In this episode of Startups For The Rest Of Us, Mike interviews Justin Jackson about launching 100 projects in a year. Justin talks about the goals and idea behind his MegaMaker project. He talks about some of the products he has come up with and how he went about marketing those products.
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Mike [00:00] In this episode of ‘Startups For the Rest of Us’ I’m going to be talking to Justin Jackson about launching a hundred projects in a year. This is ‘Startups For the Rest of Us,’ episode 296.
Welcome to ‘Startups For the Rest of Us;’ the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.
Justin [00:25]: And I’m Justin.
Mike [00:27]: And we’re here to share our experiences to help you avoid making the same mistakes we’ve made. How you doing this week Justin?
Justin [00:32]: Well, like I was saying the kids just got out of school, which just feels hectic. It’s amazing how much we rely on the kids being occupied all day. And so now it’s like they’re out. Now what am I going to do?
Mike [00:43]: That’s actually a really good way to put it, and I’ve never quite phrased it verbally before, but it’s nice that the kids have school to preoccupy them for six or seven hours on most days of the week.
Justin [00:54]: Now there is a theory. I don’t know if this is real; but there’s a theory that schooling, public schooling, really came about because of the Industrial Revolution. Because you couldn’t have parents working all day and then have kids just running around. So I don’t know if this is true or not, but that’s what I’ve heard is that a lot of public education came out of just needing to occupy the kids while mom and dad are in the factory for 12 hours a day.
Mike [01:17]: I would actually guess that it’s probably a direct result, not necessarily of the Industrial Revolution, but of child labor laws that prohibit the kids from working.
Justin [01:25]: See now we’re getting down.
Mike [01:28]: So that’s probably it. But anyway, great to have you on the show. For anyone who is not familiar with Justin, Justin lives in Vernon, BC, which is in British Colombia. Which, to me, I call it Canadia on occasion just because I live so close to the border. I used to live in Buffalo, NY, and I mean literally you could hit a golf ball and hit Canada.
Justin [01:44]: Well there you go. Do you have some Tim Hortons there?
Mike [01:46]: Yes we did have Tim Hortons. So went there on occasion.
Justin [01:49]: So you’re basically like 30 percent Canadian.
Mike [01:52]: I guess. I don’t know if I’d admit to that publicly on a podcast with thousands of listeners. But I did want to have you on the show because – just talk a little bit briefly about your history. And you’ve been the former Product Manager at Sprintly, and in 2015 you kind of struck out on your own to make your own stuff. You’ve been kind of around the block, I’ll say. You’ve got three different podcasts that you’ve run, Product People, Build and Launch, and now you’ve got Mega Maker that you’re working on. And then you’ve also got a bunch of ebooks that you’ve written, there’s Amplification, The Hacker News Handbook, The Product Hunt Handbook, Marketing for Developers; I’m sure that there are several other ebooks, and other podcasts that I’m probably missing in that list. So why don’t you, I guess fill people a little bit more in on some of the highlights for anything that I might have missed.
Justin [2:34]: I got started in the software business in 2008, working for a email service provider in Edmonton. And I kind of started my ground level just answering customer emails and doing customer support, but kept poking my nose in everything. I was interested in design and development and marketing. And eventually I worked my way up to being Product Manager in that company. And it’s actually a good definition of a Product Manager. They’re people that kind of sit in the middle of all those other categories. And then after that I went to work for a startup called Sprintly in Portland. And did that for about 14 months or something like that. And then Sprintly got sold and I had this decision to make. I could go out and find another big consulting client, go out and get a job, or I could stop working and make my own stuff. And I’d been kind of building little side projects on the side up until last November, and decided okay, I’m going to do this. And so I went to my wife and I said, “Hey honey, what do you think about this idea of me not going and working anymore, but just working on a bunch of little things and maybe trying to make a 100 projects in a year, and then documenting it on this podcast called Mega Maker?” And she said, ‘No.” And I was –
Mike [3:58]: So executive preapproval was denied.
Justin [4:00]: Yeah. No approval there. And I was like, “Please.” I was just begging her. And so the deal we struck was I said if I can make a living, if I can keep paying our bills, keep food on the table, et cetera, let me do some exploration here. And the whole idea wasn’t to like maybe go out and start a big startup. The whole idea was I had been working ever since I was 22 up until 35, working full-time for other people. And I just want instead of kind of jumping feet first into starting a company or trying to build something really big, I just wanted to explore a bunch of different things. So my wife has called this kind of like my early mid-life crisis, and it’s actually probably a pretty good description. I just wanted to try out a bunch of stuff and in some ways, to learn new product skills, learn new marketing skills. And also, just to kind of maybe figure myself out a little bit. After working full-time for all those years, let’s try something else out. Let’s learn a little bit about myself.
Mike [5:02]: That’s awesome. So how did you go from the answer of “no” to “maybe let’s see how things go for a little while”? Because it seems like there’s a gap there that you might have glossed over some stuff. Did you trade one of your kidneys or something like that?
Justin [5:14]: Well, obviously it was a conversation and I just said, “Honey, I think I can make this work.” And one of the reasons I felt confident is I’d just released Marketing for Developers and it had done quite well. I think by that point—just doing some math off the top of my head—I mean it’d probably done about $30,000 in sales or something like that. And so I felt like I’ve got this one product that seems to be selling pretty well, and I think that will give us some leeway to go and try some other things out. And my goal, revenue-wise was if I can bring in $10,000 a month just from doing whatever, I think we’ll be okay. And each month it was like an experiment in how am I going to make money this month? And there was a few months where it was scary. Like in May. May was the month where I decided I wanted to work on some software products. And so my buddy Marty and I, we had built a bulk SMS application called Network Effects. And then we said for the show, we wanted to launch two products at once and kind of examine the response to each of them. It’s kind of like split-testing product launch. And so we launched this other software product called Remote Workers, which was an online community and what I call a reverse job board for remote workers. So we were working on both of these, but because I was heads-down working on those I hadn’t been trying to make any money. So I kind of lifted my head and was like, “Whoa. I haven’t made any money this month, what am I going to do?” And I think I just toughed that one out because I knew that I was going to do a big sale in June. I did a deal with the app Sumo. And so I was like, “I think we’ll be okay.” So we just kind of toughed it out through May and then made it to June. To answer your question, every day my wife says, “So when are you going to go get a job?” And I’m like, “I’m not getting a job. This is way too much fun. I’m going to keep going as long as I can.”
Mike [7:08]: I guess what I wanted to drill into a little bit was whenever somebody is starting to kind of go down that entrepreneurial path, as soon as the question or decisions start to come up around, how are you going to make money and are you going to get a quote-unquote “real job,” then most people see that as a stable form of income and the merits of that statement are debatable at best. But most people look at that and say, “We have to have a serious conversation about it.” That’s what I want to drill into this, like what was that conversation like? Because I think that a lot of people listening to this are on that path and you have to have your spouse on board in order to be an entrepreneur. There’s really just no other way to do it. Or you’re divorced. It seems like those are the two paths that people would end up on.
Justin [7:51]: I mean I think one thing that made it easier is that we had kids quite young. We were married when we were 21 and we had our daughter Sadie when we turned 22. And before that, before 22 I had all through college, all through high school, I had run my own little business. I had a video production and Web design business in high school and college. And when we had our daughter we made a decision that I would not do my own business and that I would work full-time until all the kids were in school. And so this year our youngest, we have four kids and our youngest was in grade one, full-time. And so because that transition had happened I said, “Hey, you remember that conversation we had? Well, now all the kids are in school and now I have this opportunity. Sprintly’s just been sold. And I could go do something else. Why don’t I try to do that thing we talked about 15 years ago, and let me try to do my own business again?” And so that was part of the conversation. And the other conversation is I said, “If this doesn’t work out I’ll just go and look for a job or look for another client.” But I said, “I think I could probably go out and find something else if I really needed to.”
Mike [9:03]: And I think that that’s something that can be comforting to the spouse is if you are in a position where you are in demand; they want you to come work for them. And if you ever needed to you could fall back on that and you could go out and get a job in relatively short order. And I think that that’s applicable to probably a lot of the people who are listening to this podcast. And especially if you’re in the tech world, just because there is so much demand for tech talent that if you are talented, if you are publicly visible to a lot of people, then it makes it easier for you to find full-time employment to fall back on if you really needed it.
Justin [9:35]: I mean I think everything’s a risk. I think employment kind of lulls you into sleep in some ways. And not recognizing how risky it is. Employment is just as risky as anything else; that you could get laid off at any time. And at least when you’re running a business you’d know your own financials. You’d kind of know what’s coming down the pipe. But employment, you could just show up one day and be like, “Sorry, you’re gone.” And client work is even kind of worse in some ways. In some ways you kind of what’s coming down the pipe. But other ways, just like, “Man, this could disappear at any moment.” So I think there’s pros and cons to all of them.
Mike [10:10]: Well, sorry for that little side track there, but I thought it was important to drill into that initial conversation because I think a lot of people are going to have to have that conversation early on when they’re starting to build a product. But I wanted to have you on the call today so that we could talk about your Mega Maker project. And I guess, could you summarize very quickly exactly what the Mega Maker project is so that the listeners have an idea?
Justin [10:31]: I had this idea that why don’t I try to build 100 things. And some of these would be small little products, some of these will just be creative things for me to explore on my own. And I’ll document it on this podcast called Mega Maker. So it’s kind of like a lab. It’s like my marketing and products lab. I’m working on all sorts of little things. So as an example, we’ve got this little SMS app, what would it be like to run this as a full-time business and to really feel that? That’s a big part of this whole experiment is to experience things without committing too much. I’m going to try this out, try it on for size, see how it feels. That’s interesting. And then kind of looking at everything. So, for example, one thing I’ve learned over the past just six months is that most of my revenue still comes from things like Marketing for Developers. People really go to me for product marketing advice, product marketing teaching. And the lion’s share of the money I’ve made so far has been there.
Mike [11:37]: So it’s kind of like this gives you the ability to launch a mini product and get a feel for how much traction it gets without committing three month, six months, nine months to a single thing, which may or may not pan out or you may have to do a lot more validation on. I mean if you keep these small enough you can throw something out there, see how it goes, and it’s not just that you can see how it goes but you can see how well it does in relation to the other things that you’re building, which gives you a much clearer picture of how well it could do.
Justin [12:07]: Yes. But the other thing that I’ve been really thinking about, and it’s almost more important to me right now, is we talk a lot about product market fit. I’ve been thinking a lot about market/founder fit and product/founder fit. For example, serving some markets, you don’t really know what it’s going to be like until you actually start doing it. There’s some things I’ve launched where I’m like, okay. As an example, one idea I had was about 70-80 percent of my audience is software developers. What if I tried to bring some other types of creative people into the audience? What if I reached out to artists and musician and artisans? Let’s just see what that’s like. What I discovered is I really liked those people but it’s not really a market I want to serve. So there’s not a fit there. There’s no founder/market fit there. Likewise, there’s product/founder fit. And I think this is a question a lot of people don’t ask themselves, especially before they launch like a SaaS a business; is do you really want to run that kind of product? It’s a lot different running SaaS than it is downloadable software, than it is info products. They’re all very different. They all feel very different. And this has been an opportunity for me to try some of that stuff on. Like what would it be like to run this product every single day? What would it be like to serve this market every single day? And actually the third one that I’ve been thinking about a lot lately, this idea of company/founder fit. And what I mean by that is kind of like company structure. Rob Walling just had this quote I read about how to get above seven figures in SaaS revenue. You really need to have a team. And I’ve been thinking a lot about that, too. Up until now I’ve been just working by myself or partnering up with people. What would it be like to have to hire a team, to pay salaries, to be a leader, to be a confidant for employees, to bear the weight of providing for all these different families?
Mike [14:06]: Because you have to be—like if you hire somebody full-time, you’re essentially responsible not just for their job and their benefits and stuff like that, but in some cases if they’re married and they have kids, you’re responsible for their welfare as well. So it makes it, in my mind it’s much more challenging to run those types of scenarios. And I’ve done it before and I’ve had to let people go where I knew that they had a wife and kids and they didn’t have another job lined up. And it sucks. It’s very difficult to be in that position. And I think it’s something that you have to slowly work your way into. It’s not something that you can just jump into and be able to just day one know exactly what you’re doing and feel confident about it. I mean, working your way up towards it is probably a better solution. I know that there’s obviously the VC funded startups and stuff don’t have that luxury, they just kind of jump in head first. But as a bootstrap company I would hate to be in that position where you have to hire ten people and then half of them don’t work out, or a quarter of them don’t work out.
Justin [15:00]: And these are the things. I think a lot of product people are so desperate to build something that gets product/market fit, and that’s hard. Finding something that—a product that fits with a good market, a market that’s able to pay you, a market that had demand for that thing that you’ve built. I mean, that alone is really hard. But there’s these other vectors, which is like, does this even fit me as a person? A lot of us are kind of running away from something. We’re like we don’t want to work for the man anymore. We don’t want to work for clients anymore. And so we run towards product. But often we run towards product and we end up serving a customer base that we don’t really like, or building a product that we’re not really passionate about, or creating a company that we now have to run. We then become that boss that we really didn’t like.
Mike [15:49]: I have wrote about that a little bit in my book because I met somebody who had a seven figure business and he hated it. He didn’t want any part of it but he was so involved in it that there was no way for him to really get out of it. It was a services business, but at the same time he was so involved on the relationship side of things that it would have been almost impossible for him to sell it. So he kind of had no option. It was kind of like being locked into a job that you just didn’t like.
Justin [16:14]: Exactly. And so this is all the exploration I wanted to do with Mega Maker. So at the beginning, season one, it feels very much like watching a guy have a mid-life crisis. Instead of going out and buying a Lamborghini, I’m making things. And the story that everyone talks about from that season is, I said what would it be like to go to a restaurant and design a menu item for that restaurant and then actually make it and then market it? Go through the whole product development process, not for software, but with something like food. Because I had never done something like that before. And so I convinced this restaurant to let me do a Friday lunch special. It’s a barbeque restaurant. They didn’t have a burrito on the menu and I love burritos. So I said let’s try to make a Mega Maker burrito. There was kind of two goals with it: one was to just experience what is involved in making a food item at a restaurant, and two, how can I apply some of the things I’ve learned doing marketing and sales for software products to marketing this lunch special? And that story, I can’t even remember the other episodes, but that story is still the one that people come up to me at a conference or whatever and say that whole thing was insane. That was just me exploring stuff. Just figuring stuff out. You know when you’re running a tech event, like a conference or something, you need to get people in the seats. That’s the most important thing. And so I was like I’m going to make a list of everyone who is going to come on Friday and order one of these burritos. So I had a spreadsheet where I was calling people, emailing people saying, “are you coming, how many burritos are you going to order?” So I had this running total because I wanted to make sure that we were above 60.
