In episode 690, join Rob Walling for another solo adventure where he answers listener questions. He advises on the ethical considerations of email marketing and answers how he would value a business when buying out a partner. He also addresses the best ways to collect customer feedback and the value of high-fidelity customer calls.
Going from an idea sketched on the back of a napkin to a robust, stable product requires a wide range of skills. You can spend ages looking for a one-in-a-million developer who can do it all, or you can quickly ramp up an entire product team to help you build and launch your product with our sponsor – DevSquad.
DevSquad provides an entire development team packed with top talent from Latin America.
Your elite squad will include between 2 to 6 Full Stack Developers, a technical product manager, plus experts in product strategy, UI/UX design, DevOps, and QA – all working together to make your SaaS Product a success.
You can ramp up an entire product team fast, in your timezone, and at rates 75% cheaper than a comparable US-based team. And with DevSquad, you pay month to month with no long-term contracts.
Take the hassle out of assembling and managing a sprawling team of freelancers and work with a group that’s ready to hit the ground running.
Visit DevSquad.com/startups and get 10% off your engagement.
Topics we cover:
- 2:59 – Emailing users about other projects you are working on
- 9:26 – Avoid sending spam-like emails
- 12:55 – Building a service vs. selling it as an affiliate
- 17:34 – SaaS evaluation after business partner falling out
- 21:25 – The best ways to collect customer feedback
- 25:36 – Determining which group of buyers to sell to, HOA’s or property managers
Links from the Show:
- The SaaS Playbook
- Ask a Question on SFTROU
- Start Marketing the Day You Start Coding
- The Stair Step Method of Bootstrapping
- Quiet Light
- FE International
- Discretion Capital
- MicroConf Connect
- Producer Xander (@ProducerXander) | X
- Episode 139 | 6 Questions You Should Ask In Your Customer Development Survey
If you have questions about starting or scaling a software business that you’d like for us to cover, please submit your question for an upcoming episode. We’d love to hear from you!
Going from an idea sketched on the back of a napkin, to a robust, stable product requires a wide range of skills. You can spend ages looking for a one in a million developer who can do it all, or you can quickly ramp up an entire product team to help you build and launch a product with our sponsor, DevSquad.
DevSquad provides an entire development team, packed with top talent from Latin America. Your elite squad will include from two to six full stack developers, a technical product manager, plus experts in product strategy, UI/UX design, DevOps, and QA, all working together to make your SaaS product a success. You can ramp up an entire product team fast, in your time zone, and at rates 75% cheaper than a comparable US-based team. And with DevSquad, you pay month to month with no long-term contracts. Take the hassle out of assembling and managing a sprawling team of freelancers and work with a group that’s ready to hit the ground running. Visit devsquad.com/startups and get 10% off your engagement. That’s devsquad.com/startups.
Welcome to Startups for the Rest of Us. I’m your host, Rob Walling. In this episode, I’m going to answer listener questions. I have several voicemails and video calls that, as always, go to the top of the stack, and digging into topics like, if someone signs up for my SaaS and I now have their email address, can I make that part of my marketing list? Also, a question about which customer type they should sell to, and what’s the best way to collect customer feedback.
Before we dive into that, if you haven’t picked up my book, The SaaS Playbook, after the very successful Kickstarter a few months ago, momentum has continued with the book. And if you haven’t picked it up, you can go to saasplaybook.com, or search for SaaS Playbook in Amazon or Apple iBooks. Is that even what they call it anymore? Audible, all the places. And if you have read it and you like it, I’d really appreciate a five-star rating on Amazon or Audible. That helps me get discovered by new readers.
I’ve been very pleased with the reception of the book, so much so that my wife, Dr. Sherry, and I have sat down and written a table of contents for a new book. Glutton for punishment, I believe, is the expression you’re looking for, but we are looking to start writing that here in the next few months, so that would be, at the earliest, an end of ’24 release, most likely maybe spring of ’25. That’s going to continue to be around topics about being a startup founder, diving into the psychology and mental struggles of a certain aspect of being a founder, a certain point in time that many of us aspire to achieve. So more on that later.
I want to dive into our first listener question. If you want to send a question to the show, go to startupsfortherestofus.com. Look for Ask a Question in the top nav, and submit your question. Obviously, as I always say, audio and video go to the top of the stack. I will try to get to a couple of text questions in this episode. So let’s hear our first one of the day.
