. There are some other places to get information about industries. It depends on what kind of industry you’re going after. If you’re going after some of the older more established industries they’re usually associations, state registry, big companies that basically just sell list like Hoovers or there’s half a dozen others that are pretty good sources of information and most of which you can get for free in different ways.

[39:24] And starting with googling is a pretty good way to start. It’s especially effective if you use a VA but you have to be a little bit careful. It depends on the types of calls you want to make and the volume of calls you want to make. I think that’s a great way to get 30 or 40 people to talk to. But if you’re really going to call 200 or sustain calling 20 or 30 a week or something then it’s going to breakdown fairly quickly.

[39:51] Rob: Right. You’re just going to run out of prospects. Let’s say someone is listening to this and they’re thinking about writing software for electrical contractors to help them with some part of their business. And they’re thinking obviously they’re not exactly target online audience that they can really drive them to a landing page and get emails. How many people do you think if they put together a list from Google of 40 or 50 local electrical contractors, do you think that’s enough if they called all of them to vet this idea or not, to kind of have an idea of whether their software idea has legs.

[40:30] Robert: In my experience, that’s enough people to talk to. I think if you can actually talk to 20 or 25 people you get a fairly clear idea. Some people will quote higher number, some people will quote lower numbers, some people will change it up and say you need 5 sales or 10 sales. The best advice I got on that front was Jason Collin picked up a tweet of mine asking a similar question a while back and he said you can stop whenever you don’t learn anything anymore. And so from that perspective you really want just to find the place where I called 20 or I’ve called 30 or 40 and I’m not really getting new things from what these people are saying. Either there’s not something I can solve here. There’s not some inconsistent or a lot of this people would pay for this.

[41:17] Rob: Got it. And here’s the big question and I know the answer is it depends. But I’m wondering do you mention price?

[41:26] Robert: You may or may not mention price in your initial call. Sometimes I used calls especially with local people in the early stages is a way to setup a face to face but you definitely mentioned price at some point in the process. It’s got to be part of you deciding if this is a viable business or not. Cause it doesn’t matter if you have something for electrical contractors that all of them want to buy but all of them want to buy it for $9 a month and you need to be $50 a month then you still have nothing.

[41:56] Rob: Right. All right well, you know, Robert I appreciate you coming on the show. Your eBook which is at coldcallingbook.net is I know it has other stuff. It talks about writing script, the importance of taking note, dealing with gatekeepers and I think you have an appendix for sample notes that you took and sample scripts and all that stuff. If someone was interested in finding out more and going deeper into this topic they can go to coldcallingbook.net. But if they want to catch up with you I know you have a blog or you talk about this kind of stuff as well as process to getting your own startup off the ground. Where would they find you?

[42:28] Robert: The best place is whitetailsoftware.com, that’s the blog.

[42:32] Rob: Very cool. Well thanks again for coming in the show and we’ll see you at Microconf 2013.

[42:37] Robert: Thanks a lot guys.

[42:38] Music

[42:41] Rob: If you have a question or comment, you can call it in to our voicemail number at 888-801-9690 or as Mike would say 9960 cause Mike transposed the numbers last week, or you can e-mail us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt, used under Creative Commons. You can subscribe to this podcast in iTunes by searching for Startups or via RSS at StartupsfortheRestofUs.com where you’ll also find a transcript of each episode. Thanks for listening. We’ll see you next time.

[43:10] Mike: You know it’s not funny when you have to explain the joke.

[43:13]            [Laughter]

Show Notes

Transcript

[00:00] Rob: This is Startups for the Rest of Us: Episode 95.

[00:04] [Music]

[00:11] 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.

[00:22] Mike: And I’m Mike

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

[00:29] Mike: I’ve talked about my Altiris Training site for the last couple of weeks and things are starting to, it looks like some of my trials are actually starting to convert now so I had my second trial convert yesterday.

[00:38] Rob: Awesome.

[00:39] Mike: I’m only up to I think four or five customers but they’re recurring customers. It’s not like it’s a small price point. So I think the minimum price at this point is $100. So the first two people…

[00:51] Rob: A hundred dollars a month?

[00:52] Mike: Yeah, a hundred dollars a month. So I’ve got I think four or five people on there so far. The fifth one actually paid me for six months upfront. Needless to say my first month’s conversion is pretty nice. I mean I haven’t had many people, actually I haven’t had anybody cancel yet so.

[01:09] Rob: So what do you think this says. I brought this up like casually one time and you and I kind of laugh about it. But it was like you’ve been working on AuditShark for a couple of years and your deadline is actually coming up about 12 days out from kind of your beta.

[01:22] Mike: Uh-huh.

[01:22] Rob: But what does it say like Altiris Training you came up with the idea maybe two or three months ago or that’s the first time you mentioned it to me and then you crank it out and you build it fast, outsource and stuff. And you just got it going. What are thoughts kind of the difference between these two and if you were to do AuditShark again could you do it differently or is this just a completely different product?

[01:42] Mike: Yeah. I think it’s a completely different product. I mean don’t get me wrong. The website itself took some time. I handed it off to somebody else and said here implement this. The reality is that it didn’t take a whole heck of a lot to put together. I mean the whole thing was put together in — I’m trying to think how much I actually paid for the website development and was probably 60-70 hours’ worth of work maybe 80 tops. There’s like $10 or $11 an hour or something like that. So it cost me around $800 for that. And then I got a $100 a month Wistia subscription and then everything is going through stripe and then beyond that it’s just a matter of cranking on the videos. So in terms of my time investment, I don’t think it’s very high. But also the fact is that it’s not a high traffic site. I mean it’s very very specialized, very niche and I don’t expect a lot of traffic.

[02:27] Rob: Right. So this is much more along the lines of like the true blue micropreneur approach where it’s a very small niche and it won’t get a ton of traffic but it’s easy to out market the competition. It’s not that you don’t have any but they really don’t know what they’re doing. And if you go to your competitor’s website it’s just all over the place. You go to yours and actually it looks like a reasonable thing that you take a tour or buy. I mean it’s the basic sales funnel. Whereas AuditShark is a bigger, like a bigger idea, a bigger endeavor, all that stuff, bigger market as well, bigger potential.

[02:58] Mike: Right. I mean the other thing that, I mean part of the reason why I even bothered to go down the road and try to launch altiristraining.com was because I was looking for a way to vet a developer and I needed a project to put them on. So I basically went out and looked for somebody, hired them, put them on this project and it worked out really well. So I actually in a way promoted him into doing stuff for AuditShark. So at this point, you know, he’s got a bunch of task. They’re lined up to start working on and stuff for AuditShark. But I actually let go of somebody last week who was working on AuditShark, who I hired directly onto it which in retrospect was probably not the greatest idea in the world. But the same kind of thing happen previously with somebody that I had hired and had them working on some stuff and then essentially promoted him onto AuditShark and that person worked out fine. It’s just the person who was hired directly into it, you know, just didn’t work out very well.

[03:50] Rob: Right. So have you considered focusing on Altiris Training and trying to grow it, grow it big to get to the level you want it to or do you view as a, I won’t say a side project but a project that maybe will take a backseat to AuditShark long term.

[04:03] Mike: No. I think it’s definitely a take a backseat. I don’t have any preconceived notions that it’s going to grow into some giant thing. I mean I’ve talked to a lot of people who are in the Altiris world and things are changing dramatically. Symantec just recently had their CEO leave. So things are kind of up in the air in terms of what Symantec is doing and there’s a lot of question marks over what the future of Altiris actually is.

[04:28] So people are not necessarily jumping ship to other project but they’re certainly giving other products a serious look. And I do know a consultant out there who is based in Australia who he has had problems finding work in finding doing Altiris work because their costumer based is leaving and they are going to other products. So he would like to see Altiris Training succeed because that’s one of the people’s main complaints is that there’s not enough training out there or not enough quality training, but at the same time I don’t know is that my future is there either. It’s not something I really want to upkeep.

[0:05:01] I mean the way I see it is what I’ll probably do is I’ll probably grow it kind of on the side and for the time being just to kind of squeak out whatever revenue I can. And then as I build it up if I get to a point where it becomes any sort of a distraction at all, I’ll look to unload it to one of the existing Altiris partners and just say you can have all this. You can have the customerbase and everything else that goes with it.

[05:21] Rob: You watch it’s going to get huge. It is going to totally outstrip AuditShark it’s going to be like Doh!

[05:27] Mike: Well I mean if that happens then I can hang on to it but I just don’t see that in its future. The interesting thing is that almost with no marketing I ended up landing on the front page of this website called alteregos.com and they are, I’ll call them a third party community site for Altiris and Altiris administrator. I don’t know who did this or why but you go to their website and bam right there on the front is you know a link to my training site.

[06:02] Rob: I see that. That’s crazy.

[06:03] Mike: I don’t know how that happens. I don’t even know who run the site. I mean that right there basically double my traffic.

[06:09] Rob: Geez. Awesome. And this is from June and it continues to send traffic for you. What a fortuitous little event there.

[06:16] Mike: Yeah. So I’ve been getting inquiries here and there from different people and I’ll be reselling some other people’s instructor based training on my website. I actually have that on my development server right now. I haven’t fully tested it yet or check to make sure that I can accept payments for that. But I bundled it with another partner who they’re going to give a three month subscription of my site to everybody who goes through their instructor based classes and for that they’re going to give me $250 for each person.

[06:45] Rob: I’ll tell you what, Mike. There are some potential here. It sounds like people are coming out of the woodwork to promote you and tie in with you. I mean that’s a sign that you really met an unmet need with this thing.

[06:56] Mike: I know I’ve met an unmet need it’s just it’s a matter of my interest level in it.

[07:01] Rob: Yeah.

[07:02] Mike: That’s one of those things where it’s, you know, you have to look at these things and when you’re trying to identify a business opportunity it’s like you hope for something that you know is not only profitable but you’re going to enjoy. And this isn’t something I particularly enjoy but it makes money. So you know who am I to complain about it.

[07:19] Rob: I hope to hear more about it as things kind of unfold with it. It sounds like it’s on an upward trajectory already.

[07:25] Mike: Speaking of fortuitous media what’s with this comment in the Wall Street Journal.

[07:32] Rob: Indeed. So the Wall Street Journal contacted me. A couple of reporters contacted me and ask me about freemium.  They wrote up HitTail and it was like a three or four paragraph mention and its inbetween, like Dropbox, Evernote, iPhone Apps company I’ve never heard of and it’s like a games company and then HitTail and I think one other. So I’m among pretty good company. But the funny thing is two things. One, they say my name, Fresno, California all that stuff. But right away they misquote. They say he is struggling to make freemium work for HitTail. And I didn’t say that. I just commented that there was a free plan when I purchased HitTail and then I shut it down. But they kind of inserted the word struggling and I’m like huh? I didn’t. I mean I shut the free plan down within a month or two of buying it. I’m now actually struggling to make it work. I’m not even trying to do freemium.

[08:20] Mike: [Laughter]

[08:21] Rob: And then the other thing is they mentioned all the companies. They don’t hyperlink out at all. I think the only two hyperlinks are two if they mentioned a public company’s name and they link to the Wall Street Journal’s stock page for that company that shows their quote and everything. But all the other people including HitTail zero links which obviously the hyperlinks would be worth a lot of authority from them but second to that I would love to have seen how much traffic this drove. Because I can’t tell because if people came to the site they either typed in the name directly or they did a Google search for the company name.

[08:51] Mike: Uh-huh.

[08:52] Rob: So I really don’t know. I would guess it didn’t drive that much. I can kind of see a spike in trials and it was so-so. But it wasn’t like some amazing boost in trials but I wouldn’t expect that from an article like this. But it was cool. They did get my favorite quote in there. I likened freemium to samurai sword. I said if you’re a master then you can do great things with it. But unless you’re a master you can cut your arm off. And the reporter is like that’s great. I’m going to get that in there.

[09:17] Mike: Yeah. I really like that quote.

[09:20] Rob: So this appeared in the print Wall Street Journal paper print edition which is pretty crazy.

[09:22] Mike: Wow. Did you get a copy of that?

[09:24] Rob: I didn’t.

[09:25] Mike: [Laughter]

[09:28] Rob: I don’t know. What would I do with a copy of the newspaper? I could start a fire with it.

[09:31] Mike: I would probably have taken a picture of it and said yeah I got I got in Wall Street Journal but that’s about it.

[09:35] Rob: Yeah. How about you, what else is going on?

[09:36] Mike: This week and next week I’ll be working on AuditShark almost exclusively. Aside from a couple of videos I have to build cause people have actually started requesting something for the Altiris Training site but, let’s see here. What was it? Last night I had a conference call with a prospective partner and they’re going to start tapping into their existing costumer based and trying to identify at least a couple of people who we can possibly install AuditShark on for the early release.

[10:04] And then in addition to that I had two conference calls earlier today. One was with a hosting company and then the other one was with a managed services provider. And I think both calls went really well. I definitely learned some things but essentially what I did was I called them up and I had a list of question that I wanted to run through and ask them all my questions and most of them I didn’t really learn a lot from them, but there were certain key pieces that I did learn that I found out that some of my assumptions were just wrong or a little bit off in terms of how they run their business and what sort of things they’re looking for and how they do budgeting.

[10:38] And what I found really interesting was that they were more than happy to talk specific products and specific numbers of what they were paying for some of those other products. So that was definitely intriguing from I’ll say a positioning standpoint.

[10:52] Rob: Absolutely. It’s almost like you’re able to research both your customers and your competitors at the same time. That’s really handy.

[10:59] Mike: Uh-huh. I got another scheduled for Thursday and tomorrow I’ll mostly be working on probably code and I got two developers who are working right now on AuditShark. And I’ve got a documentation writer who is going to be starting probably later this week. I promised her I put together a screencast later today but I just haven’t had time to do it yet. Somebody is going to be building some policies for me later this week as well. I have to give them over the desktop client that allows them to actually build policies but he’s going to be working on that. And he’s got a lot of experience with this kind of things so I’m not too concern about him being able to put those thing together.

[11:34] Rob: Very good. Yeah. HitTail is doing well. I’m continuing with the paid acquisition I’d talked about. No real news there except for I hit the point where I have more trials in my cue with 38 trials going on at any time since I’ve owned it. I would guess more paid trials at any time since HitTail was started six years ago. Things are looking up. I’m hoping to be able to continue this growth. It’s a fairly scalable traffic source. I’m excited to see what happens.

[1:59] And this month did in fact it looks like it’s going to be on pace to match last month and last month I had a $1,000 article order that was just a one off thing. So I’m pretty please with, cause I didn’t start the advertising until well after that. And so none of that traffic has converted yet and it’s still going to grow to keep up with that pace, you know, the $1000 in a month so.

[12:23] Mike: Very cool.

[12:24] Rob: Yeah. I’m pretty pleased with it. I’m trying not to, you know, I’m always cautious optimistic with this stuff right. I never want to, there’s so many things can happen. I’ve had a bunch of trials in the cue and my conversion rate just plummets because the trials were basically from traffic sources that weren’t actually interested in buying. And so making projection is so difficult but at the same time it’s nice to have more than I’ve ever had in the cue and with the possibility with being able to continue that moving forward.

[12:50] Mike: Now have you turned off those advertising avenues that were not working out nearly as well. I think you’ve said that there were two or three that were working really well between 7 and 10 that weren’t working out so well. Have you turned off those other ones and kind of focus just on those two or three?

[13:06] Rob: I have. So everything that wasn’t working, you know, there were a few that I had to purchase. You have to purchase three days at a time but it wasn’t ridiculously expensive so I did it. But everything else I was able to turn off between, you know, basically 24 hours of discovering. Hitting the point where I was like wow zero conversion and 500 visitors. This one is not going to make it even if I get a few conversions all of a sudden. It’s still going to be a crap traffic source.

[13:30] So yup everything else at this point is turned off. I am doing some new experimenting now. I’m swinging back to one. Since I’ve learned so much about buying clicks and demographic and stuff that are converting well now, I’m circling back to one other site that I think I could potentially improve upon and just see if that works this second time around. But aside from that I am focusing and I’m not going to be, I don’t plan to revisit any of the other traffic sources that didn’t work out.

[13:58] Mike: Uh-huh. Cool.

[13:58] Rob: So I saw this thread on Quora. I think someone linked out to it. I think maybe Dan Andrews had linked out but the thread is called, is anyone here a member of the Dynamite Circle/Tropical MBA? And Dan Andrews runs a lifestyle business podcast and then he has essentially it’s kind of like a private social net call that the Dynamite Circle or the DC. And it’s a still membership website basically. It looks like its three months for $97 or $388 a year. And asking the question of course is it worth paying, is it worth the price? It seems kind of pricey with a forum with 400 members.

[14:30] And I love, there’s a whole discussion after this but basically it’s like 10 or 15 Dynamite Circle members come out and say it’s ridiculously cheap. This question is hilarious cause it’s so worth the value. But Dan’s, I love just the way he handles this. He says my sense is if you came to Quora to post this question rather than risking the Benjamin, you aren’t the target market for the DC who are mostly highly engaged followers of our work who have established businesses. Our free information is just as good or bad depending on your view. You aren’t going to learn anything there earthshattering. It’s about networking and sharing information with likeminded entrepreneurs.

[15:05] And someone comes back and says well just someone is cautious about their money doesn’t make them unfit to do anything and kind of almost acts offended. But there’s a really intelligent discussion that follows. And frankly I love so many of the DC-ers coming out the members of the Dynamite Circle coming out and being most of them at least being respectful. Saying no if you aren’t willing to risk $97 then you shouldn’t join. It was an interesting discussion for all and I like the way that Dan had handled the question.

[15:32] There’s a lot of ways you can go with it right when someone says it seems kind of pricey but you can like try to defend the value of it and defend all the things that are in it and what you’ve done to put it together. But he basically eh, he makes it more exclusive by his answer and he comes off as classy.

[15:48] Mike: Yeah.

[15:49] Rob: Well it’s the response that I wanted to start giving. You know when we first launch MicroConf like there were people complaining like $499 for a conference is crazy. And I remember thinking like man if you’re not willing to do it you shouldn’t come. But I didn’t say that to people. And now in retrospect I totally wish you had. I think this is going to be my new line when I launch something because I know the value, you know, the stuff that I or we release or work on has. And I really do think that not trying to please everyone is just a better way to go.

[16:16] Mike: Yeah. It’s just the more I look at things with either my training website or with AuditShark I mean there’s, AuditShark can do a lot of different things but I definitely realized that I don’t want to do too much with it. I really need to just focus on one small area and basically master that because trying to branch out basically leads you into these larger solutions that are more geared to the enterprise that do everything and don’t solve anybody’s problems really well.

[16:45] Rob: Yup. Exactly. So it’s about be a niche and if someone says you’re too expensive or you’re too cheap then you just tell them hey maybe this isn’t the solution for you.

[16:53] Mike: Uh-huh. So speaking of cheap, I decided that I was going to upgrade the RAM on my desktop because I installed Backblaze and I was doing everything locally. I have a NAS device that I was backing everything up to. And I said, well, you know, I should really get this stuff offsite because I got enough important things that I would like to have it offsite. So I installed Backblaze and I have some I’ll say memory issues. It seems like when I leave it running for too long the memory usage tends to escalate and it doesn’t free it up so it seems to me that it got memory leaks. I don’t know for sure if does or not but it just seems like that’s what’s going on. I was looking at my machine and I was like well I only got 4G of RAM. This machine is actually pretty old. I went back and looked and found out that I’d actually purchased this machine in 2006.

[17:40] Rob: Wow. Yeah.

[17:43] Mike: So I was like well can it even support more RAM cause I don’t know. I got Window 7 64bit on it and I was like well I’ll take a look and it turns out I can support up to 16G of RAM. I’m like oh great. I’ll just go buy a new RAM. It’s $400 to buy 16G of RAM.

[17:56] Rob: What. That is crazy. That is much more expensive that I would have thought.

[18:01] Mike: The computer itself is not worth $400 that’s the problem.

[18:04] Rob: I was going to say that’s insane. Yeah.

[18:06] Mike: So.

[18:07] Rob: Cause I bought, I mean geez I bought 8G of laptop RAM for I thought it was a $100.

[18:11] Mike: Right. The thing is that’s not for a computer that’s six years old. I mean the problem that I run to is that its DDR2 RAM not DDR3.

[18:20] Rob: I see. It’s old. It’s not made any more or something.

[18:24] Mike: I don’t think so. I don’t know if they’ve stopped making it or whether they’ve just scaled back on it so much that you know it’s just not around. But that’s kind of the highest end of the DDR2 RAM that they kind of offer. So I don’t know what else I can do.

[18:37] Rob: Yeah. I would check out crucial.com. Crucial may have it. That’s probably the only other place. I would check and then I would ponder just buy a new computer for $400.

[18:47] Mike: Yeah. And buying a new computer I’m just looking at and saying well do I really want, you know, to go that route.

[18:52] Rob: Yeah. I know.

[18:53] Mike: Yeah. I mean I would love to have more RAM right now but at the same time I got so many things going on with AuditShark that I don’t want to have to rebuild my machine either.

[19:01] Rob: Right. Well you can also just upgrade to 8G. So for listeners who have never heard of Backblaze it looks like it’s a backup service just like Mozy.

[19:08] Mike: Uh-huh.

[19:09] Rob: Is that right. It’s a just a little less expensive. So, Mozy starting jacking their pricing structure. I’ve been a member of Mozy or customer of Mozy for I don’t know four or five years and they used to be unlimited for $5 a month and then they become not unlimited. And so suddenly my bill jumped. You know I was backing up two computers. It was $5 a month per computer. It was about $120 a year and it doubled to like $220 because of how much space we’re using. And we weren’t even using that much space. So I jumped over to, I was going to do Carbonite. But Carbonite does not backup video or exe files by default and you have to go individual, you can’t do right click and say back up all these. You have to individually click a checkbox next to every one of them. Ain’t that crazy.

[19:48] Mike: Ouch.

[19:50] Rob: Yeah. So people, like there were people giving them bad reviews. They say its unlimited backup but they don’t tell you that and so I used it for about a week and was like no, I’m not going to do that. Now I use CrashPlan and I have never heard of Backblaze but this would be an alternative cause I think the pricing for these two are similar. So if you’re out there and you’re not backing up your machine you really need to look at Backblaze or CrashPlan. All it is you download a little exe to your computer that runs, you set it to run it at 2 a.m. every night and its $4 a month or $5 a month depending on how far out you pay. I think I even paid out three years with CrashPlan.

[20:24] And for me it’s $10 a month over the course of three years for all of the computers in my house and it’s unlimited storage. So assuming they don’t screw with that unlimited, it really is great. And my wife had an issue actually. Her computer failed. We got nice Toshiba Ultrabook and about 60 days in the thing just failed. The screen stop working and we can’t access anything. And so luckily all her stuff is in Dropbox. Some of it is in Dropbox her working stuff and then everything else is in CrashPlan. So even if they have to scrap it we’re going to be able to get her stuff back.

[20:53] Mike: Yeah. I went with Backblaze. I think I’d looked at CrashPlan a little bit and I forget what it was that made me not go that direction. I don’t recall off the top of my head.

[21:03] Rob: So hey we have a new review on iTunes. I want to thank Ken Brodhagen. He just reviewed us a couple of days ago. He says this is a great podcast with a lot of practical tips. Mike and Rob also have a great chemistry that makes the show entertaining as well. I listen to 25 episodes or so and I’ve just downloaded the whole backlog of archive so I can listen to them all. And of course Mike and I recommend that you do the same if you haven’t heard those glorious first 50 episodes.

[21:26] Mike: [Laughter]

[21:27] [Music]

[21:30] Rob: So I came across this cool article. It’s actually just a one page thing from this September issue of Fast Company. But it’s the 36 rules of social media and it’s kind of just they surveyed a bunch of social media people like the guy behind Radian6 and one at Percolate, VPs of marketing of different web company and all that. And they got these 36 rules that they put in this graphical display and a lot of them are boring. We’re not going to go through all of them. But I wanted to mention a few here that I thought were either clever or just ironically true. The first one is if you all do is respond to complaints that’s all people will send you. Another one is everyone says they don’t want to be marketed to; really they just don’t want to talk down to. And then this might be my favorite. Don’t try to be clever, be clever.

[22:16] Mike: I’m not going to respond to that and try to be clever.

[22:19] Rob: I know.

[22:21] Mike: [Laughter]

[22:24] Rob: See just a couple more. One is people would rather talk to Comcast Melissa than to Comcast.

[22:28] Mike: I don’t think anybody wants to talk to anything Comcast.

