In this episode of Startups For The Rest Of Us, Rob and Mike answer a number of listener questions on topics including the value of startup accelerators, onboarding, liability insurance and more.
Items mentioned in this episode:
Rob: In this episode of Startups for the Rest of Us, Mike and I talk about the value of startup accelerators, better onboarding, liability insurance, and answering more listener questions. This is Startups for the Rest of Us, episode 435.
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 Rob.
Mike: And I’m Mike.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. To where this week sir?
Mike: Well, I wanted to give a congratulations to Ty Wood. He was the winner of the AppSumo contest last month and he won a all expense paid trip to both MicroConfs.
Mike: That was courtesy of AppSumo. I just wanted to say a big shout out to those guys and say thank you to them for sponsoring that. We’ll see Ty Wood at MicroConf.
Rob: Yeah, Ty, please come up, introduce yourself. It would be good to meet you. Thanks to AppSumo for that. Speaking of MicroConf, I believe this episode goes live just a couple of weeks before MicroConf. I’m guessing we might have a few tickets left either for Starter or Growth. If you’re interested with hanging around with a couple of hundred other serious SaaS software startup founders, you should head over to microconf.com, take a peek at it and hopefully, we’ll see you in Vegas.
Today, we’re going to dig into some listener questions after we’re down to absolute zero a couple of episodes ago. We got a nice little influx, we got a few voicemails, but I wanted to kick us off with first a thank you from James.
He says, “Hi, Mike and Rob. I’ve been listening since 2014. I’m a solo entrepreneur living in Central Africa, in Burundi, Rwanda. Here, we don’t have angel investors. Instead there are people with cash but most of the time, they aren’t people who share my same values. There’s a lot of financial corruption here. I decided to go solo, train another developer. Now we have two main products that can serve two different niches locally. The wisdom on your podcast has helped me so much during my journey. We have different realities, but I regularly find motivation to continue on and a clear understanding during the journey, so thank you so much.”
Thanks so much for that, James. I really appreciate it. We started the podcast, both to find other people like us because it was like, “Hey, you and me, are the only people doing this,” and then to find a handful of others that were doing it? Along the way, I’ve really seen it as an amazing by product that we’re able to help people whether it’s directly or indirectly, whether it’s us just talking and giving motivation or tactics or through the conference that we started and the community we’ve built. I love getting emails like this. these kinds of things make my week.
Mike: Yeah, congratulations, James. It’s hard enough to put one product together but you’ve got two that are serving two different niches and both helping out underground where you’re living. It’s fantastic to be able to help out the local community and be able to make a living from it as well. Really appreciate hearing from you and best of luck with that.
Rob: Our first question of the day is a voicemail on the value of joining an accelerator if you ultimately want to raise institutional funding.
“Hey, Rob and Mike. This is Sree, cofounder of clocr.com, it’s short for cloud locker. We are an early stage startup company based out of Austin, Texas. CLOCR empowers you to manage and protect your family’s most important documents and enables you or your loved ones to have instant access in case of financial, personal, or medical emergencies. We are currently in a pre-launch stage and we’re giving away about 1000 lifetime subscriptions for early adopters. I found you guys about four months ago on the podcast and it changed my life forever. Seriously. The amount of guidance you both provide is invaluable. I wish I had found this podcast about a year ago. Please do keep up the good work. I can’t wait to meet both of you at the Micro Conference.
I found several co-founders for CLOCR and that is [inaudible 00:04:20] our LinkedIn and angellist. I’ve been self-funding CLOCR for about a year or so—less lower than a year. I’m getting ready for the launch in the next four weeks. My strategy is to seek a small amount of funding, $200k-$300k for the next 18 months or so to a kind of a workable debt. Our plan is to aggressively bring in users before going in for institutional funding. I denied a few requests for funding. Here are the questions: Now that I have a few advisers joining CLOCR and I continue to add advisors as we go, is there a value in going down the accelerator path? Will that add any value in terms of the buzz and visibility or will it be a distraction? Will these accelerator programs help set-up for funding, or will they help me grow the user base? My main goal is to increase the user base and set-up the [00:05:17] vision thing and folks to build the company. Second question, I do like the participate in a startup innovation competition, do you have a short list of companies that we can participate on? Thank you.”
I kind of took three questions away from that. He said, “Is there value in joining an accelerator? Will it provide buzz or visibility?” Second question is, “Do accelerators help grow the user base?” and will it help him get set-up for funding or will it be counter to that, will it be a distraction. The third one is about innovation competition.
I think I’ll start with the innovation competition and say, I don’t know, I would probably just Google it. There’s one called 59 Days of Coding in Fresno. That’s really the only one I’ve been involved in that and that’s the only one I know off the top of my head.
Mike: Going back to Sree’s first couple of questions, is there value in going through an accelerator in terms of buzz and visibility. I would think that for some accelerators you would get some buzz from it but for something like CLOCR that is more B2C oriented, I suspect that the buzz you get from it is probably not going be to nearly as helpful. They may have PR outlets that could help you generate more publicity and get in front of more consumer type of users. But I think the main value in joining an accelerator—I guess there’s a couple of different things you can get out of it—but the first one would be the mentorship.
It’s not necessarily about growing your user base directly by virtue of joining an accelerator but rather you get mentorship to point you in the right direction and helps guide you in terms of what other people have done before you, what mistakes they’ve made, what things they’ve done that’s gone really well, people they can introduce you to, the network. Those are the types of things that are going to grow your user base. It’s not like you just join and you suddenly get a magic ticket that pumps 5000 new users into your app. It’s not how it works. You have to basically go through the program and talk to people and figure out what it is that you’re supposed to do that’s going to have the most impact and then go do it. That is going to grow your user base.
The other thing that the accelerator’s going to do for you is if it’s coupled with funding of any kind, it’s going to help give you runway and allow you to focus on working on the business as opposed to working on it as a side venture. Because if you’re trying to do something nights and weekends, that’s great and all, but you only have so much time to do that, and a lot of your time is probably going to be spent on your main job trying to make ends meet for you and your family. Getting rid of that as a distraction is going to be one of those main benefits of that accelerator.
The other one is if you’re looking to raise money down the road, an accelerator, going through a program like essentially gives you validation, and to some extent, trust from other investors that, “Oh, this accelerator invested in me and the business because they believe what we’re doing.” By virtue of that, that’s transferred to other investors. There’s a lot of credibility that you can gain in your business just by virtue of being attached to them. But because they have presumably vetted you in some way, shape, or form in order to accept you into the accelerator program.
Rob: I would agree with that. I imagine someone gets 900 applicants and they pick 10 and you’re one of the 10. There’s some signaling there. There’s some halo effect—I don’t know what you want to call it—but you were chosen. It’s different but it’s like getting into Harvard or getting into Yale; you make it through a selection process and that does lend some type of credibility.
I think like you said, it’s going to depend on the accelerator. I mean, there’s hundreds of accelerators and some of them are going to be really good, like helping you grow your user base. But you can either contact prior companies who have gone through it or you can look at the people who are running it and who the mentors are and think to yourself, “Do those people know how to grow a user base? Do I think that their advice or their network, whatever it is that they have can help translate into that?”
I have seen accelerators where I’ve looked at the list of mentors and I don’t know who any of them are or a lot of them are business coaches or college professors or people who maybe have not run a business directly. That’s always a question in my mind of like, “Are they going to give me MBA advise or are they going to be boots on the ground and really dig in to what’s going?” That’s one question I would ask about how to do that.
Certainly, a top name accelerator like YCombinator or TechStars, I think that gives you buzz and visibility. Obviously, the elephant in the room is I run TinySeed which is a startup accelerator designed for all community. I think that there will be a certain amount of buzz and visibility given within our sphere when we announce. I think that as time goes on that buzz and visibility will get bigger and bigger as we become more successful, and as our alumni, do more interesting things.
Our answer is probably the same, yours and mine. It’s like, yeah there is value, but I also—you’ve probably heard this advise of like, “If you’re going to get an MBA, you do it for the network and you do it for certain things.” There’s advises I don’t bother getting it from bottom tier school because it’s not the information, it’s more about the prestige of having Harvard on your diploma or whatever. I would think similarly of there are going to be accelerators that I’ve heard that don’t bring a ton of value. This is not a blanket answer for all accelerators. There really is a vetting process that you’re going to have to go through.
I think his second question was kind of like, “Do accelerators help set you up to raise subsequent funding?” My understanding is pretty much unequivocally, yes. That’s actually the goal of most accelerators, to provide you enough money to get to that demo day to have a product to raise funding. TinySeed in particular, that’s not our end goal, but there’s nothing in our terms or even in our goals for our companies that say you should or should not raise subsequent rounds.
One example is some of the angel investments that I’ve made in the “bootstrap space” most of them have not gone on to raise subsequent rounds but one or two have. I’ve been super encouraging about that because the founder saw the opportunity, wanted to level up, the money was there, and the choice is something you evaluate when you get there. I guess the answer to, do startup accelerators help set-up for funding, I think across the board, yes. I don’t know of an accelerator that won’t help you do that, that won’t connect you to angel investors or VCs down the line should you want to raise that money.
Now, one thing I would say is that there are some funds that are offering money to the bootstrapper space that do have clauses in them that will make it hard to raise funding later on. Just be sure you have a good lawyer, or you really look at the terms, or read. There are comparisons of these alternative funding approaches, the non-traditional VC stuff. Do your research and figure out, “If I did want to raise the $2 million later on, is this basically a poison pill?” Poison pill clause doesn’t allow me to do that. As I’ve said, we do not have that in Tiny Seed. We’re going to make it very easy to have [inaudible 00:12:37] investments. I’m thinking most will but there are some that whether intentionally or accidentally do have some clauses but those are not, as I said, they’re not accelerators.
The last thing I realized, innovation competitions. Since he’s a B2C, you should try to go on Shark Tank. It’s not a competition per se. I don’t think Shark Tank is the [00:12:58] all of anything but I do enjoy it for the entertainment value and that’s why B2C companies go on there, is to get that exposure. In addition to potentially getting a high-profile investor, but just going on there is going to drive some interest.
Mike: I’ve seen stories of people who’ve gone on to Shark Tank and whether they got a deal or not, sometimes there’s stories that circle back on those companies afterwards. There is that exposure piece of being on there whether that investor helps you or not doesn’t matter because people will see you. They see your business, they see your company, and you’re getting exposure that you probably would not have gotten otherwise.
Rob: Thanks for the question. Super interesting one. It’s good for this community to be thinking about it and talking about this. our next question is super interesting. It’s about how to better communicate to users who should be connecting to an existing SaaS account. Basically, they’ve been invited as sub-users but instead, they’re signing up for new trials over and over and over. Let’s listen to this one.
“Hi guys. It’s Jarrod from sportstrackerapp.com here. We run a website that helps teachers and students organize their track and field and swimming needs. We’ve been really successful watching it grow. At certain stage, we introduced the feature that will allow admin staff to welcome sub-account access to their students so that they can login and register themselves into different events.
It’s dramatically cut down the workload of the admin staff. However, we’ve noticed that since opening up this feature, some students—regardless of the communication that we make available to the admin staff—students are coming through and signing-up to the website as an admin user and starting trial accounts and obviously, that’s not something that’s even remotely close to what they need to do.
What actually happens is the admin staff are given a piece of print out paper or an email that they pass onto the students and it sends them to a different URL [inaudible 00:15:13]. However, regardless of that communication, we still can’t get past the few students signing up on a daily basis. What thoughts do you have around making this as clear as possible without making a trial require a credit card, because obviously that would stop students. I look forward to hearing what you think about it. Thanks!”
Should we start by saying how we would design the ideal flow just to make sure, because I know he said no matter what the communication is, the students still come in sign-up for the trial. But could we walk down the steps of how we would do it. What would the ideal flow to at least communicate to them so that maybe there’s one or two things that he’s not doing that they could try then actually get to his question.
Mike: I think that there’s a couple of assumptions that you need to make or at least clarify as part of this while we’re going through this mental exercise. Are we assuming that this app is design explicitly for colleges, universities, schools, etc., and then the students that are part of it? Or is it like a general-purpose app that can be used outside of that system because it seems that this is a very specific situation. I’m not clear on whether or not the app is geared that way.
Rob: I think it’s focused on the niche of sports, managing sports teams. I’m guessing it’s more like junior high high school.
Rob: Let’s make that assumption.
Mike: I guess based on that, it sounds like that the fundamental problem is that there’s confusion passing the information onto the teachers as to how to invite those students. If they’re getting forwarded to a particular URL, that’s fine, but if they’re printing something out and handing it to them and then the student comes to the website because they see that on it, that poses something of a problem.
I think that one thing that does come to mind though is if this is such a serious problem and it comes up constantly then I would take a look at the sign-up process itself and ask people when they go to register, are they a student or are they a teacher/coach or whatever. By that, you could basically interject yourself into that sign-up process and say, “Well, if you are a student coming in here, chances are you’re not going to be signing up for an actual trial of the product, you actually want to be attached with a sub-account.” How do you direct them to that?
Obviously, that’s going to depend on whether or not they’re signing in with an email address that is part of the school system for example. Because with this, you can match them up and let them select stuff, but I don’t know how much privacy controls or concerns are around that either. I think that the very first thing that I would look at doing is seeing whether or not you can differentiate between a student signing up and a teacher/coach because that right there should tell you whether or not they should be actually creating a trial or not.
