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Rob Walling

Entrepreneur, podcaster and helping SaaS founders bootstrap better with Tiny Seed and MicroConf.

"Build an audience first" is great advice when selling info products. Much less so when launching a SaaS. An audience is always a leg up. But if you don't have one today, I seriously question investing the effort of building one if you're going after SaaS.

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Episode 90 | How to Shut Down a Product, Raising Capital Without Investors, Generic or Product Domain Name, and Other Listener Questions

Episode 90 | How to Shut Down a Product, Raising Capital Without Investors, Generic or Product Domain Name, and Other Listener Questions

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Show Notes

Transcript

[00:00] Mike : This is Startups For The Rest of Us: Episode 90.

[00:02] [Music]

[00:11] Mike : Welcome to Startups For The Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.

[00:19] Rob : And I’m Rob.

[00:21] Mike : And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s going on this week, Rob?

[00:26] Rob : To tell you what July has been a tough month. Today is my fifth day of work and — in July. It’s the 24th of the month.

[00:33] Mike : Slacker.

[00:34] Rob : You know, it’s the summer, right? So my — my kid that’s, you know, is going to be in first grade is off for the summer. And my wife is off for the summer as well. So we’ve been doing a bunch of traveling, went to Denver, went to — I went to Reno and spoke at ISV Con couple of weeks ago and then —

[00:49] Mike : How did it go?

[00:50] Rob : You know, it’s fine. It was a very — it was a small conference and it was a different crowd that we typically see that. I don’t think anyone from any of the other conferences I go to were there. So it was more of the –more desktop software developers shareware guys because it’s based on the, you know, ASP which is the Association of Software Professionals and they used to be a conference called — was it the SIC? I think —

[01:12] Mike : Yeah.

[01:12] Rob : … Software Industry Conference that was held, you know, in Texas and a couple of other places and that conference kind of died as the — I mean I don’t know why but it seemed like the shareware movement kind of slow down, you know, for obvious reasons to — and I forget how you pronounce her last name but it’s like Sue Pichotta, I think. She resurrected ISV Con and or SIC and renamed it as ISV Con and this was the first year back. So it was — as a result, it’s pretty small because they didn’t have the momentum of, you know, having multiple years of folks knowing but I did get to hang out with some good folks. Patrick Foley was there and he actually spoke on Sunday. Ted Pitts from Moraware was there. Ruben was there from Bidsketch and then I met, you know, Dave Collins’ partner from Software Promotions. It was good. You know, it’s better for the people. From my perspective it was a better conference because of the people who were there rather than — than the talks, the topics that were covered.

[02:08] Mike : Uh huh, yeah. I think that’s it for most conference so that’s pretty typical. It’s better to talk to the people as oppose to, you know, the conference is just an excuse. Okay. [Laughter]

[02:16] Rob : Right. Although they did have a nice sports bar that was half off all drinks till like 7 p.m. I wound up in like an 8 or 9-hour conversation with a couple other guys just talking about SaaS apps and marketing and different approaches and trading SEO tips and advertising tips and funnel optimization and just throwing out ideas and problem. So that — that was fun. I mean it felt like a 9 or 10 of our mastermind meeting with some pretty sharp people. You know, and that’s got to be the — the highlight of it for me.

[02:39] Mike : Very cool.

[02:40] Rob : How about yourself? Where are you at this time of — of month?

[02:44] Mike : Oh well, I’m in Delaware right now. Having never been here before, I didn’t necessarily have high expectations but those expectations were absolutely shattered. There — there seems to be absolutely nothing, you know. [Laughter]

[02:56] Rob : Yeah. [Laughter]

[02:57] Mike : I had didn’t — the nearest airport to me is Baltimore which is a two and a half hour drive away. So I flew into Baltimore and drove down here. And there was just nothing between the airport and here. I mean there wasn’t even a highway. It was all back roads. I really felt like I was in row upstate New York. I mean nothing but corn fields and cows. I mean [Laughter] it’s just nothing.

[03:20] Rob : Right.

[03:20] Mike : You know, it’s not a bad area. It’s just that there’s nothing here, that’s all.

[03:24] Rob : Right, right. The theme for my month of July is goals and focus. I’ve been kind of honing in on a couple of goals I’ve had with HitTail as well some goals I have in terms of getting back blogging again. I realized, man, it is — it’s hard to stay focus like when you’re doing a lot of things, you know, all the stuff we have on our plates and most entrepreneurs tend to put on our plate. It’s just a challenge to keep moving forward in all of those things until you tend to not move forward in any of them. So I’ve really been making an effort to — to basically like if I get e-mails about things that I’m not focusing on right now, I will literally just send them out with Boomerang and tell them like come back in two weeks. Obviously if something is an emergency, I can’t do that but for the most part, I’ve been just putting off anything that has nothing to do with my key goal for the month and the goal this month is growing HitTail.

[04:13] July is going to be the best month ever for HitTail and in fact, it’s probably going to be the largest single month of growth ever even when I wasn’t working and of course, the reason is that all the seeds for this were sown, you know, a couple of months ago. It’s like delayed. You do a bunch of marketing and then people come the next month or two months later. So I mean there’s 30-day trial that put them even further back. So if I don’t continue the marketing, you know, and pick it up pretty hard now that I’m back from vacation. It will obviously slow down probably in August or September but it is something that I’m keeping in mind. It’s about picking a single goal and trying to get to that goal and monitoring that goal everyday I wake up and the first thing I do is I look at my dashboard. I have a dashboard of a bunch of numbers, lifetime value, churn rate, trial to paid conversion. It’s just a rolling 30-day average and so I now have a very tight pulse on the business and the result it — it keeps my mind focus on it both good and bad. The good part is I’m focused on it so it’s growing. The bad part is I am thinking about it all the time but I’m really mentally kind of thinking about HitTail, what to do with it, how to grow it, tactics I’m going to use and all that stuff even when maybe I should be slowing down and not working.

[05:26] Mike : Cool. What do you use for your dashboard? I think I asked you this before. You use a custom dashboard, don’t you?

[05:31] Rob : Yeah, because — I do. It’s just a single ASP page. I wouldn’t use ASP normally but that’s where the apps written in and it’s just a bunch of hacked queries, very simple. It’s just black text on a white background, you know, login screen in front of it. Yeah, I’ve honed these queries and every, probably a week or two, I realized there’s numbers that I want that aren’t there and also calculating them manually and if I calculated manually a few times, suddenly I realized I really should just add it to the dashboard even if the query is pretty complicated since I’m the only one running it and I don’t run it that often even if it’s slow, it’s still — still worth having. So yeah, I have my real time LTV so I can see how it changes base on how many articles are ordered, how many people were build last night, how many people canceled in the last, you know, 24 hours impacts my, both my lifetime value, my churn rate, my trial to paid conversions, all that stuff.

[06:21] So it’s a very interesting — well, it’s an interesting approach to it. I don’t think it’s something I want to do long term but especially in these early days of the business when things are volatile and they’re still moving around pretty dramatically, I feel like it’s — it’s good to have. I think overtime what I’d like to do is get some grasp so I can actually watch, you know, watch more of a moving average of it because that’s really the more important part of it. And also I think it’s a business mature it is — the stuffs are kind of settle down as more processes are being developed, you know, when the marketing is more stabled, the cost preposition, the LTV, those things all become much more stable as I’m not doing this big kind of experiment which is essentially what I’m learning. I’ve purchased more clicks in the past 30 days for HitTail than I have for all of my other apps combined in the last 12 months. I’m just experimenting like crazy and just throwing money out of my LTV hit the point where I can totally scale this thing. I just need to find a couple scalable marketing approaches.

[07:15] Mike : Very cool. See up — for your dashboard there’s – there’s — really and I was wondering about whether you built it yourself or not was because there’s a couple of different companies out there that offers some dashboarding technologies so to say. One of them is a GoodData which I looked in a couple of years ago but at the time their entry level pricing something like 2000 or $3000 a month and I was just like no. [Laughter]

[07:38] Rob : So it’s an enterprise dashboard then. BI as they call it, right, business intelligence?

[07:42] Mike : Yeah and the other one I saw which I think it just came out of beta back in December or so, it’s called DigMyData which probably actually as an advisor than so they come with all these integration points for a lot of different data sources like –

[07:56] Rob : Yup.

[07:56] Mike : … Google Analytics and PayPal and Gmail and MailChimp, et cetera.

[08:00] Rob : Totally, yeah. So I would actually beta tester DigMyData and I know Adam. He’s a nice guy. He’s one of the founders. We had hooked up at Business Software. Yes, I actually like it a lot. I haven’t been using it because of a certain way they need to track sales and it was just a little more of a pain in the neck than I wanted to do for my particular set up. But I know a lot of people at least a dozen folks who use it, who really like it. And Peldi is not, like not a super data guy and he — he’s totally in to it so I buy it. You know, the other one, KISSmetrics. I actually do have KISSmetrics account. We’ve got a free one for going to MicroConf.

[08:36] Mike : Yup.

[08:36] Rob : And so I do have that all set up on HitTail and I use it for some things but I don’t use it for everything. I tend to use Google Analytics and my costumed dashboard.

[08:45] Mike : Right, right. Oh you know what? I was doing some Math the other day and this is episode 90 and I was thinking, oh well, you know, episode is 100 coming up in the not too distant future and I said, well you know, we should probably do something, you know, kind of special for the 100th episode. And after doing the math on it, I realized that episode 100th is scheduled to go live on October 10th and guess what else is scheduled to live that week?

[09:11] Rob : New season of the Walking Dead?

[09:13] Mike : Not. No, close, very close. AuditShark. [Laughter]

[09:16] Rob : Yes. Well so AuditShark is supposed to go to beta September 10th, right?

[09:21] Mike : Right.

[09:22] Rob : And then you’re figuring you’ll go live one month later?

[09:25] Mike : Right, roughly.

[09:26] Rob : Awesome. You heard it here first.

[09:29] Mike : That’s the — that’s the current plan. We’ll see how that works —

[09:31] Rob : That would be such a milestone for us. [Laughter] Now, the problem is when we record that episode a week earlier.

[09:37] Mike : Right.

[09:38] Rob : So you won’t actually be — be launched but you know what? That would be cool. So episode 100, we do need to take something cool to do for that though.

[09:45] [Music]

[09:48] Mike : So hey today’s episode we’re going to go over bunch of podcast questions because people had been sending us a bunch of e-mails and asking a bunch of different things. So I want to be just to get right in to those. The first question is from Chico and he says, “My name is Chico and I listen to your podcast all the way from Zimbabwe. I think it’s great and it helps me in aspects of managing myself and following my passion. In the midst of building one business, I realized I wasn’t so much in love with it because of other pressures that had built up. In short, I discovered there is a lot more that goes in to design like the customer support, building, et cetera that my initial idea got left interesting. I love the web and developing a lot but I wanted to know what you guys think about a 180 degree pivot. I’ve discovered I’m startup person where I create a product that I run as oppose to creating lots of products that ship out constantly. The pressure is enormous and it gets in to a routine that can be in madness. Given that I want to run a startup I’m developing right now, how can I best bring down the current on my previous business and more importantly, how can I battle with the fear that I might be leaving an opportunity and charging in to uncertainty. Thanks a lot for your feedback. Keep up the good work? What are your thoughts on that?

[10:53] Rob : Well, I mean it’s an interesting question. I feel like there’s some details left out of the question like whether or not he had existing customers on the other one or whether it’s just a work in progress because obviously your approach tends to differ based on those factors. I think if you don’t have any customers and you’ve totally lost passion for your old idea and you don’t want to do it anymore aside from just having to deal with the fact that, you know, you wasted time essentially. I think you just shut it down and you stop working on it. I think if you have existing customers, you can — well, if the thing is just running by itself since it’s a SaaS app, I don’t know that you necessarily need to shut it down unless it don’t have a lot of support. If it is a lot of support you can try to sell it or you can try to offer to the customer so they can install it on their servers. I mean I think there are some fairly simple ways to get out of that if it’s not a SaaS app if it’s downloadable software and people already have it downloaded.

[11:44] I mean I think you just update the site and say, “Look, you know, we stop development on it. We will support bugs and stuff but no new features will be developed and stop selling it.” So I don’t think that’s — that’s too hard. I think the bigger question is second part which is “How can I battle with the fear? I might be leaving an opportunity and charging in to uncertainty.” And I think the best way to essentially appease that fear or get rid of that is not to charge in to uncertainty but it’s you start talking to customers and start building a mailing list then start doing the pre-coding stuff that we talked about, you know. It’s both customer development and talking to customers but it’s also trying to analyze the market using keyword tools built in the landing page, driving traffic, seeing if anyone wants to — to get on the mailing list to hear about it. It’s those things that you should spend time doing before you write a line of code to validate the idea. And the more you’re able to validate, you’re never going to get it to one hundred percent but you can maybe get it to 50 or 60 or 70%. The more e-mails you gathered, the more potential customers you talk to.

[12:45] And to me, that is how you’re going to fight that uncertainty and — and give yourself the — the confidence as well as kind of the staying power with this idea that if you do in fact think it’s going to work, you’re going to be more likely to stick around it and keep working on it.

[12:59] Mike : Yeah, I agree with pretty much everything you said. The other thing that comes to mind is the whether or not the business he’s currently working on is more of a full time income form because I think that that changes things a lot if it is your current full time income versus — if it is your full time income, you can’t just take the thing and shut it down. You can’t just take it and sell it off because there are obvious risks associated with that. But if it’s just something you’re going on the side and as you said if you don’t have a lot of customers, then it doesn’t necessarily matter as much. I think the big question is kind of where existing revenue comes from, is that from a full time job or is it from this business and I think to that right there probably make in my mind a lot of the decisions for me.

[13:40] Rob : Right and if in fact you are making a full time living off of it and that means just probably pretty successful app and I think the opportunities to sell it whether it’s thru, you know, something like Flippa or whether it’s through your blog or becoming — I mean there are people in the Micropreneur Academy who had be more than — more than happy to look at an app that provide a full time income. So I think that’s definitely and that could potentially be a way for this successful to get some revenue out of it or some kind of upfront money that you can then use to fund yourself as you develop the next one.

[14:10] Mike : And then I think it’s probably important to sell it upfront as oppose to kind of string in to things along where the revenue kind of, well probably tank to be perfectly honest if you’re not paying attention to it at all and you just neglect it, my inclination is to believe that the revenue is eventually going to tank. It’s just going to continue going down. And then when you do decide to sell it, it’s just going to be worth that much less. You better off to sell it in upfront and being done with it.

[14:34] Rob: Exactly. If you know you’re done with it, I would agree with that.

[14:37] Mike : So Chico, hopefully, that helps to answer your question. Our next question is from Til and he says, “Hi, Mike and Rob. Thanks a lot for the podcast. It’s been an invaluable source of action and advice and on top of that, I really like the way you guys present it in a down-to-earth manner. Please keep up the good work. My question is I’m working on a SaaS product and I have the opportunity to get some generic product domain name with a .NET or .ORG top-level domain like crmsoftware.net for take example. I’m considering using this generic domain as my sales website for SEO reasons and hosting the app and another domain represented a specific product name like highrise.com, to give another example. Another option would be the use of generic domain plus the top-level domain as a specific product name for, example is prmsoftware.net but from my eclectic perspective I’d prefer a more costumed product name. Please note that the user who likely access the apps via their own sub domains. I’d appreciate hearing your thoughts on this. Thanks for your help. Til.”

[15:31] Rob: Obviously, Google give preference or gives a nice boost to generic top-level domain names. So if you get crmsoftware.net, you’re going to naturally rank higher for CRM Software for that phrasing Google. What I’ve been noticing and kind of been hearing ramblings up is that boost may not be as much as it used to be. It’s still really nice. It’s still a really good signal that they use but I don’t know if in the future moving forward, you know, how much that’s going to continue to be there. I think it’ll be always be there, it’s just a matter of how much they dial it up and dial it down, right? So I guess the next thing I’ll say is I don’t feel super comfortable about separating the sales website from the application website. Then I think, one, it’s confusing to have two different top-level domain names between those two and two, if you need any integration between the two of them like when you have a signup form that does something and maybe a need to share JavaScript from one to the other or maybe it needs to share cookies between the two, it’s not going to work because browsers, security settings are a nightmare when it comes to using any client’s sides stuff across top-leveled domains.

[16:37] I’ve ran in to this a number of times. I’ve actually ran in to this with sub domains of the same top-level domain and had to do pretty hacky work around and like do double redirects and all types of fancy stuff that was really hacky in order to make sure that they’ll like cookies held up between the sales website and the SaaS app. So if at all possible, I would lean towards keeping everything on the same TLD, add a minimum, right? Even if you do sub domains that’s fine, but I would lean towards that unless there’s a compelling reason not to. So with that said, you really have a choice, right? You can name your product fancy CRM but you’re going to get crmsoftware.net. I think you’re inclination is that shouldn’t you have fancycrm.com, right? You know, shouldn’t you have the .com for your product name and I think it depends on how much you plan on relying on SEO. If the SEO is going to be a major player in your business and in your marketing approach, then I think buying crmsoftware.net, I know it’s a fake example but, you know, I’m going to keep the example, but I think the buying crmsoftware.net is a good approach.

[17:40] But if you’re going to be marketing this thing doing a lot of social media and press and stuff that means that SEO is actually only going to be a smaller percentage 10 or 20% of your overall picture, then you want to think about using your product name .com as the main website. I would buy both domains definitely but it’s, you know, it all comes down to how you set it up. I think if you do decide that SEO is going to be a big part of your marketing approach and you go with crmsoftware.net, I definitely would buy fancycrm.com and just have a simple, you know, a 301 redirect to crmsoftware.net so that people can, you know, if they type in your product name .com that they — they always get there. It’s not going to give you any SEO benefit but it will just help folks who are looking for your product. With the generic TLD, the crmsoftware.net, you’re still going to rank for your product name. I mean that’s — that’s going to be a foregoing conclusion because you’re going to get a handful of links for your product name and then bam, you’re going to rise right to the top. So that’s not issue I’d be concern about at all.

[18:43] Mike : I — I think that the SEO boost from having a top-level domain name matching whatever the search term is is great to have but like you said, I mean Google could turn it around at any moment and just completely drop it from the algorithm. I mean the fact is that in any given language, there are only so many words that can be use to describe different things. And using that as a — I’ll call it a biased factor and the algorithm eventually kind of falls over because just as you were there first doesn’t mean that you’re doing the best at it. And Google is from right on said, you know, “We’re rating a lot of updated content much higher than people whose web pages haven’t changed in 10, you know, 10 months or 20 months or whatever.”

[19:29] So if you start following that line of thinking, you might also say, well why should a domain that’s been around for 10 years have more weight than one that is been around for 5 years or 3 years, you know, because you’ll start looking back at those things and just because somebody was there first for CRM Software and they get crmsoftware.com, they’ve had the domain name for 10 or 15 years, does that mean that it’s updated? Does that mean that they know things better than somebody else who’s only been around for 2 or 3 years and I think there’s other things that weigh in to that a lot more.

[20:03] Rob : Right now, Google says yes..

[20:05] Mike : I had said —

[20:06] Rob : Google said —

[20:06] Mike : … they said yes now.

[20:07] Rob : Yup.

[20:08] Mike : But in the future, that’s just one thing that you’re basing this decision off of. That’s kind of my point.

[20:13] Rob : Right, I think the worst case though as I’m thinking about it is if he gets the generic and optimizes for it and starts ranking for it and then Google turns that down, you know, turns down that signal, he could always change later and as long as he gets his, you know, fancycrm.com, you know, his product name .com URL, he could always just move the website there or 301 everything if SEO becomes not as large of a part of his marketing or he loses the rankings because of the TL lead stops being worth it then that’s actually not the end of the world to do that.

[20:45] Mike : Right.

[20:45] Rob : So…

[20:46] Mike : I’m kind of torn on it myself. I think that it’s really nice to have that for the SEO benefit but on the other side customers don’t necessarily relate well to a product name that is generic like that and I wonder if it might be either interesting or a good idea to go in a slightly different direction where you get both domain names and then for the domain name that is the generic one, you basically make it in to a review site and then you obviously will link have to relate it to your own domain. You would review heavily to your own software or maybe you review it favorably or not, favorably or whatever but that’s another option where you could basically give yourself some SEO benefit by linking directly from that domain and you know, you could also use it as an educational site. I mean you could just talk about in general, these are the things you should be looking for if you want this particular type of software.

[21:37] Rob : Yeah, I think building a satellite website like you said or a microsite as some people call them, I think that could be done. I don’t know if I make it a review site. Probably a review site would be decent I guess. I would always have someone else to write it. So that feels a little, you know, a little weird if you’re writing content about your own without disclosing it if you’re writing content about your own app.

[21:52] Mike : Right.

[21:52] Rob : I’d almost want to hire a third party to do it or just not making a review site and make it about, you know, something else just an educational site where you happen to have a banner. That’s obviously going to cut down — I mean that, you know, if you rank number one for that term for CRM Software you’re only going to get a couple of percentage click-through from there. So you really are killing off most of the traffic. It’s not going to make it to your — through your sale website. So it well — different approach you can do. I don’t know that it’s just as good. I agree, I’m torn as well. I don’t think there’s a right or wrong answer here. I just think it’s what you feel comfortable with and kind of how you’re going to be marketing the product if it’s going to be, you know, 90% SEO then it’s an obvious response here. But if it’s going to be mostly a branded product, then I think you go the other route.

[22:33] Mike : Well I think that about wraps it up. And Til, hopefully, that answer your question and thanks for getting in touch. Hopefully, things will work out for you and you come to a decision on that.

[22:41] [Music]

[22:44] Mike : Our next question is from Sean and he said, “Rob, you mentioned using AppSumo to get a boost of capital in the early stages of HitTail and I’m stoked because I love the guys over there and I’m happy that it delivered for you. I’m wondering what other avenues or opportunities you and Mike can suggest to get jumps in revenue or financing in the early stages of a product’s life. I’m a big fan of maintaining control of the product as long as possible and not going the investor route.”

[23:06] Rob : Yeah, I have a few thoughts on this. I guess first I’ll clarify I didn’t do the AppSumo deal for a boost of capital as much as I did because I wanted to get the word out. I don’t actually need the capital right now as much as just, you know, spreading — spreading the word in that respect but — this is a good question. I like — I like this line of thinking. It’s basically you started off, you’ve launched your product to some success but you need some capital for some reason. And I would be hesitant to say that you need a bunch of capital to buy ads and do paid acquisition because if you’re still this early in your startup, then odds are pretty good that you are not going to have — really not going to have the lifetime value and the cost per acquisition where you need it to actually make that a viable thing.

[23:49] So hopefully, you’re not thinking that you’re going to raise the cash just to spend it on ads but to use them in some other strategic way. But a couple of ideas do come to mind AppSumo is definitely one any deal of the day site. I mean there’s like SoftwareDealOfTheDay.com or it might be softwaredod.com. There is BitsDuJour.com. There are several others depending on your niche. There’s a bunch of ones for the Mac too, so any of those can be a quick influx of cash. Another way that I’ve seen used is to do annual plans and to either offer them on the site directly or if you’re dealing — if you’re doing any type of medium touch or high touch sales that you talked to your customers and say, “Hey, you know, if you pay in advance for 12 months, we can cut you a pretty big discount.” And you may have to offer a 2, 3 or 4-month discount depending on how far long your product is and how much people trust it and how much value they’ve already gotten out of it. But you know, if you’re charging a hundred bucks a month and you can suddenly get an influx of 8 or 9 months of capital, you have to support that customer for the next year but that, you know 8 or 900 bucks can be a nice big influx and if you can do that with a handful of customers in any given month, it starts to add pretty quickly.

[24:56] I’ve also seen some apps do it directly on their site where when you go to sign up, it gives you that option and people can just pay in advance. Again, you do have to offer discount but can still be a way to kind of eak some revenue out early. The other way that I would recommend and I’ve done this in the past is to actually do offer customizations. So it’s almost like you’re consulting on your own product but you can almost just consult in the space as well. So to give you examples to this like with DotNetInvoice early on, I would offer customizations for a 125 or a 150 bucks an hour. So I didn’t want to do a lot of them, right? But people didn’t want to pay me to do a lot of them because it wasn’t cheap but if someone came along with 5 or 10 hours, suddenly you’re doing a little bit of consulting work. It is kind of a pain but you can make a little chunk of change that way.

[25:43] The other interesting thing is I’m getting e-mails constantly with HitTail. People want us to offer SEO advice, do link building, just create content, you know, just kind of do SEO services like a consultant will do. So while it’s not a straight customization in my product, it is just affiliated or related consulting gig. It’s something that someone would be interested in if they’re using your product. So I think those are probably three avenues that I would at least entertain. They all have draw backs. I think you can — they’re pretty obvious what the draw backs are but if you’re really trying to put together, you know, a little bucket of cash upfront, I think those are definitely viable.

