- YouTube is the worlds third largest search engine
[00:01] Rob Walling: This is Startups for the Rest of Us: Episode 4.
[00:13] Rob: Welcome to Startups For the Rest of Us, the podcast that helps developers be awesome at launching software products, whether you have built your first product or are just thinking about. I’m Mike.
[00:23] Mike Taber: And I’m Mike.
[00:24] Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s going on this week, Mike?
[00:31] Mike: Not a whole lot. Just sitting here in front of a lot of hardware, like we discussed earlier. [laughs]
00:36] Rob: Yeah, it seems like you have about two data centers worth of hardware behind you in your basement. What’s the story behind that?
[00:41] Mike: Just a lot of stuff that I collected over the past couple of years for some enterprise software that I was testing. What I was doing at the time is I was doing a lot of testing for enterprise applications and systems management. So I had to have tons and tons of machines up and running at the same time so I could demonstrate that you could do something and push out policies and it would apply to different machines and do whatever you told it to do on the right machines.
[01:06] So I had SQL servers, Windows, and Linux, and Solaris, HP-UX, AIX, etc; tons of stuff.
[01:13] Rob: Judging by the stack of Dell boxes behind you, did they name a wing or a building after you? Is there like “The Taber Building”?
[01:20] Mike: You know, I’m still working on that, but I think they are breaking ground sometime in 2015 or something like that. I don’t know. But they are waiting on my check.
[01:28] Rob: Nice. Yeah! Well, very good. Anything new this week? Anything interesting?
[01:32] Mike: Not that I can think of. [laughs]
[01:34] Rob: No? All right, well I have plenty interesting to talk about, so I’ll talk for both of us. How about that?
[01:38] Mike: That sounds great.
[01:39] Rob: I spent a lot of time this week doing some DotNet Invoice stuff once again. I’ve been spending a lot of time on it. I like doing kind of “binge” work on a project. So I’ll work really hard for two to four weeks on it and then I’ll…I won’t say I ignore it, but I kind of put it on the backburner and let it run on autopilot.
[01:58] Actually, about the past couple months has been a lot of DotNet Invoice. And last week I pushed a new landing page live.
[02:04] Mike: Was that the one where you were doing AB testing on the video?
[02:07] Rob: That’s right. It’s an interesting experiment. I am kind of wondering how it’s going to turn out.
[02:12] Mike: I like the video. I thought it went a little fast, but I think that was probably intentional on your part just to kind of get through things and make sure that you go everything that you wanted to get said, said. But at the same time, I think that it does come off a little fast.
[02:26] Rob: Yeah. If I were to do it again, I would definitely cut some pieces out. I really like the narration and the copy that I wrote and read. And then once I started recording stuff, I recorded too much. That’s the bottom line. So yeah, it’s too rushed.
[02:40] The problem is going back and editing at this point. It like breaks all my timing and my changes, so it’s a pretty big hassle. I may look at going back and doing it, but it’s like once you layer all these things on top of each other, then as soon as I change it and it changes the time, I have to edit the audio, I have to edit the music background; there is just a ton of undoing. So it’s something I wish I had caught earlier, because once its published, it’s like, “Oh, man.” It’s not a five minute fix at this point.
[03:03] Mike: Yeah, I can imagine that.
[03:05] Rob: Yeah, you know how it is working with video. The interesting thing is I am actually…I’ve never done this before — I’m AB testing the homepage of the website. So it’s not just the landing page. That page with the video, half the people are seeing that as the homepage. And I’m checking out which one gets more people to our demo.
[03:24] Mike: Are you starting to see any results at all or no?
[03:26] Rob: Yeah. So far, this landing page is just getting crushed by our normal homepage. The normal homepage, for the listeners, is just a standard kind of 37 Signals homepage with some screen shots and a “Try Now” button. And this other thing that I’m AB testing is just really going out on a limb, and it is very stripped down with any page. There is no top navigation. Actually, above the fold there is no links at all. All you see is a video and some very brief copy, and a guarantee, and then a box that says “Try the demo”. And all the navigation is in the footer.