Rob: I would agree with that. I think that what you could do is sign-up for trial and it’s like, “Are you a student? Are you a coach or administrator?” If they say student, then you default to saying, “You should’ve received an invite from your whatever. Check that email or check the flyer. But if you really are trying to sign up for a brand-new account for your school, then click here.” Make it like really have to opt in. you have to double opt in if you’re a student where you have to click that and then click another thing whereas if you’re a coach or administrator or whatever, then make that the default.
The other thing I was thinking about—I’m trying to think how to make this work. What I’m imagining is that I’m a coach, I have my account, I log in, and it says, “Invite Users.” I can enter some email addresses of students. Then it either gives me a PDF to print out and physically hand to them, he said, the physical paper, or it sends them an email. What if on that PDF and the email that goes to the student there is no mention of the name of the URL? It does not say Sports Tracker. All it says is, “Your coach so and so is inviting you as an administrator on the thing that organizes your sports team. Go here to sign-up or to accept this invitation.”
That URL could feasibly be just a totally different URL. Just pick whatever, a random one, thesportstrackersignup.com or even just signupfortheapp.com—just pick something. If they go to the homepage or if they go to the full URL, because my guess is it says like right now, it’s sportstracker.com or .com—I don’t even know what their URL is—but let’s say sportstracker.co/ a bunch of stuff to accept the invite, and people are just typing in sporttracker.co and then hitting trial. Don’t even allow them to do that. Just give them a completely different URL and the homepage is something that says, “You need a special code. Enter the code in the URL,” or whatever. You can figure out a way how to do this intelligently but not let them get back to your main URL in anyway because you can control the message. You have this PDF and this email that go directly to them. What do you think about that?
Mike: I think that’s fine. Unless you have a situation where the professor or the coach or whoever is telling them, “Hey, I use this app. Here’s the name of it.” Because if they search for it and I think that that’s the problem he’s alluding to is that if they go online, presumably they’re web savvy enough to go online and search and then they come to the website. The one thing I would think about is giving somebody a sign up that is literally just a single field that says, “Accept Invitation,” or something along those lines or as you said, give them a PDF that they can print out.
I don’t know the mechanics of how it’s currently being done because do you want to just print something out that’s exactly the same for all 30 people on the team or do you have individual ones for all 30 of them? I would imagine you would want the former rather than the latter so that you don’t have to plug in 30 different email addresses. You print the exact same thing, hand it out to everybody in the team and say, “Go here and do this.” And then they basically join. Maybe it’s like a 6-digit code or a 10-digit code or something like that. They just go to, as you said, the URL, plug it in, and that’s the end of it. I think hiding the name of the product is probably the best bet because that way, the kids won’t search for it.
Rob: To be honest, Sports Tracker, when I go to just search for that phrase in Google, there’s a bunch of iOS apps that come up. I can’t find the app that he’s talking about in Google right now. There’s sports-tracker.com, there’s SportsTrackr with no E, there’s all these things and I don’t think any of them are his app. I actually don’t know that even hiding the name, I really think it’s just the URL. You know what people could do is if it says Sports Tracker on the PDF and they go to Google and type it in then sign-up for the first one, it’s going to be the wrong app. Maybe they should just hide the name and the URL and try to get them there.
Like I said, it’s an interesting problem—user behavior thing—to have but I think there are probably some ways that we’ve thrown out. Hopefully, those are helpful to him. Thanks for the question.
Our next question is about liability insurance. It’s from Z and he says, “Hey guys. Could you talk about what types of liability insurance SaaS companies should get? It’s very confusing, there’s not much information out there. What type of insurance should founders get for their companies depending on the stage they’re in and to protect themselves and the company?”
We have talked about this in the past, right, Mike? We’ve talked about getting an LLC and maybe worrying less about the insurance aspect of it because you have the liability protection there in the early stages. Obviously, we’re not attorneys, we can’t give legal advice and really, you should not take advice from two chuckle heads like us. But in the early days of a product, I would tend to have any type of E&O insurance. When you have 10 customers or something unless you’re in a particularly litigious niche.
Mike: I think the question here is different though. He’s talking specifically about liability insurance versus the liability of having things under a company. To his point, this is very confusing and there’s not much information out there. The reason it’s confusing is because insurance is one of those old industries where they profit based on your lack of knowledge and them being able to be kind of opaque about stuff.
If you go to, let’s say, two or three or five different insurance companies and ask them for a quote for liability insurance for your company, they’re going to say, “Okay. Fill out this form and give us a bunch of information.” Every single one of those forms is going to be different. It’s not like going to a sandwich shop and ordering a ham sandwich. That’s going to be basically the same between 30 different ham sandwich shops.
But with insurance, even liability insurance, it’s different for every single one of them. They’re going to have different questions, they’re going to want to know different things, and each of those forms is going to be different. Then they’re going to plug it in their back end of the engine and they’re going to say, “Okay. Here’s the risk profile, etc., and these are the things that we cover.” If you compare the output of each of those plans, there are going to be differences between them. It’s not like there’s a standardized liability insurance. There’s going to be some like Plan 1 from Company 1 might include XY and Z and then the same exact information that you gave to Company 2, they’re going to say, “We cover X and Y,” but they’re not even going to mention Z because it’s not covered but they cover QR and L.
It’s complicated and the reason you’re finding it that it’s confusing is because it is confusing. It sucks. It’s weird when you have to go through those things but really, there’s the umbrella policies. You have to be careful about what you’re doing in terms of what access to customer information you have, what your access level is to your on-site software or databases, or level of access that you need in their environment. All those things are going to be questions, are beyond those forms. Every company is going to quote you differently.
Rob: Yep. Insurance—not fun. I think that to protect yourself from personal liability, you can of course get an LLC or an S-Corp or whatever is the equivalent in whatever country you live in. I tend to say, when you’re young and you don’t have a lot of money or what’s called judgement proof, no one’s going to sue you because you don’t have any money. When you get to the point where you have some assets, I recommend getting a personal liability plan. I shouldn’t say recommend, this is what I have done. [inaudible 00:25:43] recommended to me and this is what I did, and it’s to get a personal liability coverage.
You can get $1 million or even a $2 million coverage for literally a few hundred dollars a year protects you from personal liability if you get in a car accident and someone sues you because their neck hurts or whatever. I think it protects your personal wealth and I don’t know all the details. It’s going to depend on your circumstance in the policy you get as to whether or not someone piercing a corporate veil. You don’t come in through an LLC after your personal asset. It’s going to protect that or not.
And then if you really want insurance for your company, personally, I would go to foundershiled.com, that’s who I use. I’m trying to think of some type of E&O or some insurance when we had to deal with a big Fortune 500 company and they required us to have, of course, crazy stuff that no one else requires you to have. I went to foundershiled.com, had a great experience with them when they were first starting out. They’re much further along now and really can’t recommend them highly enough for folks like us who really don’t want to deal with all the nuts and bolts of it but kind of need to get some [inaudible 00:26:49].
It depends on your risk tolerance how soon you want to do this but those are our general thoughts. Thanks for the question, Z. I hope that was helpful. Our next question is from Hamish and it’s about outsourcing development and NDAs.
He says, “I’m a new listener. I’m catching up with previous episodes. I’ve a question. I have a website which at the moment is no more than a hobby. I want to outsource some development to see if I can take it to the next level. I’m presuming NDA is not worth much for a small website. Should I be at all bothered about giving access to the code to a third-party developer? Are there any basic steps I can take to protect the copyright and the ideas?”
What do you think, Mike?
Mike: It goes back to the standard disclaimer: We’re not lawyers or insurance agents. An NDA is probably not going to be worth the time. The one thing I would be aware of or at least pay attention to is it when you are having somebody else build the code for you or write anything for you that you want to have a contract of some kind in place. If you’re hiring them through something like Upwork, that is generally taking care of it for you, but otherwise, you’re going to want to have something that says that it’s essentially a work for hire and that you own the output of that. That is probably the most basic thing that I would do. That ensures that you own whatever it is that they write for you. Beyond that, I don’t know. I wouldn’t worry too much about it because at this stage, it’s just an idea and it may or may not go anywhere.
Let’s say that they build it and you start making a couple of thousand dollars a month from it. The chances of them stealing it and trying to do the same thing, I would say are probably small. But even if they did try to do it, it’s not the app itself; it’s all the marketing and the sales engine and the sales funnel and emails—all the stuff that you do alongside of it—that is going to make that much money, it’s not the code itself and the app.
Rob: Yeah. I’m not sure how much I have to add there. There’s always risk with this kind of stuff. I would say that I’ve had dozens and dozens of developers that I’ve hired, some for really small projects, some for really big ones. As far as I know, none of them have ever stolen my code and gone off and tried to compete with it. I mean, maybe here’s a chance that I had a class in something that interacted with Stripe or with Twilio and they took it and used it in another project. How would I possibly know? But I have not had that experience.
I think that it’s easy to be bothered by this stuff. I think it’s easy to be overly concerned with it. It does depend on risk tolerance, but I would really air on the side of just hiring someone good and interviewing them to the point where you trust them and letting them do it and trust that they’re not going to steal your code because most people frankly, want the paycheck. It’s just so much effort to steal your code and try to do something with it. The odds of it happening I think are pretty slim.
Our next question, Mike, I pulled off of Quora. It was in the startup section and it said, “How much should an MVP cost?” What do you think about that? I love the premise of the question. It’s just like, “Oh boy!”
Mike: How much should an MVP cost? This seem like a trick question.
Rob: I would say that an MVP should cost zero.
Mike: Zero, yes.
Rob: I mean, not in all cases but remember, an MVP really shouldn’t be a software product, if at all possible. It should be me strapping a Google spreadsheet to Zapier, to a VA, to me peddling a hamster wheel that makes the thing go on, and to make give the appearance that I have a product but in fact it’s just all human-powered. I mean, that’s just one example. But I think an MVP should as little as possible. Take the number in your head and remove a zero or two.
Mike: I think the interesting thing about this question and maybe is because it comes from Quora, there’s people who are not necessarily as experienced in understanding exactly what a minimum viable product would actually be. But really what you’re looking for there is, “What is the least amount of work you can do to answer a particular question?” And you have to start with the question. If you don’t start with the question, you’re really not doing the whole MVP process correctly.
That’s kind of the core of the issue here I think is if you don’t understand what an MVP actually means, then asking how much it should cost is almost irrelevant because it really depends on what the question you’re trying to answer is. Like, “Will people pay for this?” “Well, just go online and do a Google search and see if there are other products out there that exist that solve that problem. If so, then yes.” That’s a very simple thing to do and it costs you absolutely nothing more than a few keystrokes. But if it’s a lot more complicated like, “Can you get $1000 or $10,000 people to your website in order to validate that you can acquire that traffic in order to potentially sell them something?” Well, that’s a very different question that you’re trying to answer. The amount that it’s going to cost is going to be different.
I would actually differentiate between how much time it’s going to cost you versus how much money and over what time period because all three of those things are very different. You might be able to find out a piece of information, but it could take three months. It might only take an hour or a week for the three months but the total time span that it takes is going to make a difference. If you’re trying to validate a couple of different ideas against one another or answer several different questions, it can become difficult to answer all of them in a time frame that is appropriate to whatever your current life situation is.
Rob: Yup. I think those are good points. Like I said, I think it should cost, frankly, as little as possible. You should be able to strap together a lot of tools and not have to actually build software if you’ve validated to that point or you get your 10 or 20 buy-ins, your purchases, pre-purchases, commitments, or whatever you’re going to do. I agree with you. I think I like the different dimensions you put on that words like there’s price, there’s hours of your time, and then there’s duration–is it 6 months or 12 months or 2 months or whatever.
I would love to get an MVP done in less than two months for, I don’t know, less than $5000, less than $10,000. It depends on who you hire. If you hire in the States, it’s going to be more expensive. It’s kind of hard to say, I think but I do think it’s an interesting thought experiment. It’s like, “Are you building an MVP of an email service provider or are you building an MVP of a little form app, like something that compete with Typeform or Google Forms or something.” That’s a totally different use case.
Again, if you’re going to give people Type Form, you just build the form UI, have it go straight into a Google spreadsheet so you don’t [inaudible 00:33:48] have a database and then to actually build the UI to build the form, you manually build that directly with your customers, you don’t build any type of form builder. You know what I mean? That could literally be like a weekend project of just displaying a landing page with the forms that you plug into some XML file or some database or JSON thing. That’s pretty minimally viable but it would be a product if you’re trying to test something out.
Anyways, I think that probably wraps us up for the day except for our final question of the day, Mike. The Star Wars Holiday Special marked the first appearance of which Star Wars character? There are four choices: Jabba the Hutt, Boba Fett, Jar Jar Binks, Lando Calrissian. Do you know the Star Wars holiday special? Have you heard of it?
Mike: I’ve heard of it.
Rob: It’s from the ‘70s. It’s awful. Go to YouTube and look it up. It is really not good. There’s this thing called life day and there’s wookiees and it’s really not canon.
Mike: I sort of vaguely remember hearing about it or seeing it. The question is which of these four characters shows up for the first time in that?
Rob: For the first time in the Star Wars Holiday Special that came out in ’78. It’s Jabba the Hutt, Boba Fett, Jar Jar Binks, Lando Calrissian.
Mike: I’m thinking Boba Fett.
Rob: You are correct.
Rob: It’s in an animated segment of the show.
Rob: Yup. This has never been released on video but as I said, you can hit YouTube or other places to find recordings of it.
Mike: Oh, that is shockingly nerdy.
Rob: It is. It is nerdy. I couldn’t get through it. I watched five minutes of it, and I had to scrap it.
Mike: Is it that painful?
Rob: It’s awful.
Mike: It’s painful as a podcast and our jokes.
Rob: Yes, it is indeed.
