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[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.

 

 

 

 

 

 

Show Notes

• Lifestyle Business Podcast
• MicroConf
• Foolish Adventure
• YCombinator
• AuditShark Private Beta – September 10th
• AppSumo
• inDinero

Transcript

[00:00] Mike: This is Startups For The Rest of Us: Episode 88.

[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?

[00:25] Rob: You know, I want to give a shout out to Dan and Ian from the Lifestyle Business Podcast. They just wrapped up their first in-person tropical MBA mini-conference. I think there were eleven or around a dozen entrepreneurs that are kind of in their audience and they just wanted to bring them together in to one place. And the cool part was in the most recent episode of the LBP, Dan had mentioned that us doing MicroConf and talking a lot about kind of the inner workings of it, you know, our behind-the-scenes episodes we’ve done each year, he said that we may had part in influencing him to kind of do an in-person event because — it’s actually an uncommon thing in terms of podcasters who build an audience and you tend to interact with people via e-mail, via the podcast itself and maybe via a blog but it is indeed, you know, kind of a rare occurrence for a podcast to actually blow up in to a full-pledge conference.

[01:13] Yeah, I’d just wanted to congratulate them and it felt good that, you know, we may have been a very small part of the inspiration or at least got the spark going in his mind of, hey we, you know, we should bring folks together in to one place and they did it. You know, we do it in Vegas. They did it in two weeks in the Philippines.

[01:28] Mike: Yeah, I can’t imagine trying to coordinate anything like that overseas. I mean I think that that just be really hard and it’s funny because we’ve gotten a couple of requests from people, I guess more than a couple for us to do like a MicroConf in Europe. And  it’s one of those things where it’s — it’s honestly kind of intimidating to even consider doing something like that. For them I think it’s a little different because they knew the area and they know how to get in and out of the country and all these — all the logistics of coming in themselves. But for us to do something in Europe seems extremely intimidating just because we’d have to deal with booking our hotel over there, you know, depending on the country they — we would have to deal with the language barriers and things like that. And I think that a hotel, it’s a lot easier to get by speaking English but I just can’t imagine trying to get people to come in from a foreign country and to actively trying to pursuit that type of an audience and bring them in.

[02:19] Rob: Yeah, I think they, you know, they did it smart. They started small like I said they’re only about a dozen folks there. They didn’t do — I mean it wasn’t like MicroConf where there is a hundred and sixty people there and we fly speakers in from around the world. I mean they just, Dan and Ian led the sessions. This is just based on — listening to the podcast. I don’t have any insider information. But Dan and Ian led the sessions. I think they had — they had Tim Conley from Foolish Adventure and maybe another expert or so. And it was kind of more like a seminar. It was a two-week long thing and it was — people hacking away, you know, kind of day and night trying to get to launch and then meeting during the day and giving inspiration and feedback and all that stuff. So it was just super fast iterations. And I think the whole — the whole program actually run two months, maybe a little longer than that and a combinator in this two-week hackathon. So it was — you can almost think of it as like maybe a Y combinator type of thing where they got a group together and you know, they let them feed off of each other’s energy and then folks gave each other feedback and such.

[03:11] But that would definitely be easier to organize in the Philippines or something if you had someone living there like, you know, Dan. I guess he’s not living there but he’s, you know, he frequents there and you only have eleven people to worry about because you’re right, if we’re — if we had to do something in like France or I don’t know, Western Europe or anywhere, there would be — there’d be some hurdles for us to have to jump in order to get — pull off a MicroConf. And I have seen, yeah, we’ve had at least a dozen requests to do something like on the East Coast to the US or in Western Europe. I think definitely on our radar but that maybe a year or two out until we really have everything, you know, dialed in with our — our West Coast one and then we can think about hiring someone to help us with the, you know, something in England might be the best place to do it actually. It’ll eliminate the language barrier and it’s just, you know, a nice Central easy place for people to get to I think.

[03:59] Mike: Well, having a second MicroConf in Europe would certainly alleviate the problems associated with, you know, keeping MicroConf small because then we’ve had two instead of one. [Laughter]

[04:07] Rob: Yeah and as you know, I mean based on people that write in as well as folks in the Micropreneur Academy, we have a quite an audience in Europe and I think when I first sold my — when I first put my book up for sale, I was surprised that 40% of the sales were from outside the US and there was a big chunk of those were in Western Europe. So I actually do think like there, you know, that we do have enough of momentum there that we probably could pull it off in terms of ticket sales. It’s just all the other stuff that goes along with it that I just don’t think you and I have the time right now. You’re trying to get AuditShark out of the door. I’m trying to grow HitTail and it’s like taking or I have the ball to do, you know, another conference and it doesn’t feel like a wise move at this point.

[04:46] Mike: Just recently we actually got a podcast question which we’ll probably cover in the near future, a question that came in from somebody in Zimbabwe so —

[04:53] Rob: Yeah, it’s always — it’s always crazy. How about you? What’s new with you? Any — any AuditShark news?

[04:57] Mike: Yeah, I’ve been trying to figure out exactly how much longer it’s going to take to get AuditShark out the door and I went through all the different bugs or the majority of the different bugs and cases that are outstanding in order to get AuditShark to launch. And I’ve started cutting things left and right. And it’s funny because things that used to be must-have’s to me if — I guess I’ll say, I’ve dialed them back and [Laughter] then just kind of threw them away and said, “You know what? I really don’t need that.” And it’s just interesting how my perspective has shifted in terms of just trying to get the product launching out the door.

[05:31] Rob: Do you have an example of like a specific feature that you’ve — that you used to think was a must-have and that you’re able to get rid of it?

[05:38] Mike: Yeah, I can — I think one off the top my head which was a — because everything is in Azure, I wanted to be able to run things like reports and things like that on a daily basis or weekly basis or whatever. And one of the issues with running that stuff in Azure is that because everything is distributed, there’s no expectation of concurrency anywhere. So when you deploy an application out there, it has to be written in such a way that it can run on its own or with other copies of itself. So if you have a scheduler for example, the problem with a scheduler is that you can’t just deploy it out there and have everything run because the first part of the problem is, you know, the redundancy. I mean the primary purpose of using Azure is to, you know, rely on that redundancy and if you only have one copy of that Azure worker role or web instance out there, then there’s no guarantee that it’s going to stay up and running.

[06:33] You know, they move things all — all around all the time. They bring things up, they bring things down and you have no control over that but you’re using things on a platform and the expectation that they have basically set forth is that if you build your application correctly, they can bring one of them down and they set up rules so that they’ll be in different machines and different physical hardware so that they can bring one down and then bring you up another copy of it some place else. And your traffic just kind of gets a load balance between them. If you deploy a single instance, you don’t get any of that redundancy and the problem with Azure is that it can drop that instance at any given time and you’ll basically lose everything scheduled during that timeframe until it comes back up again. So it’s possible for the thing to go down and then you lose it, you know, anything that will — was scheduled to go off during that time will basically be gone. It just won’t happen. So whether it’s reports or whether it’s specific tasks that need to go on and that you really have no notification or way of knowing that that scheduler went up and down.

[07:31] Rob: So it’s —

[07:31] Mike: And that’s kind of a problem. [Laughter]

[07:32] Rob: Right, right. But what’s the feature that you had that you’re not going to do?

[07:36] Mike: It has to do with organizing the data and the building reports off of it.

[07:41] Rob: I see. So you had a feature organizing data building reports and you’ve decided to drop it because it’ll get you to market faster. Why the change of heart? What convince you that you could do this now? Is it just looking at it with fresh eyes? Or is it that it’s serving a new market now?

[07:57] Mike: No, it’s more of a I’ve decided not to try and build a redundancy in to it and if it —

[08:03] Rob: Got it.

[08:03] Mike: … hacked out, then there’s only so much I can do about it, so it’s one of those things where what’s the harm if somebody doesn’t get a particular report especially if it happens within the first couple of months of the application being live.

[08:16] Rob: Is it — is it a report that would run in the background that’d be e-mailed to someone or it is someone —

[08:19] Mike: Yes, no. It’s —

[08:21] Rob: Okay, a background report.

[08:21] Mike: … it’s back end process. At that time, there’s this process that scheduled that will kick off and run a report. Well let’s say, 12:04 the — the Azure instance drops and then comes back five or ten minutes later. Well, that scheduled repot is not going to execute. So it will never execute. It actually won’t execute until the next day. So that daily report will not go out pretty much for anybody, you know, for you running this process once a day and just a report is just one example. I mean there’s a lot of other back end processes that, you know, I’m looking at that I might — I may end up scheduling. But if that’s the case, how often could it happen, you know, if you only have something scheduled once day, chances are good that it’s probably not going to it hit very often.

[09:01] Rob: Right.

[09:02] Mike: But I mean there’s a lot of things where people are going to be putting schedules — schedules in to the system. So they’re going to say, “I’m going to schedule my audit to run on my servers at 1 a.m. or 2 a.m. or 3 a.m.” Oh, what happens when those things kick off and —

[09:16] Rob: I see.

[09:17] Mike: I’m caching them on the client sides so I don’t think that that’s going to be an issue. It’s going to be more if the customer decides to make it change in the near, you know, somewhere around the time that audit supposed to kick off and it’s just not going to be able to stop it in time or reschedule it and —

[09:32] Rob: Right.

[09:32] Mike: … I look and I said, well that’s probably not a huge deal right now.

[09:35] Rob: But how hard is that to fix after you’ve launched if it becomes a big deal?

[09:39] Mike: It’s a — it’s a very challenging problem like it does shoot —

[09:41] Rob: Got it.

[09:42] Mike: … it fault tolerance. Scheduler is a very hard problem.

[09:44] Rob: Right, so it’s not — yeah, it doesn’t but it doesn’t become any harder because you do it after launch. It’s the —

[09:48] Mike: Yeah.

[09:48] Rob: … same difficulty basically to do it now and do it later.

[09:51] Mike: Right. And now all —

[09:52] Rob: Yeah.

[09:52] Mike: … I’m doing is just saying well there is only so much I can do. I think it would be a significant engineering effort to make it work and I’ve talked to some people within Microsoft to say how would you actually do this and you know, they’re still trying to get back to me.

[10:05] Rob: Yeah, it seems like — a pretty big limitation with Azure because I have — you know, I’m on a basically a cloud server which is essentially a really beefed-up VPS, right, Virtual Private Server and that’s what runs HitTail. And I have at least a dozen tasks that run in the background daily. They’re — there’s billing that runs every night. They’re, you know, they’re all console apps, right, just Barebones EXE’s that pulls off out of the database and do something with it and then — and then stop. And so there’s — there’s billing. There are — there’s an eMailer that you get keyword, e-mail alerts. There’s a few reports that it actually generates and e-mails to me about the number of trials of previous day, the high volume users, you know, just different stuff so I can keep track of it. And when they don’t run once, it’s actually not catastrophic. I mean even billing has choked a few times. I’ll, you know, upload a buggy version and it’ll crash. And since I’ve written it so that if I run it the next day, it’ll go back the previous two days, obviously, it’ll go, you know, kind of bill everyone who should have been billed by now. But that’s pretty rare that that happens and I can count on it running everyday because I’m using the Windows Scheduler. The Azure doesn’t have anything like that or it doesn’t have an equivalent, you know, mechanism.

[11:15] Mike: You can do those things but because of the way AuditShark works, it’s a little different. At least about the underline architecture for it is such that when something is scheduled to go off, it’s not initiated on the client. So what happens is it’s initiated on the server. So the server says “I’m going to spawn this task and this task needs to happen on the client.” So what it does is as part of that scheduled task on the server, it creates an entry in one of the Azure queues and because the clients are pulling in to the system and saying, “Hey, do you have anything for me to do? Do you have anything for me to do?” It creates that task basically on the fly. So it’s more of the fact that it is time sensitive in terms of the delivery and not the fact that, you know, there’s this report — I mean the reports was just one example.

[12:03] Rob: Right.

[12:03] Mike: And it’s probably not a big deal if it runs, you know, if somebody doesn’t get a report Tuesday night and they get one Wednesday or they, you know, it doesn’t kick off Tuesday night and then Wednesday morning I look at it and say, “Oh this didn’t get out. Let me fire it off manually and just go ahead and do it.” That stuff, I don’t think is a big deal. What is a big deal is if somebody schedules their audits for the middle of the night and then none of them run.

[12:25] Rob: Yeah, I agree. So it’s — it’s early July right now. And you are honing in on — on what timeframe for doing your beta and other stuff?

[12:35] Mike: I was going to say September 1st.

[12:37] Rob: Yeah. So somewhere like first week of September is what you’re looking at?

[12:40] Mike: Yeah, the first or second week of September, probably at the latest.

[12:43] Rob: And that is what — that’s when you’ll have beta to – you’ll let like a handful of beta testers in to start?

[12:49] Mike: Yeah, I mean that’s probably when I’ll start opening up to, you know, multiple private beta testers. I mean I’ll probably be reaching out to a couple of them within the next week or two to see if I can get some of them on in August. So it’ll kind of be, you know, there’ll be some that will come in on August, probably only one or two, maybe three tops and then hopefully, once I get in to September, then I’ll kind of flashed out more of the issues and you know, add in more private beta testers. And then I think that the first, first or second week of October is kind of what I want to shoot for a full blown launch.

[13:21] Rob: Because Labor day is September 3rd and that’s a holiday. So, you’re looking at September 4th or you’re looking at the September 10th?

[13:28] Mike: I was looking at September 10th because –

[13:29] Rob: Right.