[22:31] Rob: it’s okay to drive people to your site instead of Facebook. And that’s an interesting one. So several people who I talked to when I was talking about gearing up on paid acquisition and a couple of folks who’d used Facebook said oh yeah don’t send the traffic to your site. You really want to send them to your Facebook page because Facebook jacks up the price of the ad as soon as you send them to an external URL. And I wasn’t super comfortable with that. I mean there is HitTail Facebook page and of course you drive them over there and then you try to get them to like you so that it’s viral.

[23:00] And you try to get them to go from there to then your external website. And then that certainly is a long term thing. I’m going to look into. But I wanted to see if I could get people to convert straight away from the site. You know have a compelling enough value prop for them, a compelling enough ad that they click through and then a compelling enough value prop on the site that they convert. So I like that one because I think kind of the common wisdom of today is send them to Facebook because that’s what Facebook wants you to do. So they make your ad click cheaper and make it easier.

[23:26] Mike: I didn’t realize they made it cheaper to do as well.

[23:30] Rob: I haven’t done it. I think that’s pretty much, several people told me that so I’m assuming that’s the case.

[23:36] Mike: Wow. That’s crap.

[23:38] Rob: That’s Facebook.

[23:39] Mike: As told by their stock price.

[23:41] Rob: Yeah and that’s a whole other discussion probably.

[23:43] [Music]

[23:46] Mike: Why don’t we answer a listener’s question.

[23:49] Rob: All right. This is from Gerald Briones. He’s with Ganda Studios and he says hey I’m a big fan of the show especially like the podcast on Marketing a $1 App. Any tips of negotiating with contractor via oDesk? I’m hoping to develop a project but I’m on a limited budget. The programmer I currently used has declined to do my next project due to low budget. I’m probably going to try contacting other programmers on oDesk. Cheers and happy podcasting.

[24:15] Mike: So I think that when you’re working with contractors via oDesk it’s probably going to be a little bit challenging to negotiate with them on price. And I think the reason for that is because when you’re going through oDesk you’re already asking them to compete against each other. And unless you have set forth a very specific budget for the project and then post it out there as a fixed price project I think that you’ll probably going to run into issues.

[24:44] And you know this question doesn’t necessarily say whether the projects are being done on an hourly basis or on a fixed price basis. So I don’t know. I think it’s a complicated situation. I mean why don’t we just discuss it as opposed to me giving an answer that we can talk around quite a bit and then go from there. Cause there’s a couple of different sides. The first one is whether it’s a fixed price contract or whether you’re doing something on hourly project right.

[25:09] Rob: Yeah. I mean the big difference is if it’s a fixed price and you negotiate them down they’re going to cut corners, right? I mean that’s what they’re going to do. Contractors are not going to sit there and then work the same amount of hours and take less pay. And I think the problem is hourly, yeah, to me it’s a bad idea. I mean I think you can always try to squeeze dollars out of people but I would look more at cutting scope or somehow trying to come up with money through other means basically. You know when you’re boat strapping you can do all types of crazy stuff to come up with a few dollars.

[25:42] But I think try to cut down the fixed price one like I said the person is going to cut corners and then you’re going to get in fight over that if the app doesn’t work or whatever. And if its hourly and you’re negotiating down, I mean as a contractor when I was consulting, I never let people negotiate. If they wanted to ask to pay less I would just say you know what this is my rate period and you can pay it or leave it. And I wasn’t a jerk about it but that was what my time was worth at the time. And I had plenty of people who would pay it.

[26:08] The flip side of that is even if you get them to agree to drop their rate, as soon as they have other work that pays them the better money, they’re going to prioritize that higher than yours. And so you’re always going to be the person they don’t want to be doing your work. They don’t want to do more work for you. They want to do it for other people. I think it’s a short-term mentality to think about negotiating for something like that.

[26:27] In fact, when I hire contractors I’ve done this for a while. If I find someone who is good and who does solid work I actually increase their rate. I’ll negotiate against myself after a while once I know that they come through because I want me to be priority. I want them to think of working for me as the no. 1 highest priority because I’m actually the highest paying guy that they’re using. And I did this even before I had a lot of success cause I knew early on that finding good people was important.

[26:53] Mike: Yeah. I would agree with everything you said. I mean it’s just I don’t know I would have a hard time especially on oDesk trying to convince people to cut their rate. Because when you go onto oDesk if you’re doing like an hourly project I haven’t done a fixed price project there but if you’re doing an hourly project then you’re already providing a rang. And they can come in and they can say, let say you get a range to $8 to $18 an hour for whatever the project is. If you come in and somebody says well I’m going to charge $20 an hour or somebody else comes in and says they’re going to charge $6 an hour there’s I think a certain level of quality difference that you’re going to get between those two people as well.

[27:37] And it may be substantial and it may not be and it’s up to you to try and figure out what those differences are. And when you get into the hourly projects I mean that kind of get rid of any sort of fixed price project. I think when you’re talking about people on oDesk one of the issues is that you just dot want them to start negotiating because as you said I mean if they have to negotiate with you against the rate that they’ve already tried to persuade you to give them, you know they are going to cut those corners.

[28:05] Rob: All right, Gerald. Thanks for the question. I hope that helps.

[28:08] [Music]

[28:12] Mike: If you have a question or comment, you can call it in to our voicemail number at 888-801-9690 or you can e-mail us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt, used under Creative Commons. You can subscribe to this podcast in iTunes by searching for Startups or via RSS at StartupsfortheRestofUs.com where you’ll also find a transcript of each episode. Thanks for listening. We’ll see you next time.

Show Notes

• KISSmetrics
• Patrick McKenzie
• ABingo
• AppBackr.com

Transcript

[00:00] Mike: This is Startups for the Rest of Us: Episode 94.

[00:02] [Music]

[00:11] 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.

[00:20] Rob: And I’m Rob.

[00:21] Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s going on this week, Rob?

[00:26] Rob: What’s going on this week is 6700 paid clicks in three weeks from twelve ad networks.

[00:33] Mike: Nice.

[00:34] Rob: That’s what I’ve been buying. Yeah I’ve been — I’ve been focusing pretty hard on it. I had some guest posts opportunities and other stuff. I would say it’s in the works but I’m just — I don’t know, I’m really focused on this right now. So I’m putting everything else on hold and it’s been fun. You know, it’s always — it’s always a learning experience coming back to this stuff having not done it in a year or two with this intensity. It’s all — it’s a learning experience with the new product because it’s certain networks just working really well for certain niches. Of the twelve that I’ve tried there’s two that are working exceptionally well and they’re kind of outliers and I’m going down, tripling down on right now. So it’s cool. So the paid clicks have been I’ve maintained the positive ROI essentially. Excited to see how long I can maintain it because three weeks does not a business make.

[01:16] Mike: [Laughter]

[01:18] Rob: We’ll see.

[01:19] Mike: Are you going to continue this beyond three weeks or did you have a timeline set up in mind that you’re just kind of can it after that time period?

[01:26] Rob: No, my goal is continue — is to go after these — these two networks that I’ve found or the two sites that I’ve found that worked really well and basically try to figure out a system to where I don’t have to invest so much time in to it. It’s not super time intensive like the first week it was really — I was really on it all the time. And now, I just checked in and then create some new ads and do some different stuff but it’s — it’s getting to be where it’s kinds of in maintenance mode and I want to figure out how I can get it even more in the maintenance mode and kind of get it systematize and then hand it off to someone else so that I don’t have to, you know, manage it and that they can only get in touch if something is out of the ordinary. And I’m not sure yet if that’s going to be someone I hire through oDesk or if it’s going to be like a specific, you know, an ad management. There are companies and such that handle this kind of thing.

[02:18] Mike: Uh huh, oh it’s cool.

[02:18] Rob: Yeah. And how about you? What’s going on?

[02:21] Mike: So remember the feature or the piece of technology I had mentioned where I had said that I kind of needed at some point to have this full tolerant distribute scheduler because of the way that I’m scheduling things inside of AuditShark?

[02:34] Rob: I do.

[02:35] Mike: I spent about probably two to two and a half hours and built an entire prototype for it. And —

[02:40] Rob: Wait, you said it was going to take a like a week or something.

[02:44] Mike: Yeah, I thought it would. Well, the thing is maybe it would but what I did was I sat down and I actually talked about it with a couple of different people. One of them I’ve talked to over Twitter just sent me a couple of e-mails back and forth named Rich Buggy and I talked to him. I talked to Patrick Foley from Microsoft a little about it. And just kind of came up with some ideas and was kicking around in my head for a couple of weeks and then I was on a plane and I’m just like, well I’ve got two hours to kill and I just started writing out the design document for it and I got probably three pages or four pages in and I was like oh, this doesn’t actually seem that bad. So I spent another hour working on it and I got most of it done and then I got to my hotel and I spent, you know, probably another hour or so on it. So between the design document, the hour on the plane and plus the hour that I spent in my hotel, I basically banged out the entire prototype in about two or two and half hours and it seems to work. It may works really well to be perfectly honest.

[03:41] Rob: Awesome. So that’s that whole redundant reporting thing that you were talking about, right?

[03:46] Mike: Redundant scheduler so that I can —

[03:48] Rob: Got it.

[03:48] Mike: … reboot the schedulers and not have to worry about whether or not something is still going to trigger whether there’s audits that are going to fire or there’s going to be too many things that end up going out so I don’t have to worry about relying on the window scheduler anymore. I can just do it using this and I can have — I probably just have two of them running at the same time. I mean because if one of them goes down, there’s still another one there and you know, if both of them go down at the same time well, you know, something probably pretty serious is going on.

[04:14] Rob: Right. Cool. Well, that’s good nice. It’s always nice when something takes one tenth of the time you think it will.

[04:19] Mike: Uh huh, uh huh.

[04:21] Rob: So I’ve been going on a bunch of different podcasts lately just people been contact me to talk about different things. And what I found is that it’s kind of exposed me to a new audience and I’m finding that I’m getting about two e-mails a month right now with people who have businesses that they want to sell like websites and web apps. Either they are selling it or like a friend wants to sell it and so I’ve actually gotten a couple that are pretty intriguing and I’m looking in to one right now. I don’t feel like I’m ready to do that yet, you know, like I’m at the point with HitTail where I can — where I can hire a product manager and kind of step back and get a new idea. But I am starting to — I mean it’s not going to happen this month but I am starting to think about when that day comes here in the next six to twelve months, what that’s going to look like. [Laughter]

[05:03] Mike: You’re not going to push HitTail to like a six figures a month business?

[05:07] Rob: I don’t know. I just — it’s possible. I may and I guess that’s — that’s part  of what some ticket that I need to do, you know, in terms of whether I want to do that. But at this point, I don’t know. When I get these e-mails from people, it’s like intriguing because it’s like, oh, look at this a new business and I can see all the things right away that are wrong with it and I’m like, “Oh, their funnel doesn’t do this. Oh, I know I could improve that,” and so it’s like low hanging fruit. You know, HitTail now is like the low hanging fruit is gone [Laughter]. The business is growing but it’s like each — each proceeding step, it gets harder and harder, right? You’re like pushing it to the next tier, pushing it to the next — next plateau. Whereas this other thing, it’s like oh, look at the new shiny object and the app is built and it works and you know, there’s — they have an audience. They essentially have a product market fit but they’re just not marketing it well. It’s like, man, I could just sink my teeth in to this thing right now. I think it’s the entrepreneurial ADD kicking in and making me want to move on to the next shiny new object .

[06:00] Mike: Yeah, I think we all get that from time to time. Either walk away from some stuff or put on the back burner and then come back to it later.

[06:06] Rob: Yup. You know, that’s what I’ve been doing so far.

[06:07] Mike: So one of the other things I’ve been working on lately as started looking around for a C Sharp framework that I could integrate in to some of the different websites that I have and do A/B testing and integrate those results directly in the KISSmetrics. And I looked around and there are really wasn’t a lot. There was one framework out there that was based on Patrick McKenzie’s A/Bingo Ruby on Rails plug-in but it doesn’t sense data anywhere. So it all does is it just maintains this local database where it’s not even a database. I mean it’s just an XML file where it sensed all of that data. So it’s nice enough that it works but I started going through it and digging in to it.

[06:44] One of the issues I found was that it doesn’t fully work. There is a bug in the code where if you are a user and you see test A on, you know, any given page, if you go to all the other pages where you’re doing other A/B test, that user is always going to see test A. They never going to see test B and it’s because of the way that the sessions are split between the different A/B tests. So I’ve got to go in and fix that because it’s just fundamentally broken. I mean the mathematics behind it just don’t work out to have a good A/B test and I already actually ran it by Patrick McKenzie and he’s like, yeah that’s wrong.

[07:19] Rob: Wait, a specific user sees the A test and they should always see the A test.

[07:22] Mike: Right but that’s for test one. If you — if they look at the test two that you’re running on a different page, they should have an equal chance to see either test A —

[07:30] Rob: Got it, got it.

[07:30] Mike: … or test B and they always see test A no matter which test it is. You’re right. They should see the same test all the time in a specific test but with test two, they should have an equal chance of seeing one or the other and if there’s a zero chance that they’ll see, you know, alternative B.

[07:45] Rob: Right.

[07:45] Mike: Yeah. So I got to work on that and get that figure out but that’s coming along pretty well. I’ve been actually pretty productive on some of these things over the past couple of days. Hopefully, it’s kind of a sign of things to come because I’m taking a couple of weeks off here to kind of sprint to the end for the AuditShark early release that I’m putting out there.

[08:02] Rob: Very cool.

[08:03] [Music]

[08:06] Rob: A listener sent in a question a few weeks ago and they were asking about using Kickstarter to kind of fund their app and we’ve mentioned that, you know, they’d have a tough time getting that done. I heard of a site that’s actually been around for a couple of years and it’s called appbackr and we’ll link to it in a show notes but it’s app B-A-C-K-R with no E. It is basically made for developers to have their apps crowd funded and what they do since the law is in place or all the stuff — the regulation is in place yet to actually sell a share of your app. What you do is you pre-sell licenses to the app. The biggest success they had was an iPhone app that raised a hundred and one thousand dollars.

[08:43] Mike: Holy crap.

[08:43] Rob: Yeah, it’s a very interesting idea. I haven’t actually been on the site. I read about it in the magazine a couple of days and tore the page out. So the folks who are looking to get some kick started, then appbackr is probably a better bet than Kickstarter is.

[08:56] Mike: Wow, that’s really cool. Yeah, about the one other thing I have going on is I have a documentation writer available. So I’m going to start her working on some of the AuditShark documentation which is something I largely neglected until now because it just hasn’t been all that important and I think what I’m actually going to end up doing is when she asked me a question, I’m just going to record like an MP3 and send it to her and let her deal [Laughter] —

[09:19] Rob: All right.

[09:19] Mike: … because I mean the stuff that I’m doing within AuditShark tends to be complicated enough but I’m going to send her screenshots of everything and I might, you know, walk through some of the different UI elements with screencasts if she really needs it but especially for the terminology, I was thinking I’ll just, you know, record an MP3 and send it over to her and let her deal with it.

[09:36] Rob: Now, that sounds a bad way to go at all. Why do the screenshots for her?

[09:41] Mike: Because she doesn’t have an overview of the app and all I have right now really are the screen mockups. I don’t even have screenshots. So because — everything up until this point, it’s all been done using mockups that I’ve sent to the developers and said, “Here’s what needs to get built. This is how it needs to work,” and now I’m at the point where the UI is kind of finalized but I don’t have a screencast of that final UI at this point. I’ll probably just walk through a screencast and say, “Look, this is what the BY looks like. This is what you’re going to have to put in to the documentation and talk to people about it.” So she’s already got some ideas on how she’s going to work that in. But yeah, so hopefully, that will turn out well. And she — and the nice thing is that she’s got experience in the compliant space. So it’s not like this is her first time in this type of software.

[10:29] Rob Well and what’s nice is this is so much of a better way for you to do it than to spend time writing it yourself.

[10:35] Mike: Oh yeah, totally.

[10:35] Rob: Right? This is like one of those killer and not only — this is one of those killer elements where she will probably do a better job than you because she’ll spend more time on it. And you totally don’t want to do this and that’s a perfect task to outsource, right?

[10:47] Mike: Yeah, I mean I know that the final output is going to be good. The problem is she’s expensive but you know what, you get what you pay for too. So —

[10:53] Rob: Yup.

[10:54] [Music]

[10:57] Mike: So for today’s episode we’re going to go through a bunch of listener questions. There seemed to be a surge in listener questions that are started coming in. The first one is from David Welton and he says, “Hi, guys. Here’s a conundrum for you. Amongst the masses there’s a significant minority who are still not comfortable dealing with anything where they can’t call someone up and ask them the same questions they could find the answers to on the front page of the website. This is clearly problematic in terms of scaling things up. Sure sooner or later you might get big enough to hire someone and sit around manning the phones but for most micropreneur type situation that’s some way is off. Worst of all, it seems that a good number of these people aren’t paying customers who have a problem they are in a hurry to deal with but prospects who’d just want to talk to somebody on the phone. I’ve tried a number of different approaches to this without a lot of success. I’ve tried hiding the phone number or trying to call them back or just saying ‘Sorry, we don’t do phone support, can e-mail your questions.’ Each one of these has its own problems. Anyway, I’d just want to hear your thoughts and thanks for the great podcast.”

[11:49] Well David, I think for this type of question, there’s a couple of things that you need to keep in mind and the first is that unless your price point is high enough to actually justify having someone there, then phone support, you know, obviously just isn’t an option in many cases. And I don’t know if I’d really worry about in the beginning because what you really need to do is you need to make sure that you are serving the customers who actually want to use your product and who’s paying is so great that they don’t care that you are not offering that phone support. So I mean I’m kind of in that situation with AuditShark where I’m probably just not going to be able to offer phone support for a while. And I’ve worked with a bunch of other companies, even recently, I mean I’ve had support problems where I’ve had to e-mail them and I don’t hear back from them for a day or two days. And there’s really not a lot you can do but at the same time is what you’re doing, you know, critical to somebody else’s business. Does their business come to a grinding halt if they can’t use your software? And chances are really good that that’s probably not the case.

[12:45] The other thing that I think you need to keep in mind is that if they’re the type of person who absolutely needs to have phone support, then they’re not necessarily your target market at first. They may very well be your target market in the future but I think that when you’re starting out, you have to have the right type of customers and if the right type of customer or the ideal customer for a business that’s only one person that can’t do phone support, well the ideal profile for that customer is they don’t want phone support. And if you start running across these people where they say, “Look, you know, we won’t buy unless we have phone support,” and say, “Okay. Well you’re on the enterprise plan and that’s $10,000 a month.” And you know, that’s a very quick and easy way to deal with it and I’ve heard other people who do that. They’ll say, “Look, you know what? If you want phone support, that costs extra and this is what the pricing point is for that.”

[13:30] The other thing that you can do to kind of combat that sort of thing is when you explain to them that you don’t do phone support, if they’re start shifting the question saying, “Well you know, we can go with this company or we could go with you,” you’ll just tell them, “Look, why don’t you call their phone support on, you know, Saturday or Sunday and you’re going to get the same person who doesn’t know anything that you call on Tuesday in the middle of the day.” And you can essentially justify your existence and your slower response time by saying, “I’m going to offer a better support than they will even though they give it to you 24/7.” So those are kind of what my thoughts are on it. I really don’t think that you need to justify yourself too much as a small business. I mean — and quite frankly, you can just be honest with them and be like, “Look, I’m a one-person shop. I can’t do phone support. It’s just not something I’m able to do at this time.”

[14:17] Rob: If it’s a major concern and you get this question a lot and you just — you kind of don’t want have to defend it, to add a phone support plan at ten times the price, just an outrageous amount totally make it worth your while to do it. They get more than worth their while. So if you sell a product for a hundred bucks, sell a $1000 version that includes, you know, X amount of hours of phone support. I would break it down. Let’s say, who’s your audience? If it’s mostly technical people, then they should be able to deal with not being — talking to someone on the phone before purchasing. I also think we should break down the difference between support and sales because with sales if you have a high enough price point to justify it, then you should be willing to do some low to medium touch stuff meaning talking to someone on the once before they purchase your app. DotNetInvoice is 300 bucks and I have talk to people on the phone before buying it. If DotNetInvoice was $19, I would never do it. It would never be worth my time to chat with someone on the phone.

[15:09] So I think that’s something to think about is there is a difference there and with DotNetInvoice, I publish the number on the website and when people call, it always hits voicemail and it says, “For fastest results, you know, leave your e-mail address or e-mail us directly and that would get you the most thorough written response, you know. The best way to contact us is via e-mail.” And so I do let them know that. Now, if people buy and they expect phone support, that’s not something I would — I would offer period. I’ve done it a few times especially when DotNetInvoice was first out and it was a disaster, frankly. It was just a big waste of time. So I think if you have a high enough price point, you know, you can kind of justify anything. I also think that if you really want to get on this road and I wouldn’t recommend it just like Mike said, you can get an answering service that will be a real person.

[15:57] There’s a bunch of services but one is like is called Call Ruby, callruby.com and a real person will answer and say, “Yup. You know, this so and this is your company name. How can I help you,” and they’ll say “I need support,” and she’ll say, “Okay. Well you know, give me your number and we’ll have someone call you back or if you can leave your e-mail with me, I’ll have someone e-mail you back.” And you — so it can actually be a real person interacting but it’s not actually you doing the phone support and it’s just, you know, obviously there’s a fee involve with that but you could also hire a VA from oDesk to handle stuff like that for you. So Call Ruby itself is fairly expensive. It’s 230 bucks a month for a hundred minutes of phone time but there are services comfortable to this that are cheap.

[16:34] Mike: So David, thanks for the question. Our next questions comes to us from Peter and he says, “Hi, Rob and Mike. First and foremost, great work on the show. It’s been a real inspiration for me. Now for my question, when building a new web app, do you involve a lawyer straight from the start so you have a solid terms of service document or do you count on the fact that happy customer isn’t going to suit you?” And Peter walks through a slightly longer example of exactly what his situation is but I think it’s a good question.

[16:59] Rob: Obviously, we’re not lawyers, we can’t give legal advice but I think I can tell you how I’ve done it in the past. In essence I don’t tend to get a lawyer involved right from the start in terms of service and privacy policy and such. There are a few open source or what do they called Creative Commons versions of these docs. So if I’m going to start a brand new app and I haven’t — if I have nothing which I’d never had a lawyer do it, then I would — I would probably start with those. What I do these days is I look at the other apps that I have because I have had stuff review in the past and so I’ll use that but to me, it all depends on your risk tolerance, right? It’s having a little bit more insurance that if you get sued that you’re more air tight but when you’re just starting and you have zero customers, you know, for me I have a tough time justifying spending a thousand or 2000 bucks to get a privacy policy and terms of service unless I have an app that’s particularly risky or has a lot of liability.

[17:51] Mike: Yeah, I think for my perspective, I would look at how much money the app is currently bringing in and if you can get an attorney to look things over and give you a guideline or give you a boilerplate in terms of service and privacy policy for, you know, maybe two weeks revenue or something like that, then sure go for it. But otherwise, I probably wouldn’t worry about it. I mean especially if it’s going to cost you six months revenue in order to get it done. I mean regardless it doesn’t matter. As soon as you get a lawyer involved, it gets expensive very, very quickly. So I think for me it comes down to a matter of do you have something that is worth protecting or as Rob said, is it something that is likely to cause problems? And if it’s something that somebody else’s business is going to be relying heavily on, if down time would cause them to lose money, then I would certainly consider it.

[18:44] But you know, the other option I was going to mention that, you know, before Rob said it was just go around and look for Creative Commons versions of these different privacy policies and terms of service. And if you start aggregating multiple privacy policies and terms of services together, then you tend to get a complete picture because any given lawyer that you talk to, no matter what contract it is that you’re getting, you can ask lawyer one for a boilerplate contract for, I don’t know, a real estate agreement and then you ask attorney two for his boilerplate version and they’re going to be different. They’re going to be subtle things that are different and most of it will be the same but there will be the subtle differences between them. And those subtle differences are based on legal proceedings that they have read about or that they have learned about through different organizations that they’re members of.

[19:29] And those are the things that you’re really kind of want to look for and decide whether or not they’re right for your business or not because not everything will be in there. They’re not going to include everything. So those are my thoughts. I don’t think it’s necessary in the beginning and you know, I probably wouldn’t do in the beginning. I mean for the terms of service and privacy policy for AuditShark. I mean I expect that to be a larger product but I did them all myself. I didn’t go to an attorney for any of them. I mean I based it on stuff that attorneys had approved but it was stuff that I basically built from by piece and things together from different agreements. So Peter, we hope that answers your question.