Good day, Rob and team. I’ve got a small SaaS that is performing humbly, with a few thousand users having created an account and used the product. My question is regarding the email addresses of those people who have created an account. Can I consider that part of my “email list”? So if I were to start working on something new, can I email those people and let them know about it?
For the longest time, I thought that I could absolutely do that, but then I saw some chatter about spam, and that my approach could actually be considered spam. If emailing those users isn’t technically allowed, how is an email list actually built, if it’s not from collecting them through various online ventures? Do we need to have a clear checkbox alongside the email input field that states, “I allow you to keep me informed about all the things you’re working on, not just this specific product.”? Look forward to hearing your thoughts.
Thanks for that question, Luke. There’s the letter of the law, and that of course is literally going to depend on which country you live in, because the laws are different. And then there’s, I’ll say the kind of moral or ethical implications of it. Because letter of the law, if you acquire an email address and someone opts in and checks the box that they can hear from you or that they want to hear from you, I don’t know of anything in CAN-SPAM, which is a US law, and that’s what I’ll refer to the most during this conversation. I don’t know anything in CAN-SPAM that says I can’t email them about anything I’m working on, until they opt out. They need to be able to click on subscribe and opt out, but realistically, could I email them for years and years about different projects that I’m working on? I believe so, not legal advice, but that is my understanding.
However, I am of the mind and the belief that I only want to send people things that they have opted in to hear about. And if I’m stretching that definition, for example, let’s say someone opts in at robwalling.com, which they get one of my books for free. It’s called Start Marketing the Day You Start Coding. And in that email, I welcome them and I say, you will hear from me again about stuff that I’m working on. And I hit them up a few weeks later with more info about things I work on on MicroConf and TinySeed.
Now, if I go to email those users about a TinySeed batch application opening, I always put, at the top, first paragraph, first several sentences is, usually it’s something like, “You’re receiving this email because you opted in at robwalling.com. And as you know, I work on many things, one of which is TinySeed. It’s my accelerator, blah, blah, blah. If you don’t want to hear from me anymore, click this link right here and you unsubscribe.” Then I go into the email about TinySeed.
Similarly, folks opted in at saasplaybook.com, which is my book website. And some folks give their email in order to receive the sample chapter. And that goes into my robwalling.com email list. It’s all one big list in Drip. And so legally, I believe I could just start sending them email about whatever I want because they’ve opted in. But I don’t. If you go to saasplaybook.com, in your email, what you’ll receive from me is the sample chapter. And then a few days later, I believe I send an email, it may be in the first email, I’d have to go and look at exactly what it is, but I basically say, “I work on a lot of things all related to SaaS. If you opted in to hear about this, you’re probably going to be interested in some other stuff I’m doing like Masterminds, like this podcast, this YouTube channel, maybe the accelerator.” And I give people plenty of notice and plenty of options and the ability to unsubscribe.
And what I’ve found, I’ve done opt-in and opt-out over the years, where I will not put them on the main list. I’ll only have the list for this single product. And I found that most people were confused by that and said, “Well, I opted in. I wanted to hear about…” We used to do this with MicroConf. This is a great example. We would have a different email list every year for MicroConf. So like the MicroConf 2011 list, we didn’t roll it in to the 2012 event. And we started a new launch list from scratch. We did that for a few years. And then people would tell us, “I’m so confused. I thought I opted in to hear about MicroConf.” So that’s one example of, obviously, we should have just been smarter, but we eventually just started, all right, there is a MicroConf list, and once you opt in, you are going to hear about MicroConf stuff. And we don’t get complaints about that.
And in fact, even the way I’m talking about with my book, how I ease people in, if you sign up for a sample chapter, then I merge you into the Rob Walling list. But I call that out, either at the top of an email or in an individual email, saying, “Hey, here’s other stuff that I work on.” For example, “You opted in for a sample chapter of The SaaS Playbook, but here is an entire book called Start Marketing the Day You Start Coding that is free and here’s the link to the PDF.” So to me, the laws are less strict than I think that we should act. We should be looking to be transparent and honest with people who opt into our lists.
