Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike take a number of listen questions on topics including bootstrapping an MVP as a non-developer, gaining traction with the stair-step approach, and more.
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Transcript
Rob: In this episode of Startups For The Rest Of Us, Mike and I talk about building an MVP as a non developer, gaining traction with stair stepping and answer more listener questions. This is Startups For The Rest Of Us Episode 366.
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. Mike, I have a question for you before we start the episode here. What is the lamest and/or most embarrassing domain name that you have ever purchased?
Mike: Lamest and most embarrassing, I don’t think of any that I got that were embarrassing. I’d say probably the lamest was dotnetforumsoftware, I think it was.
Rob: It was like dotnetforumsoftware.com?
Mike: Yup.
Rob: I don’t remember offhand but I had some when exact match was such a big deal and the dashed exact match was not as good but almost as good, I had some horrendous, like five and six-word dashed dotnets. It’s like business-credit-cards.net or something like that. It was when I was hacking a lot of SEO stuff and just trying to figure out how to rank stuff. Most of those wound up being AdSense sites that made back their initial investment and then not much more because Google updates came along but there’s probably some pretty embarrassing names in the boulevard of broken dreams there.
Mike: Yeah. I can definitely think of a bunch that I don’t remember whether I’ve registered them or not but they were kind of non starters because they were either hard to pronounce or could be very difficult for people to hear it and associate a domain name with it. They were just bad ideas. I think one of them was bitclinic.com or something like that. I don’t think I ever registered that one but there’s a whole list of them that I came up with and they’re just disqualified for a number of different reasons.
Rob: Especially once you start hosting a podcast, or doing public speaking, or going on interviews, you realize how important the pronunciation and the ability to spell something in one way that there’s no ambiguity over which version, if you’re using a homophone or whatever, which version of the word that you’re using.
Mike: Yeah, God forbid you register penisland and try to sell pens because that’s just not going to work out.
Rob: Penisland, did you do that?
Mike: No, I didn’t but I remember reading somebody who did.
Rob: Got it. Cool. What’s going on with you and Bluetick this week?
Mike: I’m still working on that code refactoring that I started on last week or was working on last week and it’s just turned into a nightmare. I was going through a bunch of changes and I made them and then a lot of my unit tests failed and then I had to start digging to figure out why and then realized that there’s some architecture changes that need to be made so there’s code refactoring. I’m like, “Oh, this is way more complicated and way more involved than I thought it would be.” A lot of it is because there’s stuff that’s buried in the code that I learned it all like a while back and then left it out of my brain for a while and it was just brain dumped and I’ve forgotten most of it.
Now, I’ve had to go back and research some of the stuff and say, “Okay, how does this actually work again?” Because like I said, it’s going to be kind of re-factor and re-architect so it just makes it difficult.
Rob: Yeah. This is to give yourself a multi user capability. Is that right? Like folks can have multiple logins and pay per seat?
Mike: Yup.
Rob: Cool. This sounds like something that’s pretty important especially based on our conversation last week. This is nice expansion revenue to get from folks who are using it. You’ve had this request a lot along the way and I know that you’ve avoided building it because you knew there was going to be some complexity around re architecting things.
Mike: Yeah. It wouldn’t be so bad except that a lot of the services layer is all hard coded for the user account. All the database changes and stuff are in place, the services layer is all really tied to either the user or the account at this point so that’s still reasonably good at this point but the problem is that authentication mechanism on the frontend, I’ve got to pass the account information up and down the stack, which if I could kind of separate that out and use it like an object to pass in as opposed to a user ID. It would make things so much simpler and it’s not that simple right now.
Rob: Yeah, it’s a bummer. It’s hard to do something you know you need to do but then it takes longer than you want it to. This is where the founder impatience kicks in of like, “I want to be moving faster but if I rush it, I’m going to cut corners and then I’m going to regret it later.” So how do you deal with that? I know the feeling, man. This is the time to hammer it out as quickly as possible. Drink a lot of caffeine and listen to some death metal.
Mike: I forgot when it was, it was earlier this week but I was looking at the stuff that I had to do and I’m like, “Man, I really should be switching over to doing the marketing stuff.” And I was like, “I know if I do that, then I’m basically leaving this half done and it’s going to take me longer to get back through it.” As you said, it’s got to be done right the first time. I figured I’d just pile through and made the conscious decision to just continue on it.
Rob: Alright. From my end, since I’m hopping on a plane tomorrow, I don’t have many updates this week. I’ve been wrapping up some loose ends and I’m actually talking about hiring plans for next year and just kind of looking. It’s November now and it’s starting to be time to look ahead and project growth, both revenue and usage growth and stay ahead of scaling. We’re looking at what hiring is going to need to be required in order to do that. That’s been an interesting exercise and one that I have not done so thoroughly in the past.
Our growth has never been this fast now that we’re in this venture funded engine. I have to be a little more deliberate about it because if we wait until we have issues, if I wait until we’re understaffed or if we wait until we start seeing performance problems and it’s too late because it takes months to fix these so I’m trying to think three, four, five months out right now. That’s been, I wouldn’t say fun because I don’t particularly enjoy it but it has been enlightening and I think a necessity if I want to feel relaxed and chill and have a good time next year.
Other than that, we have a lot of five star iTunes reviews. We have 550 reviews in worldwide iTunes repo. Most recent one was on October 9th. It says, “Tons of practical tips and lessons.” It’s from [Honey Maura 00:06:24] in Canada and he says, “I’ve been listening for about four years now and I love what Rob and Mike share each week. I’m hooked. I’ve been following Rob’s stair step approach since launching several premium WordPress plugins first and a few months back launching my first SaaS. Thanks for all you do.” He’s with repurpose.io.
If you haven’t left us a review, you don’t need to leave a full comment. We do appreciate it. Just going into iTunes, Stitcher, Downcast, Overcast, or whatever you use to catch your podcast as it may be, hopping in there and hitting the five star rating would do us a great favor.
Today, we’re going to be answering some listener questions. It’s funny there’s a whole theme going on. A lot of it is like I’ve launched. Now what? It’s kind of the theme of today. Maybe not every single one but there’s three or four here that are asking guidance post launch.
Our first question is from [Yan Wustland 00:07:13]. He says, “Hi Rob and Mike, thanks for the great show. Like everyone else, I have to praise your excellent work with the podcast. I feel I have a classical developer problem. I am a solution looking for a problem. I started with web development and then I continued to the iOS, Android, and Mac development. I like the stair step approach and I’ve been launching single products targeted towards web developers like myself, more specific to the niche of Laravel developers.” He has a link here. It’s eastwest.se/apps.
“So far, I’m selling a couple of licenses per week but it’s nowhere close to paying my bills. I have got a great response from the Laravel community and customers but I feel I have to make a move. Their expectations at Mac app should be cheaper than a WordPress plugin and most of my customers who are developers seem to dislike monthly subscriptions. I have a lot of ideas for new products but all of them are centered around MacOS, which I’m passionate about, where it feels a lot harder to justify recurring subscriptions. Without all the details, what advice would you give?”
He laid out some options and we don’t have to stick to these options but I’ll lay them out here. “Number one, continue with one time products and learn more about marketing. Number two, this is not the right place to be and I should try to come up with another product and then find product market fit. Eventually, the right idea will come up. Number three, bite the apple and try to introduce annual plans in my Mac apps with the risk of making customers angry. To me, all the possibilities are a bit paralyzing. How do I know which is the right one to go for? Again, thanks for the great podcast.” What do you think, Sir?
Mike: I’m looking at the website. One thing that I’ve noticed is that the apps themselves seem like they’re a little bit all over the place. There’s this thing called F-Bar which is for managing Laravel Forge Servers. Another one is git-ftp deploy, which is for ftp deployment and then there’s like a radio player and then plugs of the world, which is your guide to sockets and plugs for iOS. These different apps or utilities are all over the map in terms of what types of problems they solve so it makes it difficult to do the marketing for them because there’s no overlap between them.
I think I might go down the road of looking to see if you could just sell off a couple of these outright to somebody else and have them take them over and then focus the efforts on building a small suite or a tool set of different things that you could sell individually and then have a bundle option. If you really are getting a lot of interest from the Laravel community, then that’s a great option in terms of being able to raise your lifetime value for those customers because then that bundle option’s going to give people the ability to pay you more.
They’ll feel like they’re getting the deal on it because individually, these products might cost $100 but if you give it to them for $70 or something like that, then it’s a better deal for them.
Rob: I want to jump in here. What I’ve noticed in looking through his list of apps is the top two, one is like you said, the Laravel Forge Server and the other one is git-ftp deploy. Those two he charges for. If you click through, one is $15 and the other is $20. Everything below that, which is a radio player and a timer and crush cockroaches, a game, it doesn’t appear like he charges for those. Maybe when you click through to iOS, they’re $1 or $2. But I mean these are definitely really small utilities almost.
One thing I would say just for organization’s sake is on the website, on his apps page, I’d probably have a heading that says tools for developers and then other stuff I’ve built. Because I bet my guess is he’s making a lot more money. He said he’s only selling a couple of licenses a week at $15 to $20, so it’s not that much money. Maybe a low end car payment in a month. He’s probably making the vast majority of his stuff from this top two if he’s making any from the lower ones at all.
