Episode 779 | 10 Myths Most SaaS Founders Believe

Rob Walling:
You’re listening to Startup. For the Rest Of Us, I’m Rob Walling and in this week’s episode I talk with Mark Thomas about 10 myths that most seven Figure SaaS founders believe, and this is based on a LinkedIn post he pushed live a couple of weeks ago. If you don’t know of Mark Thomas, he has spoken at MicroConf Europe and he’ll be speaking again this year in Istanbul, Turkey in just a few months. Mark served as head of Growth for both Powered by Search and Podia and he’s now doing growth consulting and he is one of our founding coaches of SaaS Institute, which is our premium coaching program. You can head to SaaS institute.com if you are interested in learning more about that. Before we dive in to this episode, I want to tell you a little more about MicroConf Europe in Istanbul in just a few months.
I’m really excited for it. It’s going to be in late September. You can head to MicroConf europe.com to buy a ticket. As of the time I’m recording this, which is about two weeks before this episode goes live, we are already 65% sold out. All the early bird tickets have sold out and we have sold out all of our events for the past few years. So if you want to come to this event, you really do want to get a ticket. Now we have speakers like Mark Thomas who you’re about to hear from. Michelle Hanson, founder of Geo Coio and author of Deploy Empathy, and James Mooring, founder of Talti who was on the show, I dunno, in the past six months. It’s a great crew that’s forming. We’re going to have another couple speakers as well and I’d love to see there September 28th through the 30th in Istanbul. You can head to MicroConf europe.com if you are interested. And with that, let’s dive into my conversation with Mark. Mark Thomas,

Marc Thomas :
Welcome to Startups For the Rest Of Us. Finally here. Finally here. It’s been a long time.

Rob Walling:
It feels like you’ve already been on the show and I’m kind of surprised you haven’t. So glad you took the time. Finally, after all my phone calls, my emails, my dms, it’s been

Marc Thomas :
Incredible

Rob Walling:
Into the abyss. I can’t even believe I finally had to go through Tracy, it’s SaaS Institute to get you on here.

Marc Thomas :
Yeah, the weight of correspondence has just been too much.

Rob Walling:
It’s a big deal.

Marc Thomas :
Yeah,

Rob Walling:
You have these, what I’m calling 10 myths, that seven figure SaaS founders believe these because I’ll also be 10 traps that pitfalls that seven and eight figure SaaS founders falling to and you did a really good post on LinkedIn about it and we’ll of course link that up in the show notes. Give us some background before we start walking through these of where you came up with ’em. Anything else you want to add before we dive in?

Marc Thomas :
Yeah, so I’ve done a lot of consultancy work but also worked in a number of different contexts in SaaS in general. I’ve been a founder. I actually was not great at marketing as a founder. We could talk about that in a bit. And then I learned marketing and now I do it my job and I’ve been in agency contacts working with big SaaS companies, but pretty much every time I work with a company I hear one of these things that we’re going to talk about and every time I think, I don’t know if that’s true, I disagree or I think there’s a different way and I’ve always try to gently guide people to the other path because ultimately I do this full time, but founders are thinking about a million different things. So yeah, I thought I put these down so that I got something to point people to next time they say one. So yeah,

Rob Walling:
I love lists like this too because listicles, they got a bad rap because of all the buzzfeeds and whatever, really diving into ’em 10, 15 years ago, I actually like listicles or just lists of things as long as they’re accurate and they deliver on the promise and they’re not bullshit, they’re not just made up fluffy really this could have been an email. It’s like this whole thing of no, these 10 I think are actually really interesting. Now, I don’t think you and I are in a hundred percent alignment on all of them, but that’s going to make for interesting radio and

Marc Thomas :
That’s what a rubbish world it would be if we were.

Rob Walling:
Yes, mark everything. I’m a Syco fan. Everything you’ve said in here is 100% my experience and that’s the other beauty is you and I coming onto the show, it’s like what is my experience? Also as a founder, I’m invested in 200 something startups and you’ve done probably more, certainly more in-depth marketing work with more startups than I have. I flit on the outskirts and I have high level conversations and I’m like, this is how I would approach it. And then I step away and for whatever my founders, they think I’m like sipping margaritas on a beach somewhere, but I’m actually recording fun podcasts like this. But you have been in the trenches certainly in knee deep in more startups than I have, so that’s where different perspectives come in.

Marc Thomas :
Yeah, hopefully.

Rob Walling:
Alright, so let’s dive in. So Mark Thomas on LinkedIn, if you are not following him, you should look in the show notes for that link and your post says, stuff I’ve heard from working with founders at SaaS companies between one and 10 million ARR and why they’re wrong. Number one is I’m not good at marketing.