[03:55] So it’s really focused and basically saying, “If you like this video, try the demo.” And that’s all we are trying to get you to do. And so far, very few people are trying the demo compared to our normal homepage. You know, our homepage gets pretty high conversion rates on that. So, it’s a trip. So I think it will be a shorter…I mean in a good way, I think it will be a shorter AB test cycle than a lot of AB tests you do. You know, because if it is really close, it takes weeks to figure this stuff out.
[04:20] But, I mean when I looked yesterday, it was nine to two…Yeah, it was like 4 ½ times more; 450% more effective than our normal homepage. Yeah, it was like embarrassing.
[04:29] Mike: More effective or less effective?
[04:31] Rob: Less effective. The landing page is less effective.
[04:33] Mike: So the video landing page is less effective?
[04:35] Rob: Less effective. Yep. And I certainly don’t think it’s because of the video. I am actually considering…I mean the next step, if this video landing page doesn’t work, is to take that video and put it on my homepage and test it against the current homepage, just to see if the video draws more.
[04:50] Anyways, that’s what I’ve been up to. And I mean, certainly, long-term, it will lead to improvements, even if this killer iteration doesn’t.
[04:57] Mike: Well, that’s interesting. It will certainly be interesting to find out how well that works out for you, because I mean I think that a lot of people are trying to try other things, and video is obviously one of those things that might or might not work.
[05:08] My biggest concern with video is the fact that…your video probably illustrated this quite a bit…there is just so much stuff that you want to squeeze onto it and want to be able to say. Because a video is very linear, and you and I have talked about this before — even just editing audio for other things, you have to really pay attention to that specific point time. It is not like a web page where you go to a web page and you have complete and utter control over where you look and how you look at it. And that’s great, because if you want to skip to the second or third paragraph of something, you can.
[05:40] But with a video or audio, you can’t. You don’t have that option. So you are forced into listening to it our watching it in whatever way somebody else wants you to. And it is very difficult to skip ahead and to know what it is that you are skipping ahead. You can’t skim a video, for example.
[05:58] Rob: Yeah, that’s a good point. It is. It’s interesting, and that’s why I think AB testing a video versus no video is a better test than what I’m running now, because I think my landing page itself is having a negative impact, rather than the video part of it.
[06:11] I think, in general, video will outperform other stuff as long as it’s a good video. I think it will outperform text, but that is not going to happen in every situation.
[06:19] Mike: I read an article recently some place. I wish I could remember where it was. But it basically said that for the time being, and probably for the foreseeable future, if you create a video for something and you try to market that online, especially with Google, what will happen is your video, because there are so few videos out there, Google is tweaking their search engine such that they are mixing video results into their search results and they are weighting them a lot higher than they will regular text, because of that reason — they want it to catch on and they want people to be seeing those things in there. And because video is difficult to search, obviously, I mean they have to do something.
[06:58] Rob: Absolutely. Yeah. No, Google has been doing this for quite some time; maybe six months, nine months. And that’s absolutely right. It is. If you put out a video and it gets quite a few views and it gets any type of clout in YouTube, then it will appear on the first page of Google. And it is a lot easier to rank for that kind of stuff than it is for text these days. So a lot of search engine marketers are going in that direction.
[07:21] You know, another interesting thing is that YouTube…I’ve heard this from two places now. I’ve heard that YouTube is now the third largest search engine.
[07:29] Mike: Really?
[07:30] Rob: Yeah. That that many people use it. You know, you go to YouTube and people type in whatever — recipe, or this or that. So it’s justification for creating some videos. I mean that is what I am going to do. I actually haven’t uploaded the video I created to YouTube. It’s only in Viddler right now because of the higher quality and higher flexibility. But I am definitely going to put it in YouTube.
[07:49] And there are some key things you have to do when you do it. You have to make sure to put keywords in the title, and you have to put some links. And there is like a description. The first three lines display, so you kind of want a URL in there.
[07:59] So there are some key things to do to take advantage of the few thousand views you might get for something like invoicing software. Because I put up a video probably 18 months ago, and all it is like “DotNet Invoice Invoicing software”. And it was what we were using as our demo on our site. And yeah, it’s gotten like 3,500 views in the past 18 months.
[08:16] I mean this is boring stuff, right? Who wants to go watch a video of some guy demoing invoicing software? And yet, a few thousand people have checked it out. So I definitely think there is a lot to be said there for YouTube marketing.
