[00:00] Mike: This is Startups for the Rest of Us: Episode 82.
[00:11] Mike: Welcome to Startups For The Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.
[00:19] Rob: And I’m Rob.
[00:20] Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. How is it going last week?
[00:24] Rob: Yeah, it’s good. I’ve been in and out of town this week and I’m trying to wrap up pretty big HitTail feature I’ve been working on for a while. It’s an integration that allows me to basically have one click articles created for a keyword suggestion so the people can because that’s kind of — the one biggest complaint that people have, one biggest reason people cancel as that they get all these suggestions but it basically creates work for them and the customers will be able to click one link, wait a couple of days and then get an article back for this, the keyword.
[00:50] Mike: That’s really cool.
[00:51] Rob: Yeah. I’m excited about it. It’s been on my list for months ever since like before I relaunch, you know, and so I finally just took the fall this week and it’s one of those things been — both easier and harder than I thought it would be, you know, certain parts have just flown by and some other parts that you would think would just work, have taken, you know, twelve hours or something. So…
[01:09] Mike: Like — like estimating code?
[01:11] Rob: Oh, my gosh.
[01:12] Mike: [Laughter]
[01:12] Rob: No, not that actually. The — it’s the connecting to an API thing that should just work. It’s a SOAP API and .NET is supposed to work just great with SOAP and yeah, the SOAP API doesn’t. It —
[01:23] Mike: I was referring more to the fact that when you’re trying — as trying to estimate how long some thing is going to taking code like sometimes you’re just off by or also [Indiscernible].
[01:30] Rob: Off gazillion, yeah. Right because you’re run in to one thing that should just work that should be one liner code and instead you have — you have to write like an entire class library to handle it from scratch. That’s — I’d rather go down to Bare Metal and basically call SOAP using XML strings.
[01:47] Mike: Oh.
[01:47] Rob: And yeah, exactly. An HTTP post and responses and parsing in that because the kind of SOAP they’re using on their end isn’t working with — with the — the class libraries that are available. So yeah, it’s been interesting.
[02:01] Mike: Do you —
[02:01] Rob: It’s times like this I’m glad I’m a developer because I’m able to just suck it up and do it because I would hate to — if I had, you know, like a higher developer, it’d be a struggle because I bet they had be running at all kinds of problem and it’s kind of hard to communicate. If you’re a developer trying to communicate and saying, “Ahh, this just isn’t working and you know, what should I do? Should I just press through or spend an extra twelve hours to do it or worse, I just got to the point where it’s like, yeah, I’d just need to spend a time and —
[02:25] Mike: And I think it’d be especially hard if you weren’t a developer because then it’d be hard to articulate what some of the problems are if you were to try to hand it off to somebody else.
[02:32] Rob: Exactly like why does this taking twelve times longer than I thought it would.
[02:35] Mike: [Laughter]
[02:36] Rob: Yeah because literally, I thought that all the SOAP connection would take less than an hour because you just give the reference and you get, you know, the whole object structure built for you automatically and when that didn’t work, it’s like, okay. I’ll just spend this time parsing a little XML in and out. So…
[02:51] Mike: Cool. You know, I think I had mentioned last week that I’d be doing a couple of surveys. One was the MicroConf survey and so let’s talk a little bit about that. And then I did another survey for AuditShark. But let’s talk about the MicroConf survey first. I mean we sent out a survey to all the MicroConf attendees and got some, I’d say some pretty interesting data points back.
[03:10] Rob: Yeah, I was — I was quite please because it’s like, you know, you’re at the conference and you’re asking people’s opinions but it’s hard to get a real good gauge because, you know, I mean you can only ask twenty people or so. And so it’s you can’t really get a representative sample unless you made the survey a lot shorter. So I think —
[03:23] Mike: [Laughter]
[03:23] Rob: I picked good response. We had great response last year as well but yeah, some of the key insights I thought we — I guess of the respondents, 80% were first-timers, first time at MicroConf, first time and 20% were had been there last year. The break down of mobile web and desktop, if people could select more than one because, obviously, some people were doing both web and desktop but it was 85% web, 51% mobile and 38% desktop. So that does indicate and we got some feedback that we need to provide that’s kind of a more mobile stuff. And I agree, we definitely need a mobile speaker next year. Then in terms of we had a mobile app that you can install on Android [0:04:00] and iPhone and it was like the schedule and the info about the conference and that was through KitApps.com — KitApps.com, they sponsored it and gave it to us for free which was cool. It turns out 47% of attendees liked it, 25% didn’t find it useful. Around 25-28% did not install it.
[04:20] Mike: Uh huh. So the people who liked it though I mean that basically comes out and says about 60 — 67% of the people who used it, liked it.
[04:28] Rob: Exactly.
[04:28] Mike: And I remember — I remember talking to some people about it and they said, “Yeah, I didn’t really like it because, you know, it’d be really nice to have specific timelines for, you know, when the speakers are talking and what’s going on throughout the course of that 9 to 5 block.” And I said, “You should really put in the actual times that everybody speaking.” And I told them, I was like, “Well, we did that last year and 10 minutes in to the conference, the whole schedule went sideways. And then we were trying to play catch up and everything was off. So there were no points to even doing that.” And the same thing happened this year. I mean 10 minutes in to the conference. I mean we were already 15-20 minutes off schedule. So it didn’t help. I think that it probably would have made things a lot more chaotic.