Mike: Oh, that’s terrible. Well, on that note, if you have a question for us, you can call it into our voicemail number 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. We’ll see you next time.
In this episode of Startups For The Rest Of Us, Rob and Mike answer a number of listener questions, topics include fixing onboarding, marketing a low LTV product, and the legality of cold email.
Items mentioned in this episode:
Mike: In this episode of Startups For The Rest Of Us, Mike and I talked about how to fix your onboarding, marketing the product with a low lifetime value, and more listener questions. This is Startups For The Rest Of Us episode 382.
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.
-: And I’m Rob, I guess. And I’m not Mike.
Rob: That’s what Sherry said when she was on the show, “And I’m not Mike.” What’s going on this week, man?
Mike: I just pushed the new Bluetick website live this week. That’s finally out there, they were out, I think, Monday night. Just been making some minor tweaks here and there just to get the images all straightened out and smooth out some other rough edges.
My main focus was just getting the design itself in place and then the copy along with the new updated theme because it’s all built on WordPress. Now that that’s stuff’s in place, I actually have to leave in four or five hours to go to FemtoConf and then once I get back, then I’ll probably finish off the rest of the little minor things that need to be taken care of and just make sure all my plugins are installed and all the analytics are working and then from there just start marketing.
Rob: The site looks great, it looks really nice. It’s like ten times better than what you had up there. All the way from the look, to the images, to just the verbiage and then what you have there. Bravo on that. Can I give you two small critiques? I’m sure these are behind on your list. You have a testimonial on the home page which I think is great.
Mike: Actually those are gonna be swapped out.
Rob: Cool, you got multiple, but put big old quotes around it. There’s something about seeing quotes around it. I know there’s Justin’s face there and then there’s a testimonial to the right of it but without the quotes, it’s like there’s just something there. I really like to call out large quotes because then people know the guy is saying that. It’s a little thing that I see in a lot of sites but I think there’s some impact.
Mike: Yeah, I’ll definitely do that. What’s the next one?
Rob: The other one is, you know what, this one isn’t actually a critique. You have one sentence description at the bottom of the page in the footer about Bluetick and it says, “Bluetick relieves the soul deadening drudgery of email follow up for founders, overworked sales executives, and anyone who’s ever lost a perfectly good lead to the email blackhole.” That’s a really well-written thing. Why does it say FIP? What’s FIP mean?
Mike: I don’t know, actually I think that’s gotta be RIP.
Rob: There’s just a little typo there. I don’t love your logo because it took me a while to figure out what it is but it looks like it’s a dog eating an envelope or carrying an envelope, is that right?
Mike: Yeah, it’s carrying an envelope.
Rob: I’m sure it looks better when it’s big but given the size on your site right now. Listeners, you should go to bluetick.io and check all this out and see if you agree with me or what else we can figure out. I’m sure changing your logo is like priority 942 on your list right now.
Mike: Yeah. The only reason I even had the logo done was because before it was just text and I wanted to have something up there so that people could associate the logo with the text itself because there’s familiarity that people get with certain text fonts especially when they go with a particular logo but I’m gonna be using that logo inside of some of the emails and stuff that are being sent out. I just want that familiarity to at least be there.
It wasn’t necessarily important, it was just like okay, if I’m doing a step up, the previous logo was literally a stock image that was just black and white of a dog’s face and it was just not very relevant, I’ll say.
Rob: I would think if you could somehow simplify just the dog’s face, turn it into a line drawing or something. Again, I realized it’s hard because you can’t do it yourself, you’re gonna have to hire somebody. I don’t think this is a deal breaker, I don’t think people are not gonna sign up for the app because of that. It’s just something that every time I come to the site I notice it and I’m like it’s a little busy.
Mike: This is gonna turn into a website tear down episode.
Rob: It’s gonna be the whole episode. These are very minor things. There are no typos on the page, the copy is good, personal touch at scale for all your follow up emails, that’s your headline. It’s really well-written. Obviously you could split test against something but nothing comes to mind as like boy, this copy is really jacked up or anything. It looks good.
The only two, again these are minor things, your Drip widget popped up on me after maybe 5 to 10 seconds. I was in the middle of reading your headline or the subheading and the thing popped up. I would probably push that out to 30 seconds, you have quite a bit of [inaudible 00:05:05] on the page, maybe even 45 seconds. Just give people a bit of time to read a little more.
Last thing is, your title tag on your home page, it says, “Home-Bluetick.” I know you’re not doubling down on SEO right now but really, Google has probably indexed you already. You may wanna start that with something, I don’t know what keyword you’re gonna be targeting or keywords but whether it’s email follow up or whatever generic phrase you would love to rank number one in Google, at least have that somewhere in there, probably towards the front.
Again, I wouldn’t keyword stuff but Home-Bluetick isn’t gonna get you much. You don’t want people to find you for the word home. People are gonna find you for the word Bluetick. Neither those really need to be there, although I’d probably still have Bluetick in there somewhere. That’s about it, man.
Mike: All of those are great suggestions. Some of them, like you said, the typo, I knew that I had to get to that but I just hadn’t gotten to it. I feel like extending out the Drip widget a little bit so that it gives people more time. All the title tags and stuff like that, I have not even looked at any of those yet. That’s on the list of things to do when I get back.
Rob: You have some art on the tour page, that’s very cartooning. Those look really cool, I like the feel of that. It’s very professional feel.
Mike: The designer who did the website, he came up with those illustrations. We went back and forth on a couple of different design ideas that he had and those are the ones that came out of it.
Rob: Very cool, man. Good luck. I’m interested to hear how it impacts conversions and all that kind of stuff.
Mike: The main focus of doing all of this stuff was just to give the website a much better feel to it so that when somebody either came to the website itself or was directed to it because of a referral, it doesn’t look like something that they would’ve just clicked the back button and said, “No, I’m not even gonna give this a chance.” I did hear that as feedback from people where I recommend it to so and so they told me that if I had not recommended it to them, they wouldn’t have even given a second thought.
It’s really to just overcome that as a primary objection. I can do a demo for somebody or a webinar and I could sell them on it and say, “Yes, this is what the product does.” By showing them inside the product and what it can do for them and solve their problems, yes it’s fine. But a completely cold lead who comes to the website has no idea and they’re not gonna give it a chance, that’s really what it is. The bar for something like a SaaS product is much higher than something that the old website could even overcome.
Rob: The bar is much higher than it was five or ten years ago as well. I think you made a good call here. Doubling down on this, you’re at the point where you’re starting to scale getting more trials coming through the websites, now is the time to do that. If you spent much time on this when you’re in customer development, it would’ve been a waste of time. I think it was a good use of time and money.
I wanted to talk a little bit about MicroConf, it’s coming up in April, Starter Edition. We still have tickets left and we have some really good speakers this year. We have Mary Pullen who’s talking about her first year of SaaS bootstrapping. We have Alli Blum talking about copywriting and onboarding emails, she’s been on the show. You’re speaking, Justin Jackson, Ben Orenstein, Courtland Allen from Indie Hackers, Mojca Mars about Facebook Ads, really solid lineup this year.
If you’re at all interested in hanging out with 100-250 folks who are all the way from idea to making a full time living from their business, head over to microconf.com, click on Starter and the tickets are relatively inexpensive compared to most conferences and we do still have some left. We’d love to see you there.
The other thing is I’m driving to Lake Geneva, Wisconsin next Thursday or I guess it’s two days after this will air to attend Gary Con, have you heard of that?
Mike: I have not. Is that related to Gary Gygax?
Rob: Yes, Gary Gygax was the creator of Dungeons and Dragons. He died in I think it was 2010, 2012. Basically friends and family just got together and played a bunch of games. It’s like there’s table top games, there’s card games, and RPGs and miniatures and the war games and all that kind of stuff. It was like 20 or 30 people the first year and they jokingly called it Gary Con in his honor. The next year, they sold a few tickets and they had 100 people and it just turned into this thing.
I went last year, it’s kinda neat being in the midwest. I’ve never gone because I was never gonna fly from California out to Lake Geneva, Wisconsin but being in the midwest, it’s like a four or five hour drive. Last year I was kinda nervous about going, my son and I, we obviously love and play these games but we’re not sophisticated gamers, we’re just playing for fun and there are about 1200 people there. It was a blast, man. It was so much fun.
People are really nice and welcoming. I’d come up with my ten year old son and I was like, “Hey, we’ve never played this.” They’re like, “No problem, we have a character for you, here’s how you do it.” They were just super helpful. Anyways, I’m really looking forward to that. If anybody happens to listen to this and be there, please drop me a line. We’d love to connect with you but if not, I’ll certainly report back about the nerdery that’s gonna take place in Lake Geneva next week.
Mike: That’s awesome. I’ve been to a couple of gaming conventions like that, there was one in Buffalo, New York that I went to. It’s probably 10 or 12 years ago. It’s interesting because there was a guy there who had a role playing game that he was trying to launch and trying to get funding for but he was also still doing play testing for it. There was a room of 25 of us, he basically threw us into this game. I think the game was called monoxide amazon or something like that.
The idea was you’re in this world where you just basically have to run away from everything, everything is out to kill you. Half the people died in 10 or 15 minutes or something like that. It was like an hour long session but out of all of us, I think there were only five or six of us that made it out alive.
Rob: That’s cool. That’s the neat part. Last year the same thing happened, there were several people there who were trying to get their games on Kickstarter or going to put them on but they were doing play testing. My son actually played that Tower Defense game board game that he enjoyed a lot. The convention itself, it is four days.
We’re only going for three days of it but it’s not just some eight hour session, we’ll probably game as much as we can, eight to twelve hours a day, we’ve already signed up for tables in advance and then we’re also wandering around. There’s so much cool stuff to buy too, it’s really bad. I need to limit my spending but I get overwhelmed how much cool stuff people bring. It’s a great time to buy dice and miniatures and all kinds of geeky stuff.
Mike: Cool. What are we talking about this week?
Rob: We have a few listener questions. Actually, by the end of this episode, we will have zero listener questions in the cue. I don’t know if it’s woohoo or not. We’re gonna have to come up with some content next week. If you do have questions for us, please, email them to us at firstname.lastname@example.org or certainly call our voicemail number which we read at the end of every show.
Our first question is from Tim Win. He has a couple questions in the same email. His first question, he says, “I was wondering, for a B2B Saas targeting specific niche market, what will be a good amount of traffic I should try to generate to get meaningful feedback?” Aside from it depends, do you have thoughts on this? Because it does depend, that’s a very general answer. Let’s weigh it on, I may have some thoughts.
Mike: I think when you ask a question like this, what you’re really trying to get out is the amount of feedback that I’m getting good enough in relation to what other people would get or are you getting the feedback that you need to make a decision. I think that’s how I would approach it to figure out whether or not you’re getting enough traffic.
You have to decide on what your KPI for that website is and how you’re going to be gathering information from people. Let’s say that you use Hotjar and you put a poll on your website and you get 100 or 500 people to it and you get 3 people to answer the poll, that’s not a good percentage but 3 people out of 500 visitors is not going to help you in any way, shape, or form. Even just adding once answer is gonna skew things in such a direction that it’s just not helpful.
I think I would look at it in terms of how much feedback you’re getting versus how many people are visiting. Also, recognize that when you’re looking at the traffic stats for a particular website, it’s very easy to misinterpret bots coming to the website to just crawl it versus actual visitors who were there for purpose or came from a particular search term or were directed from an email or another website.
Rob: If you’re using Google Analytics, though, I don’t think it picks up bots, I’m pretty sure it does not, it’s only if you look at raw server logs, just a caveat in there.
Mike: But it is hard to tell when you’re looking at that because you do see on the server logs, you’ll get 20 or 30 visits a day. I’m not convinced that Google accurately filters out all the robots that it’s supposed to.
I’m guessing they would exclude it if they could. They’re pretty smart about that. The point is if you’re not using Google Analytics and you’re using your logs, they could be in there.
Mike: That’s true. With this particular question, what you’re really trying to get out is what is the information that you’re trying to retrieve from people and what feedback is it that you want. Do you want conversations? Do you want them to comment on something? Do you want to get them on a phone call? What is the KPI that you’re trying to push people towards? Are they doing it?
I don’t think it’s a matter of trying to measure the actual traffic itself because, I think, bear minimum, you probably need at least 500 visitors a month, anything below that you’re just really not gonna be able to make a meaningful business out of it.
The other thing to consider is the fact that not every B2B SaaS product needs to have traffic coming to its website if that’s not your primary source or primary channel for marketing the product. If you’re doing outbound cold emails, for example, or if you’re sending postcards in the mail to people or you’re doing cold calling, none of those things involve people coming back to your website so there’s an implicit assumption here that the traffic that’s coming to the website is based on SEO or content marketing or something along those lines.
I would just be hesitant to say that there’s 100% correlation between website traffic versus being able to get that meaningful feedback because if you are doing cold calling, for example, you can get on a call with somebody and you can ask them questions and talk to them, get the information you need and they never hit your website at all. That’s something to keep in mind.
Rob: I think that’s probably the first point that I would make. I think that that’s something to keep in mind, is it’s not about necessarily driving a bunch of traffic to a form or to an opt-in. It depends on your business idea but boy, if you have no audience and no reach, I would probably start with some type of outbound, cold email, or maybe some ads going to a landing page or something.
There’s just no better way to get feedback because that’s his questions, it’s not how do I build a meaningful business, it’s how do I get meaningful feedback. The way you do that is you ask for it. It tends to have to be outbound. I would hang on with this concentric circle marketing I was talking about.