[13:29] Mike: … if I’m talking to these people beforehand, you know, the Monday afterwards or the day after and say, “Hey, would you like to beta tester?” I want to talk to them beforehand. I’m going to talk to them in August at some point.

[13:39] Rob: Let’s say a date. Let’s say it’s September 10th and it’s just so that we can revisit this in — I mean that’s basically two months away because it’s July 10h today. So you have two months to get — get your stuff together. What happens between now and then? Is that all feature development?

[13:53] Mike: So some of it is feature development, I’ve still got that back end tool that is being built and that, you know, working through a number of different usability bugs right now but I have to have more conversations with people about what their expectations are for what the tool tells them because the engine, you know, the engine works the way that it works. It grabs data from the machines and puts it out on to the servers and I can run at least minimal reports at this point. But what I really wanted to find out from people is what things they’re interested in knowing about their machines. Are they more interested in — in like the vulnerability side of things or they’re more interested in path side of things? Are they more interested in industry standard configuration policies?

[14:35] I mean I’ve been reading a lot lately more of to gaining marketing material for my website and in looking through different ways that machines are — are hacked in to or compromised, a lot of those breaches come from system misconfiguration. So that was kind of really what my goal was. But I want to know is that people or something to people are actually really concerned about or is it, you know, just the data there, out there is telling me hey, this is a scenario of serious concern and it becomes more of an education process because I don’t want to have to educate people as much as possible. I really like to have them to say, “Yes, I recognize this is the problem. I want you to tell me what all the issues are with it.” And the product can do it. It can do all of those things. I just really need to figure out I guess what my landing point is in terms of the content that’s loaded in to the system. So —

[15:25] Rob: Very cool, man. Two months obviously we’ll be talking about it between now and then but I’d just kind of want to get — get something on the calendar so we can check it out as it — as it gets closer.

[15:34] Mike: So I have a question for you. You —

[15:36] Rob: Yes.

[15:36] Mike: … you had done this, the articles for HitTail and you had started pushing that to people and having them be able to request articles based on the keywords. How is that going?

[15:47] Rob: You know, it’s — it’s going quite well. It’s actually going better than I thought it would. I knew that there’ll be interest in it but there had been multiple articles purchase pretty much everyday. And so I did almost eighty articles. It was like seventy five articles in June that were sold and then looking to — I’m actually on track to beat that in July. And so what that’s done is I talked a little bit about it last time but in effect as raised the lifetime value of a customer because that revenue aside from the — the money that goes to pay the authors, that revenue is now — it’s pretty much pure profit. It just — it goes straight to the bottom line and as a result if I divide that whole, you know, the big bucket of revenue by the number of active customers, I have this — this bucket of money that’s basically increasing lifetime value and it means I can now spend more money to acquire a customer and that really was the original goal. I mean I talked about this in MicroConf talking. It was definitely the goal was to increase that lifetime value because aside from — from increasing prices or keeping people from canceling like lowering churn rate, selling extra things to people, extra value, extra things that they need is one of the best and easiest —

[16:58] Mike: Yeah.

[16:58] Rob: … ways to kind of increase a lifetime value of a customer. So you have more money to work with when you’re doing your marketing. So I’ve been pretty happy. I’m actually getting in to some paid acquisition with HitTail to haven’t done up till now because the funnel was so — it was a leaky funnel is what the phrase I use. People were just bailing during the trial and then the churn rate was high but I got that tamed and so now I’m actually, looks like I’m going to be able to use some — some paid acquisition and make money out of it pretty easily. So it’s — it feels like a good time to be — to be doing this. I’m really glad the articles have worked out to say the truth. And I think for the amount of hours that I spent building it, it’s probably been the most profitable feature that I’ve implemented in the past almost year that I’ve owned HitTail now.

[17:41] Mike: That’s really cool. I mean a lot of that sounds very similar to just basically selling additional products to your, just say, audience.

[17:49] Rob: That’s what exactly what it is, yup. So with DotNetInvoice when we wanted to increase lifetime value, we added on. We have a QuickBooks Integration, you know, little modules that’s like 99 bucks. And so it’s along the same lines, right? It’s just selling one more thing that people probably have already requested or maybe they haven’t but you know that it’s a good compliment to the service and create a lot of value for both you and the users doing that. The funny thing is maybe the punch line to the whole thing is yes, my — my revenue, my profit went up but I have this monthly milestones I’m trying to hit and typically it’s like I want to grow by a thousand dollars month over month, right? So it’s a small growth right now but I missed the milestone by $14 this month which I did two —

[18:29] Mike: Oh.

[18:30] Rob: … months ago as well, right? So it’s like one more article would have pushed me over the revenue mark. But again, it comes back to, okay, so fairly, you know, by — by comparison to 14 bucks it’s a pretty large number and I missed it by 14 bucks like it actually doesn’t really matter because I’ll blow past it next month, anyways. But it was just funny to add those numbers up and be like, “Oh, it’s going to be close, it’s going to be close. Oh…” That the agony —

[18:54] Mike: [Laughter]

[18:54] Rob: … just defeat, you know. But it’s nice to see – to see the growth coming. I’m actually I saw a big rush of traffic because I did the AppSumo deal in June and that went well. It sold a lot and so I should be expecting a big chunk of cash from that that I’m done hoping to feed in to my paid acquisition funnel to just, you know, be able to leverage that cash in to buying some ads through some different channels I’m trying out and hopefully, continue to grow the recurring revenue because the AppSumo deal is all one-time revenue, right? They basically bought a year’s worth of HitTail for a discounted price but I want to take that cash and put it to good use by building recurring revenue and that was really — really the goal of it.

[19:31] Mike: Now, did you include the — the money from the AppSumo deal in to your June numbers or no?

[19:37] Rob: I did not, no. Yeah, I know the AppSumo deal I bet will do between two and three times my monthly June revenue that I will — I will net two to three times the month of June revenue purely from that AppSumo deal. That’s — the audience is huge, dude. So they, you know, it’s a really quick influx of cash is what it is.

[19:55] Mike: Uh huh. So basically based on what you just said though, you know, what you’re supposed to do generally when you’re doing accounting for these types of things is when you get those one-time revenue spikes that are for a year in advance, you’re supposed to take that whatever that number is divide by twelve and then amortize it over the course of the next twelve months. So realistically, you did probably —

[20:15] Rob: Right.

[20:15] Mike: … hit then.

[20:16] Rob: I did.

[20:17] Mike: That $14 is covered I think. [Laughter]

[20:18] Rob: Yeah. Oh, it definitely is. I’m just not — I’m just not going to do that because I’m going to — I get paid, you know, in about a month. They pay net 60. So I get paid in early August and I’m basically going to just reinvest that right back in and I’m not — probably not going to count – I’ll probably put an asterisk in my little revenue tracking sheet and say this month, you know, I took away X thousands of dollars from the AppSumo deal but I’m not even going to — I’m really way, way more interested in recurring revenue. This one time burst in revenue even if they are high four and low five figures, I won’t say it’s not interesting to me but it isn’t as nearly as interesting to me as something that is building up that monthly recurring flywheel, right? It’s the flywheel that I want to get. So just because I can — if I can license something or you know, do one big sale that goes in one big influx of cash, I want to take that money and just reinvest it back in to  creating more flywheel revenue, more recurring revenue.

[21:09] Mike: No, I understand that. It’ll make sense to me. I mean I was just saying that in terms of your the charts and stuff that you’re putting —

[21:15] Rob: Yup.

[21:15] Mike: … in for, that was just probably, you know, divide by twelve and then add it in every month for the next twelve months.

[21:22] Rob: But yeah and based on accounting and tax accounting and all that stuff, I’m sure that’s what I’m supposed to be doing but it’s kind of yeah, I’ll just lump it in with my annual revenue at the end of the year. Hey so, you’ve been working four tens.

[21:33] Mike: It’s going pretty well although I’m not particularly thrilled about getting up at 5:30 in the morning. I mean I’m sure there’s people who listen to this and are like, “Oh 5:30 is nothing. I get up at 4 or 3.” I am not a morning person by any stretch of the imagination. I mean if I — if I were a president of the United States and I could had the power to abolish mornings, I totally would. Like no work anywhere, would get on before noon. [Laughter]

[21:55] Rob: So but you’re — but you have Fridays free now, right? You’re basically able to get — if you’re traveling, you’re able to get home a day early and —

[22:02] Mike: Right.

[22:03] Rob: Have you been able to put in time on AuditShark on those days?

[22:05] Mike: Yeah.

[22:05] Rob: … just spent and do another stuff.

[22:06] Mike: No, it’s been on AuditShark so, you know, I’ve been getting home late on Thursday evenings or you know, really early in the morning on Friday but then I get up Friday morning and then I have pretty much all day to work on AuditShark which is really kind of nice. And you know, because I have — I’m off to five contractors working for me right now. So I have all of them doing different things but managing them, you know, in the evenings is much more of a full time job than I thought it’d be because —

[22:32] Rob: Yeah.

[22:32] Mike: … I have to direct people all over the place and say, “Oh, you need to do this,” or “This isn’t right,” because I have everything going through FogBugz, you know. And it’s nice to be able to manage all that stuff in there but at the same time, I feel like there’s times where I have to micromanage things because they are all contractors. And I think maybe this is a little bit of a difference between employees and contractors where contractors will not do something unless you explicitly tell them to do it —

[22:57] Rob: Yes.

[22:57] Mike: … versus employees who will probably look and hence say, “What should I be doing to kind of move —

[23:01] Rob: Yeah.

[23:01] Mike: … forward?

[23:03] Rob: Right.

[23:03] Mike: So I felt like —

[23:03] Rob: Right.

[23:04] Mike: … I’m doing a lot more micromanaging than I would like to be but I don’t know if there’s another choice right now because it’s not like I have the money to hire — hire somebody full time.

[23:12] Rob: Right, you know, that’s what I’m going to say. I think as you move up to chain, what I’ve discovered because I’m starting to move up to chain with a few oDesk contractors with kind of some positions that I have and what I mean by moving up to chain is you start making money for my business that we’re working on and then you have a little more budget to pay them because you’re not just syncing money in to it. And so I’ve sort of hiring people that are a little more expensive than I would have originally hired. And I’m finding that those people tend to be more forward thinking even as contractors and I have people who are making suggestions about improving my business which is super helpful and it means that you’re exactly right, you don’t have to micromanage when you start getting good people like that but they tend to be a little more expensive for sure.

[23:55] Mike: Yeah, I mean I have one guy who’s been with me since January so he’s — he’s done things like that where he’ll see something and he’ll just do it and I’ve told him upfront in numerous times like, “Look, if you find something or see something that should be fixed or could be done better, just go ahead and do it.” And there’s been several times where he’s just like, “Oh and by the way just to let you know, I did this,” and I was like “Wow, that’s awesome. Great. [Laughter] You know, great. Thanks.” So he’s definitely aware of those types of things but, you know, I don’t — obviously, I don’t get that from everybody. One of the things that I’ve had the contractors worked on is the AuditShark’s sale site because I — the site is out there right now. It’s okay. It was just kind of meant to have a website but I’ve put a lot more thought and effort in to the website itself as a, you know, kind of sales machine at this point. So what I did was I hired out to design and had somebody build everything for me and then I had to put together. And basically, what I did was I generated all the content for all the different pages and one of the things I found was remember that survey, the Wufoo survey that I was running a couple of months ago?

[24:55] Rob: Yup.

[24:56] Mike: What I did from that was I was trying to build like the FAQ page because most larger applications are semi complicated applications have an FAQ section. And what I did was I went through that and one of the questions in my survey was “What concerns or questions do you have about AuditShark?” or “Would you have about, you know, a service like AuditShark?” And I basically was able to fill out my entire FAQ based on what people answered there.

[25:23] Rob: Nice.

[25:23] Mike: Oh, the nice thing was it was people raising objections. I mean and that’s really what —

[25:29] Rob: Sure.

[25:29] Mike: … what the people were saying —

[25:30] Rob: It’s perfect.

[25:30] Mike: … is like, you know, “This is why I wouldn’t use this product.” And I was able to say, you know, somebody — somebody said “I would be concerned about the quality of the code,” for example or “I would be concerned about how trustworthy the application is.” And of course, you know, how do I answer that because I’m a small company and that basically just laid it out in the sale site and then the FAQ and just said, “Look, you know, I’m one person. I’m building this but here’s my online profile. Here’s my LinkedIn account. Here’s the podcast that I run. Here’s the conference that I helped run. I’m all over the internet. I have absolutely no intentions of starting my — my entire online identity over again.” And you know, and that’s basically what I’m kind of relying on for my initial trust. I think that it’ll change overtime as it becomes I’ll say more corporate and I established a lot more generalized credibility in the field but you know, for now, I don’t really have a whole heck of a lot to rely on. So…

[26:24] Rob: Right. And I think you’re — you’re ahead of the game because when I bought HitTail basically the trial to conversion funnel was just a bit small. I mean it was like, I don’t know, 1% or something of people who started trials converted. And one of the things that I did after I relaunched in January was e-mail. I had my VA e-mail everyone who canceled during their trial and asked why they canceled. And he did that for a few weeks and I got this great list of essentially were — they were objections. And so you already have that and you haven’t even launched yet. So that’s awesome. But what I did is I took those objections. I categorized them and there were seven different groupings basically and there were things like, “I don’t have time to use HitTail,” and so I said, “Okay. What’s the solution?” The solution is they should be able, you know, write articles with one-click and that’s why I built the one-click article feature.