I agree with you. I think the folks are starting to focus on people who are willing to pay something. Even if it’s $15, $20 a month, I think that’s probably a decent first step.
Mike: Yeah. I didn’t get that far because I was trying to go through. When I browse, I usually will right click on a link and then go to the next one and right click on it so that I can open things up quickly in different tabs. The way that the website works is if you right click on something, it actually browses to it. There’s no way to open up those links in a different tab so I honestly didn’t get there. It was annoying.
Rob: That makes sense. I guess as I think about this, it seems like when I look at the three options, he laid out basically keep doing what you’re doing and build more products or start doing totally different things, try to launch a SaaS app or something or launch annual plans. It seems to me the third one is the easiest to test, launching an annual plan. If you pushed it out for one or two weeks and everybody’s angry and nobody pays it and sales plummet, or do it for a month. If it doesn’t work, it’s easy to undo this. To go back to people and give them a refund or just say, “We’ve abandoned the annual plans and now you just get it for good just like everyone else does.”
I would try that with one or both of the apps and realizing that you will get some complaints but if suddenly, you see more sales or you feel like you’re going to make money with that in the long term, I don’t think that’s a bad way to go and it’s easy to test.
The real problem there is even if you test that, if you’re only selling a couple of licenses a week, then you’re not going to see any fruit from this for another year until they come up for renewal. Really, you’re not doing anything to grow your revenue in the short term. I think one of the big issues is something that he pointed out is that utilities in the app in any app store, they’re a commodity in essence and you really can’t charge that much for them and so, they have to have wide appeal and you have to sell a lot of them in order to make any type of money at it.
I think it’s a tough space to be in. The other drag about it that’s a trip is selling through the Mac App Store means you have this instant, easy distribution. That’s a good thing. The bad thing is you’re really not learning much about marketing because you’re not building a website, building an email list, nurturing people, running ads or blog, doing content marketing or whatever it is that we want to talk about marketing a product. If you don’t have to do that, you can but you don’t have to do that if you’re in these app stores.
One of the benefits that I found in the stair step approach is you’re not just gaining revenue and you’re not just gaining confidence, you’re not just gaining money, you’re gaining experience doing things with these smaller products. Even the folks who do WordPress and they put them in the repo and then they have an upsell to a free version, they have to learn how to write nurture sequences and how to write good copy and how to build an email list.
There’s other things that they do that I think the app stores, while they’re a good starting point and including Themeforest in there, anything that you post into, that pays you a commission but has all the distribution, it is a nice thing to get started on the side. But to grow that to the point where it supports you is hard because the prices are low and even if you get to the point where it supports and you compile all your hours, you’ve really missed out learning a lot of things that someone who is slogging away, building WordPress plugin or an ad on the Shopify and he’s doing more traditional marketing, I think we’ll learn that.
I don’t have a really strong recommendation here but I do feel like if you can’t market these through other channels, because if you only get one or two a week through the Mac App Store, then obviously there’s just not that many people searching for it in there. Do you go market it elsewhere?
Whatever it is, whatever they purchase, you talk about it in forums or you go on podcasts or whatever, you have a message you’re going to use to promote it, you try to do those to grow sales or do you perhaps get into a space where there’s a little more margin and you can launch products that are at least $50 or $100. Having a lifetime value of $50 or $100 is still a pretty tough gig but definitely it would be a step up from these $15 and $20 sales.
When you’re selling something that’s this cheap, distribution has to pretty much be free. You really need to rank number one or top three in Google or rank high in an app store or in YouTube or in Amazon or in one of these places where people just find you because you just don’t have enough money to really do any type of paid marketing. That’s definitely the challenge here.
One of the things you can think about is you’ve built something that people want or at least there is some sales here and there, you may want to think about doing some of these deal a day sites, they have developer deal a day site. I know you have to cut your prices and it wouldn’t be a sustainable thing but it could be an interesting short term influx of cash that can help motivate you to build that next thing.
I think if I were in your shoes, given what’s going on, I don’t see any easy way to grow these existing products. Nothing jumps out at me aside from doing some of these deal things, which again is a short term thing. Personally, without knowing all the details, I would probably start thinking about a way to launch something else that has just a higher lifetime value, whether that’s a one time or a recurring thing, that just leaves a little more money to do some of these other marketing approach and try your hand at them.
Mike: A couple of things that come to mind is try and pursue an affiliate channel of some kind. There are lots of websites out there that just have dozens and dozens of products or actually, probably tens of thousands of products on them where people can go through and identify what products that they want to push as an affiliate on their own site. It’s hard to get noticed in those so you would probably want to pick and choose different people to approach for that.
If you have a set of customers who keep running into a particular problem that your software works really well to solve, then approach in like the vendor’s, whatever that platform is of that application and trying to get in the door as an affiliate and say, “Hey, bundle this other application, whether it’s your git-ftp deploy or your F-Bar,” that would be a good way to get in front of those people and provide yourself with an additional channel.
Rob: I like that idea. I like that. It could be worth pursuing as well. Find another JV channel, basically, to go through. That’s cool. Thanks for the question, I hope that was helpful.
Our next question is another one from Saphia and he had sent a question a couple of weeks ago. Subject line is we may have built [00:17:04]. He says, “I’m a big fan of the show. I’m still binging my way to the backlog since I discovered it. Thanks for the great advice. I’d like your opinion on something. My co-founder and I, first time founders, have been building a SaaS app for about a year, part time, based on an idea that he had as a business coach. Essentially, the app recreates a process but moves it online. It’s one he’s been successfully charging for offline for a number of years and it solves the problem of lack of clarity and difficulty onboarding new employees in a flat organization.
Our landing page has collected more than 500 emails. The feedback we get on blog and social media is generally super positive. People seem to be very eager to try the product. Now, we have an MVP that we launched with about 10 leads as a free trial for a few weeks. All the feedback is very positive. None of them have yet paid for the product. It’s a flat rate of $99 a month per team. Some have logged a few bugs in quick win features that I’ve deployed in a matter of days. How would you approach this? Should we go down the list of 500 prospects and another 10 leads? Should we focus our attention on the current 10 and get to the core of why they’re not paying? How do we know if we have problem-solution fit and most importantly, if there was a problem in the first place. Could it be that we built a cool looking product that is just nice to have? Am I too impatient? How long does it take to close a sale in the B2B world?”
I’ll let you take this first. At the am I too impatient, it’s like yes, we all are. You can be searching for product market fit for 6, 9, 12 months. This can take a really long time. I would definitely give it a little more time but why don’t you weigh in, Mike, on maybe what you would do next.
Mike: Welcome to the club of impatience. I don’t think that that ever goes away. Nothing will ever go as fast as you want it to or you won’t scale as quickly as you like. In terms of what to do next, if you’ve got a list of 500 people and you’ve only gone through 10 or so, I might look at those 10 a little bit and start asking those people questions. It sounds like maybe either haven’t asked them questions or you’ve asked a couple of people and maybe they didn’t get back to you but you really don’t have enough information right now to go off of.
What I’d be careful of is burning through that entire list of 500 and just trying to on board all of them and get to the point where you’re not getting enough information to make a good decision about what to do next. I think one of the issues that I ran into with Bluetick was that when I was putting people onto the system at first, I didn’t do a very good job of defining what a success card here was and what the next steps were for people and what the timeline was.
I feel like the timeline was probably the most important thing and I was the worst at that. I basically said, “Hey, try this out and let me know when it’s providing value and at that point, then I’ll start charging you.” That absolutely didn’t work. When I turned around and I decided to put a time pressure on it, that’s when people made the decision.
I think part of that was due to the fact that it just took so long to get to that point where, I don’t want to say put my foot down but I drew that line in the sand and said, “Okay, either you’re in or you’re out.” It’s very easy to just let things slide. If you go back to this 10 and you really can’t get answers from them, that’s fine. Just go to the next 10, that’s okay again. You’ve still got 480 more people.
But set clear expectations with them about how the process is going go, how long they’re going to be able to test things for, what you’re going to do if a bug comes up. You can explicitly tell them like, “We will pause the billing, for example, for x number of days.” Or however long it takes us to get that particular issue fixed. If they come to you and there’s a problem, push their trial out by a day or a week or whatever, if that’s how long it takes you. If it’s going to take you six months, obviously, then I would say move on because that’s not going to be beneficial for you and it’s probably not a good fit for them at that point.
But you can essentially iterate through probably 5 to 10 times and you’ll get through 50 to 100 of those people and you’ll find out a lot of information about what is working and what’s resonating with them and what’s not.
Another thing I would do is when you’re going through the on boarding process, don’t let them do it themselves, walk them through it. Get them on board, walk them through signing up with their account, get on a video call with them and watch them do it and watch where they have problems because that’s where you’re going to learn the most from. Having them tell you after the fact is just not going to be very helpful. You want to watch them struggle and watch what they’re doing.
That’s what I did with Bluetick, was watch people sign up for it. Every time they had a problem, I wrote it down. Even if they just looked around on the screen and they weren’t sure where to go next, I wrote it down because that’s a problem. Because when I’m not there to guide somebody or answer a question directly, how are they going to figure it out on their own? If I don’t see that that’s a problem or you don’t see that there’s a problem on that on-boarding area, you’re not going to be able to figure it out especially just by looking at statistics and data from Mixpanel or Kissmetrics or whatever, those things are not going to tell you what’s wrong.