[08:27] Mike: Yeah. It depends on what they consider a view. [laughs]
[08:29] Rob: That’s true, yeah. It auto plays, so if someone just stumbles upon it and it appears, you know?
[08:34] Mike: Or the click on it. It’s one of those things where if it starts to load, does that count as a view?
[08:39] Rob: Yeah. Yeah, I think if it starts to play, they count it as a view; maybe five seconds or something.
[08:44] Mike: Right.
[08:45] Rob: It’s pretty flimsy.
[08:48] Rob: So today’s topic is: Eight things we wish we knew when we started out. And you and I have set down and we’ve put together our list of eight things that we wish we knew when we became entrepreneurs and started companies and launching products.
[09:03] And I think some of these will not come as a surprise to people listening but will be shocking revelations. So I’ll get started with the first one.
[09:11] I wish that I knew that having traffic to a website isn’t enough to succeed. I wish I knew that when I started out, because I was under the impression that you could launch a product or a website and if you just got enough people to come to that website that that was it; that’s all you needed. I mean you needed a decent product or a compelling website, but it just turned out that that is so far from the truth it’s not even funny.
[09:34] Traffic quality is a huge deal in terms of having actual targeted traffic, and so much time…I mean to me it is like a two part equation. There is traffic and then there are conversions. And getting people to convert is as difficult or even more difficult than just generating traffic.
[09:53] These days, I almost feel like generating traffic is an easier task. Like, once you get something converting, there are all sorts of avenues to get traffic. You can use AdWords, you can do SEO, you can create videos like we’ve talked about, you can go on podcasts, you can start a blog. I mean all of these things are going to funnel traffic, even if it is a few hundred visitors to start with. But I really do think that that is the easy part. It is getting a compelling offer and getting people to buy your product, or at least give you their email or kind of opt-in to getting to know you better.
[10:23] Mike: That’s definitely something that if we had more than eight things, that would be on my list as well. You are absolutely right. I mean traffic is just absolutely not enough. And you really need to know a lot more about the traffic that is coming to your website and be able to do something with it. I mean you can get 10,000 or 100,000 visitors to your site, but unless they are doing what it is that you want them there for, it just doesn’t matter.
[10:46] Rob: Yeah. I remember the first time my blog was on the front page of Digg. I got around 50,000 visitors in about 2 ½, three days. And I thought, “Oh my gosh! My RSS subscriptions are just going to shoot through the roof.” And I don’t remember what I was at at the time; probably 1,500 or 2,000 RSS subscribers.
[11:03] And I think it went up between 100 and 200 subscribers. And I thought to myself, “Oh my gosh, that is just nothing! That is nothing compared to what it should have gone up if I was able to convert those people.” And I think that has a lot to do with the traffic quality from Digg, right? They are not typically going to subscribe. They are more of a smorgasbord type buffet.
[11:21] Mike: Cheap.
[11:21] Rob: Yeah, you could say that…
[11:22] Mike: Cheap.
[11:23] Rob: Oh, here we go! Send your flame emails to Mike@….
[11:33] Mike: And I hate Mac’s and Linux…
[11:35] Rob: And open source…
[11:37] Mike: [laughs] And open source.
[11:38] Rob: Yeah. No, but you have a point. I mean I wouldn’t go as far as…Well, maybe I would say cheap. But the quality isn’t there. People aren’t really seeking to actually subscribe to something. They are really just looking to surf around in between playing a first person shooter and…
[11:51] Mike: Yeah, I mean they are looking for something interesting. I mean they are trying to kill time. They are not looking to solve a problem. The problem that they are trying to solve is boredom.
[11:59] Rob: Right. That’s true.
[12:01] Mike: One of the things that I think that I really wish I had known when we started out, or when I started out, was the amount of administrative overhead that it takes to not only create, but to run a business.
[12:13] When I first got started, I actually did things the official, “government approved” way. I went out, I got an attorney, I got a CPA and filled out all the paperwork, which there was a lot of. And as time went on, that paperwork got to be more and more.
[12:30] And it’s just a huge administrative headache to run a business. And the thing that sucks the most is there are all these things that people don’t even tell you that you have to do. For example, if you have a corporation, you have to file a yearly…I forget exactly what it is. It is just basically a yearly form that you file with the state or the Federal government that says, “This corporation is still in existence.” And typically, in a larger or public company, you would have somebody who does that for you, because they take minutes and they submit them to the state and say that, “Yes, we are continuing to do business.”
