Episode 281 | Tools You’ll Need for Your Bootstrapped Startup

Episode 281 | Tools You’ll Need for Your Bootstrapped Startup

 
 
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Show Notes

In this episode of Startups For The Rest Of us, Rob and Mike talk about tools you’ll need for your bootstrapped startup. They discuss the different options to choose from pertaining to the pre/post revenue stages of your business.

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Transcript

Mike [00:00]: In this episode of Startups for the Rest of Us, Rob and I are going to be talking about tools you’ll need for your bootstrap startup. This is startups for the rest of us episode 281. Welcome to Startups for The Rest of Us, the podcast helps developers, designers and entrepreneurs to be awesome at launching software products, whether you’ve build your first product or you’re just thinking about it. I’m Mike.

Rob [00:24]: And I’m Rob.

Mike [00:25]: We’re here to share our experiences to help you avoid the same mistakes we’ve made. What are you doing this week, Rob?

Rob [00:29]: I’m getting excited for MicroConf. It’s just a couple of weeks out in Las Vegas and we have a pretty cool speaker lineup I’m excited about. A lot of new names this year, names that folks may not have heard of but that either you or I have seen speak elsewhere or we have been highly recommended by MicroConf attendees that we trust. There’s folks like Claire Liew from Know Your Company who did a Believe at BoS Lighting Talk. We have Amir Khella from Keynotopia who has spoken in several places and Scott Nixon from Happy Herbivore recommended him and I’m excited about his story the more I talk to him on Skype. A lot of people haven’t heard the story Keynotopia but it’s pretty fascinating. We have Tracy Osborn from WeddingLovely and Patrick Campbell from Price Intelligently and of course Des Traynor from Intercom, which is cool. There’s several others and some names that you’d recognize as well. It’s cool because I feel like it’s a bit of a sleeper year in terms of brand new big name folks. I’m excited about the possibility of the quality of these talks that I think people will come across with.

Mike [01:30]: I think it’s interesting how at some conferences you look at the lineup especially early on and either you are attracted to it or you really notice it. There’s a bunch of standout names that you’ve heard before and they’re high profile names. I totally agree with you. A lot of the names we have on the docket this year are not probably as well know but the speaking quality is still there, the stories are still going to be interesting. It will be great to see how things turn out this year and what comes out of that.

Rob [01:59]: I think of it in terms of Joanna [Wylde?], when she first spoke at MicroConf, she was an up and comer at the time in this space. Brandon Dan was at the time. He first spoke; it was like four or five years ago maybe. It was a while ago. We’ve had several folks like Josh Pigford was still running PopSurvey. Samuel [Hullick?] before he was doing – there’s a lot of folks who are now more prominent in our space, who have graced the stage before they were big names and that’s how I feel about several of the speakers here. I have a feeling that they will be becoming well know partially from taking the stage at MicroConf. You get some name recognition there. There’re headed on that trajectory and I think we’re just helping them along. How about you? What’s going on?

Mike [02:42]: A couple of days I signed out what I hope is going to be my final to the people who have prepaid for Bluetick before I start on-boarding them in the next couple of weeks. Right now we’re testing and trying to work out some of the different kinks and the application and make sure that the basic usage scenarios and the basic workflow that people will go through to use the product are in line with not only expectations but everything’s working and we’re properly handling everything. A few minor issues here and there and we’re dog-fooding it internally but it’s looking good so far.

Rob [03:13]: You’re deadline that you’ve set for that is April 1. Is that correct?

Mike [03:17]: Yeah. Unfortunately, there’s a lot of things that play into that unfortunate part of it but at April 1st obviously is April Fool’s Day and it wasn’t intentional. It just happened to be Friday of – I think I counted out a certain number of weeks that was either 12 or something like that. I said, “Okay, I want to have it done by this time,” and that it just happened to be the day. It’s also two days before MicroConf.

Rob [03:38]: I know. You picked that day before we scheduled MicroConf, I think?