Rob: That was a really good answer. Tell me honestly, did you rehearse that before this episode in front of the mirror?
Mike: No, I did not but I thought about that a lot.
Rob: It was really good. You called out basically handholding and watching people use the app and see where they stumble, you called out digging in with the 10 current ones and not jumping ahead and digging as much as you can into finding out why they’re not paying and setting expectations properly. And then only when you’re convinced that it’s not going to be a fit for them or that you can’t get the answers, then go to the next 10 and then you talk about doing that 5 or 10 more times, which might take months and months.
Remember, I called this the slow launch of Drip where we got our first paying customer in June. There was early access. They weren’t paying yet. But by the end of maybe June or July, I think it was our first payment. We didn’t launch to our big list until November. It took us five months of essentially this exact process of I was letting people in 5 and 10 at a time, looking at where they were succeeding, where they were failing, where they were getting value and doing that. This is the playbook, man. I think you captured it really well.
Sophia, I won’t just say that’s what I would do but that’s what I did and that’s what Mike did. You’re following the path and I think the answer to the question of are you too impatient is yes but we’re all impatient so don’t feel bad about it.
Our next question is from Sameer. He says, “I’m launched but I’m discouraged. What are my next steps?” He says, “I built dcaclab.com for teaching electronics. I feel schools all over the world will love to use it. In fact, some schools already use it but I still am not making enough income to leave my 9:00AM to 5:00PM job. I’ve done everything I can. I’m still pushing forward towards freedom. The most recent thing I’ve done is add a blog to the website so I could start adding content to get more traffic and hopefully more sales. It’s very hard work and I’m working by myself. How would you encourage me to keep going my website? Alexa global ranking is 338,000 and I feel tired. I’m interested in hearing from you on how I can keep strong and not give up.”
What do you think, Mike? Should he keep strong and not give up? I guess it depends on how much progress he’s made, right? It’s like if he has one paying customer and he spent a year, then he probably should give up, maybe.
Mike: It’s hard to answer with the data that we have. I think you have to figure out whether or not you’ve actually got traction. I think we’ve talked about this a little bit in the past but one of the things, and I heard somebody talk about this on a podcast as well, I can’t remember who it was, but they talked about the fact that if you launch a bunch of things, it’s a lot easier to see where the outliers are as opposed to launching let’s say three products and none of them do well. It’s hard for you to see what the outlier is, where things go really, really well and you recognize that.
If I remember correctly, it was somebody who I’d been talking to, Paul Graham, about that where they just didn’t know what success looked like because they didn’t have a very objective opinion. It’s just like, “Oh yes, get as many people as you possibly can onto the system or the platform and grow as quickly as possible.” You’ll know when you’re doing well and you’ll know when you’ve got traction and some success with it.
Unless you get to that point, you really don’t have a good understanding of what that actually looks like. If you don’t have any of those successes, it’s very difficult to be objective about your own situation. That’s how I would look back at the stuff that you have done and talk to other people who have put apps out there and have gotten some level of traction or progress with it and ask them to evaluate the different things that are in your business versus maybe theirs. Even if they’re only a little bit more ahead of you.
Let’s say that they’re making $1,000 a month, they can look at their own statistics and how they got to where they’re at, versus the things that you’re doing now and what you’re getting and let you know where the different problem areas are. There’s not going to be a silver bullet here but it will help point you at least in the right direction.
In terms of the app itself and the direction that I would go to towards trying to get more traffic and more sales, the name itself dcaclab, I get it. It’s direct current alternating current. But if you’re not really into electronics, you’re not going to really understand that. That’s not necessarily the point but the average person may not quite understand the subtleties of the difference between them. If you play with home electronics kits and stuff like that, unless you’re an electrical engineer or have electrical training of some kind, you really don’t completely understand that. It’s not going to come to you like if you’re searching for it on the web like dcac. That’s just not going to come up.
The SEO perspective is probably going to be a little hard. I’m not saying change it. It’s just something to think about. But this screams to me something that you could go to Kickstarter with. People in our age bracket are probably the most likely people to help fund something like this because they want to teach their kids about electronics and how alternating current works and how direct current works and how you can build little pieces of a large robot and experiment with those types of things. It just seems to me like that would be a great channel to go after to try and expand not just the horizon of what the number of people that you can reach but also to get an influx of cash. You could do a heck of a lot more with it.
There’s a lot of information out there on how to do a good Kickstarter and I’m not going to say that it’s easy because I know people who’ve done it and have made lots and lots of money from it or brought in lots of money but you also have to be able to deliver on it. Getting yourself to a certain point where Kickstarter really works well for you, you also have to do a lot of pre marketing in order to essentially accelerate it and pour gas in the fire once you do get it on Kickstarter.
The similar things that come to mind is you could go the route of trying to get into government funded channels like directly into public education, public schools, or even private universities or private schools, but those seem to me like the channel is going to take you a heck of a lot longer in terms of the timeline to develop and I don’t know how much time you have to put into this or even how much energy you have left to do it because it sounds to me like you’re at the end of your rope.
Rob: That’s a thing. Selling directly to schools or universities would be the money fad here in terms of the big contracts. It can make a difference. But it’s like one to two years sales cycles because they budget way out and you gotta convince them it works. I got to be honest. Just looking at the screenshots and I just watched a little video. It’s a pretty sleek tool. It really does look like a circuit board. I think you use it right here on a web browser. It’s interesting here.
It’s one of those tough markets of individuals probably aren’t going to buy it in terms of like, “I wouldn’t buy this for my kids because I might buy a coding class or something. It’s only $42 a year but I just don’t know. They’re not doing enough circuits right now.” You’re just going to get onesie, twosie sales. What you want to do is go after groups like schools, universities, even public, private, all that stuff but that’s just that enterprise sales cycle and so it becomes a challenge.
I like the advice that you laid out. I think that if you have almost no traction, if you literally have a couple hundred dollars in revenue, it might be time to just walk away, sell it on Flippa. You have built something here that has some value but it probably couldn’t sell through a broker if it’s that small. If you have at least say $25,000 a year in revenue, it may have to be profit actually, then you can approach a website or an app broker.
If you really are burned out and just struggling to get past there, that’s not a bad option, then you’ll find that you’ll leave out with a little bit of cash in your pocket and feeling refreshed. That’s something I’ve done a number of times so I know firsthand how that feels to keep an app around longer than it should and feel guilty about it because you’re not committing the time and you feel like you’ve invested a lot of stuff and you have this cause fallacy and you want to keep building it and you don’t know when to stop. I’m not saying that you should stop but you do need to listen to those feelings if you feel like you’ve just been pushing a boulder uphill and you haven’t really made any progress.
I kind of have a question mark in my mind, whether a blog, which is what you mentioned, has an x marketing channel is the right thing. I think if there’s a lot of SEO terms, there’s long tail, people searching for this kind of stuff, then maybe I wouldn’t do it for six months without some type of noticeable ROI. I might do it for a couple of months and of course, the hard part there is you have to need time to build this snowball there.
AdWords isn’t going to work here. Facebook Ads, probably not, given the low lifetime value. There’s not a ton of options aside from the places we’ve talked about before, which are the joint venture deals of is there anyone anywhere who’s bundling these things together. Is there anyone who has an audience that would be interested in this? Like a blog or that you could pay a big 40% affiliate commission to get the nice one time hit. What other free channels are there? Are there forums? Are there discussions? Is there a stock exchange for electronics? I’m almost sure there is. Can you become active in there and you don’t just hit there and pitch your thing, that you answer the questions because you haven’t seen a lot about circuits but you answer questions and then your profile has the links in it.
There are ways to do this. This is not like a high growth market. It’s not something that you’re going to hit a hockey stick by tapping the right thing. It is just going to be a slow build and if you’re interested in it and you still want to push it, then do that. If you’re not, then I would think about launching the next thing because you obviously have some skills to be able to launch this one.
Mike: Something else that came to mind as you were talking was what about building a course around teaching somebody how to use electronics and then bundling a one year subscription of this, or three months, or six months with it. That way, you’re really selling the course but this is kind of an augmentation of that course. That seems like a good idea.
Rob: Yeah. I pay quite a bit of money for my 11-year old who does coding courses. I buy those courses online and then he goes through them and he builds minecraft models and all that stuff. If there is a way to make this interesting, parents are likely to buy things for their kids. That’s an interesting market. It’s not an enterprise sale but it is a way, like you said, they’re going that B2C kind of Kickstarter path, selling the course with this bundled as a Kickstarter or an Indiegogo or something. That may be the best idea we came up with today regarding this business in particular.
Thanks for the question, Sameera. I hope that was helpful.
Our last question for today is about bootstrapping an MVP as a non developer. It’s from Rusty. He says, “I have an idea for a SaaS application. I feel like I have a great in, in an industry that I’m familiar with. However, I’m not confident enough in my abilities as a programmer to actually code a viable product. What’s the most financially viable way for me to get a demonstrable demo of a product up and running without having the personal ability to code it?
Mike: I think the first step is to take it from beyond having a great idea in an industry to talking to people and get in either commitments or actual presales from the people there to give you the confidence that go into that without having a development background and being able to know that you can essentially program your way out of any technical problem that you run into.
