In this episode of Startups For The Rest Of Us, Rob and Mike talk about how to recover from coding for months without talking to customers. Based on some questions a listener sent in, the guys give advice to the classic problem of spending all your time developing and not enough time talking with customers.
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Mike: In this episode of Startups For the Rest of Us, Rob and I are going to be talking about how to recover from coding for months without talking to customers. This is Startups For the Rest of Us episode 347.
Welcome to Startups For the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.
Rob: And I’m Rob.
Mike: We’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s going on this week, Rob?
Rob: Well, I am back from Sweden. I had a great time attending and speaking at Brennan Dunn’s Double Your Freelancing Conference in Europe. He said it was going to be the last DYF conference he throws and then he’s going to only do small retreats after this so it was cool to meet up with him and his crew.
And then I spent a couple of days with Sherry in Stockholm. We had left the kids at home and we had a great time seeing the sights, painting the town red, and I got a good amount of work done. It’s crazy when you’re in a new environment. I was basically taking the days off, “vacation days,” but there was still stuff going on back here, back in the office so a couple of hours a day, 90 minutes or so, I could just hammer out a ton of email and Slack replies.
I had some really good ideas because I had the headspace to think about stuff so I noted them down and I’m starting to put those in the queue right now. It was actually a productive, I wouldn’t even say it goes far as to say as it was a workation, it was more like a light vacation with a bit of work sprinkled in. That’s, to be honest, my ideal thing because I think when I don’t work for like a week, I feel disconnected and I get bored just travelling and being in places without having something to occupy my mind.
Mike: I’d imagine that’s a lot like retirement as well. I’m not one who just likes to take extended vacations just for exactly that reason. I find myself getting bored.
Rob: Yup. I think that’s where having hobbies, like I do investing, which is fun, but I can only do so much of that in a day and think about it for so long before I need to do the next thing. After the conference was done, we would go see one sight and then we’d go to lunch and then Sherry and I would come back in the afternoon which is when this time zone was waking up and Sherry had a few calls and she was still doing quite a bit of consulting and stuff. It was good. It was a nice mix. I really enjoy that stuff.
I also enjoy getting away for retreats. Like we’ve talked about in the past, taking a full two, three days but seven complete days for me without thinking at all about the things I’m most passionate about, which is a lot of what I work on, is always a hard stretch.
Mike: Cool. On my end, I finally got the two step sign up process for Bluetick all squared away. There’s definitely edge cases in there that I just said, “Look, I’ll deal with this later.” Instead of making the whole thing bulletproof, I made it basically just work. I know that there’s going to be cases where something is going to come up and somebody goes to sign up and it’s going to break. I’m just going to have to figure it out at that point because I don’t really have the time to try and capture every single edge case.
Right now, it’s just going to show some generic messages if it goes sideways and certain ways that I just don’t know about because I don’t know all the different ways that Stripe for example, could say, “Hey, this card isn’t going to work.” I got that all squared away and finally got started working on the marketing and sales websites. I got the price and page all set and I’m working on the tour. I got to create a couple of videos to add in there, probably put one on the home page then work on flushing all the rest of the tour and figuring out whether I want to do just one page for the tour or I want to divide it up into several of them based on what different situations people are in.
I’ve got a bunch of different notes that I’ve aggregated from various customer discussions that I’ve had and different things that they’ve either keyed on or asked about during demos and putting those into specific places in the tour and try to essentially walk somebody through the decision making process for it.
Rob: Good for you, man. That’s exciting. I know it took a lot longer than you wanted to but it’s got to feel good to have that behind you and be able to pull the next thing off the list.
Mike: It is. The thing I don’t like about doing the stuff on the tour side of things is that it’s a completely blank slate and I’m not a designer. I’m sitting there, going through and trying to figure out how should the page be laid out and what should I say in certain areas and how should one thing lead into another. For whatever reason, it’s really hard for me to do that. I can conceptualize what I need to say but doing the layout for it, that’s the part I’m having a hard time.
Rob: Yeah, that is hard. I haven’t done that in years. When I used to do it, I wasn’t very good at it. It’s such detailed work. It’s tough. That’s what you got to do when you’re scrapping being bootstrapped and you’re counting the days until you can hire someone else. Get a contractor, even if it’s a contractor, get somebody because they’re so much faster at it and the end product will look better too.