[05:07] Rob: Yeah. I agree. And several conferences I’ve attended in last year don’t have specific time schedules. They just have speaker orders and they have the expectation that you’ll get a break between each speaker. And I think, I’m pretty sure that’s how we’re going to continue to do it because you’re right, having this — this tight schedule that you can’t stick to because of unforeseen stuff and we had speakers, we have speaker dropped out last year. We had speakers swapping like the night before wanting to go on a different day this time due to health issues. I mean there’s all kinds of stuff that is just out of your control.
[05:36] The cool part, we got feedback on the speakers and all that but the cool part is we, we left some open ended questions of like what are the three things you like the most and what are the three things that, you know, you like the least or that we should have tried to improved upon. And some of the suggestions or some of the thoughts about three things people like the most were same things we heard last year so which is good. That’s mean we’re being consistent but it was the quality of the attendees and the small size [0:06:00] of the conference.
[06:01] And so people were saying you need to keep the price where it is or raise it. You need to keep this, this group tight and you need to keep the — the people who are coming here, they need to be serious because people would — even in the survey, people are giving examples about like they went to a different conference last week and they just had a bunch of people kind of were wasting their time about their attendees and it wasn’t even fun to walk around and talk to people because they didn’t have anything in common. So — so that’s cool like keeping that quality of attendee and the seriousness high and I think has been a real kind of boom for us over the past two years.
[06:31] Mike: Interestingly enough, I think that last year, we had gotten some — I think it was early on we got some initial complaints about the cost of the conference and I think that cost actually keeps those types of people out who aren’t very serious about it.
[06:45] Rob: Exactly. Oh, the approachability of the speakers and that’s again something we heard last year was since we’ve kept it relatively small that you can pretty much meet all the speakers and we asked speakers, when we asked them if they want to come, we basically say, you know, “We want you to do a talk that’s actionable. We want you to come for all three nights and we want you to come to the events because we really — we don’t just want to see you speak, like we want you to interact and help the attendees and…” So we’re trying to get speakers who are interested in doing that and so far, we’ve had good luck doing that. And I definitely be keeping that up next year because obviously, it’s one of the kind of the top three things folks mentioned.
[07:19] Mike: Uh huh.
[07:21] Rob: How about the negatives? Do you want to run through them?
[07:22] Mike: Sure. So the first one that we got back which I was a little bit surprised about was that the Hard Rock Hotel is not very well received. A lot of people said that it was too loud or it was really hard to talk to people during some of the hang out sessions. And one of the things that I noticed was that Monday night was by far the easiest night to talk to people and that was across the street. It’s some place else where it was kind of a private gathering.
[07:44] Rob: Yup. You know, I was surprised by that too but it makes sense and a — enough people said there was a big chunk of people who basically said the Hard Rock is too loud or it was too hard to hang out. And some — there’s one person said it fell like spring break. Another was actually a reality TV show being film there. It was an MTV show that neither you nor I knew about. And so like Saturday and Sunday and even in to like Monday morning, there were just a bunch of kind of spring breakers and I was actually trying to get out to the pool and the guy was basically like, “Uh-uh.” Like he gave me the “you’re not dressed for the pool” because I was in jeans but I think what he really meant was “You’re too damn old to be out in the pool right now.” [Laughter] I think we need to think about it next year, you know, looking at a different hotel.
[08:24] Mike: Well that’s a — I mean if you think about in terms of scheduling, this is the second year in a row where we’ve had the conference and something else was going on that we just didn’t necessarily know about.
[08:32] Rob: Yeah.
[08:33] Mike: And we have to be able to control about it. I mean I think last year we had MicroConf in a middle of Apple’s Developer Conf. [Laughter]
[08:40] Rob: Yeah. And realistically if that wasn’t there, I do think it would had been a different — a different scene. It would have been quieter. But bottom line is, yeah, next year we’ll — we’ll at least evaluate other options and see if we can, you know, potentially swing another hotel.
[08:53] Mike: Yeah, definitely. I really did like the second night over at Rumor across the street.
[08:58] Rob: Yup.
[08:59] Mike: That was put on by the guys over at WildBit which is really cool to do that. So definitely, thanks to you guys for helping us to put that on and putting all that stuff together. I think I get a lot of great feedback from that as well.
[09:10] Rob: We had other positive and negative feedback. This was kind of the most popular. I was surprised to see several comments. People were saying they were disappointed with the Tuesday evening gathering that it wasn’t in a penthouse suite because last year we had just a total last minute, we hadn’t organized anything for Tuesday night and Andrew Warner happened to have this big suite that we — that we had given him and we just hauled in up there and you know, bought some beer and some snacks and hang out. And that was — it was really cool.
[09:35] But this year we tried to do that, you and I tried to get the penthouse suite but it would only hold 75 people. And so we couldn’t do it because we would have had, you know, not being able to have everybody up there. So instead we just went to a bar and slapped down a credit card for a few hours. And I thought it was fine but we got enough feedback that it wasn’t. Some people said they felt not organized and other people said it was too loud and then other people specifically mentioned, “Oh I heard there was, you know, kind of a penthouse suite thing last year and was bummed that that didn’t happen again.”
[10:03] Mike: Uh huh. Yeah, we’ll definitely have to try and find some place that has a penthouse or do something else different I think next year. But you know, it’s good feedback.