It is probably the place to start because if you can get those commitments and have that confidence that people are willing to pay for it and you’re able to find enough of those people, then that’s really the next step. It seems like a clear way to try and figure that out. If you do get that confidence, especially if you have let’s say $20,000 in pre sales, you can take that proof of presales and go to a developer and have a much higher chance of being able to convince your average off the street developer that hey, let me work with this other person or a partner and I’ll either do it for free or do it for a really low rate in exchange for equity or whatever in order to be able to latch onto this business that clearly has some legs to it.
Because what you’ll run into if you go to a developer and say, “Hey, I’ve got this great idea. I’d like you to build it for me.” I can tell you what’s going to happen. They’re going to say, “Haha, no. I don’t think so.” Unless they’re just not any good at it because there’s too many developers who’ve done that too many times and they’ve gotten burned. It just does not work out because the technical side of this is not the problem. The problem is the business side of making sure that you can get in front of enough customers on a repeatable basis. If you can prove that upfront, then you can move on towards actually building the product itself.
But I don’t think that there’s a lot that you need to do in order to even just put something in front of people who you’re talking to. I did Balsamiq mark-ups for Bluetick and that was all I needed in order to get presales. I would recommend having those conversations first and then going to the process of showing them what it might look like and then after that, if you can get them to buy into it, then move on to actually building a prototype until you get to that point where they say, “Yes, I’m willing to pay for it.” Or, “It’s a problem that I have that I need to solve.” It doesn’t matter. You can build all the prototypes you want but you could very well just be building the wrong thing.
Rob: That’s a playbook sort of recap. Have more conversations, have a bunch of one on one conversations. You can go out and you can look in forums and you can look in wherever folks who you’re trying to sell to hangout. If you have any inn in the industry, you already probably know a bunch of people in that industry. Talk to them, describe the idea in as much detail as you can and say, “It’s going to be $100 a month to whatever you think the pricing will be. What do you think?”
If they say yes, then say, “Awesome. I’m going to go build mock ups and I’m going to come back and show you. If I build this product, are you willing to pay that?” And then they’ll say yes or no. Once you get enough people and you really have an idea of what you want to build, like Mike said, make the mock ups. Balsamiq is a great tool. I think today, it’s like sketching and vision but you don’t need to get too fancy with this.
When you come back to them and you say, “Here’s what it is. Here’s what it really does.” They’ll have questions for you. Then you make a decision. If you get a bunch of people ordering and you get the validation, like Mike said, you can go to a developer or if you have savings, you can feel a little more confident that perhaps this thing will work and maybe you go and hire a developer, which is a whole other podcast episode. A lot of challenges there but you can hire someone to build it and essentially hire a cofounder or you could go down a different path.
If it’s a service that can be mocked up and handled by hand like by yourself or by a virtual assistant with minimal software, maybe no software at all like can you mock this thing up, have a fully functional version with Google Forms and Zapier and you copying some kind of a spreadsheet and manually sending emails through Gmail or MailChimp or manually crunching data in Excel spreadsheet, instead of an app actually doing it, then maybe you don’t even need a developer to get to the next step, past the mock-ups.
The next one is, “Okay, now I’m going to do this for you.” I don’t know what your service is so that’s where this part’s hard. But it’s like if you’ve committed that you’re going to bring 20 leads a week to lawyers or to real estate agents, it’s like, yeah you want to build a software to do that ultimately. But now, just get on a phone and generate the leads. Run the AdWords and generate the leads. If you’re going to do SEO analysis on something, then yes, you’ll want a computer to do that eventually. But for now, just do it yourself. Do it manually and develop the algorithm and send them pen and paper in essence. Send them that Excel spreadsheet that is super low tech and see if they’re like, “Oh my gosh, it’s amazing. I’m getting a ton of value out of this.” Or if they’re like, “Yeah, the results really aren’t as interesting as I thought they would be. They don’t necessarily need to, in a lot of cases, actually use a software to get the value that the software will ultimately provide.
That’s kind of your either or. They are depending on the idea. If you can’t do that and that is possible in more and more niches than you think and with more ideas than you think. But if that’s totally not possible, then yeah, you do go down the train of trying to build a prototype/mvp. Those things don’t have to be the same, but in this case, they essentially would be.
Mike: Thanks for the question, Rusty. I think that about wraps us up for today. 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 questions@startupsfortherestofus.com.
Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening and we’ll see you next time.
Episode 353 | Noah Kagan’s Post-Launch Advice for Bluetick
Show Notes
In this episode of Startups For The Rest Of Us, Mike and Noah Kagan of AppSumo, talk about the evolution of Bluetick. Mike discusses how the idea came about, development, and issues faced along the way. Noah provides some post launch marketing advice and tactics.
Items mentioned in this episode:
Transcript
Mike: In this episode of Startups For the Rest of Us, I’m going to be talking to Noah Kagan about Bluetick marketing tactics. This is Startups For the Rest of Us, episode 353. 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, you got to say, “And I’m Noah.”
Noah: What’s up, man? I’m Noah.
Mike: We’re here to share experiences to help people who made the same mistakes we’ve made. What’s going on this week, Noah?
Noah: This week, I’m doing marketing. That’s kind of what I’ve been thinking about with our sumo.com business, just who’s the customer, where are they, what kind of plan can we put in place to help reach out to them.
Mike: Awesome.
For the listener who may not be familiar with Noah Kagan, he’s the founder of AppSumo and sumo.com. They offer a variety of free tools for small businesses. You put a little JavaScript snippet on your website and essentially you end up with a suite of tools that helps you build your email list, promote it, get people into your sales funnel, and really just manage a lot of the online marketing that you do. Is that an accurate ballpark assessment of that?
Noah: Yeah. Our whole company’s purpose is we help the small dudes or the little guys become sumos. We have two businesses, one’s AppSumo which is a GroupOn for geeks, and sumo.com which is the tools for people to be able to promote themselves, mostly around growing their mailing list and growing their customer base.
Mike: Awesome. Today, we were going to dive into Bluetick. I just launched it a couple of days ago, I think this episode will go out actually a week or two later. I wanted to talk to you a little bit about it just because you’ve got a knack for all things marketing, to be perfectly honest. You’ve done a lot of different work with some very high profile companies like Mint and Facebook, especially in the early days of those companies.
I wanted to talk to you a little bit about if you were running Bluetick based on where it is today, what would you do and how would you approach things moving forward? Take that not only for my own selfish purposes to use that moving forward, but also to illustrate to the listener what sorts of things are possible and what sorts of things they should be looking at when they’re trying to get their product out the door right after they launch.
Noah: Totally. I don’t know how much you shared with your audience on the podcast, maybe you want to give a little bit of a background for possibly new listeners or to anyone who haven’t heard about Bluetick yet?
Mike: Sure. Bluetick is a warm and cold email follow up tool. The basic idea is that if there are certain points in your sales funnel that you know where you typically have to reach out to somebody more than once to get them to do something, whether that’s to reply or to fill out a form, or to submit information, something along those lines, then you put them into this email sequence. It will email them. If they don’t perform that action, it will email them again. It will keep emailing them again until it either runs out of emails to send or the person does that. You can have them pulled out of the email sequence, put into a different one.
It integrates with Zapier. People use it for integrating into a variety of tools like Asana and various CRMs to help them move people through so that they don’t have to do it manually. Otherwise, you have to copy from spreadsheets and things like that. It’s a pain in the neck to track of how many emails you’ve sent to each person and how far down in the email sequence they are.
Noah: How did it come to where it is today? Were you on the toilet and you’re like, “Hey, I really am tired of doing follow-ups. I need to go build software because I’m a smart developer.” How long did it take? I’m curious more of where the problem and the creation came from.
Mike: You were actually one of the first speakers at MicroConf back in 2011.
Noah: I thought you were going to say I was one of the first speakers to never be invited back, which that is true. I’m still waiting for my invite.
Mike: The hot sauce incident, I think that’s what did it. There was hot sauce 12 ft up in the wall.
Noah: [00:03:49] incident, it will not be talked about.
Mike: There was a no hot sauce rule after that. Disregarding that, when Rob and I were running MicroConf, he typically handles a lot of the speaker side of things and I handle the sponsor side of things. What I found was that when I was emailing sponsors to see if they were interested in sponsoring MicroConf, what would happen is I would send somebody an email and they wouldn’t respond. I would have to send them another one and possibly two or three more.
At some point along the way, they would reply. Usually, these were sometimes warm contacts, sometimes they were cold contacts. In most cases, because my email fell much lower on their priority list, they didn’t necessarily see it as necessary to respond right away. Of course, there’s good intentions there. “Oh, yeah, I’ll get to this. I don’t have time right now because everything else gets in the way.”
I would find myself emailing them two, three times, four times, over the course of a week or two, or three weeks, something like that. I found myself saying the exact same things to them over and over. I had the idea that there could be a piece of software out there that would do this for me.
I know exactly what the second, third, and fourth emails are going to be. The first ones are usually customized, Bluetick allows you to do exactly that. But those followup emails are all heavily driven from a template. They’re pretty much automatic. It’s really just to kind of get a response from somebody and help move the conversation forward.
Noah: So you had the idea, you’ve had these problems with these guys. I’m just curious, these are the things I’m thinking about. How did you go from that to saying, “Alright, I’m gonna build a software around that.”