[26:21] Mike : Yeah, the ones that came to mind for me were, you know, as you mentioned the yearly plan and then other one was doing product integrations with other products. So if you have something that can integrate in to pretty much any major vendor who has a pretty large audience and you can offer any sort on integration between your product and theirs. A lot of times they’re very happy to publicize that there is that integration to their existing customer base. You may very well get a lot of signups as a result to that. It really depends a lot on what the other products are just to kind of you threw out some examples. I know that you can do integrations with like MailChimp and Google Analytics is one but honestly, they’re — you know, people aren’t paying for that but if they are products that people already paying for, you know, as a subscription then those are the types of people who are already willing to pay for a subscription and then they may very well be willing to pay an additional fee for a subscription to your product.

[27:13] So those are the things that I would probably look at as a good way to boost revenue. And the nice thing about that is that it’s continuing. It’s not just a one shot. I mean obviously you’ll get one shot in SEO benefits and you know, the influx of traffic when, you know, whoever that integration partner is publicizes it but – on an ongoing basis, you’ll get additional revenue based on the fact that those people are using their product and say, “Oh I just found this product.” Maybe it’s Basecamp and they’re using Basecamp and I’ll say, “Oh well there’s just an integration with my — with this other product over here. Maybe I’ll go check that out.” So thanks for the question, Sean.

[27:54] The next one we’re going to go to is from – I know I’m going to butcher this name Loradrius Thomas and he says, “Hello, I’m not a techie individual but I have an idea for an application that will assists entrepreneurs but I don’t have any experience with the code or writing software. What do you recommend I start?” I would say start episode 1 and start with —

[28:11] Rob : Yeah, exactly. [Laughter] This is a big question.

[28:14] Mike : It’s a huge topic as an involved topic and there are so many different things that you need to understand that just having an idea for something is not necessarily good enough. I mean you basically have to prove that there is enough demand for whatever it is that your idea is that people are willing to pay for and until then you’re not going to have anyone who is going to be a developer who’s going to sign on to the department, you know, as we’ve mentioned numerous times that you have to have at least two out of three things to build a business you need to have the time, money or skilled set, two out of those three things. And as long as you have two, then you’re fine and it sounds like — I mean, you know, it wasn’t clear you don’t say that you have money, you don’t say that you have time to do it but if you have time, then you can learn to write software. If you have money, you can pay somebody to write it and if you have the skilled set to either do the marketing or do the development, then that’s at least half of the equation. But if you don’t have those things then you’re kind of a stand so there’s not much you’re going to be able to do.

[29:19] Rob : So I think the first thing to think about is how to prove out this idea, how to get as far as possible without having any code. And he doesn’t give us much of an idea of what the app is. It’s a application that will assist the entrepreneurs but if there’s any way to do this without code or is there any way to do it via e-mail with Excel spreadsheets, with a VA, with your manual time just doing stuff on the back end does it truly have to be software or can you hack it and basically do human automation and get your thing launched and even if I mean even if you don’t have a website at all, if this helps entrepreneurs, then find entrepreneurs and start helping them with this, you know. And if you need to throw up a WordPress website and use the theme and you added some text, then learn how to do that and get people to it and then start helping them.

[30:08] So I mean I think that really would be where I would start. Obviously, we’ve talked in the past, there are several — several times about partnering up with a technical co-founder, how to encourage them to get onboard, how to basically prove to them or at least as much as you can prove to them that that the idea has merit and that you basically remove as much doubt as possible. But those things are all down the line to me because until you’ve taken this first step and validated the idea, you don’t need code to validate a lot of the ideas even something like HitTail. If you think about what HitTail does, it really just analyzes traffic and it takes the best keyword and so, you know, the best keywords from what you target. So the hack way around that is to find people who use Google Analytics or using Analytics package and say, “Okay, I’m going to help you with this.” It can be 10 bucks a month. I’m going to need you to export, an excel export of all your organic keywords from last month and they send it over and you manually go through it and do the checks or you hire a VA to do the checks, you know, figure out where your algorithm is going to be, how you’re going to recommend stuff and then send them back the list manually. It’s totally hokey. It totally doesn’t scale but it’s a way to see if you can provide value to people who’ll pay for it without writing a line of code.

[31:25] And you know, and then from there, if you figure out that you can provide value and that people are liking it, now you actually have a few customers using your — your service which is essentially just a manual service at this point but from there you — you can go approach a developer and say, “Hey, people are actually using this. People are paying me money for this. How can we automate this? What’s our first step to automating this?” Because at that point, you don’t need to go ask and spend a thousand developer hours to build something, you could start really simply by just building a very basic database that, you know, you could manually import to and you can kind of just take the next step, the next minimum viable step instead of trying to build this full-fledged app from scratch. I hope that helps, Loradrius, I think that’s his name. Loradrius Thomas, thanks for the question.

[32:07] [Music]

[32:10] Mike : Our next question is from Steven and he says, “What’s the best way to approach other bloggers about interest in my blog and is that even necessary? Here’s the thing, I can’t stand reading other blogs and the genre I like to write about because I feel like it takes off all my time and has information I already know. So how without liking these blogs do I get interest in my writing? Does this even matter in a marketing and traffic growth sense?” Well to me like this isn’t a question so much about a product as it is about a blog and getting attraction from other bloggers and then niche for this blog. And I would wonder about whether or not these other bloggers feel the same way about it as you do. I mean is all the information that you’re putting out there and that they’re putting out there stuff that is common enough between all the different blogs that you can read one blog and pretty much know all there is to know about that particular niche and you know, this question doesn’t necessarily say what’s the niche is but I think it’s hard to imagine that there is a particular niche out there that, you know, one, you could just go to one blog and it’s kind of a one-stop-shop for everything you could possibly know about that and even if it is, it’s — sometimes it’s very nice to get a different take on it especially for people who aren’t fully in trench in to that particular niche.

[33:23] I mean it sounds like if you’re writing a blog about it, you obviously know a lot about it and if right off on it and you’re willing to share that information but you don’t necessarily want to hear other people talk about it because of the fact that you already know all the stuff that, you know, they’re going to be talking about. So those are kind of my thoughts on it but I don’t think that it’s unwanted to go talk to these people. I mean I think that the thing to do is just drop them the e-mail and you know, whether you do have like chat with them or talk to them, you know, one of the things you don’t necessarily saying here is what is it that did you actually looking for from these blogs. Are you looking for recognition from them? Are you looking for back links? Are you looking for partnerships? Those are some things that kind of entered my mind and if you’re looking for back links, I don’t know if getting on these other blogs is necessarily going to meet a whole lot. It might help you in terms of SEO but in terms of getting their readers to come to your blog and also read your blog when the content is going to be similar, I don’t know if that’s going to help you a lot.

[34:23] For partnerships, if they have products and you have products and you wanted to do some sort of cross selling, then that’s a great way to go. I don’t know if you really need to be a reader for a blog in order to approach them because you can certainly just talk to them about it. I mean if you can work out some sort of a deal where you’re cross promoting their products or bundling them together, for example, then both of you collectively become an authority in the space just by a virtual of — partnering and reselling your products together. So those are kind of the things that enter my head with this particular question. But I don’t think that it necessarily matters whether or not you get them interested in your writing unless of course your goal is to get them to link to you for, you know, whatever reason.

[35:06] Rob : Yeah, I agree. It would help to know more specifically, you know, what he’s looking to get out of this. The other thought I had is that if you already know what’s on these blogs, then you can probably just read the title of the post and scheme through their post and getting an idea what they’re blogging about. And if you already know of the information because it’s so basic then that’s probably all you’re going to need to do to stay familiar with what they’re doing and keep up to date. And if you are in an equal plain with them in terms of readership and notoriety, then it should be pretty easy to reach across the island just dropping them an e-mail. If you are at a lower kind of plain field than them if they’re just have a lot more popularity, a lot more experience, then sending them an e-mail is, you know, it may or may not work but the sure fly way to do — to start getting noticed is to pick the two or three top blogs, you know, that you’re looking at in this niche and start leaving some comments. You don’t have to read the whole post if you already know the information.

[35:59] Again, if they’re commenting on, you know, talking about stuff that you already know then you should be able to add to that pretty intelligently, pretty fast from the top of your head and be able to improve upon their post. And once you do that a few times, these folks will start to recognize you and then when you drop them an e-mail, you can mention “Hey, I’ve been a reader, you know. I’ve been commenting on your blog,” and they will likely notice it. But I think it does come back to what Mike said what exactly you hope to get out of these relationships. If you kind of just want to network and yeah, have them cross on products, then that’s fine. I do also thinking that maybe writing a post about them or even linking to them in a post or two of yours, it’ll show up in their Analytics and they will notice you. You know, they’ll notice that you link to them and they probably have Google Alerts if you’ve mentioned them by name and they’ll come out and check out your blog and that’s another way to kind of extend, you know, a hand shake and maybe get them to — to notice you off the bat. So those are our thoughts. Hope those help, Steven.

[36:51] Mike : The last question for today is from Andrew and he says, “Hi, Rob and Mike. Great job for the podcasts, I’m really enjoying them. I was listening to the how to drive traffic to your site podcast and noticed that it was recorded a few years ago. I’m curious if all the tactics still apply. For example, do you still view Twitter as not being useful for driving qualified traffic? Thanks in advance for your response, Andrew.”

[37:11] Rob : So I think most of the approaches, I think all of the tactics actually that were listed there still apply. I think for his specific question which is probably all we have time to answer on this podcast is “Do you still view Twitter as not being useful for grabbing qualified traffic,” and the answer I have is yes. So I view Twitter as a great networking tool. It’s a great way to keep up relationships. It’s kind of like just up an ongoing chat between a bunch of people. It’s great for partnerships. It’s great for kind of deepening relationships and it’s also really good if you are creating content. So if you’re putting out a blog, a post now and again, whether it’s on your company website or your — an industry blog, something that is interesting to people who are reading your Twitter feed, then Twitter is a great distribution mechanism.

[37:53] But that’s — that’s how I view it as, it can certainly draw people in from your Twitter feed to your app but honestly, you need, I mean literally tens of thousands of qualified followers to get any kind of sales funnel out of that. And I just — I don’t see it as being very viable nor a good way to spend your time. I mean there are much, much more effective ways of driving qualified traffic that we did talked about in this episode — it was episode 6, I’m pretty sure.

[38:22] Mike : Yup.

[38:22] Rob : How to drive traffic to website and you know, there — obviously, there’s paid acquisition and there’s SEO and there is other social media approaches. I mean there’s — there’s a lot of ways to do this that that are going to just be a much better use of your time if you’re actually trying to sell something as the end goal.

[38:38] Mike : Yeah, I would have to agree with that. I mean I still don’t necessarily view Twitter as a great way to drive traffic. Now I do feel like Twitter has value in that if you already have a product that’s established and you’re getting people to follow your product on Twitter, then I think the Twitter is a great way to get additional information out about your product or to get people talking about it but that’s going to be generally for people who are already customers of yours. Or if you’re running a product where people kind of admire your product or in your state they admire what you’re doing, they may follow you just kind of hear what sort of things are being said but I don’t necessarily think that those are going to turn in to qualified leads. All of that said, Twitter does have an advertising platform so you may be able to tap in to that and use it to get paid traffic. It’s not something I’ve tried yet. I actually have like a hundred to a $150 that I got from American Express for some program that they were running. I will be trying that out with AuditShark to see how that goes and I’d be happy to share what I learn from that. But aside from that, I don’t think that just having a Twitter account is going to drive the qualified traffic that is qualified enough to turn those people in sales.

[39:54] Rob : All right, Andrew. Thanks for the question. By the way, he is at videorascal.com.

[39:59] [Music]

[40:03] Rob : If you have a question or a comment, call it in to our voicemail number at 888-801-9690 or e-mail us at [email protected] Our theme music is an excerpt from “We’re Outta Control” by MoOt, used under Creative Commons. Subscribe to this podcast in iTunes by searching for Startups or via RSS at StartupsfortheRestofUs.com where you’ll also find a full transcript of this episode. Thanks for listening. We’ll see you next time.

Rob and Mike answer listener questions about shutting down a product, buying a generic or product domain name, raising capital without investors and more.

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Episode 90 | How to Shut Down a Product, Raising Capital Without Investors, Generic or Product Domain Name, and Other Listener Questions

Episode 90 | How to Shut Down a Product, Raising Capital Without Investors, Generic or Product Domain Name, and Other Listener Questions

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Transcript

[00:00] Mike : This is Startups For The Rest of Us: Episode 90.

[00:02] [Music]

[00:11] Mike : Welcome to Startups For The Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.

[00:19] Rob : And I’m Rob.

[00:21] Mike : And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s going on this week, Rob?

[00:26] Rob : To tell you what July has been a tough month. Today is my fifth day of work and — in July. It’s the 24th of the month.

[00:33] Mike : Slacker.

[00:34] Rob : You know, it’s the summer, right? So my — my kid that’s, you know, is going to be in first grade is off for the summer. And my wife is off for the summer as well. So we’ve been doing a bunch of traveling, went to Denver, went to — I went to Reno and spoke at ISV Con couple of weeks ago and then —

[00:49] Mike : How did it go?

[00:50] Rob : You know, it’s fine. It was a very — it was a small conference and it was a different crowd that we typically see that. I don’t think anyone from any of the other conferences I go to were there. So it was more of the –more desktop software developers shareware guys because it’s based on the, you know, ASP which is the Association of Software Professionals and they used to be a conference called — was it the SIC? I think —

[01:12] Mike : Yeah.

[01:12] Rob : … Software Industry Conference that was held, you know, in Texas and a couple of other places and that conference kind of died as the — I mean I don’t know why but it seemed like the shareware movement kind of slow down, you know, for obvious reasons to — and I forget how you pronounce her last name but it’s like Sue Pichotta, I think. She resurrected ISV Con and or SIC and renamed it as ISV Con and this was the first year back. So it was — as a result, it’s pretty small because they didn’t have the momentum of, you know, having multiple years of folks knowing but I did get to hang out with some good folks. Patrick Foley was there and he actually spoke on Sunday. Ted Pitts from Moraware was there. Ruben was there from Bidsketch and then I met, you know, Dave Collins’ partner from Software Promotions. It was good. You know, it’s better for the people. From my perspective it was a better conference because of the people who were there rather than — than the talks, the topics that were covered.

[02:08] Mike : Uh huh, yeah. I think that’s it for most conference so that’s pretty typical. It’s better to talk to the people as oppose to, you know, the conference is just an excuse. Okay. [Laughter]

[02:16] Rob : Right. Although they did have a nice sports bar that was half off all drinks till like 7 p.m. I wound up in like an 8 or 9-hour conversation with a couple other guys just talking about SaaS apps and marketing and different approaches and trading SEO tips and advertising tips and funnel optimization and just throwing out ideas and problem. So that — that was fun. I mean it felt like a 9 or 10 of our mastermind meeting with some pretty sharp people. You know, and that’s got to be the — the highlight of it for me.

[02:39] Mike : Very cool.

[02:40] Rob : How about yourself? Where are you at this time of — of month?

[02:44] Mike : Oh well, I’m in Delaware right now. Having never been here before, I didn’t necessarily have high expectations but those expectations were absolutely shattered. There — there seems to be absolutely nothing, you know. [Laughter]

[02:56] Rob : Yeah. [Laughter]

[02:57] Mike : I had didn’t — the nearest airport to me is Baltimore which is a two and a half hour drive away. So I flew into Baltimore and drove down here. And there was just nothing between the airport and here. I mean there wasn’t even a highway. It was all back roads. I really felt like I was in row upstate New York. I mean nothing but corn fields and cows. I mean [Laughter] it’s just nothing.

[03:20] Rob : Right.

[03:20] Mike : You know, it’s not a bad area. It’s just that there’s nothing here, that’s all.

[03:24] Rob : Right, right. The theme for my month of July is goals and focus. I’ve been kind of honing in on a couple of goals I’ve had with HitTail as well some goals I have in terms of getting back blogging again. I realized, man, it is — it’s hard to stay focus like when you’re doing a lot of things, you know, all the stuff we have on our plates and most entrepreneurs tend to put on our plate. It’s just a challenge to keep moving forward in all of those things until you tend to not move forward in any of them. So I’ve really been making an effort to — to basically like if I get e-mails about things that I’m not focusing on right now, I will literally just send them out with Boomerang and tell them like come back in two weeks. Obviously if something is an emergency, I can’t do that but for the most part, I’ve been just putting off anything that has nothing to do with my key goal for the month and the goal this month is growing HitTail.

[04:13] July is going to be the best month ever for HitTail and in fact, it’s probably going to be the largest single month of growth ever even when I wasn’t working and of course, the reason is that all the seeds for this were sown, you know, a couple of months ago. It’s like delayed. You do a bunch of marketing and then people come the next month or two months later. So I mean there’s 30-day trial that put them even further back. So if I don’t continue the marketing, you know, and pick it up pretty hard now that I’m back from vacation. It will obviously slow down probably in August or September but it is something that I’m keeping in mind. It’s about picking a single goal and trying to get to that goal and monitoring that goal everyday I wake up and the first thing I do is I look at my dashboard. I have a dashboard of a bunch of numbers, lifetime value, churn rate, trial to paid conversion. It’s just a rolling 30-day average and so I now have a very tight pulse on the business and the result it — it keeps my mind focus on it both good and bad. The good part is I’m focused on it so it’s growing. The bad part is I am thinking about it all the time but I’m really mentally kind of thinking about HitTail, what to do with it, how to grow it, tactics I’m going to use and all that stuff even when maybe I should be slowing down and not working.

[05:26] Mike : Cool. What do you use for your dashboard? I think I asked you this before. You use a custom dashboard, don’t you?

[05:31] Rob : Yeah, because — I do. It’s just a single ASP page. I wouldn’t use ASP normally but that’s where the apps written in and it’s just a bunch of hacked queries, very simple. It’s just black text on a white background, you know, login screen in front of it. Yeah, I’ve honed these queries and every, probably a week or two, I realized there’s numbers that I want that aren’t there and also calculating them manually and if I calculated manually a few times, suddenly I realized I really should just add it to the dashboard even if the query is pretty complicated since I’m the only one running it and I don’t run it that often even if it’s slow, it’s still — still worth having. So yeah, I have my real time LTV so I can see how it changes base on how many articles are ordered, how many people were build last night, how many people canceled in the last, you know, 24 hours impacts my, both my lifetime value, my churn rate, my trial to paid conversions, all that stuff.

[06:21] So it’s a very interesting — well, it’s an interesting approach to it. I don’t think it’s something I want to do long term but especially in these early days of the business when things are volatile and they’re still moving around pretty dramatically, I feel like it’s — it’s good to have. I think overtime what I’d like to do is get some grasp so I can actually watch, you know, watch more of a moving average of it because that’s really the more important part of it. And also I think it’s a business mature it is — the stuffs are kind of settle down as more processes are being developed, you know, when the marketing is more stabled, the cost preposition, the LTV, those things all become much more stable as I’m not doing this big kind of experiment which is essentially what I’m learning. I’ve purchased more clicks in the past 30 days for HitTail than I have for all of my other apps combined in the last 12 months. I’m just experimenting like crazy and just throwing money out of my LTV hit the point where I can totally scale this thing. I just need to find a couple scalable marketing approaches.

[07:15] Mike : Very cool. See up — for your dashboard there’s – there’s — really and I was wondering about whether you built it yourself or not was because there’s a couple of different companies out there that offers some dashboarding technologies so to say. One of them is a GoodData which I looked in a couple of years ago but at the time their entry level pricing something like 2000 or $3000 a month and I was just like no. [Laughter]

[07:38] Rob : So it’s an enterprise dashboard then. BI as they call it, right, business intelligence?

[07:42] Mike : Yeah and the other one I saw which I think it just came out of beta back in December or so, it’s called DigMyData which probably actually as an advisor than so they come with all these integration points for a lot of different data sources like –

[07:56] Rob : Yup.

[07:56] Mike : … Google Analytics and PayPal and Gmail and MailChimp, et cetera.

[08:00] Rob : Totally, yeah. So I would actually beta tester DigMyData and I know Adam. He’s a nice guy. He’s one of the founders. We had hooked up at Business Software. Yes, I actually like it a lot. I haven’t been using it because of a certain way they need to track sales and it was just a little more of a pain in the neck than I wanted to do for my particular set up. But I know a lot of people at least a dozen folks who use it, who really like it. And Peldi is not, like not a super data guy and he — he’s totally in to it so I buy it. You know, the other one, KISSmetrics. I actually do have KISSmetrics account. We’ve got a free one for going to MicroConf.

[08:36] Mike : Yup.

[08:36] Rob : And so I do have that all set up on HitTail and I use it for some things but I don’t use it for everything. I tend to use Google Analytics and my costumed dashboard.

[08:45] Mike : Right, right. Oh you know what? I was doing some Math the other day and this is episode 90 and I was thinking, oh well, you know, episode is 100 coming up in the not too distant future and I said, well you know, we should probably do something, you know, kind of special for the 100th episode. And after doing the math on it, I realized that episode 100th is scheduled to go live on October 10th and guess what else is scheduled to live that week?

[09:11] Rob : New season of the Walking Dead?

[09:13] Mike : Not. No, close, very close. AuditShark. [Laughter]

[09:16] Rob : Yes. Well so AuditShark is supposed to go to beta September 10th, right?

[09:21] Mike : Right.

[09:22] Rob : And then you’re figuring you’ll go live one month later?

[09:25] Mike : Right, roughly.

[09:26] Rob : Awesome. You heard it here first.

[09:29] Mike : That’s the — that’s the current plan. We’ll see how that works —

[09:31] Rob : That would be such a milestone for us. [Laughter] Now, the problem is when we record that episode a week earlier.

[09:37] Mike : Right.

[09:38] Rob : So you won’t actually be — be launched but you know what? That would be cool. So episode 100, we do need to take something cool to do for that though.

[09:45] [Music]

[09:48] Mike : So hey today’s episode we’re going to go over bunch of podcast questions because people had been sending us a bunch of e-mails and asking a bunch of different things. So I want to be just to get right in to those. The first question is from Chico and he says, “My name is Chico and I listen to your podcast all the way from Zimbabwe. I think it’s great and it helps me in aspects of managing myself and following my passion. In the midst of building one business, I realized I wasn’t so much in love with it because of other pressures that had built up. In short, I discovered there is a lot more that goes in to design like the customer support, building, et cetera that my initial idea got left interesting. I love the web and developing a lot but I wanted to know what you guys think about a 180 degree pivot. I’ve discovered I’m startup person where I create a product that I run as oppose to creating lots of products that ship out constantly. The pressure is enormous and it gets in to a routine that can be in madness. Given that I want to run a startup I’m developing right now, how can I best bring down the current on my previous business and more importantly, how can I battle with the fear that I might be leaving an opportunity and charging in to uncertainty. Thanks a lot for your feedback. Keep up the good work? What are your thoughts on that?

[10:53] Rob : Well, I mean it’s an interesting question. I feel like there’s some details left out of the question like whether or not he had existing customers on the other one or whether it’s just a work in progress because obviously your approach tends to differ based on those factors. I think if you don’t have any customers and you’ve totally lost passion for your old idea and you don’t want to do it anymore aside from just having to deal with the fact that, you know, you wasted time essentially. I think you just shut it down and you stop working on it. I think if you have existing customers, you can — well, if the thing is just running by itself since it’s a SaaS app, I don’t know that you necessarily need to shut it down unless it don’t have a lot of support. If it is a lot of support you can try to sell it or you can try to offer to the customer so they can install it on their servers. I mean I think there are some fairly simple ways to get out of that if it’s not a SaaS app if it’s downloadable software and people already have it downloaded.

[11:44] I mean I think you just update the site and say, “Look, you know, we stop development on it. We will support bugs and stuff but no new features will be developed and stop selling it.” So I don’t think that’s — that’s too hard. I think the bigger question is second part which is “How can I battle with the fear? I might be leaving an opportunity and charging in to uncertainty.” And I think the best way to essentially appease that fear or get rid of that is not to charge in to uncertainty but it’s you start talking to customers and start building a mailing list then start doing the pre-coding stuff that we talked about, you know. It’s both customer development and talking to customers but it’s also trying to analyze the market using keyword tools built in the landing page, driving traffic, seeing if anyone wants to — to get on the mailing list to hear about it. It’s those things that you should spend time doing before you write a line of code to validate the idea. And the more you’re able to validate, you’re never going to get it to one hundred percent but you can maybe get it to 50 or 60 or 70%. The more e-mails you gathered, the more potential customers you talk to.

[12:45] And to me, that is how you’re going to fight that uncertainty and — and give yourself the — the confidence as well as kind of the staying power with this idea that if you do in fact think it’s going to work, you’re going to be more likely to stick around it and keep working on it.