[10:12] Rob: It’s always good to hear. So we’ll keep going through that, looking forward to next year and see if I can convince you to do it again. Anything else on your radar for the week before we dive in to some listener questions?
[10:22] Mike: Yeah, I did have that survey that I put together for AuditShark because I talked —
[10:26] Rob: That’s right.
[10:26] Mike: … last week about possibly redirecting it and I talked to some people at MicroConf about it. So I put out the survey, you just used Wufoo for it and put together a short survey. I think it was seven or eight different questions. I really like using Wufoo for this because it tells you like your conversion rates for the people who come and just look at the survey versus the people who actually go through and fill everything out. And it lets you know like all the percentages, page views, all that kind of stuff for it really, really helpful. And I basically asked people — I kind of explained what the problem was to having a third party look over your — your server to make sure that it was configured securely and that you weren’t accidentally doing things that you shouldn’t be that some script kiddie out there is going to end up hacking in to your server over.
[11:12] And I got a lot of great feedback from. I got about twenty responses. And of those twenty, there was only one who said they wouldn’t pay for it and collectively, there was a couple of thousand dollars worth of, I don’t want to call them commitments because I wouldn’t quite call them a commitment but you know, people said that they were collectively willing to pay a couple of thousand dollars for it. So I definitely feel like I’m on a right track with that and I’d just kind of need to flesh out, you know, exactly how that offering is going to shape up and do a little bit more of market development on it and build my list a little bit more. I think there was only one person who said that I couldn’t add them to their — to the launch list as well.
[11:46] Rob: Very cool. So that shows you’re heading in the right direction. Are you able to — you called it like website security audit software or something, are you going to go in to more of the description with them of what it would do or did you already at the top of the survey?
[11:58] Mike: So the basic question that I asked was [0:12:00] “Are you concern about the security of your web servers?” And then on to that I said I can help. And then my problem description was “This survey is intended for people who administer their own web server. If you have trouble sleeping at night because you aren’t a security expert and are constantly wondering if something might be wrong that you simply haven’t discovered yet, please help us to help you by answering some simple questions.” And then I just gave a brief about my prospective solution and just said “AuditShark is a cross-platform, cloud based security product designed to read configuration data from a computer. By analyzing configuration settings and aggregating metrics across servers, AuditShark can tell you where & why you may be vulnerable to malicious attacks on your servers. Using anonymous, aggregate metrics it can rank your security profile in relation to other servers with similar configurations. In a nutshell, AuditShark acts as another set of eyes on your servers to help keep them from being compromised because of seemingly innocuous misconfigurations.”
[12:50] Rob: Got it. So it sounds like you want to do a pretty good description of kind of the solution that you’re proposing for their problem.
[12:56] Mike: Uh huh.
[12:57] Rob: So how many — how many e-mails did you send out and what was the response rate?
[12:59] Mike: I actually didn’t send out any e-mails. So [Laughter] what —
[13:02] Rob: What —
[13:03] Mike: What I did was I posted this as a link to the show notes for last week and —
[13:07] Rob: Okay.
[13:08] Mike: So we’re recording this on Thursday. I put this out there on Tuesday at around 9 a.m. So it’s about 48 hours later and I’ve gotten I think twenty different responses from people, 21. And 461 page views, 4.6% conversion rate. It gives you an average time for submission but it’s wrong. So, somebody left their browser open for like five or six hours. So that really skewed a lot of the results but the first day that it was open, the average response time was about 5.2 minutes. So, people spent some fairly significant time looking at it and reading it. I would suspect that they read the entire description and kind of really understood what it was that they were contributing the information for.
[13:46] Pretty much everything came through either my RSS feed on my blog or through the link from the show notes. I think that the vast majority of it was from my blog to be perfectly honest. I also put some out there on Twitter in the — the referrers for this. It doesn’t [0:14:00] really seem like there was a lot of activity there. I know it got retweeted several times but I don’t see anything coming in here from Twitter at all. And it made just be that it’s not displaying it because the traffic —
[14:14] Rob: I think — is direct because if – because like I used TweetDeck and so that will show for direct traffic is an example to launch twitter.com as a referrer. t.co is the referrer.
[14:23] Mike: I also — yeah, I see t.co. There’s only one. What I don’t like is that it doesn’t show me all of the traffic that came. All it shows me is the people who actually completed it.
[14:23] Rob: Got it. Okay.
[14:33] Mike: Which is kind of annoying but, you know, it’d be nice to see how many of those 400 and you know —
[14:38] Rob: Yup.
[14:38] Mike: … 30 people or whatever came from Twitter.
[14:40] Rob: The only cool what — so where — what’s your next step? Are you going to be contacting those folks to find out more about what they need?
[14:45] Mike: Yeah, so I’m going to start sending — because there’s only about twenty of them, I’m going to go back and I’m going to start having individual conversations with them and kind of clarify exactly what it is that my intentions are and how it would work. And one of the things I asked which I thought was important was says, “What are the two primary concerns you would have about this type of service?” And I got a lot of good feedback about people saying, “Oh, I wouldn’t sign up because of this or that.” And there are things that could be easily address with like an FAQ or something along those lines. It was just because I didn’t give them enough information. But it seemed to me like because they have a real problem, they’re willing to make — also a certain concessions about, you know, signing up for a service that’s actually going to let them resolved that problem.