And so I’ve been in your shoes. You have an example of, I’ve had 2,000 people sign up for this product to get an account in this product over the last several years. So I’ve been in that situation, where I have emailed all those people who had signed up and canceled, and some were still customers, when we launched a big new feature as part of that product. And I couched it with, “You signed up and you canceled, and I’m not going to keep emailing you about this, and unsubscribe here if you want to. But, I felt like you would be interested in this.” And I did this with Drip 2.0. “Drip 2.0 is this whole new thing with automation and blah, blah, blah, and you signed up a year ago. And I think you might be interested in hearing about this.” So that feels like an easy sell to me. I don’t think you’re going to get many complaints.
However, if they opted in to try out a product, and while technically, I have the legal right to email them about a new book I’m working on that’s completely unrelated to that product, I don’t think that’s cool. I wouldn’t do that myself. I would want to think, is there enough connection between these two things that I can bridge that with a paragraph or an email? And if I can’t, if it’s really far flung, there is an app for social media posting, that’s the app that they opted into, and then I’m going to go write a book about something completely different, building SaaS companies. In that case, personally, I would ask them if they wanted to opt in, rather than opting in by default and just letting them know, as I’ve said in my previous example.
So there’s a little bit of judgment call here and I will say, you said that you felt like you’d be able to email them and then there’s talk online that your approach is spam. I’ll be honest. Look, I ran an ESP for years. There are privacy purists on the internet who say, any bulk email is spam and they’re just (beep) about it. And we would get this complaint all the time and we’d have these people who were either, they were so far off in their perception of how the real world works, that they were just kind of obnoxious (beep).
And so if you get online and you’re in Hacker News or you’re on Reddit or you’re on Stack Exchange, especially with developers, and especially with open source developers for some reason, I’m sorry to throw shade, this is the pattern that I kept seeing was, the whole internet should cater to their whim and exactly their opinion. And even though the law says something different, and even though I kind of have my own moral and ethical code around sending email, boy, if it didn’t line up with them, then you’re a (beep) communist or whatever they want to throw at it. It’s like, there is no room for conversation.
And so what I’m saying is, be careful with taking people’s perspectives on the internet, especially on public forums, especially on anonymous public forums, about what they consider as spam and what you should and shouldn’t do. In my experience and what I do is I ask myself, if I was on this list, and I opted in for this thing three years ago, and they emailed me, what would I need to read in that email to not feel like I’m pissed off they’re spamming me? What would I need to read? And if I can’t write anything that would make me not think that, then, at best, I’m going to email them and say, “Hey, you signed up for this. I’m working on a new book. I’m not going to email you about it again. Click here to opt in if you’re curious.” That’s the most I’m going to do if these two things are completely unrelated. But if they are related enough that I feel like I can bridge that, then usually, for me, that’s what I do.
So thanks for that question, Luke. I’m sure it’s something that other people have encountered as well. And this actually brings up an interesting point of the advantage of building things that are related. Because if you opt in to robwalling.com, and then later on, I email you that I have a new book out, that makes total sense, you would expect to hear that. If I email you about Mastermind Matching with MicroConf, probably still in your wheelhouse. If I email you that Startups for the Rest of Us had a great guest or three great episodes or we’re hitting our 700th episode soon, I’m the host of the podcast, it kind of makes sense.
I have this luxury. It’s an intention. It’s not like I lucked into it, but I have a luxury of, most of our lists, if you look at robwalling.com, Startups for the Rest of Us, MicroConf and TinySeed, they’re all closely related enough, that any one of them emailing another list with their announcement can be couched with just a few sentences of why you’re hearing about this. And while we are careful with the volume of email we send, it’s a nice to have if your projects are related enough that you can contact an existing audience that you have, rather than doing what I used to do, where I had nine or 10 products completely unrelated so none of the customer bases could be co-promoted to another of my products.
And that was just the way things played out in my early career. But if you’ll notice, as I’ve gotten further along, my software products and my companies have become more and more aligned, because this concept of building kind of a single audience and being able to share audiences between them is pretty powerful. So thanks for that question. Hope it was helpful.
And with that, let’s roll our next question about whether to build a service or sell it as an affiliate.