[13:02] But as a small company, you don’t have the luxury of having somebody else who keeps on track of all the state and federal guidelines that you need to follow in order to maintain the business as a recognized business.
[13:15] And if you don’t keep on that stuff, you can actually lose your status as a business and the IRS can come at you and say, “Well, you are not really running a business because you haven’t filed all this paperwork.” So they will start nailing you for massive taxes and you won’t get any of those tax shelters that a normal business would offer you.
[13:32] In addition, there are all these other things that you need to do such as keeping bank statements separate. So all your business expenses have to be separate from your personal expenses. Anything that you are going to write off, you need to document that. If you go out to dinner and you talk to somebody, you have to write down on the receipt exactly what it was that you talked about. You have to keep track of all this stuff in QuickBooks because, let’s be honest, an Excel spreadsheet is just not enough. And the government is going to look at that and they are going to say, “Well, you know what? We don’t accept an Excel spreadsheet as an official document for keeping track of all of the things that you supposedly wrote off during the year.”
[14:07] Because you can write anything you want in there. And, granted, you can sort of do the same thing in QuickBooks if you know what you are doing, but it is a little bit more difficult if you have to keep track of all those receipts and stuff. The amount of time and effort that goes into making sure that you maintain everything in the official, approved way is just ridiculous. And it takes so much time that you don’t actually spend nearly as much time as you want to on your business itself. So whether you are trying to build a product, or marketing it, or anything, anything that actually contributes to your bottom line, it takes away from that.
[14:38] Rob: I take your comment on the Excel spreadsheet as a personal and deliberate attack on my approach. Mike knows very well that I manage…I am the polar opposite. I started my business about eight years ago and I run everything in Excel. I am totally loosey-goosey with it.
[14:53] Mike: But your situation is different. My business started out as an S Corporation. So I have some different requirements that I have to follow. And as I have two S Corporations, I have to do it for each of them and I have to keep them completely separate from all of my personal stuff.
[15:10] Rob: Right.
[15:11] Mike: And that’s the difference between us. So it’s not a personal…
[15:13] Rob: Right. I know, I know.
[15:18] Mike: And your Vista 64 machine sucks. [laughs]
[15:17] Rob: Oh, man…“Oh, it rumbles!” So, yeah, I have been a sole proprietor for eight years. And only in the past couple of months have I even considered getting an attorney, and I now have one. And I am probably going to move to an LLC in the next few months for some tax advantages and liability protection.
[15:36] But I did get a CPA a few years ago. But, yeah, Mike and I have taken a different approach to it. He went with the S Corp up front. And even then, I use Excel; I don’t use QuickBooks. I’m going to have to move to it soon. But even then, I still feel like there is a ton of overheard, especially with taxes and just all the paperwork that I have to file with the city and the dba thing that has to be done every couple of years. So I agree with you.
[16:00] Mike: Just a quick note. If you are going to go with the 2010, get the “QuickBooks 2010: The Official Guide”. I got the one for 2008 because that is back when I first bought it. But that is a very good reference manual, because QuickBooks is kind of confusing, especially if you are not an accountant. And “Accounting for Dummies” is another good one to help you figure out, like, the double-entry accounting and how all that stuff works.
[16:22] Rob: Right. Good tips. I’ve actually been looking at Clarity Accounting, I think it’s called, and it’s a QuickBooks Online competitor. So I may go with that just because I don’t need heavy duty stuff; I really just need some basic double-entry. And Clarity is less expensive, but that’s not the reason I am going with it. It is just way more flexible; it appears to be anyways. And the UI is a lot better. It is made by tech people; tech people who know accounting. Whereas to me, QuickBooks is just almost like made by accountants. It’s just so clunky when I’ve used it.
[16:54] Mike: Yeah, the one nice thing about QuickBooks is you can hand it off to virtually any CPA on the planet and they all know how to use it.
[17:00] Rob: Yeah, that’s the thing I am going to ask my CPA before I go with this move. I have a bookmark right now, but I am going to ask him.