[0:20:04] Our next one is on gauging price sensitivity and this one is from David Wilson and he says, “Hello, Rob and Mike. This was originally going to be a question asking for some feedback on an idea but I’ve managed to start up several conversations with members of my target market which had been tremendously helpful in validating my general approach. In one of these conversations, the target market member told me that she had tried Basecamp but found it both time consuming to customize to her needs and somewhat overpriced. The customization issue is something I hope to solve with my products but the price comment worried me. Basecamp isn’t an incredibly expensive product in the world of SaaS as near as I can tell. Does this comment indicate I might be selecting an overly priced sensitive market? My hope is that being a better tool for the job and Basecamp should allow me to easily justify charging a reasonable sum for the product but I’d like to validate this before I take any drastic action. Any general thoughts on determining or testing the price sensitivity of the market? Thanks for the help and keep up the great work.”

[20:57] Rob: To begin, Basecamp has it looks like four pricing plans $20 a month, $50 a month, a hundred and a hundred and fifty and so it really depends. I think the $20 a month does ten projects and the 50 does 40 projects. So if she had 40 projects and 50 bucks seem a lot of money there, then yeah, maybe it is too expensive in her mind. The other thing is use the word overpriced. You know, overprice does not the same as too expensive, right? Overprice means it’s there — there’s not enough value that it’s priced more than the value she got. So if she feels like it’s a halfway solution and it costs 50 bucks a month for her to use, then yeah, that’s could be overpriced for here whereas if she had something that just nailed it that it required no customizations at exactly what she need, might she be totally willing to pay $50 a month or even more than that, it’s quite possible. So I think I would visit that with her.

[21:49] I would also say this is only one person so that definitely does not a market make. You’re always going to find, you know, out of a crowd of 50 people, you’re going to find one or two who are going to complain about price or maybe a few more but that doesn’t mean that your app is actually overprice. So I would seek other opinions. I would also think about what’s her vertical. In other words, does she work for, say a non-profit because you have to think about — I mean project management software is not necessarily a vertical app, right? It’s horizontal. So if she happens to be working in a budget constrained vertical then maybe you should think about either, you know, offering less for that — for the price that she’s willing to pay or think about moving to another vertical where they aren’t. So price constraint, you ask how to, you know, kind of determine or test the price sensitivity. I would ask and I would ask a lot of people because you’re going to need to get a good sample. One person is not going to go to be able to help you at that.

[22:41] I would figure out what she needs and then take your best guess at what you think you could charge for and then ask 20 people, 20 people that you can find. Yes, that’s going to take a while. Yes, it’s probably going to require some cold calls and you know, working with some networks even if you won’t going to ask them over e-mails. It’s ideal to do it over the phone but if you ask them over e-mail and set a price and say, “I’m going to charge 49 bucks a month for this thing.” If it did this, this, that and this and it’s solved your problem exactly, would you pay 49 bucks? And you’re going to start seeing a pattern. People are going to hem and haw about it. They’re going to say absolutely yes, absolutely no. You really get a sense of it pretty quickly about four or five people in and then you can start adjusting that and saying, “Well, would you pay $29,” you know, and find out if that’s a no brainer price for them.

[23:23] Mike: Rob makes pretty much every point that I probably would have made including if you actually just you got to go back and talk to her because the issue with Basecamp is that it doesn’t fit everyone. I mean it’s — it’s kind of like QuickBooks where it does a lot of different things and I know they’ve tried to make it simple and they’ve tried to say, “Oh well, this is kind of your base, basic implementation of project management software,” but at the same time it doesn’t do everything that people are looking for. The other issue that you have to be a little bit sensitive about is the specifics of what somebody is using it for. So if she has a lot of projects or she just wants to separate things because she says, “Oh well, I want to separate this in to one project, this in to another project,” and she’s starts pushing herself against those boundaries or maybe she — I mean I don’t know, for all I know maybe she runs an architecture firm and the store space for uploading files is too limiting for her which pushes her up in to those, you know, very, very high pricing tiers that, could be a deal breaker for her.

[24:18] So those could be the issues that she’s running in to. I think you really need to understand why is it she feels that it is overpriced and you know, that that’s really what this — with this question comes down to and then you have to just talk to her and talk to other people who are also in that niche and understand that there are going to be people who are not willing to pay what you want and you know, that’s okay. It’s okay to say no to some customers. It’s okay to say, “Look, you know what? Are — this product is just not going to fit your needs at the price point that you’re looking for.” So David, thanks for the question.

[24:18] Our next question comes in from Joseph and he says, “He guys, just recently found your podcast and I really enjoy it. So I’ve been validating my idea with my colleagues and friends who work in the industry I’m looking to target. However, it’s hard to tell if they believe in the products or if they believe in me. Either way, I’m considering just cold calling these types of businesses engaging their interest. In doing that, what questions should I be focusing on outside of that does this sound interesting to you? Should I move the conversation in to how much would you pay for this direction or should I use this opportunity to get more information and turn them in to a hot lead down the road. Thanks.” So Joseph, my single piece of advice here is that you should go to the website www.coldcallingbook.net and buy Robert Graham’s book. So he has a whole book on cold calling and the types of things that you should ask to basically get in the door and you know, how to direct the conversation and how to basically do A/B testing on your conversations with people to get to the results that you’re looking for.

[25:47] Rob: That’s the advice I would give. I would also say, you know, in terms of the questions he asked. He said, “Should I move the conversation to the how much should you pay for this direction,” and I would say absolutely because I think does this sound interesting to you is the question you’re asking and that is not nearly, nearly specific enough because everyone is going to say, “Of course, that’s interesting to me.” But it’s like will you pay for this? Will you buy this? What single feature does this absolutely need to have for you to pay $49 a month for? And you need to name a dollar amount. I don’t think you ask how much would you pay for it. I think you start by naming prices and then seeing how it goes from there. So those are the specifics but like Mike said I would definitely go to coldcallingbook.net and check out that book because it’s all about validating your idea and finding your first customers via cold calling.

[26:35.] Mike: And that brings us to our last question which is from James and he says, “Hi, guys. Congrats on the fantastic show. I’m loving it. We run a voiceover site and a video production company in the U.K. and Ireland. And I’m trying to improve our organic search visibility. I’m finding the competing advice out there very confusing. Everything from the short cut such as Traffic Geyser and HitTail to just knuckle down and blog and tweet. I was hoping you could talk about your marketing calendar. Thanks again for the awesome content. James.”

[26:59] Rob: I mean I’ve never even heard of Traffic Geyser and I went to the site, I got to be honest, I’m not even sure what it does. It says automated video, social media, Traffic Geyser for a dollar. I just — I don’t know. So I’ve never tried it out. I’ve never heard about it. It doesn’t look like something I would try but I wouldn’t necessarily [Laughter] group HitTail with that. HitTail is actually — if you talk about just knuckle down and blog and tweet, HitTail is what gives you content ideas so you can blog it. It doesn’t actually do — I mean you can get that articles and stuff but it doesn’t like try to automate the stuff. It just helps you give you ideas in a very non-spammy [Laughter] fashion because the short cut sounds like it’s spammy. I don’t feel like blogging and tweeting is knuckling down per say. You know, great content has always one out and will always do well. You can obviously tow the line of what Google finds acceptable and someday, they would likely catch up with you. So I’m not exactly sure that — he says, “I’m finding the competing advice out there confusing.”

[27:56] Mike: I think that looking at his e-mail and you know, just a fact that he says that they run a voiceover site and a video production company, it seems like creating good videos and good voiceovers would probably be enough to start getting you at least some traction and attention from customers and maybe that’s putting things out on YouTube and just putting advertisements out there quite frankly. I mean and if you make them funny and interesting and engaging to people and you know, maybe there’s a chance that those things will start to get picked up and more — not necessarily mainstream media but people will start e-mailing them around not — and I’m not talking really about going viral or something but people show they’re friends because they look at something and I think that it’s funny.

[28:36] So those are ways that you can start getting more attention for your site but you know, I think what Rob was saying is either putting great content on your site, relevant articles, educational content definitely putting things in there about why people would need your service, why they would want it, what it would do for them. And start educating people and those things are going to start showing up in the search engine results that people are out there and you know, and getting because if somebody is looking for — how do I increase user retention on my website? Well, one way is to do it with a video. So and then you have an entire post on your website talking about and educating somebody on exactly what it will do for them and why they should do it. And obviously, you know, you’ll have — it framed inside to your website so that they’ll pick it up and hopefully, come to you guys for that sort of thing.

[29:25] But you know, those are the types of things that I would probably lean towards and just expanding on the I’ll call the educational footprint on your website of why people  would pay for that. I mean anything, anytime you’ve had a conversation with a customer and you’ve named the price and they say, well, that’s too much. If you’ve ever hard a discussion about why it’s not too much, if you’ve ever been able to back that up, I would definitely capture all those things and put them on your website.

[29:51] Rob: Yeah, I’m glad you pointed out that they are a video production company. I’ve missed that the first time through. Google heavily favors videos in their search results. And if you put together a video site map and you can just Google a video site map for Google, you can see the format of it, they will rank your videos tend to rank a much higher than just textual blog post and stuff. So this to me is a no brainer that you guys start producing one or two short videos a week somewhere between one and three minutes long that answer a specific question that people would be asking if they were thinking about purchasing your services. So you can hit the Google AdWords keyword tool and ask them in the form of a question. Well you can either ask them in the form of a question or you can start them with how to, how to X, how to Y. And those — those tend to be the best ways to do it and you publish a video on your site. You do not put them on YouTube. You host them on your site and you put them in your video site map because Google will rank your videos.

[30:47] They tend to rank them even with YouTube. They won’t rank YouTube above –above your videos if it’s the, you know, the same content and all that stuff. And if you put it on YouTube and that ranks, then you’re really diluting your clicks because you only get a couple of percent click through from that video back to your site but if you host them on your site itself, you can have your own call to action and they’re  already there on your site. So rather than just going the traditional route that everyone else is doing because yes, I do think blogging were great since you have that asset, a video production. It seems to be the –to be a no brainer to kind of show case your talents, answer some questions as well as I would also consider as you start getting traffic installing something like HitTail because that that will then tell you new suggestions for new articles and new questions that you should be answering in future videos that you create. So hopefully, that answers your questions, James. Thanks for sending that in.

[31:35] [Music]

[31:38] Mike: If you have a question or comment, you can call it in to our voicemail number at 888-801-9690 or you can e-mail us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt, used under Creative Commons. Subscribe to this podcast in iTunes by searching for Startups or via RSS at StartupsfortheRestofUs.com where you’ll also find a transcript of each episode. Thanks for listening. We’ll see you next time.

Show Notes

• Bathrobe Millionaire

Transcript

[00:00] Rob: If you stick till the end of this episode, Mike and I are going to talking about five things you must know before starting a joint venture. This is Startups for the Rest of Us: Episode 93.

[Read more…] about Episode 93 | 5 Things You Must Know Before Starting A Joint Venture

Show Notes

• Original Article – 12 Rules for Building Your First Profitable Startup
• Layered Thoughts website
• Altiris Training
• HitTail
• AuditShark
• MicroConf
• Patrick McKenzie – Kalzumeus Software
• WP Engine

Transcript

[00:00] Mike: This is Startups for the Rest of Us: Episode 92.

[00:02] [Music]

[00:11] 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.

[00:19] Rob: And I’m Rob.

[00:20] Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s going on this week, Rob?

[00:24] Rob: We have quite a few iTunes reviews. Worldwide we have 208 and the US we have a 154. So we’re up from something like 70 when we started our iTunes review drive. Some of the most recent ones, one from Ocanorton [Phonetic] in late July says, “I’ve listened to over 40 of these podcasts in the last few weeks. These guys are great. They’re open about their own business model holding each other accountable and they are laser focus. So I highly recommend for anyone starting a company.” Then Jeff and Jillian [Phonetic] say, “Highly recommended. I’m not a software guy but this is a great business resource for anyone looking to gain insight in to the world of startups. Highly recommended.” And finally just yesterday, Greg Barry said, “I first came across Startups for the Rest of Us a few months ago. I’m not sure how I didn’t find it sooner. As an experienced life-long entrepreneur, I still get a ton of value from the show and find the advice given by Mike and Rob practical and on point. I look forward to each new episode and continue to recommend the show to entrepreneurs at all levels. Keep the greatness coming.” So thanks for the reviews guys and really appreciate a five star rating in iTunes and this helps us appear in the top results when people search for startups. How about you? What’s going on?

[01:31] Mike: I talked last week about launching my new training site or at least the relaunch of it and I ended up having to do it a day late because I ran in to some issues with the billing and signup code. So there’s still an issue after straightening out where somebody tried to sign up and it bombed got him on the enterprise plan of all plans, you know, the one that’s $500 a month.

[01:50] Rob: Yup.

[01:51] Mike: So I [Laughter] have to do something about that but I look at that. Still trying to figure out what was wrong. I haven’t found it in the logs yet. So I’m still looking through that but otherwise things are going well.

[02:01] Rob: That’s — for the listeners, that’s altiristraining.com, right?

[02:04] Mike: Yup, that’s the one.

[02:05] Rob: Cool. So I’ve been wrestling with .htaccess rewrite rules in WordPress. Yes, so here’s the deal, all right. I have a blog, HitTail has a blog and it currently reside. It said hittail.com/blog and that’s great because it’s good for SEO, it brings people to the site, does all stuff. Problem is is that blog is about 300 flat HTML files because it used to be in Blogger and Blogger would export with FTP HTML files out. Google shut that feature down years ago and so the last time the blog has been updated is 2009. So I’ve imported all those in to WordPress, all the URLs have changed even though I had a contractor coming in and helping try to make the URL’s the same. It just — it’s virtually impossible to get everything working. So I said no problem, got to go in to .htaccess. For those who don’t know, it’s a way to have URL’s basically rewritten so they appear the same in the browser but it actually goes out to a different page and grabs the content and this should be no problem but WordPress doesn’t see it that way.

[03:05] So after — I mean staring at it for an hour and things not redirecting. If I create the flat HTML file there, it works great and if I use WordPress. It doesn’t work. It gives me a 404 when it goes to grab it. And it turns out that WordPress, it actually looks at the address in the browser. It won’t use the rewrite rules that are in the .htaccess. So I’m maybe going to have to hack the WordPress core like hack. It’s not — it’s like two to three lines of code to do it but it’s just one of those things you never want to do, right? Or I have to create a plugin so then I don’t have to hack the core. I have — I had someone writing blog posts and publishing them and Google just went haywire and was not indexing a bunch of stuff. So it’s been — been kind of the struggle.

[03:45] It sucks when things don’t work like you expect they should. I mean I know .htaccess rewrite rules just enough to be dangerous and I feel like I’m the same with the underpinnings of WordPress. Obviously I use the front end admin for all, you know, all my blogs and all the podcast and all that kind of stuff. But when you get under the hood and you start modifying, it’s not that I don’t know PHP and how to rewrite rules, what I have there should work but it’s the — it’s that interaction effect, you know, like which one is not working and why? And eventually after, you know, searching for quite some time on line, I’m so glad someone pointed out what the problem is because now like knowing the problem like, you know, actually shouldn’t be that, that hard to fix.

[04:25] Mike: I’ve dug into those rewrite rules before and I got to the point where I had so many of them because I imported my blog from subtext over to WordPress that I think that Apache was actually starting to choke on it a little bit and at some point, I just drew the lines so now down the heck with it and just [Laughter] let Google figure it out and if people —

[04:43] Rob: Yup.

[04:43] Mike: … have happened to sent it to the wrong one, oh well, there’s not much —

[04:46] Rob: Right.

[04:46] Mike: … I can do about.

[04:48] Rob: Yeah, I only have – I have about 250 rewrite rules right now but that should be a snap.

[04:54] Mike: [Laughter] It should be. It should be. Well the other thing I’ve got going is all the stuff for the AuditShark and I — I feel like I’m just buried under a code reviews because I — I review all the functionality that I send out to have developed and I got a list of like 30 or 40 different things that I have to sit down and review and they’ve been stacking up. So I’ve been handing out work and I haven’t had time to go back and actually review all of it. So my work load is piling up while they’re, you know, continuing to get through their work load and it’s just — it’s a nightmare. I get to sit down this week and really try to make a concentrated effort to get through those just because I don’t want to get too far ahead to the point where they have left that code for so long and I find the errors or bugs in it, then they’ve got to go back and try to work around things because maybe they implemented something completely wrong.

[05:41] Rob: Yeah, I agree. I think there’s a couple dangers with that. One, you get two to three weeks down the line and you kind of start forgetting what that code even does, you know, depending how complex it is, you can forget what you were doing. They’re just not as familiar with it as if you had gone back to them in a day or something. And then the other thing is you’re right, if you don’t make design decisions quickly and see that it’s something screwed up, then they just keep going with it in two or three weeks down the line. They’ve now made a bunch of more decisions that may not jive with what you want. You start outsourcing, you get multiple people working. It is a definite amount of work just to keep up and keep everything. It’s not even QAed. It’s just — it’s like you said reviewed to make sure it’s in line with what you expect out and to make sure that the code quality and the basic design decisions are off to snuff and that’s — that’s a non-trivial amount of amount to keep up with that.

[06:28] Mike: Yeah. It’s not like it’s two or three weeks worth of work. It’s more like five or six days, yeah, it’s just — it’s just hard keeping up with it.

[06:35] [Music]

[06:38] Mike: So one of our listeners sent in a blog article that he thought that we should take a look at and it’s called 12 Rules for Building Your First Profitable Startup and the person who sent it in is Rick. He’s from I believe Australia. He just said, “Hey guys, loving the show. I saw this article and thought the rest of your listeners might find value.” He gave us the URL on it and it’s on layeredthoughts.com. We basically walked through some of these thoughts on 12 Rules For Building Your First Profitable Startup and I thought we’d go through those 12 and see if there were some things that we could pick out and share with listeners.

[07:10] Rob: Very cool. So looks like the blog was written by the owner/founder of a site called SerpIQ, serpiq.com. It’s the ultimate — it bills itself as the ultimate SEO research tool outranked anyone with unmatched competition data. So that’s kind of the basis he’s coming from. So it’s look like it’s a bootstrap product. It’s a SaaS product, fairly low price point that is 29 a month, 59 a month, 149 a month.

[07:36] Mike: So why don’t we get in to the rules that he set out. And the first rule is to Sell something. And it’s interesting because I don’t know is that something I’ve never thought of. I think that one of the first things that comes to mind that most people will try to do is selling their time and expertise as consulting services and I don’t think that that’s what this particular rule is getting at. It’s getting to selling a product. And I agree. I think that that’s one of those mistakes that a lot of people make is they just they say, “Oh well, what can I sell? What would people find value in?” And you know, the natural answer to a lot of it is, “Oh well I’ve got this expertise in X. So let me sell my time and consulted services around X,” when what you should really do is probably try to build like a knowledge website like I did in altiristraining.com. You could also write an e-book. There is a lot of different ways that you could leverage your knowledge without necessarily selling your time directly for that.

[08:29] Rob: Right and I wouldn’t even read it as that. I don’t think he’s talking about consulting versus — versus products. I think he’s saying sell something meaning have someone pay you for something instead of building something like a social network. And I think that’s what he’s getting at because he kind of says in his intro. He says, “I’m running a profitable company. I plan to use it and the experiences and capital I am getting from it to slingshot myself into the next, probably riskier project.” And so he talks about unprofitable riskier ideas like Reddit or Facebook. And he says, “They’re great ideas to pursue after you have money in the bank and are not risking everything on your idea but until you reach that point, I think you should focus on ideas that, while smaller, can much more easily be made profitable.”

[09:10] So this is kind of, I mean this is what we’re talking about, right? This is the micropreneur approach. This is what that we talked about on the podcast. This is very much in line with that. And so I think that’s something to keep in my mind as we read through the rules is that they’re coming from that advantage point. And he said that the rules are to maximize your chance of success of your first startup, right? So it’s the first one and then after that, you can break these rules and go somewhere else. But I think with his lens in mind that he says, I do think that selling something is definitely the way to get started. All the products that I launched that haven’t sold anything, I have not been able to — to make much money from them. The only ones that I’ve ever made any kind of substantial money even my X hundred dollars a month have been more ads since websites. But everything else has been something worse. Someone actually gave me money in exchange for X.

[09:59] Mike: Yeah and then that’s one of the examples that he points out is specifically doing things where you’re making money from ads or affiliate marketing and things like that. You’re not actually selling anything. You’re making something off of directing someone to buy something from somebody else or you know, then those types of advertise that you really not actually selling anything at that point. So I think that’s a good one. The second one is Build a product your customer can directly or indirectly use to make money.

[10:26] Rob: Remember in my MicroConf talk, I talked about the four tiers of customer desire and I talked about tier 4 as an entertainment products and they’re really hard to market. Those are like games and social networks and they’re just — it’s kind of like if you get lucky, get on some hit list. You get popular, then yeah it goes big but it’s popular hit based in 99.5% of ideas and apps built along entertainment lines are going to fail and you’re not going to be able to do much about it. And then tier 3 is enterprise products and those are complicated products that have to really be sold. It’s high touch sales. Tier 2 is vitamin and tier 1 is aspirin. And I say are they sold on value, right? Because entertainment is not sold on value whereas aspirin and vitamin are sold on value. And just sold on value that phrase it means does it make someone money or save the money.

[11:14] That’s like a critical point. I feel like early entrepreneurs don’t necessarily focus on enough because we do see the big ideas of the Facebook, Reddit, LinkedIn that kind of thing. And without an enormous amount of funding in the bank, it is easy to make the mistake of not selling something based on value. So yes, I think this is a fundamental rule here and again, the rule is Build a product your customer can directly or indirectly use to make money. So I say it saves — saves someone money, make the money sold on value.

[11:42] Mike: Your MicroConf talk really ties a lot in to number three which is to Build a “must have” product, not a disposable “nice-to-have” product and that’s really, you know, as you said that’s aspirin versus vitamins. I mean vitamins are “nice-to-have” but aspirin is one of those “must have” products.

[11:57] Rob: Absolutely. An entrepreneur, I was — I’m still working with. He had a product that was a really good documentation system for developers and startups and open source projects and such. Problem is this documentation is “nice-to-have” and so what he found is that people would say, “Oh this is great but I don’t have time to do it right now but I’ll get to it like we all — I even said that. I was like, “Yes, I’m absolutely going to use it for DotNetInvoice and we could use it for HitTail,” but I never put my docs in and I basically advising him and was not using his tool, a tool that I could have use because it wasn’t “nice-to-have”. Now as soon as he’s now working on more of like a lead gen tool, that’s a “must have”, right? I mean everyone will pay for leads like it’s a total no-brainer. It’s the same reason that something like an SEO tool or any type of marketing tool or a tool that helps you get more work like proposal software, all that stuff is great because it’s at the front end of the process and it’s a “must have” and it’s obvious because everybody really needs more work.

[12:55] Mike: One of the quotes he has in here specifically relating to this is “Once your customer has started to use the product, they’ll be in pain if they have to get rid of your product.” And that’s — that’s a perfect quote for, you know, defining what is a “must have” versus a “nice-to-have”.

[13:10] Rob: The nice addition to this point is try not to add items to your customer’s to-do list. If your product adds items to their to-do list, try to figure out a way around that and that was one thing that HitTail used to do was add items to your to-do list because it’s basically said, “Here are some great suggestions. Now go build content,” and that’s what the article writing service has been successful is that it basically made it so if you do have a little bit of money, it’s 19 bucks for an article that we essentially give you something to do and then we can take that pain away pretty quick and you’re going to get a benefit out of it ultimately. Hopefully, making ourselves in your “must have” product. So rule number is Replace part of your customer’s workflow with a better solution and he basically says, “The easiest way to provide value to make it a “must have” product is to look at your prospective customers’ current business processes and identify steps or tasks of theirs that can be simplified, automated, or eliminated.” What do you think about that?

[14:06] Mike: So I think this is an interesting one because if you are highly focus on specific portion of your customer’s workflow and identifying what the pains are and then trying to simplify automate it or eliminate those things, then it seems to me like that is essentially a no-brainer. I mean it almost falls back in to rule number there where you’re building a “must have” product versus a “nice-to-have” because if you can eliminate that pain and make that stuff go away is part of their workflow process, then that tool becomes invaluable especially if that process or that portion of their workflow is something that takes two days or it’s just something that is just so — something that somebody does not want to ever have to do.

[14:48] So you know, like for example matching up your transactions from your bank account with your checkbook. Nobody wants to do that. Nobody likes doing that but it’s one of those things that is almost a necessity in order to figure out that, you know, how much money you have and you know, whether your bills are paid and whether people have been paying you. And so that’s one of those things that, you know, there’s a lot of software tools out there that will do that kind of thing and it becomes essentially a no-brainer for somebody to buy that because it makes that portion of their workflow better. I mean it makes it so they don’t have to resort to pen and paper to do it.

[15:19] Rob: Yeah, this one really comes back to makes someone money, save the money, make them time, save them time. One of the ways to do that is to replace part of a customer’s workflow and a better way to do it.