[12:59] Mike : Yeah, I agree with pretty much everything you said. The other thing that comes to mind is the whether or not the business he’s currently working on is more of a full time income form because I think that that changes things a lot if it is your current full time income versus — if it is your full time income, you can’t just take the thing and shut it down. You can’t just take it and sell it off because there are obvious risks associated with that. But if it’s just something you’re going on the side and as you said if you don’t have a lot of customers, then it doesn’t necessarily matter as much. I think the big question is kind of where existing revenue comes from, is that from a full time job or is it from this business and I think to that right there probably make in my mind a lot of the decisions for me.

[13:40] Rob : Right and if in fact you are making a full time living off of it and that means just probably pretty successful app and I think the opportunities to sell it whether it’s thru, you know, something like Flippa or whether it’s through your blog or becoming — I mean there are people in the Micropreneur Academy who had be more than — more than happy to look at an app that provide a full time income. So I think that’s definitely and that could potentially be a way for this successful to get some revenue out of it or some kind of upfront money that you can then use to fund yourself as you develop the next one.

[14:10] Mike : And then I think it’s probably important to sell it upfront as oppose to kind of string in to things along where the revenue kind of, well probably tank to be perfectly honest if you’re not paying attention to it at all and you just neglect it, my inclination is to believe that the revenue is eventually going to tank. It’s just going to continue going down. And then when you do decide to sell it, it’s just going to be worth that much less. You better off to sell it in upfront and being done with it.

[14:34] Rob: Exactly. If you know you’re done with it, I would agree with that.

[14:37] Mike : So Chico, hopefully, that helps to answer your question. Our next question is from Til and he says, “Hi, Mike and Rob. Thanks a lot for the podcast. It’s been an invaluable source of action and advice and on top of that, I really like the way you guys present it in a down-to-earth manner. Please keep up the good work. My question is I’m working on a SaaS product and I have the opportunity to get some generic product domain name with a .NET or .ORG top-level domain like crmsoftware.net for take example. I’m considering using this generic domain as my sales website for SEO reasons and hosting the app and another domain represented a specific product name like highrise.com, to give another example. Another option would be the use of generic domain plus the top-level domain as a specific product name for, example is prmsoftware.net but from my eclectic perspective I’d prefer a more costumed product name. Please note that the user who likely access the apps via their own sub domains. I’d appreciate hearing your thoughts on this. Thanks for your help. Til.”

[15:31] Rob: Obviously, Google give preference or gives a nice boost to generic top-level domain names. So if you get crmsoftware.net, you’re going to naturally rank higher for CRM Software for that phrasing Google. What I’ve been noticing and kind of been hearing ramblings up is that boost may not be as much as it used to be. It’s still really nice. It’s still a really good signal that they use but I don’t know if in the future moving forward, you know, how much that’s going to continue to be there. I think it’ll be always be there, it’s just a matter of how much they dial it up and dial it down, right? So I guess the next thing I’ll say is I don’t feel super comfortable about separating the sales website from the application website. Then I think, one, it’s confusing to have two different top-level domain names between those two and two, if you need any integration between the two of them like when you have a signup form that does something and maybe a need to share JavaScript from one to the other or maybe it needs to share cookies between the two, it’s not going to work because browsers, security settings are a nightmare when it comes to using any client’s sides stuff across top-leveled domains.

[16:37] I’ve ran in to this a number of times. I’ve actually ran in to this with sub domains of the same top-level domain and had to do pretty hacky work around and like do double redirects and all types of fancy stuff that was really hacky in order to make sure that they’ll like cookies held up between the sales website and the SaaS app. So if at all possible, I would lean towards keeping everything on the same TLD, add a minimum, right? Even if you do sub domains that’s fine, but I would lean towards that unless there’s a compelling reason not to. So with that said, you really have a choice, right? You can name your product fancy CRM but you’re going to get crmsoftware.net. I think you’re inclination is that shouldn’t you have fancycrm.com, right? You know, shouldn’t you have the .com for your product name and I think it depends on how much you plan on relying on SEO. If the SEO is going to be a major player in your business and in your marketing approach, then I think buying crmsoftware.net, I know it’s a fake example but, you know, I’m going to keep the example, but I think the buying crmsoftware.net is a good approach.

[17:40] But if you’re going to be marketing this thing doing a lot of social media and press and stuff that means that SEO is actually only going to be a smaller percentage 10 or 20% of your overall picture, then you want to think about using your product name .com as the main website. I would buy both domains definitely but it’s, you know, it all comes down to how you set it up. I think if you do decide that SEO is going to be a big part of your marketing approach and you go with crmsoftware.net, I definitely would buy fancycrm.com and just have a simple, you know, a 301 redirect to crmsoftware.net so that people can, you know, if they type in your product name .com that they — they always get there. It’s not going to give you any SEO benefit but it will just help folks who are looking for your product. With the generic TLD, the crmsoftware.net, you’re still going to rank for your product name. I mean that’s — that’s going to be a foregoing conclusion because you’re going to get a handful of links for your product name and then bam, you’re going to rise right to the top. So that’s not issue I’d be concern about at all.

[18:43] Mike : I — I think that the SEO boost from having a top-level domain name matching whatever the search term is is great to have but like you said, I mean Google could turn it around at any moment and just completely drop it from the algorithm. I mean the fact is that in any given language, there are only so many words that can be use to describe different things. And using that as a — I’ll call it a biased factor and the algorithm eventually kind of falls over because just as you were there first doesn’t mean that you’re doing the best at it. And Google is from right on said, you know, “We’re rating a lot of updated content much higher than people whose web pages haven’t changed in 10, you know, 10 months or 20 months or whatever.”

[19:29] So if you start following that line of thinking, you might also say, well why should a domain that’s been around for 10 years have more weight than one that is been around for 5 years or 3 years, you know, because you’ll start looking back at those things and just because somebody was there first for CRM Software and they get crmsoftware.com, they’ve had the domain name for 10 or 15 years, does that mean that it’s updated? Does that mean that they know things better than somebody else who’s only been around for 2 or 3 years and I think there’s other things that weigh in to that a lot more.

[20:03] Rob : Right now, Google says yes..

[20:05] Mike : I had said —

[20:06] Rob : Google said —

[20:06] Mike : … they said yes now.

[20:07] Rob : Yup.

[20:08] Mike : But in the future, that’s just one thing that you’re basing this decision off of. That’s kind of my point.

[20:13] Rob : Right, I think the worst case though as I’m thinking about it is if he gets the generic and optimizes for it and starts ranking for it and then Google turns that down, you know, turns down that signal, he could always change later and as long as he gets his, you know, fancycrm.com, you know, his product name .com URL, he could always just move the website there or 301 everything if SEO becomes not as large of a part of his marketing or he loses the rankings because of the TL lead stops being worth it then that’s actually not the end of the world to do that.

[20:45] Mike : Right.

[20:45] Rob : So…

[20:46] Mike : I’m kind of torn on it myself. I think that it’s really nice to have that for the SEO benefit but on the other side customers don’t necessarily relate well to a product name that is generic like that and I wonder if it might be either interesting or a good idea to go in a slightly different direction where you get both domain names and then for the domain name that is the generic one, you basically make it in to a review site and then you obviously will link have to relate it to your own domain. You would review heavily to your own software or maybe you review it favorably or not, favorably or whatever but that’s another option where you could basically give yourself some SEO benefit by linking directly from that domain and you know, you could also use it as an educational site. I mean you could just talk about in general, these are the things you should be looking for if you want this particular type of software.

[21:37] Rob : Yeah, I think building a satellite website like you said or a microsite as some people call them, I think that could be done. I don’t know if I make it a review site. Probably a review site would be decent I guess. I would always have someone else to write it. So that feels a little, you know, a little weird if you’re writing content about your own without disclosing it if you’re writing content about your own app.

[21:52] Mike : Right.

[21:52] Rob : I’d almost want to hire a third party to do it or just not making a review site and make it about, you know, something else just an educational site where you happen to have a banner. That’s obviously going to cut down — I mean that, you know, if you rank number one for that term for CRM Software you’re only going to get a couple of percentage click-through from there. So you really are killing off most of the traffic. It’s not going to make it to your — through your sale website. So it well — different approach you can do. I don’t know that it’s just as good. I agree, I’m torn as well. I don’t think there’s a right or wrong answer here. I just think it’s what you feel comfortable with and kind of how you’re going to be marketing the product if it’s going to be, you know, 90% SEO then it’s an obvious response here. But if it’s going to be mostly a branded product, then I think you go the other route.

[22:33] Mike : Well I think that about wraps it up. And Til, hopefully, that answer your question and thanks for getting in touch. Hopefully, things will work out for you and you come to a decision on that.

[22:41] [Music]

[22:44] Mike : Our next question is from Sean and he said, “Rob, you mentioned using AppSumo to get a boost of capital in the early stages of HitTail and I’m stoked because I love the guys over there and I’m happy that it delivered for you. I’m wondering what other avenues or opportunities you and Mike can suggest to get jumps in revenue or financing in the early stages of a product’s life. I’m a big fan of maintaining control of the product as long as possible and not going the investor route.”

[23:06] Rob : Yeah, I have a few thoughts on this. I guess first I’ll clarify I didn’t do the AppSumo deal for a boost of capital as much as I did because I wanted to get the word out. I don’t actually need the capital right now as much as just, you know, spreading — spreading the word in that respect but — this is a good question. I like — I like this line of thinking. It’s basically you started off, you’ve launched your product to some success but you need some capital for some reason. And I would be hesitant to say that you need a bunch of capital to buy ads and do paid acquisition because if you’re still this early in your startup, then odds are pretty good that you are not going to have — really not going to have the lifetime value and the cost per acquisition where you need it to actually make that a viable thing.

[23:49] So hopefully, you’re not thinking that you’re going to raise the cash just to spend it on ads but to use them in some other strategic way. But a couple of ideas do come to mind AppSumo is definitely one any deal of the day site. I mean there’s like SoftwareDealOfTheDay.com or it might be softwaredod.com. There is BitsDuJour.com. There are several others depending on your niche. There’s a bunch of ones for the Mac too, so any of those can be a quick influx of cash. Another way that I’ve seen used is to do annual plans and to either offer them on the site directly or if you’re dealing — if you’re doing any type of medium touch or high touch sales that you talked to your customers and say, “Hey, you know, if you pay in advance for 12 months, we can cut you a pretty big discount.” And you may have to offer a 2, 3 or 4-month discount depending on how far long your product is and how much people trust it and how much value they’ve already gotten out of it. But you know, if you’re charging a hundred bucks a month and you can suddenly get an influx of 8 or 9 months of capital, you have to support that customer for the next year but that, you know 8 or 900 bucks can be a nice big influx and if you can do that with a handful of customers in any given month, it starts to add pretty quickly.

[24:56] I’ve also seen some apps do it directly on their site where when you go to sign up, it gives you that option and people can just pay in advance. Again, you do have to offer discount but can still be a way to kind of eak some revenue out early. The other way that I would recommend and I’ve done this in the past is to actually do offer customizations. So it’s almost like you’re consulting on your own product but you can almost just consult in the space as well. So to give you examples to this like with DotNetInvoice early on, I would offer customizations for a 125 or a 150 bucks an hour. So I didn’t want to do a lot of them, right? But people didn’t want to pay me to do a lot of them because it wasn’t cheap but if someone came along with 5 or 10 hours, suddenly you’re doing a little bit of consulting work. It is kind of a pain but you can make a little chunk of change that way.

[25:43] The other interesting thing is I’m getting e-mails constantly with HitTail. People want us to offer SEO advice, do link building, just create content, you know, just kind of do SEO services like a consultant will do. So while it’s not a straight customization in my product, it is just affiliated or related consulting gig. It’s something that someone would be interested in if they’re using your product. So I think those are probably three avenues that I would at least entertain. They all have draw backs. I think you can — they’re pretty obvious what the draw backs are but if you’re really trying to put together, you know, a little bucket of cash upfront, I think those are definitely viable.

[26:21] Mike : Yeah, the ones that came to mind for me were, you know, as you mentioned the yearly plan and then other one was doing product integrations with other products. So if you have something that can integrate in to pretty much any major vendor who has a pretty large audience and you can offer any sort on integration between your product and theirs. A lot of times they’re very happy to publicize that there is that integration to their existing customer base. You may very well get a lot of signups as a result to that. It really depends a lot on what the other products are just to kind of you threw out some examples. I know that you can do integrations with like MailChimp and Google Analytics is one but honestly, they’re — you know, people aren’t paying for that but if they are products that people already paying for, you know, as a subscription then those are the types of people who are already willing to pay for a subscription and then they may very well be willing to pay an additional fee for a subscription to your product.

[27:13] So those are the things that I would probably look at as a good way to boost revenue. And the nice thing about that is that it’s continuing. It’s not just a one shot. I mean obviously you’ll get one shot in SEO benefits and you know, the influx of traffic when, you know, whoever that integration partner is publicizes it but – on an ongoing basis, you’ll get additional revenue based on the fact that those people are using their product and say, “Oh I just found this product.” Maybe it’s Basecamp and they’re using Basecamp and I’ll say, “Oh well there’s just an integration with my — with this other product over here. Maybe I’ll go check that out.” So thanks for the question, Sean.

[27:54] The next one we’re going to go to is from – I know I’m going to butcher this name Loradrius Thomas and he says, “Hello, I’m not a techie individual but I have an idea for an application that will assists entrepreneurs but I don’t have any experience with the code or writing software. What do you recommend I start?” I would say start episode 1 and start with —

[28:11] Rob : Yeah, exactly. [Laughter] This is a big question.

[28:14] Mike : It’s a huge topic as an involved topic and there are so many different things that you need to understand that just having an idea for something is not necessarily good enough. I mean you basically have to prove that there is enough demand for whatever it is that your idea is that people are willing to pay for and until then you’re not going to have anyone who is going to be a developer who’s going to sign on to the department, you know, as we’ve mentioned numerous times that you have to have at least two out of three things to build a business you need to have the time, money or skilled set, two out of those three things. And as long as you have two, then you’re fine and it sounds like — I mean, you know, it wasn’t clear you don’t say that you have money, you don’t say that you have time to do it but if you have time, then you can learn to write software. If you have money, you can pay somebody to write it and if you have the skilled set to either do the marketing or do the development, then that’s at least half of the equation. But if you don’t have those things then you’re kind of a stand so there’s not much you’re going to be able to do.

[29:19] Rob : So I think the first thing to think about is how to prove out this idea, how to get as far as possible without having any code. And he doesn’t give us much of an idea of what the app is. It’s a application that will assist the entrepreneurs but if there’s any way to do this without code or is there any way to do it via e-mail with Excel spreadsheets, with a VA, with your manual time just doing stuff on the back end does it truly have to be software or can you hack it and basically do human automation and get your thing launched and even if I mean even if you don’t have a website at all, if this helps entrepreneurs, then find entrepreneurs and start helping them with this, you know. And if you need to throw up a WordPress website and use the theme and you added some text, then learn how to do that and get people to it and then start helping them.

[30:08] So I mean I think that really would be where I would start. Obviously, we’ve talked in the past, there are several — several times about partnering up with a technical co-founder, how to encourage them to get onboard, how to basically prove to them or at least as much as you can prove to them that that the idea has merit and that you basically remove as much doubt as possible. But those things are all down the line to me because until you’ve taken this first step and validated the idea, you don’t need code to validate a lot of the ideas even something like HitTail. If you think about what HitTail does, it really just analyzes traffic and it takes the best keyword and so, you know, the best keywords from what you target. So the hack way around that is to find people who use Google Analytics or using Analytics package and say, “Okay, I’m going to help you with this.” It can be 10 bucks a month. I’m going to need you to export, an excel export of all your organic keywords from last month and they send it over and you manually go through it and do the checks or you hire a VA to do the checks, you know, figure out where your algorithm is going to be, how you’re going to recommend stuff and then send them back the list manually. It’s totally hokey. It totally doesn’t scale but it’s a way to see if you can provide value to people who’ll pay for it without writing a line of code.

[31:25] And you know, and then from there, if you figure out that you can provide value and that people are liking it, now you actually have a few customers using your — your service which is essentially just a manual service at this point but from there you — you can go approach a developer and say, “Hey, people are actually using this. People are paying me money for this. How can we automate this? What’s our first step to automating this?” Because at that point, you don’t need to go ask and spend a thousand developer hours to build something, you could start really simply by just building a very basic database that, you know, you could manually import to and you can kind of just take the next step, the next minimum viable step instead of trying to build this full-fledged app from scratch. I hope that helps, Loradrius, I think that’s his name. Loradrius Thomas, thanks for the question.

[32:07] [Music]

[32:10] Mike : Our next question is from Steven and he says, “What’s the best way to approach other bloggers about interest in my blog and is that even necessary? Here’s the thing, I can’t stand reading other blogs and the genre I like to write about because I feel like it takes off all my time and has information I already know. So how without liking these blogs do I get interest in my writing? Does this even matter in a marketing and traffic growth sense?” Well to me like this isn’t a question so much about a product as it is about a blog and getting attraction from other bloggers and then niche for this blog. And I would wonder about whether or not these other bloggers feel the same way about it as you do. I mean is all the information that you’re putting out there and that they’re putting out there stuff that is common enough between all the different blogs that you can read one blog and pretty much know all there is to know about that particular niche and you know, this question doesn’t necessarily say what’s the niche is but I think it’s hard to imagine that there is a particular niche out there that, you know, one, you could just go to one blog and it’s kind of a one-stop-shop for everything you could possibly know about that and even if it is, it’s — sometimes it’s very nice to get a different take on it especially for people who aren’t fully in trench in to that particular niche.

[33:23] I mean it sounds like if you’re writing a blog about it, you obviously know a lot about it and if right off on it and you’re willing to share that information but you don’t necessarily want to hear other people talk about it because of the fact that you already know all the stuff that, you know, they’re going to be talking about. So those are kind of my thoughts on it but I don’t think that it’s unwanted to go talk to these people. I mean I think that the thing to do is just drop them the e-mail and you know, whether you do have like chat with them or talk to them, you know, one of the things you don’t necessarily saying here is what is it that did you actually looking for from these blogs. Are you looking for recognition from them? Are you looking for back links? Are you looking for partnerships? Those are some things that kind of entered my mind and if you’re looking for back links, I don’t know if getting on these other blogs is necessarily going to meet a whole lot. It might help you in terms of SEO but in terms of getting their readers to come to your blog and also read your blog when the content is going to be similar, I don’t know if that’s going to help you a lot.

[34:23] For partnerships, if they have products and you have products and you wanted to do some sort of cross selling, then that’s a great way to go. I don’t know if you really need to be a reader for a blog in order to approach them because you can certainly just talk to them about it. I mean if you can work out some sort of a deal where you’re cross promoting their products or bundling them together, for example, then both of you collectively become an authority in the space just by a virtual of — partnering and reselling your products together. So those are kind of the things that enter my head with this particular question. But I don’t think that it necessarily matters whether or not you get them interested in your writing unless of course your goal is to get them to link to you for, you know, whatever reason.

[35:06] Rob : Yeah, I agree. It would help to know more specifically, you know, what he’s looking to get out of this. The other thought I had is that if you already know what’s on these blogs, then you can probably just read the title of the post and scheme through their post and getting an idea what they’re blogging about. And if you already know of the information because it’s so basic then that’s probably all you’re going to need to do to stay familiar with what they’re doing and keep up to date. And if you are in an equal plain with them in terms of readership and notoriety, then it should be pretty easy to reach across the island just dropping them an e-mail. If you are at a lower kind of plain field than them if they’re just have a lot more popularity, a lot more experience, then sending them an e-mail is, you know, it may or may not work but the sure fly way to do — to start getting noticed is to pick the two or three top blogs, you know, that you’re looking at in this niche and start leaving some comments. You don’t have to read the whole post if you already know the information.

[35:59] Again, if they’re commenting on, you know, talking about stuff that you already know then you should be able to add to that pretty intelligently, pretty fast from the top of your head and be able to improve upon their post. And once you do that a few times, these folks will start to recognize you and then when you drop them an e-mail, you can mention “Hey, I’ve been a reader, you know. I’ve been commenting on your blog,” and they will likely notice it. But I think it does come back to what Mike said what exactly you hope to get out of these relationships. If you kind of just want to network and yeah, have them cross on products, then that’s fine. I do also thinking that maybe writing a post about them or even linking to them in a post or two of yours, it’ll show up in their Analytics and they will notice you. You know, they’ll notice that you link to them and they probably have Google Alerts if you’ve mentioned them by name and they’ll come out and check out your blog and that’s another way to kind of extend, you know, a hand shake and maybe get them to — to notice you off the bat. So those are our thoughts. Hope those help, Steven.

[36:51] Mike : The last question for today is from Andrew and he says, “Hi, Rob and Mike. Great job for the podcasts, I’m really enjoying them. I was listening to the how to drive traffic to your site podcast and noticed that it was recorded a few years ago. I’m curious if all the tactics still apply. For example, do you still view Twitter as not being useful for driving qualified traffic? Thanks in advance for your response, Andrew.”

[37:11] Rob : So I think most of the approaches, I think all of the tactics actually that were listed there still apply. I think for his specific question which is probably all we have time to answer on this podcast is “Do you still view Twitter as not being useful for grabbing qualified traffic,” and the answer I have is yes. So I view Twitter as a great networking tool. It’s a great way to keep up relationships. It’s kind of like just up an ongoing chat between a bunch of people. It’s great for partnerships. It’s great for kind of deepening relationships and it’s also really good if you are creating content. So if you’re putting out a blog, a post now and again, whether it’s on your company website or your — an industry blog, something that is interesting to people who are reading your Twitter feed, then Twitter is a great distribution mechanism.

[37:53] But that’s — that’s how I view it as, it can certainly draw people in from your Twitter feed to your app but honestly, you need, I mean literally tens of thousands of qualified followers to get any kind of sales funnel out of that. And I just — I don’t see it as being very viable nor a good way to spend your time. I mean there are much, much more effective ways of driving qualified traffic that we did talked about in this episode — it was episode 6, I’m pretty sure.

[38:22] Mike : Yup.

[38:22] Rob : How to drive traffic to website and you know, there — obviously, there’s paid acquisition and there’s SEO and there is other social media approaches. I mean there’s — there’s a lot of ways to do this that that are going to just be a much better use of your time if you’re actually trying to sell something as the end goal.

[38:38] Mike : Yeah, I would have to agree with that. I mean I still don’t necessarily view Twitter as a great way to drive traffic. Now I do feel like Twitter has value in that if you already have a product that’s established and you’re getting people to follow your product on Twitter, then I think the Twitter is a great way to get additional information out about your product or to get people talking about it but that’s going to be generally for people who are already customers of yours. Or if you’re running a product where people kind of admire your product or in your state they admire what you’re doing, they may follow you just kind of hear what sort of things are being said but I don’t necessarily think that those are going to turn in to qualified leads. All of that said, Twitter does have an advertising platform so you may be able to tap in to that and use it to get paid traffic. It’s not something I’ve tried yet. I actually have like a hundred to a $150 that I got from American Express for some program that they were running. I will be trying that out with AuditShark to see how that goes and I’d be happy to share what I learn from that. But aside from that, I don’t think that just having a Twitter account is going to drive the qualified traffic that is qualified enough to turn those people in sales.

[39:54] Rob : All right, Andrew. Thanks for the question. By the way, he is at videorascal.com.

[39:59] [Music]

[40:03] Rob : If you have a question or a comment, call it in to our voicemail number at 888-801-9690 or e-mail us at [email protected] Our theme music is an excerpt from “We’re Outta Control” by MoOt, used under Creative Commons. Subscribe to this podcast in iTunes by searching for Startups or via RSS at StartupsfortheRestofUs.com where you’ll also find a full transcript of this episode. Thanks for listening. We’ll see you next time.

Rob and Mike answer listener questions about shutting down a product, buying a generic or product domain name, raising capital without investors and more.

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Episode 480 | Stairstepping Your Way to SaaS with Christopher Gimmer

Episode 480 | Stairstepping Your Way to SaaS with Christopher Gimmer

Show Notes

In this episode of Startups For The Rest Of Us, Rob talks with Christopher Gimmer of Snappa , about his journey to making SaaS his full-time income. He details how he stair-stepped his way from small apps and products to 7 figure SaaS.

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Transcript

Rob: In this episode of Startups for the Rest of Us, I talk with Christopher Gimmer about stair-stepping your way to SaaS. This is Startups for the Rest of Us Episode 480.

Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing ambitious startups, whether you’ve built your fifth startup or you’re thinking about your first. I’m Rob and today with Chris Gimmer, we are here to share our experiences to help you avoid the mistakes we made.

Welcome back to the show. Thanks for joining me this week. Pretty interesting story this week, Christopher Gimmer did a talk at MicroConf Starter back in April. He and his co-founder really stair-stepped. They launched an app that had one-time sales, it was a marketplace. They grew that to where it plateaued which wasn’t enough they could live on, and they saw an opportunity and started a B2C type stock photo site. I guess it’s not B2C, but kind of B2b and used that to parlay into a SaaS app.

