Episode 356 | Finding Pricing for a New SaaS App, Small Business Banking, Selling to Companies Outside the U.S. and More Listener Questions

Show Notes

In this episode of Startups For The Rest Of Us, Rob and Mike answer a number of listener questions. The topics include finding pricing for a new SaaS app, creating a new product category, choosing a name, and small business banking.

Items mentioned in this episode:


Rob: In this episode of Startups For The Rest Of Us, Mike and I talk about how to determine pricing for a brand new SaaS App, small business banking, and selling to companies outside the US, as well as answer more listener questions. I also ask Mike what his favorite food is without having given him advance notice. Hey Mike, what’s your favorite food?

Mike: I don’t know, I like sushi a lot. That’s my answer.

Rob: I thought you were going to say Whiskey.

Mike: You said food. Yeah, we’ll change that to grain.

Rob: This is Startups For The Rest Of Us Episode 356. 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 Rob.

Mike: And I’m Mike.

Rob: And we’re going to share our experiences to help you avoid the same mistakes we’ve made. Aside from eating Sushi this week, what’s going on, sir?

Mike: I’m looking to push a pretty major update to Bluetick. It unfortunately breaks all of the existing routing for the entire app. I’ve been watching to see who is logged in, when they’re logged in, what they’re doing. Pretty much all hours of the day right now, somebody is doing something. It’s kind of problematic to do to just push out a major update like that. I kind of have to wait until the weekend.

Rob: Yeah. It’s a good problem to have, right?

Mike: I know.

Rob: So many people in your app that it’s hard to push updates.

Mike: I know. It’s funny, I was complaining to my wife, “This is totally a first world problem, but I can’t push an update because people are using it.”

Rob: That’s interesting. With Rails, shadow upgrades where it waits for a particular server to not have anybody else. We have load balancers and a bunch of web servers, but we have a process for there won’t be down time, or you won’t lose your session when it updates. Is .NET still the old paradigm of if you load it and someone’s in their session, they’re going to lose stuff?

Mike: I think typically, yes. But because of the way I have things set up, I’m using an Angular App so I have this session information, it’s the token that gets passed back and forth with every request. That’s not really the issue, the issue is that the URLs that are being used inside the app are changing. The next time they go to make a request, because they have all the JavaScript loaded on their client, it’s going to fail. Even though their token information will be the same, it will still authenticate. It’s just there’s nothing to authenticate to because it’s not there anymore. That’s really the problem. I really have to figure out a way to force the client to say hey, there’s a new version of this, you really should click here or just automatically refresh the entire browser and be done with it. That’s really more the issue than anything else.

Rob: Got it.

Mike: I’ve also got a bunch of trials that are set to convert to paid in the next week or two. I made the next step to transition from a 30 day trial to a 14 day trial, so I’m going to see how that goes as well.

Rob: It’s a good move. Shorten that trial. The shorter you make it, the faster you can test. This is my soap box since day one on this podcast. Shorter trials are better. No trials, the best, because it’s so easy to split test. But you want someone to get value so it’s like 14 to 7, you can split test faster, you get your money faster, it encourages people to get on-boarded faster. But obviously the shorter you go, at a certain point, you give them so little time to get set up that you’re going to have less returns, you’re going to have fewer people making it to paid, so you got to find that balance.

Mike: That’s why I went to 14 instead of 7, I think it’s a good balance between giving somebody enough time and giving me enough time to reach out to them and to make sure that they get through all of the on boarding steps. Because if they don’t, clearly they’re not going to get any value out of the app, but I want them to get value before the end of the trial.

If they’re not doing things in the app and they’re not responding to emails or any of my on boarding stuff, then doing 30 days is not going to make any difference over 14.

Rob: I agree. I have tweaked with trial lengths with pretty much every app that I’ve ever run. I have found that you can just ratchet it down, ratchet it down, and then when you go too far it becomes kind of obvious if you have any type of volume going through it and you know your numbers, you know the typical trial to paid. You’ll either start getting complaints that trials aren’t long enough or you’ll just notice that people aren’t getting stuff done on time. I think this is a really good experiment. If you get it down and stabilized at 14, I would totally look at a 10-day next, maybe in a couple of months as you have time. And as your on boarding gets better, you can do that because it gets people through that part of the funnel quicker.