Mike [03:41]: Yeah. I did. That’s not exactly true. We knew what the dates were going to be for MicroConf but it was leading up to it. It was like I just did the calculation and I thought to myself, well, it would either be the 12 weeks or I could try to rush things so I’d have to do it in less time, which I didn’t think was all that feasible. I knew that I’d have to start cutting things and making concessions or whatever. If I pushed it, I would have to push it by probably at least two weeks. It’s just because the way that MicroConf fell. It’s like, “Well, I’ll try and get it done before hand.”

Rob [04:13]: But you’re on track right now?

Mike [04:14]: Yeah, so far. There’s still two and a half weeks to go. By the time this episode comes out, it will be a week and a half.

Rob [04:19]: That’s cool. For folks who don’t know what Bluetick is, what’s the one or two sentence explanation of what it does?

Mike [04:27]: It’s essentially a sales automation tool that allows you to follow up with people in an automated fashion. The system follows up for you so that you don’t have to, as opposed to other tools like Boomerang or followup.cc. You can have them ping you and remind you that you need to follow up with somebody but this will do it on your behalf so that you don’t have to. Obviously there’s very distinct places where you would use it in your sales workflow but the idea is to help move somebody from one stage of your sales funnel to the next.

Rob [04:59]: Very nice. As for me, I’m on the Drip front. February was a good month. In fact, in [?] it was the best month we’ve had of growth and that followed up the launch of workflows in January. All the trials or some of the trials converted then and that seems to have kicked us up to a next stage of growth which is good. We also, coincidentally, didn’t have anything to do with that growth but we hired two people in the past couple of weeks. I’ve been trying to hire a Senior Rails Developer since November, December and it just happened that we happen to find him right towards the end of February. We also figured out we needed another person in customer success, hopefully, it’s the last hiring that we’ll be doing for a while because it is time-consuming and not necessarily – the goal of drip is not to have a lot of people. We’re not going for headcount, like funded startups are but it is nice to have finally because those were open loops. They were continually in my trailer board to find a person to help with this and find the next developer and stuff. Now that that it is closed out, it feels good to have that behind us and we can all move faster, able to handle the workload, get more features built and more people on-boarded. Things are going good.

Mike [06:03]: Earlier, we were talking briefly about MicroConf. James Carbary from Sweet Fish Media had me on the conference notes podcast that you can check out. We’ll link that up into the show notes. He was interviewing me about MicroConf and what the takeaways were from MicroConf 2015. We talked a little bit about that and if you’re interested, we’ll link that up in the show notes.

Rob [06:22]: Sounds good. What are we talking about today?

Mike [06:24]: Today what we’re going to be talking about is some of the different tools that you’ll need for running a bootstrap startup. We want to talk a little bit about what’s reasonable, what’s not and essentially how to allocate your money in your startup. The major focus here is mostly on tools, not necessarily things like the cost of doing business and getting insurance or office space or other physical things that you need to run your business or maybe computers of whatever. What we’re really trying to do is focus on the things that you’ll need to use on a monthly basis. That cuts out a lot of those different things I’ve just talked about but we’re also actively cutting out things like software tools because depending on your tech stack, that’s going to, pretty dramatically, between different startups. We decided to avoid that as a matter of choice.

Rob [07:11]: Software development tools. The actual stuff you need to build software like maybe source control on your editor and if you need Microsoft licenses to IDEs and stuff like that. But we will be talking a lot about software that you need subscription to SaaS apps and stuff like that.

Mike [07:25]: Exactly. We also divided these into two different phases, I’ll call them. The first one is a pre-revenue and the second one is post-revenue. In the pre-revenue, we’re going to be talking about some of the different tools that you’ll want to look at or some general guidelines that you can follow in deciding which tools you use for your business and then there’s also the post-revenue stage, where we talk a lot about the different categories or classifications of tools that you might be interested in using for your startup and what some of the different options are.

Rob [07:54]: Cool, let’s dive in.