I don’t want to belabor it as we get into Chris’ entire experience in the interview. One thing I really liked about Chris’ story is that he and his co-founder learned small things first and they didn’t try to go play in the major leagues when they didn’t have the skills to do that. They went and they played little league, then they went and played highschool ball, then they played college ball, then they played minor leagues, and then they played major leagues, that is that repeatable meticulous disciplined way that I’ve always believed in starting startups.

It’s not trying to raise hundreds of millions and take this bid luckshot that you may or may not have the skills or the confidence or whatever to do, but after listening to Chris’ story, you know that even if he were to exit his company today that he has the skill set that he can take with him to the next thing and it becomes this repeatable startups, building real products, selling to real customers for real money. Without further ado, let’s dive into our conversation.

Christopher Gimmer, thank you so much for joining me on this show today.

Christopher: Thanks for having me.

Rob: We are here today to talk about Snappa. Your startup that’s at snappa.com and your headline is, “Create online graphics in a snap. Whip up graphics for social media, ads, blogs and more even if you are not a graphic designer.” You did a talk about nine months ago at MicroConf Starter and it was a really interesting tale of your journey with your co-founder across six or seven years, multiple apps to how you got to where you are today. You and I were just talking before with a call, that you expect to hit a million dollars in ARR in the next month or two. Congratulations on that.

Christopher: Thanks very much.

Rob: You guys launched Snappa in November of 2015. You had $4000 MRR at the end of the first month, is that right?

Christopher: Yeah, we have built up a bit of a list before we officially launched and we had a beta period, so we had an audience launch too. Within a month of launching, we did hit about $4000 in MRR.

Rob: Which is obviously good. We are going to dig into that in this episode of how you got there and how you parlayed and stair-stepped your way up multiple apps. It’s a pretty interesting story. By April of 2019 which is about nine months ago, you guys were about $62,000 MRR, that’s what you mentioned in the talk and then you are just about to hit the magic $83,333.33 and for those who wanted to know, that is one million ARR.

It sounds odd when you say it in MRR, but in ARR it’s so cool to say, “Yeah, I run a seven figure business.” You are looking forward to that day?

Christopher: Yeah. Marc (my co-founder) and I remember when we first started Snappa, we are like, “Man, if we could just get to $10,000 MRR, life would just be magical.” Obviously, you end up hitting that and then everyone just talks about the $1 million in ARR and the seven figure. Once we […] full-time on Snappa and we are making a living off it, that next yardstick is super arbitrary, but I love to get to that $1 million ARR. So, we’ll definitely celebrate when we hit it most likely next month.

Rob: That’s cool. Do you have plans of what you’ll do? Are you and your co-founder remote? Are you able to get together and have a glass of champagne together?

Christopher: We both live in Ottawa. We are pretty much like bestfriends so we hang out quite a bit. We might do something special, we haven’t planned exactly what yet, but we will definitely do something.

Rob: If there’s anything I’ve learned from my wife who is (for folks who do not know) Sherry Walling, she’s a psychologist and she works with founders is to celebrate those wins because they are (unfortunately) few and far between. There’s a lot more struggle than there is the wins and I have never been good at celebrating the wins. She has forced me to do it and I think it’s a good thing for everybody. Frankly, the win is not just you and your co-founder. It’s like taking your wife out to dinner or your fiancée out to a great dinner or a great trip.

That’s the thing, the whole family had to put up with me when I was growing up my app. I’m sure your girlfriend (now your fiancée) has had to put up with a lot of crap from you as well. I think we all deserve to have those wins when they come in.

Christopher: Yeah, definitely. She’ll be excited to hear that.

Rob: Yeah, totally. Something about your story lines up with both stair-stepping that I talk about a lot, but also this concept or quote that I keep throwing out of, “Doing things in public creates opportunity.” You went through multiple apps to get to where you are now. You had one in 2012 that is unrelated, but was it in 2013 where you launched BootstrapBay?

Christopher: It was 2014.

Rob: That was a theme marketplace for bootstrap which is a CSS Framework. Tell me about how you guys thought what the goal was there in launching that. Was it, “We want to launch a business. Very much the dream of us is to get to the point where it’s supporting us full-time”?

Christopher: Yeah, that was definitely the goal of BootstrapBay. Marc and I were actually both working in the government. That’s how we met and it was funny because we were two of the youngest guys in the office. Naturally, we just started hanging out and became friends.

One day, Marc pulled me into his office and he was like, “I want to show you something.” It was almost a Zillow type of website, like a real estate website, and I was like, “Wow, you can actually program.” I had no idea because he was doing something not related at work. That kicked off the journey of me and him just trying to figure stuff out and see if we can launch a business that could enable to support our jobs.

The goal of BootstrapBay was something that we could do while we are still working in our jobs full-time and hopefully the idea was we can make enough money from it so that we can quit and go full-time on it. It wasn’t necessarily a project that we are super passionate about and that we were planning on running for the next 10 or 20 years.

Rob: That’s interesting. Why start it as a marketplace where you have to essentially get buyers and sellers rather than build out a bunch of your themes and sell them. You are basically a digital product company instead of a marketplace.

Christopher: Essentially, funnily enough we started reading about keyword research and SEO. Initially, we are actually looking for things that we can draw up […] or whatever. Marc stumbled across this bootstrap themes and bootstrap templates as a keyword that was getting a lot of search volume. At the time didn’t have crazy competition like ThemeForest, then you can have its own own bootstrap category. There was one major market place at that time which is called WrapBootstrap. I think it’s still really big today. For a variety of reasons and being super naive, we thought we could build something better than this.

In order to exceed the market place, Marc designed the first three or four themes. But we just thought it would be more scalable if we were able to get other theme authors on board and add more supply to the market place than we could generate on our own. That’s how it happened.

Rob: Was BootstrapBay a successful business? Can you give us an idea of how much revenue it brought in for you?

Christopher: The peak month was during about $8000 to $10,000. Once we paid out all the theme authors, I think we are profiting maybe $4000 or something. It was maybe a decent side hustle business, but we essentially got to the point where we are having trouble growing strictly through our SEO because our margins and lifetime value wasn’t high enough. We just couldn’t put any money into paid ads. We just started plateauing after a bout a year. We knew it was going to be an uphill battle from there which was why we started thinking about other stuff that we can launch.

Rob: No recurring revenue and the funnel is only so wide. There’s only so many people searching for bootstrap themes.

Christopher: The other problem was (like I mentioned) being the top marketplace and as you know, […] and it was something I learned after the fact is when you are the dominant marketplace and you got the first […] advantage, it was just so hard to unsee them, so we were ranking number two or three and the number one guy was just cleaning up. We knew it was going to be a really tough battle. One that we really didn’t want to keep fighting.

Rob: As you said, a nice side hustle because obviously $4000 a month is nothing to sneeze at. I have this concept of four competitive advantages when you launch a SaaS app. One is who you know, so it’s your network. The second is who knows you, so it’s your audience. The third is being early to a space, say Josh with Barametrics was early. In this case you guys were early. You were able to get in. You weren’t the first, but you were early enough that you were able to get in. Can you imagine launching a bootstrap themes marketplace now?

Christopher: It would be really difficult. We were even too late, but we were still early enough where the really big players hadn’t specifically focused on it. If we were to do that today, there’s no way we would have gotten any traction at all, quite frankly.

Rob: Yeah, It’ll be painful. You plateaued with that business and I think of it as a step one if I were to overlay this stair-step approach in bootstrapping. It was a nice step one on business. It brought in non recurring revenue. It brought in enough money that it made it worthwhile and it was a success. You gained experience, probably gained confidence in your skills both you and your co-founder.

You had a little bit of audience, I’ll say. Not audience in the blog or podcast type where people are looking at you as a personal brand but audience in the sense of traffic. You just had a lot of traffic coming in. Then you built out your SEO and your content skill set. You went from there and you started a StockSnap, stocksnap.io. Can you tell us about the unique opportunity you almost stumbled upon that led you from BootstrapBay to StockSnap?

Christopher: One of the ways we ended up growing BootstrapBay was primarily through content marketing and SEO. We ended up writing a blogpost about where to find free stock photos. This is when a lot of these really new creative comments started popping up like on […] today are really big. So when we had written that blogpost of where to get free stock photos, we started sharing it around Reddit, social media and whatnot. Out of all places, it went viral on StumbleUpon which I don’t even know if that site still exists today.

Next thing you know, we start ranking on the first page of Google for free stock photos. I figured it out at some point that would die off, but the traffic just kept increasing month over month. We were in this interesting position where we are getting so much traffic with just this one blogpost and we looked at all the websites that were linking to at the time and we noticed—again this is in the early days—that none of them had search functionality. A lot of them were releasing 10 new photos every 10 days or something to that effect. We thought, “Why don’t we just create our own stock photo site that you can actually search?”

Marc went ahead and I think it took them about three months and he ended up building what became StockSnap. Of course because we have all of that traffic coming to the blogpost, we just linked to ourselves as source and the next thing you know, we started getting a bunch of traffic to stocksnap.io.

Rob: At that point, were you thinking, “We want to start another business. BookstrapBay has plateaued and we are going to autopilot it. If we launch StockSnap, we are going to turn that into a business”? Or was it just a fun larch that you went, “Hey, I got all this traffic might as well put a website up”?

Christopher: Yes, that was the thinking. At this point, BootstrapBay was plateauing. We knew that it wasn’t going to be the business that would enable us to quit our jobs and everything. We just saw this opportunity and we knew that a free stock photo site is just something that is always going to have value. We just saw it as an opportunity that is like, “Hey, if we build this up now and we start getting a lot of traffic to this website, we will almost certainly be able to either monetize the website itself through ads or use that as a springboard to launch some other app down the road.”

To be honest, we started thinking about SaaS at that point and I had this idea in the back of my head for this graphic design tool for marketers or entrepreneurs, if you will, because I was always struggling to put these images together whenever I needed to add a featured image to whatever blogspot. That was the thinking of, “We are getting all this traffic to the blog post. Why not divert some of it to one of our properties which could be very valuable to us down the line?”

Rob: That makes sense. Did you wind up making revenue from StockSnap?

Christopher: Yes. After we launched StockSnap, like I said at that point we really started exploring the idea of a SaaS app which obviously became Snappa. I think we had one […] ad placement or something like that, which was bringing in maybe $1000 or $2000 a month in advertising, but almost from the start, we started using StockSnap as a way of promoting Snappa as opposed to really trying to monetize the website as much as we can.

Rob: That makes sense. With BootstrapBay and StockSnap, obviously people know the end result that you started Snappa […]. Do you still own those other properties or did you exit from them?

Christopher: We ended up selling them off. StockSnap was a bit of a more difficult decision in the sense that it’s still bringing in quite a bit of traffic, but when we first launched Snappa, probably 80% or maybe 90% of our leads were coming in from StockSnap whereas by the time we sold it, I think it only made up 10% or 15% of our leads because we had really built up our content and SEO and word of mouth. At that point, we decided that it just makes much more sense to put a bunch of cash in our bank account and focus on one thing as opposed to trying to maintain two separate properties.

Rob: That makes sense and by that time you had a SaaS app that you are focused on which we know takes a lot of attention. I’m curious. We glossed over several years of work here. We almost made it sound easy, like you stumbled into this thing and you ranked number one in Google for this free stock photos, which is very hard to do. In my experience, this kind of stuff is a grind, especially when you are learning it from scratch. Learning SEO to get as good as you guys are as well as content side of things, that’s really what your wheelhouse has become, is this social promotion of getting organic traffic for high competition terms.

How long did that take you to learn and did you feel like it was something where you are just grinding it out, not getting results for a while and it suddenly clicked? Or what is that process like?

Christopher: As you mentioned at the top of the interview, the first thing we ever launched back in 2012 was actually a […] website. Without going to much into it, that was basically a year of work that was not successful ultimately. Then there is actually another app in 2013 which didn’t go anywhere. There is basically two years that we are working on stuff and we got absolutely nowhere. I think a lot of people might have just given up at that point. So before BootstrapBay is when I realized I don’t know what I’m doing regards to marketing and I just read tons of blogpost and listened to tons of podcasts and videos.

At least with BootstrapBay at that point, I had built up some knowledge in terms of how to do it, but obviously you have to put that practice into motion. But even with BootstrapBay, the first three or four months, as you know SEO takes a long time. It was a lot of trial and error. A lot of blogpost didn’t end up working out, but the more you try and the more content you put out there, you start to realize what works and you get a little bit of process and a little bit of formula going.

I would say about six month to a year into it, at least in BootstrapBay we started figuring out the content side of things. With that being said, we did plateau and what was the next frustrating thing was we are a year into this business, it’s still spinning off a couple of thousand for the both of us. How are we going to get to that next level? At that time, we didn’t know that everything will work out, but we start questioning, “Is it worth it? Should we really be spending our nights and weekends trying to get this going?” We just have to persevere.

Rob: That’s what I like about your story is you really didn’t have these marketing skills and you went out and through founder forum you just learned things that were probably difficult trial and error. You grounded out and you start this site and it’s in a small niche. I’ll say bootstrap is not the most massive niche in the world and you learned the skill set in a less competitive space.

You didn’t start an ESP. You didn’t start a CRM. You didn’t start some massive SaaS app as your first effort. You started a couple of small things, BootstrapBay gets some traction, then you learned SEO and content really well, and then StockPhotos is one level harder than that. The Snappa stuff is still on the same boat, but it’s a very wide funnel, and if you didn’t have the four or five years of learning before that, starting Snappa would have been really hard without the skills. Do you think you could have even succeeded without the knowledge you have gained from the other failed and successful efforts?

Christopher: I think there’s two things that made Snappa successful. Number one was everything that you alluded to. The first couple of things that we launched, we just didn’t really know what we are doing. It took awhile to really learn those content and SEO skills and how to get traction. Just how to actually grow a software application or any kind of website to be frank.

The second thing that made it possible was having that existing funnel of traffic through StockSnap. As you know, the lower the price point, the more customers you need to make an app sustainable. It would have been extremely difficult if day one of launching Snappa we have no existing list or no existing user base that we can tap into to kind of get that going. That’s really why we were able to get up to $4000 MRR just after a month, because we had all of that list and that user base built up already.

Rob: Talk to me then about Snappa. You mentioned in your MicroConf talk, I remember you mentioned it. You built it to solve a problem that you yourself were facing. What was that problem?

Christopher: As you mentioned, I was doing a lot of content marketing for BootstrapBay. For each blog post, we need to create a featured image, and also some images within the content itself. I was doing a lot of this stuff and Photoshop. We didn’t really have the money at the time to hire a designer. Mark was pretty good with Photoshop, but he’s working on development which is more of a top priority.

I just thought, “Man, it would be nice if there was a tool that just made a lot of this easier.” When I did some brief market research at that time, I found that the tools are either too simplistic—it was essentially a code generator—or they were still too complicated. I thought there was a need to create something that was kind of in the middle where it was still super easy to use but still not overly complicated, that really anyone can just pick up and use it.

Rob: Talk me through the customer development you did to validate that, because there’s the old adage, “You should build stuff for yourself, solve a problem you have,” but I always caveat that with, “Yeah, but make sure other people have it, too, and make sure they’re willing to pay for that.” How did you do those things?

Christopher: Because we had StockSnap, we had an email list of people. The first thing that I did was email our list and just asked what they were using their stock photos for. As I kind of expected, a good percentage of those were using it for either social media or content marketing, which was kind of our target audience or what we thought would be our target audience.

For the people that did answer saying that they were using it for content and social media, I asked if anyone would be willing to hop on at 10-15 minute call just to learn about how they’re using the software, those and whatnot.

I ended up getting a call with (I think) around 15-20 people in the end. I was just asking them questions about exactly what they’re using the photos for and then going a step further in terms of what tools they were currently using to create graphics, what their process was like, who’s involved with that process, and taking a lot of the questions that I learned from the Lean Customer Development book.

The number one takeaway from that book is basically not to ask leading questions. I never once asked, “Hey, this is what I’m building, do you think this is a good idea?” or any kind of those leading questions. I was essentially trying to see if they would mention (without me poking them) whether or not they had pain points with the existing solutions.

After about 15-20 of those calls, a lot of people did mention or said things like, “Yeah, right now I’m using Photoshop and it’s a huge pain and takes too much time,” or, “Yeah, I tried this app out, but it’s not really that great,” or, “Yeah, we use an in-house graphic designer, but the turnaround time is sometimes 2-3 days. I wish I can just do it myself.”

When I heard enough of those kinds of comments, it gave us enough confidence to at least go ahead and start building some sort of MVP for Snappa.

Rob: Super cool. Mark is a developer. Did he just sit down and start hacking it out?

Christopher: Yeah, that was pretty much it. Like I said, we’ve built things in the past that didn’t really work out. We wanted to make sure that there is going to be a market for this because this is by far going to be the biggest and most complicated thing that he’s ever built. We wanted to really make sure that this could be a viable business. Once we had that validation, then Mark went ahead and just locked himself in the basement and started hacking away.

Rob: It feels like the story kind of writes itself from there. You have a lot of SEO and content skills. You applied that, you cross promoted from StockSnap, you had this existing audience, existing traffic sources that you then promoted in order to grow Snappa. I am curious. A couple of things, a couple of questions that I want to touch on before we wrap. One is, early on you said, “When we first started talking about building an app, we said, ‘Wouldn’t it be magical to hit $10,000?’” Was it magical when you hit $10,000?

Christopher: Yeah, it was actually. I don’t remember if it was exactly $10,000 but it was magical the moment that we knew that this was going to sustain us. We didn’t have to go back to our jobs, the business has legs. At some point, we would be able to probably hire more team members just to know that we had done it. It had taken us, like I said, the first thing we had launched in 2012. This is several years in the making. It truly did feel magical and we still feel very fortunate today that we’re able to do this.

Rob: Yeah, I agree. How large is your team at this point?

Christopher: Now we have four full-time team members and they’re awesome. Another thing that I really didn’t anticipate was how much more fun it is working with a team. We’re really fortunate to have such awesome people working with us at this point. We have four full-time and then we also work with a couple like freelancers and writers and stuff like that.

Rob: That’s good, that’s a pretty capital-efficient business to only have four folks working on it. Another question for you is your price points. On an annual basis, you’re $10 and $20 a month on a monthly basis, you’re $15 and $30. When I see an app like that, I think ouch. You’re probably going to have (just from the outside, I don’t know all your numbers) high churn, I would expect a low average revenue per user, which means you’re pretty limited in how you can market like you’re not going to run AdWords as an example because you don’t have the lifetime value. How has that been? Am I relatively on the mark? How has that been for you guys?

Christopher: Well, 100% you’re definitely on the mark. As you can imagine, we have probably higher churn than some of the other apps or founders that you’ve had on the show and that just goes with the territory of the low price point. That’s always been a challenge and enough reason why we had to get really good in organic (in particular) and why we focus a lot of time and effort on content marketing and SEO.

At this point, we don’t do any paid advertising whatsoever. We really do rely on word of mouth, SEO, and content, just giving a really good experience so that people talk about us. We get mentioned in blog posts and just have a sustainable and repeatable way of acquiring users.

One thing that’s interesting, though, that maybe not a lot of people think about is I think you had the founder of, was it Userlist that you had? That you were talking to a couple…

Rob: Jane Portman?

Christopher: Yeah. It was funny because I remember she was talking about how it’s difficult to get people to either try the app or switch to Userlist. I think on one hand, it’s really nice to have a low churn app, because once they kind of get in, usually they stick around and maybe it’s easier to build a sustainable business that way. But on the other hand with an app like Snappa, we’re premium, you can try it out, and really within a couple of minutes of even trying out Snappa, you’re going to know whether it’s going to provide value to you. The flip side of high churn is that our activation rates and the top of the funnel converts super well. That’s one thing that maybe some people don’t consider with these types of apps.

Rob: Yeah, there’s almost no switching cost. It’s just learning which buttons to click, but they don’t have to migrate stuff over. I agree, I think that’s a real advantage to it and I think longer term, I think an app like a Userlist or my experiences with Drip was, there was a lot of switching cost. It was harder to get people in. The churn was really low once they got in, but you’re right, the growth was tough. The growth was hard fought, but once you got that growth, it was there. It was locked in.

I think that’s where it cuts two ways. At Snappa, your funnel is so much wider. The number of people that visit your website, the number of people that sign up for a trial, and the number of people that probably start paying you is astronomically higher than what we had at Drip, as an example. I think that that is a unique advantage especially when your skill set is SEO and content, which tend to be wide funnel things. Not always, but especially in these spaces, you’ve been playing deliberately, these are wide funnels. That allows you to have this low price point and it allows you to not need to run ads but still grow business to seven figures.

Christopher: Yeah, I’d say that’s super accurate. Don’t get me wrong with low churns to go along with what we have. You learn that the market that you choose (to some extent) controls how high a churn’s going to be and that kind of stuff. We’ve learned to just embrace and accept it, and just stick to our lane, so to speak.

Rob: Yeah, it makes sense. I’m going to assume that if we look back, let’s say over the past year or even I guess ahead two months, you’re about to hit $1 million in ARR and I’m going to assume that that might be the high point of the year in terms of the business. What was a low point or the hardest part about the past year? A specific time that you felt like you were really grinding it out.

Christopher: I would say the last year. There wasn’t too much low point, but in 2018, I think it was around 2018, growth is really slow and we’re ready to start to plateau. At that point, we had, I don’t know if it was a combination of shiny object syndrome or we were so scared of competition because there’s actually quite a bit of competition in our space and we have a lot of really well-funded competitors.

We went down this rabbit hole of, we need to find a new business or we need to find another route because at some point, we’re just going to plateau and we’re not going to grow. I think we really took our eye off the prize, so to speak. That was a really tough year just seeing growth plateauing a little bit, trying to get these other projects and spinning our wheels there. I think that was tough.

In 2019 funny enough, we realized, “Hey, we’re in a really good position. We have this app.” I almost felt like we were taking it for granted or we realized that we were taking it for granted, so we said, “We’re not going to start any new side projects. We’re going to buckle down, we’re going to figure out how to get growth back on track.” We really focused back on the business and we promised ourselves that we would never consider launching another project until we hit $1 million ARR. It’s funny how that worked out.

Rob: Yeah, that makes sense, just refocusing. That’s the thing, these founder stories are almost never straight lines. It’s very, very rare. You hear the myth of people starting whatever, Uber, Facebook, Lyft, these big companies and they do a lot of side projects, there was a lot of uncertainty, and I think our stories in our own ecosystem are very similar where you often have multiple projects going at once. You don’t really know which one’s going to succeed often and you’re just trying to figure it out as you go.

I think the last question before we wrap is, you mentioned something to me about a pricing experiment that you ran, that goes against that “charge more” idea. As I said, when we talked about it, well yeah, you can always charge more until you can’t, or until people aren’t willing to pay that. There’s always a ceiling to this stuff. Talk us through what you did with your annual and your monthly pricing, and how that worked out.

Christopher: I’ve obviously been to a few MicroConfs now and one of our recurring themes is always to charge more. I’ve just always been really scared to do that again, especially because we’re serving the lower end of the SMB market. We’re in a really competitive space, but I thought, whatever. There’s enough people telling me to just charge more. We’ll go ahead and run the experiment.

What we did was we kept our annual price the same which is $120 a year for the program and then we bumped up the price of the monthly prescription from $15 to $19 a month. We were thinking more people and to send the annual plan which would obviously help out with the churn. Assuming that our conversion stay relatively the same because we’re getting the $19 a month price point even if the churn is a bit higher, all in all it should work out.

After running that—we ran it for a couple months—we realized pretty quickly that the churn had just spiked up way too high for our comfort, and the conversion rates had actually dropped more than we had anticipated. We ended up reverting back to the pricing.

I’m glad that we ran the experiment because at least now we can put that to rest, but it was just more proof that charge more, or charge less, or whatever isn’t always the best advice. It’s really a case-by-case basis, and that it just depends on a variety of factors really.

Rob: Sure. Charge more is a really great advice if you’ve never heard it before, because most people tend to charge too little when they launch. Most of us think our apps are not worth what they actually are. It’s definitely good advice. But obviously, the further you get in, if you’ve experimented, if you know your customers, there’s a certain point where pricing elasticity may or may not be there, and you’re also in a pretty price-sensitive space. You’re in a prosumer, I’d like to think one notch above consumers, so there’s going to be price sensitivity there.

The lesson I take away from it is: (a) experiment because now you know. You don’t have to think about it every month, every week, “Should I be charging more?” and, (b) you were scared to do it, but you did it anyway, and it sounds like it was a relatively easy experiment to undo which are the best. You just revert back. You just change the pricing back. Now, you have one cohort of people or something who are paying a little less I’d imagine, but that’s a small price to pay to have the knowledge that you probably are towards the top of your range right now.