I would talk to my friends and colleagues and then their friends and colleagues and then their audience and then eventually you get to the cold audiences but I would start in the center with the people that you know if you truly are going for feedback.
In the early days of Drip, yes, I threw up a landing page and put some copy on there. The only reason I did that was because I was going on podcasts and people were asking me about it and I wanted somewhere to send people.
Eventually, once I knew what we were gonna build, I started doing some ads to it and I did build a list from there but that was not the way I got meaningful feedback. The way I got meaningful feedback was a bunch of warm emails to people within my network asking them, would you use this tool? Here’s a screenshot, what do you think? And then started building momentum there. I think that’s the way to think about this.
If you wanna build an actual sustainable business and you’re asking about how much traffic, DotNetInvoice, which depended on the month but between $2000 and $4000 a month, pretty consistent, sometimes it got to 5000. That site had 1000 to 1500 uniques for years. It was just a really high converting site and it was in a vertical. That’s what he’s asking about here.
He’s like, it’s a B2B SaaS, it’s in a vertical niche. You don’t need that much but you are gonna top out at some point and just stop growing. DotNetInvoice was $300 one-time purchase. Keep that in mind as well.
With 1500 people coming to your site, if you think about, let’s just throw out a 1% conversion rate to trial, you’re gonna get 15 people into trial funnel, that’s with credit card upfront. Let’s say you close 50% of those to customers which is likely, then you’re gonna have seven or eight new customer a month.
You have to ask yourself, if you charge $1000 a month, that’s probably pretty good. If you’re charging $10 a month, that’s not very good. You have to think about your price point and just think about the numbers that I threw out there and you can do backwards math and figure out how many people you need to send to figure out how fast you wanna grow.
Tom’s second question was that he seems to be getting free trial sign ups but once users get into his onboarding which is like a getting started wizard, he seems to lose them. It’s only three steps, it’s nothing too complicated, just adding their location, product service they provide, and setting a payment processor so they can take payments from their customer.
“Some seem to get to this part and never log in. Any idea why? It’s driving me crazy.” What would you do if you were in his shoes, Mike?
Mike: I was gonna say there’s no way for us to really answer why that is. I think that if I were in his shoes and I was having this particular problem, I would email those people individually who never got past that point and see if you can help them, either just walk them through it or ask them questions about what their experience was. Your best case scenario is to get them onto a call to walk them through it and do a personalized onboarding session and then watch them as they go through it so you could just use Zoom to watch over their shoulder as they go through.
The nice thing about doing that is if you do it for them, then they see it but if you let them do it because they don’t know exactly what they’re doing, they’re going to click on stuff that they shouldn’t and you’re gonna be able to recognize that and say, “Why did that person click there?” You can ask them literally on the call, “Why did you click on that? What was it that made you think that you were supposed to click on that?”
Maybe they’re getting confused about the UI, maybe they just don’t have time to log in so they never set up their account.
I think there are other questions I would also ask about like do they come into the site and get there or do they just never come in? If they’ve gone through the signup, does it take them directly over to this three-step process or do they have to get an email and then they click on the email and then they come back into the application. How is that sequence of events set up and what’s the flow look like for the end user?
Like I said, because it was a race condition, it sometimes happened but not always. You really just need to talk to them and watch over their shoulder to watch them go through that and ask those questions to find out what it is that you’re doing. If they already got through that first step, they signed up, you have their email address or at least presumably you should. Contact them and follow up with them until you get an answer as to why they didn’t go through that next step.
Maybe they realized at that point that it was going to be more to set up than they thought it was. At that point, you have to evaluate, do I put this process in place? Do I need them to do those three things all at once? Could I spread it out? Are there ways to interject that as part of them using the product without forcing them through that concrete step all upfront? Let’s say that the location, for example, could you pull that from their credit card information?
Rob: Like their IP.
Mike: Yeah, that too. It depends on how accurate you need it to be. Like time zone, you could probably pull from somebody’s browser. If you need the address, could you pull it from their credit card? That depends on whether or not you’re taking credit card upfront which sounds like it’s not because it’s free trial. Those are the places I would start.
Rob: I think that’s spot on. The one other thing I would consider is taking away self-service signup and just putting a request demo button. When they hit that, they can just book right in Calendly and set something up. If you really wanna do this well and this is what you’re focused on, the requested demo button, you could respond to that within minutes.
If you’re relatively low traffic and you really are just hacking away all day right now, try to get back to people within ten minutes of them clicking that and just get them on the phone, do a Zoom meeting and do a screen share and walk them through. It’s essentially what you said, Mike, but I’m just saying you take away the self-service signup portion.
I think that right now it’s gonna be about talking to customer sounds like you’re still in the early days. You could throw Hotjar on there and do screen recordings, you could throw Crazy Egg in there and do heat maps, you can do all that stuff but you’re never gonna find out why, you’re just gonna see what is happening. The why is obtained through having a conversation with them. I would be more hands on these early days, you don’t have to do that forever. I think you’ll certainly find out that it’s pretty valuable for your learning, for accelerating your learning in these early days.
The last question was for you, Mike. He says, “I was listening to one of the podcasts, Mike was saying bluetick.io was having usability issues he had to fix. Are you able to get into detail? Just curious as to what some of them are.” I recall you talking about one usability issue, interested in talking about that?
Mike: Sure. The main usability issue that I have addressed towards the past six months or so, they had to do with onboarding. When somebody signs up for Bluetick, one of the first things that you have to do is you have to set up your mailbox and you have to add in your username and password. If you’re using Gmail, there’s all these different settings that you have to connect. You have to have IMAPS or hostname, username, password, port number, the encryption level. You also have to have the exact same information for your SMTP server because it may not be the same.
Initially, I had a set up page where you had to set up your mailbox and there were probably a dozen different settings. What I would do is I would personalize onboarding for each person, walk them through it, watch the backend because not everybody knows what ports they’re using for their mail server. Some people are technical, some people are not, so I walk through it with them.
I got to a point where I knew that certain types of mail servers were very common, you’re using Gmail or Google Apps. I could guess what those are because it’s always gonna be imap.gmail.com and then also smtp.gmail.com but your username and password are gonna be different.
I could basically filter out a bunch of those and I was able to shorten down the page itself but in addition to that, there were still problems because if you a have two factor authentication set up or you don’t, you either have to enable less secure apps or you have to enable two factor authentication and you also have to make sure that IMAP is enabled.
Overtime, I whittled down the number of things that somebody had to do to get their mailbox set up. At some point, I transitioned to the point where if you are using Google Apps or G Suite, as I call it now, you can just click through and go through the OAuth authentication. That basically takes care of everything for you, you’re just putting your username and password in Google, click the button and boom, everything is taken care of for you.
There’s very much a progression where I slowly pulled myself out of the setup process. On day one, I didn’t necessarily know what everybody needed and I didn’t have everything coded. I pushed myself into the process to make sure that it got done.
Rob: I think that’s a great way to do it. We had several integrations in Drip that were a pain in the butt to set up. You had to go and install a WebHook and do all this and that. We’ve been going back as we’ve grown and scaled and making them all OAuth if the provider allows OAuth. We always call it V1. V1 integration was just to plugin and then V2 is to add OAuth and V3 was to make the triggers native. There were all these things and we just have the verbiage or the language that we all knew on the dev team.
You have been in your early days, it’s customer development time. You could’ve spent another three weeks in the early days making it super simple but you didn’t need to because you’re walking people through it. I guess this is technically a usability issue but it’s like a deliberate decision to move faster and then circle back and iterate. I think that’s something that people should keep in mind as you’re building your app. It doesn’t need to be the best all the time, you gotta do your best.
Do you want your code to have not a lot of croft and not have technical debt? I wouldn’t skimp on that. But when you’re moving fast, I think making a first past through and having the usability in some areas be not as ideal as maybe you’d like and you know that and you plan to come back, I think that’s a pretty good approach.
Mike: The other thing that I use specifically in this particular case which people might find useful is that I made this decision for this piece of it specifically because it was a setup piece. I knew that it was something that most customers are only ever going to do once and once it’s done, that’s the end of it. Even if it takes me 30 minutes or 45 minutes on a call to set somebody up and get that stuff connected properly, it doesn’t matter because it won’t have to be done again.
Obviously I don’t wanna be on a call with every single person for 45 minutes just to get them set up and then after that try to do some level of onboarding and customer development. If I can get that stuff taken care of later on, I basically just kicked it down the road because it was that one-time set up and it wasn’t gonna have to be done again. You can use that as a deciding factor as to where you’re going to spend your time.
I see a lot of other vendors doing this where if certain things are painful, you tend to find those things in places where the customer doesn’t have to do it very often. The one example that comes to mind is Oracle installer which for 10 to 15 years was busted. It was fundamentally broken on Windows, you literally could not install Oracle without it failing and then having to go in and fix stuff. They finally fixed it in 2012 or something like that. But for a long time, it did not work at all.
Rob: I remember that, that was crazy.
Our next question is about cold email, it’s from Greg Ristow from utheory.com. He says, “I love the show, I’ve got a startup music theory learning site which is just now at $1500 per month in revenue with very little marketing.” Congratulations, by the way. That’s a nice market to hit.
“Starting to think about email marketing strategies for reaching college music theory faculty, and high school music teachers. I’m wondering about the legality of gathering names and emails from school websites. When I look around the web, I get conflicting information on how CAN-SPAM applies.” That’s a law in the US about not spamming people. “I know in my own day job as a college music faculty member, I regularly get emails from companies who pulled my email from my school’s website. Any advice?”
Mike, I know you have a lot of thoughts on this. I’d say give a short answer and then a longer answer.
Mike: The shorter answer is that it is legal to go to somebody’s website and pull the email addresses. At that point, depending on how you email them, that’s where the piece of CAN-SPAM falls into place. It’s not about whether or not you pull the emails from the website or whether you gather their contact information, it’s really about what you do with it after the fact.
Underneath the umbrella of the CAN-SPAM Act, there’s basically three different types of emails that are sent out. There’s commercial emails, there’s transactional emails or relationship emails, and then there’s other. I’ll talk about those in a minute but most of what CAN-SPAM basically says is don’t lie to people or forge header information when you’re sending emails and try to hide what it is that you’re trying to do.
For example your from email address should actually be you or your business. Who it’s to should be that person, don’t be forging emails to people like if I were to send an email to you and I forged the header information and said that it was Bill Gates, then it starts to fall under the CAN-SPAM laws. Lying about those things, not specifying that something’s an advertisement, or line about what the subject is.
Let’s say that you say that it’s about your recent payment, and then in the body of the email you’re saying it’s a Viagra commercial or advertisement. That right there is a violation of CAN-SPAM because you’ve not said that it’s an advertisement and you’ve also lied in the subject line.
Not telling people how to opt out of future emails, that’s another one and then honoring the opt outs. A lot of those things are typically handled by an email service provider. Those are the things that you don’t typically have to worry about.
Going back to the three different categories of email that are defined here, there’s the commercial intent which basically is an advertisement of some kind. That’s really where the pieces of the CAN-SPAM Act are that you need to pay attention to. If you’re advertising a product or a service and you’re promoting it and sending emails to these people, it’s very clear that you’re trying to get them to sign up for a service, that is a commercial intent email.
If it’s a transactional email, that essentially is exemplified by things like somebody comes to your website, buy something, and then you send them a receipt. Emailing them the receipt, that’s a transactional email because they did something and then they received based on what they did.
The third one is other. This is where you get into a very, very grey area because all three of these things are all about the primary purpose of the message. What is it that that email was intended to do and what are the contents of it. If I send somebody an email that is completely unsolicited and it’s got links for them to buy my service or to come into my website and look at the product to learn more because I’m essentially pitching it to them and saying, “Hey, would you like to learn more about this? Here’s the website.” That is more of a commercial content.
If I email somebody and I say, “Hey, I’d like to talk to you about X because I’m exploring this idea.” Or, “I have a product and I’m doing some customer development.” That is not commercial because you’re not actively selling them something, there’s not an advertisement in it. It’s also not transactional. What happens is those types of emails fall under other.
I will put a blanket categorization here that says I’m not a lawyer. Just take some of this with a little bit of interpretation and a grain of salt because this isn’t legal advice. But my reading of all of these things is that that commercial content, the transactional and other, you can essentially leverage those three. Depending on what it is that you’re putting in the email, a lot of times, you can force it to fall underneath the other category which essentially says that it doesn’t need to follow these CAN-SPAM laws and regulations.
Rob: I think the TLDR on that. Again, we’re not lawyers, we can’t give legal advice but it is generally accepted practice that, yes, people do scrape emails from websites, whether they gather them by hand or whether they have a VA to do it or whether they write a script to do it. It is legal to cold email people even for commercial purposes, I receive them all the time.
I may morally or ethically consider them spam and certain people do and they say, “You’re spamming me.” Based on the legal definition, that’s not. I would give you the advice, don’t use a bulk email program, you’ll get shut down. Script that list and then import it into Drip or MailChimp or anywhere, we’ll block your account because people will mark them as spam, there’s gonna be bounces, people are not gonna open them, they’re just gonna have low engagement. Those cold emails should not be in a tool like Drip or MailChimp, they should be in a tool more like Yesware or Bluetick.
Mike: That’s correct. The interesting thing there is that the reason Drip and AWeber and MailChimp and all those others are stopping people from sending those types of emails and stopping them from importing the list and blasting them out is because what happens is that people on the receiving end of it, if they don’t like the message, they can mark it as spam. That’s not a legal definition that it was spammed, it was that that person classified as spam. What happens is that then negatively impacts the provider.