Marc Thomas :
Ding, ding, ding. It’s the one that every founder says at one point I’m not good at marketing. I literally just said it, I wasn’t good at marketing. Right.
And the other version of this is that they say they’re not good at sales or that they find it icky or something like that and every time, I just think, hang on a minute, you have built a company that got to a million dollars at least in revenue, maybe higher. How did that happen? Did it just magic? It didn’t. Just magic. I’ve worked at dozens of teams at this stage and the founders, they’re the best marketers. They know the company, they know the client, they know the customer, they know how everything works, they know what messages land broadly. Maybe it’s not totally dialed in, but they’re incredible marketers who maybe don’t have the technical skillset of a marketer and I think it’s just such a limited belief and it makes founders often make poor choices about team structure and waste a lot of money.

Rob Walling:
I think it’s one thing to be honest with yourself, to assess yourself in certain areas of how good am I at operations versus product versus development, marketing, sales, whatever, and have a realistic, not overly narcissistic view of I’m a 10 10 on all those things, but this is one that I’ve heard probably more than I should specifically for companies that are doing seven figures, there are certainly we back founders that are doing 2,005,000 a month and some of them say, I’m not good at marketing, and we’re like, because you’ve never done it, you really just don’t know how you’ve scratch and clot and that’s legit. But if you’ve made it to seven figures, odds are something’s working. Something’s working.

Marc Thomas :
Yeah, for sure. You might not know how to run a paid ads account like newsflash. A lot of marketers don’t know how to do that either. I had a co-founder at my company who was a salesperson, he’d made his whole career in sales and recruitment and kind of selling that that’s a hard world to be in, and so I told myself, Hey, next to that guy, I’m like, I don’t know how to do sales. Same thing with marketing really. They’re pretty adjacent. And then I left the company and I went into agency world where suddenly months later I was selling effectively a hundred thousand dollars deals. It’s just a switch that you can flick and say, Hey, I’m maybe not technically gifted at this, but I could be really good at it and I’m going to do it because I’m a founder and I’m going to work it out. And that’s the founder mindset.

Rob Walling:
Yeah, that’s what I like about that is as a founder, even if you think, Hey, I’m not good at this, it’s usually, but I can be, but I’ll figure it

Marc Thomas :
Out. Yeah, that’s it. That’s

Rob Walling:
The thing. It’s like what do you need to figure out to grow this business? Sometimes it’s sales, sometimes it’s marketing, sometimes it’s hiring. There’s all these different things. You’ll figure it out even if it’s true that maybe today you aren’t technically as good at marketing as the person next to you probably doing just a fine job. I remember this after we sold Drip, we sold it to lead pages and they had a 40 person marketing team and there were marketers on that team, there were managers reporting to managers, big team, and they were really good because Clay, the CEO was a marketer by training and so he knew how to hire folks and I remember being intimidated and being like, I don’t know, and they’re like, bro, you grew this to, you bootstrapped this thing to millions in a RR. You know something about something. And I was always a little bit, intimidated is not the right word, but it was a little bit like I’m genuinely not as good as you guys, but it wasn’t that I wasn’t good, it’s just that wasn’t my sole focus. It was only something I did 20% of my time
With that. Let’s dive into number two quote. This is a founder saying this, we really need to get top of funnel working if we’re going to scale.

Marc Thomas :
Yeah. Oh my gosh, this really, really might be true sometimes, but here’s the thing, if you get to 1,000,010 million a r, there is a huge amount, I would say 90% of the time of waste in your lifecycle basically monetized usage. Let’s say you’ve got a thousand users and you get to 1 million a r, firstly, good for you. Secondly, you’ve probably got a small portion who are paying you the amount that they should be paying you and within the rest of that there is a captive audience who’ve already said somehow they have the problem that your product solves, but you haven’t yet found a way to get them to pay you. Now, they should be paying you for something if they’re using your product, if they are taking up expense basically on your company, you should find a way to make them profitable or at least pushing towards profitability.
And it’s a huge opportunity if you’ve got those thousand people and those 10% are paying you to actually make that real big amount of revenue. What would happen if instead of thinking about how much you’re going to have to spend to get three, four times that you simply said, I’m going to spend a third of what I might have spent to get to that four times number and I am going to work out how to extract as much value as I can without being an evil capitalist from these people as much as makes sense for your business and their business. It would be significant.