Hi, Rob. My name is Inad. Thanks a lot for all the content you have been providing over the years. I’ve been trying to follow the advice of, find a solution to an existing problem, focusing on B2B. My challenge though is that I found several ideas based on problems certain people in certain roles are having, but I also found that there are solutions out there they are not using. They are either using a crappy service that has better alternatives out there, or they are not using a service at all and they are just struggling manually.
I see this as an opportunity, but I’m not sure how I can take advantage of it. For example, should I build another service, even though that there are alternative services out there, just because they are not using any of these? Should I check for an affiliate program for these existing services and I connect these people to these services? What do you suggest how I can tackle this? Thanks a lot.
I like this question. It’s pretty creative actually. So I think it depends on your goals. I think that being an affiliate for a SaaS product that offers recurring commissions could be an interesting step one business. Y’all know, drinking game, stair-step method of bootstrapping, step one business, it has platform risk. Usually it’s not going to get you to $10, $20, $30K a month, and that’s how I would view selling someone else’s software as an affiliate.
So do I think it could be an interesting step one? I do. Do I think, if you don’t have an audience in this space and you are just doing maybe cold outreach or maybe if you’re creating content around it and actually treating it? Yeah. Think of it like the skeezy review sites where they’re like, we’re going to review the best podcast host, but really, the ones that pay us the highest commission are ranked number one, two, and three. So I personally wouldn’t go down that road. But if you’re going to actually go out and actively try to market other solutions.
But I guess if you’re doing cold outreach, it’s going to be kind of a grind. You need to make a lot of money for that to be worth your time, versus if you create more of an inbound funnel where people can click and you can get the commissions, it’s two separate skill sets. But you’re also going to learn a different amount. If you do the cold outreach and you actually are doing demos or consulting, and maybe even charging an onboarding fee to help people get set up to where you really become a freelancer contractor agency that is helping people get onboarded with solutions. And we have these back in the day with Drip where people just came out of the woodwork and said, I offer this service. It’s like the Drip onboarding and setup service. And they would get an affiliate commission and then they would get paid X thousand dollars to get people set up.
There were some folks charging like 10 grand to migrate and get your stuff set up on Drip. Is that interesting? I mean, if you’re interested in learning about the space. And what you might learn is that building another tool is a great idea. And what you might learn is that building another tool is a terrible idea. But I think doing that handholding and assuming that the money is there, and at least giving it a shot, I don’t know what you have to lose other than some time.
And I think for me, I’d be optimizing for learning, rather than money. Because I think if you’re in it to try to get recurring revenue from an affiliate commission, and for that to be enough to move your needle, I think it’s going to take a long time and a lot of effort if you’re starting from scratch right now, because there are going to already be companies that are ranking for these terms. Unless you see a real through line and a straight line for you to go from zero to an audience, or zero to recurring traffic channels in this space, it’s going to be a ton of work. Again, if you’re optimizing for learning, that’s okay. A ton of work without making a lot of money, at least let’s have learning going on, learning meaning I’m learning about this space, I’m learning maybe we don’t need another tool, or maybe I’m learning that, oh my gosh, if we just had another tool that did X, Y, Z, it would be so much better. These are the things I’d be trying to learn.
So I’m not a hard no on this, but I definitely don’t see it as this has such platform risk. You’re not in control of the product. Do I see you wanting to do this for five years? No. But do I see in the short term doing it to make some money to learn about the space, to evaluate whether or not you want to launch a competitor? It’s an interesting idea. It depends on how much work you want to put in and the approach. Like I said, do you want to do a high touch approach and charge a lot of money, almost as a consultant? Or do you want to try to do this low touch approach and just learn the marketing, learn the funnel and see if you can get people to click through and convert? Certainly an interesting question. I appreciate you sending it in.
Third question of the day, I’m actually going to bounce over to a text question, because this one has been in the coffers for eight months, it looks like. Apologies, y’all, but I can only do so many of the listener question episodes. But this one, the asker asked to remain anonymous. The subject line is SaaS sale and valuation. And he says, “I’m parting ways with my business partner due to a fallout. In short, I’m looking to get full control of the SaaS, but I’m struggling with evaluating the valuation. Do you happen to help with valuations or investing in SaaS companies? We have a turnover of around $18,000 a month. Please let me know your thoughts.”