Mike: Plus it’s all in WordPress. There’s only so much that I can do in WordPress. I’m just going to make do with what I’ve got and then after that, just look for a designer at some point down the road, when I actually have the funds for it.
Rob: For me, my other point of update is we’ve had some recent questions on the podcast about books, or resources to learn how to build a SaaS app and someone had pointed out the PHP spark framework, which I think is pretty cool.
There’s another one in the works now. It’s Marcus Wein. He’s in Austria and he’s working on a SaaS guide book for Ruby on Rails. I actually met him at Brennan’s conference. We talked about stuff and then he cooked up this idea and put up a landing page while we were there. I thought that was cool. He’s getting to work on that book and the URL for that is saasrailsbook.com.
If you’re interested in the fundamentals of how to build a SaaS app and are willing to either learn Rails to do it or you already know Rails and you want to just learn how a guy who’s built dozens and dozens of them would architect it and then all the things that he would think about, go ahead to saasrailsbook.com.
What are we chatting about today?
Mike: Today, we’re going to be diving into a problem that a listener had sent in to us. His name is Zac and he has a product called neverlate.io. He started working on it. He spent about three months working on it and has a basic MVP all set up but he fully admits that he made this classic mistake where he spent several months in his basement working on it and has come out of it and now he’s ready to try and find customers but he has no customers to go to or to show it to because he spent all that time working on the product itself rather than doing any customer development.
He’s tried a couple of different things to generate some traffic. He’s tried some AdWords. He’s talked to a few different people but really, he’s at ground zero at this point and he’s wondering, “What do I do here? What do I do to try and move this forward and make it work?”
Rob: The URL again is neverlate.io. It is an appointment reminder service. Right now, it is very horizontal. It doesn’t say appointment reminders for XYZ niche. It’s just a broad appointment calendar plus it can send automated text messages. I guess that’s it. It doesn’t look like it makes phone calls either. Anyways, I’m just looking at the home page. Obviously, I haven’t used the app, just trying to give the listener an idea of the business. It starts at $29 a month for up to 200 appointments a month and it has a $50, an $80, and a $500 tier.
Mike: This reminds me a lot of Patrick McKenzie’s appointment reminder app. Maybe, that’s where the idea came from. But to give a little bit more details on this, I’ve gone back and forth with him just to ask a couple more detailed questions. When he came back, he basically told me the product is functional but he doesn’t have a customer list. He doesn’t have a channel where he can start to do customer development. As you said, the bottom price point is $29 a month.
In terms of his target market, he’s a little bit unclear on where to go with that. He knows certain ones that he’s probably going to skip so he’s inclined to skip massage therapists, for example, because he doesn’t think that they’re going to be willing to pay more than like $10 a month. And then in terms of sign ups, he’s gotten some from AdWords. He spent about $50 or so in AdWords and he is getting people to sign up for trials but it’s not a lot and obviously AdWords can get very expensive.
In terms of lifetime value, he really doesn’t know yet. He’s thinking maybe a year or so of service so around $350 for lifetime value of a customer. His base question is really just what do I do at this point? Should I spend more money on AdWords? Should I do something else? What are my options and what are your recommendations about where to go with this?
Rob: We have an outline here but to kick us off, you’re in a real tough place because you basically have no customers, no list, and you have a me too product. There’s nothing that differentiates this product that I can see from, I won’t say a slew of others but I bet if I search, I can find a half dozen apps that do exactly what this does. Definitely back against the wall at the present.
Mike: I think that’s probably a situation that a handful of listeners have found themselves in over the years, probably more than a small handful, where you’ve built something and you get to a point where like, “Okay, yeah, I’m ready to take this to people and show it to them because I’m no longer embarrassed about what it is or what it looks like.” But you haven’t gotten far enough down the customer development road to figure out who it is you’re going to talk to.
I think in this case, your first priority is to prove, one way or another, whether or not this idea is going to be viable for you to execute on. I’ll put “prove” in air quotes because you’re really never going to be 100% sure that it’s going to work but you can get an idea of it. You can start looking down the road and you start doing that customer development and try and figure out does this look like it has legs or am I just wasting my time and money to try and to get this to work?