Rob Walling:
And this is one of the reasons why in the TinySeed accelerator we have playbooks, we have seven or eight different playbooks we walk through and our first one is funnels. And the reason we do that is we want to set some rules of thumb about what are the ranges of web visitor to trial or trial to paid or activation percentages, what are good decent churn numbers, what are good outbound conversion rates and calls to close and all this stuff? And it’s not that there is a one size fits all, but there are ranges if yes for credit card upfront versus not. It’s going to be different numbers and the way that I think this one of we really need to get top of funnel working if you’re going to scale is that’s true. That’s the lowest hanging fruit. If you’ve already optimized most of the rest of your funnel and most companies at 1 million have not, now by the time you get to 10 million, still a lot, but if you’ve brought in a knowledgeable marketer or you’ve learned marketing by that point, someone should have been working on your whole trial to paid or first touch to retention and expansion funnel, but it’s kind of boring grindy work and it’s more sexy and interesting to just drive more, you know what I mean?
It’s that vanity of like, but look, unique visitors to the website went up or whatever. But realistically, this is why I’m such a believer in kind of rules of thumb around a funnel. I can look at a SaaS funnel today and if you tell me credit card or not free trial or not freemium or not or it’s high touch or low touch, I’m sure you can do this too, where I just look at all the numbers and I’m, I point to one of them and I’m like, that’s your bottleneck, that’s your bottle. Well, how do I do that? It’s not magic that I’ve seen a bunch of these funnels and it’s just these rules of thumb in my head, right?

Marc Thomas :
Yeah, they’re all different, but I worked at a company once and basically they were at the upper end of this bracket up towards 10 million. I purely worked on lifecycle stuff with them, basically sequences like annual upgrade sequences, trial reactivation sequences, things like that. We added almost a million dollars of revenue in a year just through that right now. That’s wild and that’s possible for most businesses I think. I mean it’s basically what I work on these days is lifecycle stuff and just finding these opportunities.

Rob Walling:
It’s frequently low hanging fruit. The 80 20 of those is not, it’s not months and months of work. It’s like let’s get something in here, let’s get an email or two that does this and we can optimize it later depending on volume, but getting something in, let’s look at number three quote. What if we made our affiliate terms X percent for recurring revenue for the lifetime of a customer? So if I have an affiliate program and I’m a SaaS founder, the kind of myth or pitfall here is we’ve given away 10, 20, 30%, whatever it is for the lifetime of our customer. What’s the problem there?

Marc Thomas :
Well, I’ve got to say I was pretty new to affiliate marketing. It’s not something I’ve ever really thought about before, but I have now worked on a number of affiliate programs for SaaS companies in this stage, and when you download that CSV out of the affiliate platform and you look at the number of new sales that happen over time, what you tend to see, and this isn’t always true obviously, but what you tend to see is that the number of new sales actually drops over time, but the amount that you are paying out does not. In some cases it even grows the amount that you are paying out because if you’ve got expansion revenue working, you’re still paying for the same percentage for somebody who wrote a terrible little blog post in 2018, got you one customer and now they have been taking 30% of the lifetime of that customer even after you worked hard to expand them or grow the whole account.
Now firstly, that feels almost criminal to me, but secondly, stop doing it. It is crushing your profitability every month that you continue to pay out on that. Frankly, pipe dream of a promise to continue paying them forever is a month where you are making your business less profitable. Again, recently I worked on one of these and I found on day one of looking at the affiliate program, really $20,000 of revenue just sat there that was getting paid out, and it blew my mind in the sense that like, oh, this person, what would they do with 20,000 extra dollars right now if they had that today, would that make that runway for a month maybe? Yeah, maybe it might for some people or could they invest that in a channel that really works for them? Well, yeah, maybe and then they wouldn’t have to pay that. Plus it compounds for the life of the customer. It’s not just 20,000 a day, it’s maybe 20, $30,000 a year or whatever, and that’s a huge gain for some people, especially when you’re concerned with runway at the bottom end of this revenue bracket. More than the top probably.

Rob Walling:
Yeah, the least profitable bootstrap SaaS company that I know at scale is heavy, heavy affiliate stuff. And when I think of SaaS companies at scale, their net profit is usually between 30 and 50%. That’s what you can get to, and this company does 10% net profit because the affiliates are taking 30 or 40 or whatever the number is, lifetime. So this is one that I wholeheartedly agree. Now, I think if you are going to go heavily into an affiliate program and there is some keystone affiliate that you want to land, and usually these keystone affiliates have these big audiences and they want advisory shares as well. That’s kind of a dirty little secret. No one ever discloses, but yeah, no, this,

Marc Thomas :
I’ve never come across that.