[27:13] Another one was “I don’t understand the difference between this and Google Analytics,” or they’d say things like “I get the same information from Google Analytics.” And the fact is that it is just not true and so I was like, “Okay.” So the solution to this is to educate them. And so during the trial now, I had the 30-day trial, people receive about — it depends on how often you log in and some other things you do but you receive about between four and six e-mails during that 30 days. And some of them are purely educational on like SEO, you know, on content generation and other ones are — are more specifically to HitTail and so one of them is just two questions. So it’s kind of like the two most important questions I think people have and it has the questions that has kind of a one sentence answer. And then it says, “You know, here’s a link to a 60 seconds screencast that does even — an even better job in answering these questions specifically.”

[28:06] And so if they click through from the e-mail, they go on to my FAQ and there’s a big video, you know, that they can watch right in their browser and it answers that. It’s my voice. It’s me doing a screencast and I have Google Analytics on the left hand side and I have HitTail on the right and I show how you can have 1000 keywords someone found before in Google Analytics and HitTail has the same 1000 but then the suggestions are only twenty or thirty of those. Like it’s picked out the best ones you should target and that’s the key difference between the two things. So that’s just one example but there were like I said seven different objections essentially and that’s — those seven objections that I packaged together, you know, in a document, that became operation retention, right? And I talked a little about that a few episodes ago and that operation retention essentially doubled my conversion rate. The original 1% [Laughter] the trial to conversion rate went way up when I relaunched and I added credit card, you know, needing a credit card before a trial.

[29:00] But it had – still, it did not gone up as much as I wanted and so from there, I’ve now, you know, increased it by a hundred percent using this — this operation retention. So the nice part I mean the way it ties in to what you’re doing is you already have some of those objections. Certainly new ones will come up later. Once you launched, some people cancel, you know, you want to do the same thing and find out why they canceled. But you’re definitely ahead of the game on that to already have those and be able to put them in an FAQ and then I would suggest, of course, during their trial that you do like I did. You already have the info so you can just maybe call them out. You could put them right back. You could even put the text directly in to an e-mail, you know, and do one of the e-mails during the trial or you could link out to them. But definitely I have seen a noticeable increase in my conversion rate because you’re essentially able to communicate with people, you know, using the phrasing and the same questions that — that other people have had.

[29:46] Mike: Yeah and that’s been the great part of it. What I’m planning on doing the private beta that I’m doing is talking to people and asking them, you know, kind of what they’re objections are to the products then and help and use that to essentially set up the — the auto responder for when people do sign up and be able to send them some of those things upfront. I might actually — I might gather some of that information upfront and then not implement it and then wait a little while like wait maybe a month or two and just measure my conversion rate and then implement it and see what my conversion rate is afterwards because if I do it upfront, I’m not going to have any idea whether it had an effect or what kind of effect it had. I’m not real sure which way I’m going to go on that but, you know, it’s definitely something I plan on gathering.

[30:30] [Music]

[30:33] Mike: If anyone out there is using inDinero, they probably seen this already but basically inDinero decided that they were going to do away with their free plan. I mean we talked about it at MicroConf and you know, the idea is that if you’re going to be eliminating the plan or changing your pricing or something along those lines then typically what you do is you grandfather the people who were in that plan before hand and you just let them keep using it and then you start charging all of the new people. Well, they didn’t do that. They basically said, “All you people who are using the free plan, you have until July 31st and then we’re going to get rid of everything and you have to upgrade between now and then or you’re basically going to lose your data.” So I kind of understand, you know, I sent them an e-mail and said, “Look, what’s going on here? You know, this is a pretty unusual to see this kind of thing.” And I didn’t get a direct response back. I got this generic response from their CEO probably the next day or the day after kind of explaining their decision. But the initial contact that I got was just “Hey, by the way, you have to pay for this within the next thirty days or we’re going to close your account and delete all your data.”

[31:35] Rob: So they just fumbled, right? You can’t do that. If you’re — if you’re going to do that and cancel people’s accounts, you have to give them three months, six months. You got to give them a lot of notice. You’re still going to piss people off when you do that but then at least, you know, you’re giving them time to do it and I don’t see then — the logic of doing this. This really is the whole why free plans don’t work thing. Everyone thinks a free plan is a great idea. It’s going to be a great marketing approach but in the end, it rarely, rarely works unless you have doves of money in the bank and you know exactly what you’re doing, almost it never works. I’d say 99% of free plans that I see, they get removed. You can probably name a handful of free plans like Dropbox and — that’s the only one I can name right now but —

[32:16] Mike: Gmail. Gmail.

[32:16] Rob: Gmail, thank you. Well and Facebook is free, right? I mean there are free apps but these are enormous, enormous apps. If you don’t have apps with hundreds of millions of users or a huge bank account balance, it’s very unlikely that free plans work. And we talk about this before with like MailChimp. They have a free plan now but they didn’t have one for years until they were enormously profitable. And now that they are — I mean MailChimp is minting money basically. They have added —

[32:45] Mike: They handed it differently though. They handled it pretty differently.

[32:47] Rob: I know they added a free plan — they added a free plan back in. They didn’t have one to start and so they’ve added it. Now that they know their funnel, it’s optimized. They know how many free users will confer all the stuff. They can now afford to do that but to do it from the start and then cancel it like this, it’s — it’s bad news, man. And inDinero seems to do this. They seem to fumble the ball on this kind of hard, what do you call it? It’s like a decision. It’s a decision that you make that’s going to piss people off and they don’t seem to be able to handle it very well.

[33:14] Mike: And like I — I would have been okay with it if they sent me an e-mail like before they even did it, you know, like I understand its decisions like this they sometimes have to be made and I would have been okay with it if I gotten an e-mail that says, “Hey, look. We’re really sorry. We put up this free plan and not only is it not working now but we are actively losing money. And we need people’s help and this is what we’re going to do. We’re got — we have to start charging for this plan if you really want it and we’re going to leave it in place until the end of the fiscal year,” because this is financial data so the problem is that because they did it after I forget when I got the e-mail, I’m pretty sure that it was last week, but it was basically after the six-month mark.

[33:54] So basically most banks and stuff, they only let you go back six months after that — or three months and — and pull out the data electronically once you get past that three or six-month mark depending on the back, it’s kind of a pain in the neck to go back and get stuff from beforehand. So like even if you’re doing QuickBooks or pull in transactions through QuickBooks, a lot of them only allow you to go back three months, so that means that there’s like three months of transactions that I would have to manually pour over some place else.

[34:21] Rob: Yeah.

[34:21] Mike: And it’s just like you’re totally screwing your “customer-base” who kind of helped make you popular enough to get you to the point that you are. And I got no notice and that’s really what pisses me off about it. It’s like I got no notice. It’s financial information and then say, “Oh, and by the way, if you don’t want to lose this, you know, you’re going to have to pay us, you know, $30 a month.” And I basically have to until the end of the year. I’m not happy about it. I already signed up. The other thing that they had said in their e-mail was “Oh, you can log in and you can get your data.” Well they replaced the log in with a popup like a modal popup. They come up and says, “You know, your free trial has expired. Please enter your credit card information.” See, you can’t even get your data out unless you pay.

[35:01] Rob: Yeah, yeah, that’s — that’s a bummer. Have you e-mailed — I wonder if you e-mailed them directly if they had export your data but —

[35:06] Mike: I did and they did —

[35:08] Rob: Yeah.

[35:08] Mike: … sent it to me. And they said —

[35:09] Rob: Okay.

[35:09] Mike: … “Oh that’s a bug we’re fixing it,” but…

[35:11] Rob: Right. In full disclosure, I have three inDinero accounts that I’ve — that we’ve been paying for; the Micropreneur Academy and MicroConf has one and then I have one for all of my Numa group businesses and DotNetInvoice has one because that’s a separate partnership. And so I’ve liked inDinero. I like some of the stuff they do. I think we commented a couple of months ago about how they kind of flub the thing around tax time where they removed a bunch of or a couple of different types of categories and it basically wracked my data right as tax time was coming and then I e-mailed them and didn’t get back to me. It took them like ten days to get back to me. And I had — I spent like three or four hours doing manual updates to it. So that made me mad.

[35:49] But in general, they — they have hustled and they’ve done a decent job at the product and it is one of the better products out there for doing this, so I’ve always cut them a lot of slack but this kind of thing is in my opinion and I’m not even — I don’t have a free plan so I’m not like directly being affected by this but this is — it’s a bad sign for me, right? It’s a bad sign that they aren’t being more careful with the kind of changes that they’re making to their apps and giving people more of an opportunity to — to get their data and to upgrade gracefully and that kind of stuff. Do — we received an e-mail right? Someone suggested a different app that does something similar?

[36:23] Mike: Yes, somebody sent an e-mail. Well, actually it was unrelated. They had sent an e-mail to us commenting about episode 85 where we’re talking about free and low cost solutions for entrepreneurs and it was called Wave Accounting. And it looks largely similar to inDinero. I haven’t signed up for it yet. I probably will but it looks very, very much like inDinero except that it is free. Basically, the way they make money off of it is kind of like Mint where they make recommendations and suggestions to you for different products and then they get paid commissions on those products.

[36:58] Rob: Right. Yeah, I got to be honest, with then trying to launch with free I’m very skeptical. I would not, personally, would not —

[37:05] Mike: No, it’s —

[37:05] Rob: … put my accounting on it because I know they have a revenue model but they’re going to hit scale and if they don’t, they’re going to come back and probably pull the same thing that inDinero has.

[37:12] Mike: They — they — I don’t know. They’re claiming they’re getting tens of thousands of users signed up every month and they’ve — I don’t know how long they’ve been around. I haven’t really dug that far in to it.

[37:22] Rob: Sure.

[37:22] Mike: But I’m definitely going to start looking at it.

[37:24] Rob: I’m just telling you I’m —

[37:26] Mike: I agree.

[37:26] Rob: … personally hesitant to base my business accounting because of how complex it is on an app that that is free. But I would prefer to pay. If Wave was this good and they charge me and I was able to pay, I would prefer to do that. And obviously not for — like for an app like Facebook, I’ve, you know, I would prefer to use it for free because that’s how it is and it doesn’t — doesn’t matter if Facebook went away, it wouldn’t bother me. But if I’m in Wave Accounting and I’m six months in and suddenly something catastrophic happens or they have to shut down because they don’t have money or they, you know, pull this — this thing like inDinero did and they suddenly want to charge everybody and they’re going to lock my data up then, you know, that’s not going to work.

[38:02] Mike: Yeah, I mean for me, it’s not about having to pay for it. It really isn’t. It’s about —

[38:06] Rob: No, like hey —

[38:06] Mike: … how it was handled. I don’t mind paying for it and I mean this is — the business that I have this for is more of a shell company at this point and I’m just not — I’m not really using the data but I kind of need —

[38:18] Rob: Yeah.

[38:18] Mike: … to have it some place. So I threw it in — in inDinero because I knew that it was going to be under their fifty-transaction a month limit.

[38:24] Rob: Right.

[38:25] Mike: So —

[38:25] Rob: They’re not grandfathering thing it is, that’s a big deal.

[38:28] Mike: Yup. I got to tweet about it and you know, from them saying, “Sorry, please contact our e-mail support,” “Sorry you’re unhappy, please contact our e-mail support.” I think that they could do a better job handling it. It’ll be up more of upfront about things but I don’t know, whatever.

[38:42] Rob: Yeah. You know, I had to shut down HitTail’s free plan after I acquired it because it was just tanking the server. There were so many people using it for free that had been using it for years and years. And I basically I approached them with kid gloves as what I tried to do. I mean just e-mailing, letting them know they had a long time to — as much time as I could give them, I could — they could export their data. I offered them a discounted plan, you know, I kind of went the whole nine yards and was apologetic and said it was — I mean the reason that thing was having outages was could — which because there was too much load on the server and there wasn’t enough revenue coming in. So I’ve been through this myself and I wasn’t able to grandfather people in. There was a very real reason why I wasn’t able to grandfather people in but at least I won’t say I did it perfectly. Certainly, I had a few complaints but I guess I thought — it seems like I thought through it a little more because I knew people are going to be upset. I almost — it almost seems like inDinero maybe didn’t think anyone would be that upset about this.

[39:35] Mike: I — I don’t know like I said I’ve been — there’s — there’s a few different things. One was being completely locked out and not being able to get back in the short timeline, you know, their complete lack of notice. I mean if it been three months or six months or something like that, that’d be different or if they just said, “Look, in October or November or something like that, then we’re going to have to stop offering this free plan,” but it was just — there was no notice or whatsoever and then just the way that they’ve handled it since then, I just turn — it turns me off to them completely at this point.

[40:03] [Music]

[40:06] Rob: Well, listener if you have a question or a comment, you can 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 each episode. Thanks for listening. We’ll see you next time.

 

Transcript

[00:00] Rob: On today’s episode of Startups For The Rest of Us, we’re going to be talking about whether you should have multiple websites for multiple products and some ways to generate residual income. This is Startups For The Rest of Us: Episode 87.

[00:12] [Music]

[00:21] 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.

[00:29] Mike: And I’m Mike.

[00:30] Rob: And we’re here to share our experiences to help you avoid the same mistakes that we’ve made. What’s the word this week, Mike?

[00:35] Mike: I have completed the code merge that was giving me absolute nightmares last week. [Laughter]

[00:39] Rob: Oh, the merge. So to give the listeners a little background, you had a couple of developers working and like they were both checking coding that would conflict.