Mike [07:55]: In the pre-revenue stage, the emphasis here is making sure that your business has enough money to get through to the point where you have a source of revenue for the business on ongoing basis. If you spend, let’s say $100,000, to try and get your startup off the ground but you only bring in $5,000, then clearly that business is not probably going to fly. The idea here is to spend as little money as possible yet still get your products out the door so that you can make more money, so that you can feed that back into the business. But if you’re spending far faster than you’re able to acquire money, chances are really good that that business is just never going to go anywhere. At that point you’re probably better off finding a different business to use, a different product to offer, a different service to offer. In this case, in general what we’re looking at is the idea that if you’re spending more than $50 a month for any individual tool or any individual service, then you might want to take a hard look at that and figure out is that really necessary for your business pre-revenue.

Rob [08:55]: A good example of this is a tool like a Mixpanel or a CaseMetrix that start around 150 bucks and obviously there’re free plans and stuff but if you were start paying for them. I haven’t installed either one of those when I bring out a pre-revenue product. Once you get 1,000 or 2,000 in revenue, it becomes easier to justify spending that kind of money. There’re great insights you can get out of that software. But if you install that for months and months and you don’t have enough revenue to pay for it, that one always feels like an iffy proposition. All these comes back to how much money do you have to start the business because let’s say you raise an inch round. This probably doesn’t apply to you as we said in the title. We called this ‘Tools You Need for Your Bootstrap Startup’. These guidelines may apply less to that. If you’re self-funded and you do have 20, 30 grand in the bank that you’re using to get this thing going, that could also be an exception to this.

You may want to use faster. If you recall when we were building and launching Drip, I had other apps that were able to bankroll it. We wanted to move faster. We did spend more money than maybe these guidelines suggest. If you truly are working a day job and launching something on the side in your nights and weekends, a good guideline is about a $50 topper for any individual tool or service that you’re going to use. Getting started on day one of your writing code, the only couple of things that I can think of that are absolutely critical, aside from your development tools, are some web hosting and payment processing. A lot of other stuff you can get by with [?] essentially with the free stuff like the Google Analytics and the Webmaster Tools and the basic things, especially as a one person shop, which will probably be at this time. There’re a lot of tools that have a free plan for a single solo founder or a single user. You’re going to want to take advantage of those in this early stage.

Mike [10:46]: Another example or a very specific example of one of those things is being able to collect e-mail addresses and signing-up for $200 e-mail marketing platform when you don’t have any revenue and you’re really not getting enough traffic to drive to that to be able to collect those e-mail addresses. You can get by with a free MailChimp Account, for example. That will, at least, get you started. You don’t need to spend a ton of money on these tools especially when the free plans will suffice while you’re trying to figure out whether that business is going to work at all. The second guideline for a pre-revenue company is to not spend more than $200 a month across all of the different tools that you’re using. The idea behind this is that if you are really launching something on the side and let’s say you’re a fulltime employee at some place else, you’re just doing this on the side, it can be difficult to go through all of those tools and pay attention to all of them or give them the attention and care that they need in order to make them work for your business.

Chances are you’ve got a lot of other things going on, you’ve got all the development going on, you’re still trying to figure out what that market looks like. If you really have that many tools that you’re looking at, chances are good that you’re probably not focusing on the right things. You really need to be talking to the customers and spending a lot more time in those areas and building what it is that they want as opposed to trying to use all these different tools to optimize something when, quite frankly, you don’t have the traffic or the level of interest or attention from people that you really need in order to get to make that optimization work.

Rob [12:16]: I think that’s a good point, that tools can and will be a distraction if you want to chase down the next shiny object. It’s like stop breathing product on and parker news and looking at all the shiny new marketing SaaS or development SaaS that’s coming out. Focus on you building what you have instead and just use the basics like we’ve already said. Hosting, payment processing, maybe a landing page provider. That’s probably about it. I’m thinking back to Drip. We had revenue from other products that were being able to back it. But we had hosting; I had WP Engine Account for the blog and the knowledge base, payment processing and maybe one or two other things but it was very minimal. We’re talking on a recurring basis. What we’re not talking about here, let’s dive into the exceptions. It’s still with pre-revenue. We have three exceptions. One of them is paid ads. That’s not what we’re talking about at all here. We’re talking about tools on a recurring basis.