[15:29] Mike: So rule number five is to Have a “no-touch sales process”. So this is one of those things if were you have a “no-touch sales process”, I mean you probably have a website up there and people are coming to your website and they don’t have to wait for you to do anything. They could essentially just they can be in their pajamas and you know, at 2:30 a.m. as he points out that it can just, you know, go to your website, buy whatever it is that you have to offer and walk away and you don’t have to even be involved. And a lot of that actually has to do with automating your system from beginning to end so that you don’t have to be involve in any part of the sales process.

[16:03] So that includes putting documentation out there, putting your marketing, collateral out there. Making sure that you have trials or demonstrations of, you know, how your products work so that they don’t necessarily have to ask you questions if everything is available to them and you are walking them through that sales process, then you don’t have to be involved. And that’s kind of a sweet spot in terms of being able to run a business because the less you’re involve in that front end sales process, the more you can be involve in the back end stuff that can be done in your own time as oppose to doing that on the customer’s time.

[16:35] Rob: Right and I had to add something to this that have a “no-touch sales process” set up but be willing to do low in medium touch sales like that is such a benefit over if you have competition in the niche. If they’re not willing to jump on the phone with the customer to even exchange like detailed e-mails and answer questions. I’ve e-mailed some SaaS apps and typically it’s the lower price ones that are trying to compete on price and don’t really want to support the app and I’ll e-mail them questions and let’s say, “Oh that’s an RFAQ,” and they just link to the FAQ top line, right? So I have to now search through it and that’s fine but I’m going to be much less likely to go and use their product if there is a competitor out there who is willing to engage with me and basically act like a real person and so that is something that I’ve been pretty out and about. It’s like if someone e-mails us with the question, we don’t just point them to the FAQ. We do mention, “Hey, this, you know, this is answered — you know, FAQ along with some other stuff but here is your answer,” and we will type it in.

[17:27] So it takes a little extra time but it becomes then a low touch sales process and in addition probably been on the phones between six and a dozen times with potential customers who either have questions they want to know about. Typically I try not to get on the phone with a, you know, a $10 a month prospect but sometimes I do. Yeah, having those willingness to just step up a little bit since, you know, if your lifetime value justifies it if you’re not selling some 10 or $20 flat line product, I think having a “no-touch sales process” is awesome and it’s very efficient but being willing to step out of that when needed can be very profitable for you and it can also just be a very good experience for your customers and you can start building relationships with key customers.

[18:07] Mike: So a lot of what you said just reminds me of a recent article that Patrick McKenzie wrote that talks about SaaS applications and selling to enterprise customers and if you are in a market where there is a lot of large players and the potential customer that has e-mailed them and let’s say there’s a field of five or six different SaaS applications that the customers are evaluating. One of them goes to these really large vendors and they look at the deal size and they say, “Well that’s probably only a couple of thousand dollars on a yearly basis and so it’s really just not worth my time. I’m going to fire off, you know, one or two sentence replied to it,” and you know, there’s just really not engaging the customer where you have an advantage if you are small because probably to you 2 or $3000 is probably a large deal. So you can spend the extra time and effort to engage those types or customers and gee, you probably don’t want to do it all the time but if you have all the things automated, then it allows you that flexibility to start answering some of those that to you are a much bigger deal.

[19:07] So rule number six is to of your Build something that can scale independently staff. And I think that says builds a lot on the “no-touch sales process” so that if you can build something that scales independently, it means that you don’t have to do more work the more customers you have and most softwares are like that. I mean most software products if you’re running a website where you have a subscriber or any sorts of SaaS application typically fits this mold. Don’t get me wrong. There are times when support costs would kind of creep in and the more customers you have, the more support calls you’re going to have to answer and support e-mails you’re going to have to answer but you know, in the reality is that your sales can scale much, much higher than your support cost are going to arise. So if you have a hundred one or a thousand one in terms of your customers to support e-mails or support request, you can have a much smaller number of people filling those support request in, you know, the number of customers that you have and you know, this is certainly the model that you want to follow.

[20:04] What you shouldn’t do is something like groupon where you have to deal with a lot of different people. You have to have a lot of people involve in the process and whenever you do one thing, it doesn’t matter what it is, if there’s a lot of people that have to be involved in it, it just makes your entire business so much more difficult and this is exactly the reason why consulting businesses don’t scale very well because, you know, you’re trying to keep those people busy but if they’re not busy, you’re losing money. And you know, if they are busy, you — it’s very hard to pull them off of any given project to have them work on something else even if it is is more important.

[20:39] Rob: Yeah, I think this is a no-brainer rule, right? I mean this is why we’re building software products is to build something that scales. If you’re not planning on raising that money and you really want to bootstrap and you really want to pull a proper company, then I mean this is no-brainer. This is everything we suppose where you build something that could scale independently of your staff, a new software to scale that basically. So rule number seven is Avoid products that rely on a community to exist and grow. The bottom line is don’t build a product that’s value is dependent on something that’s out of your control. And so this is a great example of Facebook, eBay, Reddit. So Google would not be an example of that, right because if you build a good search and you don’t need a bunch of people using it in order for it to have value but anytime you have that two-sided market problem and we had a few people write in and ask about ideas they have to deal with that, it’s not that it’s unsolvable, it’s that it makes it a lot more complicated.

[21:30] So if you have experience building a community or you know how you’re going to get one side of it like once you get one side, typically you can convince the other side to come. So if you really get it say SEO and everybody is searching for, you know, a particular thing and you know that you can rank for that, you can build one side of that community pretty quickly and then basically you do outbound marketing for the other side. You can typically charge a lot more for that, that outbound side if you get one side of the coin. eBay is a great example of that. Once you have a bunch of buyers there, then sellers are going to flock to it, right? And so you could even go out and individually start inviting sellers and as long as you charge them enough, it could be — it could be worth your time doing it.

[22:09] Mike: I mean one of the things that comes to mind here is that how well that applies to things that our usage base. So example anytime your revenue depends greatly on the amount of usage that something gets, I wonder how much trouble that can get you in to. So for example, Google, don’t get me wrong. I think they’ve got a great search engine but they make money from people clicking on those ads and their revenue is at the very least indirectly tied to to the number of people who use their search engine and what makes me wonder about that is that let’s say that people decide that I don’t know DuckDuckGo is the next best search engine and they start using that instead and Google’s search traffic starts to go down and maybe goes to DuckDuckGo or you know, God forbid, Yahoo but their search engine results, you know, if these number of searches going through their systems start going down and then their revenue starts going down, I don’t know if there’s a lot that they can do about changing that. I mean there’s no amount of marketing that is going to fix that problem. It’s not as if they can really turn that ship around very quickly.

[23:10] Rob: But that’s not what he’s talking about here like Google if they started losing users, they would have a linear decline. If they get turn few eyeballs they get X percent fewer revenue but think of something like Friendster or Myspace like once people started leaving, it was an exponential decay. Just like there had been an exponential growth. There is tremendous value in their being a community there and if a community is not there like imagine going to Myspace having only ten people on Myspace versus there are being 10 million. Or Reddit is a great example, right? With zero people there, it’s a worthless site like you can’t do anything. You’re not going to stick around. Google, it doesn’t matter. It is a linear scale and Google is like any — I mean HitTail or AuditShark or any of those, if we started losing customers, we’re going to decrease linearly. We don’t need a community of people to support it whereas Reddit, Facebook, LinkedIn, any social network, any social news site, even any like — like I said eBay, two set of marketplace sites like TechZing is doing — the two guys are doing AnyFu. Like they have a two set of marketplace problem —

[24:15] Mike: Yeah, that make — that makes a lot more sense. I gues I wasn’t — I didn’t quite follow his train of thought on that. It applies more to those communities where you do have that — you rely on a network effect. So rule number eight is to Build a specialized version of an ordinary product targeted at a niche you’re acquainted with.

[24:31] Rob: I know it’s like an entire lesson-based in the Academy and I think it’s an entire chapter in my book of like why you must go niche. That’s like the exact phrase.

[24:41] Mike: Yeah, I totally agree. I mean it just seems so hard to conceptualize the ability to go after something that you’re — you’re not acquainted with and I mean all the big businesses that are out there I think are taken unless you’re going after angel or VC funding and you have the ability to take giant risks. And I just don’t think that for somebody who’s aiming for a much smaller business or you know, a smaller launching point is going to be able to find some big business that nobody’s ever uncovered before. So niches are definitely the name of the game and you know, the easiest way to build a business is to find a niche within an existing business and — and just tackle that one tiny slice of it. And if you focus on it, I mean you’re going to be able carve out kind of as much as you want while you’re focus on that one niche and you’re going to be able to carve it up from whoever else is out there. Because you’re focus on it, they’re looking at the broader market saying, “Well sure we could compete there but we do all of these other things that that company doesn’t do. We don’t really, really care about them.” And I think it’s just definitely a great way to go. I think that anybody can successfully take this strategy and go to market with them.

[25:46.] Rob: Right, there are so many benefits of going niche. One, there’s less competition in niches. That means typically the marketing is just not as good. So if you’re a decent copywriter and you know just something about paid acquisition, SEO, social networking like typically in a tight niche, there often is no one doing that. And so there cheaper clicks to be had. Typically the products are not as matured. They don’t have as many features. If there’s a market serving this market at all, word of mouth is big like if you get in to a niche like counter top installers or electricians or, you know, they talk to each other. So if your product really does serve that niche well, then word of mouth will take effect a lot quicker than if you have a horizontal product that’s going across an audience of 10 or 20 million people.

[26:31] So rule number is Don’t avoid competitors. The author of the articles says, “Competitors are a good thing. Why? A competitor with customers is a market validator. So what does this mean to you? It means you don’t have to spend your time and money finding out if anyone will actually buy your product.” And then he actually has a whole other post called Competitors Are Awesome You Dummy that he links to. He says, “To piggy back off of your competitor’s efforts in finding the market and then kick their ass by building a better product.” Any thoughts on this one?

[27:01] Mike: I agree. I think that the market validation piece of this is probably the most important part. If you’re building the product from the ground up and try to figure out whether there’s a market for it, it’s a lot easier to validate that there is a market for it if there’s already other products out there that people are paying for and that’s the — that’s a single easiest way to do it. And I can’t think of a better way to be perfectly honest. I mean you sure you can do a lot of market research and you can put up a landing page and try to get signups and show people what it is that you’re trying to build but at the end of the day if you’re not solving the problem, then it doesn’t really matter. And if you have other people out there who are already solving the problem and are already charging people money to solve that problem, then you know that you’ve got a product you can probably sell to people.

[27:41] Rob: I don’t think you should specifically always avoid competition but I also think that jumping in to a market that has a specific competitor that does basically the exact same thing you want to do is tough because just building a better product is not necessarily going to get you the customers. I think the more important thing is not that you can build a better product, it’s that you can out market that competitor. So if — I wouldn’t say don’t avoid competitors but I’d say don’t avoid competitors who have crappy marketing or you can see that they don’t know how to do X, Y and Z, you know, all the marketing approaches we talked about or you can see that you out market them on a number of levels. Really consider avoiding competitors in a niche where these guys really know what they’re doing and where they’re kicking ass with content marketing and where they’re doing a great job on their blog and they’re be in touch with people on Twitter and they’re just responsive and they’re known and they’re doing an excellent job of customer service and they have — even if they have a crappy product, if people are using it, I don’t think that just building a better product is enough. In fact I know it’s not enough. You have to be able to both do that and out market them.

[28:41] Rule number ten is Never compete solely on price and he says, “That’s because pricing your product as the cheapest solution simply so you can market it as the cheapest solution is a great way to go down in flames.”

[28:53] Mike: I couldn’t agree more. One of the things that delayed my training site launch over the weekend was I actually doubled my prices so I had to change all of the pricing plans.

[29:01] Rob: Nice.

[29:02] Mike: And obviously, I think that it will pay off for me on my particular site but I think that competing on price, when you compete on price, there’s only one direction to go with your price and that’s down. And I think that the race to the bottom is the race of who’s going to run out of money first. I mean I don’t think there’s any good way to win when you’re competing solely on price and you know, with software you don’t want to be the bottom on the barrel. You don’t want to be selling the product that everyone looks downs and says “Oh, that’s just a crappy thing that, you know, anybody can get,” or you know, it’s — the cheapest thing in the market, but if you’re going to afford it though with this other thing because that’s the premium one. You want to be positioned as a premium solution if you can and you know, that’s not just because you get more money for it but because you’re seen as the premium solution, you’re also the top of the line and people want top of the line. They may not necessarily always be able to afford it but it’s what they want.

[29:53] Rob: Yeah, when you’re charging more, you can afford better support, you can afford to build more features, you can afford to pay more to acquire customers which means you can invest more in your marketing and you can out market people. And so actually WP Engine is a great example of not competing on price, right? He’s going in the opposite direction. He actually found the middle. There’s a bunch of really cheap WordPress hosting and there are super expensive WordPress hosting and WP Engine is in the middle. And he’s — their fee is their competitive advantage. Yeah, it’s about going out market. I think, you know, the next — if I went up doing another — building another product after HitTail or acquiring something, I’m going specifically go after something that has a high price point. I see tremendous value in finding an app that provides enough value to build at least 49 bucks a month and ideally, a 99 bucks a month for the lowest plan.

[30:45] It just makes a lot of sense to me and you can grow a business so much faster doing that even though you will need low to medium touch sales and you will need to have more features and have really good support. And you do a lot of things that if you’re charging $9 support that you don’t need to do but you’re going to have a more long-term customers and you’re just going to be able to get and keep customers a lot easier. So that’s like a basic criteria of my next idea is to kind of a minimum price point in mind and then design the entire product around that assumption.

[31:13] Rule number eleven is Build something that you know can exist for at least 2 years. He says, “Most startups hit their sweet spot at about 18 months. There are exceptions. But don’t pick a fleeting idea for your startup. Don’t try to capitalize on something trendy. Oftentimes the most boring niches and products are some of the most profitable.” So I think that’s a section of my talk. It’s why boring products are more successful. I think a good example of not doing this is building a business on well it’s something trendy like you said like Pinterest. We don’t even know what if you built a business on like Myspace and they kind of went away. We’re pretty sure like — is Zynga — Zynga stocks down to $3. If you built that something that integrated with Zynga or they’re kind of made money off Zynga, that’s a tough game, right? What is really the longevity of an integration with Facebook if you’re — because Zynga is like what? 5, 10% of their revenue? So if brings in that much and it’s like how long – Facebook couldn’t allow that to happen, same thing with building on Twitter.

[31:13] They post some of their developers over the last year or two is they solely clamp down their API and although — I mean you could kind of say because Twitter is shifting, right? I’s — I don’t know if I’d say it’s trendy but it is like a fast moving startup and they’re — some people are getting kind of caught in the wake and — if they built an entire startup and now they’re basically, you know, are shut down based on moves that Twitter has made.

[32:31] Mike: Well I think that all of the things you just said, I mean all those kind of talk about finding something that, you know, can exist for at least two years and all the boring things that, you know, like billing applications and software for auditing servers and things like that. I mean any sort of training materials for products that are not going to go away, those things are going to have, I’ll call them a shelf life. Anything where that business is going to stick around for the next several years and you know that it’s going to, those are the types of things that you would probably want to target for your first business. Now if you’re looking to kind of ride the wave, yeah, Pinterest might be a good option, Twitter, Facebook, those kinds of things, sure, you know, you can certainly make some money and you know, turn a quick buck but does not that mean it’s just long-term sustainable business.

[33:17] And the answer isn’t necessarily yes or no, it’s just that it’s a risky proposition and I think that that’s really what he’s trying to get out. It’s just that, you know, if you pick something that you know has a shelf life at least two years, then it’s something that you not only have enough time to invest in it and turn it in to a viable business but you also know that fundamentally, things aren’t going to change so drastically that the business has no shot 18 months out.

[33:43] Rob: So rounding this out, rule twelve is Don’t plan for exits or VC money. He says, “If your business plan includes the phrases “get acquired” or “raise a big round”, stop reading TechCrunch and rethink what you’re doing. Focus on selling your product for a profit.”

[33:57] Mike: I don’t know as I would say don’t plan for exits. I think I said on the last episode. I mean my main intent for the Altiris Training website is to eventually probably would sell it off. And you know, I see it as a means to an end. It’s not necessarily something that I’m going to hold on to long-term. So I know what eventually is going to come out of that but, you know, that doesn’t mean that I’m planning to sell it. It’s not — it doesn’t mean that I’m saying, “Okay, well I want to do this so that I can get it sold,” or “I’m going to do that so that I can get it sold quicker.” That’s really not — intent. I don’t think that I’m intending to build it up in to a sustainable business so that I can — get a better price for it down the road.

[34:35] I kind of see where he’s getting out where he says, “You know, focus on the business. Focus on selling your product for profit,” I do agree with that but I don’t think that you should preclude looking down the road and saying, “Is this something I want to do long-term or not,” because things change. I mean, you know, don’t get me wrong. You could certainly change what your thoughts are on it in a year or two. I mean I start making a hundred of thousand dollars a year from the training website and I say, “Okay. Well, you know, that’s great. I’ll hang on to it for a while longer.” But I don’t think that’s going to happen. I’m going to build it up as a business and you know, contribute the videos to it and just kind of hopefully, put the marketing and things like that on autopilot and you know, gather subscriber for it.

[35:14] Rob: Yeah, I have to agree with you on this one. You know, rule number twelve is Don’t plan for exits or VC money, that’s just not a rule for me, right? It’s like I think that here’s a big difference between planning for an exit and making foolish decisions, building a shutty product, not providing support, just trying to grow fast, fast, fast with the hopes of selling out to Google like there’s responsible and irresponsible ways to plan for an exit and I feel like with every app that I work on, I always plan for an exit even if I don’t plan to sell it. Even if I’m only up for seven years, I’m always planning for an exit because that makes your product more valuable. The more you’re able to streamline, to automate, you know, everything from the marketing to the support, to the sales, to development, the more you’re able to outsource and get things out of your hands, it actually makes the product more valuable to you in the short term but it also makes it a much better acquisition target if someone were to want to buy it and it’ll makes — it makes more valuable if someone makes you an offer.

[34:35] So I don’t fully agree with this one. I mean I do feel like you should — you should always be planning for an exit. But when he says this don’t plan for an exit, I think he means don’t plan for an exit in the way that a lot of people foolishly, you know, build a business that can’t possibly sustain itself and they’re losing money just because they — they want to build it in order to — to sell it to someone.

[36:31] Mike: Cool. So any other thoughts on rules that should probably be added to this list though? I mean, you know, obviously there’s only twelve here but, you know, do you have any that you can come up with off the top of your head that might be worthy of inclusion here?

[36:44] Rob: Yeah, I think you have to do things that don’t scale early on and then figure out how to make things scale later on. I think that’s a pretty good rule. I don’t know if anyone who’s scale up a business who hasn’t done that. I also think that you needed to track some key metrics. I don’t know anyone who’s built a successful business who doesn’t track and focus on growing key metrics. I don’t think you can just stumble through in the darkness and manage to build this great product that’s suddenly as magically use by everyone. I know that maybe the dream of those of us who like to build products but it’s not the reality and it can never will be spend more time on marketing than you think you need to and spend a less time on development than you — than you think you need to because we as developers are going to tend lean towards making a gorgeous product and making everything perfect and making every line of code perfect and that doesn’t necessarily get people in the door.

[37:35] Mike: I think the one I would add is talk to your customers [Laughter] because —

[37:39] Rob: Yeah, there you go.

[37:38] Mike: … there’s not one thing in here about customer development and I understand the view point where this is coming from where it’s, you know, how to provide a set of rules for, you know, people who are trying to build their first business increase their chances of having that product to be successful but there are lot more things than just these twelve rules that go in to it and talking to customers and making sure that you have something that’s profitable with regard to your time is certainly something you really need to pay a lot of attention too.

[38:06] [Music]

[38:09] Rob: If you have a question or comment, you can call it in to our voicemail number at 888-801-9690 or e-mail 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 this podcast in iTunes by searching for Startups or via RSS at StartupsfortheRestofUs.com where you’ll also find a transcript of each episode. Thanks for listening. We’ll see you next time.

Show Notes

Transcript

[00:00] Rob: On today’s episode of Startups For The Rest of Us, we’re going to be talking about how to create training screencasts for your VA’s, subscription billing, launch day tactics and answering more listener questions. This is Startups For The Rest of Us: Episode 91.

[00:14] [Music]

[00:22] 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.

[00:32] Mike: And I’m Mike.

[00:33] Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What is the word this week, sir?

[00:39] Mike: So I have my first official early access customer for AuditShark and I’m in the middle of trying to get a conversation going with a Fortune 500 company who might be willing to give it a try.

[00:51] Rob: Nice. What does might be willing to give it a try mean? Do they have contact with you? Have you approached them? What’s on the conversation?

[00:57] Mike: Somebody gave me an introduction. It was just an introduction. We haven’t actually discussed anything but he said that it was via e-mail that my product sounded interesting. So he kind of wanted to hear a little bit more about it. So I’ve sent him some more details via e-mail and we’re just trying to sync up right now in a good time to chat over the phone to discuss what their needs are around the products and whether or not it’s a good fit and if so, then maybe we can work something out where they’ll sign under the early access program and go from there.

[01:26] Rob: Cool. And then you said you have your first official early access customer. So that’s someone who’s agreed to kind of be like the pre — pre-beta?

[01:32] Mike: Yup, we’ll see how that goes. I already had a phone discussion with that person and you know, they’ve got a bunch of servers that they want to start auditing and we’ll discuss exactly how it works and the fact that it’s a — essentially a one-click option is kind of a selling point for them. I mean they were looking for ease in and the way that I presented that and the way that it’s going to be presented in the software is when you sign up, you really don’t have to do much other than install the software on your servers and it just automatically goes and starts doing its thing for them and shows you things that it thinks you should do something about.

[02:06] Rob: Right. So is it true that we are now five weeks away from the AuditShark beta?

[02:11] Mike: Yeah, from the early access, yes and I’ve got two weeks off at the end of August to essentially kind of buckle down and make sure that everything is going well and started to get excited about it. We’ll see how things go.

[02:22] Rob: Cool, looking forward to it. So I have been scaling up my ad buys. I’ve been doing mega paid acquisition for —

[02:30] Mike: Really?

[02:30] Rob: … SEO customers. Yeah.

[02:30] Mike: Isn’t that what we advocate against?

[02:33] Rob: No. [Laughter] No, actually well that — so that’s the thing. Once your lifetime value is high enough, if you can find streams that will scale that have low enough cost per acquisition. And I’m a hardy advocate of anything that gets you new customers for a lot less than they are worth to you during their lifetime.

[02:52] Mike: You sound like a venture capitalist.

[02:53] Rob: Yeah, right.

[02:54] Mike: [Laughter]

[02:54] Rob: As I plug money in this side, money come — more money comes out the other side. It’s been fun though. In the past, I’ve definitely done — I mean I’ve done all, you know, the GAM at the Google AdWords and the Facebook and all that stuff and I’ve had success with it but not to this degree. I think HitTail is just at a different level. I mean HitTail is just, you know, it’s a different app. It’s a different animal, in most of the stuff I’ve done in the past in terms of upsize. So it’s nice to be somewhat horizontal but what I found is that when I target things out of a niche that where people are going to know what SEO is automatically, the conversion rate is terrible and it’s not that I couldn’t educate them but it’s just their not going to click through and signup for a trial for something they don’t just get right away. So at this point, the conversion rates are quite good when I stick to people who know — who already knowledgeable about SEO topics.

[03:41] Mike: Man, is that direct your paid acquisition strategy in terms of who you’re targeting?

[03:46] Rob: Absolutely. So I’m doing, you know, both banner ads to buy sell ads. I’m using well, cash. I’m probably using six different networks right now with varying degrees of success and it’s pretty obvious. I mean, you know, when you do this stuff, man, you got to get the goal tracking in there. You need to use the Google URL creator that allows you to see specifically which ads are performing better for you. So even though I have probably have 25 different ads running right at this minute and I’m constantly cycling them in and out, I know which ones, it’s not only which ones are sending me traffic but which ones are actually converting in to trials. And that is absolutely critical. It sounds like a no-brainer, right? But it’s — it’s a bit of work to set that up but it just makes it so I can now turn off all the ones that aren’t working and just basically 10 X my span all the ones that are working.

[04:31] Mike: That’s cool. So hopefully —

[04:34] Rob: Yeah.