In that case, they’re protecting not only themselves but also all of the other customers that they have. Let’s say that I imported a thousand emails into Drip and I basically blast something out and then a lot of them started getting marked as spam, I am then thereby impacting the rest of Drip’s customer which obviously is a no, no. I would expect them to shut me down.
Versus if you send it out through Yesware or Bluetick or all these other things. What happens in those cases is if somebody reports to the spam, it actually goes against your own domain as opposed to somebody else’s. From my standpoint, if you’re gonna bash your own domain and you really are spamming people, and it is classified as spam, then you’re negatively affecting your own domains, not mine, not any other customers. At that point it doesn’t impact me as much.
The email service providers, the reason they’re doing it is not for legal reasons, it’s to essentially protect their current customer base and the send rates and deliverability of everything else that they’re doing.
Rob: That’s right because they shared IPs and shared sending domains. We are at time, sir. At the start of the show I said we’d get through all the questions but we did not, we have one question for future episodes. We will revisit that at some point. You wanna wrap us up for today?
Mike: Was that a deliberate lengthening of the episode to make sure that we had the one left or no?
Rob: No it wasn’t, I figured we would get to all of them, we didn’t have that many questions but obviously some of the answers were more in depth and we just ran a little long today.
Mike: If you have questions for us, you can call it into number at 1-888-801-9690 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. Visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
In this episode of Startups For The Rest Of Us, Rob and Mike answer a number of listeners questions. Some of the topics include dealing with contractors, improving conversion from trials to paid, and time management.
Items mentioned in this episode:
Rob: In this episode of Startups For The Rest Of Us, Mike and I talk about staying motivated, improving onboarding, improving conversions, and more listener questions. This is Startups For The Rest Of Us Episode 369.
But before we dive into the intro, Mike, I have a question for you.
Mike: Oh, boy!
Rob: Why doesn’t McDonald’s sell hotdogs?
Mike: They have, actually.
Mike; They’ve done a bunch of experiments with selling hotdogs. I think I’ve seen them in Texas but I’ve also seen them in other places where it’s certain times of the year. They’ll just test it out to see whether it’s going to work or not. It’s usually just like a limited edition item. But they have tried it, I know that. And now you know.
Rob: 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 built your first product or you’re just thinking about it. I’m Rob.
Mike: I’m Mike.
Mike: I had something on my throat.
Rob: What happened with your throat? We’re here to share our experiences to help you avoid the same mistakes we’ve made. Oh, this is a good week for the intro.
Mike: Perfect, yes.
Rob: I realized something because I was flying to and from Europe and I downloaded just some older episodes, in the 200s, I just wanted to check out what we were talking about back then. The intro was different. It was like building software products or something, instead of building, launching, and growing. I think I like our new one. For a long time, it was just developers building software products, and now it’s developers, designers, and entrepreneurs. For sure our audience has expanded over the years. It was just kinda funny to hear it and for it to trick something, click something in my brain and I’m like, “Ugh, that’s not the intro.”
Mike: Yeah, definitely. Things have changed over time but it is interesting sometimes going back and reviewing things that you remember from a long time ago. It definitely is a different tone or connotation with it. Actually, Benedikt mentioned something about the fact that he was thinking about MicroConf Europe and how over time, his view of the conference has changed but also, he has changed as a person after several years of coming to MicroConf just based on the things that he’s learned, the things he has done. Although the conference, in many ways, stayed the same, he has changed and evolved.
Rob: Yeah, that makes a lot of sense. Thanks for bringing him on, by the way. It was a bummer week. You and I couldn’t discuss MicroConf Europe but I felt that you guys did a really good job of covering the topics.
Mike: Yeah, we ran a little bit out of time at the end there. We didn’t get the chance to cover end of the attendee talks which all of them were I thought were fantastic, but it would have been nice to have a little bit more time to dive into those.
Rob: Sure. That’s my updates for the week, I guess for the past few weeks, because I haven’t been on the show for a bit due to the travel. Really was going to Lisbon and I really enjoyed getting to know Lisbon. It’s a very livable city, obviously a lot more relaxed than Barcelona. There’s not as much there in terms of museums and sites to see but we really enjoyed it. We got a great little Airbnb. I was there with my kids and a nanny and we were just hanging out doing some travel. It was a lot of fun. Then, I did MicroConf Europe obviously, then met Sherrie in Rome the following week. We all hung out there for an additional week.
I just got back in town about six or seven days ago. It’s good be back in the States but travel’s always fun. It expands your mind. I found myself being way more creative and seeing things with new eyes. This is my second time back to Rome, really the whole family’s second back to Rome. It was neat to see our kids seeing the Colosseum, seeing these museums, and these sites, and remembering and talking about the last time we were there.
Since they were older, it was so much easier. I think it was three or four years ago we took them, the youngest was three or four years old and I just remembered it was hard and it was tiring, this trip was not that. It was so much more. They’re really good at travel now because they’ve done it a few times. Even on the long flights and the time change, it was a seven or eight hour time difference, they just handle it now. It was a really good trip. It was a really relaxing two weeks and I didn’t know if it would be, you’re travelling with two kids, and a nanny, and sometimes the wife, and sometimes not. There were multiple plane flights, there was a six-hour layover in Canada and we were all off time and we got tired at times but overall, it was such a worthwhile thing to do.
Mike: Awesome! Our kids today are much better traveller these days than they used to be but we still don’t travel too much, I don’t think. We went to my sister’s house for Thanksgiving, and that’s a five-hour drive or so but it’s not too bad. We spent about three days there and drove back.
Rob: How about you? What’s been going on?
Mike: Well, my wife got me a scotch whiskey advent calendar for Christmas.
Rob: Oh, man! Best gift ever!
Mike: Yeah, so that starts tomorrow, which I’m very excited about.
Rob: An advent calendar for those who don’t know, it starts in December 1st and there’s a little door that you open each day and it’s supposed to count you towards Christmas. The original advent calendar were pieces of a nativity scene which is the birth of Jesus. You open it and you built the scene over the course of the month. But now, there are lego advent calendars, chocolate advent calendars, and I had not heard of a scotch one but that is gonna be awesome. Every morning, you’re gonna open up and drink scotch with breakfast, is that the idea?
Mike: I was gonna wait until the evening. But, the others…
Mike: There’s 24 different ones in here.
Rob: Oh man, that’s gonna be good. Are they like the little airplane bottles?
Mike: They are like little 50 milliliter, or actually, I think 30 milliliter drams. It’s about a shot or so. It’s just a regular size but you know, there’s 24 of them in here and I saw the list of them and a lot of them are things that I’ve never tried before. It will be really interesting to try some of them.
Rob: For sure. 30 milliliters, Mike. That’s a third of a shot for me.
Mike: Well, I know. It depends on your hands.
Rob: Cool. Today, we are gonna be answering a slew of listener questions. We actually have four listener questions left over from MicroConf Europe. They’re not listener questions, they’re attendee questions.
You and I did a Q&A session at Europe and we asked folks for questions in advance and we ran out of time to answer them all. Maybe we’ll start with those and then go into our store of questions.
The first question is from Mark and he says “Rob, have you thought about integrating Drip with CRM platforms? Something like Salesforce, MS Dynamics, other more enterprise things. Often, a simple UI is missing the error.” We have discussed it. We do integrate with Pipedrive, with Close.io, we have a basic web-to-lead with Salesforce where a new subscriber comes in and you can just push them into Salesforce. I think we have Insightly as well, so we do have some CRM integrations.
There’s a couple things to this question. One is what do you mean by an integration? Do you just mean when they hit a certain lead score, you can push them into your CRM? Because we already do that with several systems. But if you mean a full two-way integration where it’s syncing up the data and tags and all this stuff, that kind of stuff is extremely, extremely complicated. The Salesforce alone would probably be about nine months of business development and partnership and development work. A huge amount of effort. That is one reason why I have not done it.
Another reason is our core market is not people with sales teams. That’s a whole other problem that other tools solve. We focus on people who are driving digital commerce, it’s like ecommerce, people who are selling things online, or if you take credit card online, we definitely work with SaaS apps and ecommerce sites and info marketers. Once you have a sales team, it’s less in our core competency and it’s not something that we really wanna double down on or spend the time on at this point.
Mike: One of the reasons this type of question comes up is because once you put your product out there and people start using it, they’re going to use it in ways that you didn’t necessarily envision, and you make changes to accommodate what seem like reasonable requests, but they start down a path of allowing people to do things that the product wasn’t necessarily designed to do from the very beginning. You just didn’t have the vision in it for it. To give you a prime example of that, which is in Drip, you’ve got the lifetime value that you can assign to somebody and that’s built right in. I wouldn’t say it’s front and center, but it is right there, kind of a standard option. That translates back to a CRM where you say, “Oh, what’s the lifetime value of these particular people?” It starts people down that path. It leads to questions like this, like how do you do the full two-way sync integration between Drip and whatever CRM that you have.
I think you have a great answer for it which is really trying to focus on what the things are that you do best and leave the other things to somebody else because you don’t want to try to be everything to everyone.
Rob: Yep, you have to focus.
Our next question is from Johannes and he says, “Hey, at the breakfast this morning, we discussed driving traffic either through side projects, and that was part of what Alex Yumashev had talked about which is kind of engineering as marketing. It’s building a tool that you launch on a weekend that does something; a website creator, an SEO creator, and then use that to drive leads, or through blog posts on subjects close to your product but not mainly about your product. Questions came up about how to convert these visitors into paying customers. What is you experience there and do you have any good advice?”
What do you think, Mike?
Mike: I wouldn’t say that I have any specific experience with taking side projects like that and trying to drive traffic. For context, because not everybody was there to listen to Alex’s attendee talk, but he talked about how he had built a number of side projects and then through those side projects had linked back to his main business website, and ended up getting traffic to his main website and converting those people into paying customers down the road, just by virtually the fact that he’s doing a lot of stuff in the open source community and people can browse that and they end up back in his website.
You have to treat is as something like a landing page or a lead generation mechanism as well. If people are there for a particular project, and that is in some way related to your primary product or set of products, then you have to think about how would you get them to basically buy into the commercial offering that you have. Is it related? Is the side project something that is tangential? Is it like a limited form of your main product? There’s a lot of variability there based on what the side product actually is versus what your main business does. Thinking about those things, and then using it as more or less like a landing page or launching area where you get those people over to your site, and whether it’s a specific landing page you have, maybe giving them additional resources on your website, get them on your mailing list. That’s really an entry point into your sales funnel is what you’re looking for. That’s probably the best approach for that. What do you think, Rob?
Rob: Yes, it’s all about if you’re driving people, his question is specifically if you’re getting people to these blog posts or getting them to the side project, how do you then convert them to paid? It’s all about email. It’s all about getting their email address, typically these side project things ask for an email upfront before they can use it, or you give them some results, and if they enter their email they get the rest of it then they’re on your list. There’s the WP Engine website speedgrader, there was the HubSpot website grader which I think was like SEO stuff that Dharmesh built, you had to enter emails for those. It was a nurture, education, and then it gets you through to become interested in using the product ultimately.
Mike: Right. I was actually thinking of it from a standpoint of you have a project on GitHub and it’s an open source offering versus what you had just mentioned, most of what Alex’s talk was about. The online tools that are free, engineering is marketing at that point, and you are absolutely right. You need to get that email address.
Rob: Our next question is from Paul and he says, “As a founder, I found my emotions get entangled in the success of my business. Any advice for emotionally distancing yourself from your business so you can make decisions more rationally?”
It’s obviously a longer answer but my short answer is go to zenfounder.com, listen to the podcast, click Contact Us link and talk to Sherrie Walling. That’s my quasi-joking answer but it’s actually a learned skill and someone who’s good at it can teach you. What do you think, Mike?
Mike: I agree with you that it is a skill. I have a hard time buying into the idea that there’s one set of things that you can do and those set of things are gonna work for everyone. Just based on who we are, our backgrounds, what sorts of things we’re interested in, and how involved we are mentally in our business and whether or not you are able to shut that off easily is gonna greatly impact the things that will work for you and what won’t.
It’s just like exercise for example. Some people have a really easy time getting up and going to the gym, other people don’t. Same thing with going to sleep at night or a variety of other things, whether it’s weight loss or what have you. There are different things that are going to work for each person, and there’s probably a lot of experimentation that you’re gonna have to do to figure out what those things are that work for you. You can get ideas from other people but that doesn’t mean that everything you hear is gonna work for you or is gonna work as well for you as it did for them.
Rob: This is really hard. This is the age old question and it’s one that I think every founder probably struggles with. I know that I did and I still do. I never quite was able to completely conquer this. I don’t think anybody has. That’s part of being about a good founder is that you care a lot. I used to joke, well half-joke, when my apps are unstable, I’m unstable and say things like my happiness is based on my MRR growth and while that isn’t totally true, it was…
Mike: There’s a lot of truth there.
Rob: There’s a little more truth than I would care to admit. I do think it’s learning, it’s becoming self-aware, or being able to gauge when you are really stressed out and then asking why. I’ll tell you what I do. What I’ve learned is that when I’m stressed out or when I’m angry or when I’m frustrated, I stop and I say, “Why do I feel this way? Is it something real or is it something that is fake, that is manufactured?” Someone said something stupid on Twitter that pissed me off, or someone is attacking this, or someone said something negative about my product and it hurt my feelings, and then I say, “That is a very real thing, but do I need to still be thinking about that now or is it time to let that go?” This all sounds very simple but this is how I cope with it and then I will totally be done, I’m gonna be done with that thing and I’m gonna make myself feel better. It’s actively thinking why do I have this stressed out feeling?