Paid advertising to gather information or you get in front of people is an exception to this because I believe that spending money to learn things is so valuable at this pre-revenue stage. Ideally, you’ll be able to run a reasonable test for about $100 to $200 per test. Long term, as it gets bigger, some tests may require several thousand dollars before you try to scale it up. That’s not what you’re trying to do at this point. You’re trying to find cheap clicks, split test value propositions and learn more and build a small list and that kind of stuff. For a few hundred bucks, you should be able to do that. This will let you figure out what you’re doing right and what you’re doing wrong so you can leverage that information as you’re building the product.

Mike [13:51]: The second exception here is also the legal or accounting fees to get set up as a business. Quite frankly, you can get by without setting up a full blown corporation or doing any of that stuff before you even have a product that’s out the door. You can do a lot of things and depending on who you’re working with, whether your CPA, you may be able to write off a lot of those development costs once you have gone down the path of getting an official corporation or officially filing a DBA or something along those lines. A lot of things, you can just backdate those. Again, you have to talk to your CPA about how that would work for your business. But the reality is a lot of those costs are minimal anyway, especially in the long term of your business. Over the course of your business, you’re probably going to be spending hundreds of thousands of dollars and not being able to write off $1,000 or 2,000 from the very beginning is probably not going to break the bank for you.

Rob [14:45]: We’re not lawyers or CPAs obviously but I will tell you that every business that I’ve started and every product that I launched, I have pushed off the legal and the accounting stuff as long as I possibly could. In terms of accounting, I may have done the book-keeping using tools like Xero that we’ll talk about later or Less Accounting. But the legal stuff of actually getting that as corp set up or whatever it is, the LOC, it all depends on your risk tolerance. Boy, I’ve always tried to push that off as long as possible because if you don’t have revenue and you’re spending money and time setting all that stuff up, you’re detracting from your ability to grow. The third exception, in this preliminary stage, is contract labor. If you’re hiring work, you’re hiring folks, let’s say on UpWork or even just contractors through your network, it is harder to do this one on the cheap. You can find cheaper people but you’re going have to spend more time managing them and correcting their work in general.

Realistically though, there has to be a limit on these contractor cost. If you’re seeking 20 grand in the product development for something that doesn’t have any customers or pre-launch lists, you’re probably going down the wrong path. But if you have interest, you have that launch list and you’re in communication with people, that gives you the confidence to spend more and more money. When people come and ask, we’ll often get the question of like how much does it cost to build a mobile app or how much should I pay to build my SaaS MVP or that kind of stuff. The loose range that I typically throw out is 5 to 10K and obviously it depends on what you’re building and how much software development and management experience because that dictates the level and the seniority of the developer you’re going to be able to hire, which is going to impact the cost of it and all that.

But if you have a lot of marketing skills and you have a list and you know what you’re doing then of course, dropping a lot more money than 20K might make sense. But if this is your first time and you’re doing on nights and weekends, you really need to keep a tight constraint on these things and especially in the early days. I was in the single digit thousands. That was my comfort level of how much I would drop before I would get someone in and at least paying me something for the product.

Mike [16:50]: I guess what those things said about the pre-revenue stage. Let’s move on to post-revenue. One of the differentiations here that I feel like we really need to make is the fact that when you’re talking about a pre-revenue business, there’s a very finite time window during which that pre-revenue period is sitting. It’s easy to look at a lot of different examples of those types of businesses because it’s all in this very tightly defined range. When you’re talking about post-revenue, that could mean anything from one dollar a month to a million dollars a month. Most of the time when we’re talking about our listeners or the audience that we’re referring to is generally businesses that operate up into the five, six or seven figures a year. With that kind of stuff in mind, it’s also very difficult to generalize and say, “Well, you should only be paying $25 or $30 a month on this particular thing because depending on whether you’re closer to $1,000 a month or $100,000 a month, you may be paying significantly more based on the requirements for your business. Most of the guidelines in prices that we’re going to throw out are entry level but you could also extrapolate those a little bit because some of them are based on per-user pricing and you may have one user or you may have 15 or 20. Those prices can fluctuate a little bit but will at least give some guidelines around starting points.