Mike: Yeah, 10 days might be interesting. The only issue there would be it’s part of a week, or maybe it’s not a big deal, I don’t know. I’ll probably test it at some point, I’m sure.

Rob: We have a ton of new iTunes reviews and iTunes reviews are so helpful to this podcast. A, they give us motivation to keep going. B, they help us rank higher and get more listeners. Right now, we have 531 reviews worldwide in iTunes. One from [Bob Moff 00:05:07] recently said, “Filled with so much great content. You will explode.” I like that one.

One from [00:05:13], he says, “The best. This podcast is amazing. I have a small app business and the advice they give is super helpful in my business. I listen to a number of podcasts for small business and passive income and this podcast is the most beneficial to me.”

Another one from [00:05:26] that says, “Thanks for an awesome show for Startups. Thanks for providing a great show for us.”

If you haven’t ever left us an iTunes review, you don’t even need to go in and write anything like these kind folks did. You can just deal with the clunky iTunes interface or Stitcher, click five stars. It takes two seconds, we’d really appreciate it.

Today, we’re answering listener questions. If you haven’t ever sent in a question, you can call our voicemail number which is super cool because then we get to hear your voice. That’s 888-801-9690. You can always email us at questions@startupsfortherestofus.com. We have five or six people today who did one of those things. Let’s dive into our first one.

Listener:           Hey Rob and Mike. I just want to say first off, I love the podcast. You are by far the most actionable podcast that I listen to. My question today is about pricing. I have a SaaS company starting up and I know you’ve touched on pricing before in the past briefly. I’d really love to hear you go more in depth on how you would figure out pricing for a new SaaS just getting off the ground. Thank you so much, I look forward to hearing from you.

Mike: I think this is kind of a very general topic. What I did for Bluetick for this specifically, to try and find out what people were willing to pay for, was I asked them. When I put people through the initial validation process and I started taking preorders for Bluetick, I asked them how much value do you think this provides to your business? I gave them a text field. It said you tell me how much it is that you’re willing to pre-pay for and then we’ll multiply by how many months. I got ranges anywhere from about—I think the lowest was $1.29—most of them were between $47 and $50 and then I had one that came in at $100. It gave me a good idea that the $50 price point was probably not out of range for most people. That’s what people thought it was worth.

I think there’s other ways that you can do that as well. One of them is to anchor the pricing to something. You can either anchor the pricing to the value that you provide, and in your copy and the things that you talk to people about. You say look, this is what it’s going to save you, or this is what it’s going to help you avoid. You can use that to figure out what the pricing should be and you can use that copy to help you justify it to the customer.

Another thing you can do is look at what competitors are out there and what their pricing looks like in comparison to what it is that you want to do. And then you can either go higher if you want to offer more of a premium offering, or you can go lower if you want to be more of a commodity choice or a lower end option for those people.

I’d say those are probably things that I would look at. Rob, I’m sure you’ve got a ton of things to say about this. What do you think?

Rob: That’s actually a pretty good summary. A, ask, because you probably should be or are going to be doing customer development anyway so you should ask early and then start—as you’re doing customer trial—pitching different prices to hear how people react. I think that’s a great idea. Competitor pricing is always important because people, if you say you have no competitors, you’re probably fooling yourself because even apps that don’t have direct competition have some other form of competition. Even if it’s an Excel spreadsheet and three hours a week of someone’s time, that can be a competitor to you. You can start just doing even loose math about what is three hours of someone’s time worth in the role that they do this? Multiply that times 4.33 and that’s one month. Now alright, I’m going to charge a fifth of that, or a tenth of that, or something.

Another way, something that I did early with Drip was I kept asking myself how can I build an app where the lowest price point was $99 a month. That was the initial brainstorms or one of the thought experiments I did. By the time we launched, Drip was only at $49 a month but our average revenue per user is much higher than that because it scales up with subscriber count.