Christopher: Yeah, for sure. The way that we did it was basically any new customers, they would see that new price point, and then once we reverted back, if there were any customers that were on that $19 a month plan, we just put them back on that $15 month. Now there’s no one on that increased price. It was a relatively safe way to do it and obviously, there’s no backlash as a result.

Rob: Yeah, that makes sense. I said people paying less at the pricing reverse, but whatever. Cool. We’re going to wrap up. If folks want to check out Snappa, it’s at snappa.com just like it sounds. You are @cgimmer on Twitter. Any place else folks should check out?

Christopher: That’s about it. I’m trying to make an effort to do more blogging on my personal site this year chrisgimmer.com. There’s only a few posts on there. Twitter is probably the best place for now.

Rob: Aren’t we all trying to blog a little more? I say that every year. It’s just so hard to find the time to write.

Christopher: Yeah. Essentially, my goal for this year is one post a month which I think is super reasonable and I think I’ll be able to hold myself to that and then we’ll see how that goes.

Rob: Sounds good man. Thanks again for coming on the show.

Christopher: My pleasure. I’m a huge fan of the podcast, so I’m happy to be on here.

Rob: Awesome. Thanks again to Chris for coming on the show. If you have a question, if you’re curious about part of Chris’s story, if you have questions about SEO or content marketing, feel free to either tweet me @robwalling or send them into [email protected] If I get questions, I might invite Chris back on the show to share some of the skills, because he has hard technical skills in this SEO and content space, and he’s done a lot to grow. This business has really wide funnels and has a lot of knowledge there. If you want to hear more about that, I’m happy to have another conversation with Chris.

You can also leave me a voicemail at (888) 801-9690 or just email that question to our email address and attach a file via Dropbox or Google Drive. This podcast’s theme music is an excerpt from We’re Outta Control by MoOt. It’s used under Creative Commons. Subscribe to us by searching for Startups and we would love a 5-star review in whatever pod catcher you use. If you want a full transcript to this episode, wait a couple of days after it goes live then head to startupsfortherestofus.com, full, searchable transcripts of every episode. Thank you for listening. I’ll see you next time.

Show Notes In this episode of Startups For The Rest Of Us, Rob talks with Christopher Gimmer of Snappa, about his journey to making SaaS his full-time income. He details how he stair-stepped his way from small apps and products to 7 figure SaaS. Items mentioned in this episode: MicroConf

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Episode 107 | AuditShark, HitTail and Other Interesting Stuff

Episode 107 | AuditShark, HitTail and Other Interesting Stuff

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Transcript

[00:00] Rob : In this episode of Startups of the Rest of Us, Mike and I are going to be talking about Audit Shark, HitTail and what we’re looking at doing in 2013. This is Startups of the Rest of Us: Episode 107.

[00:10] Music

[00:18] Rob : Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Rob.

[00:27] Mike : And I’m Mike.

[00:28] Rob : And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What is the word this week, Mike?

[00:33] Mike : Well, I’m working on getting the AuditShark out the door to my early access customers next week.

[00:38] Rob : So to recap, it was – was it September 10 th was the original early access date?

[00:43] Mike : Uh huh.

[00:44] Rob : You got an answer from a couple of people and then you ran in to an issue that if I recall took about six weeks to fix. There was – well, it was a bug or missing feature or something.

[00:52] Mike : Right, it was a missing feature that I thought would take a week and then I ended up taking six weeks.

[00:56] Rob : So that was September 10 th . So, then somewhere around late October did you get it back in your hands or is there something that cropped up since then?

[01:02] Mike : I think it was just the matter of having the time to actually dig in to it and figure out what needed to be done and you know, there’s all these other ancillary things that needed to be done because I’ve got a couple of different components that have to pass data back and forth. So, between me implemented things on one side and somebody else implementing things on the other side, it’s just – it took a little bit longer.

[01:21] Rob : So, you and – you said you’re looking now on getting early access back in to the hands of customers, is that right?

[01:26] Mike : Yup. So, I think I’ve got all the bugs worked out in the database synchronization and that everything seems to be working properly now. There’s a lot of other bugs that I need to fix but the product is basically functional and I can – I feel like I can release it now. I mean it’s – I’m obviously not happy with how everything is all situated but at the same time I feel like I could give it to somebody and they would actually get some value out of it.

[01:48] Rob : Right, if you’re not embarrassed by your 1.0, you waited too long?

[01:52] Mike : Right, right.

[01:53] Rob : We’re good. So, next week when we record, you will probably – there’ll be some customers using it again you expect?

[01:59] Mike : I don’t know because this week is Thanksgiving. I don’t know whether or not I’ll be touching base with them this week. It may not be until Tuesday or Wednesday of next week. I anticipate within the next day or two having things able for them to actually use it. I don’t know if I’ll touch base with them just because it’s a holiday week.

[02:17] Rob : Yeah, that’s the tough part about this time of the year. I was just talking to someone about this at lunch and we have a couple of HitTail features that are just wrapping up in terms of ready to go live and launching market and I think I’m going to put a hold on them until mid January. You know, maybe there’s a week or two in early December or some people are kind of looking around, but historically December is just a terrible month for non-consumer apps, all my B2B apps just go in to hibernation and that’s why it’s nice to have a SaaS app. It does have recurring revenue because the growth goes in to hibernation but the income still comes in. The other apps like DotNetInvoice that just kind of take a dive since they’re one-time purchases. So, do you think you’ll be able to get the early access in to other folk’s hands in early December though?

[03:00] Mike : I don’t know. I have a few people who have already make created accounts in the system and I’ll probably talk to them and say, “Hey, you know, just letting you know the stuff is all out here and you can use it now,” and start sending in to their systems and it’ll be able to give them the results and stuff that I would expect. And right now, the big thing on my plate is to just build a policy that will allow them to pull those results back and start looking at them and say, “Oh, I should fix this,” or “I should do that.” There’s just tons and tons of other things that are in place. I hesitate to start going in and approaching new people who aren’t really familiar with it to be able to do any of that stuff because it is December.

[03:37] Rob : Yeah, for sure. So, what is your timeline then? What – what happens from there? Like are you ready to – to launch and start marketing by mid January? Do you think you’ll be there?

[03:50] Mike : I’m thinking mid January and to me everything looks like it’s a go. It’s just like the time of the year is just not good. That’s really what it comes down to. At this point, I’m embarrassed enough by it that I feel comfortable moving forward. It’s just – like I said, it’s just not a good time of the year. So, I feel like if I were to try and move forward right now, it’s probably just not going to work out very well and I would much rather take the time and effort to make things a little bit less embarrassing I’ll say and put things in people’s hands, you know, early January and move forward from there.

[04:20] Rob : Very good. So, I have some – a couple of cool announcements, podcast and MicroConf related. First is our RSS feed now goes back 100 episodes. Other one, hopefully, more exciting, we have super tentative MicroConf 2013 dates and a location. Don’t book any – any plane tickets yet but maybe pencil it in on your calendar. We’re looking at tentatively April 28 th , 29 th and 30 th and in Vegas. And we did actually look at six or seven different cities this year. All signs are pointing towards late April having it in Vegas again. So, pencil it in and we’ll obviously, you know, be in touch more in the – in the coming weeks we’ll be talking about it and as always, go to MicroConf.com, being the first to hear about when tickets go on sale. We did sell out in about two and a half weeks last year. So, assuming the same thing happen you’ll definitely want to be on that e-mail list.

[05:12] Music

[05:16] Mike : So, I’m putting together an e-mail life cycle campaign for my Altiris Training site and I’ve been getting traffic but it’s just not converting at the rate that I’d like. It’s – it’s converting a lot lower. I mean it’s in the typical 1 to 2% range that I think most people would kind of expected to be but I really like to raise that quite a bit more. So, I’m looking to putting together a – I’ll say a pre-life cycle e-mail list so that when people come to the site, they can sign up for the e-mail list and get some more information about not necessarily the product that I offer but educational tips and things that they would be able to do with the software when they start learning the materials that I teach them. So, trying to get them to come back to the site as oppose to people who just come to the site once, they never come back.

[05:59] Rob : You saw my Business of Software talk in 2009, didn’t you?

[06:02] Mike : I probably did, yes.

[06:04] Rob : So, if you haven’t seen the video, search for I guess Rob Walling Business of Software and I honestly don’t remember if it’s 2009 or 2010. The entire talk focuses on using e-mail to get people to come back to your site. I’ve been like such a fist hounding proponent of that approach since then and it was something that I work – it had worked with the Micropreneur Academy. It had worked with DotNetInvoice and frankly with every one of my products eventually gets e-mail integrated in to that, that front end marketing cycle. And about six weeks ago, we launched something very similar. You know, you’re talking about what you’re doing in Altiris Training, we launched something on HitTail and if you go to hittail.com and actually it’s not – I have it off the homepage right now.

[06:41] But if you got to hittail.com/faq as an example, you’ll see the little thing in the lower right. It’s kind of like some – some sites have the chat window on every page. We have the e-mail signup widget. It has definitely worked well. It’s good that you’re – good that you’re working that in because, you know, almost guarantee to bring people back to your site and it’s returning visitors who, you know, are the ones that purchase. The other thing that you may want to think about is to do retargeting and just sign up for a service like AdRoll and you install a tracking pixel and then people when they visit your site if they are floating around the internet, then you can, you know, just play ads to them.

[07:21] Mike : Yeah, I thought about doing that just because I know Google has something very similar to that where it just follows somewhere around. I’ve seen how it works and I’ve seen the statistics on how well it works. It can be disconcerting. I’ve experienced it myself and I’ll say there’s a fine line that you have to make sure you don’t go over because if – if you see those ads on every single site that you go to, then there’s a serious problem.

[07:43] Rob : Yeah, it’s a stalker.

[07:44] Mike : Yes.

[07:45] Rob : A stalker.

[07:45] Mike : It crosses the line in to stalker though. I’m hesitant to start spending the time there because I don’t know if I would have this – the time to spend on making sure that it doesn’t cross that line.

[07:54] Rob : It’s really easy. You just flip a bit. [Laughter] It says how many maximum times to show to someone and you can just choose. And I actually wouldn’t – so I wouldn’t recommend using Google for it for a number of reasons I won’t go in to but there are other services. One call the AdRoll, AdRoll.com that actually uses like seven or eight different ad networks. Google is one of the ad networks they use and so, it has an umbrella overall these networks since you lot more exposure and you have more kind of more control over – over what gets displayed and stuff. So, anyway, just a thought. For doing any type of the advertising, retargeting is – is a necessity. I would not recommend by the way ReTargeter.com I tried and I didn’t want – I did not like them. They did not work out at all. So…

[08:31] Mike : Cool. So, what else have you got going on?

[08:33] Rob : Well, I was doing some review of what HitTail has been doing. You know, the year is coming to a close here and I was just kind of looking at goals for 2013 and trying to figure out where do I want to bring HitTail in 2013, what other things that I want do. You know, I’ve been kind of hinting around that I want to launch a new app and so I looked back at the HitTail growth curve. And over the past five months, it’s been growing 30% a month. It is averaged that. So, you know, someone has been hiring at some level but I hadn’t put it in those numbers because I look at everything in dollar amounts but it’s pretty freaking crazy to think about that. And actually it’s been over the past 13 months, it was 19% per month which frankly that it sounds – I mean it is a lot but it started pretty small, right? It wasn’t – it’s not like it was doing 10 or 20 grand when I acquired it. So, growing it 19% a month is good. I guess you do it for 13 months straight, that’s kind of a [Laughter] – that was surprising to me. It did sound like a lot.

[09:26] Mike : That is a lot. I think I’ve read something recently Paul Graham had advocated that for a lot of their Y combinator startups. They shoot for something like between 5 and 10% of growth rate per week.

[09:39] Rob : Yeah.

[09:39] Mike : So, that’s —

[09:41] Rob : So, 20 to 40% per month, that is crazy.

[09:43] Mike : Uh huh.

[09:44] Rob : That’s crazy in terms of a bootstrapper, you know. If you’re going after venture capital, then yeah, that’s like you said that’s where you need to go. And they measure it per week because they’re only air for twelve weeks.

[09:54] Mike : But if you think about that, that’s about 21% per month. If you start multiplying those numbers out I mean that comes out to a 21 1/2 % per month. So, you’re just not too far behind that —

[10:06] Rob : Yes.

[10:06] Mike : … in terms of HitTail growth.

[10:07] Rob : Right, over, over —

[10:08] Mike : Over 13 months, I mean that’s a crazy amount of growth.

[10:11] Rob : Yeah, so I mean obviously it has to slow down at some point because you just hit like eventually your churn when you have so many paying customers, even at a low single digit churn rate, you’re still losing a huge amount of – of customers and you just have to add them back in faster than you can’t find them fast enough. So, every business plateaus and then you have the lower churn and find another flywheel marketing approach. But I haven’t hit that next. When I hit the first plateau – revenue was around I think it was about 5 grand and I went a couple months there and then shut up and I haven’t seen – haven’t seen the next one. So, we’ll see when that happens. But I did want to say that I think the biggest reason all I know that there has been a couple of the biggest reasons for the growth. One is measuring the right things and actually looking at the data and focusing on these metrics like lifetime value and churn rate and paid conversions and then the other thing has been finding multiple marketing approaches, not a lot of them. It’s been trying probably twenty different marketing approaches but finding three that have really driven the bulk of the growth. And it’s – even if I name the marketing approaches, it’s not going to work the same for every business. You really do need to try a bunch of them and figure out which ones you can scale up.

[11:20] Mike : Yeah and I think that’s a hard part for most people’s figuring out what those three approaches are because you do have to try so many things and it’s not hard to try them. It’s mentally difficult to go through the exercise of failing so many times until you figure out what actually does work.

[11:33] Rob : Right and I think the first step before – the first step that I was able to leapfrog by buying HitTail is that I already knew that it’s solved the problem, right, it had problem solution fits so that I could kick — as soon as I get the redesign done and stabilized it, I knew that it solved someone’s problem. It was just me finding that market and figuring out the best way to market to them. And so finding that market took some trial and error and then once I figure it out, “Oh, these people really understand it, this group,” then trying those 20 marketing approaches in to that niche and figuring out all these three have are the ones that have worked in and some of them are not repeatable like one of them worked really well and gave me a big 30, 40% rise in a month but I can’t do it again. It was a one-time thing but that’s okay, right because it worked and got, you know, got me to the next – kind of the next plateau. It’s always an interesting ride and that’s why I mean one of the reasons, you know, you talked about doing AuditShark and I talked about doing HitTail, they’re bigger ideas but they – they are new challenge, right? It’s learning something new and that’s – that’s been the fun part of it for me.

[12:34] Mike : Cool. So, are you on Twitter very much anymore?

[12:37] Rob : So, I do check in probably once a day when I’m on my phone. I have to admit I haven’t seen you on very much at all and I’m kind of – I’m not seeing a huge point to it right now. Are you on it and I’m just not seeing or are you just not been checking in?

[12:50] Mike : I just haven’t really – little of both, I mean I check in once in a while but I don’t really make a concerted effort to post on Twitter or to actually pay attention to what’s going on and I don’t know whether that’s because I’m just not really interested or because I feel like I don’t necessarily have anything to say. I mean I feel like I do have things to say. It’s just I don’t have time to sit there and do it in a hundred and forty character increments. I mean I feel like if I’m going to provide somebody with value about, you know, insights or thoughts that I have on something, I’d rather do it on a forum that gives me more than a hundred and forty characters than, you know, something like Twitter.

[13:25] Rob : It’s more of a rare breed. I think the old school kind of blogger types you look at Joel Spolsky and you know, maybe Paul Graham and I don’t even know the – a lot of the guys that kind of you and I grew up reading, you know, during our formative startup years, they don’t really use Twitter that much. Joel is on there a little bit, you know, every – a couple of times a week maybe and even Jeff Atwood is not on there nearly as much as I would, you know, think he might be. When you blog for so long and you think your ideas through to that level, its – you’re right, it’s just hard to sound intelligent or to like be groundbreaking in a hundred and forty characters. Now, there are people who did it very well. Actually, I do more retweets and responding than I do sitting down to actually draft original Twitter content. I don’t know. It doesn’t appeal to me. I don’t feel like I can provide that much value. I feel like you and I can provide more value being here on the podcast just discussing stuff and it’s a lot less effort, a lot less strenuous than to sit there and think, “All right, what can I say that’s intelligent and groundbreaking in these hundred and forty characters?”

[14:20] Mike : I think that’s why I’ve shut away a lot more recently than I have in the past from writing bog articles as well just because I share so much on the podcast that it’s like okay, well, I can rehash this particular idea on my blog but kind of what’s the point.

[14:32] Rob : Yup, we’re both on that route. I haven’t blog nearly as much in the last year than, you know, that I had in previous years and one of the reasons because the – podcast is just more fun. It’s like a less time consuming thing and I actually feel like it could – it provides more value to the people who are really in to it like it’s just a closer medium. It’s more intimate.

[14:50] Mike : It’s a different medium because when – when you’re writing a blog post, you can write whatever it is that you’re going to write but within any given sentence, you can say it in like ten different ways. I mean you can put intonations on different words and the exact same words can have different meanings based on what you emphasize. So, I think that doing a podcast, the words that you say are completely different than the words that you would write down even if it was going directly from podcast to transcript. I mean you listen to a podcast versus reading the transcript of that podcast. They’re two entirely different things and you can read the transcript first and then you go back and listen to the podcast say, “Oh, that’s what he really meant.” And I think it’s just a different mental image that people are getting from that podcast versus the transcript.

[15:33] Rob : Have you thought about your goals for 2013 yet?

[15:36] Mike : Not really, I really haven’t.

[15:38] Rob : Do you set – do you tend to set goals?

[15:40] Mike : I usually do but the problem that I find is that I don’t actually get around to set in them until some time in January or February. So, at that point, I’m already short changing myself by like a month or two. So —

[15:51] Rob : Yeah.

[15:52] Mike : … I don’t know. I wonder if this year I should probably take a couple of hours or days or something like that at the very end of this year to say, “Okay, let me sit down and actually figure out what it is that I want to accomplish this coming year.” I mean I have a few things in minds but nothing that I’ve really written down and I committed to myself.

[16:09] Rob : Right, I have not tended to do annual goals. I am a goal-oriented person but I haven’t tended to say – tended to say, “Oh, I’m going to do it, you know, next year.” Just start to thinking what I want to do in 2013 and the interesting part is I didn’t have to think very hard. It kind of just – it all just fell out because its things that I am right on the verge of working on now and I know that they’re going to take longer than I think, you know, all of them. So, I have some things – you know, one thing is like, “Oh, I’m going to get that out here in about 90 days,” but it’s like well, it will be 90 to 120 days. And then I’ll be working it on after that for several months.

[16:41] So, it really is more of a 2013 goal. I did want to throw out these three goals that I have. One is to I want a 2.5X HitTail in 2013 and I have a plan to make that happen. And then I have three info products that I’ve been – that have been sitting on my list, on my back burner percolating for about 18 months and I just have not done another – really haven’t done an info product since probably maybe my book a couple of years ago. So, I mean by the time we do the podcast and do MicroConf and you know, run my apps, I just haven’t – haven’t meant – made a time for it. But I am now taking the step forward and have a date set in the next couple of weeks to sit down and do one of them and I’ll probably launch it after the first of the year. And so the goal would be to launch the other two later in the year and they’ll be on, obviously, start up at later topics.

[17:29] Mike : Info products are interesting because as a developer you look at it and you’re like, “Oh, this isn’t a real product, you know.” It’ll cross [Phonetic] around the real product part of it. And it’s just like it really is because if it’s bringing in revenue, then what difference does it make how you got there and I think that when you’re just starting out, you look at those info products. It’s like, “That’s not a real product. That’s not a software product,” but at the end of the day it doesn’t matter as long as it’s actually bringing in that revenue.

[17:52] Rob : Well and providing value. You can often provide as much or more value giving someone information and you can trying to build an app to help them do something. A lot of the times it’s not that they don’t have the software to do it, it’s that they don’t have the knowledge to do it and sometimes you need both but I actually think there’s a – there’s a lot of value to be having and there’s a lot that’s not being said on certain topics that I feel like I have – I’m assuming unique inside in tiers so. I agree this ties in to the stair step approach that I mentioned last time when we’re interviewing or discussing with Brennan Dunn and how he has a couple – he’s like – what is it? An in-person seminar that he gives and then he has the E-book he has written that have helped him bootstrapped his way to being supported by products. And I guess to wrap that out, the last goal that I have for 2013 is something I’ve mentioned already, it’s to launch a new app and I have a specific revenue goal as well on the first six months after launched. Were you and I really going to build the same app?

[18:44] Mike : I think so. It’s interesting that we have that conversation because I saw in the outline that you’re building something and I’m like, “I wonder if it’s this,” because you were pretty vague and I’m like, “This is what I’m building in the next couple of weeks.” You know, is this is the same thing that you’re building just based on the notes that you said and it’s basically the same thing.

[19:01] Rob : Yeah, it’s similar. It’s probably got 70% overlapped I’d say.

[19:04] Mike : Right.

[19:05] Rob : I’m at the point I’ve well in the customer development. I have eleven commitments to – I’d say they’re purchase commitments. So, basically commitments to sign up for the app and to pay at this price point assuming it does this, assuming it has a positive ROI and its say – it’s a marketing tool and the e-mail marketing space which is something I have – I have a lot of experience and I feel like I, you know, could lend some expertise to and there’s – there are several things that are lacking in today’s e-mail marketing tools. So, yeah, it’s good. I know the numbers have ROI works out. So, I have high hopes for this. I should know – I’m sure there’s people out there thinking we struggle at the entrepreneurial ADD thing, right? Because it’s a lot of people bounce around from one idea to another. I mean I never get one off the ground or they get off one of the ground and get it to a point, I mean get bored off it and jump to the next one and leave the other one to die. And that is not what’s happening here.

[19:56] My whole approach of having a portfolio of product is that I build an app, buy an app. I spent 12 to 18 months on it and then I either automate it, I hire someone to manage or I sell it. I do want of those three things. I have almost never let an app die unless there’s been some specific instances where Google has, you know, done some things and the app will kind of die on its own but it’s nothing that I could have – I couldn’t have saved it by focusing more time on it. It’s just been kind of a consequence of relying on Google for traffic for that particular app. But I do have – I’ve talked about having a product manager for HitTail and we have a plan in place to continue growing HitTail. Like I said my goal is to 2.5X from where it is now over the next year. So, I’m excited.

[20:25] Mike : The thing that I’m looking at building is more specifically for my needs versus I had in it mind to productize it I mean because I’m so focused on AuditShark right now that I know that productizing what I was going to be building was not necessarily in the near term but obviously, you’re much further along in that than I am. So, and I think it’s probably best if I build what I have to do for myself versus trying to productize it because I need it for Audit Shark. I need it for some of the other things that I’m doing. At the end of the day, I don’t necessarily know of what you’re going to be building is what I need.

[21:13] Rob : Exactly. We do have different goals as we describe the thing we’re going to build. Yours is focus on kind of a different end goal. I think they’ll be overlap of functionality but the fact that you need it now and not in three or four months and that you have a developer, you know, you said you’re training or kind of working with the new developer to find out if he can stick around with you long term, it just seems like – like be a natural fit for that.

[21:34] Mike : Uh huh.

[21:35] Rob : Cool though I’ll be mentioning probably putting up a landing page and breaking ground the first lines of code here in the next few weeks.

[21:42] Mike : So, you had mentioned that you have a product manager for HitTail, right?

[21:46] Rob : Yeah.

[21:46] Mike : How did you go about finding a product manager for that? I mean what was your – your thought process behind that? I mean you said that you – you kind of have a plan in place for at least a mental concept of what you’re going to do with a product after 12 to 18 months but isn’t it difficult to kind of hand that off to somebody and just say, “Okay, well, this is going to be something that you’re going to be working on,” and do you have them working at full time or…?

[22:08] Rob : Yeah, so what I did was I had known – I’ve known this guy for over a year, about a year and a half and we’ve – we’ve hang out a lot. I would not — I mean I would have a hard time. I shouldn’t say I would not but I would have a harder time if I was just posting a job description somewhere, you know, and saying, “Looking for a product manager,” because it’s such a unique skills that you need to run these kinds of products because we don’ have a team of developers and designers and people, marketing people. It’s like you need to have all of those skills in one person or be able to work with my contractors, you know, who I’m already – who I’m already using for the skills that I lack. And so, it just so happened that I wasn’t specifically seeking a product manager. I was just going to keep working on HitTail and then once I realize that, you know, this guy that I knew had the ability and was going to – he’s going to go start doing consulting and I just said, “You know, long term, do you want to launch products, you’ll – you can learn more from me by working for me than doing anything else. And if you do this and you’re able to handle the product, then it only makes sense that either we can grow it twice as fast or that I can then branch off and build another product which obviously ultimately means that I can grow revenue for the whole company twice as fast or more for that matter.”