[00:46] Mike: Yeah.

[00:46] Rob: Is that right? And you would have to do manual merging? Why wasn’t Subversion or Git handling that?

[00:51] Mike: It’s because it was the Visual Studio’s .Designer files which Microsoft for some reason decides that they’re going to reorder things when they go back in to the designer files. So if you two different people make changes, you’re not guaranteed that the changes in each of those files are going to be in the same places and because it’s kind of an auto-generated file, there’s not much you can do about it. So I actually wrote a utility that would sort the contents of the file and make it so that it was a lot easier to merge.

[01:19] Rob: How interesting. Yeah, I never ran in to that. I think when I was on big teams doing .NET development we use Vault or we did used Perforce but we had the lock file checked. So there if you check something out, it was locked to avoid this kind of thing.

[01:33] Mike: Yeah.

[01:34] Rob: You know, so two people couldn’t edit the file at the same time and maybe that’s why — maybe that’s why they did it at those companies.

[01:39] Mike: It could be. It could just be the type of file too. I mean because everything else merged fine. It was just a couple of .Designer files and a couple of .resx files and you know, I found a utility that would sort the resx files so it’s a lot easier to manage but the .Designer file, I couldn’t find a utility for that. So I just — I wrote one. It took me probably two or three hours to write it where it’s going through by hand. I probably spend six or eight hours before I just kind of gave up [Laughter] and turned to writing a code.

[02:06] Rob: Yeah, that’s brutal. So I guess it’s been about three and a half weeks now, I launched the article feature, one-click articles on HitTail and it’s continuing to do well. I finally sent out an e-mail to all the paying customers. Before that I basically just had a splash screen when people logged in that they would see, you know, articles were available but about a week ago, I finally sent an e-mail to everybody who’s paying and they, you know, continue to ramp up. So I think we’ve done over sixty articles in like twenty five days. So it’s been a nice pace and as a result, the lifetime value of my customers has, you know, assuming this pace keeps up as increased quite a bit. So it’s definitely been, I mean the entire goal really is to increase the lifetime value so I have more leeway when acquiring customers that I can do more creative things and some things are getting little more expensive.

[02:56]So it’s been — been a good experiment. We have had three kind of returns. One I was able – we were able to fix. My admin fixed it himself and then actually, the other one he fixed as well. There’s only one where we had to… gave someone’s money back or we asked for kind of a rewrite. That’s what we’re going to do is have a hundred percent money back guarantee on the article quality. So I actually, to be honest, I expected by the time we got to sixty articles, that there would had been a lot more just manual labor like trouble, you know, support issues, keeping that like an articles or just different things that had happened and so far, it’s just been kind of a walk in the park. I’m knocking on wood right now because I don’t want to jinx it but so far I’m really happy with the level of effort we try to expand versus the revenue that we’ve received from this feature.

 

[03:41] Mike: And you kind of did a soft launch with it too, right? I mean it’s not like you just blast it out to everybody and said, “Hey, there’s this brand new feature that we think you’re going to love.”

[03:48] Rob: That’s true. Yeah, the soft launch was just the splash screen and so it was very slow going because only thirty to fifty people log in a day and so some trickled in for several days and you’re right, I did fixed several issues during that time and so by the time I e-mailed, gee, as close to a thousand people that really had helped that I had fixed those things, you know, that I hadn’t just on a big launch without tweaking it first.

[04:10] Mike: Cool. I think that by the time we record the next podcast, I’m going to have a definitive date for when I’ll be starting my close beta for AuditShark.

[04:18] Rob: I love it. So that will be next week. We can have a count down timer.

[04:22] Mike: Great.

[04:22] Rob: Mike’s timeline.com and it’ll be a JavaScript count down timer. I like the idea.

[04:27] Mike: Isn’t there some website where you can — you go there and you have to pledge something or you give them a picture of you from high school and you have to meet your launch date and if you don’t meet it, they tweet it out and they e-mail it out to all your friends and family.

[04:42] Rob: I like this. If you know that URL –someone send it to me.

[04:46] Mike: About the other thing is I think along with my launch date, I’ll at least know what the date is but I’m definitely going to start my closed beta program on that date and then I’ll probably give myself maybe four or six weeks to give myself time to get some feedback from people and talk to people and get some of the different bugs and stuff fixed but I’m feeling good about it. I mean things are — things at the back end are starting to really come together with the code merge that I did and the guys had been making really good progress on the back end code. And it’s just been more of — I’ll say it, I feel like more like a project manager than actually a developer at this point.

[05:19] Rob: Right. And when your tight on time, sometimes it’s the best way to be.

[05:23] Mike: Uh huh. And I switched over to four by ten hour days for my consulting work for the next month or so. So that will give me an extra day every week to work on stuff and I’m still working on things in the evenings to get everything done. But so far things are progressing nicely.

[05:36] Rob: Nice, four tens. That’s a nice schedule.

[05:39] [Music]

[05:42] Rob: All right, so shall we dive in to our first question?

[05:44] Mike: Yeah, what we got on deck?

[05:45] Rob: Our first one is from Andrew and he says, “Hi, Rob and Mike. I’m in a process of launching my first SaaS product and the help you guys give on the podcast has been invaluable. While researching and developing my app, I came across another product opportunity in the same niche. I’ve already coded the second product and it’s ready for launch. I want to launch this product with the goal of bringing in some cash as well as building another source of potential customers while I finish coding my original idea. My question is whether I should launch this as a standalone product with its own website or as part of a suite of products that would eventually include both applications. There will be a big crossover in the original content I can create and blog around the two products. So from a marketing stand point, I’m leaning towards the later approach which is the single site that has two products. What are the advantages and disadvantages you can see for each approach?”

[06:37] Mike: I think it’s a tough question. I’m not real sure which direction I would go with this but I think that I might lean more towards one site and then kind of split it in to a couple of different subdirectories and that would be more for I think technical reasons than anything else. It probably would also give you a little more credibility in the website itself because it is a new product and credibility is one of those things that is I think a little difficult to establish early on but if you have two different products with different marketing material around them on the same website, then it tends to lend each credibility to the website itself. If you have your own website that is essentially forming social proof for the website but at the same time it can work because you do have the two products there and the people who look at your website and they see that you have two products, they’ll say, “Oh, this company is legitimate,” “They have a legitimate product,” “They have, you know, legitimate customers presumably” and it does reinforce that a little bit.

[07:31] But I also wonder how difficult it’s going to be to do both of them at the same time because I’ll be honest, I mean I’m in the middle of doing multiple things at the same time and it’s very, very difficult. So I think my advice would probably be to start with one product on the site and build it for just the one product and then integrate the second in to it when you’re ready. I don’t think that trying to do both at the exact same time is probably the way to go on this one.

[07:57] Rob: Yup, I agree with that last part. I think trying to do multiple products is the kiss of death and the only way you can do multiple at once is if they’re like information products and you don’t have the support and adding features and all that stuff to go with it. You can kind of write it like an e-book or something or screencast. You can build it and then it’s done and you know, you don’t really need to put a bunch of time in to it. Yeah, I do think it’s definitely a mistake to try to do both at once. And I also would agree that you want to get one of them out there, get it marketed, get — you know, get the blogging going, get the SEO going, get whatever other channels you have going and then introduce the second one to add a later time once you’ve once you feel like you know the market better and really hesitant to put two products on one website. And there’s a bunch of reasons why but I think the most prominent one is that there’s a lack of focus.

[08:42] Anytime I come to a website and it’s trying to sell me multiple things, it doesn’t do a very good job at any of them. So as an example, Mike, you and I, basically have kind of a suite of products if you think about it. We have the podcast. We have a conference, MicroConf. I have a book that’s related to the same genre. We have the Academy. These things were all related, right? So in theory, you could say well we lend credibility to each other so could just have a single landing page that’s like the Micropreneur landing page and then have a drop down list or have four things in the top and have — and have conference, book, you know, online startup school and podcast, But when you think about that, it doesn’t lend itself to a lot of things. Number one, it doesn’t lend itself to SEO very well because the content is not highly focused and Google likes small articles that are focused.

[09:27] And the other thing is it just — it overwhelms people when they arrived at the website. There’s too many decisions, too many choices and people often wind up just doing nothing. There’s too many paths to follow. What I would recommend if it’s at all possible is to create basically a chain or a long funnel and so you figure out which of these products is lower cost and which of them people are more likely to buy first. And then you set up a website for that and you market the crap out of that and you get, you know, people to buy the product. You support the product. You provide way more value than people pay for and now you have these paying customers and now, just like we do at the podcast and just like we do with MicroConf and the Academy and the book, it’s like you can kind of start tying them together. And you can say, “Hey, since you bought this, I provide quality stuff. You have the experience. You know that I took care of you and now, here look at this other thing I created that’s equally as good and it’s in a similar niche.” So I almost see this as a more of a back end product so you’re doing them in serial rather than trying to market them in parallel.

[10:24] Mike: I think one of the situations where I could see this working really well is if the products are, you know, if one of the products is actually a plugin for the other product or there is a huge integrations between them but as you said, I mean you need to start somewhere I mean even with something like, you know, the products from 37signals. You know, you look at the marketing material for them and they’re really on their own and it’s only until you get in to them and you start using them that you see that there’s additional integration points in them and that you can sort of leverage data between them and kind of stay in one interface. It’s pretty well hidden I’ll say. But I definitely agree with what you said that trying to separate them and if they are in the same niche market trying to figure out which one people are going to buy first and then use the second product as essentially an up-sell from the first.

[11:11] Rob: All right, hope that helps. Thanks for the question Andrew. Our second question today is from Ryan Higgins and he’s asking about top performing residual income generators. He says, “Hey, guys. I really dig your show. Appreciate all of the grassroots tips and have employed many in my online work. Over the past three years I’ve had success selling professional services online but I find this time consuming and often very demanding as I promise response to online clients within twenty hours from receiving their e-mails. I’ve also created modest revenue through AdSense ads and downloadable e-books I’ve written on various subjects. To be honest, I much prefer this later business platform as it seems to run automatically whether I tend to it or not unlike the online services part of my work.” So obviously, he’s talking about products versus services, right? It’s consulting dollar for hours versus building a product that’s much more leverageable.”So my question is what are some other creative ways you’ve seen people generate self regulating income online? And keep up the great work. Ryan, a Canadian in Shanghai.”

[12:10] I’ll take a crack at this one first. So Ryan is basically asking about, you know, other ways that he can monetized his knowledge and monetize his experience but not just trade dollar for hours. And obviously, there’s a big challenge upfront when you’re trying to build the products it’s that you need to find out products that people need or want and you have to spend the time to do it and there is a risk that they may not buy. And that’s where, you know, consulting is such an easier road because you can just have someone pay you X dollar for certain amount of hours and you’d just kind of cash it upfront. But on the flip side, that doesn’t — it doesn’t scale at all. It’s not leverageable over time. It’s just it’s not a way to really build a sustainable business. And so I guess Ryan is looking for other creative ways for people who generate online income and I mean that’s — that’s basically like this entire podcast is about and kind of what the Lifestyle Business Podcast and Smart Passive Income and Foolish Adventure.

[13:04] I mean I would listen to all of those podcast. It’s basically about taking your expertise and starting blogs, podcasts, writing e-books, building software, providing value and in a productized form that, you know, helps people get what they need done. And you can see this all over the place. I think maybe the best example I’ll bring up is like Foolish Adventure. If you never listened to that podcast Tim Conley has this thing called Three Product Approach and it involves having a free product and that’s typically a blog or a podcast that you’re giving away for free and then your second product is also free but you ask for an e-mail address so that’s where you build your newsletter up. And then your third product is when you sell. So that’s typically like maybe an e-book. Sometimes it can be a membership site and that’s his flow and he kind of came up with that concept then it gets — it’s really good.

[13:52] So I mean that’s one way to do it. I think that’s a creative way but I think, you know, there are certainly other ways. Mike and I throw a conference and it’s not, you know, massive revenue-generating thing but it is something that that raises our profiles and it’s fun to do and it does make some money now. So that’s — that could be a creative way. Obviously, writing e-books, writing physical books like I did, you know, paper back books and starting online membership websites are all great ways and if you have desire and you have experience in software, then that’s of course what we, you know, that’s something that Mike and I focus a lot on, on this podcast is building apps, building plugins, building something of value. I mean we know number — a number of entrepreneurs who’ve seen a lot of success in the Micropreneur Academy building WordPress plugins for folks, for in all types of niches, building SaaS applications, building desktop applications, building mobile apps, all that kind of stuff. So you know, I hope that gives you some starting points.

[14:43] Mike: One of the things that you mentioned kind of in passing was something I was going to bring up which is membership sites. And it sounds to me like what you’ve said was “I’ve created some modest revenue through AdSense ads and downloadable e-books I’ve written on various subjects.” And if those e-books are on related subjects, then I think you could probably take a lot of that material and put it in to some sort of a membership site where you’re charging people, obviously, to be a monthly member of that site and provide them access to that material but because it is a membership website, I believe that you could probably charge them significantly more than if you’re going to take all that information and just distribute it as an e-book. So essentially you are would be able to migrate the content from your e-book and into the membership website. And I think you obviously you want to add additional things in to the membership website not just, you know, do a direct copy from the e-book that could significantly boost revenue for you from that particular, you know, line of products as well.