Along that lines, I think the first thing to do is really set a time line. For something like this, it seems like a six months time line is probably an appropriate timeline to set for this. Especially if you’re working on the side, if you are working on it full time, probably less since you have a fully functional MVP, take that time line, set it aside, and say, “Okay, I’m going to do X things during this time.” And set goals for that entire time line.
The first goal that I was thinking you would set up for six months, months one and two should really just be focused on trying to get a certain number of customer discussions, whether that’s five per month of five per week. Really, you can set your own pace and schedule at that. But you’re trying to figure out can I reach these people? How do I reach them? Once you start having those discussions with them, you learn more about who they are, what they do, how much time they spend in different areas, especially trying to solve this particular problem, whether it’s something that they’re willing to pay for.
Once you have that information, you ask yourself, how much are they willing to pay? Obviously, you ask them as well. But you want to find out, are they willing to pay for it, how much, and listen to the language that they’re using. Really, these first two months are just spent doing these customer discussions. Yes, if you can get them to a trial or on to a paid account, that’s great, but that’s not your goal here. Your focus should be getting a certain number of customer discussions because that’s going to give you an idea of how easy or difficult it is to continue doing that down the road.
Rob: Right. If you can’t get into these customer discussions, which are really about learning, as you’ve just said, rather than trying to build revenue, if you can’t find anyone who’s willing to talk to you, that’s a very, very bad sign. It’s a sign that you’ve built something that people just don’t care about, don’t need, don’t want, which is going to be something you could very well run into with any product that you launch. At that point, you have to decide am I willing to essentially continue to add things to this that actually make it unique so that I’m the only app that does this in this way, or to pick a niche and niche down.
Like you said, you don’t want to do massage therapist and I don’t blame you. Is there a group? Is it medical or dental because they have HIPPA so they’re really expensive and so they’re the $500 a month and up and you offer only HIPPA compliant so it’s important reminder for medical and dentist office. There’s probably some others in that. This is where you have to do this research. This is not the time to run Facebook ads to a landing page and see who converts and play it that way. This is an app where appointments are brick and mortar type of things. I can’t think of an online audience like designers, or photographers, or developers, or entrepreneurs, there’s certain audiences that are just online a lot.
Appointment reminder, if you can figure out a way to target an online audience, great, but if not, then you have to go through these much more manual steps. I don’t really see an angle here where you’re just going to rent some Facebook ads and convert people to trial and split test your way out of this. For the whole six months, you’re going to be learning that these first two months are going to be critical. They’re going to, like Mike said, tell you whether or not you should continue.
Mike: Along with that, in these first two months, you’re trying to figure out who that target audience is. I think early on, Zac had said he was probably going to skip massage therapists. Maybe there’s some data he already has to indicate that they’re not willing to pay for that. That’s fine. But are there other professions or other verticals that you can target and try to have those discussions with them and see if that’s going to work, see if that’s an initial traction channel that you can start to establish.
If it is, great. You can move on to the next steps in months three, and four, and five, and six that we’re going to lay out. Your focus at this point is trying to figure out who those people are and if you can establish a recurring channel of them to have those discussions with. If you can’t, then maybe it’s time to pivot to a different channel, a different vertical, or can the whole thing.
I probably wouldn’t can it after trying to find one vertical. If you go to massage therapists and they say, “No, we’re just not interested.” Okay, great. Go to dentists and then maybe pivot over to a solo practitioner doctor’s offices, for example, or plastic surgeons, or something along those lines. Each of those could be a one to two month effort but you’re trying to figure out is there a place where you can get customers on a recurring basis, at least in the early days?
If you go through several of those iterations and you still can’t find them, then that’s the point where you need to re evaluate your position and decide whether or not to just cut your losses and move on.
Rob: For months three and four, assuming that months one and two are successful and you figure out a niche or a group that you’re going to target, months three and four, your KPI is the number of paying customers after you’ve had a direct discussion. This is very, very much not scalable but what you’re trying to do is to learn objections. You’re trying to overcome them via discussions. You’re trying to close deals. It’s still learning but you’re trying to start making the rubber meet the road and actually get some revenue.