Mike: I started doing a little bit of validation around it. My thought was oh, I could sell this to other conference planners and event planners. What I did was I looked into it, tried to figure out what a pricing model would look like, and realize that unless you ran a lot of conferences on a very regular basis, then you probably wouldn’t use the software.
Just because the pricing model didn’t really work out in terms of finances for me. If I charged a couple hundred dollars, it’s a little bit of a tougher sell than if I were to charge $50 a month for it. But if I’m only charging $50 a month, how many times are they actually going to pay me? It maybe two or three because they’re doing sponsorships for a couple of months leading up to the conference, and then they don’t need it for the rest of the year.
I tried doing the validation for a while and then I said this just isn’t going to go anywhere. And then fast forward a few years, I kind of came back to it and said well, there’s actually a lot of other situations that this applies to. Following up a consulting services company where they’ve got a proposal out to somebody, or they’re just trying to get the conversation started, or they’re just trying to find the right person to talk to. Those are all situations where this type of tool applies. But initially, I was looking at the wrong type of buyer for it. The right solution, wrong target person.
Noah: Who were you hitting up originally?
Mike: When I was first trying to figure out who to go after, I was looking at event planners and conference coordinators because I knew what that looked like. Right now, what I’m looking more at is services companies, anyone who has a price point that’s probably above $2,000 but less than $10,000. It’s well worth your time and effort to follow up with those people, but a lot of people don’t just because they either feel bad or they don’t want to go through that emotional hassle of sending that second, third, or fourth email.
I’ve got lots of data that shows me if you send that first email, yes you may get a 30%, 40% response rate, but if you send four or five, your response rate can increase dramatically to 70% or 80%.
Noah: That is really interesting. I found the same thing. I’ve used a similar tool. What was shocking for me is 50% of my replies to people came on the second email. It was like oh wow. It’s one of these things where most people I’m sure, Mike, you get a bunch of emails and a lot of people get a bunch of emails. You delete them. If it’s really important, people will follow up. If it’s something that’s important, the data actually really shows that.
Did you go and just build this right away or did you sell a bunch of them and get customers before you made it? How did that go?
Mike: What I did was I created this little explainer video. It was about a minute and a half long. I sent it to a handful of people in my network who I thought would have this particular problem and ask them, “Hey, is this a problem that you have? If so, are you willing to talk to me about it? I think I have a solution that would solve it.”
I got probably about a dozen conversations out of that fairly quickly, out of about 20 to 30 people that I send it to. I had those conversations. That was the initial discussion. I would ask them, “Is this something that you would pay for?” Most of them said yes. Once I got to the point where I had 12 people who said yes I would pay for this, then I sat down and I created balsamic mockups of what the application was going to look like, how it was going to work.
And then I went back to those people a month later and said, “This is what it will be, what do you think?” Then walked them through everything, gave them a “demo” of the product using those mockups. And then I asked them for a credit card, for a pre-payment. People gave me anywhere between a one month to three months pre-payment, I let them choose how much they were going to pay which helps me figure out what the price point was going to be. If that would make sense for me—if it was going to be $5 a month, I didn’t want to deal with it. But if it was $50 or $100, that’s reasonable.
After going through that, I ended up with about 15 or so people that gave me pre-payments, anywhere between one and three months, and anywhere between $40 and $100. I ended up with close to $2,000 worth of pre-payments.
Noah: Dude, go you. That is awesome. I think most people do it backwards. Build, build, build, hopefully someone comes. You’re like let’s see if people buy. I think one thing that’s a good thing for your audience to think about and it’s a good reminder for myself is that you had people already that you could reach out to. Either you had a mailing list or you had some audience or you had some type of network. I think most people do that way too late.
One of my favorite silly examples is people want to eat vegetables so they go like they have a garden. They dig a hole, plant a seed, and then they try to eat the seed the next day. I’m like obviously you have to water it, wait, and nurture it. I think you did a really interesting job where you’ve been doing this over a year so it made it easier for you to go validate this type of business idea. For people out there, go start a mailing list, go start a website, go start joining Facebook groups, go to conferences like MicroConf or whatever that is. It’s just a really good thing.
One thing I’m curious is who are the people that pre-pay? I think that’s amazing. What were they really excited about?
Mike: Most of them were services companies who wanted to get somebody into their sales pipeline or wanted to get somebody to a meeting so that they can have a call and talk to them. The issue that they had was that they would send somebody an email and say, “Hey, can we hop on a call?” The person wouldn’t respond, or they’d send them the link to their Calendly, youcanbook.me, or whatever that they were using. They’d suggest a couple of times and the person wouldn’t do it. Then, they would have to go back and follow up with them.
I built Bluetick in such a way that you can send them that link and it will send and inject data into the query string for that. So that when they click on it, they schedule a time, it closes the loop so that you don’t have to go back and pull the person out of the email sequence, it’s all done automatically for you. It tracks that on the backend so you can check what is your conversion rates and things like that on those emails that you sent, which one was the most effective, and it really just helps automate that whole process so that you don’t have to do anything beyond that first email. You just set it and by the time that person gets to that end of the sequence, the email has done its job.
Noah: You sold $2,000 worth to people, most of them wanted it for sales. What did you do next?
Mike: After that, I sat down and hired a couple of developers to help me build it. Spent about four months or so doing that. Then, probably two or three months after that trying to work through very early issues with customers, trying to figure out is this going to work for you, how does it work in your business, and just trying to get them to use it.
I ended up taking my entire development team that I hired, fired them all because everything behind it was really just not very good. I spent about six months re-architecting a bunch of things. At that point, probably around November this past year, that’s when I added my first customer who started paying on a monthly basis. Since then, I’ve been adding customers over the course of the past six, seven months or so. Right now, it’s sitting at around 20 to 25 active customers, and around $1,100 to $1,200 MRR.
Noah: Hold on, dude. That was crazy. What happened? You’re working with these guys or girls, and then you fired them after?
Mike: Basically. It was a team of three people, and they didn’t know each other. It’s just three independent contractors. I tried to position to them like hey, one of you needs to take the lead and step up and do this particular role and manage stuff. None of them really wanted to do it because it was all off of Upwork, they’ve never worked together before. In terms of management, I was trying to hand that off to them so that I could focus on customer stuff. It fell apart.
I blame myself for it because I didn’t necessarily give them as much guidance in terms of the design and engineering upfront as I probably needed to. My expectations were probably too high for them.
Noah: How would you do that differently? It’s funny, in the past six months as I’ve been doing more personal stuff, I was building some recruiting software. I used actually the Pakistani in the outsourced team that helped me build AppSumo seven years ago. Man, it was a freaking struggle. “Alright, cool, we’ll do those features.” Then they come back with the features and I’m like this is not even close to what I exactly told you guys to do and I showed you what to do.
I’m curious, how would you better communicate, hire a better team, how would you do that next time you build something?
Mike: I think that the design itself really needs to have more details or more screencasts or walk throughs with me explaining things. One of the things that I did was I would give them a document that says, “Hey, this is what it’s supposed to do.” It’s really dry and boring to look at those things. Even if you have things on the screen, it doesn’t necessarily lend itself to everybody on the team doing things in the same way.
If you have three different people who are tasked with building three different areas of the application, you still need somebody to coordinate between them to help understand, “This is the style we’re going to use, this is how we’re going to do paging and sorting,” things like that. There’s a lot of backend stuff that was just an absolute mess. It was implemented completely differently from one page to the next.
From the end user standpoint, the app barely works. It was because of all those issues. There wasn’t enough focus, I’d say, on letting them know about areas where they really need to be concerned about, which were things like you can’t just assume that you’re going to get ten records here, you might get hundreds or thousands of records, or even hundreds of thousands.
The replaces in the app where it just wasn’t scalable in any way, shape, or form and it would fall apart once you started using it. That’s what a lot of the reengineering effort was focused on.
Noah: That’s actually interesting. How much did that cost you to begin with, and then how long did it take once you took it back over to just finish it?
Mike: I’d have to go back and look but I don’t think it was more than probably $15,000 or so to have them work on it, between the three and six months that they worked on it. Most of them were working on it part-time. I don’t think it was more than $15,000.
Noah: Then how much was the new version?
Mike: The reengineered version, I did all that work myself. It took like six months to do it.
Noah: If you could go back, it sounds like ten months plus some of the validation. A year, give or take. What do you think would’ve been an alternative to get it out sooner? If you had to start this all over tomorrow, what would you do?
Mike: I’d probably stub out certain parts of the code base myself so that it’s clear how to do certain things or clear how to manage certain types of problems. There’s typical things you would do in an app like security controls, team accounts, and things like that. You really need to have those types of designs engineered upfront. If you don’t, then you’d have to figure out what to do with them later.
But there’s also that trade-off that you have to think about. Are you going to over engineer upfront to make sure that you get it right, or are you just going to slap something together and put it out there and see if it works and if it resonates with people and then re-do it afterwards so that you don’t figure out later on if you’re making a mistake? I think it depends a lot on how much money you have to spend on it and how much time, versus how quickly do you want to get to market and make the mistakes.
Are you okay with prototyping certain parts of your app, for example? Are you okay with prototyping the whole thing and throwing it away once you’ve validated that the idea’s going to fly? It depends on where in that spectrum you fall.