That’s another way you can think about it, try to dig yourself out of this I’m going to be a $10 a month SaaS app or a $20 a month SaaS app to start. Those apps are going to be great little lifestyle businesses but they are going to tend to have high churn and it’s really, really hard to grow them past, depending on churn, and let’s say $20k, $30k, $40k MRR. It’s just at that low price point, you have to find so many customers.

I think it’s an interesting angle to come at it from that other direction of alright, I’m a developer and I know I’m building an app for X. I know it’s accounting for lumberjacks. How can I make that worth $49 or $99 a month? Does it have to then, in order to provide that much value, go out and scrape people’s bank accounts? Does it have to do 10 times what Quickbooks can do? What does it have to do? I think it’s a third angle to think about as you’re doing this.

I think the last thing I’ll say is with competitor pricing, I think competitors give you a really nice level set or comparable price of what someone might be paying. That doesn’t mean you have to be the least expensive, that’s the thing. I would tend to argue you probably want to be more expensive than most of the other ones. Maybe in the very, very early days you can’t be. But as soon as you start getting some traction and you’re moving fast and you’re shipping fast, people, depending on the industry, often want to use the new cool thing. You’re going to probably have a better UI, better user experience, you’re going to be more responsive because you’re such a smaller company.

When we priced against the MailChimps, AWeber, Constant Contact, we are more expensive than all of those apps. Some people would say, “I’ll just stick with MailChimp because I can save my 10%, 20%, 30% a month.” Our answer was well, we’re more powerful, we’re more responsive, our support is better. Even over time, as we talked about a couple of episode ago, our pricing is now even a little higher than 20% or 30% over MailChimp or Constant Contact. We’ve earned that right. The price premium is a bit of positioning and positions us as much more of a premium offering in the space. I hope that helps, thanks for the question.

Our next question is about creating a new product category.

Listener 2:        Hey, what’s up Rob and Mike? This is Chris Badgett from Lifter LMS which is a WordPress Learning Management System Solution for creating and selling courses and membership sites. I love your guys’ podcast. My question for you, it’s about introducing a new category. We’re growing really quickly, disrupted the market a little bit with a free frontend product and an add-on model, premium pricing, things are going really well.

We’re about to pour gasoline on the fire and really introduce a new category. What I mean by that is something similar to how InfusionSoft introduced the marketing automation category and that was really big. We see an opportunity in the learning space and how we can move into a new category outside of just learning and courses and the membership sites. I’m actually having a hard time naming it. I know what it’s going to be and how it’s going to work, but I want to pick that name kind of like marketing automation or sales automation or those big category names and make it simple and rememberable and not too techy and not using insider lingo and techno babble.

Any advice on naming a category? A new category which is going to involve some education and teaching people about that new category, I would really appreciate that.

Anyway, keep up the great work, guys. Thanks a lot, I appreciate it.

Rob: Thanks for the question. This is a big one and an interesting one. Most people will not face it in their lifetime. I think to start with, you mentioned it, InfusionSoft introduced marketing automation. As far as I know, they did not, they just brought it down from the enterprise. Marketo, Pardot, HubSpot, Eloqua, those guys were kind of around, some of them. InfusionSoft was around before that but it was more like back office for lawyers and brick and mortar. By the time they became marketing automation, there were other players. I don’t know that that’s critically important but it is a clarification I want to make upfront.

Inventing a new product category is very, very hard and very expensive. Since you already have a business and you already have customers, you may be able to gorilla market this to them and have it spread. I’ve been involved, either peripherally or directly, in this type of exercise before. One thing, back in the day, as I was looking for a different term for an entrepreneur who wanted to stay solo and start small software companies.

Micropreneur is this term that I came up with and got micropreneur.com, we launched the academy. All the stuff happened. It was years and years of saying the same thing and talking about it and speaking about it and writing about it and still the adoption of that term. There are some people who used that term, but even with the reach into this space of those people, it still doesn’t resonate with a lot of folks. They don’t call themselves Micropreneurs.