[17:05] Mike: Yeah. I asked my CPA about it and he said either Peachtree or QuickBooks. He said about one out of 10 of his customers used Peachtree and nine out of 10 use QuickBooks.
[17:15] Rob: Yeah, that makes sense. Number three on the list of things we wish we knew when we started out is that one big link won’t make you successful. This is an ongoing myth that I keep hearing about it. I’ve blogged about it. And even now when I talk to people, I will hear a developer who is going to launch a product, and he will say, “Man, all I need is that link from Tech Crunch. All I need is that link from Joel on Software. All I need is to get mentioned on Seth Godin’s blog or mentioned on this podcast.”
[17:42] And I hate to break it to you — it doesn’t matter. It just doesn’t work out that way. That will give you a few thousand visitors, but, frankly, even before you get those visitors, you really want to work on conversions. So if you get those few thousand visitors, that fire hose of visitors from one of these links, and your site is not already optimized to help get people along in your purchase process, then it’s just not going to matter.
[18:06] Mike: Number four on the list is: You can’t do everything yourself. Outsourcing time-consuming tasks is going to be essential to making sure that you are successful. And I’ll give you a prime example. The first one I started out with was the amount of administrative overhead that it takes to create and run a business.
[18:23] Well, when I hired my first full time employee, we started looking into getting health insurance. And when you are applying for health insurance as a small business, because, you know, obviously the business provides health insurance to all of the employees and I was one of the employees, and I wanted my own health insurance because my wife was leaving her job.
[18:41] Long story short. The problem I ran into was that when you get into a problem like that, it is completely an administrative problem and it contributes absolutely nothing to your bottom line. But it has still got to get done and you want it to get done right.
[18:55] So what I did was I actually handed it off to my employee and said, “You know what? The primary reason for us getting this health insurance is for you,” because I had it through my wife and we would have gotten a discount for the business if it had gone through the company instead. But we needed at least two people on the plan.
[19:10] I was like, “You know what? This is important to you, so pick a plan. You know, you are the one who is going to be responsible for finding health insurance for the company. And make sure you pick correctly because, obviously, you are going to have to live with the consequences of that.”
[19:22] Which obviously works out, but at the same time, I mean choosing health insurance is very, very time consuming. And it is worth looking at that at least once a year, when you are up for your renewal, looking around to see what else is out there.
[19:36] But that’s something that I just…I essentially outsourced it to my employee, but I certainly could have taken that task…If I were a single employee, I could have gone to an insurance agent and said, “Hey, please find me something that is going to work for me.”
[19:49] And there are lots of other things that you can outsource as well, and they range from things like doing your accounting, doing some of your marketing, copy writing, building a website, building CSS templates for your website, creating images. I’m a developer. I know a little bit about how to use Photoshop, at least enough to get by and build things. But it is certainly not going to be as good as somebody else.
[20:12] And there have also been times where I just did not have enough time in the day. I mean I outsourced mowing my lawn to a professional agency because I just did not want to do it, because it was sucking up about an hour, an hour and a half, two hours of my time every week, and it was just ridiculous. I am like, “I don’t have that time to spend.” So I hired somebody to do it for me at like $50 an hour and just said, “Here. Go nuts.” It wasn’t $50 an hour. It was like $50 every time they came, but still…
[20:36] Rob: Wouldn’t it be like $50 a month?
[20:38] Mike: You know, honestly, at the time, I just didn’t care, because I was making so much money doing other things that the $50 for them to come and cut my lawn, it just didn’t matter to me because it was a lot less than I was making.
[20:52] Rob: Right. Yeah, that makes sense. Yeah, you know, I think there are two types of outsourcing that I’ve encountered. One is when you outsource something because someone else has more expertise than you do. And in that case, you may actually pay more than what you’ve monetized your time at, because they will do it better. Someone like a lawyer, as an example, instead of writing a document, you are going to pay them a couple hundred bucks an hour, but that may be worth it.
[21:14] And then there is the outsourcing of tasks that you could do, but ideally, you are going to pay less than your monetized hourly rate. And that is things like you said. Mowing your lawn is a personal task, but all of the virtual assistant tasks that you and I outsource, audio editing, video editing, front line email support, web design, on and on…
[21:34] Mike: Legal advice, tax advice — all that stuff.