Given that this was eight months ago, I’m guessed that the asker has sorted it out since then. I wanted to read this on the show and answer it because I have known, I don’t know, a couple of dozen founders who have had to deal with this, who have had a fallout with a co-founder and they’re trying to value the business. And so what I would do is, I would talk to a broker and I would probably pay them for a valuation. So you contact email@example.com or FE International, explain the situation and ask for what they think the business would be valued at. Maybe they charge a few hundred dollars or whatever, some number in order to get a third party valuation.
You could also ask privately. I have weighed in privately on some valuations based on my experience. You have to take all this with a grain of salt. It’s not like buying and selling stocks. It’s an inefficient market and there’s a lot of it depends, and that’s what you’ll hear. It depends on the growth rate. Like having a static $18K per month. Well, if it’s growing a hundred percent year over year, the valuation’s different than if it’s 30% or less. What’s your churn like? What’s the space like? There’s all this stuff where it’s kind of like, well, it changes the multiple. The generic multiples that we throw out really depend on a lot of this stuff.
But I have been involved in multiple companies, some of which I was invested in, where one co-founder leaves and the other one buys them out. And usually, the buyout is a little less. It’s usually less than market rate for that app, if you’re buying them out in cash. Because it just should be. Because you are left with the business and you now have to slash get to run it.
But realistically, I think the easiest, the cleanest way is you’re going to be brokers in our space. So it’s Quiet Light Nefi for this type of business. I think as you get larger, let’s say you get north of a million ARR, you could still talk to Quiet Light Nefi, but Discretion Capital, run by my friend and co-founder, Einar Vollset, would be great to reach out to for them to weigh in.
And if you’re big enough, what’s interesting is, let’s say you’re doing two or $3 million a year and you’re growing pretty quick. And you decide the valuation is $12 million bucks or something. And you want to buy your co-founder out and they own 50%. Well, that’s a lot of cash to come up with. There are outside parties, and Einar has experience with this through TinySeed and Discretion, with these private equity firms that are growth-oriented and they’re willing to write a bigger check to buy out founders. And they can buy out the founders if they’re staying. They can buy out a founder if they are moving on. And they’re willing to come in and some of them even have a playbook of how to take a SaaS from that $2 million to $10 million ARR mark. So this is something that I’d never heard of and really just didn’t exist 10 years ago. And so it is another option for liquidity for a situation like you are talking about in this email.
But as I said, that would only be available if you were further along. It is not going to be at $18K per month there. I don’t know of anyone that’s willing to do partial buyouts at that early a stage. If there are any, there’s probably one or two and they’re probably extreme value buyers, meaning they’re going to give you very low multiples.
And then of course, your other option is to sell the whole company. It’s to go to any of the brokers I just mentioned. And add acquire.com to that and just try to cash out the business. You each walk away and then you get to start your next one. So thanks for that question. Hope it was helpful.
The next question is about the best way to collect customer feedback.
Hey, Rob. How are you doing? I want to say that I’ve been fan of the show, had been listening these whole year, in the beginning of the year when I discover it. And a bit about me and I aspiring founder. I still on the process of validating a few ideas that I have. But this question is a bit related to customer feedback. You had mentioned extensively in a lot of your podcasts, in your book, which I have by the way, The Saas Playbook, and many other people also have mentioned that customer feedback, acquiring customer feedback, is super important. So my question is, what will you recommend for acquiring this customer feedback? Which mechanisms, forms, emails, phone calls or video calls? Anyway, I appreciate all you are doing and keep it on. Bye.
It’s a great question. It’s a common question. So to me, in the early days, if you’re doing one Z two Z, then the higher the fidelity, the better. If you can get a customer on a Zoom call or a phone call, that is going to be greater than anything else. Because again, it’s just high fidelity. You can read body language. You can have, even if it’s a 20 or 30 minute conversation, there’s so much information that is communicated in that that won’t be communicated if you have a form or an email. So that’s optimum if you can get people on calls.
Sometimes, people don’t want to go on calls. I will be asked for feedback about a tool I’m using and I don’t have time to do that. So I might write three sentences in an email. Or I might record a Loom. So Loom is interesting because it’s kind of halfway between maybe a text email and a video call. You don’t have the back and forth interaction that I would like, but you do get the high fidelity of voice intonation and body language and hearing someone’s real interactions or seeing their real interactions with your product.