Rob Walling:
Yeah, it’s big names. They don’t disclose. I don’t know if it’s an FTC violation or not, but whatever. Now maybe they’ll negotiate and you’re just like, I just have to do this. But once that affiliate falls, then you can get a bunch of others and the other ones you cap it 12 months, 18 months, 24 months, somewhere in there, usually 12 to 18 is what I recommend. I’ve had some TinySeed companies do affiliate programs and one of them was negotiating really hard and eventually said, well, we can give you two years. That’s a long time. Even two years is a long time. And the reason you talked about it how over time the number of new customers they send you goes down. That’s because it’s audience. Audience doesn’t grow at the pace. This is the whole reason why I often say don’t grow an audience. If you want to build a SaaS, grow an audience. If you want to do books and courses and sell events and do all the stuff I do, but if you’re going to do a SaaS, there’s so many better ways to spend your time, so many better marketing approaches than audience building.

Marc Thomas :
One thing finally, I’ll say on this one is that one worry that people have about cutting these things, if they’ve already done them, is that the affiliates will get really angry and try and sue them. Maybe I spoke to a person who runs an affiliate platform about this and they said, that’s never happened to anyone that I’ve ever heard of. The second thing is I actually did this. I cut one of these recurring commission things, just like I said, one month notice, that’s it After this, it’s just no more commission on anything older than 12 months. We actually saw an increase in referrals after that because people were like, flip, I haven’t been driving any business. I’m not getting any new commissions. I need that. I’m going to drive some commission. And we actually saw massive growth in the program after that. So it doesn’t have to be doomsday for your affiliate program to cut this stuff.

Rob Walling:
Yeah, I would agree. Number four, quote, we should build a marketing team so we can focus on product ops, finance, whatever. So what’s the issue with this?

Marc Thomas :
1 million feels like a lot of money because it’s a big mental kind of anchor for a lot of people, but even at 10 million, it’s not that big a business. It’s a nice business for sure. You should be proud of that, but the goal should be to grow out of that bracket as quickly as you can. In my experience, people, if they stall, it tends to be really between those numbers, one in 10 million revenue, try and get away from that stall by outpacing it. The reason that I think that you shouldn’t think too much about your marketing team at this point is because you’re going to make the wrong hires. You’re going to lose touch with your customer, you’re going to slow yourself down. You’re going to burn a lot of money. Let’s say you hire a VP of marketing at 1 million. Firstly, there’s no one to manage, so you don’t need a vp, but you need someone who’s senior enough to build a strategy and then junior enough to actually get it done to a high quality. Those people are hard to find and you’re probably hire the wrong person and they’re going to take a long time to ramp up. You’re going to pay ’em, they’re going to not work out, and then you’re going to have to let ’em go and start all over again. Anyway, so my advice, do the marketing yourself for as long as you can, hire consultants to fill in the gaps and help you scale channels that you already know are going to work and basically find the opportunities that maybe you haven’t have to hire them.

Rob Walling:
Alright, so this one I mostly agree with you on, and the thing that I see with TinySeed and beyond TinySeed founders is oftentimes it’s a couple developers and they want to hire marketing by the time they’re doing 20 KA month. And I’m like, no, no, no, we can’t do this. And I have this list of, we have dozens of TinySeed companies that are doing seven or eight figures in a RR and almost everyone, and I think maybe everyone, the founders did the marketing, sales and product into seven figures. That’s it.
And I believe it’s everyone, but maybe there’s one or two that didn’t, but whatever it is, it’s 90 something percent. And this can be challenging for a developer to hear of like, but I don’t want to do the mark. Can’t I just hire someone for that? Right. There’s a whole section of my book that says, can’t I just hire someone for that? It’s in the marketing channel. I hear this so much, but I do think that when you get to about a million or two, it depends on a bunch of stuff, the type of business and all this stuff, I think this is when a founder can think about handing off one of those three marketing, sales or product. Now it’s not delegating, abdicating, handing the complete thing, but it’s bringing someone in who is more senior and can do strategy rather than just piecemealing things out.
And I’m still the bottleneck. Yeah, I think it can, I’ve seen that work. I guess I’ll put it that way. I’ve seen that work enough that I’m like, this is a strategy. Now don’t hire a whole team. I’m not talking about hiring four or five people, but I’m talking about you now. If you’ve been doing marketing, sales or product for this long, you kind of know what’s happening, what’s working, what’s not, probably what you’re going to try next. Probably what’s in not autopilot, but is in maintenance mode of like, oh, we’re just doing more SEO every month. Bringing someone in who’s a little bit higher level and not just a task level thinker but can actually do project or owner level thinking is where I start to think about that between that one and 2 million ish mark.

Marc Thomas :
Totally.

Rob Walling:
I love it. Alright, number five, quote. We’ve done well with one customer type. We need to find a new market to grow into. Yeah, this is one, this one, let’s launch a second product. We talked a lot on this. I was like, Hey, we’re capping out. Yeah, let’s translate it into Spanish and German to expand our, yeah, so this is along those lines. I think the listeners of this podcast are familiar with that, but what do you talk about why this is an issue?

Marc Thomas :
Did you get my investor notes from my company?