[21:36] Rob: Yeah. Wait a minute. Not for the cheap…
[21:40] Rob: That was the first category…
[21:41] Mike: Oh, yeah. We were talking about cheap stuff. Sorry.
[21:43] Rob: Yeah, that’s not cheap! So all that to say, yeah, you definitely can’t do everything yourself, and I wished I had known that earlier on, because I certainly did way too much stuff. And I learned how to do things I wish I did not know how to do.
[21:55] Mike: [laughs] One of the things that I found was that…And I got really hung up on this, was the fact that I knew that I could do a better job than anyone else than whatever it was, because it was important to me for certain things. So building a web page, for example. Making sure that all the CSS was tweaked exactly right. And I knew that I wanted it done in a certain way, and I knew that I would do it better than somebody else, because I just cared so much more.
[22:20] But the problem with that is that you are not really being a manager of your business at that point. What you are doing is you are getting down into the dirty details and you are doing things that you really just have no business doing. And not because you care more or you don’t have the skill set, but because there are more important things for you to be spending your time on.
[22:38] And even if somebody only does it 80% as well as you do, or 75%, or 60%, the fact is that it is saving you time, and that is the bottom line. That’s what it comes down to, because time is one of your most precious assets when you are trying to build out your business. And that is why you outsource these things.
[22:56] Rob: The fifth thing we wish we knew when we started out is to think in years rather than months. It is a common mistake to feel like you can build a project in two or three months, launch it, have a big success, and, you know, within six months be making a few thousand bucks a month.
[23:12] Well, that may happen; it is very unlikely. It is going to be a lot longer slog than that. Even the developers I’ve seen who have done it really well and have applied their knowledge, and invested time and money, and just launched a product that was in a good niche, and really nailed a lot of things, typically, the development is about four to six months, and then they will launch, and the ramp up to a reasonable amount of revenue is another three to six months, at least. This is like a minimum if you do everything right.
[23:42] So it really does come out to between seven and twelve months, just if you are doing everything right, to kind of get $500 to $1,000 a month going. And if you make any slip ups or if you are in a market that maybe is a little difficult to penetrate, there is higher SEO competition, it’s definitely going to take you into the years.
[24:00] And I think that we are in an unprecedented time here. That being able to start a business on your own is like nothing in history that has ever existed. And, in addition, even being able to think in terms of seven to 12 months or 12-18 months as a time frame for getting a business going and being profitable, making some money every month, that is really unprecedented. It’s an incredible time that we live in.
[24:25] But with that said, don’t get carried away and don’t think that we are so unprecedented that it’s like, “Oh, I am going to get this done in 90 days and I am going to be making $2,000 a month.” It is very unlikely to happen. The outliers like Peldi who launched Balsamiq and made several hundred thousand dollars in his first year, it’s just a one in 10,000 chance, and it is just so very unlikely to happen to you.
[24:48] Mike: That’s a really important piece. People that you see online who are doing that, they are outliers. And that’s just what is so misleading about it, because you look at these people who are out there who are successful at it and you think, “Oh, I could do that.” And you start down that road, and unless you have that plan in place that matches the specific time line that you are talking about, you know, at least seven to 12 months, or 12-18, or 18-36 months, I mean if you’ve got a time line in your head that is easier measured in weeks than in months, there is probably a serious flaw in your business plan. I mean it is just…It is not realistic. Not to say it is impossible, but it is just not as realistic.
[25:29] So number six on the list is: Don’t waste time making the optimal decision. Make a decent decision and move on. And this goes back to, in fact, just a couple of minutes ago. You and I were talking about it. You had asked me whether I was paying $50 an hour or $50 per month for somebody coming in to mow the lawn.
[25:49] And, at the time, I mean I was well aware that the decision that I was making to pay this money was not worth me shopping around. It was for somebody to come in in the summer and do it, and I just needed it taken care of, and it was not worth my time and effort to sit there and either haggle over the price or bring in a bunch of different people and do bids over it.
[26:10] It just wasn’t worth the time. It’s almost like sitting there and spending a couple of hours trying to figure out: “Should I buy this hard drive or should I buy that hard drive?” And the difference between them is really negligible, and the price difference is, I don’t know, say $25. Well if you spend more than an hour or two hours trying to figure this out, it was just not a good use of your time. I mean you should have just bought the more expensive one and moved on, because at that point, you have already wasted more than $25. And by buying the more expensive one, now you are out $25 plus the extra time that you spent on it.