[23:18] And so, it really was a – I’ll say it was a trial run, you know. I basically brought them on half time about 20 hours a week. He’s a contractor. He evaluated me as a client and I evaluated him as a guy who’s running — running the app. Overtime, he’s just proven out that he can – that he can handle a job and so I’ve given him more and more responsibility. Until at this point, I’m doing – I’m actually doing the last several weeks doing very little on HitTail and it’s, you know, it’s continuing its growth and he’s managing making – he’s making now high-level decisions on the thing. I think ultimately long term, we will likely it’s possible we move towards like an employee arrangement.

[23:55] Mike : That’s interesting. I mean one of the things I’ve had some issues with lately is just letting go of certain things. I think part of being a programmer is just being a little bit OCD about certain things and you know, sometimes it’s just hard to let go of things that are you look at and say, “Oh, that’s not actually important in any way, shape or form,” but for some reason you still it is. And I feel like product management in some sense is one of those things where if you get somebody who’s good and they know what they’re doing and they can actually do the job, you can just kind hand it off to them and they’re going to do as good job as you and don’t get me wrong, it’s not that it’s not an important job but it needs to be done right and you have concerns about just handing that off to somebody.

[24:37] Rob : Yeah, definitely requires the right person, right? Because if you hire the wrong person for the job, there’s no chance they’re going to do it as well as you do. You mentioned having those deal over certain things and not being able to letting them go. Do you have any examples of that?

[24:50] Mike : I think one example that comes to mind is probably like the backend database design for AuditShark and how everything fits together. I mean because there are so many different moving parts within AuditShark, it’s very difficult to just for me to just hand that off to somebody and say, “Okay, well, I expect you to start making architectural decisions about how the stuff is going to interact with each other,” because I have a visual studio project or solution file that has I think 10 or 12 different projects in it. And most of them compile down in to a DLL that is then use in other projects and it’s just very difficult for me to conceptually just hand that off to somebody and say “I would like you to start making some of the decisions about how these pieces are going to interact with each other.”

[25:31] And then that also comes in to play with like, for example, the database design where I did all the database design for not only AuditShark but for the AuditShark pro version of the software that I haven’t really talk a lot about. I mean it’s mostly just the policy build or piece of it that I’ve talked about to people but that I can envision being its own product in the future for a different market segment. So, those are the types of things where I look at and say I have visions long term of where this is going to go or where it can go and I want to make sure that I’m not shooting myself in the foot with certain decisions down the road.

[26:06] Rob : Oh, absolutely. It’s been about two months since – since he started, the product manager, and he originally was just doing tier two support because I have a virtual assistant who does tier one. And I say it’s a virtual assistant. It’s guy who’s work – work for me now for a year and he actually does our Academy Support as well and he’s really good. I mean he’s not just – he’s not just that. He’s actually stepped up in to – in to a true support role. And so, the product manager starts just doing very basic tier two support and learning the code and it wasn’t until three or four weeks in where he made a small code change. And then six, seven weeks in, we needed some new database tables and so, I said go design them and run them by me. And that was it. He went in all the leg work. That’s for – it was the Basecamp integration.

[26:49] So, he went and looked at Basecamp, looked at their API and then he put – showed me to create scripts and I looked at them and I actually ran them on production myself. And so that’s the level of control that I – that I maintain. Now, probably with the next one – you know, I better – I’ll continue to review them because it doesn’t take me much time but I don’t feel like I need such hard core control that, you know, I need to keep maintaining the naming of everything or something like that and but maybe you do with AuditShark and if you do, you could still do it in a review process. You know, you don’t actually need to do the design as much as just confirm that it meets your design standards and the standards of your future vision for the product which is what I’m able to do with just a few minutes.

[27:28] Mike : Yeah, I totally understand what you’re saying. I mean there’s one contract where I have had working for me for almost a year now on a piece of AuditShark when I send him something. I said, “Hey, can you make sure this gets done for this piece of it?”And he wrote me back and he’s like, “Well, here’s the code. This is what you asked for but I have a concern about X.” And that literally sat in my inbox for almost a month before I actually had time to go back and look at it and I said, “Well, let me try and figure out what it is that he’s actually saying here that should be done and if there’s a different way to do it,” then he’s like, “Oh, well I’ll come back to you and let you know.”

[28:00] And I look at it and it took me probably 45 minutes to an hour to kind of review what it was that he was saying and what he have done but at the end of the day, he’d made the right decisions like there – there’s nothing different that I would have done but it was a very, very important piece of the product. So and at this point, I mean there were some other things that he came back to me with like there were probably half a dozen things I went through today and looked at them and said like – and after looking at that one thing, I just looked at the other ones and like, “Yup, I’m just going to approve this one.” I’m not even really going to look at it. I’m just going to approve because I’m sure that he did a right thing there.

[28:34] Rob : And that’s a thing, if you hire someone or you bring them on, you can’t trust them to make decisions from day one, right. You have to – no matter how smart they are, no matter how quickly they learn, they’re going to make some mistakes and you have to help them learn why that, you know, that was a mistake and just course correct them and you’ll know within a month after you course correct them a few times, certain contractors no matter what – which job they’re doing whether it’s development, design, support, they will continue to make similar mistakes and those are the ones that you know probably never going to be you’re A players. But it’s once – you correct them once, twice and suddenly after that, you’re not correcting them at all, they slowly build your trust that they’re going to make good decisions over and over and over again.

[29:15] And then it comes down – we talked about this before but they’ll make a 19 decisions exactly like you would and then maybe they’ll make the 20 th decision “wrong” in your opinion. You know, that you would made a different one that probably would have been better. But the fact that they didn’t have to check with you on all 20 of those is totally, totally worth the fact that one decision is made slightly differently. And I would venture to say if you hire really smart people and that’s how I feel like I’ve done here, they actually will make quite a few decisions better than you would. They’ll make some better and some worse and honestly, you know, it’ll – it’ll even out overtime or but you hopefully, above or you would be if you’re trying to run everything.

[29:52] Mike : Well, I think the other part of that is that by them making reasonably good decisions, it freeze you up to not have to make those decisions because I spent probably 45 minutes to an hour trying to figure out, it’s like, “Okay, well one, what are our options here and two, what sort of decisions should be made?” And after reviewing everything, I was like he made the exact same decisions I would have made and it was not – it was not a trivial decision either. I mean it was actually pretty complicated and it’s just he made the right decision. I mean what else can you say at that point?

[30:22] Music

[30:25] Rob : So, I have two kind of book reviews or two books that I’ve read recently I just wanted to mention what it’s called StandOut and it’s from the guy who did StrengthsFinder but it’s a new test. We did an episode about StrengthsFinder where you and I both took this test and it kind of defined your strengths or determines your strengths and then it allows you to kind of focus on those moving forward and that’s the theory. This – what StandOut does is instead of having 36 different strengths, StandOut has basically 9 clusters of strengths and so it’s the same thing. It’s like 9 or 10 bucks to get the Kindle version and then you can take this 20-minute online test and then it spits out to – it spits out all 9 of yours in order but your top 2 is really what’s highlighted.

[31:04] So, it’s fine. It’s definitely something I recommend. With the test I’ve taken, they definitely hit the nail on the head in terms of who I feel like I am and what I feel my strengths are. And so it reinforces things. It’s a reminder to me. I redo the reports and I think, yeah, I should be doing more of this. And that’s actually one of the reasons why I have the goals that I do for 2013 of launching a new app and doing info product and growing HitTail but not just trying to sit there and focus on one thing. It’s that I’m – one of my aspects, the StandOut aspects is I’m a creator and I’m like I need to be creating new things or else I’m not living optimally and I’m not doing my best professionally. And so, it definitely fits in line with what I’m doing.

[31:41] The other one, the other book I had recommended to me a couple of times is called Double Double and it’s from the guy who started 1-800-GOT-JUNK? and College Pro Painters and he’s an entrepreneur that’s grown to businesses very large. And the premise is about doubling your revenue and your profit in three years and that’s why it’s called Double Double. And it actually sounded pretty intriguing but I definitely would not recommend it for our crowd. It’s water down because he was basically trying to write – I hate it when people do this. They try to write these very general entrepreneurial books and say super high level, you know, you should be persistent and you should set a goal and then do some stuff to achieve it, you know, but it’s like there was no really action that I could take on it.

[32:22] You know, aside from, all right, set some goals for next year, it was just – it was pretty water down because he was trying to make it so general. I think the advice I would say skip it and I think the advice to take note of is to be more laser focus if you really want to build kind of a hard core constituency of fans and whether that was his goal here or not, I just – I feel it kind of leaves – leaves a lot of people out on the cold if they actually want to do take action on your advice.

[32:43] Mike : Is that kind of the – the four steps of success and the third one is a bunch of question marks and fourth one is profit?

[32:49] Rob : [Laughter] Exactly. Yeah, it’s that kind of thing. It’s actually a decent book. I listen to it and I listened to the whole thing which means it was – it had my interest but I just found it lacking in terms of truly, you know, getting value out of it. As in I’m not going to recommend it to other people because I don’t think they’ll – it’ll actually improve your business if you listen to it.

[33:05] Mike : Got it.

[33:05] Music

[33:08] Mike : If you have question for us, you can call us to our voicemail number at 1-888-801-9690 or you can e-mail it to us at [email protected] Our theme music is an excerpt from ‘“We’re Outta Control” by MoOt, used under Creative Commons. You can subscribe to this podcast in iTunes by searching for startups or via RSS at startupsfortherestofus.com where you’ll find a full transcript of each episode. Thanks for listening. We’ll see you next time.

Rob and Mike talk about AuditShark, HitTail and their plans for 2013.

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Episode 106 | Moving from Consulting to Products (with Brennan Dunn)

Episode 106 | Moving from Consulting to Products (with Brennan Dunn)

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Show Notes

Transcript

[00:00] Mike : This is Startups for the Rest of Us: Episode 106.

[00:03] Music

[00:11] Mike : Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.

[00:19] Rob : And I’m Rob.

[00:20] Mike : And we’re here to share our experiences to help you avoid the same mistakes we’ve made. So, what’s the word this week, Rob?

[00:24] Rob : Well, we just launched the HitTail Basecamp integration that I talked about last week. So it’s all live. If you go to hittail.com/basecamp, you get a brief walk through, some screenshots of how that works. And I’m pretty excited. Like I said, it’s really – I’ve mentioned it was the first integration we’ve done but it’s actually the second I realized because the first one was with kind of the – the one-click article service but that one was written by me. On this one my product manager really banged this one out and it’s all architected well and I think I told you he wrote OAuth and OAuth Library in Classic ASP from scratch. I can’t imagine. I wouldn’t definitely not have been that just — I wouldn’t have that coding forwarded to to sit down and do that. But anyways, we’re excited, you know, we’re both doing – going to start a little of bit promotion. We’re kind of doing a soft launch right now. We’d just want to get more people using it just to make sure it’s all good and also have a little bit of paid acquisition with some HitTail and Basecamp stuff going on. So, it’s pretty good. How about you?

[01:17] Mike : Well, I have this new developer starting in a couple of weeks. I just kind of worked out some arrangements with him. We’re going to try – we’re going to try doing some stuff for about three weeks or so and see how it works out and then kind of reevaluate things from there. So, hopefully, that works out.

[01:31] Rob : AuditShark?

[01:31] Mike : He will be working on other stuff first and then if that – if everything works out, then probably transition him over to working on AuditShark.

[01:38] Rob : Got it.

[01:39] Mike : As I said, it’s a trial period and we’ll just see how it goes but I really need somebody who I can put on AuditShark to work on some of the core guts of it. I’ve been working on a lot of this database synchronization code for AuditShark and I’m about at the point where I can actually start testing it but I have all these to-do comments and they’re like different events and things that should be logged. So, you know, some of them have security implications. Some of them just have synchronization implications and I haven’t actually implemented any of the login code behind it and if I had to go look, there’s probably close to a hundred places where I’ve literally documented to do log this or, you know, to do make sure that you double check this data or et cetera. So, to be honest about it, it’s not necessarily worth your time to be doing that. I mean there’s other places that your time is better spent.

[02:27] Rob : Right and that’s the thing is, you know, my 12-year career writing software, I’ve always gold plated everything especially as a consultant and working for – I was a salary employee for credit card company for years like you wrote things to the nines and so when I say I’m a hack what I mean is a hack compared to that where I would spend weeks writing this, the single routine and testing every possible option and doing all kinds of stuff and I just don’t do that anymore. Get kind of the minimum viable function out and then revisit it later. And the thing is that I can – I can just move so quickly, right? If there is actually a bug or any types of problem, I can go in and edit the stuff and it’s not a – a 2-day process to get a change in to production like it used to be. So, it’s more of taking advantage of your agility as a very small startup or a very small software company. You can really be much more, more fast moving than – than larger competitors. So, you have different pros and cons than a larger company maybe doing or building the same software.

[03:21] Mike : Right, I mean there’s just different priorities when you’re working on stuff. That’s really all it comes down to.

[03:25] Rob : Well, hey, if you haven’t checked out episode 36 of the Stock Exchange Podcast, it’s definitely worth a listen. It retells in great detail their Hurricane Sandy story of logging those buckets of gasoline up the stairs after they lost power. We’ve briefly mentioned it last week but I heard the episode. It’s just to hear that kind of that, they had like eight or nine people on this podcast since it’s a round table and they’re just telling their story of, “You know, it’s midnight on this day and then the power goes out and then you just…” One guy had a knife and another guy had a plastic vodka bottle that they cut the bottom out of and used as a funnel for the gas. I mean it was just so cool to hear the innovation and just the get it doneness of the entrepreneurs, right? They didn’t sit around complaining. They just figured out how to make it work and how to log this gas up the thing to keep – it was Fog Creek Software and Square Space were the kind of the two people on this podcast. So, pretty – pretty cool story.

[04:18] Mike : Yeah, that is cool. I haven’t – I haven’t had a chance to listen to it yet. I’ve got some time up in New York and I’m going to be spending down there again. So, I’ve got a 3-hour drive back and forth and I definitely be listening to that though.

[04:28] Rob : Nice, what else is going on?

[04:29] Mike : Oh, you know what? I think that you had said that you tried the Facebook ads.

[04:34] Rob : I did, indeed.

[04:34] Mike : I’m going to be doing that soon. My wife is kind of venturing out to actually start her own business at this point. She’s going to be – she’s a certified Zumba instructor. She’s had enough people approached her to teach at different places that she has decided to kind of take the next step and start building up her own fitness company. She was asking me about how to not necessarily how to drive people to her, you know, to her classes and stuff but she’s kind of talking about some of the issues that she’s got with that, “Oh, well, I’ve got to make sure that I have this number of people there and if I don’t, then I either break even or lose money.” And I just kind of offered to help her drive some people there and my first thought was, well this seems perfect for using Facebook ads.

[05:15] Rob : Absolutely, I really agree. I think that’s a good choice because it’s definitely a consumer-type thing. Now, for people who don’t know what Zumba is right —

[05:22] Mike : Yeah, it’s kind of a dance fitness. There’s kind of a Zumba fitness organization that oversees it and there’s all these rules and regulations about how you can use their logo and brand and everything else. So, she can’t have a brand name that says Zumba and or anything like that. But it’s – it’s very well tied to overall health and fitness and incorporates a lot of dance moves. So, she’ll teach at Curves which – Curves is a fitness facility that is exclusively for women and she has to teach it like the YWCA and there’s a couple of independent fitness studios around that she goes in to. So, she’s been subbing for different classes and somebody had said, “Oh well, I can’t do this class anymore. Can you do it or do you want to take it over?” And she said, “Well, I’ll take it over if you’re not going to do it anymore but I kind of want control over everything at that point, you know, I’m no longer going to be just doing it as a substitute.” So, she’s going to essentially expand from there.

[06:14] Rob : That’s cool. And Facebook is neat for geographically targeting like that. A mutual friend of ours was actually trying to relocate and his wife worked for a government agency that would only transfer her job if she could find someone at the new location to swap with her and so he went on to Facebook and targeted that location and that government agency because you can say people who work for —

[06:34] Mike : Oh —

[06:34] Rob : … and type it in. And so, he did that and was showing ads to like say, “Do you want to move to X,” you know, where they currently live and he got some people to come through. I don’t know that he ever actually – if that’s where they actually found the person or not but he definitely got inquiries and he just had a like a Google doc form or some, you know, e-mail link or something and people can drop a line. So, it’s pretty cool with local stuff. It’s super easy to target across a lot more demographics than any other system I’ve ever seen.

[07:02] Mike : Right. She was – she already has like a Facebook fan page set up that, you know, she’s going on there and letting people know because one of the issues she has is if there aren’t enough people attending that sometimes they have to cancel depending on the location, so, there are, you know, there’s usually post that go out on Facebook that says, “Hey, if you – please RSVP or let us know if you’re going to be able to make it tonight,” and then they’ll cancel class within like an hour so that people aren’t driving there and then find out that it’s canceled. And that was what she was thinking that she would be using Facebook for and I said, “Well, you have access to or you can get access through the Facebook ad system to all the people in this geographic area and you can advertise explicitly to those people.” And I don’t think that was something she’d ever really considered before and I don’t think that any of other instructors she’s worked with have done anything like that either. It would be interesting to see how that turns out.

[07:49] Rob : I agree. Keep us posted. I want to give a shout out thanks to Andrea Conti [Phonetic]. He put together a detailed list of the podcasts that we mentioned in Episode 104 because I just had it as kind of a bulleted list and he put up all the links and he put it in to nice HTML table and so, that’s now live in Episode 104 in the show notes. So, I’d just wanted to thank him for that.

[08:11] Music

[08:14] Rob : So, Mike and I are very pleased to have with us today, Brennan Dunn. He’s a long time Micropreneur Academy member. He also runs his own consulting firm, founder of Planscope and that’s at planscope.io which is project management software for freelancers. It’s a software service application. You know, he’s also written an E-book for freelancers. He has a podcast. He does workshops, all kinds of stuff but before we get in to that, I wanted Brennan to say hi to everybody.

[08:38] Brennan : Hey, everyone.

[08:39] Rob : So, talk to us a little bit about just maybe a 1 or 2-minute intro kind of where you come from, what you’ve been up to the last few years and how you found yourself launching Planscope, you know, having the E-book and workshop and everything.

[08:49] Brennan : Sure, six years ago, I went out of my own became a freelancer. And a little over two years ago, I decided to grow a company. Well, really, I got it so much work than I really had to scale. I kind of went out on a whim and just decided to open up a brick and mortar consultancy. And we grew to ten people and it was a rush but really, I was bit by the product bug and I really wanted to escape consulting once and for all and just kind of build products that I owned and produced recurring revenue for me because consulting can be extremely draining. Yeah, so I decided to – really what happened first was I took Amy Hoy’s 30×500 class and I also at the same time signed up for the Micropreneur Academy. So, I did my research. I discovered that there is a need for something like Planscope and I built it and launched it at LessConf last year, I believe last February.

[09:43] And it’s been growing pretty steadily but the problem with SaaS revenue is even at a 10% growth rate, when you started from zero, it’s still going to take a while to kind of become really that profitable. So, basically I promoted somebody at the consultancy to run it in my absence and I’ve been heads down on products ever since. And last summer, I released a book which in turn led me to managing a newsletter for freelancers and just recently I launched my first online workshop. So, all of it really appeals to the same audience, freelancers and they all kind of feed off to each other. So, that’s kind of my last six years in the nutshell.

[10:22] Rob : Very nice. So, your consultancy is still running kind of in the background, is that right?

[10:27] Brennan : It is. Most of the people that used to work for me fulltime had now been converted back to independent contractors and the guy, Zack who used to lead business development, I really promoted him the COO and really, I get a once a week phone call with updates and how we’re doing and everything else.

[10:44] Rob : Very cool. So, you are very much working on your business not in your business, I would say.

[10:49] Brennan : Correct.

[10:49] Rob : We’re going to be talking about moving from consulting to products and this is something that all three of us on this podcast here, you know, might have done or in the process of doing. And I think it’s a very common path and even if folks are simply moving from salaried employment to products, it can often be, you know, a similar type of set up or you’re just trying to buy out enough time, enough of your time to actually get an app off of the ground. And as you said, if you have a SaaS app, you do tend to need a pretty long runway in order to make it there. So, I guess the first question and you partially addressed this already but you mentioned that, you know, consulting obviously brings in good revenue. So, what is your motivation? Why do you – why do you thirst to own products?

[11:32] Brennan : I think because I know a lot of product owners and I know that they are significantly happier than I ever was working 12 hours a day managing a consultancy, going through the churn of client after client and really having no ownership at the end of the day of anything I produced. So, products were always kind of, you know, the light at the end of the tunnel and people were paying me to build products for them. So, I had everything I needed to build my own. The problem of being that, you know, consulting like an illicit drug gives you an immediate benefit whereas products tend to take a little longer.

[12:03] Rob : Right, so consulting is like an illicit drug and products are like exercise perhaps?

[12:08] Brennan : [Laughter] Yeah, I’ve always actually compared consulting to crack cocaine.

[12:13] Rob : How about you, Mike? What are your thoughts?

[12:15] Mike : It’s really hard to breakaway from consulting once you’re there though. I mean, I really admire what you’ve done in terms of being able to be in a position to I’ll say essentially walked away from that consulting business without having to pay attention to it because you had somebody there who you could rely on and essentially help maintain the business.

[12:34] Rob : Yeah, for sure. I think I’ve, you know, my thoughts on this as well as are similar to Brennan’s and that I was always doing it for the lifestyle element but more for the freedom of it initially and I thought that once I have the freedom that, man, I would just totally be happy and it turns out that the freedom was part of that but I also needed to continue to have challenges as well and you know, I’m certainly in the same boat as you, as you guys. So, the next question I have for you guys to throw on the table is after you realized, you know, let’s say you’re a consultant or even a salaried employee, what’s the first step you recommend once someone has made that decision that they want to go all in and they want to move to building products and they want – essentially, I think, obviously, the first step is replacing their income but, you know, even before that like what do you think now that you guys are both, you know, in the midst of it, what would you recommend someone do?

[13:19] Brennan : So, I’ve seen a lot of consultants who try to enter to the product space and the ones that fail, end up treating their product really like a side project. What I realized earlier on was that if I wanted any of my products to actually succeed, I would really need to treat it like first-class client project, not I”ll deal when I have time or I really had to make sure that I dedicated two days a week to doing nothing but working on my product while spending the other three days really fulltime heads down on, you know, paying my own personal bills. Now, I’ve kind of had it a little easier because in running the consultancy, my employees were paying my bills. So, made it a little easier to write Planscope but had I been a freelancer, it would have taken longer but the same outcome, hopefully, would have occurred.

[14:04] Rob : Very nice, yeah, you definitely have the luxury of having that consulting and it isn’t like something that was hand to. You had built the company but it certainly was a benefit to you when making that transition. For my perspective when I was transitioning from consulting and trying to replace that income with products, I was supporting the family. I had one child and a mortgage and the wife and she was an intern at the time. And so, I was consulting during the day and I was actually doing a lot of side work in the evenings and weekends to try to be able to work on my products. And so I hear what you’re saying about having it work on the side is actually a big challenge and that tends to be a recipe for failure. Somehow I has able to make it work but it do take me several years obviously and a lot of failures to get there.

[14:49] Mike : Well, I think that the way Brennan put it was a little bit differently than I would have thought of it where he said that he really has seen a lot of people failed because they don’t treat their side projects as essentially a first-class citizen and you know, basically treated them as if it was consulting work that absolutely had to be done. And what I was going to say before he had said that was essentially talking about a mindset change because when you’re doing consultant work, you get this immediate benefit from whatever it is that you’re working on and you get paid by the hour on a weekly or monthly basis and there’s a tangible reward that you know is going to be coming with the consulting work. When you’re working on a product, you don’t necessarily have that and it could be months or even years down the road before you start to make enough money that all of the time that you put in previously starts to pay off.

[15:38] So, it’s – if you’ve been consulting for a long time, it’s a serious challenge to get over that mental block that he just says, “You know, I’m going to put some time in to this. I’m going to put in 10, 20, 50 hours and I’m not going to see any return or whatsoever for a very, very long period of time and I think that’s just a mental block.” But I think the way Brennan put it was extremely good and that you have to treat it as if it was a first-class citizen as if you are doing work for someone else and that it needs to get done.

[16:05] Rob : Yeah, for sure. I think that was something within the first six months of starting to get some product revenue, I actually toned down my consulting hours right away and I knew that being able to do that with lend a lot of freedom. It will basically lend some acceleration to getting that, that product revenue going. Even when I was salary, like a couple of years earlier when I started having a little bit of revenue, I actually went down to part-time at one point, my salary job. So, we’ve talked about that on the show before but I definitely think that that’s something that people should – should consider. It’s not an all or nothing game of working 40, 50 hours a week for an employer or clients and then only being able to work on the side on your app. There is an in between and it sounds like, you know, we all have different ways of achieving that.