[15:28] Rob: Sure. Now, that’s great because that’s the way they get started with your, kind of your marketing copyright [Phonetic] getting in the minds of your prospects in for now with that conversation is that exact question you asked is perfect for getting those bullet points on your home page and getting your calls to action in place to kind of resolved those — those issues, those objections that they have early on because otherwise, you know, when you’re doing in-person sales, you know, it’s like people have objections and you address them, you know, assuming your product handles what they wanted to do like you can always just say that objection is essentially not valid, you say very tactfully but it’s harder [0:16:00] to do that on the web unless you know the objections in advance and you’ve asked that. So…
[16:06] Mike: Uh huh.
[16:06] Rob: Nice work.
[16:07] Mike: And the other thing I did was I consciously used the title for this, you know, “Concerned about the security of your web servers?” from a conversation I had with somebody at MicroConf who, you know, had said that, you know, “I would pay for this.” And I asked why and he said he’s like, “I can’t sleep at night sometimes because I wonder if there’s something wrong. It’s like I got a ton of people who are using that server and what happens if it goes down?” And he’s basically said he’d have a very serious problem on his hands just if the server went down, not even if it was hacked but just if the server goes down because there are so many people, I think he had said he have like thousands and thousands of accounts on there. I was just basically lifting his terminology to kind of put it at the top of this. And it seems like it worked out.
[16:48] Rob: Cool. And any other things before we dive in to questions?
[16:50] Mike: Based on some of the stuff, I’m going to, you know, I’ve already got a logo that’s and the works and I’m doing a scope of work for a contractor to build up a new AuditShark sales website for me. I’m going to supply all the content and everything but I need some CSS templates and stuff but you know, those are becoming up over the next week or two and we’ll just go from there.
[17:08] Rob: Sounds cool.
[17:12] Rob: All right. Well, we have a couple of questions queued up. Let’s see how many we’ll get through. The first one is about mailing lists versus a Facebook page and it’s from Brendon Duncan and it says, “I followed some of your advice and started marketing my web app before it’s finished on my site at 3dvirtualtabletop.com.” And that’s the number 3, the letter D virtualtabletop.com. “I’ve been collecting e-mail addresses with MailChimp but I also have a Facebook page. It occurs to me that a Facebook fan is more valuable than an e-mail address because their interest is public and word of my app could spread socially or at least pop up higher in search results especially with Google Plus. Given that my app is consumer-focused, I’m thinking about replacing the e-mail sign up form with a button to like my app on Facebook. What are your thoughts on this?” I love [0:18:00] this app. It’s a D&D, a Dungeons & Dragons Virtual Table Top that runs, it looks like on an iPad or maybe it’s an Android tablet and I haven’t played D&D since high school but, man, I would have love this thing. It’s such a cool demo. I really like the video.
[18:15] Mike: So I think he makes a couple of different points. And the first one is that he’s been collecting e-mail addresses with MailChimp and then he also has the Facebook page. And his thought processes that, you know, the Facebook fan page is going to be more valuable than an e-mail address because their interest is public. I think that the problem with that thinking is that because you haven’t launched yet, I think you’re going to have a very hard time getting any of those Facebook like. I think what you need to do is stick with collecting e-mail addresses through MailChimp and then once you’ve actually launched, then switch over to using the Facebook page or in trying to gather Facebook likes because I think that those initial conversations that you have with people collecting those e-mail addresses is going to be a lot more important to help you target your marketing efforts and find out what it is that people like about the product and what problem they’re truly trying to solve.
[19:04] And then using those conversations to basically fill up a marketing collateral on your website and then using those Facebook likes to kind of spread the word and spread the message because once you’ve launched, then those e-mail addresses are probably a lot less valuable to them — to you than a Facebook likes. But I think that there’s definitely a transition period there where, you know, you use the MailChimp e-mail addresses first and then you transition over to Facebook page later.
[19:30] Rob: Yeah, I’m on the same page. I do not think removing your e-mail sign up form is a good idea at all and I disagree with the notion that a Facebook fan is more valuable than an e-mail address just because they’re public. Your goal right now is to get a list of people who are interested whom you can contact at a later date when you launch. You want to get as many stock together in some form that you can message were they will actually respond. So you can think about this like you could start in theory, you could start a Twitter account and a call to action on your landing page could be [0:20:00] “Follow me on Twitter”. The reason you don’t do that is because A, a lot of consumers are on Twitter and B, the conversion rate, the clickthroughs from Twitter are terrible.
[20:09] The best conversion rates I’ve seen by far are with e-mail. Everyone has e-mail and people just, they tend to read it and they tend to clickthrough. If you could somehow build a fan page, get people to like it and then you could message them which I’m pretty sure is not actually possible. It was possible at one point but Facebook discontinued this it looks like in 2011 and even that when you could do it, it went to a separate inbox and it often did not e-mail people about it. So it really wiser, this kind of a No Man’s Land and from what I’ve read about this, there’s really low conversion rates on this stuff.
[20:42] So number one, I think you need to stick with e-mail but I think there’s an between here. I think what I would do if since you are consumer-facing is have your e-mail sign up form and when they entered the e-mail, they click submit. They arrived at a landing page that says “Thanks for submitting. Check your e-mail. You know, click on the link to be on the list. And since you’ve obviously like our app, why don’t you now click this Facebook like button and potentially a retweet button.”