[26:44] So make a decision about what to do and just move on. You are not going to do yourself any favors by making an optimal decision 90% of the time.
[26:54] Rob: The next item on our list is number seven, and it is that marketing and sales take as long to learn as software development. The bottom line is that building software products is not the same as launching them. It is not the same as marketing them and selling them to someone.
[27:10] So if someone spent two years or five years, 10 years, learning how to write code and build a product, it doesn’t necessarily mean that they know how to actually take that product to market and make it successful. And it will take literally years to learn how to do that.
[27:27] There is a reason that there are MBA programs in marketing. A lot of developers, including myself when I first started, will look at a marketing program and say, “Oh, that’s just a bunch of BS. What do you need to know? It’s common sense.”
[27:38] And to a certain extent, that’s true, but there are so many things that you learn as you go through it, and there are so many things you can learn from someone who has more experience than you, from books, blogs, and interacting with people who are launching products. And then from launching your own, of course. I mean experience is the number one thing you are going to learn from, just like with software development.
[27:57] I’m sure when you first started out as a developer, if you are like me, you read some books and you wrote a bunch of code, and over the years you got better. And that’s how you have to look at it when you are marketing and selling your own product, is that you have to take some resources and absorb them, and then you have to do it on your own and learn as you go along.
[28:16] But you are not going to be an expert. You aren’t going to be a journeyman marketer the first day you step out of the game, just like you weren’t an expert coder the first day that you started writing, “Hello world”.
[28:29] Mike: That’s an important distinction between building a project and launching a product, because most of the people who are listening to this podcast, I’m going to assume, are mostly developers. Not all of them, but most of them. And in order to become an expert of those sorts of things, the general consensus on what it takes to become an expert in a given field is around 10 years of consistently working in that field or about 10,000 hours or so. And if you ballpark 10,000 hours into working hours, that’s realistically about five years full time doing something.
[29:01] Now, because we are developers, you know, we probably went to school for this sort of thing, we get a lot of that extra time built into it. We don’t come out of college with five years of experience; let’s be honest. But we do come out of it with a certain amount of expertise.
[29:18] And going back to the distinction between building a product and launching a product, we’ve got that building a product down. We know how to build a product by the time we get out of college and into the real world. And there is probably a great many things that we don’t really understand about, such as the target market, and what people are really looking for, and why you can’t do things a certain way.
[29:39] So as you start building products, if you work for a company that actually ships products as opposed to most developers who probably write internal software and internal applications, but the companies that build products, when you get in there and you start building code for those, they have a set of processes and rules in place that are more informal than anything else, but they say, “You can’t do X.” And there is a reason you can’t do it, and it is because the product doesn’t sell well. 0:30:05] And you don’t understand at first, but, over time, you gradually figure it out and you learn these things as time goes on.
[30:12] The same thing goes with marketing and being able to launch a product. Because launching a product is just so completely different, you have to learn some of these things. And it can take years to become essentially what amounts to being an expert at marketing. And you have to be able to do both. You have to be able to build that product, and once you are done building a product, you have to become an expert at marketing and selling that product.
[30:36] So the last one of our list of eight things we wish we knew when we started out is: If it’s easy in the beginning, that will probably change. And if it’s not easy, that’s entirely normal. It’s very rare that you launch a product or you launch a service and it’s immediately very, very successful.
[30:54] A lot of times you will see these companies that are either Angel funded or investor funded and they come out of the gate and they seem super strong, and you watch them grow and they become phenomenal successes. And it looks like they do it almost overnight.
[31:10] But the difference between them and you is that they had millions of dollars to throw at a problem and you probably don’t. So if you’re trying to grow organically, it’s not going to be easy. Even if you have lots of money, it’s not always easy.
[31:23] I mean there are tons of companies that burn through millions and millions of dollars every day and they end up fizzling out because either the market was a failure or their product was terrible. Something happened in the market that made them end up going out of business, they ran into legal issues, or the founders fought and the whole company went to heck.
[31:42] But it’s not typical for those companies to just come out of the gate and be wildly successful from day one. It takes a lot of hard work, and hard work implies that it’s just not easy.
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