There’s a bunch of reasons why that might be the case, number one, because it’s just really hard to come up with a new term that resonates with people and to define it and have people get behind it. Another reason could be that perhaps the name itself, I didn’t choose it very well, meaning that maybe it’s hard to say, it’s hard to spell, maybe it doesn’t resonate with certain people. I think that’s what the first takeaway is. A, are you sure you want to do this? It’s going to be really, really hard. It’s going to be a ton of money.

Another one, I had a specific conversation with Dharmesh Shah from HubSpot. He and I have known each other for years, blogged, guest posted, we speak at conferences and we talk. We talked about HubSpot inventing the term or getting behind the term inbound marketing. They wrote a book and they pumped money and money and money into it. It was a casual-ish conversation, it may even have been on Twitter, actually. He was saying it was $5 million or $7 million and years for them to get traction with that term to where people associated it with their company. It’s a couple data points, but I will say that this is a lot harder than you think.

Going with that in mind, if you still want to do it, go on with that in mind. It’s still definitely doable. I think that nailing the name and nailing that concept like inbound marketing, certainly those words existed in english language before. But they brought it together and they gave it this tight definition, and then they just kept saying that definition over and over in different ways. That would be my advice for it. Honestly, I would consider—if you’re really going to do this—hiring a design firm or a brand agency or somebody to help you with that name. Because if you know what it is but it sounds like you don’t have the name yet, the name may be 80% of the battle. If you get that wrong, no matter what else you do, you’re going to be hosed because it just has to resonate with people and it has to have a deeper meaning and conjure up the meaning in people’s minds. That’s hard to do, it’s hard to come up with that on your own.

Mike: Sounds to me like this is just one of those classic branding exercises. When you’re trying to come up with a brand, I don’t view it as too much dissimilar from coming up with a name for your product or your company. It needs to fulfill a couple different requirements. It needs to be easy to say, easy to pronounce, easy to spell. You don’t want people to misspell it or get it slightly incorrect and end up in the wrong places on the internet.

I think the fundamental thing that is the most important of that is it must resonate with people and accurately describe what it is that they do or what the product category is in a way that makes them affiliate themselves with whatever that term is.

Coming back to what Rob was saying before about micropreneur and why that hasn’t really caught on, I think people feel like I’m an entrepreneur, micropreneur sounds a little bit like you’re couching how well you’re doing in certain things. People want to be viewed as successful. If you say micropreneur, oh, I’m a small entrepreneur. No, that’s not really the whole point of it, so I feel like there’s certain connotations along with that that turn some people off. You need to make sure that you’re cognizant of what those types of things are with whatever the term that you come up with is.

Something else I think about is is there any real value in being known as the company that established this name or created the name? Is there something else that you could latch onto that isn’t necessarily yours or wasn’t created by you but you can then build enough stuff around it. Like Rob said, HubSpot spent millions and millions of dollars and tons of repetitions saying the same things over and over to their customers and everyone else’s customers that inbound marketing and inbound marketing and inbound marketing. That’s how they ended up making that into a term that people affiliate with HubSpot.

You can do the same thing even if you don’t necessarily come up with a term. I’m hesitant to say that there’s value in being known as the company that came up with a specific term, like you said marketing automation and as Rob pointed out, InfusionSoft is not the company that came up with that, it was someone else. It would be very easy for people to misattribute it anyway.

Rob: Yeah, and last thing is given the importance of this, there are people out there who come up with names, they’re naming experts. A lot of them do it for companies, but if you have the resources, since you already have a company that sounds like it’s profitable, the name is a critical piece of it.

Someone who I heard recently on The Tropical MBA Podcast, it was Episode 401, What’s In A Name? Listen to that episode and figure out if she might be a fit for you. I forgot the name of the company but it was a fascinating exercise. Dan and Ian from Tropical MBA are wanting to rename their brand, their podcast. They want to get rid of the Tropical part.