Rob [18:09]: Let’s kick it off with probably the most important tool for a startup that’s obviously going to be doing stuff online, it’s your hosting. This cost is going to depend a lot on your app, your infrastructure requirements but I like to ballpark between 50 and 200 bucks a month. This is post-revenue so this is when you’re not on shared web hosting anymore. At this point, you’ve beefed up and you have some type of virtual machine, whether it’s on Rackspace, on Amazon EC2 or you’re on a Heroku instance, that’s when I feel your post-revenue, you feel more comfortable outsourcing some of the management of this and paying a little more to get a couple of servers, at least, to have high availability and good performance. I think that a decent ballpark, when you’re ramping up is between 50 and 20 bucks a month.

Mike [18:57]: I think that $50 to $200 a month could also be per server as well. If you have 10 servers, you might be paying $2,000 or $3000 for the servers that you have. It comes down to what your app is. Something else that falls under this bucket is whether or not you’re running your sales website at the same place as your app is. Those are two probably different things. You might run your sales website on WordPress and have it hosted at WP Engine. One site of a WP Engine is going to run you $30 a month but you can also upgrade your plan to the next level, which is $100 a month. These are round about numbers but they do give you an idea of what the starting points look like and what’s reasonable.

Rob [19:40]: In pre-revenue you can be – a lot of stuff have launches on shared hosting for 20, 30 bucks a month. As you get towards launch or maybe after you get 5 or 10 people paying you for it, then you move to this better hosting basically where you have your own servers. If you’re a hardcore developer and you have a little bit more money in the bank, you probably going to start with this level of the 50 to 200 bucks. It’s a bummer when you’re sitting there coding for four, five months and you want to have a landing page up and you’re paying 50 or 100 bucks a month just to do that. That’s never made much sense to me.

Mike [20:12]: The next category is payroll. If you have gotten to the point where you are post-revenue and let’s just assume you’ve even gotten past the post-revenue part, you start to go fulltime; one of the things that you need to look at is payroll. I’ve looked at payroll providers over the years and tried out a couple of different ones. The one that I settled on recently was Gusto. They used to be called Zen Payroll but they changed their name about five or six months ago. I have no idea what the rationale behind that change was but they did change it. Something like this should probably run you around $40 to $50 a month. Some of the larger, I would say more entrenched players, that if you’re not eligible for Gusto based on where you live, you might have to go with someone like [?] or Paychex. Those are U.S. based companies. I don’t know what the options are in other countries but either one of those is probably going to run you anywhere from $50 to $75 a month. What I have noticed about those types of companies is that they have a tendency to quote you a price and then they will tack on additional fees for doing things like, “Oh, we’re going to over-night your paperwork so that it’s there on pay day.” It’s like, “Well, everything’s direct deposit. I don’t need you to over-night it,” but they’ll do it anyway and it’s an extra $10 or $20 per pay period and that’s how they do that. It can get pricy, which is why is why I gravitated much more towards Gusto because it’s just a flat rate. Everything’s taken care of on line. They also take care of 1099s for you so you don’t have to worry about that as well, especially if you’re going through contractors that are outside of a platform like UpWork.

Rob [21:47]: Don’t do your payroll yourself. That’s insane. I’ve known some small businesses that do that and there’s no reason to do that anymore. I used Paychex for several years. Eventually, their payroll started having a lot of errors. They did a really good job early on and it was great. I think I was paying about 100 bucks a month and it was totally worth it and then more and more errors as we scaled up and it was all via phone. It was like you could have some reports online but it was junky. You couldn’t update anything online so I would have to be on the phone all the time and it doesn’t work into my workflow. The fact that Gusto, formerly Zen Payroll, is fully online and is as good as they are. They’re cheap. It’s like 24 bucks a month and then 5 bucks per employee and it’s unlimited payrolls or something. If you’re one of two people, it’s in the 20s or 30s. This is a no brainer.

Mike [22:30]: They recently updated their pricing too. They went up a little bit.

Rob [22:34]: Oh, did they?