What you might find is that you get through three and four and you can’t get enough paying customers to make it worth your while and you have to go back and repeat months one and two and find a new group to target.
Mike: The whole point of this particular piece of it, I don’t know if some paying customers is like the sole thing that you should focus on. Getting them into the app and getting them active and using the app, that’s probably a much more important first step. Obviously, you want to keep them as paying customers and get them to convert from any sort of free trial that you put them in into a paying customer. But even if they don’t, you’re still going to learn from that. The focus is really finding a certain number of people that you can put into it.
Again, you can set those numbers yourself. You can base it on how many conversations you’re actually having because obviously, if you only have 5 conversations a week, you’re not going to get 10 customers a week. That’s simply not going to happen. From that, you can back that off and put people into the app and learn those objections. You can overcome them by talking to them. A lot of times, people will have a question that if they’re on your website and they have a question in their mind, it draws doubts for them. They will not sign up because of that.
When you ask them, “Hey, would you like to sign up for an account right now?” They’ll say yes or no. If they say no, you can ask, “Well, why not? What’s stopping you? What is it that’s holding you back here?” Those are the things that you want to write down. Every single question that somebody asks, you want to write that question down. That way, you can go back to that and over time, you’ll get a base of let’s say 20, 30, 50 people you’ve talked to. Start aggregating the number of questions that they ask and which questions they ask. You can identify which of the questions were most prevalent, which ones the most people had and use that in your marketing copy once you get to months five and six, which is where you are trying to land the paying customers or on board people without having those direct discussions.
Rob: That’s month five and six. It’s moving out of the I’m talking to everyone, I’m doing demos for everyone, and I might able to start getting people to overcome their objections and sign up for a trial just purely based on a marketing website.
Take these timelines with a grain of salt here. We heard from Jordan Gal last week and he was giving demos for six months, eight months. It wasn’t just the two months we have here or I guess we have four months. One and two, finding the audience and three to four is overcoming objections, and five and six is moving towards the more automated way. Their journey took longer. They have a more complex product, probably harder to explain, harder to demo. Appointment reminders tend to be fairly, I think it’s pretty easily understood by the prospect so perhaps you’d have an easier time or perhaps you’ll have a tougher time getting to five and six because again, your product isn’t differentiated from others that they could find with a Google search.
That’s the idea here. This third step, this third piece is trying to move towards having more automated things in flow and maybe you don’t remove demos altogether, maybe you figure out you have people self select that if they’re in the lower pricing tiers, then they sign right up and if they’re going to pay you three figures a month, it’s probably worth having a conversation with that person. You have a contact that’s linked. Even if you show your pricing, you still have some type of thing, how many appointments per month and immediately, you get a paying customer and have an idea that it’s worth reaching out to them with a calendar link, trying to set up a conversation.
Mike: With each of these sets of two months, months one and two is really about trying to get a certain number of customer discussions going and then month three and four are putting people into the app through those direct discussions and then five and six is getting those customers onboarded without having those direct sales discussions. That’s really just a logical progression. As Rob pointed out, your timeline may vary quite a lot. It could be closer to a year or it could be closer to two months. It depends on how complicated your app is, how far along it is, how many people you’re able to have those conversations with early on, how quickly you get traction, and it also depends a lot on what your schedule is.
If you’re working on it full time, you’re going to be able to move faster. If you’re working on it on nights and weekends, you’re probably not going to be able to schedule 25 calls during the week. It’s just not going to happen because you have a full time job and you’ve got other responsibilities. During the work week, it’s going to be very difficult for you.
But all of this is really just establishing this logical progression so that you can determine whether or not this idea that you have or the product and the MVP that you put together is going to go anywhere so that you’re not wasting too much time trying to make something work that’s simply not going to for you.
I think that’s another key distinction that we’ve made on this podcast before, which is that even though something could be a great idea and it is reasonably well executed, it may not be the right idea for you. If it’s not something you’re passionate about or you don’t want to do or you’re just not interested in it, you’re not going to do it as well as if it was something that you were extremely interested in and extremely motivated to do. You’re going to push things off and not be as motivated to move people forward in the sales funnel and do the website, coding, and everything else.
It’s going to be harder for you. Maybe it’s just not the right fit. Maybe some other product would be a better fit. Again, these are all things that you need to evaluate as you’re going through this process.