Mike [18:00]: So you were essentially brute forcing your sales. Like a lot of bootstrap software entrepreneurs, they’ll brute force their way to like 20-30-50 customers in the early days. And you almost have to. That’s because you don’t know what traffic channels are going to work for you. So you contact everybody you possibly know in order to get the [crosstalk]
Justin [18:16]: Totally. And the whole time I was also telling the story as it was happening. I was doing clips on Snapchat. I was doing little YouTube videos. Just sharing the whole experience. And then the Friday came and it was like insane. We ended up selling 80 during the lunch hour. The restaurant was just packed out the door, you can’t get a seat. I was in the back actually making burritos. And so I got to experience everything. And it made me realize, one, I never want to do that again. But two, in terms of like product marketing there’s this great clip from that episode where this guy calls me over. I’m recording it and he says, “Do you realize why people came here today?” And I’m like, “I don’t know. They like burritos.” He’s like, “No, man. People are here because of the story. They wanted to come and be a part of the story.” And that kind of marketing is completely applicable to the product world. I think a lot of times people get interested or engaged because of the story and they’re kind of following along and they’re like that’s how they become a customer; is they were just following along with the story. So there were some parallels that were interesting.
Mike [19:28]: Now you’ve mentioned marketing. Obviously that was a one-time event. You got a bunch of people there and, yes, they’re involved in the story. But how do you go about marketing for some of these other projects that you’re launching, because, obviously, if you’re doing 100 of them in a year, that averages out to roughly two per week. So one every two and a half to three days, it doesn’t really give you a heck of a lot of time to do marketing for these. Do you do any follow-on marketing? Do you do advance marketing for some of these different projects that you’re launching? I know that not everyone is aimed at creating revenue or generating revenue for you, but at the same time there’s got to be some base of people that you want to launch it out to, or that you want to get it in front of, because there’s really not much point of creating something if nobody’s going to every look at it or use it.
Justin [20:11]: I was having a conversation with Lars Lofgren. We were just talking about marketing. He and I have known each other for a long time. And so we were just talking about marketing. And he said one of the best things a marketer can do is realize that they’re not going to be good at everything. You’ve really got to play to your strengths. And just hearing him say that, someone I really respect, it almost gave me permission to say, “that’s great, I can really focus on these things that I’m really good at.” And still sharpen the ax as much as I can with things that I’m not super great at. But really double down on the things I’m good at.
Mike [20:45]: And I think that’s important to know what your own limitations are. Not just on the product side of things, because obviously if you don’t know how to use a particular piece of technology you can probably figure it out. But sometimes it’s worth just paying somebody else to do it. But that also translates over onto the marketing side because sometimes it’s better to just pay someone else to do something that you really just don’t like. Which could be successful but you don’t want to do it because you’re just not good at it and you’re not as comfortable with it.
Justin [21:09]: And that’s why in the book, Marketing for Developers, I give so many different channels and so many different techniques because I just want people to be able to choose. When I was doing the customer research for that, a lot of folks would say, “Well, Justin, I’m just not good at writing blog posts.” And so for people to be able to choose and kind of explore different things and then find the one that they’re really good at. That’s where you should invest all your time and money; is in the thing that you’re really good at. And then either hire out those other elements or just don’t focus on them.
Mike [21:41]: So I guess going back to the heart of the question though, how much marketing are you actually doing for each of these individual projects?
Justin [21:47]: It really depends. I mean some of these are just things I need to get out of my system. So Network Effects, we launched on BetaList. We wanted to get a ten person paid beta in both. So ten person paid beta in Network Effects, and ten person paid beta in remote workers. We launched on BetaList for that, got enough people in and now we’re just like basically getting their feedback. What are you using it for? What do you really like about it? Are you willing to keep paying? It’s $9 for Network Effects and then the plans are similar to MailChimp or whatever.
Mike [22:20]: Is that like an onboarding fee for that?
Justin [22:21]: Yeah, it’s basically because with SMS you have to pay for the number. Unless you get a custom number it’s not very useful. And so we wanted to get people in, getting a custom number. And so mostly it’s just to help pay for some of our costs. But it also is just a great way to figure out who’s really serious about this. And, like I said, over ten people paid for that beta. And then the people that stuck around, I think there’s like, of that group, there’s about three that have stuck around. We’re like really working with them to figure out what do you guys need? What are you using this for? Some of them are using it like every day or every week. And we’re like we’ve got to focus on these folks. Who are you, what are you doing this, how are you using this?
Mike [23:03]: So like customer development –
Justin [23:03]: Customer development.
Mike [23:04]: One-on-one [crosstalk]
Justin [23:05]: Exactly. Exactly. And when we’re ready to really kind of turn things on, in my mind, it’s like you do a BetaList launch and then you get enough people to come and try it out. Really figure out who you’re focusing on, and then launch to the waiting list. Again, kind of figure out, why are people signing up? That’s the big question. Why are people signing up? And once you can figure that out, then after that I do a Product Hunt launch, and then it’s looking into other strategies like ads, SCO, et cetera.
Mike [23:35]: So you keep saying ‘we’ a lot. And maybe that just applies to this particular scenario. But are you working on a lot of these by yourself, or do you have partners for some of them, teammates, people that are working with you, either part-time or full-time on a regular basis, or is it just more one-off projects?
Justin [23:49]: It’s me for almost all of them except the bigger projects I’ve partnered up. And so my buddy Marty Dill, who’s an awesome developer here in Vernon. So when the idea for Mega Maker came around I said, “Hey Marty, you want to team up and build a few things?” I’ll find it for you, but I have this agreement that I sign with people I want to team up with. And basically it says we’re going to work on this project for six months, and if we decide to turn it into a business we both get like 50 percent ownership, and then we move forward from there. If this doesn’t turn into a business within six months, then we just let everything fold and we move on. I mean, it’s been audited by a lawyer and everything else. It’s just a way of saying, okay, this is the purpose of right now, we’re just testing out an idea. We’re building the initial thing together, and then when it comes to turning this into a company, we’ll both get equal shares.
Mike [24:43]: It kind of forces the conversation up front, I guess, too.
Justin [24:46]: Yeah. I started signing these because I was doing even small little partnerships, like I built a WordPress plugin with Carl Alexander, and we’re good friends but I had seen enough partnerships go real bad that I thought, “let’s start signing something upfront from day one.” And it gives it such a great framework because it’s like, if this doesn’t work out in six months, we just move on. If this does work out and we want to turn this into a business, then we create the corporation, we both get 50 percent of the shares, and then we treat it seriously. We treat it like a company. And there’s a few other kind of conditions in there as well. But I found it a really great way to get started on projects knowing that we’re both kind of protected and we can both kind of trust each other for that period. And then it kind of gives us a way of moving forward if we decide to take it from there.
Mike [25:35]: So one of the other things that comes to mind is while you’re going through and launching a lot of these different projects, one thing that—I’ve experienced this myself, but I’ve seen it happen to other people, is that when you start on something, that’s kind of the high point. When you’re embarking on a new endeavor and everything’s new and everything’s exciting, but then three months, six months down the road you start to get tired, you lose focus, you lose your motivation, I’ll say, to continue. I would imagine that for a lot of these projects that doesn’t happen on an individual project basis because the timeline for them is so short. But throughout the process of this, you’re doing a 100 of them in a year. Has that come into play for the project as a whole, or you really have low points for individual projects?
Justin [26:18]: Totally. Here’s the stage I’m at right now. So if we look at the timeline, it starts off and I’m just exploring everything. Every idea that pops into my head I put it on this list. You can see the list at Megamaker.co/list. It’s just a Google Doc. And anything that pops into my head I’m like, “I’m going to do that.” And I put it on the list. And it’s exciting that I’m exploring all of these things, I’m trying all of these things, I’m starting; and starting’s way easier than continuing, right?
Mike [26:44]: Or finishing.
Justin [26:44]: Or finishing. And so that was the beginning. And some of these are bigger things that I really wanted to explore. Like for example, going after a new market was interesting to me. That’s something I really wanted to explore. So even especially like physical makers. For a long time the term maker just applied to people that made handmade furniture and art and sculpture. Lately, digital makers, people that make apps and software have taken that term as well. But for a long time it was just physical makers. And I thought I wonder if they could be my audience, too? And what I’ve realized is, do I really want to go out and interview people that are making their own coffee tables or running their own Etsy shops? At the beginning I thought that would be exciting to me. But now I’m realizing that, no, that’s not going to be exciting to me. And so the point I’m at right now is I’m like, okay, at the beginning Mega Maker was about everything, and my life was about just exploring everything. Now, we’re six months in, it’s time to start focusing. It’s time to start closing down some projects, stopping some things and simplifying. And so I’m still planning on making 100 things through this year, but the show, Mega Maker, is going to be a lot more about products and marketing, software, digital products, similar things to what I’ve done before. Because I’m realizing I went out and I explored a bunch of stuff, but I’m coming now, back to one, the things that I feel like I’m good at, two, the things that are making money. And I guess those are the big things. Am I good at it and is it making money? Do I really like the people I’m serving? Truthfully, I was trying to bring these other customers into my world, but truthfully most of the people that listen to Mega Maker are my same audience. Mostly software developers, designers, product people, entrepreneurs. And so I’m going to start doubling down on those, stopping some of these projects that didn’t feel like a good fit.
Mike [28:40]: So did you find it difficult to complete some of those projects, or was it more of an after the fact that you decided this isn’t something that I really should go after because of the results of it? Was it more because of how you felt early on in going after it? Because I think with the list that you’ve got going, you can look through that and kind of pick and choose what it is that you work on. So chances are good you’ll probably be excited about it at the time. But it sounds to me, like throughout the process of this, you’re also kind of dialing things back and you’re trying to figure out what it is that you want to work on moving forward as well.
Justin [29:14]: Yeah, I mean, it was a bunch of things. One thing I realized is at the beginning I was just like a kid in a candy shop. And I had freedom for the first time in my life. I wasn’t working full-time. I’d always had side projects but now I could give all my time to these things. And I just started way too many things at once. So I’ve gone back to just like working on one thing at a time. Right now I’m working on a new book called Jolt. And it’s 20 surprising marketing tactics, things that most people don’t talk about. It’s going to be really good. It’s going to be exactly for that group of people that I’ve already connected with. So right now I’m trying to not focus on other things and just work on Jolt. Like every day, try to get some writing in. Every day try to finish another chapter. And I’m hoping to launch it July 15. And when that’s done I’ll focus on the next thing. So one thing at a time. And there were some things I just didn’t want to finish. And I think that’s okay. Especially if you start a software project and you’re like, “Man, this is not a good fit for me.” Carl and I just had this conversation because we’ve been maintaining this plug-in and it’s still selling pretty good, but I noticed like he was always the one to answer customer support emails first and I just was never getting to them. And part of it was I just wasn’t excited about it anymore. It just wasn’t a good fit for me. And I just said, “You know what, Carl, you just take this 100 percent. I’m okay with removing this from my plate.”
Mike [30:42]: There’s a certain amount of—I guess it goes into the feelings of procrastination for something, around the fact that you just simply don’t want to do it and you’re not interested in it. Because you haven’t prioritized it. So it doesn’t mean as much to you or you are dreading doing it. I think you said it much earlier in the episode, something about how a lot of times entrepreneurs are running away from something and that brought you to the idea that make sure that what you’re running towards is also something that you want. It’s not something else that you’re going to what to run away from.
Justin [31:11]: Exactly. And because of that we have to be willing to quit some projects. We have to be willing to either let them die or give them away, or sell them, or something. And I think that’s the piece that most of us struggle with.
Mike [31:27]: Yeah. Walking away from that stuff is hard though.
Justin [31:30]: Walking away from it. For example, this next phase of Mega Maker, I have an online community for Mega Maker and I know that this next phase is going to tick some people off. Some people are going to be like, “What? This isn’t about the thing you said it was going to be about in the beginning.” And I’m like, “Well, I have to change this. I have to keep narrowing this down to something that’s going to work.” And so having to upset people is really hard. Like say, I’m sorry, but I’m going to be changing the product, or I could be changing the focus or we’re going to move this way.
Mike [32:02]: Well, I think that’s also one of the traps that people fall into when they are launching a product. Because if you never actually launch it then you never have to worry about disappointing people.
Justin [32:11]: Exactly. The other thing I’ve learned is you get really good at launching and getting over those fears the more you launch. And so part of my message from the beginning, both with Build and Launch, and now this is kind of like version 2.0 of what I was doing with Build and Launch, the message from the beginning is, start small and start now. If you’ve never launched anything, don’t go out and try to launch the next HubSpot. Launch something super, super tiny, and then get that done. Get it done in a week and then launch a two week project, and then launch a three week project. And the more you do that the better you get at getting over that sense of dread, that sense of fear. And you just learn so much each time. And so the dread that I used to have from launching things, I still get nervous, like before this Jolt launches I’m going to be feeling the exact same thing everyone else is; like is anyone going to buy this, did I do the right things, am I targeting this the right way? But I don’t feel the same kind of anxiety as I used to. It’s a lot easier the more that you do it.
Mike [33:13]: That’s very much, I guess, it aligns very well with what Rob Walling came up with, which was the stair step approach. Which you can kind of apply to this, where his was more about the types of products that you’re building. But this is also about becoming more comfortable over time with doing the same thing, launching things over and over.
Justin [33:30]: I think the one thing that I really want to impress on people is that there’s no one path to success. And I think a lot of folks are trying to follow other people’s paths to success. And one of the things that I wanted to explore was this idea of you know what, I’m going to go and just try a bunch of different things and figure out what’s the right fit for me? And I think anybody can do that. You don’t have to make 100 things. But be willing to kind of try things out, look at your strengths and evaluate whether it’s really a good fit for where you want to be. Especially make sure that you’re not running into the same thing that you’re running away from.
Mike [34:14]: And I think that that’s probably a really fantastic note to leave off on. So Justin, tell the listeners where they can find you and if they want to follow on the Mega Maker story or if they just want to sign up for your email list or follow you on Twitter, et cetera, where can they find you?
Justin [34:27]: I’m right at Justinjackson.ca. On Twitter and Snapchat, I’m the letter M, the letter I, Justin. That’s M-I Justin. And Mega Maker is megamaker.co.
Mike [34:41]: And we’ll link all of those up in the show notes for everybody. Well, Justin, I just wanted to say thank you very much for coming on. I hope that this was educational for the listeners. And I really do appreciate you driving home that point at the end there about finding what is right for you versus what everybody else is doing. I think that’s a very, very powerful piece.
Justin [34:56]: Beauty, Mike. Yeah, it’s been a pleasure, man.
Mike [34:58]: I think that about wraps us up for the day. If you have a question for us you can call it into our voicemail number at 1-888-801-9690. Or you can email it to us at firstname.lastname@example.org. Our theme music is an excerpt from “We’re Outta Control,” by MoOt, used under Creative Commons. Subscribe to us in iTunes by searching for ‘startups,’ and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening, and we’ll see you next time.
In this episode of Startups For The Rest Of Us, Rob and Mike talk about how to choose and test a paid marketing channel. They give you some criteria and discuss the mindset you need for choosing the channel that’s best for your business.
Items mentioned in this episode:
Rob [0:00]: In this episode of “Startups For the Rest of Us” Mike and I discuss how to choose and test a paid marketing channel. This is “Startups For the Rest of Us” episode 288… Welcome to “Startups For the Rest of Us,” the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products. Whether you have built your first product, or you’re just thinking about it, I’m Rob.
Mike [0:29]: And I’m Mike.
Rob [0:30]: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, sir?
Mike [0:33]: You changed up the intro a little bit.