Mike [22:34]: Yeah.

Rob [22:34]: Did they grandfather us?

Mike [22:35]: I don’t know. I’m grandfather, I think.

Rob [22:39]: The next category is video hosting. Obviously you’re going to have some demo videos. You’re going to have some marketing videos. You’re just going to have a need for videos as you scale up even a little bit. YouTube is free but you have so little control and the player is not very nice. It’s not very attractive I should say. At the end of your video, they pop up 20 related videos that are from other people. It takes you out of what you’re doing. It’s not very professional. To me, again it’s post-revenue. As soon as you have some revenue, you’re going to want to go with someone like Wistia, which is about 240 bucks a year or Vimeo, which is 200 bucks a year or SproutVideo, which is in that range. They might have a $10 or $15 a month plan because you’re going to get so much more control. You’re going to get better metrics. A lot of them have e-mail capture built in, where you can gait a marketing video at a certain point or a valuable video that you want people to watch.

You can feature-gait it to where in essence they have to enter an e-mail to get past that. That can go directly into a provider like a Drip or MailChimp or something. This is when I hadn’t really thought of earlier on because it slipped under the radar. But as soon as we had video that needed to appear on our website, which is SSL, we could only use a few providers. Since I didn’t want to use YouTube, it became expensive pretty quick. I remember we started off with a $20 plan and then by the time we had a few videos it was up to 50. I pay either 100 or it might be a little more than that like 120 a month to Wistia because of the volume of bandwidth and the features. We needed some specific features that are feature-gaited up to that point. It’s not outrageous for sure but when you can start at 20 bucks a month, it’s a pretty good way to go.

Mike [24:18]: I will point out that I think both Wistia and Vimeo have free plans that you can get on if you want to get started with those services on day one. If you are pre-revenue, you can use those services obviously if there is feature-gaiting. If you get to a point where you’re scaling and you’re using a lot of bandwidth or there’s other features that you want to be able to use, you may have to start paying for it. But again, the pricing isn’t completely outrageous either. The next category is e-mail marketing tools. By e-mail marketing, really what I mean is capturing e-mail addresses from people and being able to send out bulk e-mails. A lot of different tools fall under this bucket; MailChimp, AWeber, Constant Contact, those types of tools. The idea here is that you want something that is going to allow you to send out mass e-mails to your mailing list.

Rob [25:06]: This is actually one of the others that if you’re pre-revenue, this was the other thing that we had. I talked about hosting and payment providers. E-mail marketing would be the other one. In the very early days, if you’d collect e-mails and send a broadcast once in a while, MailChimp is not a bad tool for that. It’s only once you segment the list and try to do anything of any complexity that you might run into problems and need to outgrow it. That’s when you move into these e-mail marketing automation tools, which are going to run you 50 bucks a month and up. That’s like a Drip, [?] and Infusionsoft and when you’re post-revenue, this is a necessity. It’s rare that you’re going to grow and scale on a basic e-mail marketing tool that doesn’t have the automation stuff baked into it.

Mike [25:47]: The next category is cash management software services. In virtually every case if you’re looking for any sort of book-keeping software, I would go Xero. They have an online subscription. You go out there and it’s very easy to use. It generally follows accepted best practices for accounting. If you know anything about accounting, you can do anything that you would probably need to do inside of Xero. There’s also other options out there. QuickBooks Online is probably the big player in this particular space. They do have QuickBooks Desktop Edition. There’s also other tools out there like Less Accounting and Outright. There’s other ancillary tools that I would probably put underneath this category such as Baremetrics or FirstOfficer.io, that allow you to analyze the incoming payments. I might also throw PayPal underneath this and I would also put something like FreshBooks or Expensify for doing invoices and receipt tracking. Generally speaking, most of those tools should not cost you very much, $20, 30, 40 a month at the most for each individual one. Being able to know how much money is coming in and how much is going out is going to save you a ton of time at the end of the year especially if you’re post-revenue and you have to start tracking how much did I spend? How much did I make? How much can I write off? All the reports and stuff that you need out of that. If you don’t have it tracked, it can be very difficult. If you have a very simple business, you can do it in Excel. But once you start getting complicated with anything, you get lots of transactions. It’s hard to track all that stuff outside of excel.