[21:09] And so then it’s a sequential thing. So, you’re not asking to do one or the other but you’re going to get, you know, everyone who submits an e-mail through is then going to be, you know, fairly likely to then click the Facebook like thing and spread it from there because you got to think about it. If you just got get a bunch of likes on this page and yeah and “goes viral” and you get thousands of people to come to this page from Facebook, what then? What’s the end goal? You still need to sell them something or you need to have their e-mail so you can sell them this app later. So thanks, Brendon for your question and I hope that helps.
[21:41] Our next question is from Brian Donahue at pigeonmoon.com. He says, “Hey, guys. I’m curious what techniques, tips or tricks you have to share about how you balance your programmers mind with your business mind in your daily work. I often find myself torn between what seems like the opposite ends of a spectrum, the desire to be and think like [0:22:00] an entrepreneur and focus on business goals and shipping good enough software and the desire to write great code, learn new technologies and generally scratch the geek itch. I’m curious if you have any good tips or guidelines about how to deal with this. I know that you both hire freelance developers to work on your stuff, I’d like to hear more about how that went initially and how you were able to let go of your need to build a code. You both seem like accomplished developers. I feel like I would be constantly fighting the feeling true or not that I could build it better. Love the podcast.” He says, “Love, love, love. That’s 3X to podcast. Thanks for doing it, Brian.” What do you think, sir?
[22:41] Mike: No. I don’t have any good tips. [Laughter]
[22:43] Rob: You don’t?
[22:2:45] Mike: No, it’s —
[22:45] Rob: It’s a struggle, isn’t it?
[22:46] Mike: Yeah, that’s the problem and I think that this person has to approach it a little bit differently. The way I do it is I think about it as an engineering a business not necessarily to engineering your product and I think to that —
[22:57] Rob: Bingo.
[22:57] Mike: … that helps me big and it may — it may help you, it may not but I think that if you – if you think of it in those terms, you’re still building something and in that sense you’re trying to make that the best that you can. It’s not necessarily your job to make the code the best but what you can do is you can put guidelines and frameworks in place. And I guess it will help that to grow out the way that you wanted to.
[23:21] So one of the topics of my talk at MicroConf for example is building processes and systems and putting them in place to help you build out your business. And I don’t see that as being any different. You put these rules in place for how you want the code checked in, how you want commented, what tools you use, all the different steps that your code needs to go through and essentially, that’s your quality control system. And if somebody is doing something wrong or you don’t like what they’re doing, you need to do one of two things. Either one, you replace them and that replacement could be with yourself but the reality is that shouldn’t be — you know, if you’ve already outsourcing the code, then, you know, if you need to find somebody [0:24:00] else to do it, don’t replace that person with yourself because you can do it better.
[24:03] The fact is you would always be doing that code better, what your talents are probably better use that is engineering the business and finding somebody to fill that role for you. I’d say that’s probably my best recommendation is to kind of step back a little bit and think of it from a little bit higher level than you probably are. I mean because when you start thinking about code, you’re thinking ones and zeros and all the things that need to go in to that and you need to think a little bit more abstract. You need to think more like an architect and you basically, you’re becoming a business architect as opposed to a product architect.
[24:33] Rob: Yeah, I think it comes down to a couple of things. I think it comes down to knowing yourself, knowing what you’re good at, knowing what will make you happy and what you enjoy and knowing kind of where you want to go like what your goals are. And I think that if you really like to code and you really like to get in and learned new things and just write scrappy code and optimizes and architect and do all that stuff, you can need to seriously think about building a product that doesn’t sell like an open source project or something like that because if you really want to optimize your fun and learning, you’re absolutely going to need to go do something where the business part side of it is not the goal.
[25:09] Rob: But if you say to that, “Well I don’t want to waste a bunch of my time because I don’t like my job and I want to quit my job”, then you need, in my opinion, you need to optimize for making money from your product. And in order to do that, you have to start letting go of some of the stuff. Period. I don’t know if any software entrepreneur or micro must [Phonetic] feel otherwise who still codes absolutely as much as they want all the time and only works on interesting things and doesn’t hire it out. And you know, is — that was able to quit their job and live on this. Maybe if you move overseas and it was, you know, a lot — a lot cheaper or something, you can do it on a thousand or 2,000 bucks a month.
[25:46] If you want a build, you know, a substantial full time income, you have to make some sacrifices for that goal and I’m not saying you have to give up code altogether. In the past six months, I probably averaged twenty hours of coding a week and I loved it like when I get in the zone, I’ve absolutely loved it. It’s brought me back to the days when I used to code, you know, forty or fifty hours a week every week. At the same time, I have enjoyed mixing it up and doing the business goals. It’s like you said having the opposite ends of the spectrum existing at both times where you’re bouncing from business stuff and bouncing back to the code. Now the one difference is that since I’m able to outsource code, I’m outsourcing the code that I don’t want to work on and I’m keeping the stuff that is really interesting and that will teach me things and I’m doing it myself.
[26:29] So that’s where I think the trade off comes is once you learned to outsource, then you do give people the stuff that is not as interesting or that you’ve done before that’s not going to teach you, you stick to the interesting things and then if you’re naturally feeling like you’re going to need to do all the coding or you’re going to be gravitating towards that, I think that if you fight that urge, you need to really fight it. You need to always swing towards to the side of the pendulum if you know that that’s your natural tendency is to outsource more than you think you need to and to put more importance on spending time on the marketing and getting — as finding customers for your product.