Rob [0:34]: I know, I added in some more stuff. Because we always talk about launching in the intro, but really, now often times we’ll talk about the building, and the growing, and the scaling and all that. Maybe I’ll update that actually in the doc. That was, kind of, off the top of my head.
Mike [0:48]: Well, of course, you know, there was the little flub there, which will thankfully be edited out.
Rob [0:53]: Indeed. So what’s going on?
Mike [0:54]: Last week, I had talked a little bit about how I had started onboarding people into Bluetick, and I recently just uploaded a spreadsheet into Bluetick so that I can have it automatically send out the emails to people to get them scheduled, so I don’t have to individually email each person. And of course the nice thing is that it will gradually email them out over time instead of all at once. So that’ll be helpful in terms of putting a little bit of spacing in between some of those. Obviously, they can choose anytime on my calendar, but it will be nice to not just use it in kind of production environment, but to also let people who are coming on to it see the app in action and what it will look like on their side of things.
Rob [1:31]: Yeah. That’s pretty cool. So, you’re at the point where you’re able to dogfood it, and use it for your own use.
Mike [1:36]: Yes.
Rob [1:37]: Yeah. You know, I remember when we first hit that moment where we could do it with Drip, and we started really using it for a lot of our email marketing. At that point it was like something flips, and you’ll suddenly — you already look at your product a certain way, because you have been building it. But something, kind of, shifts once you start using it, because you’re going to notice everything that’s clunky about it, everything that you need to fix. Even more so than you did before you started using it. So I think it’s really a plus to be able to use your own product, and to catch bugs before the people – or even to catch usability issues before the rest of your customers do.
Mike [2:11]: Yeah. I mean, I started trying to do this a couple of weeks ago, and as you said, it was clunky, and there were things where I ran into where I could do those functions and perform those actions, but it was a little painful. There was a few too many clicks, and there’s still a few places where we could optimize what we’re doing in the user workflow, and how they get to different places in the app. But we basically redesigned the entire navigation, and merged a couple of pages so that people don’t have to click around as many places. It’s a lot better today than it was even just a week or two ago. We just pushed out a new version of it this morning. It’s nice to be able to do that now, and as I said, it was working a few weeks ago, but it was a little painful. I think we are starting to turn that corner where the app – it’s not just inherently useful but – it’s nice to be able to dogfood it in a way that is not as painful.
Rob [2:59]: Yeah, for sure. I think there’s that quote that’s kind of over-quoted at this point about how, “If you’re not embarrassed by the first version of your app then you waited too long to launch.” I think that there’s two sides to that embarrassment. One, it can either be that you just don’t quite have the usability right yet. I think that’s one reason to be embarrassed. I think another one is, maybe it is really useable, but you just don’t have enough features to do what you want to do, and you feel like it’s sorely lacking. I think those two axes can either be off on one or both of them. But identifying which one, and kind of moving up market, or even just improving upon those axes, I think, is a big thing in the early days.
Mike [3:33]: What about you, what’s going on this week?
Rob [3:34]: Well, we had a pretty good response to a recent blog post on the Drip blog. It’s probably the post that’s gotten the most uptake in that last several months, and it was called, “Email Marketing Tips: 33 Industry Experts Share their best Strategies and Tactics.” It was an expert roundup, basically where really Zach on my team headed it up and did most of the legwork, although I contacted some of the people who I had contact with. But we got some really solid tactics from people like Devesh Khanal from Grow and Convert. We got Josh Pigford at Baremetrics, Joanna Wiebe at Copy Hackers, Dan [Norestelli?], Alex Turnbull, Brendan Dunne, Patrick Mackenzie, Noah Kagan – just this big expert roundup, and there’s some really interesting tips in here that people are using to improve open rates, and click through rates, and just overall just improve stuff. So it went to the top of GrowthHackers for a while. I think it went up to one or two on inbound.org, and at this point it’s got 300 social shares. If you haven’t checked it out, it’s a really good post, and I’m not just saying that because we put it out. There’s a lot of cool tips and tricks in here. We’ll obviously include that link in the show notes, but if you go to the Drip blog, or if you just search “33 Industry Experts Best Strategies and Tactics” you’ll find that.
Mike [4:44]: Awesome. So what are we talking about this week?
Rob [4:46]: Well, we periodically get questions from listeners about getting started with paid acquisition, and today we are going to be talking about how to choose and test a paid marketing channel. Most recently we received this question from Ryan Frank, and he said, “I’m sure this had been requested multiple times but I’d love to get some insights on the show regarding setting up and running marketing campaigns. What platforms do you choose to advertise on, and why? How much is a reasonably initial investment? How do you brand the campaign? How do you target? How many do you run at a time, etcetera?” He goes on to ask some more questions that we’re going to cover today. The interesting thing is we don’t tend to cover this topic specifically because—well, there’s a few reasons. One, this stuff changes so frequently. Even the ad networks that are going to work for bootstrappers will completely roll over in, let’s say, 12 to 24 months, and anything we say here about specific ad networks will be different then. In fact, with Facebook – for a while there – it was like every 90 days things were changing in the ad interface itself, and different ad types started performing better than other ones. You just had to be right at the cusp of it, and either in touch with someone who really knows what they’re doing and are constantly testing, or you have to listen to some really detailed, recent information. That’s why we don’t often dive into specifics. However, today we are going to talk more about like the mindset, and the approach, of testing and choosing a paid marketing channel. Another reason we haven’t talked about this a lot is it can get often to the weeds, and it can get a little too detailed and boring. We’re going to try to avoid that today. Then, finally there’s really this, kind of, factor of competition. And this has become more of an issue of late, with competitors kind of, I’ll say, borrowing heavily from some approaches, which has been a bummer, and it comes with a little but higher stakes now that I have ten people working for me, and we’re paying mortgages and doing that kind of stuff. So, kind of, giving away exact detailed information of exactly the wins that we’re having, and why, isn’t necessarily as feasible as it used to be when I was selling eBooks and beach towels. With all that said though, there is a really specific path that I take when I’m thinking about testing and choosing paid marketing channels, and picking out new networks, and how to test. And we really are going to dig in. There’s a lot of meat in today’s episode.
Mike [6:53]: Awesome. So, let’s dive right in.
Rob [6:54]: Yeah, so we’re going to, kind of, break it up into two sections. The first is the criteria for choosing, and the second one is really how to run a test on a paid marketing channel. The interesting thing is, it’s only getting more complex these days choosing a platform to test on. There are more choices, and within those choices there are more choices. There weren’t YouTube ads at all, and then there were YouTube ads. And now there’s YouTube Instream, and there’s YouTub- in-display, and there’s another type that I forget the name of it. And with AdWords, it used to just be the little text ads, and then there’s the display network, and then there’s the text display network, and the visual display network, and Gmail ads, and on and on and on. It’s just getting more and more ubiquitous. The nice part is that does give you more choices and more opportunities, but the negative is it makes it hard to choose. I think the kind of first thing I’ll throw out is that, these ad platforms, there the cheapest when they first launch. That’s also when they’re hardest to use, because the management tools are not very good, and there’s not a lot of insider info on how to, kind, of use them for optimum results. So you really are pioneering, and you’re going to just do trial and error. But as these ad platforms get more advanced, and they get more matur – like AdWords is an example – they become so expensive that there’s just no chance that you’re going to make them work. Whereas a platform like Facebook is probably in the middle right now, it used to be cheap. It’s not totally out of the range of being affordable, but it’s in the middle. Then somethings that’s really new – maybe Pinterest for example, or Instagram’s pretty new in terms of ad networks – those will be the cheapest clicks, but there are also maybe the hardest to use, hardest to target, and you don’t have a ton of information on how to do that.
Mike [8:29]: I talked to somebody – probably a year and a half, two years ago – about some strategies that they were using on Instagram for paid acquisition, and they showed me a graph and I looked at it. It was insane. They basically doubled their revenue almost overnight by doing Instagram marketing and just paid acquisition through that channel, and there was no mechanism for doing it. They basically built an entire system themselves. They had all these spreadsheets and data, and they were calculating all these different metrics on their own. And for themselves, they pioneered it. They didn’t really talk about it publically, but I looked at what they were doing and it was absolutely incredibly and insane. The results that they were getting, it was really, really hard to argue with the results, just because there was a point and time where they weren’t doing any of this type of advertising, and then they started, and immediately you could see the graph. It just doubled the revenue almost overnight. You are right, I think, about getting in when those platforms are new. I think the downside of that is that when these new platforms come out you can spend a lot of time and effort trying to get something working and running, and it may just not work. Because that’s one of the risks that you’re taking with those, because you are pioneering something completely new, there’s no benchmarks to go off of, there’s no guidelines, there’s really not very many people you can talk to, or ask about, in terms of being able to work on those channels. But if you can find something and make it work, it can be really, really cost effective.
Rob [9:51]: Yeah, that’s pretty cool. I remember that guy’s story, assuming it’s the same person that I’m thinking of. He basically went in before there were even official ads. There was no ad platform, and he was paying the more popular Instagram users X dollars to post the thing. It was in essence, ads, but he was so early that he got in when it was really cheap. I heard Noah Kagan talk about this – before advertising in email marketing newsletters was getting really big – he would just approach big email marketing newsletters and make them an offer. That’s a kind of way to get around the ad networks, because the ad networks are marketplaces, right? And eventually they kind of even out, especially once your competition is there, then your cost per click is just going to go up and up because there is competition for those clicks, and your cost required is going to be similar across competitors. So it is going to even out eventually at some type of norm, but if you get in way early then that competition doesn’t exist yet, and you can get the cheapest clicks early. There’s obviously a lot more danger there. That’s really the balance.
Mike [10:46]: Right. I guess one of the takeaways from that, that I just thought of off the top of my head, was that if you are getting in that early, and there isn’t a marketplace for ads on a particular channel then you could probably negotiate for some sort of exclusivity when you’re working with those people. And if you can get it, then you can, sort of, lock your competitors out of that as a channel. That’s something that also worked extremely well in that particular case. That’s something you might be able to take away from that.
Rob [11:14]: I think another question you want to ask yourself is, are you going to do this yourself? Like, are you going to test the channel yourself, or are you going to hire someone? This depends a lot on whether you want to learn it or not, whether you have time to learn it or not, and whether you have budget to hire someone. The nice part is, three or four years ago, hiring someone to do it was very, very expensive. These days there are knowledgeable folks who are managing AdWords, or Facebook ads, or Twitter ads, or I’m sure Pinterest ads – I haven’t used anybody for that – but that are not these big agencies that charge enormous sums of money – or a percentage of ads spanned – but that may charge per lead, or that just charge a lower monthly fee. There was someone that was going to manage Facebook ads and I didn’t wind up using them, but it was a few hundred dollars a month rather than several thousand like a lot of the old agencies. I think, keep in mind that running a test is not terribly hard, but it is time consuming to actually get this to work and then scale it up. So be realistic about how much time you actually are going to have to run these ads. To take a step back, I’m realizing we didn’t really cover when you should try to do this. Like, when should you think about running paid ads. I think that the two points are: really early on when you are maybe testing a value proposition on landing page, and you want to send someone, and you want to test that value proposition and get email signups. I think it’s very valuable then. I think in the interim – kind of between that launch and product market fit – when you are just trying to get more people to use it so you can do customer development, I think that’s a good time to run it. You don’t want to scale that one up. You just want to get enough people in there to get enough feedback to improve your product. That’s the second time. The third point, I think, is once you’ve built a product and you have a value proposition and things are really starting to scale up, that’s when you want to hit this really hard, and I would recommend actually getting the budget together and hiring someone. I think in the first two instances you only need such a trickle of traffic when you’re testing stuff, that I would guess unless you do have money at your disposal – like you’ve raised funding – that it’s not going to be worth going out and hiring someone for the small amount of clicks that you’re actually going to be buying.
Mike [13:10]: This is one of those situations where, as a bootstrapper, you’re kind of caught between a rock and a hard place, because in order to spend the time and effort to get the results that you want, it’s going to be time consuming, and you either have time or you have money; you typically you don’t have both when you’re doing this. It makes it painful to go in and start running some of these experiments. You have to pick and choose your battles a little bit in terms of where you’re going to try and optimize things inside of your ad campaigns, because it’s going to either cost time or money, and you typically don’t have both available to you. So often times you are trying to implement things, or run some tests, and they’re going to be less than optimal. I think that that’s an important thing to keep in mind, is that you’re not necessarily looking to optimize each and every single test. You’re looking to learn from the early ones so that you can scale things up and make them better in the long run. You don’t want to spend a lot of time and effort trying to figure out, “Okay. What is the single best ad that I can come up with?” Take three to five of them, throw them against the wall, see what happens and then measure the results and iterate from there. It’s not about getting things right on the first time. It’s about iterating over time and then enhancing your results.
Rob [14:20]: Another criteria to think about when you’re choosing an ad platform is, is it B to B, or B to C, or is it a mix? I’ve found that there’s a lot more B to C inventory than there is B to B. The B to C inventory tends to be really low quality, and so it can work, the clicks are really cheap, but if you’re not targeting something like weight loss, or online dating, or these really broad consumer interests, it can be hard to make money with those more B to C networks. And those are things like Chitika and Clicksor, and I think Infolinks is like that. I tested 10 to 15 ad networks back in the day when I was really trying to scale HitTail, and I found that most of the ones that I hadn’t heard of were just kind of junk traffic. They were super cheap clicks – five cent, ten cent clicks – but average time on site was two seconds or three seconds or something. So it was pretty noticeable that either the clicks genuinely were just bots or not real people, or they were accidental things, or they really were just looking for more stumble-upon content to hang around and be enticed with info market stuff, rather than actually trying to sell a product. You definitely want to think more. We’ill talk through a few networks here. My next bullet spells out several networks, and there still are a lot of B to B and mix networks that do have quality traffic, but you’ll want to think about this in terms of the product you are selling, and the type of scale that you’re trying to get to.
[15:43] The next criteria to think about is, does the ad network have enough volume to scale traffic? Early on, like I said, when I was running ads for HitTail, I actually ran ads on Bing and Yahoo and other search engines, and those were examples of things that converted for me, but I couldn’t get enough clicks that it was even worth managing the ad platforms. So, while you can look at all these kind of peripheral ad platforms, it often will be a waste of time even if you can get it to work. The majors are things that you’ve heard about. There’s Facebook, there’s Twitter, there’s Google AdWords. Then there’s the AdWords display network, which is basically what AdSense runs on. Then there’s YouTube with multiple different types. There’s a LinkedIn ads. Pinterest now has an app and network. AdWords has a Gmail ad section that can advertise on Reddit, and I got those to work for a short time. BuySellAds.com is a nice display network, and then we start moving in to the consumer stuff. I think there may be one or two more that are at scale and you can do B to B, but the ones that I have already listed are pretty much what I know about. Then there’s like Outbrand, and Chitika, and Clicksor, and Infolinks. There’s a good article summarizing these. It’s on monitizepros.com and we’ll include that in the show notes. The idea here is, if you can find an outlier ad network and you can make it work, the clicks are going to be super cheap and it’s going to be very, very lucrative for you. The trick is, I’ve never been able to do that, and I spent quite a bit of time and money trying to do that at one point, and I found that the ad networks today that people are talking about, there’s a reason they are talking about them. It’s because that’s where the real people who actually spend money are. So when you think of the Facebook, Twitter, the Google, the LinkedIn, and the BuySellAds, and maybe Pinterest and Instagram if that’s kind of your thing, those are going to be the mains that you’re going to have to evaluate and think – based on what I am selling – is someone going to buy email marketing software on Pinterest or Instagram? The odds are probably not. That’s not going to be at the top of your list if you are going to advertise. You’re going to want to stick more to an ad network where you feel like you at least have a chance of someone being interested in your product.