To give you an example, with MicroConf, we just added paid tiers to MicroConf Connect and that is our online community, 5,700 bootstrap founders. You should check it out, microconfconnect.com. But producer Xander did dozens and dozens of one-on-one calls to learn more about what people are looking for from Connect. And once they get in to learn what they’re liking, and perhaps where their expectations didn’t align with what we’ve delivered. So he did a ton of calls. At one point, so in the early days of Drip, before we launched, I had 3,400 people on an email list. And so I think I did a couple of phone calls, but most of my early, early stuff with about the first 20 people was via email and that’s what they preferred, and frankly what I preferred too.
But I was also trying to get data from the broader list and 3,400 people’s a lot. And so I did use a survey. I actually covered it… What episode was it? Boy, it’s got to be in the 200s, maybe the 300s. I realize it’s not a bunch of guidance. If you go back and look for an episode, it would’ve been in 2013. And it’s going to be me talking about kind of a customer development survey. It’s a really good episode. It’s one of my favorite episodes from around that time, where I walked deep into exactly the survey I sent out to the entire list. And then I will walk through some of the results. And I still have those results actually in a Google Sheet. I was looking through them the other day and I was like, man, it was very helpful for me to learn that.
But if you don’t have 3,400 people on the list, don’t send people to a form. No one wants to fill out a survey. They’re not going to type a bunch. They think no one reads it. Like having the one-on-one connection, that’s the highest fidelity learning that you will get. So I would lean much more towards phone calls or video calls, and at worst, one-on-one emails, assuming that people will respond to you. Because oftentimes, the hard part is not the mechanism of feedback, it’s that people just won’t respond. And they don’t want to spend the time out of their day to help you out. And getting on a Zoom call is cumbersome for a lot of people who are busy. And so that’s the thing is, I lean towards higher fidelity if it’s possible, and that’s the caveat. So thanks for that question. Hope it was helpful.
My last question of the day comes from longtime listener, David.
Hey, Rob. This is David, longtime listener and appreciate all you do for the startup community. My first startup was acquired a couple of years back, completely bootstrapped. My co-founder worked a full-time job up until the day we were acquired. It was great. And now, after about two years, I guess, I’m looking for my next startup, and I’m focusing on the HOA space.
Homeowners associations are a big market. I’m on my board right now and there are tons of challenges. One of the challenges is figuring out whether we sell to the property management companies, which seems a little bit more of a saturated market than the HOA boards themselves, which could be really hard to contact. So we have an MVP, at least a concept, we haven’t built it yet, and I’m thinking about just trying to start selling to boards and property managers, just to see if it resonates, before creating a landing page. But just asking for any advice you have on how do we figure out whether we can actually distribute and sell to HOA boards or whether we’ll have to go the property management route. Thanks.
So to truly answer this question in detail and tell you exactly what you should do, I would personally need some experience or have funded companies who have tried to sell to HOA versus property managers. And I do not have that experience, and I have not funded companies that are selling to those. So all I can do is weigh in on how I would think about it if I were in your shoes, knowing what I know.
And the two things that come to mind are, number one, I would try to figure out, is it harder for HOA boards to make a decision to buy than it is property managers? My gut is that it is, because it’s a board of people. And anytime there’s a group of people, they’re going to kick decisions down the line. There’s going to be 4, 5, 6 chefs in the kitchen, so to speak. My gut tells me they’re going to be a pain in the to sell to. So I would lean towards property managers where I’m guessing that I could find one decision maker and close more deals. That may or may not be true. I don’t know enough about the space, but that’s probably the hypothesis that I would look to validate or invalidate if I were in your shoes.
The second thing that I would think about is running a test and actually marketing and trying to sell to both. I know that it would require a bit more work because I’m doing, let’s say, cold outreach. Well, now I need two campaigns because I’m reaching out to the HOA boards and the property managers. Or if I’m doing inbound marketing, I obviously need probably different content marketing or SEO posts or whatever it is I’m doing to attract that inbound. I know that it means more work. But until I know for sure, I want to keep asking questions and trying to validate this. That’s really the way that I’m thinking about this. And the way I think about everything is everything’s a hypothesis until I’ve mostly proven or disproven it.