[27:03] I think Mike is right. I think of it as engineering of business, engineering your marketing process, engineering support processes and even, you know, engineering outsourcing to developers, there really are engineering elements in that and I believe that you can probably find happiness in both of them and like I said, it comes back to knowing yourself and knowing like really deep down what your absolute goals are. So hope that helps.
[27:25] Rob: All right. Question number three is from Kristoff [Phonetic]. He says, “Hi, Mike. Hi, Rob. I’ve got a question regarding pre-launch mailing lists that I didn’t find the answer in the podcast. You’ve been talking about the importance of building a pre-launch mailing list and I figure, the more the merrier. But is there a minimum viable mailing list size one should have before launching the product? For the sake of a concrete example, assume that you only collected e-mail addresses after potential customers clicked on the sign up link on your SAS applications website. Regards, Kristoff [Phonetic].” And then he says, “P.S. Your podcast rocks. Listening to it is often the only reason I get off my lazy ass and go for a run [0:28:00].” Well thanks for that.
[28:02] Okay. So I do have a couple of thoughts. So the conversion rates that I’ve typically seen from launch lists range dramatically. I’ve had launches go at 20% of the mailing size meaning 20% convert in to and the people who buy. I’ve had it as with my book. It was tapped out at about 50% by the time the launch was all done. But that’s a typical. I have seen products launch and get around a 5% conversion rate and it all depends on how well you’ve lay the ground work, how close your product is to really meeting the needs of that market, how ready they are to buy, you know, the timing and there’s a lot of elements, how good your marketing is, what phase of a [Phonetic] product it’s in, all kinds of stuff.
[28:44] Rob: So with that said, I’ve seen mailing list from, you know, in the 50, 60 range up in to the several thousand ranges and it really is definitely the more the merrier because it’s all just, you know, a game of numbers at that point. As long as the list is targeted, you definitely want to build it up as large as possible. I think if you have less than a few hundred on your mailing list that you’re going to have a tough product launch. Typically, I tell people when you hit 500, start feeling comfortable and not just, again, a vague realm [Phonetic] because even at 5%, that’s only 25 customers on your first day and that’s, you know, not like the best launch ever. But if you can get it up in to the 10 to 15%, obviously, that — that really gets you off to a good start.
[29:24] Rob: Now in terms of having a collecting e-mail addresses after potential customers clicked on their sign up link on your SAS apps to website, to me that’s just a testing phase, right? You do that, you build the SAS app marketing website and then you put the sign-up form and you’re trying to validate it. It’s more about conversion rates from people hitting their home page going all the way through to the bi-phase and you’re trying to figure out what that conversion rate is. And you know, if you can get that up in to the 2, 3, 4%, then it seems relatively viable and you can drive enough traffic to that website using, you know, whatever methods available to you. Then you’re starting to think, okay, I actually might be able to build a viable product out of there.
[30:03] Once I decided I was able to build a viable product, I would then switch it over and probably go back to the landing page first because at that point, all you’re doing is trying to optimize for e-mail addresses. You’re just trying to get the most possible before you launch.
[30:15] Mike: I think there’s a couple of things that stick out to me. And one was as you said when you’re trying to validate people who are coming to your mailing list and they’re clicking on the sign up link. I think that just to clarify, he explicitly said sign up link on your SAS applications website. It’s not clear whether he means that there’s pricing before signup page but you really need to have the pricing before that because then clicking on signup a lot of times they’re doing it just because they want to see the price. So that helps to make sure that the people who are getting on to the list are targeted and that’s the other point that I wanted to bring up was how well targeted that mailing list to actually is.
[30:52] Rob: I think that for a launch to be I guess worth that you either have to think in terms of dollar amounts for a number of signups that you want to get and then back up from there and kind of reverse engineer the math behind just to say, okay, well if I — if I’m going to — convert 15% of these people and I want, I don’t know, $500 a month from my launch, then that means that, you know, of those 15% that signed up, there’s going to be another 85% that didn’t. So kind of do the math on that to figure out what that number is actually going to come up to be and it’s obviously going to be depending upon your price point and lots of other things.
[31:26] You need to figure out what sort of a number you feel comfortable with and from there, you know, try and make sure that your mailing list is targeted. I mean and the only you’ll know that is by talking to those people who are going on to your mailing list. I wouldn’t say that there’s a minimum size. I think that it has lots to do with what your expectations for that launch are going to be.
[31:47] Rob: All right. And for our last question, we have from David Young [Phonetic] and he says, “My request for you guys is that I would love to hear more about numbers. What can developers who get in to this type of micropreneurship expect in terms of income? I know that the answer varies widely but would love to hear your two experiences with various types of sites, apps and projects. Pat Flynn has a really cool income progress report and Mixergy’s podcast always have lots of financial data. I think it helps to paint a real picture than in addition to the lifestyle upgrades you can accomplish, the outcomes could be even better than being an employee at a very successful startup. Keep up the great work and I’m really bummed. I missed the first MicroConf. Hope to make it next year. Regards, David.”
[32:29] Mike: I think it’s a little harder to generalize on this type of question, you know, I mean I can talk about numbers that I’ve seen from my businesses and things that I’m working on. I don’t know how comfortable Rob feels about kind of sharing those numbers but obviously, you already seen something from Pat Flynn and from the things that you see on Mixergy. I mean one of the things that I talked to about at MicroConf, I actually showed some of my revenue number. So for last year, my total revenue was about, I think it was 212,000 and then once you start deducting for things that where various business expenses like healthcare and dental and taxes and insurance and all kinds of other things, travel expenses, that sort of stuff, I think it dropped it down to an income of I want to say a 172,000. So it’s about $40,000 in expenses. So that’s an overhead of about say 25%.