Also, a lot of people swear by it, I don’t do it but I did do meditation when the acquisition talks were going on because I probably have never been that stressed in my entire life. I would sit in the parking lot and I would meditate for four or five minutes each morning. It’s just listening to your breath and being aware of what’s going on with you rather than having your mind race about other things. That would help me get centered going into the day. I know that a lot of people swear by that. There’s a lot of different skills.
Deep breaths is something else I’ll do. I’ll sit there for 30 seconds and take three or four deep breaths if I wanna calm myself down in the moment. These are all small things that I do when I’m actively stressed. Trying to disconnect to yourself from the business as the original asker was asking is you don’t want it to trainwreck you when things go sideways, but it should impact you in some way. You care about that a lot, it’s kind of like losing a game that you’re really interested in. You’re playing soccer, or you’re playing chess or whatever and you’re really into it and then you lose the game. You should be a good sport about it but I personally believe that you should be pissed off too because I’m a competitor. You’re playing the game to win, that’s why I play games. If things are not going great in your startup, that you should feel a little stressed out, but it’s finding the balance of not feeling so stressed out that it just dictates your day-to-day mood based on your MRR growth or whatever.
Mike: That is probably the more common issue is being too invested in the outcome versus the journey along the way, as you’ve mentioned, that ties a lot back to the financial aspects of it. It’s really hard to disconnect yourself from it when things are not going well or not as well as you would like, really.
Rob: Last question from MicroConf Europe and then we’ll get into some other questions, is from Alex. He said, “Do you have any advice on time management as a solo founder? Is it better to dedicate to specific skills, like marketing, for example?”
Mike: Going back to my comments about the fact that different things for managing your emotions are going to work differently for different people. The same kind of advice generally applies here as well. Doing stuff on individual days is gonna work for some people, just doing time blocks, for example, is gonna work for other people. I do think that there are certain types of tasks that you need to do that timeboxing within a day is not necessarily going to work as well. For example, programming tasks or anything where you really need to get into deep focus and be able to spend a fair amount of time in order to make good progress on it, those are things that you can’t spread throughout the day. You really need to be able to schedule those things better. That’s the fundamental piece of time management is being able to figure out when you’re going to be effective at certain things and when your decision-making skills are just totally shot and you really need to flip over to something else.
Rob, we’ve talked about this in terms of managing your glucose levels throughout the day. It seems like an optimization but being cognisant of when you are better at certain things that other times of the day is extremely important.
Rob: Yeah, we’ve covered this on the podcast and we’ve had guests. We talked about the timeboxing approach that some people use, there’s a couple of guys at my work that do that, they swear by it. I have to done it when I’m derailed. I do it as a short term fix to get me back on track if I’m unmotivated or I’m struggling to figure out what to do.
Personally, time management for me is about priority management. If I know what I should be working on and then what I should be working on next and I don’t have to evaluate that every time I finish a task, I’m highly efficient. What derails me is if I finish something and I look around, and I go through my email, then I go to Trello, I wind up going to Amazon or Twitter and then I look around and I don’t know what the hell I’m supposed to be doing and that’s where I lose, that’s where I mismanage my time, is if I don’t have these clear-cut priorities. Like you said, if I do have the clear-cut priorities and it’s the morning hours when I happen to be most productive between let’s say, 8:00AM and noon or 9:00AM and 1:00PM, then that’s it, that’s where I’m killing it. I try to push all of my meetings to afternoons, I try to push all of my calls to one day per week because those are distracting and interruptive for me and it doesn’t allow me to do deep work.
Alex’s question is is it better to dedicate specific days to specific skills like marketing for example. I think if that works best for you, then you should do it. I don’t think I ever did that. I don’t think I’ve ever blocked stuff off like that, like a whole day just for marketing then a whole day to just do development, but it was because when I have, let’s say I have this Trello board of 20 tasks, one was to whatever, go in and fix the forgot password thing that broke, and then the next one is to go start a Facebook Ad campaign. For me, that’s not a hard context switch if I finished one and then I move on to Facebook. I didn’t feel like I had to stuff all the marketing stuff on one day, it was just about which priority it needed to be. If I was switching back and forth between tasks when they’re undone, then there’s the big switching cause. But if I’m actually finishing and moving onto the next thing, I don’t feel like I need to separate the disciplines to different days, personally. But your mileage may vary for yourself.
Thanks again for the questions, guys. I’m glad we were able to get through the last four here on the podcast. Our next question is not actually a question, it is a thanks to us from a Nathan. He says, “Thanks for all the motivation. Thanks for the show, it’s been really motivating to get me started on my journey into the world of startups. I haven’t released a product yet but I’m working on building a public reputation and a mailing list. I just released a plugin for the Craft CMS which I use to run my personal site because I couldn’t find a good way to add events and tag emails to my Drip account for people who filled up my contact form. Releasing something even though I’m not selling it directly feels amazing. Can’t wait to release even more things in the future.” Thanks so much.
Mike: Thanks for that, Nathan! I find it interesting that the first thing you did was integrating it into Drip, especially given the other question about CMSs and you integrating with CMSs from MicroConf.
Rob: That one was CRM actually.
Mike: Okay, yeah, you’re right. You’re right. Sorry
Rob: Different TLA, three-letter-act.
Rob: Alright, our next question is about how to take over duties from your contractor, it’s from John Hollows. He says, “Howdy, I started my SaaS at the time when I didn’t know much about frontend development but I was focused on backend data handling and product decisions. I hired a contractor and it’s been great but it’s become a roadblock to development. I can’t update the frontend without sending him a Slack message and waiting a few days for a reply.” That’s a bummer. He says,” I’ve gotten good enough that now, I can do it for myself. Could you cover how to manage scaling down or letting go a contractor? I foresee requesting things to be more documented, then gradually taking back ownership of different aspects while giving him modular work, like creating a frontend module that handles the new feature. Thanks and keep up the great work.”
What do you think?
Mike: I think this is an interesting one just because a lot of people find themselves in this situation, whether it’s for financially-related reasons or because somebody just isn’t working out. They want to basically take over control or responsibility for the things so they can move faster. This I think is a really common problem if you’re early on and you’ve got money to spare and you’re hiring people and maybe they are not putting the time because you, obviously, don’t have enough money to pay them full time but at the same time, you’re beholden to their schedule. Even if you want to move faster, you can’t necessarily do it. I think that it’s just a very common situation that people find themselves in. The key to this is not to be put in a situation where you have to go back to them afterwards and start asking for documentation and start cleaning things up, and putting things in order so you could transition from one person to another, that person being them and transitioning it back to you. One thing you can do is you can go through yourself and start understanding it.
If you really are gonna take it over, then you have to understand it to begin with. You going through and doing some of that documentation work yourself might be at least a good start but you also want to put together a framework or a process for how the documentation should be put together. What sort of processes need to be put in place or documented so what when you get to a point and after you’ve taken over and you’ve been doing it and you need to shift onto something else, and you need to take this and hand it off, then you’ve got all the documentation put together and you’ve been keeping it up-to-date. If you get everything documented and then you take it over and do stuff for six months or a year but you don’t maintain the documentation, you’re gonna be back exactly where you were when you first took it over.
It’s important that the stuff that you’re putting in place are things that you are going to continue doing as part of the process and you are not opposed to doing them because if you don’t, it’s just gonna fall apart for you later on.
Rob: The way I would approach this, I’m gonna assume you have a good relationship with your contractor. You’re gonna have to judge if you tell the contractor totally honestly upfront, “Hey, I’m gonna look at taking over all the dev work. Could we start by having you create some documentation and have you walk me through the thing to get me up-to-speed, and then I’m slowly gonna take it over, over time, over the next three to six months. And let’s just transition it.” If he can do that, great. Most of the contractors that I’ve worked with have no problems with that.
If you think that the contractors is gonna be a pain in the ass about it then you can take a different tactic and let him or her know that, “Hey, I’m gonna be taking over some of the front end development work. I just find that I have more time and I wanna do some blah blah blah…” You don’t really say that you’re gonna basically be letting him go in six months. You could also say, “We may be thinking of bringing more contractors or other people and I really just want some documentation, could we put together some documentation and then walk me through it.” It’s pretty standard stuff as a contractor, I would totally expect someone to come to me and say this. You’re thinking process here that you’re gonna want some documentation, you’re probably gonna want a walk through, you’re gonna want to slowly take over more, slowly shrink the contractor’s sphere of ownership, and then eventually just take over all the work.
My guess is if the contractor is pretty good, you’re always gonna have some lower priority stuff that can wait a few days. Then there’s the high priority stuff but if the contractor saw it and knows the code-base and has delivered for you, I bet that by the time that you get to a place where you’re doing all the frontend work and you’re doing the, I should say, the high priority stuff that needs to get done quick, that you’re gonna have enough lower priority stuff that still needs to get done that you may want to actually keep the contractor around, whether it’s the amount of hours that they’re doing now or fewer, it’s always good to have another resource to help out with this stuff. There could be a lot of truth in this statement of, “I wanna learn this so that we can share the burden rather than you taking over everything.” I hope that helps. Thanks for the question.
Our next question is from Tim, it’s about improving conversions. He says, “I’ve been tracking signups across the board and about 50% of the people that come onto my pricing page follow through to signup and they use the app. However, the number of converting paying users is very low.” He has a trial obviously, he says, “I’m talking under 1%.” His trial to paid is under 1%, I’m gonna assume with a 50% signup rate of people who visit the pricing page that he is not asking for credit card in advance of the trial. “Can you point me to a resource I can use to take the first step to tackling this problem?”
Instead of pointing him to a resource, Mike, why don’t we just become the resource?
Mike: He has two different products here. One of them is called Article Insights and the other one is SEO Content Machine. I don’t know which one he’s specifically referring to. It’s probably a little bit difficult to drill directly into those. But there’s two approaches that I would take.
One is to take a look at the people who have converted and ask them why they started paying, what was important to them, maybe analyze how long they stick around and see if their lifetime value is extremely low for what you would expect, maybe you expect them to stick around for three months or six months and they’re staying around for a month or two. That’s a warning sign that either they’re signing up for something and they thought that they were getting something else or it’s just really not delivering the value that they thought they were gonna get out of it.
The other thing is you can go and start talking to those people who have signed up but if you put an offer in front of them, for example, after seven days that they could convert into a paid account, ask the people who didn’t why they didn’t or what were the biggest turn offs to them. Whether you ask them to respond to an email or get on a call with them. If you can get on a call with them, great, but I understand that a lot of them are probably not going to. But if you’ve got 99% of them who were not converting into paid then you’ve got a lot of opportunities to get them onto a call. It’s really about understanding what it is that they thought they were signing up for and what value they thought that they were gonna get, what their position is. Are they just kicking the tires, is the reason you have really high sign up rate is because they’re just tire kickers and it’s free so they figured, “What the heck, I’ll throw my email address in there,” or is it that they actually had a business problem that they were trying to solve and that’s the part that you’re really trying to get at is what are the pain points that they’re actually trying to solve and does the product actually deliver those things. Or is it that you think that it does but the reality is that their situation or problem is a little bit more tangential than your product delivers on.
Rob: Yeah, I recommend checking out a talk that I gave back in, I’m guessing it was 2013 at MicroConf. It’s gonna be on Vimeo. It’s called How to 10X in 15 Months, or it might be How I 10Xed in 15 Months. It’s basically the story of acquiring HitTail and then 10x-ing the revenue. Some part of that had a pretty noticeable impact was getting the trial to paid numbers way up. I did that using email sequences, event-based emails that would hit people up if they didn’t get onboarded, and then I’m trying to think, I should have had in-app stuff, I don’t know if I did, but that would have been another one. It’s just about getting people onboarded. I think your approach, Mike, of talking to people has gotta be the first step just to try to assess why are people not doing it. I do think that adding email reminders is going to absolutely have a pretty substantial impact, even before you know why people getting onboarded versus not getting onboarded. I still think email will have an impact if you’re not sending any today. That’s where I would start.
I enjoy these kinds of problems because it’s like you know that you’re a lot lower than you should be and it’s just a puzzle. How do you get that 1% up to 3% or up to 5%. Even 5%-15% for no credit card, it’s somewhere in there. Maybe it’s even 5%-20%. You should be able to substantially increase this and it’s just figuring out where the break is. If you can fix that, this is how you scale a business. This is where you go from trudging along, growing at a $100 or a couple $100 a month to suddenly really, really being able to hockey stick this thing if the numbers are right.
Our last question for the day is from Alex Sommerfeld and he says, “Hey, Mike and Rob. This one if more for Rob. What do you think about the newly-launched Drip service from Kickstarter?” D.rip is the service.
In essence, what’s interesting is it’s not actually a launched product that Kickstarter launched. It was a startup that started after Drip. Drip, basically, we worked on code in 2012, we launched in 2013, and I think it was some time in mid to late 2014 that this company called Drip launched and it was a music social network and it was a startup that raised a bunch of money and they bought the drip.com domain name because I couldn’t afford it, they bought it from a squatter. Once I saw that they owned it, I remember telling Derrick that I’m just counting and counting the months, 15-18 months they’re gonna be out of business because it’s a music social network, the odds of it working are just miniscule. You typically raise funding for 15-18 months of expenses.
Sure enough, sometime in, don’t quote me on this, it was sometime in 2015 they basically went under and I actually contacted their CTO and their CFO, all of the people involved and eventually was talking about trying to buy the domain name but it turned out that Kickstarter had basically just acquired the assets of Drip, of that social network, and some reason either didn’t buy the domain name or I don’t know if they didn’t want to or if it didn’t come with the package, or what happened.