[15:45] The other thing I would mention is that if you already created some sort of a modest revenue through some of these e-books, I would look in to trying to distribute them further and trying to get them out there. I mean it seems to me like a lot of the products that people have with things like this is they get to the marketing stage and they don’t do very well with it and they give up too easily and they don’t necessarily find the upper balance of where they can take something. So a lot of times they’ll give up early and you know, just not push it far enough and they’ll say, “Well, I need to look for a new product because this one has tapped out.” And the reality is it may not have tapped out, you know, are you sure that it has. And so those are the things that I would definitely look in to as whether or not those e-books can be pushed further, whether he could do additional marketing around them and increase the monthly revenue from them.

[16:30] Rob: Nice. So I give generalities on this one and you give the specifics. High five.

[16:34] Mike: Virtual high five. [Laughter]

[16:36] Rob: All right. Our next question is from Rasmus in Denmark and he says, “My product and question is around generating a valid amount of relevant traffic within a reasonable period of time to be able to validate my idea. I know you briefly mentioned AdWords to buy traffic but are there other channels or sources of relevant traffic. It would also be relevant to know more about the AdWords source, for example, volume, time span, et cetera as well as what volume you see as a reasonable validity. I know about setting up AdWords campaigns and get throwing keyword limits et cetera. Personally, I don’t have an established audience like you guys have. So how do you validate an idea if you’re starting from scratch? Would love to hear a podcast allocated to this topic. All the best, Rasmus from Denmark.”

[17:18] Mike: So I think that the things that we’ve talked about previously definitely applies to this. I mean, you know, you’re not going to be able to do SEO and drive a lot of traffic in a reasonable amount of time and I’ll define reasonable as in, you know, two to four weeks, something like that because SEO does take time. You’re going to do some stuff and it’s going to take Google two or three weeks to just either indentify your website or to put in to the rankings and then you’re going to have just take time to figure it out what changes you need to make. And it’s just, you know, a long convoluted process. I think you’re much better off trying to identify people who you want to target and then either use AdWords, Facebook ads or Twitter advertisement to try and drive traffic to your website. And from there obviously, a number of different methods you can use to try and figure out whether or not your idea has legs but two that I would look at is one, seeing if they’re actually clicking through for to the buy now button and then another one is if you will put some sort of a survey out there and start asking people, you know, is this something you pay for and how much would you pay for it. Maybe put a newsletter out there.

[18:22] And I wouldn’t do all three these things at the same time. You know, maybe put the pricing page there and after they click through for pricing or through the buy now button say, “Sorry, this is unavailable but sign up for our newsletter or take the survey.” Or you could kind of chain them together and you have buy now button and then sign up for the newsletter and then after that you can ask them to take a survey. But definitely don’t put all three of them on the same page at the same time. You want to chain them together to get better results for that. But those are the types of things that I would look at. I know that Rob and I both have a decent number of Twitter and RSS subscribers for the podcast or the blogs and everything but I don’t see those as very big generators for at least half of the business ideas that I have. I just don’t see those as legitimate ways to send traffic mainly because it’s untargeted.

[19:10] Rob: Yeah, I would agree. Typically an audience like the one we have isn’t actually that great for the products we’re launching. I experienced very low signup rates from blog readers and Hacker News readers when I relaunched HitTail in January and that was not unexpected. I mean I just don’t expect. You know, a lot of people are just getting started out to really want to pay monthly for a service that they probably can’t use until — until down the line. So Jason Cohen experienced the same thing when he launched WP Engine and he said they got — he got a handful of customers from his blog audience. What an audience gets you more of is it gets you the ability to partner up with people, to raise funding. It’s much, much more about relationships than it is about actually, you know, driving traffic and trying to get people sign up for a mailing list for a product that’s not related to it.

[19:54] I have a couple of thoughts on this. First thing is Rasmus, you got to ask is your audience online is your niche that you need to reach? Are they online at all? Because if they’re not then, you know, all this online stuff we’re talking about just isn’t going to work. You’re going to have to resort to a more offline stuff. So if he can determines they actually are hang out online, I wanted to take a step back  and say, don’t just rely on driving people to landing pages and getting their e-mail addresses. Talk to people like try to meet with them in person if they are within driving distant from you. Try to get them on Skype to have a conversation. It is so much more valuable for you and for that person if you can actually have a conversation instead of just a simple e-mail survey or simple e-mail conversation even. I would say that well all the stuff that I’m going to list and Mike talked about is good and it’s good for driving some traffic and getting an idea, getting a list that you can then contact, that’s not the end goal. The end goal is actually engaging with people and having conversations.

[20:48] I’m going to throw out some ideas. I think the first thing you should do is look at if there any conferences within a few hundred mile radius of you that caters to this audience and try to go to that conference so they can meet people in person and have discussions with them, get and idea if what you’re building is at all going to serve them. I would also look for forums that cater to this audience. Obviously, examples to that in our niche since I know them because I hang there or things like Hacker News and you could totally do an Ask HN if you have a product coming out and you can post a link there and that would bring people to the landing page, you know, you can ask them what they think to the idea. You can go on Corra and you can either ask questions or you can answer questions. And you’ll know that none of these are scalable solutions. You’ll never just going to turn a dial in this and bring million of visitors but that’s not the point. At this point, you have to do things that don’t scale and it’s going to take a lot of time. You either need a bunch of time or need a bunch of money and I’m assuming that yet at this point, you don’t have a bunch of money. So I definitely think Corra is under use for that.

[21:44] I also think that creating an infographic right off the bat. I mean you can get an infographic created a pretty nice one from between two and three hundred bucks. I found people both on oDesk and Elance to do that. That’s a great way to drive 30,000 people to your website in 24 hours if it goes viral. And if you make it good, you make it for that niche. You know, it’s a nice way to draw a lot of traffic for a small spend. You brought up AdWords, yes, its the old main stay. If you’re in a tough niche at all that’s competitive, you’re going to pay three to five bucks a click. So AdWords these days for me is more of a last resort but, you know, it could be something you can look in to and I think those four other ideas I’m going to try.

[22:23] One, I would look in to Facebook ads since the demographic targeting is so good and that you can test a lot of ads at once. It’s not about where to go. You can get some pretty cheap clicks there and then StumbleUpon. You can get 10 cent clicks but you can’t just send people to a landing page. You have to send them to some content like an engaging by a blog post that then links over to a landing page. If you send them just to a landing page, they will bail. And then the other two Mike mentioned actually. He mentioned Twitter ads which I have heard some people getting some decent success and then I guess the last one Mike didn’t mention which is Buy Sell Ads and that’s the display advertising. You buy them month at a time and they have your bunch of different niches now and you can spend as little as maybe twenty bucks and you’ll get a fairly low click-through rate because they are banner ads but you can definitely get niche traffic from a service like that.

[23:11] So those were like six or eight ideas kind of off the top of my head. But this to be honest, this process right here is what I did when I was creating the HitTail marketing plan. For the months leading up to acquiring HitTail, I would sit down for fifteen minutes at a time and sketch out a huge list of ways that I thought that I might be able to market HitTail and I just kept stuffing them in to that doc. And overtime it became a really good corpus of all these ideas. There’s about twelve pages of it and I’ve been working through it since I acquired it eight months ago. And I recommend if you’re thinking about launching your product, think about doing the same thing. Make the huge list and then start peeling off ideas and using them, you know, to send traffic at the landing page and some of them are going to work well and then you’re going to reuse those when you get to, to actually launching your product. So I realized that’s a lot of information but I hope that helps Rasmus.

[23:59] All right, for our fourth and final question today, we have an e-mail about beta phase. It’s from Kevin Marshall and he says, “I was wondering if you guys could speak a little bit about closed beta test versus just letting everyone all in at the beginning. I see a lot of startup websites in a beta stage. Sometimes they even close it off at the start and require you to sign up for a request invitation. Sometimes you may get that invitation, yet often you don’t. Overall, my question is how important is it to even have this testing phase? Is a customer more turned off because they see and realize their inner beta or they’re more turned off when they realize that a site they felt was fully polished and ready to roll is not?”

[24:40] Mike: I’ll take a first crack at this one. I think that if you’re putting together a beta and you are telling people that they have to sign up to get an invitation request and they’re not actually sending those out, my inclinations I believe that they’re doing something wrong. I don’t know if that’s a good idea. I don’t think it’s a good marketing tactic. I don’t think that in 95% of the cases that that generates any sort of anticipation or demand for the product. That’s the sort of thing that Apple could pull off or Microsoft could pull off. It’s not something that much smaller companies like us can do. It’s just doesn’t work. The purpose of a beta is usually to flesh out the bugs and make sure that there are no major problems that are going to be encountered by people once you open up the gates. And I think that if you’re going to do a beta, I think you typically wanted to do some sort of a closed beta first. I don’t know if having an open beta is really going to do anything for you because you’re really just not getting the information that you want from people. If you have a close beta, then you can essentially hand select those people kind of categorize them by the type of people they are.

[25:46] So if you had a mailing list and you are asking people information about them before you got them on to mailing list and you can essentially categorize those people. You might say, “Okay, well I want to grab five people from the low end category who would be on the lowest plan five from the middle and five from the top end. And you would essentially arrange it so that hopefully, you can get all five of those in there from each of these categories. But if you can’t, you go to the next person in line and the next person until you find people who are willing to actually sign up and use the product whether they pay for it or not is a different story. I don’t know. I have to give a little bit of thoughts to that but I also think that it depends a lot on the product itself as to whether or not you want people to try and pay for it. It depends mostly I think on where in the product development process you are and whether or not you’re confident that there’s a market for it.

[26:35] So part of it comes back to the purpose of the beta and what your purpose is because different people have different reasons for running that beta. Some people, they’d just want to use it to, you know, flesh out any major bugs or many major process problems that are in the software. So there’s other people who want to use it to actually test the code because they didn’t test it themselves or they aren’t really sure about it and there’s people who are trying to get people in to the beta program to essentially test to make sure that they have a product that was worth selling. And if you’re at that point, then it’s kind of too late for that. I mean you really should have done a lot of that leg work upfront but even if you haven’t, working with people individually is going to give you a lot better feedback than if you just open up the floodgates and try and get a lot of people in.

[27:17] If you segment your audience in to groups of ten or fifteen people what you’ll find is that all it takes is I think the number is twelve people to individually talk to them one on one and those twelve people will give you exactly what you need which is the same as you would get from having more of an open beta from like ten groups of fifteen people because people are going to be much more willing to give you that individual feedback that you’re really looking for if you interact with them one on one whereas if you’re doing something that’s more like a focus group where you have a lot of people in it they say, “Oh well, I’m not going to answer this. I don’t really have time. Somebody else would do it. I don’t have to.” So as soon as your response rate plunges and you have to talk to more people whereas if you — if you get down where you’re talking to people one on one, you’re individually working with these people who you’ve put in your beta program. You’re going to get the information back that you need is, you know, directly relevant to the goals that you put in place for that beta.

[28:13] Rob: Yup, you nailed it with that last one. It’s called the diffusion of responsibility and it’s psychological concepts that when, you know, it explain like when a group of people all get an e-mail, typically, most people will just not do anything with it but if you e-mail each person individually, then they know kind of your eyes on them and they’re much more likely to do something. I would agree with you. You’re going to get far better feedback if you have a much smaller group and you deal with people individually and you let them know whether you’re going to deal with them individually and that your beta list is only five people or your beta testing group is only five people or ten people. If I had a list, let’s say I launched was to 500 people, I would probably invite hand-pick five of them and they would either be friends who are in the niche or acquaintances who are in this niche that I’m targeting who are actually going to use the product and would pay for it long term or you know, if I didn’t have any of those, I would probably just randomly pick the top five of the list and e-mail them and invite them and let them know that it’s a very, very small group.

[29:11] This allows you to do a couple of things. One, it allows you to get a lot of detailed feedback because they’re going to be more willing to give it to you. It also allows you to kind of burn through your beta testers because you haven’t run a beta before what typically happens is you’re bringing a group of people and they look through the app and they look through and a lot of them find the same things, then you go away for a week and you fix all that stuff and you approved it. And then you come back to them and when you ask them again, they will tend to just go in for about three minutes and breeze through and make sure you fix the stuff they asked and that’s it and so you kind of do you burn through beta testers. They aren’t just unlimited resource but if you have that list of 500, you let five in, then you e-mail another five and you say, “Hey, this is like my second round of beta.” You kind of do the same thing with them and you get another around of feedback until you feel like you fix the major bugs and you fix the major usability issues.

[29:58] So kind of just to summarize I would definitely keep it small between five and ten people each round. I would only go multiple rounds if I needed to and I would keep the rounds as short as humanely possible. If you can do five days, seven day iterations, that’s what I would do. I would not do two-month long betas unless it was absolutely necessary. The other two points that I’ll touch on is what’s nice is if you get the beta testers in early and they like the app and you work with them one on one, you kind of build relationships and you build some early users and those early users can be real champions of your product long term. If they get in, they feel like they have a little bit of ownership, they’ll be the first ones, you know, when you launch, you can ask them to tweet it out or ask them to tell their friends. And they’re much more likely to do it then just this blanket list of 500 people because you’ve actually kind of build that kind of relationship.

[30:43] In terms of offering them a discount or comping, I say it would depend on how much work they actually give you. I think upfront, I would say, “Will you be a beta tester, spend some time and know in exchange for a lifetime discount on the product,” and I would just leave it at that and not specify it. And then some people are going to do so much work and give you so much of value that it’s going to just be worth comping them for life period, like I’ve done it in the past. It’s totally a no brainer and then other people are going to do less work and you know, maybe you give them 40% off or 50% for life assuming it’s a recurring product. I think the last point, the one that I didn’t cover is Kevin asked is this phase is even important to have, should you have a beta, a beta round. And I think even, you know, a simple as this article functionality that I just wrote in to HitTail was I mean it’s really just one single feature, even as simple as that was I essentially had a beta phase. It was only a week or two but it led a trickle of customers come in. There were absolutely bugs. There were usability issues. There were some minor things on certain browsers but having that was invaluable for when I kind of unleashed the firehose on it.