Rob [27:16]: We live in the golden age of starting a business. The fact that you can get all the power of the tools you just mentioned and you don’t need to install a server because it’s all SaaS and you can pay, like you said, 10, 20, 30 bucks a month for these, is just amazing. 10 to 15 years ago it was so much of a hustle, you install desktop software and then you had to back the files and the desktop software wasn’t very good. When you change computers, you had to try to remember to get the files. It was so much of a hustle. This is a much better approach. The next category, we have it as two items but I’ll lump it into one. The first is Website Traffic Analytics and the next one after that is Advanced Analytics. For just basic analytics, Google Analytics is great, Google Webmaster Tools, Clicky, which is at getclicky.com is 10 bucks a month. Those show you your unique visitors and aggregate data.

These are a no brainer for getting started and you should have them if, for nothing else, to have the historical data, you should have these installed. The advance side is going to be a tool more like a Mixpanel or CaseMetrix and that can often give you a per visitor insight. You can identify people and know what individuals did. You can analyze funnels with more advanced precision and all that stuff. They have free plans but they get expensive quick. It goes from free to 150 a month. For business generating even a few thousand bucks, it’s probably worth it because the insights you can pull out of that on how to optimize your funnel are a big deal. It’s scaling up if you’re doing 20, 30, 40 grand a month. You should be using one of these tools

Mike [28:42]: The next category is dashboarding software, which if you are running a business and you have a lot of different tools, sometimes you have to go to multiple tools in order to find a lot of different KPIs or Key Performance Indicators that you’re looking for. Sometimes it’s more helpful to have a dashboard of some kind. There’s different options out there like DigMyData or Cyph. There seemed to be more and more of these types of tool popping up all the time. What I find is that I like the idea of having a dashboard and being able to look at that data at a glance. But what I find is that if I see some piece of data that I want to drill into, I then have to go over to the tool anyway. Having a dashboard itself probably doesn’t do a lot for me except for give me the ability to publicize some of that data to other people on the team. If you’re just using it for yourself, if you’re a one person company, my guess is dashboards are probably not going to help you very much. They look nice and they sound great in theory but as a business owner, you’re probably going to be digging into that data anyway.

Rob [29:39]: Landing pages is another category here. That will cost you, let’s say, between 20 and 50 bucks a month. There’s KickoffLabs, LeadPages, Unbounce, Instapage. There’s a lot of players in this space. ClickFunnels is another one. It’s funny because I never used landing pages when I was hacking away solo on everything because I would just copy to HTML and I’d modify it and I’d do all that. But now that we’re working on a team and we’re moving fats and there’s a bunch of people doing stuff and we have a marketer who, just fulltime, is running experiments, it helps to have something where you can just crank out a landing page in 10 minutes and not have to worry about deploying and having it in source control and is it on the main website or is it WordPress and do I have a plug in. it is simpler to have one of these providers. You’re mileage may vary and each company may do it differently but I have definitely been sold on the value of using one of these landing page providers, if for nothing else, for some of the templates are nice. The speed of implementation, the speed of iteration has accelerated by using one of these platforms.

Mike [30:38]: The next two categories, I’m lumping these together but they’re both sales tools. Essentially you have your basic entry level CRMs. These will run you $10 to $20. Sometimes that’s per user, sometimes it’s just a flat rate. This is for a basic CRM or a basic sales tool of some kind. In this category I would put things like Pipedrive, Highrise or Zoho and many of the basic sales or CRM tools like that. The next level up, once you start to get a lot of information in there and you start to do more advance things or you want to do any sort of automation, it’s almost very similar to e-mail marketing, where you’ve got basic e-mail marketing and you’ve got the advanced stuff. In the advanced category for sales tools, you’re probably looking at $50 and up per user. I would say that Bluetick falls into this category. You’ll also find tools like Salesforce or Closed.io. The basics of most of these tools is that it helps to automate or improve your sales process and because of the increased efficiencies that those types of tools provide you, they do cost quite a bit more.