Rob: We call that in the biz, product founder fit. As you said, is the product a good fit for you, for your personality, for what you want to do for the customers you want to work with, for the features you want to build. It’s a bit of an amorphous concept and it’s hard to know upfront but what’s nice is that Zac said, right off the bat, “I don’t think I want to work with massage therapists.” That’s like, alright, good. It’s a good thing to know that. Don’t go after that market because you’re probably going to find out that you’re not, even if you found success, you’re not going to enjoy it. You’re not going to stick with it for the long term.
Mike: I think that’s an interesting side conversation. Even if that would work, do you want to do it? I think in some cases, the answer to that is probably not. There’s certainly groups of people that I would probably not want to work with or probably would not enjoy and everybody has their own either biases or people that they know in certain industries, they’re like, “I just don’t want to deal with any of that stuff.”
Again, it may work out. It’s just like marketing tactics. There may be some things that you’re really comfortable doing and the next person may not be comfortable with that at all.
Rob: Yeah, there was an app I almost acquired. I’m trying to think. It may have been after HitTail, or I still owned it but it had grown to where I thought it was going to grow and I was looking at other avenues before Drip. I looked at acquiring a bunch of different apps. One of them was going to put me marketing to and having a customer base of designers UX and usability folks. I had no reach into that market. Obviously, I have an understanding of what they do but I am not in that target market.
It was Ruben Gamez from Bidsketch who asked me, “You’re doing a market pivot by going from an SEO tool, which is at least marketing technology, into something that goes after a completely different audience, is that something that you want to do for the next three, four, five years?” Frankly, I have no qualms with working with designers and UX people, I think it would have been an interesting adventure but it would’ve been a huge learning experience for me.
I thought, “If I do this, I’m going to have an uphill battle to learn a whole new space and to learn what are all the sites where people hang out? Where are the blogs? I already know this from MarTech. That is one of the reasons that I wound up doing Drip. Because it’s not the same as an SEO keyword tool but it is another marketing SaaS and I already knew so much about the space because of my heavy involvement in evaluation of tools from my own personal use. It was just a different thing.
I think I still would’ve been successful. It probably would’ve taken longer had I done that. I would educate myself about a market, make myself a name in that market, which I really, really don’t have. And so, it’s just something to think about as you go through your ideas.
Mike: I think one of the last questions that Zac came up with was should I spend more money on AdWords or should I just abandon that and go do something else? I think, Rob, you’re probably in agreement with me on this one. But AdWords is probably not the way you want to go, especially if you don’t have a lot of money to throw into this because you’re going to spend money trying to learn. It’s not that spending money to learn is a bad thing but you’re going to probably spend much more money than you would if you had some customer discussions first and you waited until month three or four to start pumping up the sales funnel a little bit.
After you’ve gotten some of the terminology a little bit, you’ve narrowed down the market a little bit, if you’re just throwing money out there to try and figure out where the market is, it’s going to be very expensive to do that.
Rob: Yeah. The tough part is since the audience is brick and mortar, it’s going to be expensive and hard to find them. There are tools where everybody’s online and they’re always signing up for new things. You can do the curiosity play and get them to sign up and you have a low price point and you could test an idea with ads landing pages in more broader scope stuff if you had the money to do it. I don’t see an avenue to do that here. Just by nature of the potential audiences that we can come up with, I think you’re right.
I’m in agreement that AdWords is probably not where you’re going to get a bunch of learning at this point. Maybe you could run AdWords just enough to get that trickle of calls that you want. And again, it’s going to be expensive to get that trickle going. But if you have no other avenues, yeah, maybe AdWords or Facebook ads, or some type of paid acquisition, but if you can pay $10, $20 to find someone to get on the phone with you, who has some inbound interest, that’s interesting but you know you could just as easily do some cold outbound email or cold phone calls and perhaps get the same result with less money but more time.
Mike: That’s really what this is all about. It’s striking that balance between how much money you have available and how much time you have available. If you have more time than money, don’t do paid ads. Have those customer discussions, learn who it is that you need to target. If you have a lot more money than time, spend on AdWords and learn who but it’s going to be dramatically more expensive without having those customer discussions to guide you.
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