Mike [17:47]: You know, the fact that you had an ad budget for Yahoo means you probably could have spent enough money to just buy Yahoo outright of what they were worth.
Rob [17:55]: I know. Interesting. For real. This is back in the day. They were still worth something a few years ago.
Mike [17:59]: Are they negative now?
Rob [18:00]: Oh, it’s so sad to see a giant like that just go down the tank.
Mike [18:08]: Oh, well. So, what’s next?
Rob [18:09]: So, the next thing to think about is to take into account what the cost per click is going to be, verses your budget, and the lifetime value of your users. You’re just going to have to ask around, or do Google searches or whatever, but these days we know that Google AdWords is very expensive because it’s such a mature platform and Google’s really smart. Whereas Pinterest and Instagram – since there are early – the ad clicks are going to be a lot cheaper. You can get some cheap clicks on BuySellAds, and I have heard there’s cheap clicks on YouTube these days. Whereas Facebook, like I said, is kind of in the middle. Twitter, I think, is in the middle as well. They are both starting to mature, and they are getting a little more expensive. So this is one where I think that the most value can be had probably in the early to the middle section there, and I think a lot of the older – or the larger – enterprises are doing the more advanced, or the more mature, platforms because they are easy and more qualified clicks, but they are definitely a lot more expensive.
Mike [19:00]: I think one of the things we might want to touch on here is talking about the cost per click, or the cost per lead, that you are getting verses your budget, and that kind of ties back into what the lifetime value for your customer is as well. So obviously, if you have a one-time sale for a product, then your lifetime value is going to be whatever the sale price of that product is. So, if it’s 50 dollars to buy a WordPress plugin, it’s going to be 50 dollars. But if you have a SAS product, or anything where there’s recurring revenue – and it’s let’s say 100 dollars a month, and people are going to stick around for 10 months – you’ve got a lifetime value of about a thousand dollars. I think that the general rule of thumb that I’ve heard from most people is that you don’t typically want to spend, on a long term basis, more than about a third of what you’re lifetime value is to acquire a given customer. Now, that’s not to say that you can’t spend upwards of break even for the first set of them, but you’re going to drive your business into the ground very, very quickly if you do that for too long. The primary reason for that is because you’re going to be spending a lot of your ad budget now, and let’s say that you spend a thousand dollars to get a customer now. But the problem is that you’re not going to make up that revenue for any given customer until they are there for the entire time period. So you’re not going to get all of that money back until 10 months into it, so that makes it very difficult to do that. When you’re trying to go through and budget for this, make sure that you are very aware of how much money it is that you are spending, and keep in mind that the tests that you are running early on, you may very well run way above and beyond that, and it’s primarily just to go through and do the testing on those different channels and iterate and try and make your ads better. You’re not going to get them right the first time. You’re going to spend a heck of a lot more money the first time through, but as you iterate, if you can get that under about one third of your lifetime value then you’ve got, essentially, a sustainable channel that you can start pumping money into. Now, that’s not to say that you can do it on an unlimited fashion, because even if you are doing that, then you’re still not getting that money for at least three months. So you can’t just pump every dollar that you have into it. You do have to be careful. You do have to budget for those types of things. I certainly wouldn’t run the bank account down to almost zero with the anticipation that you’re going to be able to make it up within 30 days.
Rob [21:12]: That’s a really good point. I think the one third LTV is a good reminder, and then – typically if you are bootstrapped – I see most people not going more than about three month payback. I see some people edging up to like a four month payback window on your trial or sale cost. So that’s not a click cost, but that’s someone coming in and actually becoming a customer, and you want to get paid back within four months. In your example, if you were doing a hundred bucks a month then you could pay up to 400 hundred dollars to acquire a customer. But, then like you said, you need the cash to be able to do that. Funded startups, the rule I’ve heard is, no more than a third of lifetime value, and no more than a one year payback. They tend to raise enough money that they can cover out, but when you’re bootstrapped — I remember first starting out it was like I had like two month payback with HitTail. Then as I got more cash it was three month, then it was four month. Then once I really optimized it, and I widened the reach, and I knew that not only were the folks signing up and becoming customers, but I was watching them remain customers, I actually kicked it up a little higher than that. That’s kind of the range that I would think about. I think the last criteria for choosing a network is, are you going to need banners or fancy images? And do you have a way to do that? I know Bannerarchitect.com is a pretty good way to do that, and there are certainly people on Upwork these days that can create banners. But keep in mind, there are some text networks that work really well, and you don’t have to spend the time and money to develop banners, and banners burn out as well, so you are not going to have them made once and have then last forever.
Mike [22:31]: That’s actually a really good point about the fact that those banner ads will burn out, and the same images that you use today will not necessarily work the same even a week from now. I mean, sometimes they burn out very, very quickly. Other times they will last for a while. Again, every image I’ve ever used – or ever seen – in any of my ad campaigns, they inevitably burn out after a while. And what will happen is you will notice that the effectiveness of that campaign will start to decrease even after you’ve optimized it. So you will have to refresh those images, and use different ones, and play around with it. And the thing that sucks about that is that it screws with your stats, because even week to week you can’t necessarily guarantee, or look ahead and say that, “Oh, this advertisement is going to have this effectiveness.” because it will change over time as people see it, and they basically become blind to it.
Rob [23:22]: So moving into how to actually test a network. As a rule, the higher your budget the faster you can test. But you can test cheaper channels with a budget of, say, $10 a day. You’re not going to be able to test AdWords at that budget, but you could start running let’s, say, a Facebook test, or even maybe there’s some cheap clicks – like I said – on YouTube, or Instgram, or Pintrest. I’m sure you could do those for 10 bucks a day. I personally like to start with about 20 bucks a day so we can move a little faster. And I commit maybe around a couple thousand bucks to a full test, unless it’s either doing really well at the start, or it’s really tanking at the start, we’ll go in one to two thousand bucks; that’s just the scale we’re at right now. But you could probably make a call after a few hundred dollars. I recall doing that. I mean, some of these are just going to be so obvious that they’re not working that you don’t need to invest a huge amount of money in order to figure it out.
Mike [24:10]: I think one of the things you have to be careful about when you are doing these tests is that you have to be aware that the way that the advertising channel shows you those advertisements is not going to be identical to what is displayed to the user. So sometimes their interface is just blatantly wrong. I can think back to a scenario where I was starting to do some paid advertising for Bluetick through Twitter, and I was using their lead cards. And everything showed up in the Twitter advertisement interface just fine, and I put it out there, and I forget how long it was, but people started sending tweets back to me with screenshots that showed me that they were displaying just a link to the Twitter card, as opposed to the Twitter card itself. And people had to click through it. And at the time I was looking at my stats saying, “Well, these are abysmal, but they’re not costing me very much, so I’ll just let them run.” Because I was still getting email addresses, gnd going back and looking at the screenshots that people were sending me, my ads were just fundamentally broken. So I ended up stopping them at the time just because I was clearly spending a heck of a lot more money, and I didn’t want those images to burn out, and quite frankly it was kind of a distraction at the time. So just that said, you need to be aware that just because your advertisements are tanking doesn’t necessarily indicate that, “Oh, this entire channel is junk.” It could also mean that you’re doing something wrong. So you want to be careful to at least do some spot checks to identify whether or not, “Is it my advertisement that is wrong? Or is it just this channel?” And it’s sometimes difficult to tell the difference.
Rob [25:37]: Yeah, that’s tough. I haven’t seen that happen with AdWords or with Facebook; where the ad showed up different than the preview. But I have to imagine that happens. Especially with Twitter where all the clients are— not all the clients – but the third party clients tend to display stuff differently than the native Twitter things that they own. So I could imagine that there would be differences in display. It’s something you need to watch out for. The next step in how to test is that if you’re going to do this yourself is to educate yourself online. I would just start doing Google searches of “how to run Twitter ads”. And I would try to find like Growth Hackers links from growthhackers.com, or people who are actually doing it, kind of, in your space, because you’re going to find a lot of stuff of people running ads on this network, and they’re doing it for, again, like diet pills, or “make money online”, or just stuff that doesn’t apply to you, and it isn’t necessarily going to be that helpful. But I personally try to buy a course if I can. I try to find a podcast on the topic, and then I try to buy that person’s course – assuming that the podcast is reasonable. And obviously you’ll pay something for that course, but it can save you dozens of hours of trial and error. And maybe it’ll even convince you it’s not a good channel and it’ll save you the time all together.
Mike [26:44]: In terms of courses, there’s a lot of great resources out there that are free. And as Rob indicated you can also go out and look specifically for paid courses from people who are actively working in that particular industry. But there’s a couple of different resources you might want to check out. You can take a look over at Udemy, or Udacity, or at Coursera. And all three of them have courses that are available, either for free or for reasonably low cost, that you can just pop in, learn what it is that you need to learn and get out. And I think the one thing to keep in mind when you’re looking at these courses is that you don’t need to consume every single piece of information that’s there. Skip through, find the things that are relevant to exactly what it is that you’re doing, and then get out and start practicing with that stuff. Because if you spend too much time getting into the weeds, then you can spend forever there and not actually get your ads done. And I think that setting up your ads, and getting the images, and the text, and all that stuff all set up can be very time consuming. And if you’re spending more time learning – and we actually talked about this in a previous episode a little bit; how to balance your time in learning mode versus execution. So if you haven’t listened to that, go back and take a listen to it. I think it was episode 286 where we talked about that. It was “Five guidelines for balancing learning and doing”. So if you think that that’s an issue that you might need to contend with, go take a listen to that episode. But again, you just want to make sure that you’re getting in, getting the information that you need, and getting out as quickly as possible, so that you can start learning how that particular channel applies directly to the product that you’re selling.
Rob [28:09]: Yeah. That’s a good point. There’s a lot more resources on these topics – on ad networks and how to run them – than there were a few years ago. And those course web sites that you mentioned, I’ve actually had good luck finding decent courses on them, and have bought several for my own edification. So the approach I take when I’m testing is that I tend to try to go immediately from an ad to a sale, or a trial, or a demo, to see how that pans out. And then judge is my ad click through rate too low? Or is it the landing page that I’m sending them to that’s too low? Which should I optimize? And typically it’s going to be the ad at first, because your ads aren’t going to be very good. Then I split test images, headlines, and the audience, until I get to the point where I’m paying a reasonably small amount and getting a decent amount of traffic. By that time you’re going to find out that your landing page sucks. And then I’m going to use Optimizely to improve that. If I then spend several weeks trying to improve the landing page, and trying to get them to buy or to try, and that’s still not working, then my guess is that either the traffic is not qualified enough, or I’m just asking for the sale too quickly. So then I shift into this “Plan B mode”, where instead of asking for a sale or trial I ask for email opt-ins – either to a webinar or to an email course. Then nurture those leads, see how many convert, and this is where a tool like Kissmetrics or a Drip – because that’s what we use it for – where you have tags, and you can actually report on everyone who’s coming through those ads – because their tagged as their source is that ad. Then you can see, “Boy! Did they sign up for a trial? How many of them did? Did they sign up as customers? How many of them did? How much have they paid us?” It’s very, very big, because it’s hard to do that without a tool where you can actually see individuals and not just aggregate data. That’s a quick run through; the philosophy of actually running a test is to first try to ask for the sale trial, figure out what’s not working, fix the ad, then fix the landing page, and then – if you get that working – then it’s awesome and you can scale it up. And if that doesn’t work, then you switch into this plan B mode of getting the email opt-in and nurturing. So it sets you sale cycle out longer, it means there’s more steps between them initially clicking the ads. And, not only steps, but more time in them signing up and buying from you. But that’s what this is about. It’s about finding and reducing friction during this process.
Mike [30:23]: And I think something that that process kind of highlights is the fact that you’re going to have to go through this several times in order to find out whether or not a given channel even works at all. Because one of the first things we talked about was making sure that you had enough budget to go through and run these tests. And when you’re testing them, make sure that you’re taking a look at the statistics, and identifying your conversion rates, and how much you’re paying for the incoming leads, and whether or not those people convert to trial. And it’s time consuming to gather that information, and analyze it, and figure out where the leaks are in that particular sales funnel. Again, it’s just a matter of going through, gathering as much of that data as you possibly can, and then iterating through it multiple times in order to find where those leak points are. Because you’re not always going to find them the first time. Sometimes it’s misleading it best. I mean, you’re going to look at those things and say, “Well, this particular channel isn’t working.” And I think that that’s where a lot of the fear, uncertainty, and doubt comes about from some of these different ad channels. Because somebody will try them out and say, “Oh, well, I tried that and it didn’t work.” And your response to that should be, “Well, what did you exactly do? And why did it not work out?” And if somebody can’t explain why something didn’t work then they may not understand all the subtle nuances about it, or they just didn’t dedicate the time to it. A lot of these ad channels will work if you spend the time and effort to optimize them. Now that said, there are some that are not going to based on the type of product that you have. But if other people are advertising on those ad platforms, chances are good that it’s working for some of them, because if it didn’t work for anyone then nobody would do it. So nobody’s going to spend money to make nothing. That’s obviously a losing strategy.
Rob [31:57]: I think a final thought is that if this sounds complicated and scary, it’s not. But it does take work and it does take time. And just the dream of plunking an ad on to AdWords and paying five or ten cents a click, and then just having this amazing cost per acquisition is not—I’ve never seen that happen. It does take work, and it does take refreshing of the ads. So if you have the time to do it, invest, but consider it another marketing channel. It’s not anything that’s going to be easier than other marketing channels, or particularly less time. The nice part about it is if you get it to work then it tends to scale really well, and you can drive a lot of trial pretty quickly. I think the last thing I’ll throw in is if you’re not already doing retargeting, that is actually where I would start before I got into all this stuff that we’ve said here. I would consider using a tool like Perfect Audience, or going directly to Google AdWords, or to Facebook, and they have retargeting images build into them where you can get a pixel, and then essentially cookie people, and then retarget them with ads as they travel around the Internet or on Facebook. Those are going to be your cheapest clicks and your highest converting clicks. And so that’s actually pretty easy, and there’s not too much magic to it; maybe some testing of the ads and such. But you don’t have to get into all the targeting, which is nice, because you just have this audience. And that would be, I think, the low hanging fruit in terms of paid acquisition. But if you’re trying to get new visitors, that’s really more of what this episode was focused on. Because to do retargeting you need to have a nice bulk of existing visitors already. You can’t just start from zero, because there’s no one to retarget.
Mike [33:25]: I think that about wraps this up. If you have a question for us you can call it in to our voicemail number at 888-801-9690. Or you can email it to us at: email@example.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt, used under Creative Commons. Subscribe to us in iTunes by searching for startups, and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening, and we’ll see you next time.
In this episode of Startups For The Rest Of Us, Mike interviews Dave Collins, SEO and internet marketing expert about Google’s new search results. They discuss how these recent changes will affect small business owners and what you should be doing to stay up to date.