[31:50] And so yeah, if I was launching an entire product and I’d only done some usability and unit testing and you know, some integration testing but I really hadn’t had the actual users use it, I would be concerned with mailing out to my 500-person list and letting in a horde of people who I’m trying to sell the app to. I’ll be concern about doing that without having at least one round of testing and you know, preferably if some stuff was found going through another round until it — it just feels like it’s clean and it feels like the app is improved. I can almost guarantee you no matter how good the app is, no matter how good your feel it is, until you’ve done this round of testing and that an actual users use it, you are not going to uncover probably 70% of the issues that are going to rise as soon — as soon as people start doing it.

[32:33] [Music]

[32:36] 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 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

Transcript

[00:00] Mike: This is Startups For The Rest of Us: Episode 86.

[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. So what’s going on this week, Rob?

[00:25] Rob: Well I was down in Los Angeles hanging out with some friends and I managed to hook up with Jason Roberts who lives in Pasadena. Jason Roberts is a co-host TechZing. My wife and our two kids went over to his house and his wife, Sandy, cooked us some burgers and we just had a really good time. It was cool to meet his family, you know, you heard about them on the podcast. Yeah, they’re just like — just like he describes. They are all blonde. They look Swedish. But we had a really good time. So thanks. Thanks to Jason and Sandy for hosting us and we got to just — it’s so good, you know, to sit down and just talked tech and we talked startups and we talked podcast. We talked behind the scene stuff. He’s going to do a lot of meaty stuff sitting around a pool, drinking glass of wine and watching the kids.

[01:04] Mike: Did his wife get in on that discussion?

[01:06] Rob: She and my wife actually did and they started talking about how they neither of them listen to our podcasts and then Sandy joked and said, “You know, we should record a podcast about what it’s like to be married to a startup founder.” And we’re actually looking at putting something together like that and I think it’d be really interesting for Jason to interview the two wives or perhaps my wife to interview them as a couple to find out the dynamic. So anyways, we’re talking about doing something like that just about kind of how to have a family and keep sane and trying to launch your startup and there’s — there’s a lot that could be learn from hearing other people’s experiences.

[01:41] Mike: I think I remember Scott Hanselman. I think he had his wife on at one point and they were talking about either possibly writing a book or actually they were in the process of doing it and putting something together that was along the same line. But I definitely recall something from the Hanselminutes Podcast about that.

[001:59] Rob: Cool. Yeah,I know he’s had his wife on a couple of times but I didn’t know that they’re writing a book till today.

[02:04] Mike: Yeah, I could be misremembering that.

[02:06] Rob: How about you? What’s going on?

[02:07] Mike: Me, in Ohio right now, Columbus. I got a free room upgrade for Father’s Day. So I’m in a king size suite. Kind of spent some time with the kids by the pool and got a pool cover for the pool which I didn’t think it would make that much of a difference but it adds about ten degrees to the pool.

[02:24] Rob: I couldn’t say —

[02:26] Mike: It’s in the mid 80’s.

[02:26] Rob: Yup. At some point, it gets too hot. When it gets to be about one, it’ll get up in to the one like 109 or 110 in Fresno for a few days during the summer and the pool gets too hot to swim in like its feels like a hot tub. It’s not that it burns you but it is not refreshing at all.

[02:41] Mike: Ahh.

[02:41] Rob: Well hey, we have some new iTunes reviews just in the past few days, some of the good ones actually. One is from a Rich Hart. He says, “Great advice and cut AuditShark lose.” [Laughter] People are — people are starting to make comments in the iTunes reviews which I think is funny. He says, “Mike and Rob, I absolutely enjoy your weekly podcast. It’s always timely relevant and informative. Since I’ve started listening, I’ve created an internet business. Cut my teeth with using VA’s and find myself pushing everyday to make something happen.” Then he comments he says he thinks it’s time for you to let AuditShark in to the wild.

[03:12] And we also got a great comment from Zach and he says, “The art of enlightening others, I have to say I’ve learned more from these guys than I ever learned in business school. It just goes to show there’s no substitute for experience. Thanks, Rob and Mike” And then I like his comment. He talks about how we commented on needing a conference coordinator for MicroConf next year and he says, “I disagree. What you need is a franchise.” So [Laughter] we’re — become McDonald’s. He says, “You’ve already built the model, why not spread the love. Imagine hundreds of mini MicroConf’s across the country managed by local micropreneurs. The mini MicroConf’s remain small, personal and retaining the value of points express by past attendees.”

[03:35] Anyways, interesting suggestion. Don’t think we have any plans to do that right now. That would be more like franchising it in to almost a meetup group. So I mean Lean Startups certainly has experience a lot of success with that. I think there are several hundred Lean Startup Groups around the world.

[04:01] Mike: Yeah, I think so. You know, micropreneur meetup groups is really any difference is just there’s a huge difference between having a full-blown conference versus something local where people get together on probably a more regular basis.

[04:13] Rob: Right.

[04:14] Mike: But you and I talked about putting on something even smaller than MicroConf and just the level of effort, it’s just hard.

[04:21] Rob: Right. It’s hard to justify it, right? If you’d just do a regional conference, you can’t get the same level of speakers.  You can’t get the same level of attendees. If you try to do it one day, people won’t come in from further away than, you know, a few hours drive and you just — you kind of lose a lot of what we considered to be the magic of MicroConf. With that said, there are several meetups. And I’d say I’ve probably been contacted by six or eight people who say they are basically doing like a micropreneur meetups. And there’s — there’s one in Australia that we’ve already mentioned. There are several kind of in the Midwest and a few on the east coast. So there are things springing up. Yeah, maybe long term we’d figure out a way to better help facilitate that.

[04:53] Mike: I’ve been to a couple on the east coast. Usually it’s more me kind of organizing it or saying, hey, I’m going to be in this area for the next week or two weeks or whatever and then people going to reach out and three or four or five people want to get together, then we just go out some place to have dinner or something like that.

[05:14] Rob: Right. And the meetups I’m talking about are more like accountability meetups and sometimes they get a speaker to come in or they’ll share knowledge that that one of them maybe discovered over the past few weeks. I’ve actually done some video Q&A with a couple of them as well where they’ll just Skype me in and then we’ll have like a 30-minute thing and they’ll talk about the projects and we’ll just chat about it. Any updates from you this week?

[05:34] Mike: Well, I had an interesting discussion with Patrick McKenzie this past week about AuditShark pricing. One of the things that he’s been doing lately is he set up this training area of his website and I just — I signed up for it because I like hearing the sorts of things that he talks about. The first one was a video that talks about how to make your first product experience awesome and then he followed it up with I think it’s called the Black Arts of a SaaS Pricing which was pretty interesting. And it’s kind of timely because I’m looking at pricing for AuditShark right now.

[06:02] So I e-mailed him and just say, “Hey, this is what I’m doing. What do you — what do you think of it?” And he had some interesting takes on it. His idea was actually to instead of doing like a per server pricing for AuditShark, essentially use different levels. So you know, maybe the first level and say — he was just throwing numbers out there but say $50 a month for up to five servers and then up to $500 a month for twenty five servers and then I think the next level was fifty servers for $500 and then five hundred servers for $5000, then above that, contact us for enterprise pricing.

[06:34] Rob: Are those the specific tiers he laid out?

[06:36] Mike: Yeah, those are the tiers that he laid out which I found interesting because of the numbers and I was like, well it seems to me like one server and $50 would probably be more appropriate than, you know, five and fifty but I was also looking at that thinking to myself, well, if you do one in $50, it doesn’t give you a lot of leeway to do some of the techniques that he kind of outline which was if you change your pricing tiers and then measure kind of the before and after conversion rates and you also calculate the profit margins from each of those, it allows you to change the numbers on the page without changing the actual prices.

[07:12] I found that interesting. I didn’t realize it until after the facts but obviously I said, “You know, you don’t need to reply to this. And this just got my internal thoughts.” But then I started beginning to think about that. I was like, oh that makes sense. You can just change those numbers without changing the pricing because obviously changing the pricing on your page is kind of a big deal but if you just change the features that you’re associating with each of those pricing levels, it’s not nearly as big of deal.

[07:35] Rob: Absolutely on with HitTail just within the last month as about a month ago based on some advice and discussion in one of my Masterminds some guy said, “You know, you should raise your pricing.” We kind of discuss how to do that and what I did was I kept my pricing the same and I lowered the number of visits that each tier gets. It is the same pricing just like you’re talking about. That’s resulted in zero changing conversion rate which is awesome because it means that I’m essentially making more money, right? Because I’ve essentially raised my pricing because these people are signing up, you know, they’re being upgraded in to higher tiers. I can totally see that. I hadn’t — I’d never thought about the advantage of having that when you’re split testing pricing but it’s definitely a good tip to have.

[08:12] So I’m intrigued, I’ve actually giving this quite a bit of thought because there’s been several apps that I’ve been — been kind of working with some entrepreneurs and they’re looking at having that strict per seat pricing that you and I have discussed, you know, you’ve always kind of have that number per month, per server or per seat for AuditShark and we batted that around. Even over the past week, I thought about like the advantage of tiers and that you can essentially segment customers. So it’s not just this linear escalation of pricing but it’s to add one more server, you know, they only had ten bucks a month but they actually have to jump up a tier in essence, right?

[08:48] And now, as soon as they go to eleven or they go to sixteen, they kind of go over your tier than they do have to make a substantial jump. And that’s how most apps work now, right? That’s how SaaS apps work. I mean if you look at, you know, Basecamp or Highrise or any of these, it’s not a gradual — it’s not a per user cost. It’s actually doubles. It’s – the rule of thumb that I’ve always use as you pick a price and then you double it and you give them more than twice the amount of stuff they get at the lower plan. And so his pricing though it sounds like he was doing 10x.

[09:15] Mike: Yeah.

[09:15] Rob: He had 5500 and 5000. That’s typically a broader range than I do. I mean I would think of 4999, you know, 199 but —

[09:23] Mike: It was five servers for $50, twenty servers plus some sweetener for five hundred or two hundred servers for 5000 and then two hundred plus was call.

[09:31] Rob: Got it —

[09:31] Mike: That’s what it was. It wasn’t 550 or 500, it was — the point I was kind of getting at was at the very low end, it was not one server, it was five and that was kind of the starting point. He said that the idea was that if you have ten servers, you’re likely a very, very different business from somebody who has only two, you know, regardless of whether they are high-value servers or low-value servers. You know, somebody with ten servers has — well, like what he likes to refer to as a metric ton of money. And he said that it doesn’t really makes sense to charge linearly from one to ten in his estimation.

[10:02] Rob: Then that totally makes sense. And that’s why there’s a couple of guys that like I said I’ve been talking to and I’ve recommended they do tiering as well. And I think I’ve always look back at the FogBugz model. I’m realizing that I’m not a fan of that model and I see lot of disadvantages to doing it that way.

[10:16] Mike: I think that with FogBugz once you get past a certain point, it actually becomes much, much less expensive. So for example, I’m looking at their pricing now, from 24 to 150 users, they have a tier which is 599 a month or 719 a month for both FogBugz and Kiln. And then the next level up is a 151 to a thousand users and that one is $1,199 per month for both FogBugz and Kiln. So you can —

[10:42] Rob: So that’s insanely cheap.

[10:44] Mike: Yeah, I know it is. That’s — I found that interesting that they —

[10:46] Rob: Yeah.

[10:47] Mike: … kind of go to that at the higher end, they’re not charging–

[10:49] Rob: I agree.

[10:50] Mike: … targeting exponentially more.

[10:52] Rob: Yeah, that’s tough. That’s a tough sale for me. They either know something about their numbers that we don’t or they’re leaving money on the table with that. I wouldn’t discount stuff that much at the high end because like Patrick says and this is been very obvious in every business I’ve ever had, the people who are at the higher end tend to have more money to spend. And in general, you can’t just charge them more per seat, right? You can’t charge the little guy in a less per user and then as you go up, you actually charge more. I mean you have to give — you do have to give some kind of discount but it’s a huge mistake in my opinion to have an enterprise plan where 80% discount or something, you know, if you have a thousand users. That’s the way everyone does it and your competition does it, that’s how you have to price it and that’s fine and that maybe the case here.  But I’ve never had a business where as it gets to the high end, I give substantial discounts.

[11:36] Mike: Yeah, what I find really odd is that it’s $30 a month for both FogBugz and Kiln and then if you just kind of extrapolate that and say well for a hundred users that would be $3000 a month but on their pricing tier, that’s unlimited and in fact, their low ends tier goes from 24 to 150 people and that’s only $700 a month.

[11:56] Rob: So they give a really big price break as you go up.

[11:57] Mike: Yeah, when you started getting in to enterprises they expect like —

[12:03] Rob: Yeah.

[12:03] Mike: … a 50% discount, you know —

[12:05] Rob: Right —

[12:05] Mike: … that’s — that what they expect.

[12:06] Rob: And I bet FogBugz competition which is where it’s like Atlassian and a few others, I bet they do the same thing and I bet this is more of a competitive move. If you publish pricing on the web, you’re going to have to be competing with those folks whereas if you have a product that, you know, doesn’t have a direct competitive, then it’s a lot harder to do that.