They’ve now renamed twice. They were called The Lifestyle Business Podcast, and then they renamed to Tropical MBA, and then they’re renaming to something else. You can see how hard this is because for them the podcast is part a movement, it’s part of a new term that they’re coming up with. As their careers have shifted and their businesses have shifted, you can imagine that it’s difficult to pick something that’s going to hang around forever.

The cool part is that question and the thought about choosing a niche and name is actually our next listener question. It’s from ov@socialbee.io. He says, “I have a question that applies mostly to Rob, but I’d like to hear both of your takes on this. Your podcast is geared towards solo founders and bootstrapped entrepreneurs, ‘The Rest Of Us.’ As Rob is now part of a larger organization, he’s switched boats a bit. Would you still name the podcast the way you did if you would have to pick a new name and a new niche now? Or to broaden the question, how do you pick your niche and even your name so you’re sure you don’t outgrow it yourself? Or that if your preferences change, you’re not stuck with your initial niche. Thanks, I’m a big fan and I appreciate your open discussions. Thanks for the great show.”

I’ll insert a little bit here, Mike, just because he asked that part about me and then you can come in with your thoughts. What’s interesting is I do work for a larger organization but I actually don’t feel like I’ve switched boats. I’m still a bootstrap founder at heart. This is the thing, you get into this mindset of if someone has raised any type of funding, are they still a bootstrap founder? Look at Jordan Gal with CartHook, look at Justin McGill with LeadFuze, look at Churn Buster, yes, they each raise small rounds. Are they still bootstrap founders? Yeah, I guess by a technical definition, they bootstrapped to a certain point because they all had revenue and then they raised a small round. Maybe, technically, they’re no longer bootstrapped but at heart, they’re still super scrappy, super cash efficient, and they’re not doing the $100 million company or bust, they’re building real businesses.

That’s the bigger difference I see, it’s partly a mindset thing and it’s partly how you approach problems. Jason Cohen who’s writing WP Engine, I’m an angel investor but I have no inside information. They’re either going to get acquired by a massive company or they’re going to have an IPO here. Big time stuff. He still talks about bootstrapping in a higher level than most of us can, still he’s given the best talk I’ve ever seen on bootstrapping. He bootstrapped WP Engine to a lot in revenue before he bought on any outside funding.

I guess I would probably push back on that a bit to say that since I am working inside a company of 150 people or whatever, that I’m no longer a bootstrap founder. Every problem I approach, I still approach it that way. I guess all that to say is I still love the name Startups For The Rest Of Us. I feel personally, not just because I’m attached to it, it embodies a different way of thinking about startups. Everywhere you look, even as much as I love the Gimlet Media show Startup, it’s just the same stuff. It’s all about the Y Combinators and about these big companies. It’s really well told and I enjoy the story, but it gets old. I feel like on this show, the ‘for the rest of us’ part is really saying this is for people who want to build a real business instead of building slide decks.

I think that’s my initial thoughts. What are you thinking, Mike?

Mike: I think I agree with you for similar reasons. I think that I would stick with the name Startups For The Rest Of Us, I still really like the name. The downside of it is of course that it’s really long. If you have to spell it out or come up with an acronym, it doesn’t suit it very well. I think that the name itself, it resonates really, really well with most people. Here’s why, and I don’t think that we really considered this back when we named the podcast this.

I picked up startupsfortherestofus.com back when I read a PolyGram article about them with Y Combinator and really targeting people who were fresh out of college and didn’t have any expenses and they can send $6,000 to them and basically invest in some of these startups. The expectation was you’ll move to this location for three months and that $6,000 per person is going to get you through. I’ve read it and I was like well, what about me? What about the rest of us who can’t do that because we’ve got a car and a mortgage and family, and we can’t just up and leave for three months.

Honestly, it really irks me at the time. I look back at that and I realized that the gorilla in the startup space is really the funded startups. Those are the ones you hear about all the time, they’re the ones that get all the media attention and love. They’re the ones that get the massive news articles and press coverage that we would like to have but we just don’t.