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Mike [00:000]: In this episode of Startups For The Rest Of Us, I’m going to be talking to Dave Collins about how Google’s new search results will affect you. This is Startups For The Rest Of Us episode 279.
Welcome to Startups For The Rest Of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at launching software products. Whether you built your first product or you’re just thinking about it. I’m Mike.
Dave [00:25]: I’m Dave.
Mike [00:26]: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. How’re you doing this week, Dave?
Dave [00:30]: Hi. I’m fantastic. Thank you, Mike. How are you?
Mike [00:33]: I’m good, good. So I want to give you a quick introduction everybody. If you’re not familiar with who Dave Collins is, Dave is a SEO and Internet Marketing expert from Software Promotions, and he’s a frequent MicroCom speaker. He’s been doing this since 1997 or so?
Dave [00:48]: Yeah.
Mike [00:48]: Which is a really long time. I think I was still in college, and probably many of our listeners had not even gotten to college yet. So just to make you feel old there.
Dave [00:56]: Thanks very much.
Mike [00:57]: So I guess to get started with, let’s take a little bit of a step back and talk about some of the recent changes that have come up that Google has pushed out. First of all, why does it feel like everything is always changing in the world of SEO?
Dave [1:09]: So really it depends on who you ask. Every SEO question, that’s how the answers always start, so we can’t be proven wrong. But everything’s changed. It’s very, very fluid. Google has to keep moving and redefining the goal post.
It depends how cynical you are. Personally, I believe that Google keep changing everything, basically to provide their users with the best experience. But this isn’t with their interest in mind. It’s perverse. It’s with their interest in mind. As in, if every time we go to Google we don’t find what we’re looking for, there’s a limited number of searches that we can carry out before we start thinking about looking at Yahoo or Bing or DuckDuckGo or wherever. So there’s this constant cat and mouse game, in a way, between the people who are trying to trick Google, and the people who’re trying to manipulate the results, and Google who absolutely don’t want to be manipulated.
Mike [02:05]: I can’t imagine anybody trying to manipulate the Google search engine results.
Dave [02:09]: No, must be some sort of, I don’t know, science fiction type of thing, but there’s nothing to gain. Why on earth would someone want to do that?
Mike [02:16]: Right. So let’s talk about a little bit of recent history. What’s happened over the past couple of years? Obviously there’s been various updates. Most of them have been named like Panda, and things like that, that have come out, and for the most part, it seemed like these changes were good. It seemed like what they were trying to do was they were trying to identify the people who were trying to game the results, and modify things such that they would get rid of those people, or at least remove those people from the search engine results by identifying them in certain ways. Clearly they mishandled some of that, and there were certain people who got dropped completely, and then got added back in after some complaints and everything. But they at least had some basic ideas of what it is that they were trying to accomplish. What else has gone on recently that we need to be looking at?
Dave [02:58]: The trend. It all goes back, in a sense, is cat and mouse. That in a sense, days gone by, Google more or less came up publicly and said, “One of the ranking factors that we take into consideration might, for example, be how many websites link to you.” So all these scammy SEOs all over the world got very excited. A whole industry was born, and up to a point it’s still running, of products and services that will simply get you links.
So then Google changed the rules a little bit and said, “Well, actually, it’s not all links. It’s more about the quality of links.” But people didn’t listen. So then, they effectively said, “Okay, if you have too many really horrific links pointing to you, we’re going to penalize you. We’re going to slap you. And it hurts.”
So this game is constant and ongoing. People have a theory, “This makes a difference. Doing X results in an increase in traffic.” Everyone does it. Google stamped down on it. So they’ve stamped down on links. They’ve stamped down perversely on over-optimization. So depending on how you look at SEO, I looked at it as helping Google understand the content of your website. So if you do too much of helping Google to understand your content, you get penalized for it. And yeah, it’s ongoing. But the most recent of all is what we’ve seen in the last week or so with the total change with what’s happened to the ads on the right-hand side of the search results.
Mike [04:27]: So really, what we’re talking about is this giant cat and mouse game between people who are trying to game the system, and Google, and the rest of us who are caught in the middle of it, where there’s a lot of us who aren’t necessarily trying to game those search results, but because we’re caught in the middle we’re affected by them. So it seems to me that that’s part of the reason why Google is doing this. It’s not to directly hurt us or help us. It’s because they want to make the search results better, and they’re trying to basically fight these types of people who’re doing these gray hat or black hat strategies that they are not comfortable with and they don’t like. Are there any other reasons that they’re doing it?
Dave [05:03]: Well, all things lead back to profit when it comes to Google, which will surprise absolutely no one. So there are two things they’re trying to do. They’re trying to give us better results, which in turn feeds that profit. And they’re also trying to make more money out of people who are clicking on the ads, which is obviously where most of their revenue comes from.
But you touched on a really, really important point. That this whole idea of collateral damage, that you today don’t need to have done anything horrible black hat to get hit by one of these penalties. Like I said, Google redefined the rules of what’s good and bad. They don’t just move the goal post. They completely, sometimes, make them invisible and put them in different ends of this stadium. But you don’t need to have done anything wrong to get slapped. It’s just that, a, you might have inadvertently done something that Google have now decided, after the fact, is not a good thing. Or you might actually just be collateral damage. You’re caught up in it, and you’ve not actually done anything wrong, but Google have decided for whatever reason, you fall foul of their invisible unknown rules, and you take a hit, and it can be devastating.
Mike [06:10]: There’s a term that gets thrown around a little bit called, “The Google Slap,” which is essentially, somebody looks at your site and says, “We’re going to basically ban you from Google search results.” Is that different than this type of collateral damage that we’re talking about, where they’ve just changed the rules and you happen to be affected by them, versus they went in and they said, “We’re taking you out”?
Dave [06:30]: Yeah, there’s very much a difference. What they both have in common is when you see that your Google organic traffic has fallen from 120, 150 a day to 1 or 2 a day, irrespective which rule you’ve broken, or which type of penalty you’re experiencing, it feels the same. But they are very different. So in your Google Search Console – what used to be Google Webmaster Tools – you can see a “manual penalty”. And that’s exactly as the name implies. If Google have decided, for whatever reason, for instance, you have far too many horrible links of low quality this or that purely to manipulate them, they’ll apply a manual penalty, which is more or less someone in Google typing it into the Google PC – if they use a PC – and basically saying, “We don’t’ like this site. Let’s remove it from the listings.”
The other type is they change the rules, they roll out a new filter or a new algorithm, and you just fall. It’s not that they’re penalizing you, it’s just that they may have decided that your website isn’t as relevant for the people searching for these terms. So instead of, let’s say, having an average position of three or four, you’re suddenly on page two. So you’re going to plummet. But you’ve not actually been hit by a penalty, but you are very much a victim of these changes.
Mike [07:49]: So how much of this is based on their own self-interest, versus them wanting to help people be recognized for providing good content and providing great links out to the community?
Dave [08:01]: So, in a way, it all goes back to the same place. If Google provide you with a good user experience that means you’re going to continue using Google, which means that you’re going to click on some of these ads and they’re going to make more money. So they’re all very much interchangeable. But nowhere have I ever heard anyone from a senior position in Google saying that in some way they’re motivated, or driven, by the desire or the wish to make the world a better place. I’m not sure. I think Reddit used to have some sort of goal about making the world a better place, or making the world less sucky – something like that.
So Google’s great aspirational goal was – in days gone by – “Don’t be evil.”, or “Do no evil.” I can’t remember the exact wording.
Mike [08:45]: It was, “Don’t be evil.”
Dave [08:46]: “Don’t be evil.”
Mike [08:46]: They don’t still subscribe to that is what you’re saying?
Dave [08:48]: Well, it seems to have vanished. It’s a big company. There’s a lot of data, and it’s quite tricky to find references nowadays. But I’ve always thought of all the goals to set yourself, I have all sorts of personal and professional goals. And actually a little bit of me wants to make the world a very slightly better place by raising my children to be nice, good people with good values. But having a goal to do no evil, don’t be evil, what is that? They’ve drawn a line between bad, very bad, and evil. So they can do something bad, or they can even do something very, very, very bad. But they’re not going to quite cross that line into pure evil. So as we discussed earlier, does that mean murder, an act of just killing one person? That’s very bad, but not necessarily evil.
So if that’s what you’re about, if you were at least in the early days driven by not being evil, surely they could’ve set the bar a little bit higher?
Mike [0:09:47]: You would think. You would think.
Dave [09:48]: There’s room there, isn’t there?
Mike [09:50]: I suppose yeah, you’re right. There is definitely a little bit of room there. I don’t know how much.
So with all these changes that are going on, as I said before, it seems like the people are trying to do the right things, and trying to at least pay attention and help Google and provide them some guidance around what your website is doing and how it’s laid out and things like that, but not be overly helpful, because quite frankly, most of us just don’t have that kind of time on our hands. How is it that we’re supposed to keep up with changes like this? Are there resources that we can use? I know that Mark Cutts puts a bunch of stuff out, but it’s hard to stay up on top of all of that stuff. And there’s obviously tons of different websites that you can go to that are doing nothing but constantly talking about different tactics that you can use, and different strategies. But is there any resources out there that you can use – newsletters for example – that just, kind of, distill things down a little bit for you?
Dave [10:42]: So, again, you’ve touched on a really good point that – for want for better phrase – “normal people” don’t have time for this sort of thing. And even if you do — let’s say next week as an example, you carve out three hours and you’re going to do SEO. So Monday morning 9:00 till 12:00, you’re going to do SEO. It’s written in the diary, in the calendar. Well, once you get there, the very first thing you’re going to think, most likely, is, “Where on earth do I start?” And if you go searching for what people are saying, the SEO industry has no shortage of; let’s say, “opinionated people with questionable values”. Let’s put it that way. So a lot of people are going to say a lot of things, but the signal to noise ratio is absolutely horrific.
So Google have a whole load of amazing resources. I already mentioned Google Search Console. This is free. You just set it up. It takes a minute to set up, and it’s way better than a whole lot of SEO tools that actually a lot of people pay for. Then they also have no shortage of their information and resources for webmasters. Only a month or so ago, I think, they issued their latest webmaster guidelines. Trust me, this is not a document that you want to be reading. It doesn’t help.
But there is again – I’m going to be off Google’s Christmas card list forever by the end of this – but there’s a certain level of hypocrisy, because I always feel that up to a point, Google are kind of saying, “Don’t optimize. Don’t do SEO. We’re brilliant. Our spiders and robots and our coders, developers, we are brilliant at figuring out what’s on your site.” But then they also give you some information, and it’s like every time someone from Google opens their mouth and says something -=- you mentioned Mark Cutts who’s been out of that side of Google for quite a while – but they had the Mark Cutts version too. Every time he says something everyone quotes and it goes back to that cat and mouse. People go frantically to change this, or add this add-on, or put this in their agenda, or look into the latest thing, and it doesn’t really end.
There’s some really good information out there. There’s SearchEngineLand.com, which I think they do daily email summaries. But there too, to be honest, there’s so much speculation in the world of SEO, so much, that it’s really hard to find a trusted source.
We got a newsletter called Google Demistifier. It goes out every Tuesday, only covers one topic, and we try to be completely biased, because we’re looking at a lot of data, a lot of people’s accounts, so we get a good idea for what’s out there.
But doing SEO is incredibly difficult today. It’s become a lot more complicated. It’s become more time consuming. And I think probably a fair number of people who listen to this podcast will relate to the fact it’s pretty scary doing SEO, because we have this fear of, “If we do this and Google don’t like it, what’s going to happen?” And I think that’s part of the problem for the industry, or for the area of SEO that we all face. But I do believe that nowadays we’ve got to the point where you can’t sit there and do nothing anymore. You actually have to more or less proactively start doing this, even if it’s scary.
Mike [13:57]: Now one of the things you mentioned there was the Google Search Console, which is not the same as the Webmaster Tools.
Dave [14:03]: It is the same. They just renamed it, just to confuse people a little bit.
Mike [14:08]: Because it looks completely different than the Webmaster Tool.
Dave [14:11]: They’ve done it up. You see if you log in to Webmaster Tool, it just redirects you now to Search Console.
Mike [14:18]: Oh, I see.
Dave [14:18]: They’ve done it up. It’s a seriously useful resource. It’s quite incredible the information they give you.
Mike [14:22]: Got it. Got it. Okay, because yeah, that makes a little bit more sense. Because when you do log in – I have come across that page before, and it obviously lists out a bunch of different web properties that you have, but it’s not necessarily showing you things that you have not verified through your DNS records, for example.
Dave [14:41]: Exactly. It’s not a be all and end all. But there is something so useful in there, which there’s a section in the Search Console called HTML Improvements. And ultimately, what HTML Improvements is, is Google pointing at your website and saying, “This is what we would suggest you fix on your website.” So there’s a lot of hype and there’s a lot of misleading information, but when Google basically say, “Fix these five issues on your website, because this can only help your SEO,” in my opinion, that’s worth paying attention to.
Mike [15:15]: Got it. So we’ve got things like some of the different Webmaster Tools, the Google Search Console, the newsletter that you guys have, but a couple of other resources that we just talked about – we’ll link some of those up in the show notes. So those are some of the places where a small business owner can go to at least learn some of these things. Now let’s talk about one of the main things that we really came onto the show to talk about, which was, what are some of the recent changes that they have done? What are the biggest changes that Google has made recently that is probably going to affect most of the listeners here?
Dave [15:46]: So this is something that’s happened just in the last week – very, very recent. And basically what they’ve done is they’ve taken away all the ads, all the text ads that are on the right-hand side, that were on the right-hand side. They’re gone. This is obviously on the desktop; mobile is a completely different ballgame. But on desktop, there are no longer ads on the right-hand side. Before, they were up to three ads on top, while now they have up to four ads on top. Usually it is four ads on top. And up to three at the bottom. So what this means is when you carry out search on Google, instead of seeing the standard couple of ads at the top, organic listings, and all down the side the actual paid ads, it’s totally, totally different. It looks different; it feels different. I’m actually pretty amazed, in a sense, by how little fuss has been about this. This is, in my opinion, the biggest change that I’ve seen Google roll out, ever, since possibly – maybe since introduction of AdWords. Maybe it’s even bigger than that. And it’s going to affect, not everyone, but almost everyone.
Mike [16:49]: So we’ve talked a little bit before about why Google has made some of the previous changes. Are there any specific reasons why they made this particular change?
Dave [16:57]: Well, obviously, it’s all speculation, but the only possible incentive that I can see for Google displaying four ads at the top instead of potentially no ads at the top is revenue. I can’t see any other reason whatsoever. It’s certainly not about quality of the results that are shown, because as we all know, we’ve all experienced searching something in the ads that we click on aren’t necessarily relevant to what we’re looking for. So this is not a quality update. This has to be driven, in my opinion, solely by revenue.
Mike [17:31]: So we talked a little bit before about a lot of us being collateral damage. What are the downsides to this particular change that they’ve made?
Dave [17:38]: To be honest, I don’t want to be all “doom and gloom”, but there are a lot of negatives. So what we’re now seeing is potentially 11 ads on the first page’s search results is now at best it’s 7. That’s going to have a major impact; more than half of them at the top. And it’s safe to say that, with time, those top four slots are going to start costing a lot more. But ultimately, if have an ad with an average position of eight, that’s on page two. And you can probably – it’s safe to assume most people don’t even get to page two when they’re looking for something. They refine the actual search. So that’s one thing.