The drip.com at that point got separated from this music social network but Kickstarter acquired the assets and I don’t know what the assets of it, if it was a team of people or if there was any type of software. But in essence, they turned it into a Patreon competitor. That’s what it is. Kickstarter is launching a way to do subscription-giving to support creators.
This name has been around for a long time in bizarre context. The end of the story is my Drip got acquired by LeadPages and we bought the drip.com domain name, maybe four or five months ago. Now, if you go to drip.com, it’s our website, all our email addresses are now using drip.com, I don’t know how I feel about it. It sucks to have two things and the exact same name, you can’t trademark that name drip because it’s too generic. I should’ve tried to do that back in 2014-2015. It is what it is. There’s gonna be some confusion. We have the .com, I feel like that’s a win, it all depends on how given that we are not competitors at all. Drip does seem to just be, that word and phrase, is being used in marketing and it’s being used in juts to mean something that is released over time because that’s what this is. It’s subscription, it’s payments to creators over time versus dripping out email over time. I don’t know, I have strong opinions on it, I’m not terribly offended by it. I wasn’t super happy when they launched three years ago but I’m over it just because they’ve been around, I’ve watched the whole thing play out. You have other thoughts on it?
Mike: It’s interesting that the color schemes and everything else are extremely similar. Drip, where you work is LeadPages, it’s capital D, they’ve got a lowercase D and their I is upside down but other than that, it just looks very similar.
Rob: Yeah, when you think of of drip, you’re gonna tend to use blue, so we both used blue and startup blue is a common thing anyway.
Mike: Yeah, I don’t know. I can foresee there could be a lot of confusion, to be honest, which sucks. As many domain names as there are, there’s only so much you can do.
I think that about wraps us up for today. If you have a question, 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, we’ll see you next time.
In this episode of Startups For The Rest Of Us, Mike interviews Alli Blum about how she helps convert prospects into long-term customers in SaaS onboarding through email. They talk about the three phases of SaaS onboarding, the marketers perspective, the product approach, and more.
Items mentioned in this episode:
Mike: In this episode of Startups For The Rest Of Us, we’re going to be talking about how to improve your SaaS onboarding emails. This is Startups For The Rest Of Us Episode 368.
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.
Alli: And I’m Alli.
Mike: And we’re here to share experiences to help you avoid the same mistakes we’ve made. How are you doing this week, Alli?
Alli: Fantastic. How are you?
Mike: I’m doing great. Welcome to the show. Wanted to introduce you to everybody. I guess that I’d say your background is in copywriting but really, the gist of what you do is you help people convert prospects into long term customers in their SaaS onboarding emails. You’ve worked with a bunch of different high profile companies, I’d say, like KISSmetrics, and CrazyEgg, and MixPanel, and Autopilot. Seems like the plethora of companies that people look up to and are well known. Just want to say great to have you on and we’re going to be talking today about how to improve people’s SaaS onboarding emails.
Alli: Thank you very much. I am so excited to be here. Yeah, I’ve had the opportunity to write for some of those fine publications that you just listed. My background is that I have worked with technology companies from a lot of different places. I knew I wanted to start my own product based company, right now I’m doing service based business. I started looking around the research that you do when you’re just getting started at learning about startups and I saw Startups For The Rest Of Us and I learned about MicroConf. I just thought, oh, I think this is like a thing I want to get near to and learn more about but I was too chicken to actually come close to you. But when I finally started getting the courage, I looked and I wanted to meet people, I looked at who was attending MicroConf. I was just like, I would just email them and say, “Hey, I want to know more about what you’re doing.”
Mike: That’s awesome. It’s nice to see that the MicroConf Community is having an impact on people and we’re always looking for ways to expand that. This past year obviously, we expanded into the Growth Edition and the Starter Edition. If you’re looking for tickets, any of the listeners looking for tickets, you can get on the mailing list over at microconf.com and tickets are going to be publicly available the next couple of weeks. By the time this episode comes out, we’re pretty close to that.
I guess with Alli’s intro in mind, one of the things that we’re going to focus on today is the different techniques that you can use to improve your SaaS onboarding emails because that’s your focus point at the stage of your career, Alli. Wanted to have you on the show and educate our listeners a bit about how they can improve their onboarding emails and what the specific steps that they can take to walk through the process of improving those. Like anything else in your business, it’s an iterative process. You’ll go through it once and then you’ll come back to it and revise and repeat. I think that you have a unique perspective and that you’ve done this for a bunch of different people whereas most people listening to this will probably only have done it for one or two apps, yet you got a much wider range of experience that I think will be really helpful to listeners.
Alli: Cool, yeah. One of the things that I’m excited to talk about is if you’re listening to Startups For The Rest Of Us, you may have just launched, maybe getting ready to launch, you may have been around for a couple of years. Depending on where you are, there’s a little bit of a different approach that you may want to take to make sure that your onboarding is actually doing what you want it to do.
Mike: There are different phases to the onboarding process. Why don’t you talk a little bit about the three different phases where people might fall on the spectrum?
Alli: Excellent. The first phase would be when you have no automation at all. This would be if your app is very new or if your app had more of a consultative sales process before moving into a self signup process. At this point, you may not know too much about what makes people fall in love with your app, you may not even know too much about who the folks are who are coming into your app. This early stage, your goal is to get as much of that information as you can to talk to as many people as you can and really get a feel for why they’re signing up for a trial, why they’re starting to use your app, what are they trying to get out of it and who are they.
You take the same approach at later stages. After you’ve been around for a little while, you may have already started to introduce some automation. You may want to have a welcome email, you may have a couple of emails that go out to tell folks about features they can try during their trial but you may not have a full automation process or a full set of sequences designed to actually turn your trial users into paying customers.
And then once you’re at that stage where you’ve done a lot of hard work, where you’ve got everything automated, everything is triggered by specific events as opposed to time triggers, then you might be getting ready to be at a point where you really want to start optimizing and testing different things out, seeing what you can, seeing if you can get to a point where you’re bringing as much juice out of your trial as you can.
Mike: Those are the three basic phases of the onboarding process where people will probably fall, who are listening to this. You either got no automation, you got some minimal automation, or I’ll say complete automation that’s much more advanced. Everything is done through triggers or events or what have you.
A general process that I think people will go through when they’re looking at implementing these, regardless of which of those three phases you’re currently at, is to look at your current onboarding emails and try to identify the shortest path, they’re trying to get a customer to recognize value and figuring out what steps they need to take. And then for each step, write an email that takes them through the process of achieving that stuff.
We talked a little bit offline, you actually had some rules for this piece of it. We’re just giving a basic process now, I thought it was really interesting that you had three different rules that applied to writing the individual emails. I wanted to go through those real quick.
Alli: Yes. Many times you’ll see, if you sign up for SaaS trials or if you’re sending out emails yourself, you’ll see emails are general, and they’ll say here’s a welcome guide or read some cases studies or don’t you know we have video tutorials? What I don’t like about emails like this is that they actually introduce quite a lot of work for your reader, they have to stop and figure out what they’re doing, why they’re here. That’s why I have these rules for writing. It’s about getting that hidden work out of the way so that people who see your email can just figure out what to do and then do it.
The first one is called the Rule of One, it’s a conversion copywriting rule and it means or it states that you should write your copy for one reader, and you should get them to do one thing. You may send out an email that says here are the six tips you need to do to get started. Instead of that approach, I would recommend saying here’s the one thing you need to do to get started. This is something that a lot of folks may think oh, well if you have more calls to action in there than maybe some of those more likely to click on something for sure, but there’s a lot of data that doesn’t support that claim. I think it’s on marketing props, there’s a study where Whirlpool eliminated all the calls to action from their emails except for one and they saw 42% increase in clickthroughs. Getting rid of everything from your email and just having one clear call to action is rule number one.
Rule number two is to make sure that call to action is measurable. When we say measurable, that means we want someone to be able to know when they’ve done it. If your call to action is for someone to upload a video or to invite a team member, these are concrete actions. When you’ve done it, you know you’ve done it.
What would be a call to action that’s not measurable is something like explore my account. It’s a little bit less well defined, folks come in may not know when they’re done exploring their account, if they’ve even achieved anything. It introduces that work where they have to figure out what to do.
Then the third thing is to make sure that your call to action is something meaningful. Really, that the whole email is meaningful. We want people who are reading our emails to say, okay, yes, I need to do this. Instead of sending an email with a call to action, and we were talking about this offline that says something like submit or login, something that’s pretty boring. No one’s life ever improved because they clicked login. You’re going want to talk about what is going to happen as a result of doing whatever it is the thing that you’re doing.
Instead of login, maybe it’s invite the team member. If you want to take it even one step further, less of a call to action and more of a call to value, you could say, “Cut the time you spend on support tickets in half.” Made that one up off the top of my head, it’s probably not the best example. The reason I shared this is to show that you want to make sure you’re communicating why someone should do what you’re asking them to do. Because people have a zillion emails in their inbox, they’re going to ignore yours unless you give them a reason to do anything about it. Three rules, rule of one, make your call to action measurable and make it meaningful.
Mike: Awesome. I think that applies to not just emails that you’re writing inside your onboarding sequence but you can also generically apply that to marketing copy on your webpage or landing pages. There are lots of things that cross applies too. Again, we’re going back to the basic process for iterating on your email sequences. The first one was identifying that shortest path, second one was for each step writing the email, and then for the third step is to take a look at that. If they don’t take the actions on the follow up to remind them to take, usually this involves some level of events and automation. You’re typically not going to get here without some level of automation whether you’re using Zapier or a timed trigger that you can interject and stop. You’re just not going to be able to keep up with it after 5 or 10 people are involved in your onboarding process.
Then the next step is to measure the results of those emails and make sure that people are moving or progressing through your sales funnel. There’s a lot of different tools you can use, you can implement custom database tables or use tools like MixPanel or KISSmetrics, Intercom, Drift. There’s lots of things that do that but it’s really about making sure that you have the information to go back through and iterate for that process and make it better.
What I want to talk to you today about was that there are different perspectives for improving that process. There are three that you had talked to me about. The first one was the marketer’s perspective. Can you talk a little bit about what the marketer’s perspective is and why people tend to use this?
Alli: When you’re talking about a trial, and then the messaging that you’re doing in a trial, one way that you can think about this and one way that a lot of folks will think about the trial is part of a marketing funnel. You have your content marketing and your outreach marketing and you bring people to your site and then you get them to opt in and sign up for a trial, then they’re in the trial, and then you’re retaining them once they’ve upgraded. It’s one step in this funnel toward keeping long term customers.
If you’re a marketer, you might say okay, if the trial’s not doing what I want it to do, the way that I describe this problem is that I have a leaky funnel. Something is happening in my trial where people are not staying around. If you’re a marketer, you’re going to approach this problem like a marketer. You’re going to say okay, why are my conversion rates so low? Am I getting the wrong people into my trial? Am I not targeting the right people? Is my messaging somehow not what my target prospect wants to hear? Is the problem that my web copy is out of date that my content marketing is wrong, there’s a mismatch between who I’m talking to and who I want in my trial? Marketer’s perspective is about fixing a broken part of your funnel.
Mike: Awesome. In most cases, this assumes that your sales funnel is I’ll say either long enough or you have enough people going through it that it makes sense to look at that and try to find optimizations. If you’ve only got 10 or 20 people going through a month, it’s hard to look for optimizations with lower numbers, just because you can’t really get a good sense of what is statistically significant or not.
The second approach you talked about was the product approach. I think the product approach is probably one that I hear the most about because pretty much everyone is doing it, they’re saying how do I draw attention to the different things. Talk a little bit about the product approach when it comes to the SaaS onboarding funnel.
Alli: Oh my gosh. Me too. I hear this. Every SaaS founder that I talk to, who has a problem with their onboarding, they say, “We have so many features, how do we get more people to try all of our features during the trial?”
Mike: Why do you think that is that they want everybody to try out all the different features?
Alli: I think it’s because many of these SaaS founders who I spoke to, who like I said come from the MicroConf Community, they’re building features that people ask for, they’re building features a lot of times because they have done research and they have figured out that this is a real pain and their feature addresses that pain. They build the feature and the folks that have it, folks that are using the feature are enjoying it, and it makes sense that you would want to solve other people’s pain. Why wouldn’t you want someone to try out everything that they can do in your app. It’s going to make their lives so much better.
I think people approach it from the right place, so to speak, people really want to help. The only problem is that that’s not always, I have found, what people want to do when they come to your app. Even people who are very aware of what they want to do with your product, maybe they know the exact features that they want, they still don’t need to see all the features, at least during trial.
Mike: Yeah. They’re there to use your app because they want to solve their particular problem, not because they want to use every feature, whereas the developer tends to be more focused on, hey, I created this new feature over here, you should come check it out or you should use it. And making assumptions about the reason why some of their customers are falling out of the sales funnel is because they’re not using that feature or making assumptions about what the value is that people are getting out of it versus understanding what the customers really looking for and what would make them successful and what things they actually need to do in order to be successful.
Alli: Exactly. So much of this has a lot to do with who’s coming to your app and what category you’re in, and the stage of awareness that most of your buyers are. I like to think about categories that are really saturated as most of their prospects are likely to be switchers. If you are using, for example, a proposal software as a freelancer and something goes wrong and you don’t like it anymore and you want to switch to another one, you already know basically what you’re looking for and there might be a single feature that you need. But during your trial, you don’t need someone to bombard you and say, did you know we could do payments, did you know we could convert currency, if the only feature that you need is version control. If you are that feature focused buyer, you’ll go figure out or you’ll ask someone if this feature is available a lot of times.