Really, what that does is it puts people like us and listeners of this podcast into this bucket of people that we’re the misfits, we’re the crazy ones, we’re the rebels, we’re the trouble makers that are going out and building stuff that are not playing by the rules, we’re not doing things by the book. I think that’s why the Startups For The Rest Of Us really resonates so well with a lot of people in the audience, because they can affiliate themselves with that. They’re like I’m not following the script that the Silicon Valley people are putting out there and I’m still being successful at it.

Rob: Yeah. I also think there’s a turner phrase. ‘For the rest of us’ obviously existed in the English language, which is why it came to your mind. It means for those of us who are not privileged or who are not going after what the crowd is doing and what everybody is talking about. Now, there are a bunch of podcasts with similar names, which shows you that that concept resonates with people. There’s Money For The Rest Of Us, Minimalism For The Rest Of Us, Theology For The Rest Of Us, Quitting For The Rest Of Us, Music Appreciation For The Rest Of Us, Success For The Rest Of Us, on and on and on.

I think, to be honest, we may have gotten a little lucky with it. I remember when you…

Mike: Oh, we totally got lucky.

Rob: We didn’t actually know what we were doing. I remember you presenting it and being like, “I have this domain name.” I was like, “Oh, that’s a great idea. This totally fits what we’re doing.” It’s just one of those times when it fits.

I think to address Ov’s broader question, as he says how do you pick your niche and even your name so you’re sure you don’t outgrow it yourself. The niche you pick, you can always outgrow. You can always go from one vertical to a neighboring vertical. You can go from freelance designers to freelance developers. That is not that hard, I’ll say. Or going from a single vertical to going horizontal. We’ve seen people do it. BidSketch went from proposal software for designers to more generalized proposal software for agencies. There’s a number of examples of land and expand, of coming in and serving a single market and then going out.

The niche part is not the hard part, it really is the name. If Ruben had named BidSketch Design Sketch or Design Proposals or something like that, you limit yourself. You have to strike this balance between having a name that’s tight and having one that is so broad that it has no meaning to people, and you’re then inventing your own term and having to educate on that.

With that said, if you look at a lot of the names of big startups, they really aren’t specific at all. They did that by design. amazon.com, this is a very smart guy. I have a sinking feeling that he named it Amazon for a reason. He knew that he wasn’t just going to do books forever, he didn’t name it book website or cheap books or any of those other things. He named it Amazon because he knew he’s probably going to sell some DVDs and some furniture one day. Maybe he didn’t know about Amazon EC2 but EC2 fits under the hat umbrella as well and it’s a completely different thing.

Look at Uber. What does Uber mean? Super, is that right? In German?

Mike: Yeah, something like that.

Rob: Yeah, it’s like above or beyond or super. That fits a lot of stuff. I think the founders of Uber probably knew that they weren’t just going to be a taxi service, although early on they were called UberTaxi and they removed the taxi because they were being regulated as a taxi, and so they changed the name. Now, they could do self driving cars, they can do food delivery. There’s UberEats, you just add the little thing to the end of it.

A lot of startups, when they actually name their startup, they are using these dictionary words or even just nonsense words that have a nice ring to it. There’s a reason for that, they don’t want to get pigeon holed. If you’re naming a company, you may want to lean towards that. Again, that Tropical MBA episode that I mentioned, 401 I think it was, she talks all about this stuff and she has an ebook that is phenomenal if you want to hear more about naming companies. I highly recommend it.

If you are talking about naming a podcast or a blog or you can’t use a nonsense name, I would have some serious brainstorms and then I would try to strike that balance between being so wide and so narrow.

Mike: Of course there’s a danger here, there’s actually a couple dangers. One is if you’re so broad, then you have to spend a lot of time and effort educating people about what the name is. I think the other major danger is that you spend so much time figuring out a name that you don’t actually do anything. Those are other gotchas to be aware of.

Something else that comes to mind is you can always run into a time down the road where you suddenly decide that you don’t like the name. It doesn’t matter that it’s doing well or the customers are resonated with it, you may just decide one day that you don’t like the name. There’s almost nothing you can do about it.