Noah: Where do you think most people make mistakes around that?
Mike: I’d say that people spend probably too much time building the app as opposed to putting it in front of people.
I had something that was barely functional in front of people in about four months. I realized early on where the problems were, why they weren’t using it, and what sorts of issues they were running into that made them not want to use it. That was helpful in that I got there quick, but at the same time those types of problems took a long time to solve partially because I wasn’t familiar with some of the technologies. Using a stack that I was probably more familiar with would’ve been a little bit better, but I can’t really do anything about it at this point.
Noah: One thing that I’m considering, and then we can get into the marketing plan about how to scale this out, cause I actually use a competitor tool, we could talk about that as well. If you couldn’t have built any software, you’re an engineer so you’re obviously very smart. Engineers are smarter than everyone else. If you couldn’t build a software, how would you have done the software and how would you have just done the service without the software?
I think what people miss a lot of the time, they’re like oh, software as a service, it’s just a SaaS recurring revenue. They don’t know that SaaS means you’re doing a software that’s replacing a service. I think that’s really critical that people just jump to the software. I’m like do the service a few times. In most businesses, you can actually implement ghetto versions of it to see if it’s something valuable for people before you go out and build software.
Mike: Yeah, I think for this, to figure out whether or not that was an idea that would fly, like in terms of the validation piece of it, to see if the process itself works. If you didn’t know that the process worked, then you could probably just create your own email account or ask somebody, “Hey, can you create a mailbox on your domain? I will send the emails for you.” When people get replies, then I will shoot it over to you unless you take over the conversation. You could do that, that would probably be the easiest way.
Noah: Dude, that’s a great idea.
Mike: If you don’t know how to code, if you don’t know how to do anything like that, you basically have to say how can I insert myself in here to do what a computer would do?
Noah: Dude, I love it. I’m just going to repeat it cause it’s so good. You’re like, “Hey, just give me access to your inbox or give me a separate account. I’ll even write the emails,” and you do it for them and then they’re like oh shit, this is working. Then, you could actually go build software.
Mike: Yup. I think that would work if you didn’t know anything about it or if you weren’t technical. I think in my case, I had done some of that early validation because I was doing this exact same process for MicroConf sponsors and I basically just took that process and implemented it as a piece of software. I think it depends on the type of problem you’re going to solve, whether or not that specific solution will work. But I don’t see any reason why if you’re going to build software that solves problem X, you can’t just do it manually until you can program a computer to do it.
Noah: Yeah, that makes a lot of sense. You finally got it built six months later because you took over, you did it yourself. I’m curious for the people who aren’t technical, a lot of MicroConfs and your listeners are, but for the non-technical, how would they find someone to build it? Let’s say they validated it. Where would you go?
Mike: I started out with Upwork. I think that they combined with freelancer.com or something like that, I forget what the other one was. There’s also weworkremotely.com. The issue you find though is that the better developers, you have to pay more money. If you’re operating as a bootstrapped business or running it on the side, then you have this constant challenge or balance that you’re trying to strike between paying somebody to develop something versus either doing stuff yourself or paying somebody who is a lower cost so that you’re not burning through your runway as quickly. Cool?
Noah: Any of those different types of services, does Fiverr have any development?
Mike: Ah, I don’t know. I’ve never looked on there. Maybe they do, but my guess is that it’s probably very certain problems.
Noah: That’s fair. You finally build it and you give it to these people. What do they say? They’ve been waiting for it.
Mike: Depends on where you are in the timeline. After the four to five month mark, I count from January or 2016, because that’s when I broke ground on code. And then in April or May is around when MicroConf was, and right after that I came back and I started putting it in front of people. It really just wasn’t ready.
I had a hard time getting people to use it, I created accounts for them and they just really wouldn’t use it. I spent several months trying to figure out why it was that people weren’t using it, what was it not doing for them. There were just a ton of issues here and there, basically throughout the entire app. A lot of it just needs to be re-architected. It took me six months to get it to the point where I was getting people to start using it and realized now this is at a point where I could actually sell it to people.
I actually took somebody from outside of that core group of people and said, “If you want access to this software, you’re going to get charged on day one.” I was still trying to on-board those people, but I had given carte blanche access to use the software or not until they were getting value out of it, that’s when I would start charging them. There wasn’t any real impetus for them to start using it because it was obviously putting something on their task list, because then they have to start using it.
But then if they start getting value out of it, then I’m going to start charging them. I didn’t really draw the line in the sand for them until probably four or five months ago.
Noah: Interesting. Now you finally got it out, you finally got most of the bugs fixed, let’s jump to the marketing thing. Let’s get to the meaty stuff where a lot of people say, “Hey, how do I get more people to find my product and buy my product and grow my business?” I think the missing part sometimes is do you have something people actually want? Do you ever wonder about that, or think about if this is something people actually wanted?
Mike: For this product, no. I think that’s actually an interesting question, the way you phrase it because I don’t think that most people, when they’re building something, even question whether or not people want it. I don’t think that they do. I don’t think I’ve ever questioned anything that I’ve ever built and said do people actually want this? You don’t know that or even really consider it until after you put it out there, and then people don’t buy it. You’re like, “Oh, do people really want this?” You’re not going to build something that you don’t think people want.
Noah: Yeah, we think that. I don’t think anyone tries to be like, “I can’t wait to build stuff that no one’s ever going to use.” You know what I mean? I generally don’t think that’s the case.
Mike: Exactly. That could just be self-delusion too. It’s not to say that that’s not a possibility, it just means that no, I never really seriously thought that, and I still don’t. But it doesn’t mean it’s not a fair question, objectively, do people care?
Noah: What was your plan to get it out there? This is where we can start going through the marketing plan stuff that we went over in your document.
Mike: There’s different stages that I would say the app needs to get to. There’s the early adopters or beta users, whatever you want to call them. That group of people needed to get on-boarded and start being successful with it. Then there’s this level where I feel like it needed to start getting a critical mass of 20 or 30 people before I can go public with it and start pushing it out to larger numbers of people. That’s where it is today.
Most of the people who are on there now have either been using it for several months or were part of the very early access group, or just heard about it through word of mouth. I’ve actually gotten a lot of referrals from people who have been using the software and then recommended it to somebody else and said, “Oh, you’re having problems with X? I was too. I switched over to Bluetick and those particular problems went away. I found a lot of success in asking specific people for referrals and getting into other people’s networks and leveraging those networks to add more people into Bluetick.
Noah: Referrals, and then did you pick a goal, did you pick a customer? How did you organize that at a high level?
Mike: With the referrals, a lot of them were people that I didn’t know. It wasn’t as if I necessarily had a particular goal in mind, it was just who do you know that has this particular type of problem, and then is Bluetick a good fit for solving that problem for them? Most of it boil down to doing a demo for them, talking to them about their problems, if there were ways to reengineer the software a little bit to fit that particular use case.
I found a couple of use cases that people have hit on, one is podcasters who want to get sponsors for their podcast. It’s funny that that has come up because several years ago, when I was first doing the early validation, I was looking at event coordinators and conferences. They just didn’t happen often enough, but podcasters record every week or every other week. There’s a much higher frequency, and they could actually use the software to do exactly what it was originally going to be for for event coordinators.
Noah: A few other things. It seems like one challenge you’re figuring out is who is the ideal target customer?
Mike: Yup, that’s absolutely true.
Noah: For me, I use Outreach, there’s Mixmax, there’s Boomerang, there’s FollowUp.cc, there’s a good amount of different people doing this. Even with sumo.com and AppSumo, there’s always competitors. I’ve never seen a business where there is not competitors, even people like Tesla. There’s a bunch of other car companies, and guess what, there’s public transportation, there’s biking and Uber. Sometimes, their biggest competitors don’t even realize.
I guess the thing for you and people out there is just not to get discouraged. That’s also advice for myself. There’s always some competitor.
I think that what I’m curious for you is who do you think your customer will end up being? Is it for SMBs that are small sales teams, is it the podcast marketing tool? I do think with the outreach and some of these guys, I think we’re paying $500 a month per person or something pretty crazy and you can’t just sign up for it, you have to have a demo and all this other stuff.
Mike: I have talked to people who have been using Outreach or switched away from Outreach. One of their biggest complaint was the fact that it costs so much per license. I talked to somebody a few weeks ago and they said that there were quoted $150 or $160 a month per person. Bluetick is only $50 a month per person and it does largely the same type of things. I’ve heard from people who have used various competitors that they had problems with them.
What I did early on when I was doing the validation was I focused in on those problems and said how can I avoid Bluetick having any of those problems? I worked really hard on the engineering side of things to make sure that those things don’t happen. For example, being able to add somebody into more than one email sequence at a time and recognize when they’re in one versus the other and pull them out of the correct one for example.
Another one is being able to make sure that the emails are not being missed. If a reply comes in, how do you guarantee that the software does not miss a reply? I do that by synchronizing the entire mailbox, which I don’t know of anyone else who does that. It’s basically brute forcing to make absolutely sure that does not happen. And there’s a few other little things here and there, but those are kind of the main pieces that I focused on because the people I talk to were generally unhappy with other options.
In many ways, I won’t say the target market is this but I feel like a good chunk of my early customers are probably going to come from people who are fed up with other products and are looking for a solution because of specific things that they run into.