[12:10] Mike: Yeah, I think that Atlassian specifically targets enterprise customers with their pricing.

[12:30] Rob: Yeah, they do.

[12:30] Mike: So there’s — there’s this considerably different but it also requires considerably more resources in order to run it.

[12:35] Rob: Right. Okay. So no final notice on your pricing but it sounds like you’re working on it.

[12:40 Mike: Yeah, I’m working on it and I’m definitely going to move towards a some sort of a tiered pricing model, you know, I’m having my designer rework my sales page, my pricing page a little bit so that it’s got four different levels there instead of three. And as somebody pointed out to me when they were kind of reviewing the pricing page was that I had green check marks and red X’s next to some of the different sets of features and they’re like that looks like a warning flag to me of “Oh, don’t choose this because of this.”

[13:08] Rob: Right.

[13:08] Mike: Which I found interesting so I’m going to — I had talked to the designer already and said, “Look, you know, you got to remove those red X’s and they have to be like grayed out X’s instead. So —

[13:18] Rob: Right. But once you get started with your pricing stuff, I would guess that first ten or twenty customers you have, you’re going to be negotiating pricing and then you’re going to trying to figure out what works for them and then you’re going to learn more as you go. I mean the bottom line is when you’re starting out, you’d just have no idea what people are willing to pay. You can ask them all you want and make a best guess at it but we’ve known several founders who, you know, go in to it in the first twenty or thirty customers all get different pricing based on how they’re — how they’re able to pay.

[13:46] Mike: Right. Yeah and honestly, we’ll probably do the same sort of thing when I launch AuditShark. I mean I’m going to go to the people and you know, I probably won’t specifically publish pricing out there. I mean I’m going to go to my list and start talking to people individually and start signing them on. They’ll probably all have different pricing and till they get in and start using the product and then I can get feedback from them to say, “Now, that you’ve seen it, is this worth what you’re paying?”

[14:10] Rob: That’s the thing. Yup, you have to figure out if you’re providing the value that because you can convince someone with marketing to charge them, you know, a little lot higher than you otherwise could but then when they get in there if your churn rates really high because they’re like, “Ahh, this isn’t worth it” then you need to adjust pretty quickly and it’s such a heavy learning experience the first several months you have an app out because it’s just so young and you’re trying to figure out which way to where to go that try the most value for them.

[14:32] Mike: Right. And I think you can definitely short change yourself in many ways on that on some of the pricing. I mean you can say, “Oh well yeah. I’m only going to charge you $10 a month” when you should really be charging them a hundred and they’re getting a hundred dollars worth the value out of it.

[14:44] Rob: Right. And but I think the thing is early on like when you only have ten or twenty customers, some people are going to get in and they’re going to get, you know, a lot more value. You’re going to under charge them, bottom line and you’d just have to do that and just grandfather them in and move on. I mean that’s just the way it goes, right? Because you’re not going — this app is not going to have ten or twenty customers. You’re hoping to have hundreds if not, thousands of them. And so if you’re really mucking around with pricing early on which you should be to figure out that the optimal, you’re going to make some mistakes both high and low as you go forward. And so I don’t think, you know, if someone is paying ten bucks a month that they really are getting hundred dollars worth of value, well, good for them. Thanks for being a charter customer. I mean that’s —

[15:18] Mike: Thanks for the feedback. I mean that’s —

[15:19] Rob: Absolutely.

[15:19] Mike: … what you’re doing. You’re basically paying for them in a way for their feedback. I mean sure they’re giving you money but you know, feedback.

[15:26] Rob: Right, right. And I don’t believe in large betas. I believe in very small betas and you can give discounts to beta people. I wouldn’t use that as a reason to kind of under charge everyone. You know I’m saying? I mean I might bring in a handful of people four or five and give them a discount but I think beyond that, you really got to start getting to where people are basically getting the value out of it that they’re paying.

[15:45] Mike: Right.

[15:46] [Music]

[15:49] Rob: So I got a e-mail this week from Tope. He’s a long-time Micropreneur Academy member and he’s a founder of App Design Vault. And this is a great e-mail. He says, “Just got an e-mail from AppSumo today and it made my day. HitTail was featured alongside my product App Design Vault.” And then he took a screen shot of it and attached it. “I’m a lifetime Academy member and a lot of what I learned went in to the marketing and the DNA of App Design Vault. I quit my job seven months ago and making — and I’m making a full-time living from the business. So definitely seeing your product and mine in the same context is a good thing to see. Thanks for all your help on the podcast and the Academy. Thanks. Tope.”

[16:25] So this is just — it’s another one of those success stories like this is a stuff a love hearing, right? This is [Laughter] why we’re doing the podcast. This is why we started the Academy. Frankly, App Design Vault kicks ass. I’ve always love this idea. It’s basically iPhone App design templates. And he’s got a great call to action on their home page. If you’re an iPhone app designer, it’s a no brainer. He says, “Give me your name and your e-mail. I’m going to send you an app design worth $70 to your inbox just for doing this.” And then, you know, he says, “Join over 2000 users who are making their apps rock.” And it’s just a big gallery of all kinds of different iPhone app design templates. This is just such a great market to be in right now, right? Because instead of actually building the app, they’re selling the tools for people to build apps and since it is such a growth market, everyone is talking about it. There’s just a lot of search going on and there’s a lot of people talking about it. So I love — I love the niche and he executed it well. So thanks — thanks for letting us know, Tope.

[17:15] Mike: Yeah, that’s really cool to hear. I mean I saw the AppSumo e-mail come in as well and I saw HitTail right next to App Design Vault and that was — it’s pretty cool to see. I mean it’s that point —

[17:24] Rob: It is.

[17:24] Mike: It’s nice to talk to people but then to see the social proof I’ll call it, it’s very cool app.

[17:29] Rob: Yeah. So you have that — the AppSumo deals are going to pretty well. They run their deals for longer now. It’s kind of a different set up. They used to just do one day and they would e-mail everybody but it’s like they have the list segmented now.

[17:39] Mike: Uh huh.

[17:39] Rob: So it’s kind of several weeks that I have to wait to really — I can see daily updates but it’s not like this big massive traffic like it used to be. Used to basically be on e-mail support all day for eight hours [Laughter] because you get so many questions because their list is like 6 — 700,000 people. So when they e-mail out to, you know, it’s — it’s a rush of traffic. But so far, it’s doing very well and sales are going well.

[18:02] Mike: Yeah, I hadn’t thought about how to manage a list like that but it does make a lot of sense that they would segment their list like that so that way they probably evens things out a bit. So it’s kind of space little things out and they level out the traffic a little bit.

[18:14] Rob: Right.

[18:14] Mike: It’s very cool. I somehow landed an accountability partner for AuditShark this morning.

[18:20] Rob: Sweet. How did you that?

[18:22] Mike: I didn’t actively try for it. Somebody contacted me through my blog and basically in a very nice way said that “I’m going to e-mail you assuming that it’s okay with you, I’m going to e-mail you every week until you get AuditShark launched and out the door.” So I thought that was really cool. And I had — we had an e-mail exchange back and forth a couple of times to kind of let him know where I was with AuditShark and what sort of things were going on. I sent him an e-mail link to the temporary sales website that I’ve been working on just so he could kind of see what it looked like and where the things are at. And he said he liked it. He had some good suggestions for it. So I’m going to take some of those in to account and you know, rework a couple of different things.

[19:02] One of the things that I got was that I keep hearing from people that they think that I’m waiting until everything is perfect with AuditShark before I launch it and you know, people are saying, “Oh, you got to launch it. You got to launch it.” And it’s not that I’m holding off until everything is perfect and that, you know, all my I’s are dotted and T’s or crossed. It’s just things are just not ready. I mean I can give it to somebody right now and it would work and would do what it needs to do, the problem is that the back end of it is kind of builds around this idea of a set up policies and a library of these control points that you select and you can push down to your machines and pull it back the results for.

[19:40] But the problem is I don’t have that library built and I don’t have a good way to get things in to that library. So that’s what the tool developers that I’ve hired are working on right now is they’re working on the tools that will build those control points and build the policies that will then go in to the library. So I’m hoping that they’ll be done with that within the next four or five weeks but the UI is complicated So you know, until that stuff is done though, I can’t really move forward with pushing the product out which sucks in a way but at the same time, you know, I’ve also got other things to work on while they’re doing that.

[20:11] Rob: Yeah, I think I mean to summarize, you built AuditShark yourself for a couple of years. You spent two years. You were – or maybe a little more than that and you were focusing on banks and you thought that banks were going to be your market. You had it in there and as it got towards at the end, you found out there were a couple of things. One, that your — kind of your customer development, your discussions with banks were misunderstood, right? They were talking about one thing. You interpreted it differently. When you finally got to it, it turns out you hadn’t actually built what they wanted. And B, the sales process was going to be so high touch that you decided you didn’t want to go down that road.

[20:45] Now we can go to on all types of discussion about whether, you know, what you could have done earlier to avoid that and all that stuff but that’s fine. Once you got there, you realized, I can’t do this. I’m not going to go forward with this and so you decided to pivot. And then you were saying, “Okay, I have this code base that does something and it can help some group of people. Where is that market?” And as MicroConf came around, you started asking folks there and it turns out you’re going to be probably pivoting towards servicing people who have web servers and app servers and you’re going to be scanning for like vulnerabilities and that kind of stuff. That takes retooling of your app, right? Bottom line like you needed then figure out what the new feature set is. You don’t have to rewrite the whole app but you absolutely have to either you or have someone else write some code to now get AuditShark to do what this new market needs.

[21:15] Mike: Yeah. And the thing is there’s not a lot of that piece that needs to be done. It’s just the fact that there’s this library in the back end that needs to be populated somehow. And the —

[21:39] Rob:  Right.

[21:39] Mike: … only good way to do it is to manually do it at the database

[21:42] Rob: So there is work that has to be done whether it’s code or not and some work has to be done to make it fit this new problem you’re trying to solve. You’re now trying to reachieve problem solution fit, right? Or achieve it. Period. So now you’re trying to achieve it with this — this new market, this new group of people and that is going to take time. You do a lot of consulting. You consult, you know, most of your — of your full time hours during the week and you’re also doing a blog and a podcast and doing this other stuff. So it’s not as if this is your full-time gig. So the fact that it takes you a couple of months to pivot is not surprising to me but it does seem like a lot of comments are coming through that are saying why haven’t you launched yet.

[22:19] And while this has been a long, you know, a long process, a two or three-year journey of you figuring this app out. Some mistakes were made. At this point, I don’t think you can launch like you have to get this stuff done before you do it and of course, I would love for you to pull a bunch of all nighters and launch next week but that’s just — that’s not realistic. If you think Mike should talk to more customers or get in to more detail or do more customer development, that’s fine like I can deal with that as like a more valid opinion. I just don’t think it’s reasonable for you to say, “All right, you should just launch tomorrow because the app is actually not done. It doesn’t solve the problem that you’re trying to solve at this point.

[22:50] Mike: Yeah, that’s definitely accurate. There’s a couple of tools that need to be built in order for the product to really work in this market. And right now, it’s just not there.

[22:59] Rob: Our relationship is never really been about like keeping each other accountable with our apps like I don’t come to you and say, “Hey, I need feedback” or “I need you to keep me accountable on this” and you haven’t either and that’s why the accountability episodes where we really dove in to AuditShark, we’re kind of weird because we don’t necessarily have that relationship. We do have a business partnership with MicroConf, the Academy and the podcast but aside from that like I don’t particularly like unsolicited feedback, let me put it that way. So when people give me unsolicited feedback and they tell me how they think I should run my business or how they think I should develop my product, I don’t like it and I irritated with those people in general.

[23:31] And so I don’t feel like I should sit here and tell you unsolicited, “You should do this, that and this with AuditShark” because it implies that somehow one of us knows better than the other or something like that. Now if you came and said “Rob, you know, I really want your feedback” which you have. You’ve actually done that offline several times where after the podcast, you’ll show me your sales site and you say what do you think? But to sit here in a public form and for one of us to kind of dictate to the other, “Well Mike, I think you’re doing this wrong and you should do this, that and this” I just, yeah, I just don’t know how – how helpful that is and you and I don’t particularly have that. We just don’t have that relationship, right?

[24:02] Mike: Yeah. I mean you made some points. I mean I’ve gotten some unsolicited feedback from people saying, “Oh, you should do this and this and this.” And I’m looking at that feedback saying I understand where you’re coming from because I haven’t share all of the information with you but you’re so far off in left field but that’s just not even remotely close to accurate. And I don’t even know where to address how many problems there are with what you just said. So it is hard and you know, I try to share as much as I possibly can on a podcast but I obviously don’t share everything. I think this particular episode we’re doing a lot more just because we’re focusing more on, you know, what sort of things we’ve been working on but I don’t think that everybody wants to hear about AuditShark every episode or HitTail every episode. I mean that’s not —

[24:40] Rob: Right.

[24:40] Mike: … what this podcast is about.