One that comes to mind is FogBugz, from Fog Creek Software. The last I knew that they did not like the name and they felt like hey, if we can change the name to something that made more sense, we would. But at this point, it’s too late. There’s tons of people using it, they’ve got thousands of customers, they’re just not going to change at this point because it doesn’t make business sense. Even though they don’t personally like the name anymore, it doesn’t matter. The reality is the product is still making money, it’s making really good money. They’re just going to stick with it.

You may be stuck with a name you don’t like. If it’s working and then does it really make that much of a difference? The answer is probably not.

Rob: You know, Ramit Sethi with iwillteachyoutoberich.com, that’s the name, he says it’s too long, he says it sounds like he’s a pyramid scheme or whatever. He wishes it was less grandiose. I’ve heard Tim Ferriss talk about how 4-Hour Work Week was really a blessing and a curse. It sold a lot of books but now he has this reputation and he wished he didn’t. There are interesting connotations to it.

And then we can look to Tropical MBA that used to be a lifestyle business podcast. They’ve, again, changed once already and they’re talking about changing their name again. It’s not impossible to change. It’s harder to change a product or a company name, it can be easier to change a podcast where you still have the same subscriber base and RSS feed. You’re not going to lose people. You need to rebuild the brand over time, but it’s totally doable.

That was a good question. Thanks for sending it in.

Out last question for today is from Eric, thanks for sending this in, Eric. It’s about small business banking. He says, “What options would you recommend for small business banking? I’m looking around for a local bank like Wells Fargo, Bank of America, etc. to start with a basic checking account. Would love to hear your thoughts.”

I don’t think of those as local banks, I guess they have local branches but those are large, national banks. What are your thoughts, Mike, besides the sentence that ‘small business banking sucks’? Is that what you’re going to lead with?

Mike: I was, but national banks suck too. Pretty much all of banking sucks.

Rob: It does. You have a ton of experience with it. Do you have any key takeaways of advice, or is it really just go with where your personal stuff is just so it’s easy to transfer money between the two?

Mike: That’s probably the best advice in most cases. Most of the business offerings are going to be pretty similar from one provider to the next. It really matters more along the lines of what services you really need from the bank. Do you actually need to write checks? Do you need to visit a branch? There’s a lot of things that you can do completely online.

Obviously, if you open up an account, at most places, this applies specifically in the United States which I believe he’s writing to us from, you’re going to have to fill out a lot of paperwork that essentially validates who you are because of all of the security laws and SCC things that came along after 9/11. What you’ll need to do though is you’ll need to provide proof of who you are before they’ll let you open a bank account. You can do that online for certain types of banks.

Silicon Valley Bank for example is one where you can do that completely online. Their backend interface kind of sucks, it’s not the greatest in the world, but they have two branches. One of them is on the West Coast, one is on the East Coast, and that’s it. They’ll give you a debit card, you can use it at most places, and that’s really most of what you need. As long as you have online banking and you can take a picture of a check and just deposit it, it probably doesn’t matter. Any bank in the world, you can just order checks from a random checking service where they print out your checks and send them to you. They’re all basically the same thing.

It really comes down to what are you paying for in fees and those types of things. Across the broad spectrum of your business, probably don’t matter much because you’re going to be spending less than $25 or $50 a month on your banking needs, especially if you get over $10,000 or $20,000 from your bank account. At that point, it doesn’t cost you anything. They say you’re a valued customer, you’ve got a minimum amount of money in our account, so we’re not going to charge you for having this account.

At that point, what difference does it make which bank you have? I would say that it absolutely does not. It’s just which national bank do you hate the least?

Rob: Yup, I think those are good thoughts. If I were to do it all over again, I would probably do this mostly the same way I’ve done it which is personal banking is at a particular national bank. I’ve started up a couple business accounts at that same bank. There’s Bank of America and there’s US Bank and there’s Wells Fargo and any of these are going to be so similar. Unless I was extremely cash strapped, m that’s what I would do. You can get a business checking account at any of those banks for $10 or $15 a month if you’re not doing anything fancy. Often, it comes with a savings account for free attached to it.