[33:17] Rob: Now, that includes consulting income.
[33:19] Mike: Yes, it does. It does.
[33:20] Rob: Just to clarify because I don’t know if David means only from product income. I mean that’s — that’s why this question is hard to answer is that I know people who are making thousand a bucks a month that it —
[33:30] Mike: Right.
[33:30] Rob: … and just want to make a car payment and then we know people who literally make 30K a month who are solo operators. So there’s a huge range.
[33:39] Mike: Yeah. And I think that, you know, that’s part of what makes it so difficult to answer because, you know, the question itself is what can developers who get in to this type of micropreneurship expect in terms of income and…
[33:50] Rob: I think that’s a wrong — yeah, I don’t think that’s the right question to even ask.
[33:54] Mike: I don’t think so either. So I think you’re right, I mean that really is the wrong type of question to ask. I mean it really depends [0:34:00] on what your goals are and what you want to do. I don’t have any doubts that it’s possible to put together a business where you’re making six or you know, obviously, six figures is possible, lots of people are doing it but in terms of putting together a business that makes seven figures and it’s just you, I think that’s possible. I wouldn’t say that it’s common or probable. I think that it’s definitely within a realm of possibility to put together a solo business where you’re making 2 or 3 or $400,000 a year. I think once you start going beyond that point upwards of 4 or 500,000 a year, you almost have to bring on employees because unless you’ve got a lot of processes and automation built-in and you’re outsourcing a lot of different things, I think that’s going to be very difficult to sustain a business of that level without bringing on additional help that’s more of a full time help.
[34:50] But in terms of the question itself, I just don’t think that that’s a right question to ask, you know, what can you expect? That’s so depending upon what products you’re doing or what products, what needs that [Phonetic] you’re serving, you know, what your product as price point, all those different things factoring in to it. So expectations, you maybe expecting $20 million a month and that’s just not realistic.
[35:11] Rob: Yeah, I think the answer to the question is it’s going to involve, no matter what comes back, it’s going to involve a ton of hard work. It’s going to involve a ton of skill, a ton of learning and little bit of luck. And so you can expect that you’re going to have to put a ton of all of those things in and that you’re likely to succeed if you do all those things and you have them all in place. It’s kind of hard because some, you know, you can say micropreneur a bit like I see some micropreneurs that are literally shooting for like a thousand bucks a month and they kind of want to keep their main job and just do it and then other micropreneurs who are shooting for 20K a month and that’s just a totally different goal set, right?
[35:44] I think that if you, if your goal is to make as much money as possible, then you need to optimize your entire process for that and you need to be able to — able and willing to just work like crazy and work towards this, you know, crazy goal. But I think part, a big part of micropreneurship is it’s not optimizing for that in general. You could do it but most people I know are optimizing for the freedom, the location, independence, the lifestyle upgrades. And so I would never pitch it as your outcome, your financial outcome could be better than being an employee at a very successful startup. I don’t — I don’t even think that’s the goal. I think if that’s your goal, then you should go be an employee at a very successful startup. I think your odds are probably better of going out there and doing that than kind of to make like, Mike said, seven figures a year by staying solo. I’d just think the odd — I think the odds that are tremendously small.
[36:34] Rob: But at the same time, I actually think the odds of getting a successful micropreneur business or getting a successful business that can support you off the ground and running is much, much higher than going out and hitting the startup lottery and work in the years in moving to the Silicon Valley or Boston or New York, one of the startup hubs [Phonetic] and putting in a time and putting in the years and basically gambling and assuming that you’re going to cash out on stock options whether you’re the founder or not.
[36:59] So it’s kind of that the two ends, right? If you’re looking at the lifestyle aspects of it, then I absolutely think that you have a better chance with micropreneurship. And if you’re looking at the other end of it and want to make a big, big slam bang in terms of money, then I think you need to go at the other end.
[37:14] The last thing I’ll say is it does at some point can come down to some semantics because Mike said, you know, if you’re going to try to grow a business in to a seven figures, then you’re going to need to hire employees. Now, what is an employee and what is part-time help and what is a virtual assistant and what is a developer that just works for you on oDesk? At this point, I have talked about it before, I have between eight and ten people who work for me a few hours a month at least on oDesk. So I consider myself still independent because I’m not having to manage, you know, 401(k)’s and provide like all kinds of employee leadership and mentoring in a career path and that kind of stuff and yet, I do have to manage people.
[37:53] Rob: And so if your goal is to truly be a solo operator, then you have some limitations. If your goal is to be [0:38:00] someone in the middle which I’m considering myself at this point, I am solo, no one reports to me, I don’t, you know, get phone calls with people ask for management advice or whatever but that’s kind of a middle ground. And then on the other end, there’s — there’s people who are actually hiring and building up companies and that’s like Mike said going to be the way to grow it.
[38:17] Mike: You know, what I had said getting up to 500 to 600,000 there so and going beyond that, I mean you really need help. You know, I was thinking more employees than, you know, outsource through oDesk or something like that but I mean that’s certainly another option. Your problem with that I think is that you definitely need to have your processes nailed down pretty tight if you’re going to be outsourcing it versus having somebody who lives nearby who, you know, just managing remotely who you are employing full time and they’re depending on this as their full source of income.