[24:43] Rob: Right. The issues that we discuss here a lot deeper and a lot more complex than we probably play them out on this podcast. I got a good e-mail. I thought it was funny. It kind of relates to this topic of maybe someone outside your business thinking they know more, you know, they know what’s best for it. I got — I got an e-mail. A guy was canceling HitTail and he said, “Thanks for canceling my account. If you guys offered a plan of $4.95 a month that allowed the X visitors a month rather than, you know, whatever your currently offering, I’ll definitely be back. At this certain level that’s when I started to see proper visitors and feel free to passes feedback on to your people, I’m sure you’ll get a lot more business doing this as well.” And so basically he’s saying to lower your pricing. Funny thing is I get — probably get an e-mail like this maybe one or two a month from the several hundred people that signed up for trials. That’s right —

[25:27] Mike: Is it your lowest plan $10 a month?

[25:29] Rob: It is.

[25:30] Mike: So he’s saying that this extra $5 a month is just not worth it.

[25:34] Rob: That’s what he’s saying, yeah.

[25:36] Mike: Oh, okay.

[25:36] Rob: And it’s so hard to make money at $4.95 a month for anything but the implied message here is that the best price is less than– it’s always less than whatever you’re charging. The best price is always that, right? And whenever you get these e-mails and the second thing is always imply to charging less will always result in loads of customers. And neither of those is accurate as we’ve known.

[25:57] Mike: As single support e-mail would totally blow that $4.95 out of the water.

[26:01] Rob: I know. When you are living and breathing and inside something and you know all the numbers in the metrics, I know that I do not want customers at $4.95 like it’s just wouldn’t work. It would lower my lifetime value too much. So I will pass, you know, on customers who want to pay $4.95 and if they’re able to get value out of it at $9.95 and up — I mean I have customers paying a hundred dollars a month and are very happy with the app and I want to get a lot more of those.

[26:24] Mike: No, I totally understand and I completely agree. It’s so hard to explain to people that they’re wrong because they don’t have the data but you don’t necessarily want to share the data with everybody either.

[26:35] Rob: Yeah, I don’t — I didn’t want to say explain to them that they’re wrong. I don’t know if it’s about right or wrong. I think it’s more about how you, you approach the business, right? It’s like if you want to take your business up market and try to make it like more valuable and find the people who are willing to pay the higher end prices, then you go about things a certain way. But if you’re trying to go for a freemium product, I mean that — frankly when I bought it, it was — there were some freemium users and people were saying “You should start a free plan and you’ll get a bunch of customers and…” I’ve never seen it work with bootstrappers.

[27:01]I can’t think of a single bootstrap company that has ever kept their free plan around. A lot of people launch with it and then they winded up cutting it out. There’s that Why Free Plans Don’t Work blog post that Ruben did on my blog that was on softwarebyrob.com. It was quite a successful post because he pointed out this fallacy that we can use the same approach as like a venture funded company trying to do the freemium model and what freemium can work is very, very difficult to pull off. So I need these most people’s images of how a product should be launched and the pricing and all that stuff is sorely warped if they haven’t actually done it themselves.

[27:35] Mike: Yeah, I considered a free plan for AuditShark but I couldn’t think of a good way to actually make it work and provide enough value that people would view it as a valuable service but limited enough in such that they would want to upgrade and I just couldn’t come up with anything this kind of — it’s not worth of time and effort, really.

[27:54] Rob: Right. So anyways, I think kind of to close that loop. We were talking about AuditShark and whether you should be launching right at this very minute or whether you are in process of pivoting and that you need a little bit of time to pivot. If there’s one thing that I would say, I would like to see you talking to consumers like actually talking to them on Skype or pretty intense e-mail conversations. But before you build something, I want to make sure — I would like to make sure that you’re building really what they need.

[28:19] Mike: Yeah. At this point, I mean the product is what it is and there is not much but the core of it is going to change. I mean it can pull back results from a machine pretty much anything that you want. I think what I really need to find out is what sort of format they’re looking for the data to come back. I mean what underlying problem is that they’re to solve and for the most part of the people that I’ve talked to have said that they want some level of assurance that somebody is looking over their shoulder and making sure that they’re not doing something dumb on their machines. I really feel like there’s a big difference between what the small people want versus the big people want.

[27:01] So like the large customers, they basically want to save money because to them a data breach is obviously is a huge deal but it takes them forever to close the loop on that and notify customers whatever the statistic was. There was something like $43 per record loss. So you lose a hundred thousand records and you know, there’s a couple of million dollars in cost associated with that because you’ve got all these other things that you need to do and this is more for like losing credit card information. But for a small customer that, you know, let’s say that you were using AuditShark for, you know, your server and what it would cost you if your entire HitTail server was cracked open and hacker stole all the data. I have no idea how to even estimate what that would cost. I mean I have no idea how many customers but let’s say that it’s a thousand customers for easy math and you know, $43 a record that’s, you know, $43,000.

[29:44] Rob: Right.

[29:44] Mike: Is it realistic to say that that’s how much it’s going to cost you? You know, I don’t know. I’m not — I’m really not sure when it comes to things that are not credit card related. I mean you can look at all these studies but it’s very skewed because those much smaller businesses don’t report that information. They’re not statistically significant, you know, because regulators don’t come down on those small companies. So it’s just very hard to translate those larger customers and the fees that they pay for those data losses into the much smaller customers. So I think the motivations for buying AuditShark are going to be radically different.

[30:18] Rob: Right. That’s what you’ve started to pin point, you asked that question in the survey kind of why would you need this, what would your pain point be. Your working that in to your — your copy, your marketing materials and that’s what I’m saying. I think that going deeper into those issues and trying to figuring out if there is one or two or maybe three issues that you kind of segment people in to that they’re trying to combat and figuring out which one of those to attack first but keeping it as simple as possible. I mean it’s like, you know, I’m coming back to the HitTail feature I just released with the articles. I started off with this awesome spec and I drew it up like a true developer should and it was gold plated and had all this logic in it and I looked at it said “God, that’s going to take a month to build.”

[30:57] And I just threw everything out and I said I’m not going to — I was going to offer three different levels of quality. I was going to offer all these choices of length. I was going to offer all these — there are all these features, you know, with the market place, rather market place I’m working with that I could choose and I basically just hard coded all of those in the code and I made one length, one quality level one price. You click the button to order or not. And as a result, I could totally simplify that you and I are in the entire integration. And it sets, you know, it’s a really minimal feature. Basically, I stripped it down and I think that’s where you’re probably headed or I hope you’re headed, you know, it’s to figure out what that minimally viable feature set is  in order to get that those first customers onboard.

[31:37] Mike: Yeah, I’m not so worried about the feature set because like I said I mean the product’s library is what it is. I mean the product does what it does. I’m not changing that at this point. How I portray to the user is a little different. I mean I may need to massage that stuff a little bit but I mean in a fundamental level, it tells you whether something is configured properly or not. There’s an error message that could pop up as well or there is something that comes up and it shows up as purely information. So you know, like the operating system it’s Window 2008. Okay, well that’s not right or wrong. It’s just it is what it is. And then you’ve got, you know, you might say, well it’s the latest service pack installed, yes or no. And if it’s not, that’s a bad thing. If it is, then that’s a good thing, you know. So you’ve got your okay’s versus not okay results. And then the fourth thing that can come out is honestly an error. And that covers pretty much every single case you could possibly think of for pulling back configuration information.

[32:27] [Music]

[32:30] Rob: So I think I’ve selected my next product idea.

[32:33] Mike: Oh yeah? What’s that?

[32:34] Rob: Yeah, well at this point, I’m going to keep it under wraps.

[32:38] Mike: [Laughter]

[32:39] Rob: The thing is I’m months — I could literally be six to twelve months out for even starting to work on it because I’ve got — I’m trying to stay focused and I’m dying because you know, like us entrepreneurs, we totally want to do the next thing because the next thing is way cooler than anything we were working on now. Yeah, right now I’m like focused with an exclamation mark, right? I’m like trying not to wander off the path like HitTail. I’ve just gotten the funnel optimized. I’m starting to market it again after a few months off and things are really starting to take off. They’re starting to do well how about I said that way. As much as I’d like this next idea and I think that it could provide value to a lot of people, I don’t want to have a bunch of ideas going at once, you know?

[33:14] Mike: Yeah, I talked about it in our previous podcast where I said that me having AuditShark going and then this Altiris Training site, then my forum —

[33:21] Rob: Yeah.

[33:21] Mike: … software is kind of being reworked and I’ve actually had sales requests and questions and stuff come in for all three of them in the past week and it’s just — it’s a juggling act. It really —

[33:32] Rob: Yup.

[33:32] Mike: … in a way kind of sucks. You know, it’s my own fault for putting myself in this position but I’ve had people sign up for the — the training site and there’s things that are just not ready yet. And then I’ve had people come in and say, “Hey, can you get the demo up and running for your forum software? I really like to see what it looks like specifically so that I don’t have to buy a site unseen.” There’s all these things going on and as I said before, my worst fear is that everything is going to kind of come to a head at the same time and that’s starting to happen. So I —

[33:58] Rob: Right.

[33:58] Mike: … I would definitely hold off. [Laughter]

[34:00] Rob: Yeah — and the thing is I mean I say I think I’ve settled them my idea. I haven’t settled any idea. I’ve settled on the fact that there maybe a need for certain thing is and what I really need to going to do is start talking to people, getting out there and if there really is a need and verifying and all that. And frankly, I don’t have a ton of time to do that right now and I don’t have the focus to do it. I totally could outsource it like I could sketch stuff up and send it to a developer and have them starting building it. But I just — I don’t want — I don’t think that’s a right decision right now. I think that I need to do more on research upfront to make sure that it’s solving the problem and I need to basically not be doing either those things because I really — I’m struggling to fight off the urge to start this product and I should just stick with HitTail for now.

[34:41] Mike: Yeah I have several other things that I have thought about and I’ve got them in a Google doc somewhere and I’m just looking at them. Every once a while, I look or I’ll glance at it and say, “Man, I’d like to do that but there’s just not now”, you know.

[34:52] Rob: Yeah.

[34:52] Mike: And I don’t think that there are market opportunities that are going to go away anytime soon.

[34:56] Rob: Right.

[34:56] Mike: So I feel like I’ve got time.

[34:59] Rob: I am coming up on a one year anniversary of owning HitTail.

[35:02] Mike: Oh cool.

[35:03] Rob: … that crazy? Anyways, you had I think one more thing you want to chat about.

[35:06] Mike: Yeah, actually. Do you have like a build server for any of your products?

[35:10] Rob: I used to.

[35:12] Mike: You used to —

[35:12] Rob: I don’t have at this point.

[35:13] Mike: You don’t okay? Okay. Because I was wondering how you – right now I’m starting to run in to some issues because I’ve got multiple developers working on, you know —

[35:20] Rob: Oh yeah.

[35:20] Mike: … the same code base.

[35:21] Rob: Yup.

[35:22] Mike: So merging code and making sure the check-ins from different people are all —

[35:26] Rob: Yeah.

[35:26] Mike: … working and it’s starting to become kind of a pain in the neck. I did start taking my build server and moving it out, you know, in to Rackspace that I didn’t had it hosted locally so it could do everything out there. And it’s one of those things where it’s like I would love to have that build server up and running right now so that it could do all those automated checks and everything else. I just don’t have the time in it.

[35:46] Rob: Does it — do any of your developers have the expertise to — I mean isn’t it CruiseControl? Is that still the standard because a couple of years ago, last time I set it up that’s what I used. And most developers knew how to — most .NET guys they know how to install that.

[35:57] Mike: Yeah. I’m using Final Builder. So –

[36:00] Rob: Okay.

[36:00] Mike: … it’s a little bit different. You know, I don’t know. I might be able to hand it off to one of my guys.

[36:04] Rob: Kind of give it off. Yeah. Obviously —

[36:05] Mike: Yeah.

[36:05] Rob: Obviously, you have to check it and make sure it’s done right but that might be — might be the better solution. You’re using Source Control at this point, right?

[36:11] Mike: Yeah, yeah.

[36:11] Rob: Were they able to merge? Okay. So it’s not like they have standard copies.

[36:15] Mike: Right, right. And I mean everyone is using Kiln and you know, they’re checking their code in and the issue that I’m running in to is just it’s like certain times not everything is being checked in so that in compiles on their machine but it doesn’t necessarily compile for anybody else.

[36:30] Rob: Right.

[36:30] Mike: So that’s one of the issues.

[36:32] Rob: That’s a big one. Yeah man, as soon as you ramp up to two developers from one, it is such a big deal, right? It is like a big leap. And then going from two to three, it’s not as big of a leap because you get these processes handed out.

[36:45] Mike: Right. And that’s what I’m trying to figure out is how do I put this process in place without actually having to do [Laughter].

[36:50] Rob: Yeah. Now, I hear you.

[36:53] Mike: So I mean part of it, you know, making sure that the code is good quality and everything else. So I’m going to have to do some of that anyway. I mean I’m going to have to review the code which is not that big of deal. It’s just making sure that it’s all following the rule. So I think there’s FxCop or something like that. I used to use it. It’s basically to make sure that all the code was following specific standards but I haven’t used it in a while. But I was had the issue. It would flag a lot of different things and say oh, this is wrong or that’s wrong and it’s like, no, that’s fine, don’t worry about that. And I never really dug in to it enough to figure out how to tackle some of those switches. So maybe — maybe you’re right. Maybe I just hand it off to one of these guys and say, “Hey, can you, you know, work with the build server and just straightening out all the stuff?”

[37:32] Rob: Or you could at least give it a shot.

[37:33] [Music]

[37:36] Rob: So if you have a question or a comment for us, 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 should subscribe to this podcast in iTunes. You can search for Startups or you can go to StartupsfortheRestofUs.com and subscribe via RSS where you’ll also find a full transcript of each episode. Thanks for listening. See you next time.