Rob Walling:
No, no. I’ve just seen these pitfalls over and over.

Marc Thomas :
At one point we had a platform that basically allowed people to vote do live voting, and for some reason we thought, Hey, let’s really focus on societies where there’s a lot of democracy. And it turned out that if we look at a table of that, Iceland has one of the highest, most democratic societies, and we were like, well, it’s obvious. Let’s just translate the app into Icelandic.

Rob Walling:
It’s just going to be a, there’s no reason not to do this.

Marc Thomas :
Oh my gosh. Fortunately, better sense has prevailed because Iceland’s got, what, 3 million people? I think it’s 300,000 or 300,000.

Rob Walling:
I think the entire country is smaller than my town.

Marc Thomas :
Yeah,

Rob Walling:
It’s a small

Marc Thomas :
Place. There’s not that many users for that. So yeah, finding new markets just isn’t the biggest opportunity at this point. What I love about founders and working with founders is they have this mindset of the 80 20, what is the most impactful action? I’m here to tell you that it’s not finding a different market because you’ve, you’ve probably barely scratched the surface of everybody who could buy from you. And the other thing is, as we said at the top of the episode, there’s probably a lot of people who already tried to buy from you but couldn’t find a way or the timing wasn’t right. Going back to those people, it’s going to be infinitely easier than trying to develop a new market and find a new kind of go to market that works for them and get all of the features that that market needs maybe differently to your existing market. I think you’re going to need to do it at some point, but it’s probably not at this stage and maybe you’ll get out of the 10 million bracket without a second customer type or a second market. It’s entirely possible

Rob Walling:
In most cases, and this is again 95% plus of plateaus that I see or have nothing to do with market size or I’ve tapped out of market, it’s really a one in 50, one in a hundred where it’s like, oh no, we really have tapped out the market and you actually do need to look for an ICP. I did a talk at, well, last couple of micros about plateaus, and I think I sent you a video that I saw that saw that. Yeah, and one of ’em was, that was great. What next? I think one of them was, I’ve tapped out the market. It was the seven reasons that SaaS apps Plateau, and one of them was, I’ve tapped out of market and I pretty much say almost never just, this is here for completion, but don’t you use this as a crutch. I’m looking at you half the audience who’s like, oh, we expand it. It’s totally in line with number five here, number six, quote. If I send more email, people will unsubscribe. But Mark, this isn’t a myth. This is true. What do you want to say about this one? Rob, do you know

Marc Thomas :
Anything about

Rob Walling:
Email?

Marc Thomas :
Yeah, I come across this one so frequently because one of the things that I say most to founders and to marketing teams early stage is send more email. I think a lot of marketing science is basically voodoo, but this is true if you appear more frequently than your competitors to the person who you’re trying to sell to. And if you keep on doing that and you keep making offers, eventually someone will take notice. They might not buy from you, but they’ll certainly consider you if they have the problem that you’re solving. You think that you are appearing a lot right now. I promise you, you’re are not getting opens, you’re not getting noticed in the inbox, which gets a thousand emails a day. You’re not appearing frequently enough in people’s feeds and things like that. Email is one thing you absolutely can control. Just simply increase the number of emails that you send because a healthy email list is not the goal of building a SaaS company.
You don’t need a healthy email list in the sense that somebody who’s trying to sell an info product needs a healthy email list. You need to find new buyers in that list, or you need to sell more stuff to the people who are buying already. So just send more email. Just a specific case study here. I worked on a product once that had, who basically sending four emails a month kind of product announcements and things. I got the opportunity to basically look at that and go, here’s what I think we should do. And I just said, let’s send 12 emails a month instead of four. There was some friction there, people felt a bit sort of, should we do this? I tell you what, when we saw the data come in after doing this for a while and there was a 9% bump in conversions to paid plans after every email that we sent and then a trailing effect in the following days, suddenly people took notice. The goal is not to keep subscribers and build a subscriber base. The goal is to get more customers and send in more email and allows you to do that.

Rob Walling:
Number seven, I heard X, Y, Z company grew with programmatic SEO or insert any easy growth lever here. Why is this a trap? Because I have heard some people grow with programmatic SEO, I think Zapier did it back in the day, but what’s, yeah, talk to us about this.

Marc Thomas :
Hey, look, sometimes programmatic SEO is going to work for you, but I can’t tell you the number of times I’ve been talking to a company and they’ve gone, I think we should try programmatic SEO. And I’m like, okay, well, why have you tried creating content that speaks to your buyer’s pain? First of all, have you tried doing this other thing or this other thing? And the reason that a lot of the time people want to do stuff like programmatic SEO is because it is easy, relatively speaking, they’re basically building a feature for their marketing site. Google is not going to value that in the future in the same way that maybe they did in the past. All playbooks diminish in efficacy over time and effectiveness over time. And so if by the point that you’ve heard that somebody grew easily with whatever growth lever or growth hack or whatever, it probably is diminished in effectiveness already to a certain extent, and you should do what is more effective, which is trying to convert more people who are already in your life cycle. That’s my take.