Noah: We can go about how I like to think about marketing plans and some of the things I’d recommend for you to do.
How do you know which customer you’re going to finally be like let me hone in on this customer and this pricing?
Mike: That’s a good question. I don’t know what that looks like right now, that’s something I’m still trying to work out. I’ve shied away from honing in specifically on one particular use case or one particular type of customer so far because I don’t feel like I have enough customers who fit a given profile yet to be able to say I’m going to go in this direction.
My concern is really that the tool gets pegged for getting sponsors for podcasters, for example. I don’t want the tool to be pigeon-holed into something like that too early. I don’t know what the best customer looks like. Maybe that’s not even a valid concern, maybe I shouldn’t be worried about that.
Noah: I think you should, and I think that’s where you’re going to win. Winning means just making the business a lot easier. What I’ve been thinking about a lot in the past few weeks is called PPD. Who’s my person, what’s the price for them, and what’s my differentiator? Your PPD, I guess PDP or whatever way you want to organize it, for yourself is this is something that when I was doing marketing at Mint was probably one of the reasons that we did well. It obviously was not just me, there’s a bunch of people that made Mint.
What we did is we targeted people who read personal finance books. It was free. Your price is zero which is good, and then differentiator was it was free, and the people was very exact. It was like if you’re reading a personal finance blog, I want you. If you’re not reading personal finance blogs, I don’t care. The more that you can do that, and even commit to it for three months.
I think what I’ve noticed with marketing is that people don’t want to be very narrow because they’re going to lose out on customers. An example of that was yesterday I was talking to my friend who helps me with design work. He said, “Hey, the most lucrative customers are my web app and mobile app designs, but I get all these other businesses and I want money but I’m not making a bunch, so what do I do? It’s hard to say no to that.” I said great, more you’re saying no, the more it means you’re focused and you have the right customer. But find someone else that you can pass them off to and say hey, this is a great person for all these things you want, I’m this. In reality, he can get better at that skill and he could start charging more.
If you had two today, Mike, I’m curious, if you could only serve one person and you said for the next month, let’s just keep it really short, I’m only going to focus on this person. Who do you think that would be?
Mike: I would probably say the owner of a services company that has less than ten people in it. By ten people, I would say ten people total but probably two or three that are charged with doing the outreach efforts and marketing and sales for that business to help them build the business and build the relationships they need with their customers.
Noah: Let’s go with that, now we’ve got something. We’re doing service people who need more customers. Web design agencies, what’s an example of that?
Mike: Software development, web design. You could go so far as print design. Anyone where there’s a service based component where you typically have to talk to the customer in some way, shape, or form before you can really start working on them. Because of that, you end up with the type of business where you have multiple people involved in the creative process because you’ve got a sales rep or marketing person on the front end and they’re really doing business development, and then they hand off the business or the work to be done to somebody else, and then that person does it but they’re the ones getting compensated or the money is being generated for that consultant company based on their work. It’s not really that sales person upfront.
The price points for them tend to be higher. It may be a couple thousand dollars, maybe $3,000, $4,000, $5,000 a week, but it’s worth it for them to follow up with their customers. That’s really the key point that I found, the price point that they’re selling at has to be high enough for them to justify doing those outreach efforts. We talked about this earlier, the second, third, fourth emails, those are the ones that you also see a fairly high response rate.
If you can get to the point where you have a business if a lead is worth $4,000, $5,000, you only send them one or two emails, it’s probably not enough. You need to get to a point where you get an answer, you don’t want to send an email into a blackhole and just assume that they’re not interested. You have to follow up until you get an answer one way or the other, even if it’s no, you don’t care, you just want to know if that lead is dead.
Noah: You have that, and then what’s next? What’s next for you with that? I think sometimes when people ask for advice, this is why I tend to never give advice, is because we all have our own plans. You already have some kind of plan that you already want to do. I think when people are giving advice, just try to understand what people’s plans already are and see if you can assist that, that’s why I asked that before I tell you to go do all this stuff.
Mike: Yeah, I think the biggest question in my mind is how do I get in front of those people? It doesn’t even necessarily need to be at scale either. It’s how do I get in front of those people so that I can capture enough of their attention and enough of their interest to get the conversation going when they don’t know who I am, when they don’t know what Bluetick is or what it can do for them. Maybe they’re familiar with cold or warm emailing software and CRMs and sales funnels and things like that, but they aren’t necessarily looking specifically for these types of tools.
Noah: I am curious. How come you’re not targeting… MicroConf has how many people on their mailing list and you have so many on your mailing list. How many people are on that mailing list?
Mike: I’d say between them probably 8,000, 10,000, something like that.
Noah: Just out of curiosity, how come you didn’t focus on serving those people? Or tailoring this more to them?
Mike: I won’t say that I haven’t. Bluetick is my business, and then there’s also the Micropreneur Academy which under that umbrella you have the podcast and MicroConf and Founder Cafe. We don’t really mix email lists. I would say I wouldn’t necessarily feel comfortable going out and trying to do a sales blast or anything like that to them, just because that’s not what they were there for, it’s not what they signed up for.
It’s different if I talk to somebody at MicroConf where they come up to me and ask me questions about Bluetick because they’ve heard about it and they’re interested in it. I have no problems doing that, especially when they’re coming to me. “Oh yes, I know this person, I feel like I can trust them. They’re going to do the right thing for me.” That’s not an issue, it’s that going outbound to that audience, to those particular mailing lists is too head-putted.
Noah: That’s just one feedback, and then we can go through marketing plans. We’ll do a marketing plan in 15 minutes or less, it’s like dominoes. I think most people with marketing, and this is something that I think why sometimes my marketing is done well is that I do go to the people I already know first. I try to serve them first.
What I mean by that is I don’t know, and maybe you do and I’m totally off-base. I don’t know how many people you have that are already running software development firms, and maybe it’s a lot. The easier thing you already have for sure is you have a bunch of people who already like you, who probably have businesses or know someone who has a business that I would try to tap my close network first before I even try to think of my secondary or fourth networks I have no clue of.
Mike: No, that’s a good point. I just have to think of creative ways to do that.
Noah: I don’t even think you have to be creative, dude. Not to be mean about it, but those people already like you. I don’t know if they hate me or like me but for sure they like you. You don’t even have to sell them. Be like, “Hey guys, there’s something I’m launching, you guys are launching things, I’d love to get anybody’s feedback on it or if you guys want to use it, feel free.” You can hook them up if you want, that’s totally on your discretion.
It’s just like when I started AppSumo, I started a business for startups because I love startup software. I like promoting stuff. I had a network of that. I went out to my network on LinkedIn, I went out to all my friends and said, “Hey, can you tweet this?” It just made it really easy cause I tried to help and serve the people I already had access to versus ones I had no clue of.
Mike: That’s a good point.
Noah: Just something to consider. It’s been really interesting talking about this, here’s just a few thoughts about it.
What’s your goal for the year with Bluetick?
Mike: My goal with it, by the end of the year, I kind of classify the end of November as the end of the year because December I don’t think a whole lot is going to get sold. By the end of November, I’d like to hit $10,000 in MRR.
Noah: Okay, that is key. I just want to highlight it for people out there. If you don’t have a goal with a timeline, I just don’t think you can be successful. Someone said this quote, it’s like a boat without a router. You’re just going randomly. Maybe you’ll end up in America, maybe you’ll end up in South America, who knows?
I love that you have a goal. And then to that goal with that timeline, what’s your plan now to hit the $10,000?
Mike: I have a bunch of notes and stuff that I still feel like I need to organize a little bit better, kind of like you said just going without a router. I have a lot of tactics and specific things that I could do kind of written out, probably have a couple of hundred things. I haven’t really organized them to what your PPD, the person price differentiator. I haven’t narrowed down to say these are the people that I’m actually going to go for and these are the tactics that I’m gonna slot in to actually do that.
I have some ideas that have kind of worked in the past few months. One of them is doing influencer outreach and going on podcasts and things like that. I’ve also taught about doing joint webinars, I’ve talked to a few different people who have fairly large audiences themselves and said that they’d be willing to talk about Bluetick and have me on the podcast to talk about cold and warm email strategies, things like that.
Those are the things that I would probably lean more towards right now just because I’m more comfortable with them. I think that there’s also plenty of other things that I either haven’t done before or I’m not comfortable with, or just don’t even know about or haven’t thought about that I could do to increase traffic and add sales and customers.
Noah: Do you mind if I give some suggestions of what I do?
Mike: Absolutely, that’s what you’re here for.
Noah: Do whatever you want, but here’s how I would organize your marketing a little bit tighter. Number one, I think you should just pick a specific customer and then make your website very tailored to them. When I go to bluetick.io, it’s not very clear who it’s for. It’s like, “Hey, everyone should send cold and warm email followup software.” There’s feature driven, demographic driven, and then psychographic driven types of headlines. It’s not speaking to anyone.
For me, if I come to Bluetick, it should be we help service companies make two times more money. Oh, how the hell do you do that? And then that hooks me into what you do.
This is getting there. We send follow up emails so you don’t have to, but what does a followup email actually mean? If you’re talking to your specific audience, let’s say you target podcasters just to get guests, it’s like we help two times you book your guests, or don’t waste so much time booking guests. “Oh yeah, I’m a podcaster, I waste a bunch of time. That’s really painful.”