Now, am I ever going to get to a hundred percent certainty that it’s only HOA boards or property managers? You’re not going to get there. You’re not going to get to a hundred percent. And I’m sure you know this, having listened to this podcast. But some founders come to me and say, “I’ve just done all this conversation. I still don’t know what to do.” And it’s like, you’re never going to know what to do. You just have to take your gut and add it to the information you have and make the best choice. And even if you get to 50, 60, 70% validation that your hypothesis is correct or is incorrect, that’s better than you had a month ago or two months ago.
And so that’s what I would try to think about is, what’s the next step that I could take to figure out, are HOA boards hard to sell to versus property managers? Does this involve going to an in-person event for property managers? Because we know those exist, right? Are there in-person events for HOA boards? I think HOA boards, aren’t they mostly volunteers? Question mark? You can tell, my familiarity with the space isn’t there, but my familiarity with making decisions like this is there. And the first thing I would do is, how do I collect more data?
And so maybe it is cold outreach to HOA boards to see if anyone will respond. If they’re not looking for it, and you reach out with a question around, “Hey, you have this problem, does it need to be solved? I’m a local entrepreneur trying to solve this problem. Is this even a big problem? Just starting. I’m not here to sell you anything. I’m just curious if this problem is enough of a pain point that…?” And if you reach out to HOA boards and property managers, and one of those groups just completely doesn’t get back to you, then how are you going to find customers when you actually have a product? I’ve said that on the show before. It’s like, response to outreach and response to marketing, before you have a product, can be a pretty good signal of how hard the space is going to be to sell into.
And realistically, let’s say you get in touch with a bunch of HOA boards and property managers and no one responds, so where are you then? Well, then I’m thinking, okay, so cold outbound at least isn’t working. So then, do I need to do inbound? And which of these is most likely to be looking for this solution? And if there’s no inbound opportunity, how are you going to market it once you’ve spent the six months to build a product? That’d be at the top of my mind is, are there any Google AdWords? You can run Google AdWords and just lose money right now, because what you’re trying to do is learn.
And if HOA boards versus property managers search for this software, and if they search for it the same or different, I don’t care. Even if I’m paying 10 bucks a click, if I have the budget just to get into conversations by buying ads, this may be AdWords, maybe it’s Facebook, maybe it’s Instagram, where do property managers and HOA boards hang out? I don’t actually know. Facebook groups? If you’re in my hobbies, I know where the people hang out. But I don’t know it for this specific industry. And so in your shoes, that’s what I’d be trying to do is find out where they hang out online. Find out where they look for solutions.
My guess is, there is some in-person component to this, and it’s a lot of word of mouth. And whether there’s an industry… Again, is it industry event or trade pub? Or is there a Slack group or an industry Facebook group where they hang out? That’s usually something that forms around these organizations. I would personally want to familiarize myself enough with this that I can make a decent gut instinct to call on. I think these are going to be easier to sell to rather than the others.
And with all that said, there’s a chance that going after both is the right call, that literally going after two verticals at the start, it’s not a hard pass for me. Just because we talk about niching down or focusing our product doesn’t mean that we can’t have a couple of highly related verticals, especially if both of them onboard and use the product in the same way, even if the sales process is slightly different. I don’t know. It’s something I would consider in your shoes. So thanks for that question. Hope it was helpful.
Thanks for joining me again this week. As a reminder, if you haven’t checked out The SaaS playbook, you can head to saasplaybook.com. Search for it on Amazon. And if you’ve already read it and you liked it, it’d be amazing if you could click that five star rating. This is Rob Walling signing off from Episode 690.
Ooh, only 10 episodes away from 700. What should I do for that episode? If you have an idea of something I should do special for 700, questions at startupsfortherestofus.com and let me know. I may or may not do anything special. If you look back at 600, it was me talking about some Beatles songs, Strawberry Fields Forever, and I didn’t even mention it was 600 until the last 30 seconds of the episode. So we’ve done something special for most of the 100 anniversaries. I think 1, 2, 3, 4, and 500 we’re always special episodes. 600 was less so. At a certain point, I think you kind of run out of ideas of new and creative things to do at the 00 episode mark. But certainly, if you have an idea, shoot it over to me. And with that, I’m really signing off from episode 690.