Mike: I think it’s not just about the feature, it’s just about the fact that they are in that mindset of I want something else and I want to find something to solve this specific thing which is the reason I’m switching from somebody else, versus somebody who has searched for a pain point that they had and they are so early on in the buying process that they’re not at the point where they’re not willing to put their credit card down versus somebody who is just like you described, they’re willing to put their credit card down because that new product has that one feature that they really need.
Alli: One of the things that I think is really interesting is that in that level of awareness where people, in copy writing we might call it most aware with a high level of intent, someone is aware of their problem, they’re pain aware, they know that solutions exist, so they’re solution aware, they’re product aware, they know that your product exists, and then they’re most aware. They know your product is where, they know that you are a good candidate for solving their problem.
And then if they’re most aware with intent, that’s the dream buyer. If you have what they’re looking for, then they’re going to find you. But most people aren’t that, we do not have the luxury of being able to write for people who already know that we are the right fit for them. As marketers, copywriters, product managers, SaaS owners of any kind, we have to be ready to help folks along the way and say okay, this is what you are most likely to want to do. We’re going to help you figure out how to use this app to get you where you need to be. That’s when we start to get into that third perspective that we are talking about.
Mike: Which is a customer success approach. I guess the general way to phrase the customer success approach is that you’re looking to identify what the success milestones are for somebody coming onto your product and how can you help enable those for the prospects. I think this is what we’re going to really drill into so that people can get some actionable takeaways for this. The first question that most people are going to have to try and answer is what success milestones could there be? You talked a little bit about this before but can you elaborate on that a little bit? I think it’s probably going to be different for each product.
Alli: It’s totally different for each product. It’s different for each product and it’s different across categories. Mike, are you at a stake yet where you know what your customer’s success milestones are for Bluetick?
Mike: I have some idea of it. I would say I don’t have 100% confirmations but there are certain things that the customer has to do in order to provide value to them. The first one is that they need to connect their mailbox, if they don’t connect their mailbox then obviously they’re not getting any sort of value from the products. The second one is that they need to set up email sequences. If you’re not sending emails, the product doesn’t give any value. And then third one is you have to have contacts loaded into the system to send the emails to. And then the fourth one is obviously you have to actually send the emails.
Really, the most important one is getting them to the point where they send the emails and the value that can be measured is that when they start getting replies from those automated emails that are going out. There’s a way to measure that and then there’s those progressive steps leading up to that which they don’t do any of those then the number at the end is going to be zero. But once they get through those initial set of things, then there’s a way to measure how successful they are as they’re using the product.
Alli: That’s really cool. What I’m curious about, it sounds like the moment where people are most likely to say oh, okay, I need to keep using Bluetick, is the moment when they get that first reply, that second reply to an email that’s been sending out as part of an automation, is that what you’re observing?
Mike: Yeah, that’s it. I have customers who will sign up and then they start sending the emails out. And then after even just a day or two, they start seeing that they’re getting responses and they know that it’s working. If somebody didn’t respond, the system would follow up for them and they don’t have to worry about it. That’s exactly right.
Alli: It’s really awesome that you have that insight because Bluetick is still a very young app. I think one of the things that some apps are naturally predisposed to have these built in success milestones where you have to do a couple of things that are not that difficult in terms of the cognitive load that you bear while you’re doing them. You have to write the emails and that’s pretty tricky. But you have these clear success milestones and the measure of success is also very clear. People who are signing up, setting up their inbox, getting their contacts, sending the sequences, and then getting those replies, that’s a very clear measure and that’s great when you’re able to do that.
Mike: But that’s really a close feedback loop where there’s no real, I don’t want to say no other options but that’s the result of the product itself. I think that it’s much less clear when you have something that does any sort of analytics. I think you and I talked offline a little bit about Wistia and the process that they had gone through to increase their onboarding experience and make sure that people are successful.
If I remember correctly from reading an article, somebody just said that one of the things that they looked at was making sure that people were looking at their analytics inside of Wistia. They’d upload a video and invite a team mate and look at the analytics. Looking at analytics does not necessarily mean you take action on them. It depends on how you view that as to whether or not that’s a real milestone. How much of a milestone is it? If you went to the page and then you clicked away, does that count? Or you have to come back to it several times? I think it’s very subjective at that point. Not everything, I think, falls into a neat bucket like the process that I outlined for Bluetick does.
Alli: I think you’re absolutely right. If only every app had as clear and straightforward a feedback loop as Bluetick, make my job a lot easier.
Mike: What is it that you would recommend if somebody’s in that situation where you’ve got some customers that are coming on board and you might have an idea of what your success milestones could be, but you’re not sure. What are some of the couple of things that you could do right away to try and figure out what those milestones are or whether or not your assumptions about them are correct.
Alli: The first thing that I would recommend, it’s kind of asking yourself a series of questions. The first thing that I would say is okay, do I know who’s using my app and are all the people who use my app using it pretty much the same and what does that look like. That’s the first question. Is everyone here using the app that we have the same, and if not, how are we going to start talking to everyone the right way?
Mike: Would you recommend starting with that as a question of what the size of their business is or are there other things that you can think of that would be better suited for that type of self segmentation or is it just size of business is a great place to start and then dig in from there?
Alli: It depends. It always depends. It depends on what your category is and what those main factors might be. Ideally, you’re in a place where you are starting to have some insight that these differences may exist. You may, for example, notice that 30% of your users just never click invite a team member. They just never do that one action. That’s a very telling piece of information where team size may be a very large variable.
Mike: Going back to what you’re talking about, the product approach where one of the reasons that that may fall down is if you’re trying to get people to use the invite a team member but if they don’t have team members, they’re not going to use that. Of course, writing those onboarding emails, trying to get them to use it is never going to work because they don’t even have team members.
Alli: Yes. I sign up for apps all the time because I want to see what their free trial emails look like. A lot of them are apps that I plan on using. If the first thing they ask me to do is invite a team member, I kind of just assume it’s not for me, it’s not a product for a solopreneur because I don’t have a team member that I need to add. You’re right. The product based approach will frequently say we have our products, let’s make people use it, and the customer success approach would be like okay, who are our customers and how do we make them successful?
Mike: Right. You’re really just personalizing the features that you’re offering them based on the problems that they’re facing and they’re trying to solve. It’s just personalization of your software for them.
Alli: Exactly. Yes.
Mike: Once you’ve gone through the process of self segmenting people a little bit, what’s the next step? How should you go about finding more information about them? Because I think there’s only so many questions you can ask in self segmentation emails before you have to go onto the next step. What would that next step be?
Alli: Yes. The self segmenters are good to start off because they can be automatically triggered and you can keep collecting that data while you’re diving into the harder data which might be lurking in your KISSmetrics account, in that quantitative user behavior based data. What are people actually doing? This is really challenging to make sure that your data collection methods are labelled correctly, set up correctly, but it’s a matter of sifting through a massive amount of data and saying what are people doing right before they sign up for a paid plan? If the question you’re answering is why don’t more people upgrade, then look at what people who have upgraded have done.
One of my favorite places to look is inside your support ticketing software. I love looking at what kinds of question people are asking while they are in their trials. One of my favorite little tip is to look for phrases that follow the phrase, “So that.” So if someone’s asking you a question and they’re saying how do I configure my invoice with an automatic payment link ‘so that’ I can accept international currency, or how do I upload my video in a small file format ‘so that’ I can share it in email.
Then, you’re starting to get some data on why people are coming to your app. What is the real problem that they’re trying to solve? If it’s the video example, you have a video that you need to email to someone, emailing a video is like an impossible task if you do it as a file, how do you help someone who wants to do that, figure out how to do that. One of the things that Wistia does really well is incorporate that into both their email onboarding but also into their in app UX messaging.
Mike: All this stuff, what you just talked about is really ways to be sure that the assumptions that you’re making previously about what the success milestones are are valid. I think that looking through the support emails, specifically after where they say ‘so that I can do whatever,’ that’s fantastic, I’ve never heard that one before.
Alli: When we do review binding as copywriters, you can do it in product development where you go out and you find the pains and the crispy-sticky language, you find what people are looking for and you find out why they want to do it. Getting into the idea of the ‘so that’ is one of my favorite, favorite copy tips because it helps you just get that one level deeper. Because we’re all emotionally human creatures with wants and needs that we don’t always articulate. This is one of the reasons why we look for that ‘so that’ because we don’t want to make any assumptions about what someone is asking us for help with. If someone says I need to be able to do XYZ, you can help them of course and you should, and that’s great. If they also tell you why they want to do it, that’s gold.
Mike: All of this information is intended to help you build out the emails sequences around those success milestones but how do you know when you have enough data to get started? Does it take 5 or 10 data points or do you need 80 or 100? It feels like there’s not really a hard statistical significant number that you can look at because this is all gut feel to some extent?
Alli: That’s a really good question. When you start noticing patterns, when you notice that the folks that you talk to share the same functional role or they have the same need, they tend to do the same things or they have the same questions, that is a point when you are ready to dedicate your time to your onboarding.
Mike: It is really about looking at the patterns and when you start to recognize them and you start hearing the same things over and over again, that’s when you shift modes over to starting to automate things in your emails versus continuously analyze the data that’s coming in, right?
Alli: Yeah. I think never stop looking at the data. The more close relationship that you can have with either that quantitative user data of who does what, stuff that you can put into a graph or a chart, and that qualitative data of what people are saying and when they’re saying it. But the more that you can maintain that relationship with the data, especially during onboarding, the more that you’re going to be able to push those free to paid conversion rates up to a quarter of percent here, a little bit here, and that’s how you start to get to those high rates.
Mike: I think in terms of the pattern recognition, every brain is a different engine and you start to see massive differences between two things. Part of gathering this data allows you to see the differences between what different customers are doing. As soon as you start to recognize, hey, this customer segment over here is much larger than the second one over there, then you start focusing on one versus the other and it makes it easier to make those decisions because you have the numbers in front of you.
Alli: I agree.
Mike: Once you have this qualitative data and you believe those success milestones are, the next step is to coach people around those milestones and steer people towards them. What is the default that people tend towards if they don’t do that? What are the mistakes that people make instead of actively going after those things and intentionally doing them, what’s the default that people do?
Alli: Yes. There are so many mistakes. The default that I see is on the first day, you get a welcome email from the founder and a welcome email that says, “Here is a guide to get setup.” Or, “Here is a list of all of the places you can get support; our blog, our video tutorials, our 7 tips, our 13 minute video.” And while it is great for founders to send out those emails, while it is great to tell your users where they can get support, it is much better to say, “Great! You just signed up. Here is what we need you to do next.” The alternative to sending out emails that show your users what they should be doing while they’re onboarding is really just sending them useless information. It’s the equivalent of an email blast to everyone you know that says, “Hey, we have a thing.” Or, “Here is a new feature, look at it.” It just drives me crazy because these are apps that in many, many cases are very user friendly, in many cases are very helpful, they address a real pain, but these emails come through and they just get in the way and they make it so much more difficult to get started than it needs to be. They just introduce so much work.
Mike: They’re really just not helpful, is what you’re saying.
Alli: They’re not helpful. It’s like if you show up to a store and someone says, okay, can I help you find anything? You say no thanks, I’m just looking. And then if you show up to a store and someone says hi, would you like to try on our new jeans? But you’re there to buy a vase. They never asked you who you are or what you’re there for, they never made any attempts to help you get started or figure out what you want to do. This isn’t the best analogy.
Mike: I think it’s a great one. Because it’s exactly why I use Amazon.
Mike: Because I just don’t want to be bothered. I don’t want to go into a store and have them try and sell me some stuff that I just absolutely have no interest in. I think it’s a very great analogy.
Alli: I’m sure there are times when you are looking for something specific that maybe you haven’t bought before or you haven’t been able to track down where you need someone’s help and you’re grateful for their help. But if you walk into the store and they ask you if you want help with something that’s not the thing you came there for, then you just leave or you go some place else.
Mike: I think that’s partly a function of them either having some sort of quota and at that point, their help is about them, it’s not about you. It’s not about what they can do for you, it’s about what can I do to meet our goals or our internal needs or this product needs to be sold. Let me see if I can direct people to it. I think that’s the fundamental issue.
Alli: Yeah. It really, really is because the difference between the product approach and the customer success approach, even though neither of those are strictly a sales approach, the product approach is very self centered, this is what I have to show you. Do you want to come look at it? As opposed to I think this is what is going to help you get through what you’re trying to do here.
Mike: I think there’s a big difference that you can just objectively notice when you sign onto a software product where the onboarding itself is extremely well put together and well thought out, and is helpful versus the ones where it just meanders along, it doesn’t really direct you through to the things that are relevant to you. It’s very clear when you see those two things side by side, but I think when you’re working on your own products, it’s very difficult to be a little bit more objective about that.
Alli: The biggest take aways that I would say, I would hope anyone who’s working on their onboarding walks away from this, how can I learn more about who’s using my app? How can I learn more about why they’re using it? And how can I learn more about what they’re doing that makes them successful.
And then once you’re starting to really notice those patterns, that’s a sign to really dedicate more time to this and start implementing those sequences in your onboarding that get people to really coach them around those success milestones. Instead of taking that product approach of saying okay, let’s look at everything. Really taking that approach of saying how can I help people be successful. What do they need to do first, what do they need to do second, how can I help them do it?
Mike: Awesome. I think that’s a great place to leave off for the listeners. What’s the best place for people to follow up with you or find you after the episode or if they want to ask questions?
Alli: My email address is the best way to reach me. It’s email@example.com.
Mike: Alli, thanks so much for coming on. I really appreciate having you.
Alli: Thanks for having me, Mike.
Mike: 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, we’ll see you next time.