I think your marketing, the way that I would do it, is think about who your customers are. This is what I do. Either use live chat or just talk to them and ask them how they describe your business. Use a recorder, record it interviewing for the podcast, interview a customer, and take their language. I don’t know how they talk to their friends, but the way they talk to their friends is the way you need to talk to them, or their colleagues. That would be number one.
Number two, with your overall marketing plan, the way I like to do it is I love your goal, $10,000. You need to break that down monthly. What does that mean for August, for September, October, November, December? From each month, you should have how much MRR do I need to be to get my $10,000 by the end of the year? Then within each month, I break out if I need to go from $1,000 to $3,000, I need $2,000 MRR. What are ways I can get that? What I like to do is list out ten different ways, then I make estimations about how much MRR I can get from each activity.
For example with sumo.com, we were trying to double the amount of customers we have in the next six months. I have a list of six different things, it’s content marketing, affiliate marketing, paid marketing, free tools, SEO kind of stuff. I estimate based on some historicals and just guesses, how much I think each one is going to happen. I sort it, and then I pick just three. I don’t think we can do that many things great. I execute on just those three for the month. At the end of the month, I’d say, what did it actually produce versus what I expected?
The beauty of that then is I can cut the one that doesn’t work, keep one or maybe two that do work, and then add in another experiment, the 80-20 rule. What that does is it forces some discipline on accountability. “Wow, this is what it should do if I actually executed correctly,” and help you hit your goal. Does that make sense?
Mike: That makes perfect sense. That’s dead-on accurate. That’s fantastic, to be honest.
Noah: It’s a basic spreadsheet, I don’t use crazy software, it’s totally free, Google Spreadsheets, or illegally download Excel or maybe open source it. Even for you, you could even do one on one. A lot of times I do that in the beginning, just referral.
With sumo.com, when we started it, I just literally went out to people that I knew. If you don’t know a bunch of people, go join MicroConf, go get involved in things if you don’t know people before you need them and before you want to work with them. If you do have people, how can you go one by one and do that? We literally went through every single person on my LinkedIn account.
You know I’ve been doing internet stuff for 15 years, it took me a long time. But at the end of it, it was like oh wow, we have a good amount of people using this now and paying us. It’s one of your tactics, I wouldn’t want to discount even direct selling one by one and say I think I could probably generate $500 from that and then you do it at the end of the month. You’d be like, “I did $300, it was pretty damn good versus other things. I’ll do more of that next month and then less of something else.”
Mike: That point, I could export all my contacts on LinkedIn and just look through them, see who I think would be a good fit, or should just be filtered out entirely and then throw them into Bluetick and just do that personal outreach. I can do that. There’s nothing preventing me, I don’t think.
Noah: I think that’s even more genius. Use your own product, use your own dog food. I think that’s epic, man.
Mike: I actually use that during the course of demos. Previously, up until this week, I had just a little field on the website where you could ask for an invitation code and then they go to the next page, fill out a survey. Anyone who filled out a survey, I’d look at what they said and then plug them into Bluetick and then use Bluetick to get them to a demo. During the demo, I would show them, “Hey, this is how Bluetick got you to this demo.” It works really, really well. We got an 80% response for it.
Noah: Dude, that’s genius, I love that. This is a new method that I’ve been using with my marketing and I’m starting to apply it in other parts of the business, and it’s called Proactive Dashboards. The idea there, Mike, and for people listening is that you create a dashboard for yourself and your team of things you can do on a weekly basis that is fully controllable by you.
What do I mean by that? Mike, can you control if someone responds to your email or not?
Mike: Not directly, no.
Noah: You can’t force somebody to respond to your email. You can be like, “No, do it, I’ll kill you.” I’m going to be like meh, whatever.
Mike: There’s 300 of them.
Noah: Yeah, and then we’ll just filter emails or whatever. Point being is you can’t control them but can you control how many emails you send?
Mike: Yeah, absolutely.
Noah: Completely. I create Proactive Dashboards for my podcast, The Noah Kagan Present one that we were talking about earlier, and then for sumo.com we have a proactive dashboard. For each of these teams, it’s things that we can control that help us hit our goal.
Let’s say your goal is this MRR goal, you have a person doing sales for you or for yourself. It’s like can I send ten emails a week? That’s controllable by you. Each week, we do a green or red, whether we hit our goal. Then, you can have other things. How much ad spend? Did you spend $50 in ads? One of the guys in our team, it’s like hey, did you run two marketing experiments this week? I don’t really care which things they actually do, I just care that they do it or not do it. I want them to take initiative and all that other good stuff.
The point of the proactive dashboard is that it’s kind of this living controllable dashboard that will help you hit your goals. You can adjust it as needed, meaning you’ll probably be doing stuff like we were doing a bunch of Pinterest for a while. It was just doing nothing. After a month, it was said kill Pinterest, what’s working better? Quora. Okay, let’s increase our Quora. We did and we saw Quora go up. This week, we’re experimenting with LinkedIn. I’m seeing a lot more LinkedIn traffic and engagements so we’re experimenting with one post on LinkedIn a week.
Basically, I encourage everyone to think about what are controllable things I can be accountable for or make my team accountable for on a weekly basis that will help me hit my goals?
Mike: That’s awesome. I guess in terms of psychology, what does that do for you? Obviously, you do have control over these things. Is that why this works? Is it a psychological hack that doesn’t put you in a position where you just freeze because you’re not sure what to do?
Noah: Dude, I’ve gone to a bunch of therapy. I know everything.
I think why I like this and why the teams like it is a few different reasons. One, you want to play games you can win. If you’re doing things and your end vanity metrics aren’t working, it’s very demoralizing. But this is something where I can control it completely. I learned this from my friend [davidgrasshopper.com 00:44:07].
One, it’s controllable so you feel like you can actually win. Two, a lot of us like to see that we have streaks. The green and red every week and you start seeing you have green, you’re like okay cool, I’m doing well, I’m getting my stickers.
Three, I do think the fact that you make—I don’t know if this is as much with the psychology of it but the fact that you adjust it. For example, these marketing tests. If we were doing marketing tests and it would never help our goal, we would just cancel it. I think it just makes you a little bit more short term, like alright, am I doing the activities that I can control that are helping me move to where I want to be? So far, it’s been really great. I’m starting to implement it and I’m looking forward to it.
With the Sumo team, the webinar guy, it’s like hey you have to make one YouTube video a week. He’ll start doing it and then it’s like holy crap, that’s actually really driving traffic and customers, now you got two. And then maybe it’s like you have to do a collaboration every other week. Did you do that or not? That’s less control but did you email five people to collaborate with? That’s controllable. I think more ultimately, I have power to choose in this. I think with certain other times, you feel you’re at their mercy of hoping things work out. I don’t really believe in hope, I believe in making sure things work.
Mike: I think I have a blog post or a conference talk some place called hope is not a strategy. I completely ripped that off from Scott Adams.
Noah: I think with marketing, that’s why I always tell people to spreadsheet it. I call it quant-based marketing and I’ve written a bunch about it on OkDork. The ideas, if you need to hit $10,000, map out all the ways you think you would get to $10,000, execute on it, see which ones are right and which ones are wrong, and then keep iterating on it versus I want to be $10,000, I’ll just do a bunch of random shit and hopefully it gets there.
I don’t think if you’re trying to travel somewhere you would just say alright let’s just get on a plane and hope it lands where I want to go.
Mike: Yeah, I can’t imagine that works out for most people.
Noah: It doesn’t. A lot of the time, you’re going to try things, some of it is gonna work, some of it is not going to work. The point is that for sure in business, things aren’t going to work, that’s a guarantee. Knowing that things aren’t going to work, it’s great, but you have to say now that I know that, what things are working so that I can do more of them?
Mike: I think your point earlier about playing games that you know that you can win, I think that’s probably the killer insight that really needs to be a high level takeaway from all this.
Noah: I think that’s great, man. It sounds like overall for your marketing, one, you already got customers and revenue which is further ahead than most other people which is amazing. I would just put a little bit more organization around the PPD. Who’s the person, what’s the price, what’s your differentiator. There are options out there, so who’s your exact person?
And then in your marketing plan, I think it’s just hey, here’s my plan laid out for the year, here’s my things for this month, let me go execute on them. Let me have my weekly dashboard. And then, start iterating from that. You’ll be like holy crap, I hit $10,000 sooner than I thought.
Mike: Awesome, that’s fantastic advice. I know that you’ve got a gig going here soon. Where could people find you if they want to follow up with you?
Noah: If you’re interested in my personal stuff, Noah Kagan Presents podcast or okdork.com, I talk about business stuff that I’m learning from our business which is sumo.com, which is tools to grow your email list. We also have the AppSumo.com which is GroupOn for geeks. Any of that you can find me, I’m pretty darn accessible. If you can’t find me online, I don’t know, something is wrong.
Mike: You’re not looking hard enough I would say.
Noah: I didn’t get enough attention in high school so I’m desperate for it now. I hope to get invited back to MicroConf one day if I can earn that right. There will be no Sriracha, or I might just bring one bottle.
Mike: You take it easy. Thanks for coming on the show, I really appreciate it. If you as a listener 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 questions@startupsfortherestofus.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.