Rob Walling:
What you said about it being easy really makes my founder myth or founder mistakes thing tingle because the founders who I see on the internet who kind of get in their own way over and over and never seem to succeed, but you’re always like, but you’re smart and you build good prop, but you never, it’s, they want to do the easy and they want to stay in their comfort zone. I see them thinking out loud on Twitter and instead of them saying, Hey, I built this product for this type of customer, what marketing purchase should I do? What would resonate with them? What are my customer? They’ll say, well, I’m good at or comfortable with, or in the past I’ve done, therefore I’m going to implement this for this SaaS app. And I’m always like, that has nothing to do with it. Nothing to your experience in comfort zone, to have nothing to do with whether this is going to be successful. You should start, you’re asking the wrong question. It’s not the easy, it’s not the comfortable. So that really just that piece of it really resonates with me.

Marc Thomas :
I think one thing I will say is I’m not trying to shame anyone here by saying this to her, and I know you’re not either, Rob.

Rob Walling:
No, I am. Yeah, no, I’m calling people out. I’m going to start throwing names. No, I’m not Just kidding. I’m just kidding. No, but not trying to shame anybody, but trying to educate and trying to be helpful.

Marc Thomas :
Yeah,

Rob Walling:
Right.

Marc Thomas :
I think it’s like, yeah, it is. Because the reality is people are scared of failing and scared of looking silly If they get the marketing or the sales wrong, look, you’re going to fail if you don’t get it right, so you may as well give it a good go on your way to the inevitable middle.

Rob Walling:
Yeah, that’s right. No, it’s never about making someone feel bad for what they’re doing, but it is saying, Hey, here’s a heads up and here’s how to do this better. I mean, that’s the whole point of this frigging podcast and the YouTube and all the books and all the reasons that I’m yapping yapping my face off for the last 20 years is hopefully we can help you make fewer mistakes. And I think the times when I get frustrated and when it sounds like I’m trying to shame people is when people keep making the same mistakes over and over, because I’ve been saying this for 10 years, stop doing B2C, stop doing two-sided marketplaces and stop staying in your comfort zone when it comes to marketing and sales. Your customers don’t care. Your customers don’t care what you’re comfortable with. They care with how they buy and how they want to be spoken to. So I like this. We got some good energy going here.

Marc Thomas :
Yeah, nice.

Rob Walling:
Alright, number eight, sales doesn’t work for us. We want self-serve only. What’s the issue with this?

Marc Thomas :
Sales works for everybody. You don’t like sales? There we go.

Rob Walling:
This is it

Marc Thomas :
You feel like you don’t want to be sold to, but again, it’s a limiting belief. At some point you validated this company that you’re building, unless you got incredibly lucky, and let me tell you, it’s not going to happen a second time. You had to validate this. It’s the same thing as sales. All you’re doing is validating in reverse. Now you’re basically saying, Hey, you’ve got this problem. I’ve got a product now that works and you’re going to the same people that you used to validate this thing, the same customer type, and you’re saying, look, do you want it? Because here’s the thing, self-serve is great, but if you’ve never done it before, and even if you have, it’s an absolute pain to get right. There are so many variables that could go in the wrong direction for you, and it takes time and energy and Headspace.
I’m not, again, self-serve models. In fact, most of the companies I work with are predominantly that. But you will learn a lot. You’ll go faster by adding a sales model and you’ll go faster by closing more deals and putting things that you learn back into the marketing, back into that self-serve motion. Definitely, even if you’re building an incredible self-serve motion, then still every now and again, get on a sales call with someone. Even if you don’t predominantly do that, just do it. Trust me, take the hint. You’re going to see some revenue from that. You’ll close bigger deals, you’ll learn that you’re underpriced, you’ll learn that people want you more. You’ll learn the features they actually care about the things they say about you. It’s like a shortcut to greatness by doing hard work.