[04:35] Mike: … the 10 X span will equate to a 10 X sales but…

[04:38] Rob: So far I haven’t  hit10 X. I have 3 X since I started and it has allowed 3 X to trials. So you know, it’s a 30-day trial. So I don’t actually know. I mean I know my standard trial-to-paid conversion and assuming that that holds true, I’m doing pretty good. Somehow I’m happy with it. I’ll put it that way. It’s nice to find something that’s somewhat scalable. I mean I have this, you know, I’ve talked a lot about this 11-page marketing plan that I put together and all that stuff is great but some of it is stuff that’s like infographics and guest blogging and that kind of stuff that’s just — it’s very time intensive. It’s not going to let your business basically grow infinitely where you can kind of step back. I have to be involved. Even if I’m outsourcing, I outsource the infographics production, I still have to be integrally involve with each of the steps. Paid acquisition I’m realizing is a lot more time intensive than I think I had realized but I still — I will outsource that eventually but it is something that I can really outsource and step away. And I could — if I can find someone who can run it, run it well and I’ve already started the conversation with someone.

[05:33] Mike: Well I think you could probably set up parameters around that such that if it dips below a certain point then —

[05:40] Rob: Absolutely.

[05:40] Mike: … you just say, “Look, we’re going to pull the plug on this,” but you know, just kind of set those numbers out there and either publish them to the person you put in charge of it or you just kind of —

[05:48] Rob: Yup.

[05:48] Mike: … watch them out outside of that.

[05:50] Rob: No, that’s absolutely. The guy I’m talking to I basically I’m like here’s my cost per acquisition I can go to. Here’s what I need for, you know, who I can pay for a trial. Here’s what I’ve been getting for clicks. I show them everything I’ve been doing because I want them to take it out and then expound upon it and do a better job with it.

[06:03] Mike: Are you using Google AdWords at all for that?

[06:05] Rob: So that’s the — that’s the kicker, right? You would think that Google AdWords would be the best thing. They won’t allow me to send traffic from AdWords because we guarantee that you will — that you’ll get an increase in search traffic and we’ll refund your money if we — you know, if we don’t. But they are like, “Nope, you can’t do that.” You can’t make what they — and seriously, in the — in the e-mail it’s called site policy, you can’t make outlandish claims about guarantee and it’s a boilerplate, right? I didn’t write specifically for my site but I mean they’re obviously guarding against like this — this fly-by-night internet marketers definitely. You have to include what the — the average person or what the typical result is and I wrote back and I’m like well the typical result is the people increase their organic search traffic like I said and that way, you can’t guarantee that without like a big asterisk and some other stuff.

[06:51] So at this point, frankly, I’m not the site converts really well the way it is and I’m not about to start messing with headlines just to get AdWords traffic yet because I have other sources that are working well enough. So I’m going to stick to those focus to those and keep focus on them and if I burn through them, then I’ll look at, you know, messing with my site. But that’s a whole other — it’s a whole other deal, right? Then I have to test headlines and make sure the conversion rates stay and there’s a lot of work to go in to there so I don’t just want to — want to start mess with it because Google asked me to.

[07:20] Mike: It’ too bad that you’re not using Google AdWords for that because I was going to thank you for the check that I got from Google. [Laughter]

[07:28] Rob: What did they send you?

[07:29] Mike: So I got, I guess Google had some class action lawsuit against them for AdWords but I have a check like in my hands from Google for some AdWords that I’d done a few years ago and it says, “Pay to the owner of Moon River Software. $0.17.”

[07:48] Rob: Now you can get that operation you’ve always wanted.

[07:50] Mike: [Laughter] It just boggles my mind that they have to send me a check for less than it cost to probably to send this. The other thing I’ve got going on is I’m relaunching my Altiris Training website this coming Monday. I’ve talked a little bit about that probably about two months ago or so. My —

[08:05] Rob: So Altiris is software that Symantec built, right?

[08:08] Mike: Yup, so I do a lot of consulting around that and a long time ago, I said wow, you know, it’d be really nice if I could kind of translate this knowledge and not actually have to go to talk to people and instead just either have them subscribe to a newsletter or mailing list or video website or something like that. So a couple of months ago, I had — I had mentioned that I was messing around and accidentally launched a new product in it. I put the Altiris Training website out there. I recorded a couple of videos but I hadn’t done anything too serious with it and over the course of probably about a month to a month and a half, I’ve kind of done all of the analysis of the niche and said, okay, well how many — how much traffic do I expect to get and what’s my signup rate going to be. And I figured that I only get a couple of a hundred visits per month. So it seems kind of low to me. I wasn’t real sure whether or not that — that would really get any traction where the people would, you know, really start converting very well for it.

[08:59] And what I found was I actually got a fair number of people signing up for it. It was actually probably two to three times what I had expected and people were paying me money and in which every single person I had to refund their money because I really didn’t have a full-blown website for them. So what I do was I sat down for about 8 hours and scoped out an entire site design and handed it off to a developer who implemented it and everything is kind of come in together right now. I’ve got Wistia on the backend to run all the videos and do the analysis for the content the people are viewing and I’m going to be sending it off in Excel spreadsheet to my VA here pretty soon and she’s going to go upload all the videos and put them in a Wistia and format them on the website and hoping by Monday, I’ll have the website good to go or I’ll just going to send an e-mail out to the people who’ve signed up and see if they’re willing to basically pay me again because again, I had to refund all their money through PayPal. Now I’m doing everything through Stripe because they’re a lot better when it comes to subscriptions and dealing with those. I don’t know. I’m looking forward to it. It should be — it should be pretty good.

[09:59] Rob: You are a shining example of outsourcing. It sounds like you pretty much outsourced everything except for making the videos.

[10:05] Mike: Yeah, the videos themselves, I spent some time doing them. I’m trying to think I’ve got — I’m up to 19 videos now. I should have 30 by Monday and of those 19 videos, I probably spent — I’d say I’ve spent 3 to 4 hours setting up the environment to create the videos and then after that I probably spent maybe 4 hours for those 20 videos and like my time to record is going down dramatically for each video. I mean some of them it’s just one pass through and boom, I’m done. So in a 3-minute video, it takes me 4 minutes to actually record it because I just have to double check some things. But yeah, I mean the vast, vast majority of this thing has been outsourced. I haven’t done hardly anything for it.

[10:45] Rob: Sweet. Well, good luck with the launch. It’s —

[10:47] Mike: Oh thanks —

[10:47] Rob: It’s four days away.

[10:48] Mike: I’ll definitely keep everyone posted on how that’s going. I mean I look at it as a way to short term kind of get me out of a consulting. Once I get far enough along with AuditShark, I’ll probably look to start selling it because I don’t really want to be creating these Altiris videos every week.

[11:02] Rob: Right. So you see it as building an asset for now to generate some income but it’s not a passion thing and —

[11:08] Mike: Yeah.

[11:08] Rob: … laid hold down the line once you’ve, you know, left consulting and that kind of stuff, you know, AuditShark takes off or your next project. Cool. I have three quick things I want to run though. One is HitTail update. July was the best month ever for HitTail and actually grew by several thousand bucks in recurring revenue per month and that there are bunch of things that went on in June that sent a ton of trials and then they all converted in July. So that was — it wasn’t new. I was — I knew that was going to happen but I was very excited to see the numbers grow. I also had — somehow ordered $1000 worth of articles.

[11:42] Mike: Wow.

[11:43] Rob: Okay? Yeah. Now my margin is 50. It’s about 50%. I was shocked. He e-mailed me directly and said, “Hey, I want 66 articles,” or whatever the number was and you know, he asked for quote and stuff and I had my VA get it done. So it was — that was part of it, right? I was part of when — when the bump will be big and you know, won’t necessarily be in August but it was a nice one. So HitTail is scheduled to pay back its original purchase price in August assuming you have a, you know, close to the month that I had in July.

[12:13] Mike: Cool.

[12:13] Rob: Yeah, that’s so cool but it doesn’t include improvements, you know, obviously all the time and money I’ve spent since then but it’s just the original purchase price itself.

[12:21] Mike: Right. Now, did you ever end up landing that enterprise customer that you talked about? You did a lot of I guess foreign character —

[12:28] Rob: Chinese SEO. So no, I didn’t and I’ve — I’m still e-mailing with him. It’s been —

[12:32] Mike: Oh —

[12:32] Rob: … like two months probably and I e-mailed with him and he says, “Oh, we just,” you know, it’s typical, right? It’s a long sale cycle thing and it’s an expensive account and he says, “Yes, I really want to try it out but other things are going on.” Now, I have been in talks with two or three other enterprise customers from – for me your enterprise customers. They’re tripled — below tripled digits per month. That’s — it’s fairly exciting because HitTail is, you know, typically 10, 20, $40 a month plan. I’ve been in contact with — with three of them. I had phone call with one of them. So there is some, you know, kind of medium touch sales going on here which — which is totally worth it once you get above that — that $99 price point per month. So I’m excited about it. None of them have converted. I had verbal commitments from two of them. One guy I guess we’re — we’re going with it, just have to, you know, get it through and get the code installed and all these other stuff but no money as of yet. But that would be nice, that would be nice. I will bump when it — when it comes through.

[13:24] Mike: Cool.

[13:25] Rob: The second thing is you haven’t checked out Techzing episode 200. They did a special episode. They got the Techzing wives on the show to tell all. It was hilarious and it was — Justin’s wife, Jason’s wife and actually my wife, they got Sherry on there. So the three of them just have a blast talking and kind of roasting —

[13:44] Mike: [Laughter]

[13:44] Rob: … their husbands. It’s pretty cool. So yeah, I definitely — definitely recommend it. I just listened to it yesterday. I was dying. There are some pretty funny moments that I think will all resonate with us.

[13:54] Mike: You didn’t get to control over any sort of the editing process?

[13:57] Rob: No.

[13:58] Mike: No?

[13:58] Rob: No and I listen to some of it and I was like, “Oh I can’t believe she said that.” One of the things Jason’s wife Sandy said was that he’s in to the Bachelorette and she’s like “He’s going to kill me for saying that.”

[14:07] Mike: [Laughter]

[14:07] Rob: And I was like yes. If you look actually the actual comments on the episode on techzinglive.com, there are some — some other cool summarizations of the funny moments but definitely worth the listen. It’s, you know, as usual it’s an hour and 45 minutes or whatever but it’s a good one. The last thing is I stumbled upon this show on Hulu but it’s called Start-Up Junkies and it follows Earth Class Mail. It’s like a reality show following the, you know, workings of Earth Class Mail getting started and raising funding. It’s pretty freaking interesting and I think they are like 30 minute show and there’s only eight episodes. So I don’t know if you need Hulu Plus to watch it or if you can watch it with the non-paid plan but again, it’s not something you watch to like learn — to actually learn actionable tips, it’s just entertaining and it’s cool to see the stuff they’re going through and how they have to define everything like they’re just in phone conversations talk about venture capitals and then like this popup pops on to the screen and it’s says, “Venture capital,” quote in “Funding raise from people who want to high rate of…”, you know, they have to kind of make it a lay, layperson appropriate stuff.

[15:07] Mike: Layperson finally, you know.

[15:08] Rob: Yeah.

[15:09] Mike: Interesting.

[15:10] [Music]

[15:09] Rob: We have a bazillion questions, questions seem to be coming in faster than we can answer them so we — we’re actually not — we’ve stopped answering all the questions on the air. Some of them we answer via e-mail. I did want to ask folks when you send a question in, try to make it as detailed as possible while keeping brevity in mind. So keep it short but keep it detailed because I’ve finding as I’m listening back to some of our answers, we have to say, “Well the guy didn’t say what business he’s in,” because he — if you’re selling beach towels or if you’re selling software or if you’re selling an info product, the answer really is different. So the more detail you can give us, the less we have to kind of hem and haw and say it depends on this, this then this. I’m finding that a lot of the questions that we’re getting really do lack in some key details. I’d just wanted to ask for that. I think it’s beneficial to both to us and to the listeners and the people asking the questions if you can give us more info.

[16:01] First question is called Sample Screencast and it says it’s from Justin and he says, “What is your explanatory screencasts look like?” He’s talking about for virtual assistants. “Can you post a small sample or perhaps make a screencast on how to make a screencast.” So I don’t think we’re going to make a screencast on how to do that but you and I both created a lot of screencast to show VA’s how to do a simple process and sometimes it’s one process they’ll do over and over. Sometimes it’s just a one-time process. You want to talk through briefly how — how you’ve gone about that?

[16:31] Mike: Sure. So typically if it’s — you want to do this for repeatable task or things that you’re going to have one person do over and over again or there are additional details that are probably going to get lost. If it’s something you can explain to somebody and just one paragraph, then chances are good you probably don’t need to screencast for it. But if it’s something that is going to take you several minutes to kind of walk somebody through, then it’s worth making a screencast. So what you’ll want to do is you’ll want to walk through the entire screencast and actually do it. I use Camtasia Studio to do the recordings for these things and it works out really well. You can just upload the videos directly from Camtasia in to screencast.com. screencast.com has a free account that allows you up to I think 2 gigs worth of videos and then beyond that I think you get 25 gigs for I don’t know what it is. It’s like 50 bucks a year or something like that. It’s not really expensive. But then you can just — you can separate them out in to folders and you give some people access to some videos and other people access to other videos.

[17:26] But what you’re looking for when you’re going through these videos and created them is that you essentially want to walk in through the entire process of what it is they’re doing and provide commentary on why and the why part tends to be much more helpful when you’re going through specific details. So for example, if it’s very important when you’re, let’s say you’re doing a login bugs or working with bugs and FogBugz for example. When you’re talking to somebody through that, you not only explain what you want them to do but why and the why part is important because it gives them a reference framework for why they’re doing something. So for example, if setting a priority is important to you, then say — don’t just say set the priority, say set the priority to X and because so that you can list things in order because maybe that’s the way that you work. You want to give them that additional detail to let them know why it’s important to you that it is done that way, just telling somebody to do something.

[18:22] If they forget it, then you have to remind them and if you’re going back and forth through e-mail, it could be a little bit off putting from their perspective but when they’re hearing your voice say and I need you to set the priority based on, you know, however important it is because I use the priority field to sort things and determine what things I should work on next. So if it’s really important, set it to one. If it’s not so important, set it to six or somewhere in between, obviously, set it in between and then I’ll use that as a — a reference for, you know, how important it is that I get to that in a timely fashion and if it’s a six, they can probably wait a few days. If it’s a one, I need to get a respond to it right away. So giving the person that you’re giving those things to that — that point of reference is really, really important and again, them hear it in your own words is much, much better than just putting it in an e-mail because with an e-mail, you don’t get the voice intonations where it can be a little off but it depend how it’s phrased.

[19:17] Rob: Absolutely. So I find that there are three types of screencast I create. The first one is typically an overview screencast and so if I hire a new VA, a new developer, I want them to have a high-level view of what the app is that they’re working on. So I’ve done this for — for all of them, DotNetInvoice, the Academy, HitTail, you know, anytime I hire someone I just say “Start at the basic. Here is what this app is. Here is what it does. You can go to this URL to see it,” like they — they need to just get the general idea. Even if they’re just — a VA answering support e-mails or developer just writing code on one section, it helps to have big picture stuff. So typically those one at being about 10 minutes long. Some of them I created one for a developer where I walked through HitTail and then I walked through the actual code based briefly and I show them what the — you know, “These folders are unnecessary for what you’re doing blah, blah, blah,” and he wrote back and he said, “This is the best overview I’ve ever had. I wish all clients did this.”

[20:10] And I know that it — because I’ve been a consultant, right? You get brought a new project and you’re like you’re totally disoriented because you don’t even understand not just the architecture but like folder locations and there are so many little nuances that you don’t want to read a 10-page doc to get and that we’re sitting and watching a 15 minutes screencast is super efficient. It’s efficient for me to create. It’s efficient for him to watch to get an overview. And like you said the nuances of language and the nuances of intonation, you can kind of say stuff like, “You know, what? I don’t really know what this is for,” and that’s okay to say in a screencast whereas you’re not really — you’re probably not going to put that in to like a doc.

[20:43] The second type of screencast I created for recurring tasks and those ones I tend to create it and that will be typically between 1 to 5 minutes, then I will try to put some bullets in to a Google doc so that they — because they’re going to need to refer back to this in the future and they’re not always going to want to watch a screencast over and over. And what I’ll tell them in the screencast is “Here’s the Google doc. Please update this Google doc,” you know, I share between the two of us. “Update it as you find new things as you — if you think the screencast says something that I’ve missed in the doc, update it.” So that’s kind of a living document and then they are all — definitely a one-time tasks that I passed off. That’s a lot of — typically a lot of research stuff, organization that went off, you know, when I get the thousand dollar article order, I just popped in. I created a 2 minutes screencast. “Here’s what you’re going to do. Here’s how to do it.” I didn’t even create a Google doc accompanying it because it’s like that — the screencast explained everything and “E-mail me if you have questions.”

[21:35] It literally is just a few minutes of you walking through talking fast and stepping through the different step you’re doing it, totally unedited because it — only one person is ever going to watch it and so it does not need to be professional at all. And I’ve also found I use Camtasia. It uploads right in to screencast.com and that is by far the fastest way to do it and it allows me to make a 60-second or a 45-second screencast and have it be worth my time rather than rendering it to the hard drive and then FTPing somewhere and uploading it and finding the URL. I mean that stuff it doesn’t sounds like a lot of time but when, you know, it’s a super quick screencast. It really just it’s on a starter. It doesn’t make sense to do. So cool, I hope that helps.

[22:14] [Music]

[22:17] Rob: I’ve titled this one “Which subscription billing system should I use?” and it’s from Alan Sanchez. He says, “First of all, you guys had been such an inspiration.  Whenever I’m doubting myself or in a lost of what to do next in my work on my SaaS app, I just go back to your podcast and get recharged. Since you guys are working on subscription-based web apps, so what billing systems or services do you use and recommend? From your experience, is it better to hack it in-house against the payment gateway that has a recurring payment API like PayPal or go with the billing service and not worry about it? What are the advantages and disadvantages? I know billing services take care of PCI compliance and charge back, et cetera. In my case, I’m mostly leaning towards billing services like Chargify, Recurly, Spreedly, CheddarGetter, et cetera when it’s time to deal with that later on and decide which one is best for my case. I remember you guys somewhat have touched on this in previous webcast specifically on whether to go with a percentage transaction fee service or by the number of customers. Looking forward to more of your podcast. More power. Thanks. Alan.”

[23:12] Mike: So my thoughts on this are that when you’re taking a look at things like, you know, as you mentioned Chargify, Recurly, Spreedly, CheddarGetter and I’ll throw in Stripe as well. I don’t think that it actually matters and the reason I don’t think it matters is especially if you’re looking at this specifically from a price stand point, the fact is that you’re really talking about percentages or variations between the cost that are really, really small. And you’ve spend more than, I don’t know, 30 seconds trying to think about which one you should be using, then you probably spent too much time.

[23:43] Rob: Chargify, Recurly, Spreedly and CheddarGetter are recurring billing services where you can create plans. They have like a layer built on top of their API, right? They have subscription billing and then you can create plans and you basically redirect from your app to their website and handle everything. Stripe is a little bit different, right? They do have a subscription billing system but it’s all API-based. And so I agree with what you said so far but I didn’t want it like Stripe and PayPal are different than those other four recurring services.

[24:12] Mike: Yeah.

[24:12] Rob: So we didn’t group them together but anyways, keep going with your answer.

[24:15] Mike: Yeah, well I was just going to essentially say that, you know, you really have to look at the feature set and exactly what you said. I mean depending on what the feature set that you’re looking for and the user experience. I mean if you have to redirect the person to somebody else’s website, it may be a jarring thing for the end user, it may not be. It depends on how you do that integration and whether or not you’re going to put the time and effort in to that. But I hear and see a lot of people spending a lot of time looking at the base cost and then the percentages. Well this person is charging is 45 cents plus 2.9% at transaction. There’s other company they’re only charging 30 cents but it’s 3.5% per transaction. Unless you get to the point where you’re charging 10 to 15, $20,000 a month, it really doesn’t matter.

[24:57] So just kind of ignore those cost things, kind of throw them way out the window and just pick something that you’re comfortable with. The other thing that I would look at is if you’re only getting one or two transactions a month, then it maybe time to start looking at those things because sometimes they have like a base-cost associated with it and it’s, you know, a 30 to $40 a month. And if you’re only getting one or two customers a month then you might want to consider looking at another product anyway but I think that’s a separate discussion. But I would take a look at those things. Again, just look at specifically the things that those services are offering as oppose to looking at how much they’re costing you.

[25:35] Rob: Yup, you nailed it. It’s people spend so much time looking at the stuff and spending time on the 2.19 versus 2.29 and trying to eke out every tenth of a percent and you’re right, until you’re at 10 or 15 grand a month is completely — it’s just — it isn’t worth the time. I had lunch with the founder yesterday who’s trying to get his app off the ground and the advice I gave him was — he asked me this question, “Which I do for billing?” He’s going to use Stripe that’s who I would recommend to go with. But he said they have a script subscription API [0:26:00] and we talked through what it would take. And we figured by the time he’s all said and done and tested and everything works, it’s going to take somewhere between probably 15 and 20 hours to get it all done. And he is working a full time job so he only has about 15 hours a week and I said take that week and contact the customers and figure out like get someone to buy before — because he doesn’t have any customers yet, right?

[26:21] And I said, “Get someone to buy before you even think about doing that,” and in the meantime sign up for either Chargify, Recurly, Spreedly or CheddarGetter and use that until you have at least a handful of customers depending on your price point. Once you know that you have traction, then you switch over to Stripe. You keep your, you know, your old Chargify, Recurly, Spreedly, CheddarGetter account going and you do have to run two billing systems if you have a few customers on that one who eventually dropped out. But to me to save that 15 hours at such a critical time, right as your approaching launch because he’s been a few, you know, four weeks of launch, I think it’s a big deal like I think until you proven your idea and people are actually paying you for it, I think investing 15 to 20 hours, that’s if you’re going to use Stripe subscription API. I built mine in-house where it’s actually an internal billing executable and all tolled I outsource a bunch of it. I did some myself as about 60 hours to build the engine, to integrate with Stripe, to figure it out all the UI in place.

[27:17] I mean it’s a substantial amount of effort and so if you’re not able to outsource and you’re not able to work on this full time, you need to think about if you’re going to spend a month of your side project time rather than doing — what I would essential say is a stopgap measure. I mean it’s kind of a lien approach to go with one of these recurring billing systems and I would say spend less time working on that stuff and more time getting your app out there and getting customers to buy. And if you have a big influx of paying customers, well now you have money or you’re going to have time to go in and have the justification to actually build an actual billing system.

[27:49] Mike: The other thing that I’ll throw in here is that you don’t have — if you go with Stripe which is what I use for my Altiris Training site that I’ve talked about earlier today, you don’t have to do everything all at once. So for example, in mine in order to get things up and running very quickly what I told the developer to do was essentially to create the billing integration and don’t worry about all the other thing such as being able to cancel and being able to do refunds and keeping track of the customers. The only thing I’m doing is keeping track of a customer ID that I get from Stripe and that’s it. I don’t really care. Everything else can be handled manually until I start getting enough customers where is justifiable for me to spend additional time doing a lot of that other integration stuff.

[28:28] Rob: Absolutely. I’m still at that — that point. My VA logs in to my Stripe account to do refunds. My Stripe account, that’s HitTail Stripe account. He logs in to do refunds. He logs in to do anything like that. There is no code written. I think I have the minimum amount of API calls just to make a charge on the HitTail’s site. So it’s like two, maybe one or two API calls and that’s it. And so I agree and I didn’t — if you recall, I didn’t build this billing engine until — I didn’t actually get it live until like two days before the first 30-day trials we’re going to expire, right? So I actually had customers sign up for my trial and they were going through the path getting e-mail saying, “Hey, you’re doing your trial,” and I did not have any type of billing in place at that time and a contractor was building the engine and keywayed it, fix some stuff and pushed it live about — it was less than 48 hours before the first billing needed to be done. So I totally think that’s the way to go.

[29:21] I’m not a fan at all of the old-school merchant account providers like authorize.net, CyberCash, Bank of America, Chase, any bank stuff like that. They just — they charge you fees out that was you — typically they’ll say the monthly fee is 25 bucks. It’s not that. It almost always winds up being $75 and more by the time they tack on all their garbage, the application processes take forever. There’s just — there’s no reason to do it in this staying age. Go — if you’re in doubt, go with Stripe unless you have a compelling reason to do otherwise like we’ve talked about here, you know, using the recurring billing systems would be the other option. Even these days, I don’t recommend using PayPal like I used to. Stripe just — I’m in love with Stripe these days. They really are kicking butt. And aside from some very minor issues with international cards don’t seem to go through as well on Stripe and I’ve had some JavaScript problems with some — because they use JavaScript to get you around PCI which is really nice but I’ve had browsers with plug-ins like Mac, Chrome with X plugin that basically means all the card keeps getting rejected even though the card is valid. So aside from those minor issues, I can’t say enough good things about Stripe.