[38:48] Rob: Yup, it’s a different ball game. Yeah, there are examples of people who are, you know, talking about their income. I know Amy Hoy had mentioned I think she made 330,000 from Freckle, that’s her run rate right now. And I know they’re making another 300,000 from other stuff. I mean it’s easy enough to find people talking about their incomes, the problem is it’s kind of, one, it’s survivor bias and two, they just tend to be outliers. And it’s like five years later, you know, after all the stuff, someone is making X amount but I’m not sure really how realistic that is for someone that, you know, you’re out of the gate and I couldn’t even guess what the odds of that kind of thing are going to be of hitting it at that level.
[39:25] Mike: Yeah, I mean the survivor bias definitely skews that metric because you don’t see all the people who tried and or doing it now but they’re only making a couple of hundred dollars a month. I mean those people are generally not putting all those numbers out there because they don’t feel like they’re impressive or they’re embarrass by them. I started sharing my numbers at MicroConf just because I want to start getting people to have those discussions because I think that if you have a company that’s five or ten employees and you say, “Oh well, you know, my ten-person company made, you know, one and a half million dollars last year.” That’s a lot different than saying, “I have a single-person company [0:40:00] and you know, I made X last year or a 150,000.”
[40:04] It’s the same number per employee but it’s different when you’re saying, “I made this and you know, I was doing everything on my own” versus “My company made one and half million dollars” and I think that having those discussions is definitely important because I don’t think that people talk about them enough and I didn’t go in to a lot of details about why I shared my numbers at MicroConf. But I mean that’s basically it and I think that those discussions need to be had amongst people and I think that it helps people to just kind of judge, not just necessarily where they’re at but to help kind of answer these types of questions of, you know, what can I expect, what is realistic?
[40:38] Mike: And I think that that’s the one thing that’s not in either of our responses yet is that your expectations can be widely out of touch with what reality is and what is possible. And because you don’t know what anyone else’s numbers are, you might have this idea in your head that, “Oh, I can — I can build, you know, $750,000 a year business and you know, everything will be great.” But if you start looking around and you start seeing that the people who are doing that have teams of people under them, you’re going to start realizing, hey, that’s not really realistic.
[41:06] That’s kind of, you know, why I started sharing those numbers just because I think that people need a bit of a reality check sometimes. Don’t get me wrong. I mean I understand where you’re coming from about the point of survivor bias and you know, the numbers get skewed and you got all these people who’ve been doing it for three or four or five or ten years. I mean I’ve been on my own for seven years at this point. So that seven year number should definitely factor in to what I’m talking about here. But you know, it takes a while to get there. It’s not something that’s something that you can do overnight or the most people can do overnight.
[41:34] Rob: I will say that I know a lot, I mean dozens of basically solo software/web/mobile founders who are making full time incomes. You know, whatever that means and some — for some people full time income is 4 or 5,000 bucks a month and for others, they had to get to a 100K before they could quit their job. I know a lot of folks doing that. So it’s definitely becoming, you know, I feel like it’s becoming more and more viable over the years. It’s a good thing for everybody.
[42:00] Mike: Yeah. And I mean that that full time income is definitely the key piece of that whole question I think. I mean it’s not about the dollar amount. It’s about whether or not you can make a full time living and doing it. And I think —
[42:12] Rob: Yeah.
[42:12] Mike: … that’s the — that’s the big piece of it. It’s not as and we haven’t really talked a lot about it. It’s just, you know, can you do this on your own and not be employed by some mega corporations at some place. And the answer to that is absolutely, yes, you can. And will you have to make some sacrifices about where you live or you know, the type of house that you have or the type of car that you drive, maybe. You know, that’s very possible but you know, once you start getting in to it and you start finding that you have 20, 30 or 40, 50 hours a week extra that you didn’t have before that’s syncing to your business, I think that things change very quickly.
[42:44] Rob: The cool part is you’re able to decide it for yourself, right? If you decide that having that free time or not even free time but just time to invest in your business and enjoy what you’re doing is more valuable to you than that second car or than, you know, the neighborhood that you live in. Then at that point, you’ll make the sacrifice and basically take the step down or you work a little harder for the next six months and keep growing the business until it hits the point where it really does support you at the level you’re at.
[43:10] Rob: If you have a question or comment, call it on to our voicemail number at 888-801-9690 or you can e-mail us at firstname.lastname@example.org. Our theme music is an excerpt from “We’re Outta Control” by MoOt, used under Creative Commons. You can subscribe to this podcast in iTunes by searching for Startups or via RSS at StartupsfortheRestofUs.com where you’ll also find a transcript to each episode. Thanks for listening. See you next time.
Ahh! The coder/ entrepreneur dichotomy question. This is an issue I have struggled with for about a year and I’ve finally arrived at an answer: take care of your income stream first. Usually, when this issue comes up, there is a shortage of income. The typical 18-22 year old does not have any real liabilities and responsibilities, so their geek itch takes priority. Take care of the income issues first, so as to put yourself in a position to work on your personal/ long-term projects. Study more “IT” than computer science at first, more Java and C# rather than Python. Set a small income target, hit it, maintain it, then you can return to the “geek itch.” Better advice: Find a business major to partner up with.
Oh,BTW, it was Rob’s book, “Start Small, Stay Small” and this podcast which helped make my decision more clear. Thanks Rob and Mike.