Rob Walling:
With Drip, we were self-serve only in their early days, and at a certain point people wanted to start talking to us and what I had to do was qualify them upfront. I didn’t want to talk to everybody who wanted a $50 a month plan because it just wasn’t. And now in the early days I did, I was trying to learn, but at a certain point I was like, this isn’t worth it. So what we did was we learned to qualify with a little JavaScript pop-up questionnaire that’s like, Hey, how many subscribers do you have? Because we had just had one value metric and it was like, well, obviously you’re going to pay us two, 300 bucks a month. I’m willing to do a one call close with you. And we found that we had a two to three X improvement of conversion for those amazing instantly.
And then that’s when I hired, I had customer success. I didn’t even have a sales team. I just had one customer success rep who I then had do these warm, they weren’t even sales calls. It was more like answering questions like, I’m on Infusionsoft, how are you different? I’m on active campaign. How are you different? It was stuff like that and it really helped. And I think every business, almost every SaaS company, I know there are some very, very rare exceptions, but almost everyone can use some help with this. Not even help, but that it would help their business, as you said, along the learning and along conversion rates. And it gets you there faster. And it also can help you suss out. If you’re charging $30 a month for your SaaS and it’s all low touch, no touch, you start doing a few sales calls here and there. When someone’s like, well, I want 30 seats of this, or I want to buy 10 times more data than anyone, whatever your value metric is, you start to find those companies that do want to pay you $500 a month or a thousand dollars a month or $2,000 a month. You build that dual funnel of one low touch and one high touch, and that is where I see real kind of bootstrap or hockey stick stuff come out of.

Marc Thomas :
Yeah, totally.

Rob Walling:
Alright, I’ll tell you what we’re going to do. We are going to do number nine and then we’re going to leave it to the listeners to go to your LinkedIn post in order to discover what 10 is. How’s that for a teaser like that?

Marc Thomas :
Rob? Rob, you’re a marketer.

Rob Walling:
I’m not good at, I’m not good at marketing Mark. So alright. You just did it. That was it. That was ladies and gentlemen, that was mine. Alright, number nine. We don’t want to take cheap shots so we don’t do competitor content. So first you want to kind define quickly what competitor content is and then go into why this is probably not a healthy view.

Marc Thomas :
So competitor content would be something like literally an alternative page or a drip versus active campaign. I’ll take that one as an example. Yeah, that’s it. So people don’t want to do these because they think, oh, these never work on me, or I don’t believe it when people say things about their competitors, and that’s fine, but I tell you this, these pages are one of the best conversion points across all companies that’ve ever worked on. They’re almost always in the life cycle and the conversion path of a great customer. You can do competitor content that is genuinely helpful to your buyer without nagging your competitors, without saying like, Hey, these guys suck by our product. Instead, they’re going to choose someone in the market. So it makes sense for you to put across the genuine take rather than just saying, Hey, I’m going to take their most expensive plan and say I’m a thousand percent cheaper.
Right? Instead, just make the argument about who your product works best for and why. Because if you don’t do it, someone else, your competitor probably might put across the nagging view. They might do the potshot content and they’re going to be less generous, their stuff’s going to rank, people are going to read it. You should do it on the basis that you’re a helpful person trying to help your customers make a good choice. And by the way, if you create this content and say to people, Hey, if you are not the right fit for us, you are going to be in this group of people. These products are great for you because this is who buys these, but if you are the right fit for us, you should buy our product because of these reasons, you’re going to have better lifetime value because people are going to churn less frequently because you’ve actually sold people honestly on your product and you can deliver. That’s my big take on competitor content.

Rob Walling:
And we’ve talked about this on this show quite a bit, and we get listener questions about how do I do it? Should I do it? And I’ve talked about three gradients of going really all in and naming names and really being aggressive or naming names, but being a little more light handed with it or not naming it these different, I don’t know, even thresholds are just kind of areas of the spectrum. But in general, yeah, this is something I think probably every SaaS company should do to one degree or another. So Mark Thomas, thanks so much for joining me on the show, man. If folks want to keep up with you, of course they can search Mark Thomas on LinkedIn. It’s MARC

Marc Thomas :
And also on my website, which is positive human.co.

Rob Walling:
Positive human.co. Very nice. And again, as a reminder, if folks want to maybe chat a little more with you, SaaS institute.com and your info and Mark’s first group is coming together now. So thank you again for joining me, man.

Marc Thomas :
Thank you for having me. It’s been great.

Rob Walling:
Thanks again to Mark for coming on the show. And as a reminder, Mark’s going to be speaking at MicroConf Europe in Turkey in late September, MicroConf europe.com if you’d like to see us both there. Thanks for listening this week and every week. This is Rob Walling signing off from episode 779.
Well, hello listener. You have found the hidden track of this episode. Mark Thomas made the mistake of telling me one of his hobbies. I said, what’s your hobby? Please tell me. It’s Dungeons and Dragons. I know much of tribute. No, it’s not. It’s music. In fact, being a musician, it’s playing guitar and bass and composing and doing all types of stuff. You can actually see him singing to his own compositions on LinkedIn. But what I did is I went and asked chat GPT for 10 questions about playing guitar and bass that I could ask a podcast guest good if they’re funny in increasing order of difficulty. So I’m going to start with you. We’re only going to do three.