The actual organic results – the SEO results, if you like – they really got pushed down. So the typical format, if you carry out search at Google, you now see four ads, you see the knowledge graph, which is effectively Google scraping websites and just pasting that information in, that can still be on the right-hand side. But quite often it’s below the ads that you have, ads knowledge graph.
And on a recent blog post that I wrote I took a screenshot of the search results for things to do in London. And you had four ads, a load of knowledge graph information, and right at the bottom – this is at pretty high resolution on my monitor – at the bottom there was one single organic listing being shown. And sure I can scroll down the page, but if I’m going to find what I’m looking for, why would I? There’s all sorts of theories out there, but ultimately no one knows what’s going to happen. But this is definitely going to have an enormous impact on SEO, and I don’t think it’s going to be positive.
I think the biggest ramification that we’re going to see is some AdWords account holders – if they’re especially with let’s say low margin products or high competition, or both – they’re going to be squeezed out. They’re going to be squeezed out by companies with budgets that actually can justify, make sense, or perhaps they’re just oblivious to how much they need to spend for these top four. And I think that’s going to hurt them quite badly.
And the other negative I can think of is I can’t see how this is actually going to be positive for the user, for the person going to Google and searching. I just can’t really see that happening.
Mike [19:55]: So it doesn’t sound like there’s any reasons for Google doing this other than basically making money. It’s not really because it was for the end user experience. It was basically because they want to make more money from this. And obviously, us as website owners, we are in an unfortunate position where Google has such power over the traffic on the Internet that there’s really just not anything that we can do about it, except just deal with the aftermath of it. We’ve talked about a lot of the downsides for us. Are there any upsides to this change that they’ve made?
Dave [20:24]: Yeah, there definitely are some positives, definitely. I think one, I think when you advertise on AdWords, you’re going to see hopefully some more meaningful and accurate average positions. So the days before these changes where you could get three ads at the top and let’s say seven or eight ads on the side, adding fourth position could be the very top at the right-hand side and that could actually sometimes be more effective than being in position one, two, or three, because you appear to be the top. So number four could most likely do better than positions two and three. So that gets a whole lot simpler, because now we know top four means exactly that. There is no right-hand side. There’s going to be better clarity there.
I also think – potentially, it’s all theory – there may be more consistency in ads as well; that they’re starting to look more familiar. Things like the side links aren’t jumping out, so that sort of evens things out a little bit.
Definitely, if your ad in position four for the most part, you’re going to be happy. Then there’s also – I should’ve mentioned this already — the other thing that could be on the right-hand side, as well as the knowledge graph – in other words the Google scrape – Google shopping ads are showing up on the right-hand side still as well. So if you’re using Google shopping ads, you’re probably going to see quite a significant increase, and you’re probably going to see that working quite well for you. But I have my own issues and reservations with Google shopping. But yeah, it’s not all bad.
Mike [21:56]: Right. But again, most of these push people down the path of spending money with Google in order to get to some of those top rankings, with the exception of those situations where you end up in the long-tail search results, and you happen to be at the top. But you’re still going to be below paid listings at that point.
Dave [22:14]: Exactly. So irrespective which viewpoint you take, and which stance you take, it seems every direction you look it’s all about an increase in revenue.
Mike [22:24]: Right, right. So based on that, where is this headed? Is this the only change that you can see them making in the near future, or are there other things that they’ve, kind of, announced that they’re going to be rolling out in the near future that are things that we need to pay attention to, and take a look at, or at least be aware of?
Dave [22:41]: So all of this is very new. So right now, there’s some noise about this on, for instance, the WebmasterWorld Forums. And some people are seeing an increasing click-through-rate, for instance. Some people are seeing a decrease in cost per conversion, which is all very well and good, but it’s all new. So it doesn’t mean anything. New behavior isn’t the same as what you’re going to expect to see in four, five weeks, six weeks down the line. So Google are in no way putting their feet up on the desk now and saying, “We are now done. Our goal to not be evil, and to maximize our ad revenue is complete. We’re finished. Everything’s done here. Now we’ll just let the internet run itself.”
There are some predictions being made already, which is beyond insane, but no one knows what’s going to be ahead. But one thing that’s guaranteed, Google are not going to – first of all, they’re not going to finish to try and maximize their ad revenue – which I don’t have any problem with. They’re certainly not going to finish trying to provide better organic results, so that we find what we’re looking for, so that we keep coming back to Google.
And you see that touches on the aspect of this that I, personally, find most interesting. This is the first update that I’ve seen by Google that’s actually left me scratching my head wondering, “Aside from revenue, why would they do this?” I wrote this in this blog post that they wrote about it. This is the very first time that I actually started to do the unthinkable, which was look at options like Bing. I actually went to Bing and DuckDuckGo, because there’s already – for some searches – it looks like the results are very ad-heavy. And they are. I can’t even imagine what it’s like at a low resolution, where really you are only going to see ads on your screen without scrolling the mouse. And we’re all lazy. We only scroll the mouse if we have to.
So as we touched on when we were discussing this, I have to wonder how many people are going to want to go to a search engine when the results that they see are primarily dominated by ads. If they keep going in this direction and become mainly, if not solely, ads that are on display, I can’t see people wanting that experience. I mean, would you?
Mike [24:59]: No, probably would not.
Dave [25:00]: No. It’s a strange, sort of, future that they’re potentially carving out for themselves. But I do have faith in Google that they’re smart people; they will have thought about this. I’d love to hear Google’s response. But, yeah, I’m completely baffled and I’m pretty much certain that what’s ahead of us is more change. I can’t overstress it. It won’t even be the first move in something. It’s not even really starting. It’s all rolling out. It’s all new.
I think another interesting aspect of this brings it more in line with the mobile experience. So for a while now, you could have four ads at the top of the mobile result. You know, search on your mobile phone. And I think, again speculation, but I think it’s very much about this convergence of devices that there are blurred, more blurrier maybe, blurrier lines between desktop, PC, smart phone, tablet, laptop, and so on. And I think Google want to give this consistent experience across all devices. So I suspect, I do think that’s probably part of it. But, again, it all goes back to profit.
Mike [26:08]: So, I guess we’ve talked a lot about what they are currently doing, what they have done, what it means for us, but we haven’t really talked about the one issue that I think is probably most important to the people listening to this is, what is it that we should be doing? Because obviously what we don’t want to do is sit in the middle of that game of cat and mouse between Google and people who are doing black hat SEO tricks, and end up – we don’t want to spin our wheels, we don’t want to do things that don’t matter – but we want to maximize our time and the return on the investment in that time. So what do we do?
Dave [26:40]: So the first thing to do, I think, is if there’s ever been a good time to put SEO and Google on your – let’s say, take it off your “to-do” list and put it on your actual radar – so this is something you start to pay attention to. Now is a really good time. I’ve heard a few people express this, sort of, helplessness along lines of, “Well, if organic is going down there’s nothing we can do about it.” But I’m a big fan – a big believer – in staying informed. And I think more than ever we have to stop paying more attention. We need – especially if you’re spending on AdWords – you really need to pay very close attention to, for instance, average position. Which I think a week or so ago, before this change, your average position was an indicator, but not as important as a lot of people thought. Whereas now it’s vital. If you’re consistently getting your ads in average position five, it’s very, very safe to say you’re going to see a huge drop in performance, and you’re going to have to market his informed decision whether it’s worth doing what you can to either try and get the ad higher by, in a way, gaming the system, getting a better quality score, or if you’re actually going to simply pay for it to get in that top four.
So, more than ever, you’re going to have to know your numbers with your AdWords accounts. And same with SEO. I can’t even begin to guess right now what effect we’re all going to see in our organic data, other than, say, it’s going to be very big. But the one thing I definitely want to know is I’d want to know what’s happening. I’d want to know if my organic traffic is dropping, by how much – if that’s a really vital channel for me.
If I’m a business and, let’s say, I don’t know, organic traffic accounts for 60% of our traffic and let’s say 50% of our sales, it could be time to diversify into other channels, and start spending a bit of time – maybe money – in some of the other options. But it’s really about being informed. And I think one strategy that will actually work for both – for AdWords and organic – is long-tail keywords. I think these are a potential – I won’t say a life-raft, but let’s say a lifebelt – in that, AdWords for instance, you’re not going to have as much competition with the long-tail keywords. So these are the keywords that aren’t so obvious, that aren’t getting quite as many searches as the big obvious ones, but add them together and they can be very sizeable. So I think in AdWords, long-tail keywords could be a very good strategy right now, because you’re going to have less competition meaning, you can make sure that you’re in that top four throughout.
And long-tail keywords’ always have been a good SEO strategy, but bearing in mind that the SEO results are getting squeezed down right to the bottom of the page, I think more than ever this has to become a more or less a standard SEO strategy from now. Well, I won’t say forever, but from now until the next major update.
Mike [29:36]: And just to be clear, one of the things that you’ve alluded to, but didn’t directly call out, is that there’s a very big difference between what your ad placement ranking is – whether you’re third or fourth position – versus your search engine result ranking. Those are two entirely different things, and you would monitor them entirely differently using different tools.
Dave [29:53]: Yeah, absolutely. There’s a huge – it’s almost impossible to pin down the differences, they’re so many – but it’s most simple obviously for AdWords you get to decide if you want to go up, either tweak the system or spend more. With SEO, sadly, it’s never quite that simple.
Mike [30:11]: So essentially, all the things that you’ve talked to boil down to what amounts to four different things that we need to be doing. First one is to monitor the placement of your ads and keywords. Are you number one, number four for ads – or in terms of your keywords – are you on the first page or are you on the fifteenth page? So that’s the first recommendation that we can take out of this.
The second one is monitoring your traffic levels, and making sure that you know where they’re headed based on other things that you’re doing. The third one is using the Google Search Console to identify things that you need to do on your website to either fix usability issues, or improving your search presence. Because Google will tell you directly what it is that you have to do. And then the last one is to really just stay, at least peripherally, informed about what’s going on, either using your newsletter, or the WebmasterWorld Forums or a variety of the different things that Google has provided. Is there anything else that you want to add to that list?
Dave [31:06]: Yeah, I’d say and the other thing is hidden number five is most businesses have SEO on their to-do list. In other words, we all mean to get round to it at some point, but there are always more pressing things to be done. And I think we’re now are at that time where it’s become, I’d say, pretty close to mission critical. It doesn’t mean you need to invest ten hours a week. We don’t have ten hours a week. But if you can be keeping an eye on this, and if you can just schedule 30 minutes a week – just to keep an eye on these things – and at least respond to the most pressing issues, in my opinion, that’s seriously time well-spent.
Mike [31:41]: And that could be something incorporated into “Marketing Monday” of all days.
Dave [31:44]: Absolutely. Exactly. Or Mocking Wednesday.
Mike [31:48]: Well, thanks for coming on, Dave. I really appreciate you taking the time to step in and help our listeners understand a little bit better some of the changes that they’re going to be seeing from Google, or what Google has already rolled out.
Dave [31:58]: Thank you very much. I love the show and I’m delighted to be here again.
Mike [32:02]: And if you have a question for us, you can call it into our voicemail number at 1-888-801-960, or you can email it to us at firstname.lastname@example.org. Our theme music is an excerpt from We’re Outta Control by MoOt used under creative commons. Subscribe to us on iTunes by searching for “startups” and visit StartupsForTheRestOfUs.com for full transcript of each episode. Thanks for listening and we’ll see you next time.
In this episode of Startups For The Rest Of Us, Rob and Mike talk about the different tools they use to run their startups.
Items mentioned in this episode:
Rob [00:00]: In this episode of “Startups for the Rest of Us” Mike and I talk about the tools we use to run our startups. This is “Startups for the Rest of Us,” Episode 243.
Rob [00:18]: 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 Rob.
Mike [00:26]: I’m Mike.
Rob [00:27]: We’re here to share our experiences to help you avoid the same mistakes we’ve made. [Where are we?] this week, sir?
Mike [00:32]: I’m going on vacation next week to Hershey Park in Pennsylvania and taking with us – with me, I guess! [laughs] I bought a couple of Kindles for the kids, and I have to say, the setup process for those is not terribly intuitive, if you’ve never used a Kindle Fire before. The actual setup of the Kindle was fine – it walks you through very easily – but if you’re trying to set it up for a kid to use, it wasn’t obvious what you had to do in order to wire everything up to a household or create a kid’s profile, and things like that.
Rob [01:02]: Did you get the Kindle Fire Kids version? They have the ones with the big bumpers and they have free replacement and all that?
Mike [01:08]: I did not, actually.
Rob [01:09]: I wonder if those are all set up for that already. I bet they are.
Mike [01:11]: Maybe. Maybe. Yeah, that could be. I just was like, “I’ll just get the cheapest thing there, and if they break it, I’ll just buy a new one.” [laughs]
Rob [01:17]: Right. That may be why they don’t make it super obvious to do the kid thing. They kind of push all that over to the kid version of it.
Mike [01:25]: Yeah. I mean, it wasn’t too hard because I’d used – I’d set something up similar on the Google Nexus that I had, a while back. But, of course my kid dropped that on a concrete floor, so that didn’t last for very long. [laughs]
Rob [01:35]: Yeah.
Mike [01:36]: But I did get some decent cases for the two Kindles. We’ll see how long they last.
Rob [01:41]: Nice.
Mike [01:41]: I’ll give you an update as soon as they smash one.
Rob [01:43]: Yeah, for real. I’ve been sick, man. It took me down, about two days ago. I was so sick I couldn’t listen to podcasts.
Mike [01:52]: Are you serious?
Rob [01:52]: Yeah, it was awful! [laughs] That’s me – that’s as sick as I get! I like, put the earbud in, and I was trying to listen, and I just couldn’t. My throat hurt, and my – it was pretty crazy. Yeah, when I can’t work, and I can’t listen to podcasts, those are kind of the two low points of me.
Mike [02:10]: I can’t imagine being too sick to listen to podcasts.
Rob [02:12]: [laughs] I know. It was terrible. I was really bored then, you know. Because it’s like, at least if you’re sick and you’re lying there, you want to be able to listen to something. But I couldn’t focus on it, and it was distracting. One of my ears was all jacked, so it kind of hurt –
Mike [02:24]: Wait a second! Distraction from what? What else did you want to do?
Rob [02:26]: [laughing] I don’t – from the pain? I don’t know! I just couldn’t focus on it. I’m just getting back to it – I’m actually starting to lose my voice now. You know how like, after you get over a head cold, you don’t even feel bad any more, but then you sound really bad? That’s kind of where I am entering now, and so I get the feeling I’m going to lose part of my voice here over the next couple of days.
Mike [02:43]: Now how did you get a cold? Because isn’t it like a hundred degrees there?
Rob [02:45]: It is a hundred degrees. I have no idea! It is the worst to be – it’s bad to be sick and walk out, and have it be a hundred degrees. It just feels terrible. It feels wrong, right? It should be winter when you have a bad cold and your head’s all stuffed up and your ears jacked up. I don’t know how I got it. Probably my kids.
Mike [03:05]: [laughs] You can always blame the kids –
Rob [03:06]: Indeed, indeed.