[30:25] Mike: So thanks for the question, Alan. And our next question is launch day tactics and this question is from Kevin. He says, “Hey, guys, listened to your last podcast “Why it’s easy to be great but hard to be consistent”. I really appreciate your discussion on the fears of actually launching and how tempting it is to just keep working on the development side itself to postpone the big day. I was wondering if you guys could talk more about tactics and strategies for smooth launch day. Additionally, could you discuss whether or not to do a beta test during the initial launch phase? Is it worth it to just go out there as is or spend some time testing first? Thanks. Kevin.”

[30:55] Rob: So I think we’ve covered the beta test whether to do it during the launch. We — it was what, three or four episodes ago. We kind of went to an in-depth discussion. But I do think it’s worth discussing some ideas for having a good launch day. Yes about having a smooth launch day. I would say how to have a successful and profitable launch day. Smooth launch day implies there are lots going to be going on and your servers are going to crash and bugs are going to happening and first of all, your servers probably not going to crash some traffic. If they crash it all, it’s going to be just battle up but the odds of you getting, you know, mad amounts of traffic, it’s going to take you down are pretty low. Some thoughts that I’ve shared elsewhere I put them in my book and I think we’ve talked about them before about having a good launch day are not to think of it as a launch day but to think of it as a launch couple of weeks. It’s a launch process. And the thing is as if you are building a product that people are ravenous to have, then you are going to have an easy time and you definitely should have build anticipation for your launch day.

[31:51] You don’t — the worst thing you can do and I see this over and over with sites I’ve signed up for. You signed up for the mailing list. People get that first step and then three months or four months, six months later, I get a single e-mail from these guys that I have never heard from and it’s like, “Hey, we launched X app today. Come and check it out. Click,” and they don’t give me any contacts. I don’t even remember what the app does. I don’t remember why I signed up with it. I don’t remember how I heard about it, anything, right? So I’m not excited to check it out at all and they get a bizmo conversion rate. You get a bizmo [Phonetic] conversion rates when you do it that way. What I would recommend is if you get the mailing list going and then every couple of months you update with a quick update whether it’s a short screencast, whether it’s just a couple of paragraphs, “Hey, you know, do you remember you signed up at this website? This is what the app does. Here’s our progress.” So you got to keep people in the loop every couple of months or else they’ll lose it.

[32:40] Then as you build at the launch, you send an e-mail about two weeks before you launch and you said, “Just giving you a heads up, we’re almost ready to launch. I wanted to give you, since you’re on the list, a sneak peek no one else is going to see it. It’s an exclusive thing, right?” And you give them something cool. Write something that’s actually worth or something not just like a bunch of bogus marketing stuff but like “Here’s some helpful info or helpful screencast or something,” and it also of course happens to relate to your product. And then about a week before you say, “All right, we’re going to launch next week and of course you are on the mailing list and we told you, you know, you’re going to get something special basically. You’re going to get a discount for life on this product. We want to thank you for being part of the mailing list.” And then the day before you launch, you say “Hey, we’re launching tomorrow. Gates open at this time and basically, it’s going to be like a 3-day or a 5-day thing. You should definitely come and check the app out.”

[33:24] And by this time, you hopefully given them some information. You’ve given them testimonials from beta testers. You’ve built anticipation in their mind. You’ve shown them some screencast, shown them some — some screen shots where if you’re building a product that people want, then they really like are going to be chomping at the bit by now because you’ve slowly drift to them some decent content. It gets them really excited. And then you do your launch to e-mail, you say “You know, here you go. You get X percent off,” whatever you’re going to give — give these people “And for life as long as you’re a customer, you get this cheap rate.  Everyone else will pay the high rate.” And then on the day that it ends three — 72 hours to 5 days later, you basically just say, “Hi, you know, there’s only 8 hours left just a reminder and then this thing shuts down.” And you do, you shut it down. You don’t allow people to sign up after that time at that rate. So I think that’s the basic strategy.

[34:11] Mike: The other question he sort of asked was doing a beta test during the initial launch phase and it’s just really not a good idea to do your beta testing at the same time as you’re doing your initial launch. I mean you should really have a phase approach where you have some sort of an initial alpha or beta and then maybe early access is is kind of part of that but you don’t publicly open the doors to pretty much everybody on your mailing list. You kind of phase it out first just to kind of work out the major bugs because people are going to run in to — if you have — if you open up to 25 people and there’s a major show stopper bug, they’re all going to run in to it and you’re going to get 25 reports for the exact same thing. So put a couple of people on it and kind of work through what those issues are. Put a few more people on it. Work through whatever issues those other people come — and with and then just kind of work through it and from there. And then once you get to the point where you have your early access, then things should be well enough along that all the major things were out and that would kind of contribute to your smooth launch then.

[35:04] [Music]

[35:07] Rob: For our last question today Juha [Phonetic] wrote in and he asked how to get people to sign up to your pre-launch mailing list. “In a recent episode you talk a bit about pre-launch mailing list. I would like to hear your ideas about what works in getting people to come to the site and sign up in those lists when I don’t have a product yet. Should I already have a short screencast screenshots at that point for them to come and check out? Thanks.”

[35:29] Mike: Well I think this should be a pretty easy question to answer. I think you should go to the StartupsForTheRestOfUs.com website and look for episode 72 and that one is called 8 Tactics for Building Your Pre-launch Mailing List. And we have a bunch of different things that you can use to help build up your mailing list and I believe we’ve talked about it in a previous episode as well. It was probably early on maybe within the first 10 or 15 episodes but we’ve talked about mailing list there as well. I guess to kind of summarize those, I don’t think you need to have screenshots and screencast but I think you definitely need to have things that are calls to action and you — I don’t think you have to have a product either but you definitely need to be able to clearly articulate the products that you’re offering and that you want to build.

[36:12] And I would be hesitant to start talking about something that is going to take you a significant amount of time to build. If it’s going to take you eight months, ten months or a year or two to build it, I don’t think that going about just creating a mailing list is kind of the right way to do it. I mean you should start talking to customers and working with people early on to build the product as oppose to building a website to try and see if there is interest. I mean those are two different strategies for building a product and I think that you need to evaluate which one is more appropriate for you. But those are kind of my thoughts on it. I would definitely go back and listen to those other podcasts episodes because we talked a lot about the types of things that should go on to the website when you’re trying to either build it thoroughly or build up that mailing list and convince people that they should be signing up for it.

[37:00] Rob: Yeah, I think it depends on the niche, you know, when you should build the landing page or take the — the more heavy customer development approach. So even if it’s going to take you a year or two to build it, I would still put up a landing page but in terms of the landing page early on, I think that a nicely design landing page with one or two sentences that describe the very high-level problem that your product solves and then has a single call to action to build the mailing list, I think that’s probably the best thing to not get in to the features, to not get in to a bunch of bullet points, screencasts, screen shots, any of that stuff. Very early on I think that works well. I think if you could have a very attractive screenshot that that can help but if you’re going to take six months to develop this thing I would not spend a ton of time trying to spec it out so to speak and get a bunch of features on to the landing page if you like to just clutters it up.

[37:50] But I do feel like as you move towards the launch, you know, you check out how the page is converting. If it’s converting well, I will just leave it. And if it’s not converting very well, then I would think about, oh people may need more information and look at creating either a nice screenshot that’s certainly going to be easier or creating a like a 60 seconds screencast with the music in the background and then either if you’re going to narrate it, you can do that or you can just leave it as music. But I’ve almost found kind of unprofessional screencast. They will hurt your conversion rate more than anything so unless you — you know what you’re doing, I would lean towards having nothing or just having a screenshot. Go back and listen to episode 72 for more info.

[38:26] [Music]

[38:30] Mike: If you have a question or a comment, you can call it in to our voicemail number at 1-888-801-9690 or you can e-mail it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt, used under Creative Commons. You can subscribe to this podcast in iTunes by searching for Startups or via RSS at StartupsfortheRestofUs.com where you’ll also find a full transcript of each episode. Thanks for listening. We’ll see you next time.

Show Notes

• ISV Con
• Association of Shareware Professionals
• Software Promotions
• GoodData
• DigMyData
• Flippa
• Micropreneur Academy
• AppSumo
• Software Deal Of The Day
• BitsDuJour
• Video Rascal

Transcript

[00:00] Mike: This is Startups For The Rest of Us: Episode 90.

[00:02] [Music]

[00:11] 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.

[00:19] Rob: And I’m Rob.

[00:21] Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s going on this week, Rob?

[00:26] Rob: To tell you what July has been a tough month. Today is my fifth day of work and — in July. It’s the 24th of the month.

[00:33] Mike: Slacker.

[00:34] Rob: You know, it’s the summer, right? So my — my kid that’s, you know, is going to be in first grade is off for the summer. And my wife is off for the summer as well. So we’ve been doing a bunch of traveling, went to Denver, went to — I went to Reno and spoke at ISV Con couple of weeks ago and then —

[00:49] Mike: How did it go?

[00:50] Rob: You know, it’s fine. It was a very — it was a small conference and it was a different crowd that we typically see that. I don’t think anyone from any of the other conferences I go to were there. So it was more of the –more desktop software developers shareware guys because it’s based on the, you know, ASP which is the Association of Software Professionals and they used to be a conference called — was it the SIC? I think —

[01:12] Mike: Yeah.

[01:12] Rob: … Software Industry Conference that was held, you know, in Texas and a couple of other places and that conference kind of died as the — I mean I don’t know why but it seemed like the shareware movement kind of slow down, you know, for obvious reasons to — and I forget how you pronounce her last name but it’s like Sue Pichotta, I think. She resurrected ISV Con and or SIC and renamed it as ISV Con and this was the first year back. So it was — as a result, it’s pretty small because they didn’t have the momentum of, you know, having multiple years of folks knowing but I did get to hang out with some good folks. Patrick Foley was there and he actually spoke on Sunday. Ted Pitts from Moraware was there. Ruben was there from Bidsketch and then I met, you know, Dave Collins’ partner from  Software Promotions. It was good. You know, it’s better for the people. From my perspective it was a better conference because of the people who were there rather than — than the talks, the topics that were covered.

[02:08] Mike: Uh huh, yeah. I think that’s it for most conference so that’s pretty typical. It’s better to talk to the people as oppose to, you know, the conference is just an excuse. Okay. [Laughter]

[02:16] Rob: Right. Although they did have a nice sports bar that was half off all drinks till like 7 p.m. I wound up in like an 8 or 9-hour conversation with a couple other guys just talking about SaaS apps and marketing and different approaches and trading SEO tips and advertising tips and funnel optimization and just throwing out ideas and problem. So that — that was fun. I mean it felt like a 9 or 10 of our mastermind meeting with some pretty sharp people. You know, and that’s got to be the — the highlight of it for me.

[02:39] Mike: Very cool.

[02:40] Rob: How about yourself? Where are you at this time of — of month?

[02:44] Mike: Oh well, I’m in Delaware right now. Having never been here before, I didn’t necessarily have high expectations but those expectations were absolutely shattered. There — there seems to be absolutely nothing, you know. [Laughter]

[02:56] Rob: Yeah. [Laughter]

[02:57] Mike: I had didn’t — the nearest airport to me is Baltimore which is a two and a half hour drive away. So I flew into Baltimore and drove down here. And there was just nothing between the airport and here. I mean there wasn’t even a highway. It was all back roads. I really felt like I was in row upstate New York. I mean nothing but corn fields and cows. I mean [Laughter] it’s just nothing.

[03:20] Rob: Right.

[03:20] Mike: You know, it’s not a bad area. It’s just that there’s nothing here, that’s all.

[03:24] Rob: Right, right. The theme for my month of July is goals and focus. I’ve been kind of honing in on a couple of goals I’ve had with HitTail as well some goals I have in terms of getting back blogging again. I realized, man, it is — it’s hard to stay focus like when you’re doing a lot of things, you know, all the stuff we have on our plates and most entrepreneurs tend to put on our plate. It’s just a challenge to keep moving forward in all of those things until you tend to not move forward in any of them. So I’ve really been making an effort to — to basically like if I get e-mails about things that I’m not focusing on right now, I will literally just send them out with Boomerang and tell them like come back in two weeks. Obviously if something is an emergency, I can’t do that but for the most part, I’ve been just putting off anything that has nothing to do with my key goal for the month and the goal this month is growing HitTail.

[04:13] July is going to be the best month ever for HitTail and in fact, it’s probably going to be the largest single month of growth ever even when I wasn’t working and of course, the reason is that all the seeds for this were sown, you know, a couple of months ago. It’s like delayed. You do a bunch of marketing and then people come the next month or two months later. So I mean there’s 30-day trial that put them even further back. So if I don’t continue the marketing, you know, and pick it up pretty hard now that I’m back from vacation. It will obviously slow down probably in August or September but it is something that I’m keeping in mind. It’s about picking a single goal and trying to get to that goal and monitoring that goal everyday I wake up and the first thing I do is I look at my dashboard. I have a dashboard of a bunch of numbers, lifetime value, churn rate, trial to paid conversion. It’s just a rolling 30-day average and so I now have a very tight pulse on the business and the result it — it keeps my mind focus on it both good and bad. The good part is I’m focused on it so it’s growing. The bad part is I am thinking about it all the time but I’m really mentally kind of thinking about HitTail, what to do with it, how to grow it, tactics I’m going to use and all that stuff even when maybe I should be slowing down and not working.

[05:26] Mike: Cool. What do you use for your dashboard? I think I asked you this before. You use a custom dashboard, don’t you?

[05:31] Rob: Yeah, because — I do. It’s just a single ASP page. I wouldn’t use ASP normally but that’s where the apps written in and it’s just a bunch of hacked queries, very simple. It’s just black text on a white background, you know, login screen in front of it. Yeah, I’ve honed these queries and every, probably a week or two, I realized there’s numbers that I want that aren’t there and also calculating them manually and if I calculated manually a few times, suddenly I realized I really should just add it to the dashboard even if the query is pretty complicated since I’m the only one running it and I don’t run it that often even if it’s slow, it’s still — still worth having. So yeah, I have my real time LTV so I can see how it changes base on how many articles are ordered, how many people were build last night, how many people canceled in the last, you know, 24 hours impacts my, both my lifetime value, my churn rate, my trial to paid conversions, all that stuff.

[06:21] So it’s a very interesting — well, it’s an interesting approach to it. I don’t think it’s something I want to do long term but especially in these early days of the business when things are volatile and they’re still moving around pretty dramatically, I feel like it’s — it’s good to have. I think overtime what I’d like to do is get some grasp so I can actually watch, you know, watch more of a moving average of it because that’s really the more important part of it. And also I think it’s a business mature it is — the stuffs are kind of settle down as more processes are being developed, you know, when the marketing is more stabled, the cost preposition, the LTV, those things all become much more stable as I’m not doing this big kind of experiment which is essentially what I’m learning. I’ve purchased more clicks in the past 30 days for HitTail than I have for all of my other apps combined in the last 12 months. I’m just experimenting like crazy and just throwing money out of my LTV hit the point where I can totally scale this thing. I just need to find a couple scalable marketing approaches.

[07:15] Mike: Very cool. See up — for your dashboard there’s – there’s — really and I was wondering about whether you built it yourself or not was because there’s a couple of different companies out there that offers some dashboarding technologies so to say. One of them is a GoodData which I looked in a couple of years ago but at the time their entry level pricing something like 2000 or $3000 a month and I was just like no. [Laughter]

[07:38] Rob: So it’s an enterprise dashboard then. BI as they call it, right, business intelligence?

[07:42] Mike: Yeah and the other one I saw which I think it just came out of beta back in December or so, it’s called DigMyData which probably actually as an advisor than so they come with all these integration points for a lot of different data sources like –

[07:56] Rob: Yup.

[07:56] Mike: … Google Analytics and PayPal and Gmail and MailChimp, et cetera.

[08:00] Rob: Totally, yeah. So I would actually beta tester DigMyData and I know Adam. He’s a nice guy. He’s one of the founders. We had hooked up at Business Software. Yes, I actually like it a lot. I haven’t been using it because of a certain way they need to track sales and it was just a little more of a pain in the neck than I wanted to do for my particular set up. But I know a lot of people at least a dozen folks who use it, who really like it. And Peldi is not, like not a super data guy and he — he’s totally in to it so I buy it. You know, the other one, KISSmetrics. I actually do have KISSmetrics account. We’ve got a free one for going to MicroConf.

[08:36] Mike: Yup.

[08:36] Rob: And so I do have that all set up on HitTail and I use it for some things but I don’t use it for everything. I tend to use Google Analytics and my costumed dashboard.

[08:45] Mike: Right, right. Oh you know what? I was doing some Math the other day and this is episode 90 and I was thinking, oh well, you know, episode is 100 coming up in the not too distant future and I said, well you know, we should probably do something, you know, kind of special for the 100th episode. And after doing the math on it, I realized that episode 100th is scheduled to go live on October 10th and guess what else is scheduled to live that week?

[09:11] Rob: New season of the Walking Dead?

[09:13] Mike: Not. No, close, very close. AuditShark. [Laughter]

[09:16] Rob: Yes. Well so AuditShark is supposed to go to beta September 10th, right?

[09:21] Mike: Right.

[09:22] Rob: And then you’re figuring you’ll go live one month later?

[09:25] Mike: Right, roughly.

[09:26] Rob: Awesome. You heard it here first.

[09:29] Mike: That’s the — that’s the current plan. We’ll see how that works —

[09:31] Rob: That would be such a milestone for us. [Laughter] Now, the problem is when we record that episode a week earlier.

[09:37] Mike: Right.

[09:38] Rob: So you won’t actually be — be launched but you know what? That would be cool. So episode 100, we do need to take something cool to do for that though.

[09:45] [Music]

[09:48] Mike: So hey today’s episode we’re going to go over bunch of podcast questions because people had been sending us a bunch of e-mails and asking a bunch of different things. So I want to be just to get right in to those. The first question is from Chico and he says, “My name is Chico and I listen to your podcast all the way from Zimbabwe. I think it’s great and it helps me in aspects of managing myself and following my passion. In the midst of building one business, I realized I wasn’t so much in love with it because of other pressures that had built up. In short, I discovered there is a lot more that goes in to design like the customer support, building, et cetera that my initial idea got left interesting. I love the web and developing a lot but I wanted to know what you guys think about a 180 degree pivot. I’ve discovered I’m startup person where I create a product that I run as oppose to creating lots of products that ship out constantly. The pressure is enormous and it gets in to a routine that can be in madness. Given that I want to run a startup I’m developing right now, how can I best bring down the current on my previous business and more importantly, how can I battle with the fear that I might be leaving an opportunity and charging in to uncertainty. Thanks a lot for your feedback. Keep up the good work? What are your thoughts on that?

[10:53] Rob: Well, I mean it’s an interesting question. I feel like there’s some details left out of the question like whether or not he had existing customers on the other one or whether it’s just a work in progress because obviously your approach tends to differ based on those factors. I think if you don’t have any customers and you’ve totally lost passion for your old idea and you don’t want to do it anymore aside from just having to deal with the fact that, you know, you wasted time essentially. I think you just shut it down and you stop working on it. I think if you have existing customers, you can — well, if the thing is just running by itself since it’s a SaaS app, I don’t know that you necessarily need to shut it down unless it don’t have a lot of support. If it is a lot of support you can try to sell it or you can try to offer to the customer so they can install it on their servers. I mean I think there are some fairly simple ways to get out of that if it’s not a SaaS app if it’s downloadable software and people already have it downloaded.

[11:44] I mean I think you just update the site and say, “Look, you know, we stop development on it. We will support bugs and stuff but no new features will be developed and stop selling it.” So I don’t think that’s — that’s too hard. I think the bigger question is second part which is “How can I battle with the fear? I might be leaving an opportunity and charging in to uncertainty.” And I think the best way to essentially appease that fear or get rid of that is not to charge in to uncertainty but it’s you start talking to customers and start building a mailing list then start doing the pre-coding stuff that we talked about, you know. It’s both customer development and talking to customers but it’s also trying to analyze the market using keyword tools built in the landing page, driving traffic, seeing if anyone wants to — to get on the mailing list to hear about it. It’s those things that you should spend time doing before you write a line of code to validate the idea. And the more you’re able to validate, you’re never going to get it to one hundred percent but you can maybe get it to 50 or 60 or 70%. The more e-mails you gathered, the more potential customers you talk to.

[12:45] And to me, that is how you’re going to fight that uncertainty and — and give yourself the — the confidence as well as kind of the staying power with this idea that if you do in fact think it’s going to work, you’re going to be more likely to stick around it and keep working on it.

[12:59] Mike: Yeah, I agree with pretty much everything you said. The other thing that comes to mind is the whether or not the business he’s currently working on is more of a full time income form because I think that that changes things a lot if it is your current full time income versus — if it is your full time income, you can’t just take the thing and shut it down. You can’t just take it and sell it off because there are obvious risks associated with that. But if it’s just something you’re going on the side and as you said if you don’t have a lot of customers, then it doesn’t necessarily matter as much. I think the big question is kind of where existing revenue comes from, is that from a full time job or is it from this business and I think to that right there probably make in my mind a lot of the decisions for me.

[13:40] Rob: Right and if in fact you are making a full time living off of it and that means just probably pretty successful app and I think the opportunities to sell it whether it’s thru, you know, something like Flippa or whether it’s through your blog or becoming — I mean there are people in the Micropreneur Academy who had be more than — more than happy to look at an app that provide a full time income. So I think that’s definitely and that could potentially be a way for this successful to get some revenue out of it or some kind of upfront money that you can then use to fund yourself as you develop the next one.

[14:10] Mike: And then I think it’s probably important to sell it upfront as oppose to kind of string in to things along where the revenue kind of, well probably tank to be perfectly honest if you’re not paying attention to it at all and you just neglect it, my inclination is to believe that the revenue is eventually going to tank. It’s just going to continue going down. And then when you do decide to sell it, it’s just going to be worth that much less. You better off to sell it in upfront and being done with it.

[14:34] Rob: Exactly. If you know you’re done with it, I would agree with that.

[14:37] Mike: So Chico, hopefully, that helps to answer your question. Our next question is from Til and he says, “Hi, Mike and Rob. Thanks a lot for the podcast. It’s been an invaluable source of action and advice and on top of that, I really like the way you guys present it in a down-to-earth manner. Please keep up the good work. My question is I’m working on a SaaS product and I have the opportunity to get some generic product domain name with a .NET or .ORG top-level domain like crmsoftware.net for take example. I’m considering using this generic domain as my sales website for SEO reasons and hosting the app and another domain represented a specific product name like highrise.com, to give another example. Another option would be the use of generic domain plus the top-level domain as a specific product name for, example is prmsoftware.net but from my eclectic perspective I’d prefer a more costumed product name. Please note that the user who likely access the apps via their own sub domains. I’d appreciate hearing your thoughts on this. Thanks for your help. Til.”

[15:31] Rob: Obviously, Google give preference or gives a nice boost to generic top-level domain names. So if you get crmsoftware.net, you’re going to naturally rank higher for CRM Software for that phrasing Google. What I’ve been noticing and kind of been hearing ramblings up is that boost may not be as much as it used to be. It’s still really nice. It’s still a really good signal that they use but I don’t know if in the future moving forward, you know, how much that’s going to continue to be there. I think it’ll be always be there, it’s just a matter of how much they dial it up and dial it down, right? So I guess the next thing I’ll say is I don’t feel super comfortable about separating the sales website from the application website. Then I think, one, it’s confusing to have two different top-level domain names between those two and two, if you need any integration between the two of them like when you have a signup form that does something and maybe a need to share JavaScript from one to the other or maybe it needs to share cookies between the two, it’s not going to work because browsers, security settings are a nightmare when it comes to using any client’s sides stuff across top-leveled domains.

[16:37] I’ve ran in to this a number of times. I’ve actually ran in to this with sub domains of the same top-level domain and had to do pretty hacky work around and like do double redirects and all types of fancy stuff that was really hacky in order to make sure that they’ll like cookies held up between the sales website and the SaaS app. So if at all possible, I would lean towards keeping everything on the same TLD, add a minimum, right? Even if you do sub domains that’s fine, but I would lean towards that unless there’s a compelling reason not to. So with that said, you really have a choice, right? You can name your product fancy CRM but you’re going to get crmsoftware.net. I think you’re inclination is that shouldn’t you have fancycrm.com, right? You know, shouldn’t you have the .com for your product name and I think it depends on how much you plan on relying on SEO. If the SEO is going to be a major player in your business and in your marketing approach, then I think buying crmsoftware.net, I know it’s a fake example but, you know, I’m going to keep the example, but I think the buying crmsoftware.net is a good approach.