Rob [31:39]: Our next category is demo software meaning software that helps you give demos to your potential customers. Some free options are things like Skype, Google Hangouts, join.me, all of which we tried at Drip and they all had one hang up or another. They’re other unprofessional or a lot of people aren’t on Skype or you have to get approval from their username in order to contact them. It just feels like you’re running a junky service. We have since moved on from those. GoToMeeting and WebExpo have free plans. I haven’t used either of them but I know they’re popular. We’ve settled on Zoom which is 15 bucks a month per user. It’s working out quite well. There’s a lot of tools available for this. You just want to find something that is A, professional and B gives you a lot of control and allows you to demo whatever you need and frankly you may also want the user, depending on whether if you’re also using this sometimes for on-boarding or some high end support, you may want the user to be able to share in their screen and that’s a nice benefit of a tool like Zoom and GoToMeeting. These should be in there. They’re anywhere from free up to about 15 to 20 bucks per user, depending in the features you want. You can find something that’s like $50 per user per month. You should be able to get by with 15 to 20 range.

Mike [32:51]: Now that we’ve talked a lot of those different categories, we want to talk about two different exceptions that we came up with for this. The first one is that in general spending money to learn something is worth the investment. You’re looking at a specific channel and you’re spending money there to try and figure out whether you can use that channel to acquire customers or you’re trying to learn things about your audience. It’s very difficult to give guidelines about what specifically you should be spending on these things because if you are making $1,000 a month, clearly you don’t want to be spending $1,000 a month on your advertising or $10,000 a month on your advertising to learn something. But if you’re bringing in $100,000 a month, spending $10,000 to try and figure out whether or not a particular channel is going work for you to acquire customer, that could be justified. It’s difficult to provide specifics in this particular area because of that but we do want to point it out as something of an exception to this. It’s hard to give guidance about exact numbers for that.

Rob [33:48]: It’s also hard to give guidance. Your pre-revenue is a pretty finite space and there’s not a lot of room there. You can be specific about it. Post-revenue is anywhere from a dollar a month up to hundreds of millions a month. It’s hard to give all of these ballparks. Generally, we’re talking about businesses that are doing up to in the seven figures a year. Once you’re in the eight figures, a lot of stuff changes. With that in mind, the other exception to all of this is headcount. Salary for one employee is going to eclipse everything in this list combined. But we just wanted to talk about tools today and the software tools that you would need to get started up.

Mike [34:27]: We’re running a little short on time here but we do want to live you guys with two tips in general about looking at the different services that you’re using in your business. The first one is that you should buy tools that do the job that you need done not tools that you have seen other successful people or businesses using. A lot of time just using that particular tool that somebody else is using isn’t going to make you as successful as they are. It’s more about how you use the tool and what jobs you’re accomplishing with them as opposed to the tools that you’re using.

Rob [34:54]: The other tip I’ll throw out is to buy what you need now not what you’re going to need in the future because otherwise you’re going to be paying for something that you can probably upgrade to at the point when you need it. There’re some minor exceptions. If you think about a Mixpanel or CaseMetrix, the more historical data you have the better. Unless you do have a lot of budget that dropping 100, 150 bucks a month from the very start is a dubious proposition if you’re trying to bootstrap a startup. In general, the best advice is to buy what you need now and not something that you think you’re going to need in the next six months. That wraps us up for today. If you have a question for us, call our voicemail number at 8-8-8-8-0-1-9-6-9-0 or e-mail us at questions@startupsfortherestofus.com. Our theme music is an excerpt from ‘We’re Out of Control’ by MoOt, used under creative comments. Subscribe to us on iTunes by searching for startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.

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2 Responses to “Episode 281 | Tools You’ll Need for Your Bootstrapped Startup”

  1. Andrew Cox says:

    Heads-up on this drip competitor: http://doubleyourfreelancing.com/drip-pro-tools/

    The name is a bit cheeky.

  2. Great episode. Lot of useful advice for those who may be considering a startup with limited technical knowledge.