Mike [03:06]: – [?] for just about anything.
Rob [03:08]: Hey, today we’re talking about the tools we use to run our startups. We’ve broken them down into several different categories, including things like team communication, customer communication, marketing, hosting, etc. We’ve never done an episode like this, and it struck me earlier today that it’s reasonably frequent question that we get, whether I’m at a conference, or I’m doing talks, or whatever.
Folks ask – they don’t ask, “What tools do you use in general?” But they’ll say, “I’m trying to get this done. What do you use for that?” I found that just over the years in talking to a lot of people and just being on the interwebs like we are, I tend to have some type of recommendation. It’s pretty rare that I need to Google for something.
If they say, “How do I track podcast stats?” “I have – well here’s what I use, and it works reasonably well.” Or, “How should I set up payroll?” Or, “How should I track online purchases?” or whatever. I mean, they’re typically – each of these, I at least have – I may not be the expert on it, but at least have used something, and I have a go or no-go recommendation on it. You and sat down, we put our heads together, and we put together kind of the – as complete a list that I think we can of the tools that we use to run our businesses.
Mike [04:13]: I think the interesting thing is that a lot of these tools, there’s overlap between them. For example, you’ll use certain tools, and I will use other tools in some cases, but they solve generally the same problem. The interesting part is that, if you start looking across a broad spectrum of startups, people have different preferences for the tools that accomplish the same types of jobs.
Just because we have a tool that we use and we like, doesn’t mean that it will necessarily work for you, but there are certain categories of tools that are generally applicable to most startups. I think that, just knowing what else is out there and what other people are using can be really helpful in trying to figure out how to address some of the different problems in your own startup.
Rob [04:51]: Right, and that I think that’s good you pointed that out, because just because we use those tools, doesn’t mean there necessarily are the best breed, or necessarily are the one that everybody should use. That’s why there are competitors, because they offer different feature sets at different price points, and that kind of stuff.
This is kind of a starting point, and if you’re in a similar situation to us, where you’re a very small company, let’s say one to ten employees I think would fit, then these tools would probably be reasonably good for you. I think if you’re in an enterprise, a lot of them would not be. It really depends on the situation you’re in, and your budget for that matter.
To kick us off, our first category is team communication. This is trying to stay up to date and keep informed between your internal team, not with your outside world. The first thing that we use is for chat, and it’s Slack. Most people have probably heard of it. The funny thing with this is, Derrick introduced Slack into the Drip team, and I was kind of resistant to it, because I don’t love IM. I don’t love instant message. I feel like it interrupts. We used to do ICQ back in the day when we had a web development shop, and I just felt like it was constantly kind of, people screwing around and it didn’t really push things forward.
But pretty much, within a week or two, I realized how invaluable Slack would be. Even though we do work in an office all together at least two days a week, there’s still two or three days that we’re apart, and it’s really, really helped improve our communication during those times.
Mike [06:08]: Yeah, I use a combination of Slack and a couple other things as well. But one thing that I’ve used kind of for a long time now is HipChat, which was out, probably quite a long ways before Slack was available. I’m actually considering moving everything over to Slack because I’m a member of a couple of different Slack chat forums, or Slack chat groups, so it would be convenient to have them all on that same technology, so that I don’t have to have HipChat and Slack at the same time. Because the only I have HipChat for is for internal stuff. It’s nice that with Slack, it’s all web-based, so you don’t have to have a client on the desktop in order to use it.
Rob [06:45]: Yeah, I do use the desktop client, but you’re right, you don’t. I think one of our team members purely does it on the web, and I think it’s a perfectly acceptable experience.
I have to be honest, I am completely shocked at how quickly Slack grew. When I first heard the idea, I was like, “Yeah, there’s HipChat, and there’s Campfire, and there’s like ten others that already do the exact same thing. But somehow they did it differently, and their growth has been insane. Hats off to them, for basically being a B-To-B company with a growth curve, like a B-To-C company is. Pretty impressive.
The next tool that we used internally here, building Drip, is GitHub. We use GitHub for [our?] Source Control, and then we use GitHub Issues to track our development issues. Then we use a layer that’s built on top of that, called Codetree. It’s at codetree.com. It’s actually build by one of our developers internally. His name is Derrick, and he launched it as a small [Sass app?], and it sprinkles enough cool stuff on top of GitHub Issues, that it is super valuable.
It allows for prioritization, and assigning to different people, and it can span multiple projects, so if you have a lot of GitHub projects and you want to see those all in one place, it’s got a kanban view, so like a trello view or a list view. It’s got just enough stuff that it’s kind of made it invaluable. I wouldn’t have moved over to GitHub Issues, because we were using FogBugz. But once Derrick built Codetree, that was kind of what convinced me to move over there. This is not for support. Remember this is for development, and our internal kind of development and issue and feature communications.
Mike [08:09]: I still use FogBugz, and I still like it, and it works reasonably well for everything that I use it for. But I think the interesting thing here is that we kind of put this set of tools underneath team communication, because you can use it for assigning tasks to different people, assigning features. Actually, you talked to me a little bit before the podcast about how you use the notifications in there to – when something new comes and has been added to Source Control, that you get a notification that something has been completed, and then you turn around and you notify your customers.
In some ways, I see it as, essentially work flow for the internal development team to say, “Hey, this particular thing is complete. Send something over to the marketing team,” because you’re kind of the marketing team. Then that marketing team can then let the customers know, “Hey there’s this new feature that you might be interested in.
It becomes more of a – not just an internal team communication, but it helps you formalize that process of doing that internal development, send it over to the marketing team, and then letting the customers know that something new is available for them.
Rob [09:12]: Exactly. It keeps the stuff out of email, right? Then it’s all tracked in one place, so you can just go back to the issue in GitHub, and kind of the whole flow of our whole conversation about that issue as we hammer it out is all there in GitHub Issues.
Our other app that we team communication, no surprise, it’s Skype. We will video Skype when we have a longer discussion, because sometimes typing stuff out into Slack just takes too long, as needed. Doesn’t happen too often, it’s surprising. Maybe it’s only once every couple weeks. We also work a couple days a week in the same office, and so we do take care of a lot of the face-to-face stuff on those days, and then every couple weeks we’ll have one of the off days that we’ll need to have kind of a face-to-face, and that’s what we use Skype for.
Lastly, with team communication – kind of an honorable mention here, because I didn’t know where else to put it – is Trello. We don’t actually use it for team communication. We really – each individual team member who uses it, uses it for their own to-do list and prioritizing and moving stuff around. But I do know a lot companies that have shared Trello boards. They drive entire CRM processes off of it, or they’ll drive their development off of Trello. I did want to put it here as kind of a collaboration tool that I know a lot of companies are using.
Mike [10:22]: I use Trello as well, but I’ve started looking at a product called Workboard, which you can find at workboard.com. It’s almost like Trello, except that it’s essentially like a project management layer that’s added on top of Trello. There’s no real integration between Trello. It just is a Trello-like experience. It kind of crosses between what, I guess, FogBugz used to offer in terms of assigning cases to people and issues and things to do. I used to use Fogbugz for that, but obviously it gets expensive when you have VA’s.
But with Workboard, you are just essentially paying for that one manager account, or however many managers you have in the company, to be able to see some of the different dashboards and things like that. I think that Workboard adds enough of a management layer on top of it to be able to push tasks through what they “workstreams,” that you can use those workstreams for different projects and you can see how those different projects are progressing.
It’s something I’m still exploring, but it looks like a good alternative to Trello if you’re looking for something that has a little bit more of the project management functionality built into it.
Rob [11:25]: Yeah, I hadn’t heard of it before you mentioned it, and I’m pretty impressed with the – at least the tour they have on their website. Looks like something to keep an eye on. I think that it’s like a strongly typed Trello. There’s more to it, for like software development teams or for more structured timelines, and I think there’s a real benefit to that.
Mike [11:41]: Yeah, and it is free, if you just want to go for their basic team. They do have like a per-manager plan, which is either 49 or 69 dollars a month, but then you can have unlimited team members with that. The advanced features and stuff include like, progress heat maps, and individual goals, and goal dashboards, and things like that. But I think that most people could probably get away with just like the basic team plan, which is free.
Rob [12:03]: Our second category of tools is customer communication. The first tool we use is for customer support, and we used to use FogBugz up until, maybe 60 days ago. We moved to Help Scout, and I highly recommend Help Scout. We’ve had a very good experience with it. It’s an easier UI to work with than FogBugz, and than a lot of the other support tools I’ve seen. They have keyboard shortcuts, kind of like in Gmail. If I wanted to go through 10, 20 issues at a time, it’s super easy. I never have to touch my mouse. Hit “R” for reply; hit “N” for note. I can change statuses – all with my keyboard.
The other biggest perk I found is on my mobile. I check my email, an issue comes in. It’s just a notification from Help Scout that says there’s a new issue. If I respond directly to that email, it goes directly to the customer. If I respond to that issue, but I put the “at” sign, and I put “note,” it’ll add a note to it. Then I can reply again and put “at assign” and I can assign it to another team member. The last one, I can reply and put “at close,” and it’ll close an issue. I can do my complete support work flow from my mobile without installing an app. It’s all from within the email itself – I use the Gmail app on iPhone.
It has rocked my world. I really like, because I find that I do a lot out and about. I do a lot on my iPhone when I’m in line, or when I just have few minutes to check stuff, and it helps me not have to see, “Oh, I got a notification. I’ll handle that when I’m back at my computer.” It has streamlined my work flow for sure.
Mike [13:31]: I’m still using FogBugz for all my customer support stuff, and it works fine for what it is. Then there’s the cases where something’s complicated enough that you have to get on the phone. For me customer support kind of falls into this situation where it’s a very quick reply, and I can just do it through FogBugz, or it’s very involved and I have to get on the phone. It doesn’t seem like I get a lot of stuff where there’s this middle ground.
Rob [13:52]: The other communication tool we use of course is dealing directly with whether it’s partners or maybe at the higher, medium touch stuff that we do, sales, anything like that. That’s just going to be straight up email. Of course, I’m in Gmail. Actually, all our team members are in Gmail, everything forwards into their Gmail, and they can segment it out, and they can reply as their GetDrip account. I found that works well, because I have like, whatever it is – 9 email addresses, and I certainly don’t want to login to 9 different clients. So I have everything come in, things can be labelled and filtered as needed from there.
And then, I’m a big fan of Boomerang and Reportive. Those are two plugins that I use in Gmail, and they help me – Boomerang of course helps me send stuff later, or boomerang it back into my inbox to make sure that someone acts on something. If I don’t hear from them, I get reminded of that. Reportive just gives me a nice little head shot, and a little bit of information about the person who I’m emailing with.
Mike [14:45]: The other one that I’ll throw into this category besides Boomerang and Reportive is Sidekick. Sidekick is from HubSpot. It’s another plugin that you can essentially use alongside your Gmail account. What it does is it allows you to send somebody an email, and then it will trigger a notification for you every time that email gets opened. If you send somebody an email, and they look at it three times or five times, you’ll get a little notification pop-up that shows you that that person looked at the email or saw it.
This is really good for high touch sales, because you can send somebody an email, and if they take a look at that email, you can see that. Then you can either call them or you can send them a follow-up email if you haven’t heard from them in a couple of weeks, and then suddenly they start looking at this particular email that you sent to them. It kind of triggers, on your end, this notification that says, “Hey, this person’s looking at your email that you sent them two weeks ago. You might want to follow up with them now. It’s probably a good time.”
Rob [15:40]: Our next category of tool is for marketing. Mike, I’ll give you three guesses as to what I use for email marketing, but your first two guesses don’t count.
Mike [15:48]: Oh, they don’t count?
Rob [15:49]: They don’t count.
Mike [15:50]: I’ll have to go with AWeber and MailChimp.
Rob [15:52]: [laughs] That is perfect!
Mike [15:54]: [laughs]
Rob [15:54]: Perfect. Surprise, I use Drip for all our email marketing, and I’ve moved – again, I have like 8 Drip accounts. I had like 3 or 4 MailChimp accounts. But now that I have the ability to kind of expand at will, I have a bazillion Drip accounts, because we have the podcast, and we have MicroConf, and there’s ZenFounder now, and my Software by Rob lists, and then we have the Drip and the HitTail – you know, it just goes on and on. Drip is what I use – I think we do still have one MailChimp account for kind of MicroConf, Micropreneur Academy stuff that we haven’t moved over, but I’ve been deleting users out of that to get it pretty inexpensive. At some point I think we’ll migrate all of that over to Drip.
The other tool I use, surprise, is HitTail. I use that for long tail SEO. That’s obviously another tool that I own. Helps find keywords in your traffic that you should be ranking for, but aren’t, and helps you rank for those. The next one is for search engine rankings, I use –
Mike [16:48]: Oh, go back and don’t skimp on the other thing that HitTail does. You can order some new articles for your website based on what some of those keywords are that you should be ranking for.
Rob [16:58]: Yes, and I do that quite frequently. I use our article ordering service often, and my bookkeeper says, “What are all these $19 charges on your account?” I was like, “Well, those are technically going to us.”
Rob [17:10]: I use that feature a lot. Then, next is Serpfox, and I use this to track search engine rankings. I’ve used a number of different tools. A lot of them go out of business because technically tracking search engine rankings is against Google’s terms of service, because they don’t have an API for it. You basically have to scrape their search results. Most of the companies that used to do it are gone.
But two that I like are Serpfox and AuthorityLabs. I’ve gone back and forth between using both of them. I happen to be using Serpfox right now, but I really do recommend both those tools. They do it solid and I feel like they’re in it for the long haul. How about you? What do you use for SEO stuff.
Mike [17:46]: Mostly, I use Moss. It doesn’t necessarily give you great search engine tracking, but it does give you some level of search engine tracking. But I do like to use it to kind of measure against what the competitors look like in my spaces. Obviously it’s significantly more expensive tool than some of the other things out there, but at the same time they have access to huge amounts of data. It’s nice to be able to kind of rely on some of their data sets to take a look at how your marketing results are coming in, and get some idea of what their impressions are of what the landscape looks like.
Rob [18:18]: I agree. That’s Moss’s competitive advantage, is no one else has their open site explorer stuff, and all the data they have. They really are on top of the game. They have by far the best competitive analysis tool for SEO that I’ve seen.
Mike [18:32]: They also have Followerwonk, which, if you have a Moss subscription, then you get additional insights into Followerwonk that you wouldn’t get without it.
Rob [18:40]: Right. There are a few other tools that I use intermittently, kind of when I’m starting a new business. I mean, something like Market Samurai, or Micro Niche Finder, which I heard is not for sale anymore. But those types of things, when I’m looking for a new niche, or looking at [?] or research or that kind of stuff, I do use them. I didn’t really include them in this list, because they’re not what I use on an ongoing basis. Most of the things we’ve listed here are things that I’m subscribed to. I kind of went to my credit card statement, and looked back at “What do I pay for on a recurring basis?”
As well as some free tools of course, that don’t charge anything, such as Hootsuite, which is on the freemium model. I’ve been using them for years, and just never hit the point where I needed to pay for them. I have to be honest, I don’t love Hootsuite as a Twitter client, but all the other Twitter clients I’ve used have eventually been bought or shut down. Twitter bought one of them, and removed a bunch of functionalities, so I couldn’t do stuff.