[17:40] But if you’re going to be marketing this thing doing a lot of social media and press and stuff that means that SEO is actually only going to be a smaller percentage 10 or 20% of your overall picture, then you want to think about using your product name .com as the main website. I would buy both domains definitely but it’s, you know, it all comes down to how you set it up. I think if you do decide that SEO is going to be a big part of your marketing approach and you go with crmsoftware.net, I definitely would buy fancycrm.com and just have a simple, you know, a 301 redirect to crmsoftware.net so that people can, you know, if they type in your product name .com that they — they always get there. It’s not going to give you any SEO benefit but it will just help folks who are looking for your product. With the generic TLD, the crmsoftware.net, you’re still going to rank for your product name. I mean that’s — that’s going to be a foregoing conclusion because you’re going to get a handful of links for your product name and then bam, you’re going to rise right to the top. So that’s not issue I’d be concern about at all.

[18:43] Mike: I — I think that the SEO boost from  having a top-level domain name matching whatever the search term is is great to have but like you said, I mean Google could turn it around at any moment and just completely drop it from the algorithm. I mean the fact is that in any given language, there are only so many words that can be use to describe different things. And using that as a — I’ll call it a biased factor and the algorithm eventually kind of falls over because just as you were there first doesn’t mean that you’re doing the best at it. And Google is from right on said, you know, “We’re rating a lot of updated content much higher than people whose web pages haven’t changed in 10, you know, 10 months or 20 months or whatever.”

[19:29] So if you start following that line of thinking, you might also say, well why should a domain that’s been around for 10 years have more weight than one that is been around for 5 years or 3 years, you know, because you’ll start looking back at those things and just because somebody was there first for CRM Software and they get crmsoftware.com, they’ve had the domain name for 10 or 15 years, does that mean that it’s updated? Does that mean that they know things better than somebody else who’s only been around for 2 or 3 years and I think there’s other things that weigh in to that a lot more.

[20:03] Rob: Right now, Google says yes..

[20:05] Mike: I had said —

[20:06] Rob: Google said —

[20:06] Mike: … they said yes now.

[20:07] Rob: Yup.

[20:08] Mike: But in the future, that’s just one thing that you’re basing this decision off of. That’s kind of my point.

[20:13] Rob: Right, I think the worst case though as I’m thinking about it is if he gets the generic and optimizes for it and starts ranking for it and then Google turns that down, you know, turns down that signal, he could always change later and as long as he gets his, you know, fancycrm.com, you know, his product name .com URL, he could always just move the website there or 301 everything if SEO becomes not as large of a part of his marketing or he loses the rankings because of the TL lead stops being worth it then that’s actually not the end of the world to do that.

[20:45] Mike: Right.

[20:45] Rob: So…

[20:46] Mike: I’m kind of torn on it myself. I think that it’s really nice to have that for the SEO benefit but on the other side customers don’t necessarily relate well to a product name that is generic like that and I wonder if it might be either interesting or a good idea to go in a slightly different direction where you get both domain names and then for the domain name that is the generic one, you basically make it in to a review site and then you obviously will link have to relate it to your own domain. You would review heavily to your own software or maybe you review it favorably or not, favorably or whatever but that’s another option where you could basically give yourself some SEO benefit by linking directly from that domain and you know, you could also use it as an educational site. I mean you could just talk about in general, these are the things you should be looking for if you want this particular type of software.

[21:37] Rob: Yeah, I think building a satellite website like you said or a microsite as some people call them, I think that could be done. I don’t know if I make it a review site. Probably a review site would be decent I guess. I would always have someone else to write it. So that feels a little, you know, a little weird if you’re writing content about your own without disclosing it if you’re writing content about your own app.

[21:52] Mike: Right.

[21:52] Rob: I’d almost want to hire a third party to do it or just not making a review site and make it about, you know, something else just an educational site where you happen to have a banner. That’s obviously going to cut down — I mean that, you know, if you rank number one for that term for CRM Software you’re only going to get a couple of percentage click-through from there. So you really are killing off most of the traffic. It’s not going to make it to your — through your sale website. So it well — different approach you can do. I don’t know that it’s just as good. I agree, I’m torn as well. I don’t think there’s a right or wrong answer here. I just think it’s what you feel comfortable with and kind of how you’re going to be marketing the product if it’s going to be, you know, 90% SEO then it’s an obvious response here. But if it’s going to be mostly a branded product, then I think you go the other route.

[22:33] Mike: Well I think that about wraps it up. And Til, hopefully, that answer your question and thanks for getting in touch. Hopefully, things will work out for you and you come to a decision on that.

[22:41] [Music]

[22:44] Mike: Our next question is from Sean and he said, “Rob, you mentioned using AppSumo to get a boost of capital in the early stages of HitTail and I’m stoked because I love the guys over there and I’m happy that it delivered for you. I’m wondering what other avenues or opportunities you and Mike can suggest to get jumps in revenue or financing in the early stages of a product’s life. I’m a big fan of maintaining control of the product as long as possible and not going the investor route.”

[23:06] Rob: Yeah, I have a few thoughts on this. I guess first I’ll clarify I didn’t do the AppSumo deal for a boost of capital as much as I did because I wanted to get the word out. I don’t actually need the capital right now as much as just, you know, spreading — spreading the word in that respect but — this is a good question. I like — I like this line of thinking. It’s basically you started off, you’ve launched your product to some success but you need some capital for some reason. And I would be hesitant to say that you need a bunch of capital to buy ads and do paid acquisition because if you’re still this early in your startup, then odds are pretty good that you are not going to have — really not going to have the lifetime value and the cost per acquisition where you need it to actually make that a viable thing.

[23:49] So hopefully, you’re not thinking that you’re going to raise the cash just to spend it on ads but to use them in some other strategic way. But a couple of ideas do come to mind AppSumo is definitely one any deal of the day site. I mean there’s like SoftwareDealOfTheDay.com or it might be softwaredod.com. There is BitsDuJour.com. There are several others depending on your niche. There’s a bunch of ones for the Mac too, so any of those can be a quick influx of cash. Another way that I’ve seen used is to do annual plans and to either offer them on the site directly or if you’re dealing — if you’re doing any type of medium touch or high touch sales that you talked to your customers and say, “Hey, you know, if you pay in advance for 12 months, we can cut you a pretty big discount.” And you may have to offer a 2, 3 or 4-month discount depending on how far long your product is and how much people trust it and how much value they’ve already gotten out of it. But you know, if you’re charging a hundred bucks a month and you can suddenly get an influx of 8 or 9 months of capital, you have to support that customer for the next year but that, you know 8 or 900 bucks can be a nice big influx and if you can do that with a handful of customers in any given month, it starts to add pretty quickly.

[24:56] I’ve also seen some apps do it directly on their site where when you go to sign up, it gives you that option and people can just pay in advance. Again, you do have to offer discount but can still be a way to kind of eak some revenue out early. The other way that I would recommend and I’ve done this in the past is to actually do offer customizations. So it’s almost like you’re consulting on your own product but you can almost just consult in the space as well. So to give you examples to this like with DotNetInvoice early on, I would offer customizations for a 125 or a 150 bucks an hour. So I didn’t want to do a lot of them, right? But people didn’t want to pay me to do a lot of them because it wasn’t cheap but if someone came along with 5 or 10 hours, suddenly you’re doing a little bit of consulting work. It is kind of a pain but you can make a little chunk of change that way.

[25:43] The other interesting thing is I’m getting e-mails constantly with HitTail. People want us to offer SEO advice, do link building, just create content, you know, just kind of do SEO services like a consultant will do. So while it’s not a straight customization in my product, it is just affiliated or related consulting gig. It’s something that someone would be interested in if they’re using your product. So I think those are probably three avenues that I would at least entertain. They all have draw backs. I think you can — they’re pretty obvious what the draw backs are but if you’re really trying to put together, you know, a little bucket of cash upfront, I think those are definitely viable.

[26:21] Mike: Yeah, the ones that came to mind for me were, you know, as you mentioned the yearly plan and then other one was doing product integrations with other products. So if you have something that can integrate in to pretty much any major vendor who has a pretty large audience and you can offer any sort on integration between your product and theirs. A lot of times they’re very happy to publicize that there is that integration to their existing customer base. You may very well get a lot of signups as a result to that. It really depends a lot on what the other products are just to kind of you threw out some examples. I know that you can do integrations  with like MailChimp and Google Analytics is one but honestly, they’re — you know, people aren’t paying for that but if they are products that people already paying for, you know, as a subscription then those are the types of people who are already willing to pay for a subscription and then they may very well be willing to pay an additional fee for a subscription to your product.

[27:13] So those are the things that I would probably look at as a good way to boost revenue. And the nice thing about that is that it’s continuing. It’s not just a one shot. I mean obviously you’ll get one shot in SEO benefits and you know, the influx of traffic when, you know, whoever that integration partner is publicizes it but – on an ongoing basis, you’ll get additional revenue based on the fact that those people are using their product and say, “Oh I just found this product.” Maybe it’s Basecamp and they’re using Basecamp and I’ll say, “Oh well there’s just an integration with my — with this other product over here. Maybe I’ll go check that out.” So thanks for the question, Sean.

[27:54] The next one we’re going to go to is from – I know I’m going to butcher this name Loradrius Thomas and he says, “Hello, I’m not a techie individual but I have an idea for an application that will assists entrepreneurs but I don’t have any experience with the code or writing software. What do you recommend I start?” I would say start episode 1 and start with —

[28:11] Rob: Yeah, exactly. [Laughter] This is a big question.

[28:14] Mike: It’s a huge topic as an involved topic and there are so many different things that you need to understand that just having an idea for something is not necessarily good enough. I mean you basically have to prove that there is enough demand for whatever it is that your idea is that people are willing to pay for and until then you’re not going to have anyone who is going to be a developer who’s going to sign on to the department, you know, as we’ve mentioned numerous times that you have to have at least two out of three things to build a business you need to have the time, money or skilled set, two out of those three things. And as long as you have two, then you’re fine and it sounds like — I mean, you know, it wasn’t clear you don’t say that you have money, you don’t say that you have time to do it but if you have time, then you can learn to write software. If you have money, you can pay somebody to write it and if you have the skilled set to either do the marketing or do the development, then that’s at least half of the equation. But if you don’t have those things then you’re kind of a stand so there’s not much you’re going to be able to do.

[29:19] Rob: So I think the first thing to think about is how to prove out this idea, how to get as far as possible without having any code. And he doesn’t give us much of an idea of what the app is. It’s a application that will assist the entrepreneurs but if there’s any way to do this without code or is there any way to do it via e-mail with Excel spreadsheets, with a VA, with your manual time just doing stuff on the back end does it truly have to be software or can you hack it and basically do human automation and get your thing launched and even if I mean even if you don’t have a website at all, if this helps entrepreneurs, then find entrepreneurs and start helping them with this, you know. And if you need to throw up a WordPress website and use the theme and you added some text, then learn how to do that and get people to it and then start helping them.

[30:08] So I mean I think that really would be where I would start. Obviously, we’ve talked in the past, there are several — several times about partnering up with a technical co-founder, how to encourage them to get onboard, how to basically prove to them or at least as much as you can prove to them that that the idea has merit and that you basically remove as much doubt as possible. But those things are all down the line to me because until you’ve taken this first step and validated the idea, you don’t need code to validate a lot of the ideas even something like HitTail. If you think about what HitTail does, it really just analyzes traffic and it takes the best keyword and so, you know, the best keywords from what you target. So the hack way around that is to find people who use Google Analytics or using Analytics package and say, “Okay, I’m going to help you with this.” It can be 10 bucks a month. I’m going to need you to export, an excel export of all your organic keywords from last month and they send it over and you manually go through it and do the checks or you hire a VA to do the checks, you know, figure out where your algorithm is going to be, how you’re going to recommend stuff and then send them back the list manually. It’s totally hokey. It totally doesn’t scale but it’s a way to see if you can provide value to people who’ll pay for it without writing a line of code.

[31:25] And you know, and then from there, if you figure out that you can provide value and that people are liking it, now you actually have a few customers using your — your service which is essentially just a manual service at this point but from there you — you can go approach a developer and say, “Hey, people are actually using this. People are paying me money for this. How can we automate this? What’s our first step to automating this?” Because at that point, you don’t need to go ask and spend a thousand developer hours to build something, you could start really simply by just building a very basic database that, you know, you could manually import to and you can kind of just take the next step, the next minimum viable step instead of trying to build this full-fledged app from scratch. I hope that helps, Loradrius, I think that’s his name. Loradrius Thomas, thanks for the question.

[32:07] [Music]

[32:10] Mike: Our next question is from Steven and he says, “What’s the best way to approach other bloggers about interest in my blog and is that even necessary? Here’s the thing, I can’t stand reading other blogs and the genre I like to write about because I feel like it takes off all my time and has information I already know. So how without liking these blogs do I get interest in my writing? Does this even matter in a marketing and traffic growth sense?” Well to me like this isn’t a question so much about a product as it is about a blog and getting attraction from other bloggers and then niche for this blog. And I would wonder about whether or not these other bloggers feel the same way about it as you do. I mean is all the information that you’re putting out there and that they’re putting out there stuff that is common enough between all the different blogs that you can read one blog and pretty much know all there is to know about that particular niche and you know, this question doesn’t necessarily say what’s the niche is but I think it’s hard to imagine that there is a particular niche out there that, you know, one, you could just go to one blog and it’s kind of a one-stop-shop for everything you could possibly know about that and even if it is, it’s — sometimes it’s very nice to get a different take on it especially for people who aren’t fully in trench in to that particular niche.

[33:23] I mean it sounds like if you’re writing a blog about it, you obviously know a lot about it and if right off on it and you’re willing to share that information but you don’t necessarily want to hear other people talk about it because of the fact that you already know all the stuff that, you know, they’re going to be talking about. So those are kind of my thoughts on it but I don’t think that it’s unwanted to go talk to these people. I mean I think that the thing to do is just drop them the e-mail and you know, whether you do have like chat with them or talk to them, you know, one of the things you don’t necessarily saying here is what is it that did you actually looking for from these blogs. Are you looking for recognition from them? Are you looking for back links? Are you looking for partnerships? Those are some things that kind of entered my mind and if you’re looking for back links, I don’t know if getting on these other blogs is necessarily going to meet a whole lot. It might help you in terms of SEO but in terms of getting their readers to come to your blog and also read your blog when the content is going to be similar, I don’t know if that’s going to help you a lot.

[34:23] For partnerships, if they have products and you have products and you wanted to do some sort of cross selling, then that’s a great way to go. I don’t know if you really need to be a reader for a blog in order to approach them because you can certainly just talk to them about it. I mean if you can work out some sort of a deal where you’re cross promoting their products or bundling them together, for example, then both of you collectively become an authority in the space just by a virtual of — partnering and reselling your products together. So those are kind of the things that enter my head with this particular question. But I don’t think that it necessarily matters whether or not you get them interested in your writing unless of course your goal is to get them to link to you for, you know, whatever reason.

[35:06] Rob: Yeah, I agree. It would help to know more specifically, you know, what he’s looking to get out of this. The other thought I had is that if you already know what’s on these blogs, then you can probably just read the title of the post and scheme through their post and getting an idea what they’re blogging about. And if you already know of the information because it’s so basic then that’s probably all you’re going to need to do to stay familiar with what they’re doing and keep up to date. And if you are in an equal plain with them in terms of readership and notoriety, then it should be pretty easy to reach across the island just dropping them an e-mail. If you are at a lower kind of plain field than them if they’re just have a lot more popularity, a lot more experience, then sending them an e-mail is, you know, it may or may not work but the sure fly way to do — to start getting noticed is to pick the two or three top blogs, you know, that you’re looking at in this niche and start leaving some comments. You don’t have to read the whole post if you already know the information.

[35:59] Again, if they’re commenting on, you know, talking about stuff that you already know then you should be able to add to that pretty intelligently, pretty fast from the top of your head and be able to improve upon their post. And once you do that a few times, these folks will start to recognize you and then when you drop them an e-mail, you can mention “Hey, I’ve been a reader, you know. I’ve been commenting on your blog,” and they will likely notice it. But I think it does come back to what Mike said what exactly you hope to get out of these relationships. If you kind of just want to network and yeah, have them cross on products, then that’s fine. I do also thinking that maybe writing a post about them or even linking to them in a post or two of yours, it’ll show up in their Analytics and they will notice you. You know, they’ll notice that you link to them and they probably have Google Alerts if you’ve mentioned them by name and they’ll come out and check out your blog and that’s another way to kind of extend, you know, a hand shake and maybe get them to — to notice you off the bat. So those are our thoughts. Hope those help, Steven.

[36:51] Mike: The last question for today is from Andrew and he says, “Hi, Rob and Mike. Great job for the podcasts, I’m really enjoying them. I was listening to the how to drive traffic to your site podcast and noticed that it was recorded a few years ago. I’m curious if all the tactics still apply. For example, do you still view Twitter as not being useful for driving qualified traffic? Thanks in advance for your response, Andrew.”

[37:11] Rob: So I think most of the approaches, I think all of the tactics actually that were listed there still apply. I think for his specific question which is probably all we have time to answer on this podcast is “Do you still view Twitter as not being useful for grabbing qualified traffic,” and the answer I have is yes. So I view Twitter as a great networking tool. It’s a great way to keep up relationships. It’s kind of like just up an ongoing chat between a bunch of people. It’s great for partnerships. It’s great for kind of deepening relationships and it’s also really good if you are creating content. So if you’re putting out a blog, a post now and again, whether it’s on your company website or your — an industry blog, something that is interesting to people who are reading your Twitter feed, then Twitter is a great distribution mechanism.

[37:53] But that’s — that’s how I view it as, it can certainly draw people in from your Twitter feed to your app but honestly, you need, I mean literally tens of thousands of qualified followers to get any kind of sales funnel out of that. And I just — I don’t see it as being very viable nor a good way to spend your time. I mean there are much, much more effective ways of driving qualified traffic that we did talked about in this episode — it was episode 6, I’m pretty sure.

[38:22] Mike: Yup.

[38:22] Rob: How to drive traffic to website and you know, there — obviously, there’s paid acquisition and there’s SEO and there is other social media approaches. I mean there’s — there’s a lot of ways to do this that that are going to just be a much better use of your time if you’re actually trying to sell something as the end goal.

[38:38] Mike: Yeah, I would have to agree with that. I mean I still don’t necessarily view Twitter as a great way to drive traffic. Now I do feel like Twitter has value in that if you already have a product that’s established and you’re getting people to follow your product on Twitter, then I think the Twitter is a great way to get additional information out about your product or to get people talking about it but that’s going to be generally for people who are already customers of yours. Or if you’re running a product where people kind of admire your product or in your state they admire what you’re doing, they may follow you just kind of hear what sort of things are being said but I don’t necessarily think that those are going to turn in to qualified leads. All of that said, Twitter does have an advertising platform so you may be able to tap in to that and use it to get paid traffic. It’s not something I’ve tried yet. I actually have like a hundred to a $150 that I got from American Express for some program that they were running. I will be trying that out with AuditShark to see how that goes and I’d be happy to share what I learn from that. But aside from that, I don’t think that just having a Twitter account is going to drive the qualified traffic that is qualified enough to turn those people in sales.

[39:54] Rob: All right, Andrew. Thanks for the question. By the way, he is at videorascal.com.

[39:59] [Music]

[40:03] Rob: If you have a question or a comment, call it in to our voicemail number at 888-801-9690 or e-mail us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt, used under Creative Commons. Subscribe to this podcast in iTunes by searching for Startups or via RSS at StartupsfortheRestofUs.com where you’ll also find a full transcript of this episode. Thanks for listening. We’ll see you next time.

 

 

 

 

 

 

 

 

 

 

 

 

Transcript

[00:00] Rob: If you stick around to the end of this episode of Startups For The Rest of Us, you’ll hear us talk about whether you should pay someone to build your app or learn how to code, figure out how you find datasets you need for an application and talk about the best ways to leverage cloud offerings. This is Startups For The Rest of Us: Episode 89.

[00:18] [Music]

[0:00:27] 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.

[00:36] Mike: And I’m Mike.

[00:37] 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?

[00:42] Mike: I’m a little disappointed. I think I might have to seriously consider letting go one of my contractors.

[00:47] Rob: Really? Is it a developer?

[00:49] Mike: Yeah, it’s unfortunate. It’s a new relationship. It’s not like he’s been with me for like two or three months or whatever but he started about a week ago. And so far he has yet to actually log any time in oDesk. I mean he keeps telling me about this work he’s doing and is it okay if he comes in some hours offline for offline work or whatever but he’s like, “Oh, I don’t feel comfortable using the oDesk tools that track my time because I feel like it puts pressure on me.” [Laughter] That’s kind of what I used to —

[01:13] Rob: That’s a bad sign.

[01:13] Mike: … make sure. I know.

[01:14] Rob: Yeah.

[01:14] Mike: I know.

[01:15] Rob: Yup. I mean I probably — over the years, I have probably had between twenty and thirty contractors work for me through oDesk. That is a big red flag for me. And I know sure there may be one in twenty people who do that and really aren’t comfortable with it but it just — I don’t know. That is the reason we use oDesk, right? It’s so you — if during those initial weeks you do get some insight in to what they’re doing and how they’re doing it.

[01:35] Mike: So I don’t know. If it doesn’t straighten out and resolve itself, probably by Friday, I think I’m probably going to pull the plug if it doesn’t resolve itself rather quickly.

[01:44] Rob: Yeah, I had to something similar just a couple of weeks ago. I had a developer helping me out with some classic ASP work on HitTail and he was a good developer and he was — he picked up the code really quick which is, you know, a fit because the code is not — it’s not well-architected and he was doing a good job but he just wasn’t putting enough time. He was putting in like two to three hours a week or three to four hours a week and I wanted him for ten to fifteen. And there was always something that was coming up, you know, in his other work. “Oh, the servers all crashed. I have to rebuild them.” I was like, “Okay.” And then the second week it was something else and sure enough we were six weeks in and he’s still averaging like, you know, four or five or six hours a week. So I had to pull the plug as well. So luckily my ASP work has slowed down so I may — I may just be able to scrape through with .NET deal we have at this point.

[02:29] Mike: Uh huh, cool.

[02:30] Rob: Hey, so we have a few new iTunes reviews. We have Quentin at Newbie who says, “This is a great podcast for developers or other creative types looking to use their skills to bootstrap a business. It’s great hearing about the ups and downs, successes and challenges with your own projects that you guys discuss. Thanks and keep up the good work.” And then Thomas Benos he said, “Great work. Rob, Mike, I really appreciate what you do, very good content.” So we greatly appreciate iTunes reviews. Mike was just telling me we’re up over 200 reviews globally which is just awesome. So if you haven’t given us some review, you know, we’d really appreciate a five star. Log in to iTunes, search in for Startups and checking us out.

[03:09] [Music]

[03:12] Rob: So today’s episode we’re going to be diving in to some listener questions. We have several on deck and we will see how many we can go through in our time constraint. The first question is how to do marketing for your startup and it’s from Luis Buenaventura. And he says, “Hi, Rob and Mike. I’m not sure if you guys have taken a marketing question recently but I wanted to ask if you could give some specific first steps towards marketing a young startup. My startup Infinite.ly which is Infinite.ly is a tool kit for small business owners. So I’m not sure if we generate the kind of content that would be useful for SEO something that Rob talks about quite a bit on his blog. I’d love to hear your thoughts on this. Cheers, Luis.” And I went and check out Infinte.ly and it — at least at this point, it’s a landing page and there are super simple way to get a website up. So you can just like kind of type in a domain in to their form and build a web page in 60 seconds or less. I imagine they’re going to have additional things that they’re going to add over the years but they are very horizontal. So it’s a pretty broad market at this point.

[04:17] Mike: I think that my first take on would be that in terms of SEO, everything here is all in one page and I understand that maybe it’s just because it’s in beta right now and there’s not a lot that you want to talk about but I think the biggest red flag to me is that it’s really just a one page. I mean there’s no — almost no way to get any good SEO benefits out of it. The second thing that I would say is that in looking at it says choose a domain name and build a web page in 60 seconds or less and that’s kind of the title at the top. And that doesn’t seem to me like it’s loaded with any sort of keywords that would lands you any traffic. So I think that between the two of those things, it’s really hard to promote the site and get any sort of traction through, you know, some of the classic SEO methods that we talked about. I think that, you know, there is a link to a blog and say hello which I assume is just a contact page but the blog is even on its own sub domain. So that’s going to end going to a completely different page and just kind of reviewing some of the things on the blog. There’s not a lot there that would relay to the product itself.