That’s what I would do, keep it simple. $10, $15, $20 a month, don’t spend so much time doing stuff. The one mistake I’ve made in this banking stuff—well I probably made more—but the one that really comes to mind is I was being super cheap one time trying to set up this account, I didn’t want to pay anything for it, and I set it up with a purely online bank of the internet or something like that. It was just a fiasco, it took forever to get stuff through. Once I had the account, it was fine. But as you said with Silicon Valley Bank, the interface for the one I was using was just awful, it was very limited. Yes, I saved myself $12 a month and I regretted it every time I had to do anything with that bank. I wished I just paid, even if it was $20 a month, to anybody where I could go to a branch or call. It just all fit my other workflow. I would encourage you to not try to save a few bucks.

Maybe there’s a local credit union, I’m not saying don’t use a local bank, because that could be great too. If you can go in and get personalized service, local bank, local credit union, no issues with that. I always try to get the clever solution, I’m gonna hack this and do a really good job. Thus far, it’s backfired on me with banking.

One thing that we will link to in the show notes is a nerdwallet article. This is finding a free business checking account by state, because they’re regulated by state. You could look at this for your state and look through it and see if these places look legit that are in your state, there’s only a handful per state that are listed here. I don’t think there’s any silver bullet here.

Mike: A lot of banks will give you a business account for free for 12 months just for signing up with them. Then after that, they’ll charge you, $10, $15, $25 a month if you don’t have that minimum balance. That’s something else to keep in mind if you want to be able to save some money in the short term until your business gets up and running and you’re able to get cash saved away in there.

I think that about wraps us up for today. If you have a question for us, you can call it into our voicemail number at 1-888-801-9690 or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in 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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6 Responses to “Episode 356 | Finding Pricing for a New SaaS App, Small Business Banking, Selling to Companies Outside the U.S. and More Listener Questions”

  1. Hey Mike, you mentioned at the start of this episode that you were looking for a way to force a client browser refresh when you roll out breaking updates to your Angular app’s routing.

    Since I’ve received so much value from you and Rob through your podcast, I thought the least I could do was throw out a suggestion that might help you. Hopefully, this is the right place to post this.

    At ClearEvent, have a SPA and our backend is .NET as well. While our SPA is not an Angular app (like yours), the high-level approach I’ve described below should be similar.

    On the server, we built a simple update & refresh mechanism by adding an HTTP Header (e.g. ‘MyAppVersion’) to every response returned by the server. The value of ‘MyAppVersion’ gets set to the .NET assembly version. Since we increment our back-end assembly version each time we deploy, we can use it to know when the client needs to change. You could just as easily use a value from a config file on the server too. To set the header for every response we used an ASP.NET HTTP Response Filter.

    On the client, when your app loads, you would simply need to cache the value in memory from the MyAppVersion HTTP header. Whenever a request is made on the client to the server, you can use an Angular HTTP Interceptor to check that the version from the MyAppVersion HTTP header in the response hasn’t changed. If it has, you could set a global state flag to indicate a refresh is needed.

    When the angular app navigates between routes, you can use a route guard to check if a refresh is needed and can then redirect to a page that instructs the client that the app needs to be reloaded (or you could reload it automatically). When the app reloads, the flag would get reset and the app would grab the latest version number from the MyAppVersion HTTP header… and would be ready for the next update.

    You can obviously get fancier than this with https://www.asp.net/signalr or other real-time communication library, but this approach is pretty simple and has worked well for us so far.

    Feel free to reach out if you want more detail.

    Cheers & thanks,

  2. The term “for the rest of us” came from Apple in the early days.


  3. Thanks for another great episode.

    PS. Am I the only one listening to this via a webbrowser? 🙂

  4. @alex You are not alone, i usually download the podcast mp3s and listen to them when i am in offline/non conectivity areas.

  5. I download the mp3 file and puts it on a very oldschool (and very small) mp3-player. Perfect for enjoying the podcast while running.