I’ve stuck with Hootsuite because it’s been consistent. It’s not the best thing I’ve seen. It does allow for like, multi-column views and some pretty sophisticated scheduling and other stuff. I just can’t seem to find another client like that, that will sync up with an iPhone, that kind of does all that I need, so, Hootsuite is it.
Mike [19:47]: Yeah, I’ve used Hootsuite in the past, and right now my primary mechanism for doing some of that stuff is Buffer. You can find that at bufferapp.com. They’ve got a really good series of blog articles on their website that they publish on a very regular basis. Some of them relate specifically to their company, but some of them are kind of more, general purpose in the startup world or in social marketing, that sort of stuff. But it’s a useful tool. It doesn’t have all of the features that Hootsuite does, but Hootsuite doesn’t have all the features that Buffer does either.
Rob [20:16]: Our next category is hosting, and for the most part we use Amazon. We use EC2, we use Amazon S3, and frankly we pay Amazon a house payment for a nice California home every month, in the amount of servers and bandwidth and storage space and all the other stuff that we use.
Mike [20:39]: Yeah, I use a combination of Rackspace and Microsoft Azure. Microsoft Azure, their platform I use a bunch of the different things that you probably use over on the Amazon side. Not just the hosting of VM’s, but also the disc storage as well. Then, with Rackspace, that kind of where I have the static servers that I want to just be able to maintain myself.
Rob [20:59]: Yeah, the other hosting provider that I still have an account with is DreamHost, and I still think that DreamHost is a good shared host to get started with. When I have smaller sites, like lower traffic, I still put them up on DreamHost first. I actually host a lot of podcast files, because they have a little CDN built in, that allows it to be reasonably downloaded around the world, and doesn’t need to be super, super fast for the podcast download files. Try to get Libsyn or something for the volume – the terabytes of download that we get every month would be really expensive. It’s nice to be able to do that. Then they actually do a lot of email hosting as well.
Mike [21:36]: Yeah, I use DreamHost for exactly the same reasons. Because they give you basically unlimited ability to download stuff, and then all the different email. The other one that came to mind is WP Engine, which you can use that for all your WordPress hosting. We use it for the podcast site, for MicroConf sites, bunch of other stuff as well. But, WP Engine is just awesome for hosting anything WordPress related.
Rob [21:58]: Yeah, that was the last kind of hosting, or the third hosting thing that I use. I think we have two WP Engine accounts, because there’s one kind of for my site, the Numa Group stuff, which is my blog and ZenFounder and then all the Drip and HitTail WordPress blogs and that stuff – our KB, our knowledge base is there – and then we have the whole MicroConf, Micropreneur Academy side of it.
I should divulge that I was an early angel investor in WP Engine, but I’ve been using them years, and I’m a big fan of them. It’s still a very fast site with a lot of uptime and I like the fact that I can back up with one click and restore. It’s really been a good service for me.
Mike [22:35]: Moving on with the list of hosting, I use Wistia for hosting all the videos on my sites. They had a bunch of different plan. They used to have, I think, more plans, but the space in between them was much larger. I used to pay like $100 a month for it, and I was able to drop down to like the $25-a-month plan, just because my bandwidth requirements weren’t nearly as much as what they were offering. They moved the ability to have unlimited videos down into their $25-a-month plan. That’s really why I needed the higher level plan, so since they moved that down, I was like, “Yeah, I’ll drop down to this other plan, because I don’t need the bandwidth,” and it’s worked out really well. I think you use Vimeo, right?
Rob [23:13]: I use SproutVideo, which is more of a direct competitor to Wistia – they’re B-To-B services. Vimeo is more for creators. Like, if you’re a director, a filmmaker, they seem to have gone that route. But Wista and SproutVideo are where it’s at. If I were start over today, I would probably go with Wistia, but at the time when I signed up, their minimum plan was really expensive, and I only needed to host one video for like six months.
I went with Sprout, because they had like a $9 plan or something. They both have good analytics, and they both have bunch of good stuff, but I think all things being equal, Wistia’s probably a better a service, and it’s what I would go with. But the switching cost at this point, I’d have to update so much code and lose so much legacy, that I don’t think I’ll be switching any time soon.
Rounding us out for hosting is really just podcast stats. Folks ask us how we know – how many unique downloads or whatever our podcast has. There’s a service called Bluebrry, and it’s B-L-U-B-R-R-Y. They don’t host the podcast, but they do kind of host a go-between your audio file and – it’s like a proxy I guess, between your audio file and the listener. It gives you stats, so I use this on all the podcasts that we have. This one at ZenFounder and then the Startup Stories podcast that I released last year.
Our next category is tech health, and our first entrant in that category is Pingdom, and this just hits your website how every often you specify. It can tell you if the site is up or not. We also use it to hit some kind of private endpoints that we’ve set up, that don’t just say, “Is the site up,” but they’ll actually have an account of say, how many records are in a queue, and if it gets over a certain record, we’ll change a certain message, and it’ll say, “Uh oh,” and Pingdom will pick up – that if it says, “Uh oh,” it texts all of us, and it says, “We have a problem somewhere.” It’s not just SiteUpime, it’s actually for us maintaining queued throughput. If anything were to die or slow down in terms of sending emails or processing search keywords or anything like that, we’d all be notified. We really use Pingdom to kind of help manage all that. It’s both email and text notification when things go awry.
Mike [25:11]: I switched over. I used to use Pingdom for this, but I started using a combination of Clickie and – I had New Relic running at one point as well. Then the other one I had, that I used for a while was Verelo, and – trying to think of the last one. The last one was Rackspace alerts, because Rackspace has it built into their platform where you can just set up alerts based on the ability to see your server from different data centers. Depending on where the traffic is – and that’s the one that I kind of rely on the most right now, is just the Rackspace built in alerts, because they do have those set up in the different data centers and they do send alerts directly to you to let you know whether or not you can see a server from different data centers. Then in addition to that they’ll let you know when things are fixed.
Rob [25:57]: Nice. Yeah, we also use New Relic as well. I had forgotten to mention them, but it helps. [Check it out?]. I had kept hearing about it, and we never installed it, but I learned that it shows you all your consumption of RAM and CPU and disc space, and it’s pretty helpful.
Last couple for tech health: one is Honey Badger, which is from Benjamin Curtis. He’s like a 3, 4-time MicroConf attendee, and it’s a service that basically catches Ruby exceptions and then gives you all the detailed information. There are some more generalized services that do this. They’re really, really helpful. We often learn about exceptions right as our customers encounter them, and sometimes even before. It’s pretty cool to be able to get that, see exactly what the problem is, go in and fix it, and without a customer reporting it to you, email them and say, “Hey, we’re sorry you ran into that page load error 20 minutes ago. It was a bug. Here’s what it was. We fixed it.” It’s a really nice tool to be able to deal with. Even if you’re not using Ruby, you can look for a more general – I don’t remember the name of the one, but it’s kind of like Exception Handling, or Exception Management.
Then, last one in tech health: I want to give a hat tip to my DBA. He’s at rubytreesoftware.com. His name’s Creston, and he’s really taken good care of us on the Postgres and my SQL side – that’s what he specializes in. He also is a Rails developer. If you have a need for someone to help out with DBA and scaling and performance and that stuff, he helps us with all our backups and S3 management, and just all kinds of stuff that as developers, we don’t want to get involved in, right? It’s much more DevOps and DBA stuff. But it would be a lot of our time and a lot of headache if we didn’t have Creston involved.
Mike [27:30]: I think now we’ll move on to everyone’s favorite topic, which is money.
Rob [27:34]: Moving money. Yeah.
Mike [27:35]: It would be money.
Rob [27:36]: Yeah, so the first couple on the list are pretty obvious, right? Stripe and PayPal? You use both of these as well?
Mike [27:42]: Yes.
Rob [27:43]: Yeah, so use Stripe to collect all the incoming money. I only have a PayPal account anymore really to kind of move money through other PayPal accounts. I guess aside from Micropreneur and MicroConf, I don’t really collect PayPal payments anymore. Oh, that’s not true. I guess selling my books. They are still a few places where I collect PayPal payments. But, Stripe and PayPal – kind of no-brainers.
How about paying employees? Or paying yourself, since you’re an employee of your corp? What do you use?
Mike [28:10]: I’ve used ADP and Paychex in the past, and I kind of flip-flopped back and forth between them until I decided that their fees were getting outrageous. Then this past year, I switched over to using ZenPayroll, and I love ZenPayroll. It’s so much easier to use, and it’s a lot more intuitive, and it’s a lot cheaper. It’s about half the price of either ADP or Paychex. That’s a nice bonus as well.
Rob [28:34]: That’s good to hear. I use Paychex. I’ve used them for four or five years, since I set up the LLC, and they were great when I was one person, one employee. As soon as we got to two or three, they started making mistakes. I would change something and they’d mess it up. It was some pretty simple stuff. I’ve become disenchanted with Paychex and I’m actually planning in about a week and a half to move to ZenPayroll. I’ve only heard good things about it, and I’m excited to get everything moved over there.
Mike [29:02]: Yeah, it’s a bit of a pain to set up at first, but once you’ve got it set up, it’s pretty smooth. I think the only thing that I’m not real fond of is the fact that if you own your own business, it’s a little bit difficult to set up things in such a way that you can have it automatically pay yourself kind of like an owner’s dividend, and not count that as a reimbursement. It’s kind of a pain to do that. You have to kind of do it outside of the system. But otherwise, everything else is pretty smooth.
Rob [29:29]: Oh, that’s okay. I’ve always done that outside of payroll systems, so that won’t be a problem.
Mike [29:33]: Got it.
Rob [29:34] Next one is UpWork, which used to be oDesk. UpWork is both a way to manage, right – there’s like a project management aspect of it. But I’ve also found it really handy for moving money around the world. Because I used to pay people in the Philippines, and they don’t have PayPal, or they didn’t have PayPal there, and it was really hard to get money there. ertain parts of India, and certain parts of the world – these things that we take for granted aren’t there. oDesk/ UpWork really doesn’t have a problem doing that.
I’ve actually moved contractors into UpWork, and you pay like a 10% up charge basically, but in order to get the nice project management and the easy move of money and automatic payments, where I don’t have to manually cut someone out a PayPal invoice or whatever, it’s been worth it for me.
Mike [30:16]: Yeah, I use them as well. Funny enough, when they were changing their name from oDesk to UpWork, I was just in the final stages of releasing my book. [laughs] I had to go through and change it, or just add in a little note that says, “Formerly called oDesk,” and call it UpWork instead.
Rob [30:32]: Oh man.
Mike [30:33]: But it was right at the tail end of it. It was kind of a pain. The only other thing I’d add under this is Gumroad. I use Gumroad for selling my book, “The Single Founder Handbook,” and it makes things very easy. You don’t have to mess around with a shopping cart or anything like that. If you have any updates that you want to issue – so if there’s spelling mistakes or anything like that – if it’s a product where you have to provide any sort of updates, you can just do those directly inside of Gumroad. It will automatically issue those updates to everybody and let them know that there’s an updated set of files that they can download, which is really nice, so that you don’t have to worry about, “Okay, who has what version, and did they pay for it,” or what have you. It’ll just do it automatically for you.
Rob [31:10]: Yeah, I’ve used Gumroad as well. My son wrote a book called “A Parent’s Guide to Minecraft,” and we sold it through Gumroad, just because it was no-brainer. You know, it’s the simplest way to get something up there and start collecting some money.
That rounds out our moving money category. Let’s move on to the next one. It’s back office. I kind of threw everything else in here that I noticed I was being charged for that didn’t really fit into the other categories. We have accounting, and I use Xero, which is pronounced X-E-R-O. I’ve also used Outright in the past, and they were fine. Then GoDaddy bought them and they’re so-so, and they’re kind of the same. I’m more of a fan of Xero. Xero’s also three times the price, so it kind of depends on what budget you’re in. Outright works perfectly fine for smaller, less complex businesses. With all that I have going on, I found that Xero is a better fit. But it’s like 30 bucks a month. You have to make up your mind on that.
Mike [32:00]: Yeah, I use Xero as well, and I’ve used a bunch of different things in the past. I used to use QuickBooks for a long time, and then I switched over to – I’ve used Outright in the past, and what was it? There was a couple other things –
Rob [32:11]: Indinero?
Mike [32:12]: Indinero. Yeah, we used that before. You know, I had a couple of accounts there as well. I like Xero just because I know my way around accounting software, and it works well. It does exactly what it is that I need it to do. I’ve basically handed everything off to a bookkeeper, and she doesn’t seem to have a problem with the software, so, works out nice.
Rob [32:30]: Yup, I use the same bookkeeper. She does a bang up job. Next, for affiliate management. I use Ambassador at getambassador.com. I imagine quite a few folks have heard of that. Stamps.com – I finally signed up for an account, maybe 18 months ago, and I have never looked back. Man, I have not made a trip to the post office in 18 months, and it’s the best thing ever. Just to have this scale that you plug in, and you can weigh stuff, and you print the postage out, right there. It’s like we’re living 2015 or something. Honestly.
I sell stuff on Amazon or Ebay. Like I resell old – whatever it is – old computers or old books, or just stuff that I have. I don’t like to keep a lot of stuff around my house. If I’m done using it, I’m not going to use it, I post that thing for sale or I give it away to Goodwill. When I post it for sale, it comes with the burden of having to ship it. That was one of the reason I got it.
The other thing is, with Drip, we give a lot of Drip t-shirts away when people get their first conversion goal hit, or if they tweet something cool or whatever. I like to ship people a shirt, or maybe a nice Moleskine notebook with Drip stamped on it, and so there’s a decent volume of those going through. I’ve just found that there’s quite a few things that I wind up shipping out, and to not have to run to the post office all the time is totally worth the – whatever it is. I think it’s maybe $15 a month? Then you just pay the exact same price you’d pay in the post office for postage.
Mike [33:44]: Got it. I don’t ship things out very often, and I’ve tried to move to completely online for most things or just not bother dealing with anything. For example, bills and stuff – any business bills, I try to push that off to my bookkeeper. Then, the personal bills and stuff, I just pay them all online. I try as little as possible to deal with paper mail if possible, but there are those few exceptions.
Rob [34:06]: Lastly, in our back office, is GoDaddy, the domain registrar. I think if I was starting over today, I would probably use someone like Hover, which I think is spelled is spelled H-O-V-E-R. I think they’re probably a better bet for it. They have less kind of up sells and all that kind of junk. But, I have 60, 70, maybe even 80 domains with GoDaddy, and all the DNS settings and stuff, it’s just too much of a hassle to change. That’s what I use. How about you?
Mike [34:31]: I’ve used Active-Domain for a long time. That’s “Active dash Domain.” I have a bunch of domains registered there, and then I have a bunch that are over on DreamHost. At one point I tried to kind of do some kind of consolidation, and then I got distracted and never completely finished it. I’ve got a bunch of domains that are at Active-Domain and then the other half of them are probably over at GoDaddy. They both work reasonably well. No real complaints either way.
Rob [34:56]: I think that about wraps us up. If you have a question for us, you can dial it into our voice number at 1-888-801-9690, or email it to us at email@example.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt, used under Creative Commons. Subscribe to us on iTunes by searching for “startups,” and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening, and we’ll see you next time.