[05:19] I mean the second post that I’m looking at here is talks about Diablo 3 and the Philippines Startup Community and that has absolutely nothing to do with the product. So that blog isn’t getting any kind of help for the product itself. And you know, those are the kind of things that I would look at first. I would probably take some — build some content around solving the problem itself that your product is trying to address. So for example putting up a landing page, create a couple of articles on how to build a landing page, why you would do it, what are the benefits, what are the down sides, what are the problems that people run in to and set those up. It’s kind of an educational area of the site and link to those from your main page and then use those to drive traffic back to the main page and say, “Hey, if you’re interested in this particular type of product that will solve that problem, sign up here.”

[06:07] Rob: Yeah, I think the first step in to trying to market this app is to figure out who really needs it like very, very specifically who needs it and whether that means you actually niche the app and you say this app, it is for small restaurants who want a website or whether you just realized that small brick-and-mortar businesses are going to be more attracted to this business but you really need to figure out because at this point, I would say  figure out who is already using it, who’s getting value from it and go market to them. But my guess is perhaps no one is using it yet that you haven’t, you know, actually done any marketing or gotten anyone using the app. And so you can look at something simple like just trying to get a few initial users in to it by doing some Facebook ads but I wouldn’t even know where to start with – with doing the demographics because you can’t advertise to the whole world. If you have a bunch of money in the bank and I mean seven figures that you’ve raised from venture capital, you won’t have as much of a challenge as doing a big horizontal market and trying to advertise to every small business in the world like Intuit does or Mint.com does.

[07:08] But you know, when you are bootstrapping and you’re trying to just get a trickle of users in and trying to use revenue to grow from, you really have to know who your customer is and you have to know what websites they frequent and you have to notice — know how to reach them. So beyond the SEO that Mike talked about, obviously, Google is a great source, organic searches are a great — great way to do it but going out and pitching a guest blog post, pitching podcast, interviews where you’re interviewed about, you know, doing your startup or how you can help people and doing some initial Facebook ads to get some initial interest. I mean there’s — there’s a ton of stuff. Obviously, this could be an entire book. Each of these things we’re talking about could be its own podcast episode because there’s so many details to it but realize that until you figure out initially who it is that should be using your app and who you’re trying to market to and where they are, none of this other stuff is really that important or really that helpful because you can’t target your message. You can’t position them.

[08:03] And this is actually something I did quite a bit with HitTail when I first acquired it. It was going after, in my opinion, the wrong audience. So there wasn’t good product market fit and I’ve kind of shifted that and the people who now come, you know, come up on HitTail and discover it, the positioning is quite a bit different. The conversion rates as a result are quite a bit higher. So I think that’d be our, our initial advice for first steps.

[08:25] [Music]

[08:28] Rob: Question number two is from Pierre and he says, “Hi, guys. I love the show since I came across it via Lifestyle Business Podcast. Something I personally would love to hear the show about would be your advice on how to go about starting a web app beyond drawing up interactive diagrams and hiring someone off at Elance. Well, I’m no a coder. I’ve used web apps like Juno, WordPress and Magento for years. Now I have an idea that I believe has a huge potential, a proven demand and should be relatively technically simple.” And he puts a cough in there. “What next? My concerns are that if I hire some guy off Elance that my inexperience in coding will end up either blowing out the budget or producing something with major unforeseen technical problems at the same time, is it really the best using my time to spend six months learning to code PHP and MySQL which seem to be the advice you guys gave on starting a software-based business in the past. I’d also be curious to hear what your thoughts were on using Kickstarter to fund something like this.” I think we have discussed this exact topic before and I think we said the opposite of what he said we said. I think we said before that you shouldn’t learn how to code and that you should hire someone to do it.

[09:33] Mike: I was going to say the exact same thing. I don’t know if we ever said that. We might have said that it’s probably a good idea to learn how to code but not necessarily be the one to implement everything. I could see myself saying you should at least learn how it’s done and the process but I don’t know as I would advice anyone to go out and spend six months learning how to code because I don’t think that coding is the thing that you’re really selling. I mean you’re selling a product and your vision behind the product and how it’s build and how everything is put together as a whole ideally a lot more important than knowing how put the stuff together on the back end. He said, “Now, I have an idea that I believe has huge potential, proven demand and should be relatively technically simple,” and that’s one of those things where I guess he doesn’t provide the details about what the proven demand is but I guess I wonder what type of proof he got. Is it just talking to people? Is it showing them screen mockups or anything like that but I guess to get more to the meat of his question, I don’t know as I’d really worry about hiring somebody off of Elance or oDesk or you know, any other place to spend some time building this up and produce something. I think my bigger concern would be about whether you’re building something that people actually want.

[10:43] Rob: Bingo and that’s it. He says it’s a proven demand. How are you proving that? Because if it really is as good as what – how be — percentage here, then shouldn’t he be able to find a development partner pretty easily. He should be able to prove that to him and come to him and say, “Look, it’s a proven demand. Here are the numbers, right?” If it’s proven, then — then he has some data about that. That means you’ve talked to ten customers who’ve committed to pay a hundred bucks a month for the thing or you have an e-mail list of a thousand of people who are dying to get this thing. And any of those assets are assets that you can use to convince a developer to come onboard with you and say, “Look, let’s do a prototype in three months. You’d take X percent equity and let’s develop together.” That’s actually the one approach that I recommend when a non-technical founder is trying to find a technical founder is to have a — you either need some money or you need some, I don’t typically say proof but I typically say some evidence that this idea is actually going to fly and it’s not just some random idea that you have. So if you have that evidence, then I would say consider looking for a co-founder.

[11:41]  The other avenue you could look at if you don’t want to, you know, give away equity or if you don’t actually have the proof that you need to convince, you know, a developer to come onboard is to go through Code Academy and Code Academy is a free online tutorial but it’s more of like a course that teaches you the basics of coding and there’s been over a hundred thousand people have gone through it and bunch of people are — are just getting in to learn the basics of coding. And so well I don’t think you need to spend six months to learn every element and every class and every aspect of MySQL. I do think that learning how to code so you understand how to hire and how to manage someone is potentially worth your while to spend part time for a month or two to really kind of get a concept of how to build the basic database accessing PHP app.

[12:29] Mike: Yeah, I think the other thing that I would mention is that if you really thinks that it’s relatively technically simple, what he could do is he could hire is he could hire somebody off of, you know, any of those websites we talked about and have them put together something relatively simple and it doesn’t even need to be his application. Just have them put together a very basic website with some very, very basic data access stuff because of it — truly is a technically simple problem. I think that the question that he’s getting in to is what sort of major unforeseen technical problems am I going to end up running in to. Well, I think to work with somebody and trying to manage them, get your feet wet with managing people who are developers and who are technical when you’re not. Putting together just a basic website and it doesn’t need — it doesn’t even need to be your application because it’s just be like the sales website for your application and you say, “I want to capture this data from people when they come to the website,” and that’s it.

[13:21] It doesn’t need to be anything fancy but you’ll get an idea of what that person is like, what is it like to work with them, what is it like to manage them, what, you know, how they do things, and if that doesn’t work out, I — chances are really good that you probably didn’t spend a lot of money to begin with. So you can kind of move on to the next person and try again with either a related site or you know, something else. But again very, very, minimalistic and in terms of technical challenges, somebody who’s good should be able to point some of that stuff to you and you can intentionally make some poor decisions. You go through Code Academy and make some intentional bad decisions and find out if they point them to you and say, “No, you shouldn’t do this because XYZ,” and if they are able to point out those things to you that should be very basic, then you know that you got somebody that you can kind of rely on to help work through those bad times.

[14:10] Rob: Man, I think to what you said maybe have them build the prototype, you know, you said they can do the marketing side or they can do just have you could have somebody do a very simple prototype that you can then show around and show that there is interest. Something else I would say is depending on the niche. If it is something that you’re eventually going to be selling over the web so it’s more of a SaaS play, then think about just going to LaunchRock and getting a landing page or going to Unbounce in getting a landing page or installing WordPress and using John Turner’s coming soon WordPress plugin and try to collect e-mails, you know, because what’s that going to do? It’s going to do a couple of things. One, it’s going to prove to you that it has the value and two, it’s going to prove to a developer whether you, you know, you try to get them onboard for equity or — or whether you’re just trying to convince yourself to actually spend the money, go to the Code Academy and go through the effort of hiring someone on oDesk.

[15:00] It’s just one more point of confidence for you to move forward with. And realistically, it actually if you, you know, we’re going to try to raise some funding, it could also be an asset towards doing that. So Pierre’s second question was that he’d be curious to hear what our thoughts are on using Kickstarter to fund something like this. My gut instinct, I know Kickstarter takes, I think it’s a total of 8% or 10% that includes payment processing plus their cut, so I don’t think losing that 10% is that big of a deal. My inclination though is that Kickstarter is they — they edit heavily like a lot of people submit stuff to them and they don’t tend to want to fund certain types of projects. And from what I’ve heard they don’t tend to want to fund a lot of software projects. It’s more designed and art stuff like music and movie. So my guess is you wouldn’t be able to get this on Kickstarter but frankly, if you are able, I don’t see why you wouldn’t. I don’t know of any drawbacks to it. Kickstarter may be in my future for a project I’m looking to do. It won’t be a web project. It’ll be something else. So…

[16:00] Mike: I’ve looked at Kickstarter before and some of the statistics that I’ve seen basically say kind of the same thing that you just said is that software projects of any kind don’t tend to do very well. I mean anything dealing with technology. The funding rate was definitely less than 50%. It was like 30 or 40%.

[16:17] Rob: Right. There was one called — it was called Light Table. It was like an IDE for Ruby or Python or something and that got funded and that’s a big success story. So yes, there have been those by and large, the — the ones that are really successful that I’ve seen on Kickstarter are physical products, kind of physical manufacturing stuff that actually have larger production class and then there’s kind of the arts and the movies and music and such so, you know, might be worth the try. I know it’s quite a bit of effort to pitch them and my guess is, you know, that your odds of getting in are low.

[16:48] [Music]

[16:51] Rob: Our next question is from Peter Ozoldos He says, “Hi, Mike and Rob. I’ve been listening to your podcast for a while and I enjoy and profit from it despite not having yet made the leap to start my own product. I’m just applying some of the ideas at the firm’s product that I’m working at but I’ve already started tearing around an idea notebook. Some of the ideas that occurred to me would require a comprehensive dataset to be useful at all much like Rob’s College Coach Finder idea described in his book. Well the book glosses over the process, I’ve researched this idea and came across a pristine dataset of the information needed to build the product that could bridge this gap. The problem is that data costs several thousands dollars per year to license. I would love to hear about some of the approaches you tried or would try to discover whether such datasets exist and how it could be obtained. Looking forward to listening to more episodes in the future. Keep up the great work. Cheers, Peter.”

[17:44] Mike: Well the first thing that I’d like to point out is that when you’re looking for pristine data, a pristine data is going to cost you money and there are not a lot of ways around that. One of the things that I can think of that you might want to try, I mean if you’re looking specifically at this dataset, they cost several thousand dollars a year at license, I would try to amass, say kind of a critical mass of people who are interested in the product and you can kind of roll the dice on it and try and get as people on to a mailing list as you can and then actually go out and buy the dataset and plug it in to your engine or your product or whatever and then release it as a product. And hopefully, you’ll get your money back very quickly but it’s something that you’re going to want to prove that the demand is there before you make that investment in the data.

[18:28] Some other ways that I can think of to get what I’ll call less pristine datasets is to, you know, hire some virtual assistants to just go out and start harvesting that for you. I read a book recently. It was from Robert Graham. It was Cold Calling Success Secrets or something like that but basically talks a lot about cold calling and how to harvest data for your cold calling efforts and he’s got some great ideas about how to go about that as well. And you know, one of the things that most people don’t think of is going down to the public library and you can hire VA’s to go do that for you but you know, there are a lot of sources of information at public libraries for different organizations, different state lists that people subscribe to or members or organizations from the government the people are members of because of they’re – they’re in the specific industry or something like that.

[19:18] So there are ways to get that data and you know, just be a little bit creative in terms of where you’re directing people to get it. I mean I don’t think that you need to do all the leg work for getting some of that data but you do have to be a little bit creative about coming up with the ideas of where to get it and then you start directing people to go get that data for you. And hire a couple of people at the same time, make sure that they are both going out and getting the same sets of data or you know, maybe hire three or four people and then just keep the best one or two that you find that who are — who are coming back with the most results and the most unique results and you know, work from there.

[19:54] Rob: Yeah, I agree. There’s no way I’d pay that that licensing fee before I had at least the mailing list or potentially some people committed to paying for the product.  And I think the purchase you named are good. I also think that you could ask for some sample data if there is a pristine dataset that cost three to five grand or ten grand or whatever, ask for a small subset of sample data and they’re going to tend to be willing to do that and then you use that to populate your database and assuming the licensing allows you to do this but allow people to come to your site, do a sample search that you name as a sample search, this is what the data will look like and then at the end say, “Hey, you know, we’re basically putting together the full app right now. We’ll totally ping you and you this is live, give your e-mail.”

[20:37] So it’s no just a simple e-mail landing page. You’re actually giving people a taste of what they might see and that’s actually the — the example that — that he brought up is an app called College Coach Finder that I was considering building. This was before the Micropreneur Academy. So this is like three and a half years ago and I eventually got side track with other projects but I still think that’s actually a decent avenue because there was just so much open space in the SEO area and the dataset did cost, I think it was $3000 to license and that’s why I have all the comps all built out because I was going to have an entire, you know, sale site built and allow people to click through and then basically collect e-mail addresses and it was more of an idea validation at that point than it was trying to amass a list of people to sell to eventually but of course, that would have been a good side effect.

[21:26] So really, unless you have a lot of money, if you’re bootstrapping then, you know, you probably don’t want to drop that three to five grand or ten grand or whatever without first figuring out if there’s demand and kind of faking it until you make it, right? It’s like what can you do? How far can you go with just a sample or small subset of data? So thanks for the question, Peter.

[21:47] [Music]

[21:50] Rob: Our next question is from AJ Bovird and he says, “Hi, guys. Just finished episode 85 on my way home from an Azure dev camp. And I can’t wait to check out some of the new tools you’ve introduced me to. I was wondering if you could talk in the future episodes about your experiences or thoughts on using cloud platforms like Azure and AWS which is Amazon Web Services. Well, I’m having a lot of fun learning about Azure’s intricacies in particular. I’m having a hard time making up my mind on whether some or all of the individual components that make up Azure are really going to be that beneficial to me as oppose to traditional hosting. Thanks very much for taking the time each week to produce a podcast. It’s an invaluable resource and a source of inspiration for me.” Mike, you are the resident expert on this. I’d love — love to hear [Laughter] your thoughts first.

[22:35] Mike: I mean I think that you have to have the right type of product to actually build on, you know, a cloud platform in order to make it worth the time and effort of doing it. For example, Azure does a lot of black holes when you start getting involved with it. There is a wealth of information out there but it is I’ll say poorly organize for somebody who’s just trying to learn it. There’s not a good walk-throughs that I have found. I mean at this point I kind of understand it and how it all fits together and how it works but when you’re first trying to figure it out, it’s not that easy and I think that the learning curve is high enough that in most cases, you shouldn’t be looking at it. That said, there are cases where I think that any sort of a cloud platform would be very beneficial for you.

[23:18] So some of the obvious things are, is if you have a very, very large datasets. So if you’re hosting video files or large files or you plan on scaling out to be hosting a large numbers of them, I could imagine if you were running Dropbox or something like that, you could definitely use, you know, the Azure or Amazon platform for that type of stuff. If you’re doing anything that needs to scale across tens of thousands of user and you know that upfront, then those are types of places. Another one is where you can foresee the upfront cost of that hardware being very, very difficult to swallow and you need to be able to manage your cost associated with it. So those are the different places where I could see going in to those cloud platforms and wanting to use them. But if you’re just hosting a small website where you’re going to be able to host everything all on one server, I would be hard press to say, yeah, you should do that.

[24:11] Rob: Frankly, I have a tough time seeing the real value proposition of things like the Azure and Google App Engine. I see some benefits but to me the fact that your app has to be built differently and that you’re essentially locked in to that platform is a huge negative in my mind. Amazon Web Services is just a generic global umbrella of like ten different web services Amazon offers and I’m assuming that he means EC2 which is their Elastic Computing Cloud, that’s different, EC2 is actual virtual server. It’s like VPS as that you can boot up and if I have a Python or Ruby or pitch the app that run on there or .NET app if use their Windows engines, I should be able to move that app somewhere else. I should be able to move that to my own hosted server to a cloud server or somewhere else. There’s no lock-in. So that’s the big difference I see. Azure and Google Engine and I think there maybe one other or — they’re almost — they’re different. They’re like compiled run time environment where you put code in —

[25:11] Mike: Not all of it though. They’re —

[25:13] Rob: No?

[25:13] Mike: No —

[25:14] Rob: Because — could I — could I just take a basic .NET app and run it in Azure with zero changes and —

[25:20] Mike: Yes.

[25:21] Rob: … put my sequel database?

[25:22] Mike: Yup but —

[25:22] Rob: So it’s just basic hosting. Why has no one told me this? [Laughter]

[25:24] Mike: Because —

[25:25] Rob: I heard .NET MVP and I’ve never heard this before.

[25:27] Mike: Because it’s — it’s brand new like that — that came —

[25:29] Rob: Oh I got it.

[25:29] Mike: … just came out —

[25:31] Rob: Oh, okay.

[25:31] Mike: … this year. So like there’s —

[25:32] Rob: Okay.

[25:33] Mike: So there’s a difference between like Azure kind of covers the whole thing. It’s kind of like Amazon Web Services that encompasses like ten or twenty different — different types of services they have.

[25:43] Rob: Right.

[25:43] Mike: The Azure umbrella right now covers, I don’t know, probably fifteen or twenty different things that Microsoft does hosting for, so like they do actually have the capability to just host the sequels for server for you. They have the capability to just host a web application for you. Basically, just upload the web application bits and they host everything. That said, if you want to get in to something like fault-tolerance or scalability, there are other things that you can do and know that — that they do somewhat involve like a vendor lock-in and no matter which platform you go with whether it’s Amazon or Azure or Rackspace, it doesn’t matter at that point. You really are going to have some sort of vendor lock-in if you start integrating in to certain types of their services.

[26:26] Rob: Right. Yeah, I think, AJ, I think my advice would be unless you have a specific need for something that Azure offers that only Azure offers and that you really can’t get elsewhere, I would lean towards more traditional hosting like VPS shared hosting, dedicated hosting. Obviously, there are specific needs and sometimes you may need to do that but as someone who’s likely bootstrapping and you’re going to want potentially want to find contractors who can work on it. Azure it its own — I mean ask Mike, it its own unique skill set. You need experience in it if you’re actually using their, you know, their tools and not just doing their new hosted version that he’s talking about. I would actually see Azure hosting if you could just plug a .NET app in to it, I would put that with – with other hosting options that are available out there. But the one where you specifically have to compile your app in order for it to work and same thing with Google App Engine, I would personally veer away from those unless there’s a very, very specific reason that you think you’re going to have to scale at that level right away. So I hope that helps, AJ.

[27:24] Looks like we’re one more question on deck and this one is from Oak Norton and the subject is “Outsourcing a Help Desk”. He says, “Hi, guys. Just found your podcast last week and I’m fifteen episodes in and loving it. My commute is great now. I have a question and maybe you’ve answered it in one of your podcasts and I just haven’t reached it yet. I’m still working a full time job and I have a pretty cool niche website. It’s riddleme.com,” and it looks like it helps people build scavenger hunts. So it says, “I’ve been selling a simpler version of the software for ten years at riddleme.net and it was very intuitive. The new website is more robust so there’s a few new complexities and the interface isn’t quite a streamlined. I’ve had a few people request refunds lately and I would like to implement a live chat on my site where someone potentially from the Philippines,” there’s kind of a question mark there, “… could be available 24/7 to help anyone that has a question. Have you ever done this? Do you have any recommendations? Thanks, Oak.”

[28:18] My first question would be why do you think a live chat is going to keep people from requesting refunds? Do they request refunds within three or five minutes or ten minutes of signing up? I have never had a 24/7 live chat for any of apps and I have some apps that have gotten a lot of traffic and where people are signing up pretty much 24 hours a day from all around the world and e-mail support has been sufficient for those. So that’d be my first thing is to question whether you really need a live chat or whether you just need a good VA who can check two or three times a day kind of a good intervals to kind of hit people as they’re getting confuse and provide really good support.

[28:57] Mike: Yeah, I think that my thoughts on it would be, you know, start asking people why they’re cancelling. It kind of get to the root of the issue of why they are cancelling. Is it because they didn’t understand the product? Is it different than what they expected? And if so, how is it different? And start figuring out how to alleviate that pain or alleviate that problem so that those sorts of things don’t happen and I understand that that can be very, very difficult because in looking at the website, there’s a lot of information here. I mean just the first page alone is enormous. I’m not saying that it’s good or bad. I’m just pointing out that there’s a lot of information on there and it may be the people are buying it without reading all that stuff and not really understanding what it is that they’re actually buying. I do see a video there. I don’t know how many people actually watch it so that would be something else that I would look at and start taking measurements and try to figure out, are people actually watching the video?

[29:48] You could use Wistia. It has a free plan now. So you could post your video up to Wistia and you could basically plug it on to your website and use their metrics to figure out are people watching it, are they watching ten seconds in and saying, “This is boring. I’m not going to watch the rest of it,” because you may see traffic from that, actually, it’s hosted on YouTube. So you probably have close to no metrics on, you know, how much people are actually watching and what the bandwidth usage of that is. So those are the places that I probably start. I start looking to see what information you can glean from the people who are returning things and you know, what people are actually looking at on your site. There’s something else that I think of, there were a couple of different tools that we’ve talked about in episode 85, I think it was, for monitoring where people are looking on your site. One of them was Crazy Egg. What was the other one, Rob?

[30:37] Rob: Inspectlet.

[30:38] Mike: You could use either of those to find out where people are looking on your website and see if there are sections of the text that you have on this — on this main page that people are just not looking at and maybe tighten that up a little bit.

[30:51] Rob: So yeah, I think that coming to the conclusion that you need a 24/7 live chat as I said before, I think maybe a premature. I think the first thing that I would do is think about going to a service like UserTesting.com or FeedbackArmy.com, I think they’re a little cheaper right now, and getting a bunch of people to come and hit your site and you know, records a video or screencast of them as they do it, you can specify certain demographics try to get people in your target market and they can talk about what’s confusing them and the try to improve those things because it sounds like you’re already aware. You said that the new website is more robust but there are new complexities and it’s not a streamline. So that maybe the real cause, you know, you may not actually need — need 24/7 support. You may just need to — to improve the app overtime and it’ll go away mostly.

[31:35] But the other thing I’d think about doing, if you are still handling e-mail support yourself is to hire a VA at this point and get them up to speed because that’s going to take a little while, have them handle e-mail support first and the nice part about e-mail support is you can work them up gradually to that, right? So they can — if they run in to an issue, they don’t know how to answer a question, it’s not like they’re on a live chat and the person on the other end doesn’t get an answer or whatever or gets an answer that, “Oh, I don’t know what I’m doing,” if you’ve had someone doing e-mail support for thirty, sixty, ninety days and they’ve bounced issues to you, you’ve given them the solutions, they’ve learned about your app, they’re going to be so much more able to do that live chat support. You’re just going to be in a better position for them to handle it. So I would say if you’re thinking about doing a live chat support at anytime, to think to try to get them doing e-mail support first so they can learn your app on the ropes and then move on to it later.

[32:26] So I haven’t ever done this. I haven’t ever seen the need for live chat support but I would definitely, if I would hit oDesk, I’d find a solid VA for e-mail support and slowly working them up to that if you think you need to do it. I mean worst case, you could get something like Olark. You install the JavaScript on your site and then the little popup in the bottom right where it says, “Hey, click here for help,” and just not have someone manning it or you only man it eight hours a day when you’re working and the other sixteen hours a day, when they click on it, it says, “Hey, no one is online right now but you know, just pop — pop your name and your message here,” and then you guys are going to support e-mail so at least people feel like they’ve sent in their issue and it’s pretty easy to do and it’s easy to do from every page.

[33:08] There are obviously some other services that do as well. Olark is just one that comes to mind because I’ve used it with DotNetInvoice. And the other cool thing about Olark is and with most of these is you can get an app on your iPhone and if someone pings your, you know, your site, you can be out and about, your iPhone beeps and you can actually have a live chat on your iPhone while they’re on your website. So hopefully, those are a few good suggestions for you Oak. Thanks for listening to podcast and for sending in your questions.

[33:33] [Music]

[33:36] Mike:  If you have a question or a comment, you can call it in to our voicemail number at 1-888-801-9690 or you can e-mail it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt, used under Creative Commons. You can subscribe to this podcast in iTunes by searching for Startups or via RSS at StartupsfortheRestofUs.com where you’ll find a full transcript of each episode. Thanks for listening. We’ll see you next time.