[16:47] So, I want to switch the discussion over to this thing that I’m calling the stair step approach to replacing – essentially replacing your income and I’ve mentioned that a couple of times because that’s kind of the first goal. I feel like if you’re a bootstrapper, you need to replace this income of, you know, your salary job or consulting. And a lot of people hunker down and try to build this big SaaS app and they want to make the big splash and you know, start generating that recurring revenue right away. But what I’ve seen and the approach that I took and what I have actually seen a lot of people having success with is not relying on a single product and having some easy wins early on. So, either writing an E-book, having a WordPress plug-in, running a workshop like you’re doing, Brennan, to fund some of your time so you’re able to work harder and focus more on your longer term win like a SaaS app.

[17:34] And so I had – I have crazy websites people have heard about like justbeachtowels.com where I, you know, I had beach towels that were being drop ship to people and I had a CMS theming service early on and I had some other information products that I don’t even own anymore by there were my stair step products just to get that income replacements so that I had enough time to then really focus on this long-term goal of building the products with more longevity. You, Brennan, are already attacking that. Can you tell us a little bit about how that’s worked and whether it was intentional or whether you’ve just kind of, you know, stumbled in to having these multiple smaller products?

[18:08] Brennan : Yes, so it’s actually a pretty funny story. One of the misconceptions I think is that consultancies have a very high profit margin. It really tends to not to. So, now that I’ve kind of given the reign to somebody else, the income from the consultancy isn’t nearly what it used to be and what it used to be wasn’t that significant either. The thing is Planscope right now we’re kind of slowly growing it about 10% a month but that translates to maybe $400 a month in growth which isn’t going to pay my mortgage and my kids’ schools and everything else anytime soon.

[18:35] So, I had two paths. I could go full steam consulting and really throw away a lot of hours because consulting, you spend an hour on a client project and that hour doesn’t benefit your product or your audience at all. So, that was path one and path two which really came really accidentally I think. I had a bet with Amy Hoy where I really wanted to go to a conference in Ireland and we had some medical issues, you know, in the family and I didn’t have anything budgeted to go and I know Planscope wasn’t going to be able to give me the money I needed to do that. So, she convinced me to write a book. The book actually came pretty easily because I had developed really good relationships with my Planscope customers and determined that a lot of them were kind of unsure about to price their services.

[19:19] So, I wrote a book. I collected pre-sales and I actually sold $6,000 in product before the book was done and since then, it sold another 25,000. Now, it’s brought in 30 grand which I’m pretty happy about considering that’s nine months or eights months of Planscope at its current state’s income. And then that actually led me to realize that there was a smaller need in the subset of people who wanted to learn me from me about building a consultancy. So, I up the ante and actually charge a thousand a seat. I sold 25 seats. That added another 25,000 to my runway of capital. So, the benefit overall I think of the second path is that all of this feeds in to each other.

[20:02] So, I’ve gotten Planscope customers who found my book because the book is much – it’s hard to convince somebody to drop their current project management software and use yours but it’s a lot easier to an impulse buy to get somebody to find your book and if your book is about – like mine is doubling your freelancing rate that’s a quick and easy buy. They read the book. They either like or they don’t like my philosophy on things, then or are much more willing to check out my other products because they like me. They like the mentality I have towards consulting. So, they all kind of worked out really well and it still is. I mean the book is still selling. The workshop is still selling and Planscope is still selling. So, the diversification for me at least has yielded a lot of returns.

[20:42] Rob : Yeah, that’s really cool to hear. I think we’ve seen similar things with, you know, the podcast tying in to the Academy and tying in to MicroConf and then, you know, I wrote the book, my book on a similar subject, then I certainly see the same thing of there are just being a lot of crossover with people finding one and basically liking it enough that it kind of gets them in to your world. And if they respect the work that you do, it’s pretty easy for them to then say, “Oh, well, I paid 19 bucks for a book. Next, I’m able to actually invest a little more and maybe I even, you know, spend a thousand bucks and go – go to the conference and that happens in the next spring.”

[21:12] Music

[21:15] Rob : So, our next topic is going to be talking about the pros and cons of moving to software products from consulting versus moving from a salary gig. And this is actually one thing that Mike and I get this question a lot from a lot of different people. It’s a challenge. If you’re working at a salary gig and you’re really unhappy, the choice of moving directly in to products or moving first to consulting and trying to build that business enough to support you and then moving the products, it’s a big question and it doesn’t necessarily have a right or wrong answer but I want to throw that out there and kind of have — maybe Brennan, you can tackle it first and then Mike and I will give our thoughts as well.

[21:49] Brennan : Sounds good. So, I haven’t been a salaried employed for six years now. So, I really wouldn’t know what it’s like to go from salary to products but what I do think is it’s probably easier to go from consulting to products specifically because as a consultant, you really are a small business owner. And secondly, one of the really interesting things that came out of the workshop that I discovered was a lot of the students wanted to end up building products one day and a lot of them currently productize their consulted services. So, they might have different packages or these retainer agreements and they are already getting experience in pricing and how to market their services which I think is giving them a huge advantage when it comes to building what we might call traditional products, info products or software.

[22:34] So, that’s my thought on it. I think also one of the benefits that I think of being independent is you can kind of – it’s almost like a scale. As your product revenue increases, you can then taper down your consulting time but likewise when you’re just starting out, you’re probably going to doing more consulting because you don’t really have any product income to begin with and usually as an employee, you can’t really — you’re stuck nights and weekends usually to work on your side projects.

[22:58] Rob : Right, it’s a lot harder to taper, taper down your hours. What are your thoughts, Mike?

[23:02] Mike : I think if somebody will come to me and ask my advice on whether they should jump from a salary gig in to consulting and then use that to leverage it in to products or just go straight in to the products, I probably advice them to go directly in the products. And I think the reason for that is more along the lines of when you’re doing consulting especially if you don’t have a subcontractor arrangement where work is essentially being handed to you at all times, then your focus tends to be divided. And by divided, I mean you’re essentially trying to make sure that you have enough consulting work in order to make ends meet and if you don’t, you have to work twice as hard at it. And that is very detrimental to being able to put – set aside time for working on your side project versus if you have a salaried engagement, you don’t – there’s all these other stuff that you don’t really have to think about. You can just say, “Oh, well, you know what? I’ve got a couple of hours free. I can just work on my own product,” versus if you are running your own consulting company and you’re doing independent consulting, a lot of times you have to spend that extra time thinking about, “Well, where is my next paycheck going to come from? Where is my next project going to come from?”

[24:10] And those things tend to get in the way. Now, there’s definitely a benefit to running your own consulting company and getting the experience of running your own business. I could certainly see the benefits of trying to work through pricing and things like that and getting an external view of that because most of the time developers who are working in the company don’t see like the sales and marketing sides and things like that. But I think that having that paycheck, that weekly paycheck that you don’t really have to worry about where it comes from and being able to fall back on that, I think that’s really, really beneficial.

[24:41] Rob : I certainly see both – both sides of the coin. I think when – when I get this question, I say that if you’re already consulting, it’s a no brainer to keep doing that purely because of the freedom that you have and the timing flexibility and the ability to kind of to filter down your hours or funnel down your hours as Brennan said. But if – I think if you’ve been a salaried employee for years and you’ve never been a consultant, there’s a lot to learn and that first three to six months that I tend to recommend people don’t try to jump in to it because it’s going to take them several months just to figure all their stuff out. New experiences of taxes, new experience of finding projects, managing projects, billing clients, making sure they get paid, you know, there’s all that stuff. And once you’ve been doing it for six months to a year, all that becomes a natural but it is a learning curve upfront.

[25:24] And I also think that if your added job that doesn’t have you working a ton of hours, that it’s actually more beneficial like if you’re working 30, 40 hours a week at a salaried gig and they’re not pushing you to 70 or 80 and you’ve been there for several years and you already have the clout and you kind of the trust of people, it actually gives you a lot of time to kind of go and decompress and work on stuff on the side. You know, there is kind of dependence on how your day gig actually is and how they actually treat you and if you do have the autonomy outside of it and you do have the mental space outside of it to devote to your product because certainly if you are working 70-hour a weeks and have you doing on the weekends, then my answer would be to put – potentially I have to find a different salary job or to move in the consulting from there.

[26:06] Brennan : The last time I had a salary job, I was working 80 hours a week and there’s just no way I had any mental energy left to do anything else. So, I think if I had a very cushy safe and secure job, then you’re right. I think not needing to jilt with business development or anything is useful in a lot of ways. So, I think Mike actually has a really good point.

[26:24] Rob : So, obviously, you’ve had several successes both with your – your SaaS app that you’re building up. You’ve had a successful consultancy you’ve built, your E-book, your workshop, are there any major missteps that you feel like you’ve made along the way that other people would be likely to make?

[26:39] Brennan : I know one thing that I made a huge mistake of and that was letting my initial Planscope mailing list got cold. When I initially tried to cross sell the new book to that list because I haven’t literally spoken to them in months, the reception was not nearly what it should have been. You know, conversely I did keep my list warm for the book. If you buy the book, you get on my newsletter and I send three advices once a week which people seem to really like. Within hours when I announced the workshop and kind of ramped up anticipation about the workshop, I literally almost sold out the workshop within a few hours because the list was warm. That’s one huge mistake that I made with Planscope because I didn’t really understand the value of relationships outside of a user entry and a database.

[27:23] Rob : Yeah, the power of that list is not to be trifled with. Mike, do you have any missteps?

[27:30] Mike : Yeah, I mean the one that I kind of harp on that I ran in to was getting in to a consultant arrangement where you getting paid as contingent upon somebody else getting paid. That was more of a contract issue than anything else. Sign something and not really thinking about it and you know, they’re like, “We’ll pay you within seven days when we get paid by our customer.” And that was just sounded great. Their customer doesn’t pay them, then I’ve got no recourse to go to them because they didn’t get paid. And you know, I sat around for it was probably close to six months before I got 30 some thousand dollars in– invoice is straightened out.

[28:02] Rob : Okay, well cool. Let’s talk about myths and all that – there’s a lot of startup advice out there and as soon as you start actually working on a product, working on a startup and launching something, having people use it. Instantly, some of that startup advice becomes essentially a myth in your mind because it’s just not true, right? It maybe had been true with that person who said it, it may have been true for that person, but there are some common things like eating your on dog food, you must be part of your target audience, you know, build something people want and all these things that may or may not turn out to be true if you launch and have a different experience. Anything come to mind that once weren’t true but now is nothing more than – or maybe a startup myth?

[28:40] Brennan : So, I pointed out three different things that I used to believe and no longer believe. The first is that I used to believe that you realistically couldn’t consult or do something else and bootstrap a product. There’s a huge emphasis on you need to take outside money so you can stay focus 100% on your product and that I just think that’s simply not true. I think you can — you can multitask. You can work on both. So, I mean again it’s a slow growth, tortoise and hare type of raise but in the long run, I think it’s better, at least for me than the alternative. The second thing that I think I’ve come to realize is you really don’t need a business co-founder. I’m a developer. I’m also a designer but when it comes to things like Planscope, I run support. I do all the marketing. I did blogging. I pretty much handle everything. No one else works on it with me and it might seem overwhelming but I’m very partial to low risk easy win B2B products that I’m not inventing new markets. I don’t need to have some crazy viral win to grow their product. What I found is that when you take that route, when you focus on solving things that businesses have, I think it is manageable by one person.

[29:48] So, my third myth finally and this is something that took me a while to realize is the myth that marketing is boring. I’ve actually come to prefer doing split testing over writing code. I just think it’s a lot more interesting. I mean it’s almost like people hacking. I mean you’re getting to see like how different variations are affecting things or – I recently redid my on boarding completely and I was able to see tangible financial results pretty immediately afterwards. That’s the stuff that really is interesting to me and I used to think that the marketing side of thing that’s left for a marketing department, you know. All I care about is code quality and craftsmanship and everything else which are important but I’m really enjoying the traction affecting things of the job.

[30:30] Rob : For sure. What I’m seeing with entrepreneurs who are — developers who are transitioning to entrepreneurs and I did the same thing is you start by disliking the marketing just because we consider the four-letter word in the development world because if you’ve ever worked with marketers, they’re always a pain in the ass because they’re always making you do stuff as a developer that you don’t want to do, you don’t understand what they want you to do. And so, first you start kind of your standoffish to it and then as you start learning it and you start to enjoy and see the – like you said, its people hacking, it’s engineering of business. There’s like all these different ways to look at it but once you get in to it, it becomes super addictive and I found that that entrepreneurs who – the bootstrappers who are actually making it happen, they eventually making the switch that you’ve said where you actually enjoy the marketing perhaps more than writing code. Writing code is still fun. Writing code is your first love but this new thing, shiny and new and it gives you the financial immediate feedback that you don’t get to see when you’re sitting or hacking away and creating a new business object or new database table. So, I could – I can totally see that. How about you, Mike?

[31:30] Mike : Well, I think Brennan talked about two of the three. I would have ordered them slightly differently. The first one was that you need the co-founder and I don’t think that’s true at all.

[31:37] Rob : Right, you’ve long been in time – you’ve long been —

[31:38] Mike : [Laughter] Yeah, I’ve long been an anti co-founder and it’s not —

[31:40] Rob : Yeah.

[31:41] Mike : And it’s not really so much anti co-founder is that not having the right co-founder is probably worse than having no co-founder and that’s really what it is. I just think that people really need to understand that you if you get involved with the wrong co-founder is infinitely worse than doing everything yourself. The second one is that you need funding in order to do anything interesting. I think that there’s a lot of people out there who are doing some very, very interesting things that they just don’t have funding for what they’re doing. They’re all bootstrapped or they got things to a certain point on their own and then they decided that they wanted to go after funding and I don’t think there’s anything inherently wrong with funding but I think that there is this frequency of notion out there that you need funding in order to be successful and I just don’t think that that’s true.

[32:20] The third one is that if you read a lot of the – the successful people out there, it seems easy and you ready everything they say that they, you know, they’ll talk about some marketing technique or something like that and you kind of intuitively understand it. It’s like, “Oh, well, yeah, that makes sense. I would have done that.” But you wouldn’t necessarily have done that and what you come to realize is that those things aren’t necessarily hard but they’re time-consuming to learn and the reason that they’re time-consuming to learn is because you make a series of missteps before you kind of stumble on the right idea and then in retrospect everything should have been obvious to you but it wasn’t.

[32:57] So it’s just that things that should take a lot less time especially when you’re getting in to the marketing side of things, they’re going to take substantially more time than you think they will because you’re going to have to go through those series of missteps before you really understand what’s going on and it’s only in looking back out of it that you understand.

[33:15] Rob : Right, I think, I, too was a victim of reading the blogs back from about 2000 to maybe 2005 and it was – it was folks like Paul Graham, Eric Sink, Joel Spolsky and they talked about their startup days and they just sounded so awesome. It sounded just like this romantic vision of this peaceful villa where you’re just typing way some code and launching some products and I was totally a victim. So and I don’t think – certainly don’t think that was intentional on their part but it’s just you’re not going to write a blog post about the stuff that’s really boring and as it turns out, a lot of the stuff that we do [Laughter] is pretty darn boring. Don’t know if I would call a myth but definitely a misunderstanding of mine early on.

[33:51] Some folks say that you have to be a user of your app like you have to be the number one user that you have to build something that you will use. And well, I do think that is super helpful, I don’t think that’s a necessity and I absolutely think you can build something in other niches for other people, you know, still the low hanging B2B bootstrap ideas I’m a big fan of. But I still think you can have a lot of success with that even if you’re not necessarily in the niche that you’re building for.

[34:15] Brennan : I think it can be harmful to you to build something that you’re a little too passionate about. One of the things that I’ve tried to get pretty good at is putting my ear to the ground and listening to what people are saying and what problems they have day to day. And I think that is significantly better than the alternative which is you’re in the shower in the morning and a great idea comes to you and you go and build it. I think doing that kind of I won’t say market research but just listening to what people are venting it out, that’s where Planscope came from. I was basically crawling through internet forums for freelancers and I started from there.

[34:50] Rob : Very cool. So, the next question I have is do you have one or two traits that you think are the most important for a successful founder now that you’re kind of knee deep in it?

[34:59] Mike : I think one of the single most important traits of a successful founder is perseverance and understanding that you are going to make mistakes and that’s perfectly okay, you know. Nobody escapes from the business world completely unscathed. That just doesn’t happen. There are people who get really lucky but they still make mistakes along the way and it’s learning from those mistakes and adjusting and listening to what your customers are telling you that really makes a difference at the end of the day. You’re not going to hit homerun on the first day. That’s generally doesn’t happen. You can do a lot of things right but you’re still going to make a few minor mistakes along the way and overtime, the number of mistakes that you make is going to go down in certain areas and then as you start to thread new ground, you’re going to learn new things. You’re going to make mistakes in those areas and then you’ll essentially adjust in those other areas as well. So, I think that perseverance and in the phase of uncertainty is really the single key trait that somebody has to have.

[35:56] Rob : I think the willingness to fail and to actually go out with the intention of failing at a few things is important trait that I learned early on. I was just thinking about six months ago when – I don’t know, it’s about ten months ago, now when I relaunched HitTail I had this marketing plan and I put that in to a task list for myself and I was going to try about there are like 18 different marketing approaches, all different kinds of tactics. And I look at it and said, “You know, if 18 of this fail, and only 2 succeed, I am going to have a growing startup.” I’m actually going to have an app that works and even if 19 of them fail but 1 of them is like a huge success, you can get 10, 20, 30% growth a month in an early stage bootstrap startup with just a single – single successful marketing tactic. And it was actually in my head early on that most of them would fail but I need to try all of them.

[36:48] One, to get the updated experience with them and two, because I love learning, I love trying new things. And three, because I just didn’t know which one was going to work best and which one is going to drive the most traffic. And so running through all these things, I now have learned a ton about all of them and I know how this, you know, much brighter vision for what I can do both with HitTail and with future products that I have. So, I think that the willingness to go out there and to take some risks and to bet both some money and some time. And it’s not betting the farm on any of these single approaches but it’s vesting some money and some time and learning from that and being able to take that knowledge and then invest, you know, as you move forward.

[37:24] Brennan : Yes, I would point out cadence as being an important trait which goes along with what both of you were just talking about and what I mean by cadence is knowing that in order to be successful, it’s going to be a lot of very small victories or a lot of very small steps. And I see a lot of founders who they go away in to a basement and write a product almost in secret. They have this idea of this grand launch day. They launch it and crickets and then they get discourage and fades away. I’ve always been a big, big advocate of really a thousand launches, right? I never really saw my launch day as being anything really that significant except that now I had an avenue for getting paying customers in the door.

[38:08] But there is nothing spectacular on my launch day and I think you read TechCrunch or these different publications and you hear about these grand launches and people adding millions of users overnight. Like I think I mentioned earlier, it’s a long tail game. It’s steady march. It’s a cadence. It’s – I do my, you know, continual amount of blogging and producing content that helps me with my organic visibility where I slowly build out new features base on what my customers are actually asking for instead of thinking it as all or nothing way of looking at things.

[38:40] Rob : Right, as Dan Anders would say, “It’s playing long ball.”

[38:43] Brennan :Right.

[38:44] Rob : All right, so I’m going to wrap this up with one final question and I’m actually interested in hearing everyone’s thoughts on this. We’ll start with Brennan, where do you see your business or businesses one year from now? What do you envision?

[38:57] Brennan : I will probably have another book out because there has been, again, I kind of mind my customer correspondents to figure out what problems people have and they try to see between the lines and what I could offer to them, you know, initially. In a year I would like to fully live off a combination of my products and I would also like to really optimize. I would like to have a very grand funnel that works across all of my products and makes the transition between each product very seamless because the way it’s working now is all of my products really target a single audience. If I can pull that off, that will obviously help my growth of my sales which will, hopefully, get me even closer to cutting the cord on consulting.

[39:41] Rob : Very nice. How about you, Mike, where do you see yourself with AuditShark, Altiris Training, forum software, what else you have going on?

[39:50] Mike : [Laughter] Well —

[39:50] Rob : Where do you see that in a year?

[39:51] Mike : Oh, on top of that, I will probably have published a book in about a year. So —

[39:55] Rob : There —

[39:55] Mike : There’s a spoiler alert.

[39:56] Brennan : [Laughter]

[39:56] Rob : First announcement. Very cool!

[39:57] Mike : Yup, yup.

[39:58] Mike : I anticipate being completely wind off from a consulting probably within twelve months. I don’t know how quickly that’s going to go but I, you know, obviously have a lot of different things going on right now and it’s a matter of kind of figuring out which ones are working, which ones aren’t. I have probably three or four different things that are I’m obviously juggling at the moment. Between all of them, I’m just going to be figuring out what one works and which one doesn’t and then, you know, putting some extra effort in to the things that are working, hopefully, leveraging some partnerships that I’ve been working with people on and you know, like I said just getting on a consulting. That’s kind of my main focus for, you know, the next six to eight months.

[40:34] Rob : On my end, I anticipate or hope, however you like to say it, that HitTail will be a two at least 2X where it is today and with a potentially to be it about 3X it means growing at a pretty nice cliff right now. And I have a product manager in place that I’ve mentioned a few times and he’s taking on more and more responsibilities. So, over the next three to six months, I expected transition in to another product. More updates on that in the future.

[41:03] Brennan : Nice.

[41:04] Rob : Well, Brennan, thank you very much for coming on the program. We really appreciate your time in lending your insight. You know, someone who’s knee deep in this process of transitioning from consulting to products, I’m sure that there’s a lot of folks in the audience who identify with where you’re at inside this. I certainly appreciate it. If people want to get in touch with you, learn more about you, what’s kind of the number one place they can go to get – maybe get in touch with you or just read more about your trials and tribulations?

[41:28] Brennan : So, my – the Planscope blog has most of – I blog extensively and I do this because I’ve realized that for me at least Hacker News can be a pretty good source of new business and I’ve put up quite a few different blog post about – well, I’m very open and transparent with my numbers. Well – I’ll detail on boarding experiments and the results of that or one of the more recent ones was about how I built up this runaway of cash through these different products. planscope.io/blog is where you’ll find a lot of my writing. You can e-mail me at [email protected] or I’m on Twitter @BrennanDunn, B-R-E-N-N-A-N D-U-N-N.

[42:08] Rob : Well, very good. Thanks again for joining us.

[42:10] Brennan : Yeah, thank you.

[42:11] Rob : If you have a question for us, call our voicemail at 888-801-9690 or e-mail us at [email protected] Our theme music is an excerpt from ‘“We’re Outta Control” by MoOt, used under Creative Commons. Subscribe to this podcast in iTunes by searching for startups or via RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening. We’ll see you next time.

Rob and Mike talk with Brennan Dunn about moving from consulting to products.

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Episode 108 | 11 Software Startup Myths Debunked

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Show Notes

Transcript

[00:00] Mike : This is Startups for the Rest of Us: Episode 108.

[00:02] Music

[00:11] Mike : Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.

[00:18] Rob : And I’m Rob.

[00:19] Mike : And we’re here to share our experiences to help you avoid the same mistakes we’ve made. How you doing this week, Rob?

[00:23] Rob : I’m doing good. I’m coming back for a week off for Thanksgiving feeling rested. I went to a cabin near Mt. Shasta in Northern California and I did a lot of thinking, a lot of thinking about what 2013 is going to look like, dove deeper in to those topics I mentioned in the last episode about growing HitTail by a certain amount, looking building some – a couple of info products and launching a new app. So, I kind of sort of diving in to those in creating some specific like outlines, plans, dates, that kind of stuff. There’s a lot of fun. I actually – it was so super relaxing to me because I feel like it lays out what, you know, now I know what to expect over the next 12 or 13 months.

[01:00] Mike : Very cool.

[01:01] Rob : How about you? What did you do for Thanksgiving?

[01:02] Mike : I stayed home. My parents came over to visit and had turkey and mashed potatoes and you know, the whole nine yards and I’ve got some more worked done on AuditShark and got all the tasks together to send off to my new contractor for AuditShark so —

[01:15] Rob : He’s a developer and he’s here in the state, is that right?

[01:18] Mike : Yup, so he’s working on the cloud side of Audit Shark which I haven’t put anybody else on that piece yet and I spent probably two or three hours working with him to not only get us some development environment setup but to make basically walk him through everything and I probably would have done that. It’s like a screencast that you just send it over to him because honestly I would want to reuse that in the future but I needed to help him get his environment set up because I hadn’t documented exactly what needed to be done to do that. So, now, I’ve actually got some of that information because I’ve go everything set up on my laptop and my desktop but I haven’t done it for anybody else. It’s been a long time so I’ve had to do it so I couldn’t quite remember exactly what needed to go in to it.

[01:55] Rob : So, he’s working on the cloud side which is like you said it’s more green field development that just kind of plugs in to AuditShark. What does that mean in terms of are you still looking to launch the second week of January to —

[02:04] Mike : Uh huh.