Speaker 3:
So

Rob Walling:
First one is easy. It’s number one, what’s the name of the four string instrument that lets you play root notes Look cool and take way fewer solos than your guitarist friend.

Marc Thomas :
Oh, that’s definitely the bass.

Rob Walling:
Alright, there we go. I’m going to jump to Medium easy. This is four out of 10, which guitar effect pedal is basically required. If you want your intro to sound like the edge from you two.

Marc Thomas :
Oh my gosh, I don’t own any pedals, but let me say this. My favorite name of a pedal, it’s the big muff.

Rob Walling:
Oh yeah, I used, I had a big muff back in the nineties I think.

Marc Thomas :
Yeah, it’s great. You know what? If you want a clip for YouTube, sure. It’s just you saying, I had a big muff in the nineties.

Rob Walling:
We can’t, Josh, do you need to bleep this? No, it is a distortion pedal, right? I’m pretty sure.

Marc Thomas :
Yeah. It’s a big, I had one big growly pedal. Yeah.

Rob Walling:
Back when I played in a grunge. I was kind of a nirvana’s cover band with the screamy grunge songs thrown. I can see

Marc Thomas :
Did you have long hair?

Rob Walling:
Yeah, kind of with an undercut. Yeah, it was pretty rough. And wore oversized sweaters. Like shoe guys. Yeah, kind of. Except we just weren’t that good. So alright. That was, oh, so you didn’t get it. So the edge from U2 uses it’s a delay pedal. Delay pedal, right.

Marc Thomas :
There you go. I thought we were asking a specific name though.

Rob Walling:
Nope, just the effect. Alright, let me see. Some of these are ridiculously hard. I’m even sure I would’ve gotten this. I’m a huge Beatles fan. Do you like the Beatles?

Marc Thomas :
I do like The Beatles. Yeah.

Rob Walling:
All right. I don’t think this one’s going to go well. This is hard. Number nine out of 10, which Beatles song features Paul McCartney’s slapping his Hoffner bass, like he invented funk, even though slap bass wouldn’t be popularized until decades later.

Marc Thomas :
Is it definitely a Beatles song? Because I was going to say Arrow, what’s it called? Arrow Right Through Me. What’s that song called McCartney

Rob Walling:
Song?

Marc Thomas :
It’s a wings one. I don’t know that

Rob Walling:
Song. That’s song. But is he just

Marc Thomas :
Couldn’t have done Worse Thing to me.

Rob Walling:
That’s a liver pu neck. This is amazing. Wow. So according to Chad g pt, it’s come together.

Marc Thomas :
Oh, okay. I can cha gt Cha G PT Hass. Never heard anyone slap a base.

Rob Walling:
That’s the thing. I was kind of like, wait a minute. Yeah, it’s one of this. Isn’t that Slap bit,

Marc Thomas :
That’s one of the coolest baselines I think ever. I think the only other baselines that I would consider cooler or a couple of top ones, anything by the jam, massive fan of that. In fact, that’s how, one of the ways that I got into playing electric bass, I actually play double bass. Oh

Rob Walling:
Boy.

Marc Thomas :
Wow. And yeah, that’s how I got into electric bass. And then the other one I’ll say is just listening to Peter Hook, kind of Blue Monday, joy Division, just generally like new order. Anything by those guys. The way he plays bass is just so incredible and different.

Rob Walling:
I love it. Yeah. I dove into McCartney’s baselines. Well, did I dive into it? What I did is I found a YouTube video as I go down these YouTube rabbit holes. And it was talking about how if you played root notes to several of these songs versus what McCartney played, and they’re like, here’s what a competent basis me. I am a competent rno basis just enough to sound good. And they were playing it do when I call you up. But then the McCartney bass says it’s like something out of a ska baseline. It’s like melodic, isn’t it? And it’s of course because he’s a songwriter and he writes melodies and all this stuff. So I love exploring outliers and I can play an instrument, but they can play an instrument. You know what I mean? It’s genius versus like, yes, I’ve been playing the bass for 20 years and I can do it competently. But it’s so different to write amazing songs and baselines.

Marc Thomas :
One more amazing baseline recommendation, if you haven’t heard it yet. There is an episode of the podcast, one song where they break down the roots, the stem, sorry, of all the different famous tracks. And there is an episode of that about London calling by the Clash, the baseline in that I had never noticed it before. It is incredible. And I’ve since listened to it and I’m like, I can’t hear anything except this bass now.

Rob Walling:
Yeah, now it’s,

Marc Thomas :
Go listen to that episode after this. Yeah, I’ll do that. Awesome. Alright man. Appreciate it man. It’s great to see you. Bye.