[02:05] Rob : And any updates since last week early access customers using it, have you made any progress on that?

[02:10] Mike : I talked to one early access customer and I had him go through and run a policy. I basically gave him a set of instructions and said, “Hey, why don’t you go through in to this and let me know what your thoughts are?” I made sure to phrase the e-mail on a specific way and not lead him and his response back to me he said, “Wow that was really easy.” “What exactly do you mean by that?” And he explained it a little bit and he’s a like, “You know, usually the stuff is a lot harder.” He’s like, “I expected it to be a lot harder.” So, it was really nice to see that because that’s exactly what I was going for because I worked with a lot of this type of software before in the past and I know how complicated it can be and it was just extremely easy for him to just go in and run an audit and literally, he clicked the button and within two minutes he had his results. It was – it was awesome.

[02:53] Rob : Well, cool.

[02:54] Mike : The real big thing is that now that I have – I’ve had a developer who’s been working on the client side policy builder and now I’ve got a developer who I’m putting on to the cloud side of things. I’m hoping that this works out. We’re going to do a 3-week trial to see how things go and then from there, we’ll make some decisions and talk a little bit more to see where each of us wants to go with it. And what I’m hoping is that I can basically hand off all of the technical stuff to these two guys and you know, I’ve already got all the client side stuff handed off technically and now, I’m looking to get all the cloud side stuff handed off, all that technical stuff handed off so that I can focus, you know, solely on the marketing and customer development and everything else.

[03:29] Rob : All right, well, good luck. So, are you still looking at getting the AuditShark out the door launched in public on January 14 th ?

[03:35] Mike : Right around that time, yes, so I know that there are certain things that are just not going to be working and you know, in terms of the policy, I know that I’m going to have to go back and forth with my developers over the next six weeks to make sure that everything kind of works from my end and I expected that there’s going to be things that fall a little bit short from where I would like them to be but that’s the goal right now is to have the product out there and launch publicly by the 14 th of January.

[04:00] Rob : Oh, let’s move on to some iTunes reviews then, shall we?

[04:03] Mike : Sure.

[04:03] Rob : So, we got several new iTunes reviews, one is from Gerald Dees [Phonetic]. He says, “Excellent advice for any entrepreneur. I’m not a programmer and I don’t have a software or service business but as an author and entrepreneur, I get an incredible value out of the podcast. I love learning from the trials and successes that Rob and Mike share about their business.” Also, we have one from T Nguyen 444 [Phonetic] . He says, “Very informative this podcast and This Week in Startups are my two favorite. This Week in Startups is a high level and Startups for the Rest of Us helps with lower level attention to detail type information.” We got a few more I won’t read but the other one I like is from Eric Foster and he says, “Awesome, awesome, worth listening to every single minute.” Really appreciate your reviews and even if you don’t write a full review, would love a – just a 5-star rating in iTunes. What else is going on with you?

[04:51] Mike : Couple other things. So, next Thursday, I’ll be meeting up with Corey from the Birdy because I’ll be back in Brooklyn and I’m trying to get together a couple of people to meet up for dinner somewhere in Brooklyn. So, that would be fun. Hopefully, we can get some other people. I’ve had a couple of meetings around the country with other people just through the various travels that I’ve done. I had a meeting last night, actually. Some of my consultant work is going to be changed a little bit. And typically, I’m going on site and doing customer work for people but one of the customers that I work with wants me to start doing some of their e-mail marketing campaigns. So, that would be an interesting change of phase I’ll say because I can do it on my own time. I don’t necessarily have to be at a customer site and we’ll see where that lead. I think that there’s a lot of potential there. They definitely have a severely mismanaged e-mail campaign I’ll say. They’re not measuring anything. They have no idea, you know, who’s clicking on what. They’re not even using an e-mail service provider. Everything is going out through their ISP.

[05:42] Rob : Right.

[05:42] Mike : So, I’d suspect that not a lot of it is getting through it —

[05:45] Rob : Getting there, yeah. Well, it’s unfortunately a common mistake.

[05:48] Mike : What I’m concerned about is taking all those e-mails and putting them in to like MailChimp or ConstantContact and then sending out an e-mail and then having most of them actually get through and then flag to spam because previously they – have just never gotten there because a lot of the e-mail vendors, they will just automatically send it to spam if it comes from certain IP addresses and their IP address may have gotten flagged as a spammer so then they’re just going straight to the trash whereas if I move it over to like MailChimp and then send them out, suddenly, they’ll get through because it’s coming from a different IP address and then what’s going to happen. Am I going to get ban from MailChimp?

[06:23] Rob : So, I’ve done this before with a list I inherited and the first in a big paragraph at the top or a big first sentence that just say, “Hey, you’re receiving this because you signed up to receive them or you either a paying customer of X, you signed up on this URL to receive it. If you prefer not to receive any more of this, simply click this link right here to unsubscribe,” and give them the unsubscribe link right at the top because if they are going to click it, then let them do that rather than mark you as spam. I’d also set up a separate account. I wouldn’t use your MailChimp account. I set one up for this – this guy’s business. So, if it does get banned, that you don’t – you don’t also get banned.

[06:58] Mike : Right, I was definitely going to do that. The thing that I remember reading though was that I think that MailChimp also measures the number of unsubscribed and if it’s really high for a list, then they – I forget how they flag it but basically they take note of it.

[07:13] Rob : You’ll get an e-mail. They do but it’s not nearly as bad as spam marks. You definitely want people to unsubscribe rather than spam – rather than mark it as spam. We had a list that did get more unsubscribed than they liked and it was like – it was like if it goes over 1% unsubscribed, then it get upset and that’s fine but they basically e-mail. And I reply back and I said, “Look, here’s what we’re doing. We’re reviving an old list, blah blah blah.” And they were just like, “That’s fine, you know, just don’t – kind of don’t want to happen again. That was just a warning type thing.” So, that’s all they did because people unsubscribing, I mean that really doesn’t hurt anyone, right? It doesn’t knock their IP, you know, whereas when they mark it as spam, it actually like is a ding against their IP address and that’s why they don’t – I can — and that’s why they’ll ban you.

[07:53] So, the only reason they’re looking at people unsubscribing it’s a danger sign that people may start marking it as spam in the future is the thing. So, I wouldn’t worry too much about that. The other thing you could do depending on how big their list is, is you could break it up in to chunks. If it’s 5000 people, you could send like the first 500, the most recent 500 as one list and send it and see what happens and then work your way backwards because by the time you get back five years or [Laughter] you know, however long it’s been, the really early guys probably are going to – there’s going to be a bunch of bounces. They’re probably are going to be a bunch of mark as spam no matter what you do. So but if you kind of work your way that gradually, then you don’t really, you know, pollute the list right from the start.

[08:32] Mike : Got it. They have two different lists. One of them is about a thousand e-mails which is I’ll say much cleaner and they’ve been e-mailing that or at least they’ve e-mailed it at least once that I know of and the other one is around 5000 and I don’t know where it came from and they can’t really tell me. So, I’m really – I don’t know if I’ll even use it to be perfectly honest. I just don’t think it’s worth then.

[08:51] Rob : Well, the good thing is if you set up the MailChimp account, you put the 1000 safe — “safe” e-mails in there and send them a few e-mails over the course of several weeks or a month or whatever, then you can at least get that MailChimp account, get it some credibility, you know, so it doesn’t look like this is your first mailing out of that account. You at least had some successful non-spammy sense. Then if you go to the other list and just do the recent most 500 and see what happens, you at least have some – some credit in their bank of credibility so to speak. So, hey, I received probably the most sophisticated phishing attack via e-mail that I had ever seen. It was an e-mail comes and I’m checking on my iPhone. So, it’s mostly text. It has the exact subject line and all the text from an e-mail that I get from WordPress when I get a comment on my blog at softwarebyrob.com.

[09:42] And so, I’m seeing this comment and I’m seeing the post name and all the URLs and it says to mark it as spam, click this link. To mark it as, you know, approve it, click this link and the comment was junk, right? So, I click on mark it as spam and it opens up Safari on my phone and you know, you know, I just glanced through and haven’t really look at URLs but it sent me to a fake URL and it was all customized for my blog like someone made a specific, very specific attempt. This was not a mass attempt and the only reason I noticed it because they had an image wrong on the thing it was a broken image and I started thinking, “What is going on here?” But I almost like entered my credentials when I —

[10:19] Mike : Wow.

[10:19] Rob : It’s crazy and I went back to the e-mail, it was like list-9.com/rob/ and that’s what all the e-mails where. So, I think it was list-9 or something like that. So, it’s some funky URL and someone really went to – I’m assuming they scraped blogs from some list and then customized it but there was – I was shocked at how close it was to the e-mails that I get. You know, you get every – kind of everyday as you get comments, you need to mark. I mean it was identical because no way I wouldn’t – wouldn’t be fooled like some – by someone like that.

[10:50] Mike : How close for you to actually click in and putting in your credentials?

[10:53] Rob : Well, there were two reasons I didn’t. One was that broken image just made me a little suspicious and that made me look up at the URL because normally if I’m on my computer, my laptop, I’m going to see the URL. That’s like the first thing I look at but on my iPhone I don’t because they hide the address bar pretty quick.

[11:06] Mike : Right.

[11:07] Rob : I didn’t glance up. The other reason is that I don’t really know my credentials by heart and so, it wasn’t in Safari so I was going to have go in and get it out and I was trying to think do I really want to do this right now. So, that gave me pause and enough pause to sit there and work at it. So —

[11:22] Mike : Wow, that’s an – that’s impressive. I think that’s the way that a lot of these types of security attacks are going to go. I mean the password hacks and stuff have kind of fallen by the wayside just because it’s so much easier to get somebody’s credentials through a phishing attempt.

[11:35] Rob : Yeah, it’s that social engineering, right —

[11:38] Mike : Uh huh.

[11:38] Rob : … rather — run a correct password they get you to do that. It’s pretty crazy. So, any listeners, I would just keep your eyes out for stuff like that. I imagine that that has worked with people. It’s a different URL and that should actually raise a flag, right? If typically you’re able to just click and log in, that’s another thing to think about. So —

[11:54] Mike : I don’t know as a lot of people would catch that though because sometimes your browser cashes it and then sometimes it expires so you have to put them in again but if you’re using something like, you know, a password manager then typically you would not have to type it in. It would just cash it there and would allow you just to go right in and then when it didn’t work or didn’t do that, then you’d have to go look up your password and that probably will put you in the same position where that you were in where you said, “Oh, well, why is this not working,” or – then you start to look at it a little bit.

[12:25] Rob : Yup.

[12:25] Music

[12:29] Mike : Today, we’re going to be talking about eleven software startup myths debunked. So, I thought that we’d take some time and talk about it to people and kind of share what our thoughts were.

[12:37] Rob : Let’s dive in.

[12:38] Mike : So, the first one is if you own a business it mean you can never go on vacation and I think that part of this thought comes from a couple of different areas. One is looking at people who own companies like restaurants or brick and mortar businesses where there’s always customers who were coming in and out and you almost have to be there if you don’t have a manager and this is especially true for any sort of restaurant. You know, restaurants are notorious for like having these mom and pop shops where people don’t go on vacation for years and years at a time because if they do, the entire thing shuts down. And because software businesses are completely different because you can sell software from your website while you’re not actually there, it’s a completely different model. And this whole idea just does not apply.

[13:17] Rob : Yeah, I think with software, it’s so much easier to implement some process to systematize things obviously something we talked a lot of about on the podcast but if you – if you’re able to work on your business instead of in the business and you’re constantly thinking week to week what do I not want to be doing, what’s the most repetitive task here, you know, revisiting that and handing them off to either virtual assistant and just doing all the process stuff that we talked about. It is – I mean I got to be honest, I’ve taken more vacation than [Laughter] ever since owning a business than I did before. It’s a dramatic difference to not have the dollars for hour’s thing. Once you decouple – it actually takes a mindset shift once you decouple the hours you work from the money you make because I still have the mindset of like, “No, no, I need to work 40 hours this week,” but you really don’t and you can start cutting that back either on a week to week basis or you can take a lot of vacation. This is a good myth to bring up.

[14:10] Mike : Well, one of the things that I find is that even when I take a week off or two weeks off to work on my own products while I’m not doing consulting, what I find is that I’m not productive for eight hours even if I’ve got eight or twelve hours on a day to work, I’m not productive for eight or twelve hours. I’m really productive for like four or five but beyond that, I’m not necessarily as productive and it feels like I end up wasting quite a bit of time. So, unless I really buckle down and make a consorted effort to be super productive then I’m not going to be as productive and what that tends to do is it tends to essentially kill my productivity somewhere in the future.

[14:45] Rob : Yeah and the cool part about owning your own business is that you are then able to basically hyper focus on those times when you are productive. So, if you are a morning person, you can make that your work day, you know, you can work three hours a day, five days a week and that can be your whole thing. I mean if you literally get twice as much done in that time, then it’s like working 30 hours a week but you do it in – in half the time. Or if you’re more of a night person, you can do that, you can really structure a time and again, the entrepreneurs I know who – who do this well and who run businesses and are really have a good like work life balance, they understand when they’re – when they’re optimum working hours are, what causes them to be in that optimum working zone and when they find themselves and this something I do, when I find myself on HackerNews or Facebook, I just say, “I’m done,” and I’m going to walk away from my computer because there’s no reason for me to sit here acting and thinking like I’m working when I’m not actually getting anything done, you know, I want to actually rest and rejuvenate during that time.

[15:38] Mike : Cool. So, number two is that mailing list don’t work and are nothing more than spam and this is so false that I just don’t even know where to begin.

[15:46] Rob : Yeah, this is the classic developer mentality, right? It’s like, we, as a developer, we don’t like getting a lot of e-mail or we have this stigma against it but a lot of the biggest online businesses in the world are built purely because e-mail exists and they have massive, massive e-mail list. And so if you look at Groupon or you look at Facebook, even Twitter, the startup Foursquare, on Quora and any of these things, I mean they are constantly when you sign up for them, they are sending you updates via e-mail. It’s what engages people. This is the reason that my conversion rate on many of my apps has gone up substantially like by double digits both during trials as well as retaining customers, even taking visitors and getting them in to trials, all of those things are dramatically increased by getting an e-mail address and engaging customers in a nice way. It’s not about hard selling. It’s not about market, market, market. It’s about educating, providing value and engaging them and setting themselves that they actually want to see and want to open, you know, and even this is one of the reasons I spend more time now creating content for my mailing list, my Software By Rob mailing list than I do for the blog. I actually put more articles out on that in the last six months than I have – I have on the blog because there’s something just more personal and more engaging about e-mail.

[17:00] Mike : This kind of comes back to the conversation I had with the business owner a couple of nights ago where we were talking about this mailing list and I was like your entire marketing strategy behind this is completely mismanaged because people actually do want to get these e-mails and what you’re doing right now is you’re just not measuring anything and that’s got to be turned around in some way, shape or form and I’m like and I can help you do that if it’s something you want help with and he’s like, “Yeah, you know, I’d like you to take a look at it.” So, you know, we’ll see how that goes but that’s definitely I think something that people look at and they say, “Oh, I don’t want to send people e-mails because I don’t want to bother them and you have to bother them because you have to get in front of them but if you are providing them with something that they want, you’re not actually bothering them. They want to see those e-mails and it’s just a mental hurdle that I think a lot of people have to get over.

[17:43] So, moving on the third one is that I’m going to make either billions or nothing and a lot of people think that when they start a business and I think there is a realm of difference between these two and I think you have either one or the other you don’t necessarily have both. You either think you’re going to make absolutely nothing and it’s not worth your time and effort or you think that you’re going to make billions and it’s going to be an over night success and when it’s not, you kind of flip flop over to the other one where you’re like, “Oh, this is just totally not worth it.”

[18:09] Rob : The first time I realized it there was an in between where starting a software company didn’t mean I had to have a hundred million users was just completely shocking to me where I realize, oh, you mean, I can build a business that generates $10,000 a month that’s just software company that I can just be a, you know, solopreneur and kind of do what I want to do and as long as I keep these things in check and build an app that people want, that I can just build a business that – but basically is more of like a small business but as software as the core value of it. My mind was completely blown. This is not the impression that’s in the press, right, of any Fast Company, Inc. Magazine, Entrepreneur Magazine, all these things, they’re not talking about these businesses. These are the small niche B2B stuff that we talk about. I mean there’s a whole movement behind it and actually what’s cool is that there’s so much more to talk about these today, these in between businesses, these niche businesses, niche software businesses than there was even five years ago and there’s just so many more people exploring that and that’s exciting to me and a lot more developers are getting, you know, financial freedom and being able to quit their jobs and because of it, because there’s just so much more education and information available about this.

[19:19] Mike : Yeah, that’s absolutely right and it’s interesting to see those dollars just show up in your account when you’ve got something that you’re selling online because it’s not like you actually put in the time and effort, you know, that leading up to that check being deposited in to your bank. It’s no to say you didn’t put the time in to build the products and put it out there and do everything but it’s not as if there was a direct correlation between the time that you spent doing it and the time that those dollars showed up in your account.

[19:44] Rob : Yeah, it’s that decoupling of hours worked for dollars entering your bank account and it really does blow your mind the first several months of it.

[19:51] Music

[19:54] Mike : Number four is that “I have to do everything because I’m the one who understands how everything is supposed to work.” And I think this issue can be addressed by setting up various processes and procedures for others to follow. And I think part of this mentality comes from thinking that something that’s either too complicated of it’s going to take too long to explain to somebody else how to do it or you just don’t want to give up the control of it and definitely mental hurdles here to getting over this but I think the key is to find the right people for doing this type of work for you and if they’re not working out, then you need to find somebody else. You can’t afford to act like a full-pledged business that has lots of money to burn. If you’re trying something out and you hand some piece of work off to somebody and it doesn’t work out, cut your losses and move on. But that’s not to say that you should never try that again because it may just be that it didn’t work out with that person. You really have to test the waters a lot in order to figure out what is working and what’s not and if somebody else is making it work, then chances are really good that you can too.

[20:55] Rob : I really enjoy the story that Glen Germaine told us last year when he came to MicroConf. If you recall he had e-mailed in about having really struggling with the idea of hiring a developer. He said he didn’t have the money to hire a fulltime developer and he has a system that I recall it’s like medical – sort of medical billing or medical admin office automation type of stuff. And so it’s a pretty complicated software and he was concern that he would spend more time telling a developer had to do something than – than, you know, actually the time it would take and sure enough, he wrote in and we gave – we designed the whole podcast around it which I think was about – it was about hiring and managing remote developers and then he went and he hired one and it turned out really well. He was very detailed and did an excellent job evaluating but he hired someone through oDesk and since then, he’s just raved about it and he gave us the full story at MicroConf and then we – we talked about it later. But that’s the kind of thing. He did it right. He spent the time and found a right person from the start. The thing to remember is if you do pick the wrong person, it’s a learning process.

[21:54] And so, like you said Mike, if it doesn’t ring up the first time, it doesn’t mean it doesn’t work. It doesn’t mean that it won’t work, it just means that you have to give it another shot and you have to learn from your mistakes and get better the next time because this is the only way that you will actually be able to take that vacation we talked about earlier and that you will be able to grow your business is if you let go of these simpler tasks or the lower end tasks I guess I’ll say and I don’t – I’m not to say that development is a lower end task but it is something that’s easier to outsource than the visioning and you know, kind of the entrepreneur mentality of really directing the business. That’s the thing you can’t outsource. For everything else, I think slowly overtime, if you own a business 3, 5, 10 years you are going to want to slowly outsource more and more pieces of it. It’s a learning process like anything else learning how to do that effectively.

[22:43] Mike : And the one piece that you touched on there that I think is really important is that you can’t outsource the vision of what the product is suppose to become. You can outsource all the things leading up to it but you can’t outsource the vision itself because nobody else is going to have that insight and that’s why it’s so difficult to copy somebody’s idea because if there are actually visionary about it and they have in their head exactly what needs to be done, you can’t just look at somebody else’s business and copy it and expect to get the same results because there’s little subtle nuances that you’re going to miss.

[23:13] Rob: I think the one other thing I’ll add is early on in your business, at least this is the way I did it, I didn’t have a lot of money to pay great people. And so, I started off with cheap virtual assistants, cheap developers. They were inexpensive but that’s what it took to get the business off the ground. They were okay. I dealt with some headaches. I dealt people who were, you know, not ideal but it’s what it took to give me — I bought myself enough time that I was able to leverage these businesses and grow them up but what you can do is overtime you then – you can trade up so to speak. So, I had a VA who is – I always knew she was average but she was good enough and then I found someone who’s almost three times the cost that she is but this person is almost three times better. So, now, I have everything going to him and I’m just funneling all types of stuff. Now, it’s more expensive but I have the leeway to be able to do that and I’ve done the same thing with developers and designers and everything. It’s like you trade up overtime as you have the luxury of being able to do that and it then buys you even more time because you get better people who not only provide better results but they are just more reliable, they’re more consistent that answers many questions and that kind of stuff.

[24:21] Mike : So number five is saying, “I don’t know where to start,” or “I don’t have any good ideas about anything that’s never been done before.” And part of that is finding something that’s never been done before. If you’re looking for something that’s never been done before that is just an outright mistake because if something has never been done before, then how do you know that anybody is willing to actually pay for it and that’s one of those things that you really need to find out early on when you first start building something is to make sure that there is going to be people who are willing to pay for it. In addition to not having the ideas, it’s a matter of just asking people and you don’t want to ask them in a way that says, “Well, do you have this problem,” or “If I gave you X, would you be willing to pay for it?” What you really need to do is start focusing on what people feel are their own problems because when you talk to somebody and you say, “Would you be interested in a product that does X, you know, and solve such and such problem for you?” Well, of course, they’re going to be because you have phrase the question in such a way that is very leading.

[25:15] If instead you ask them, “You know, what sorts of problems are you having with your business or with your environment or with this or that just to describe some pinpoints. You start looking at the individual things that they’re saying and the subtle nuances of things that they might talk about. So, they may say, “Oh, well, I’m having a problem with my billing. I’m doing everything and sell and it’s kind of a pain.” And you may think oh well, this person needs a, you know, some sort of software that will do their billing for them but that may not actually be the pain. You have to drill in a little bit deeper and you may very well find out that it’s not that their billing system is a pain. It’s just that the person doing it is difficult to work with. So, unless you’re asking those in depth questions, you might start making assumptions about what the problem is and going down the wrong path.

[26:01] Rob : Yeah, I think there’s a progression of questions you have to ask because early on, you’re right. You want to ask – you want to find a customer group. You want to find out a common problem they all have, right? So if there’s 20 of them that you talk to, 10 of them or whatever, then you try to group that together and say what’s this common pain they have, then though I think you get in to the customer development side where you start saying, “All right, my hypothesis is they need an app that does this and in order for this to work, I need to charge 50 bucks a month for it.” So then you come back to that group and then you find others and you say, “Would you pay 50 bucks a month for an app that does this,” and if they say, yes or no then you say why. You know, you try to figure out what the salient points are, the feature it needs, you know, maybe something it’s lacking with the prices and all that kind of stuff. We definitely agree with you there’s that early space where you really need to just throw it out, throw up in here and say, and don’t lead them yet because you’re just trying to – you’re almost trying to do a brainstorming session where you don’t want to – you don’t want to introduce, you know, impurities in to the conversation.

[26:35] Mike : And that kind of leads us in to number six which is to build something that people want. Why don’t you talk a little bit about that?

[27:01] Rob : Yeah, so you know, I won’t say this is as much of a myth as it is only half of the equation. It’s a myth that this is all you need to do. This is to build a better mouse trap theory and we know that just building a product that’s better, it isn’t enough. You also have to be able to acquire customers for less money than they give you over their lifetime and I think that’s a key part that’s really missed in the discussion of building something people want. I love the quote because Paul Graham wrote an essay and it may – it was out there titled Build Something People Want and that was the salient point from it and now that’s thrown around all the time on Hacker News and in other startup circles. And I think it’s important but it’s half of the equation. There’s the entire marketing side that people ignore when they say this phrase.

[27:42] Mike : Number seven on our list is that passion is a competitive advantage and this is just not true at all either and the reason is because everyone has passion for the products that they’re working on especially when it comes to their first product but the fact is that passion for your product is just not enough. You have to be able to get over your fears. Be able and willing to go talk to people that you’re not necessarily comfortable talking to and that’s something I think a lot of people miss.

[28:06] Rob : Yeah, I mean there are a lot of ways to have a competitive advantage. I like to think that each person has a competitive advantage that – that really is something that they should leverage, just kind of their number one skill and so some people are awesome networkers. And if you have just a fantastic network and that’s what you’re really good at, then that’s your competitive advantage and that’s what you should totally leverage to build your app. If you have a real like an engineering mind and you enjoy marketing, you should combine those two and become, you know, an engineer-driven marketer and that’s more of like Patrick McKenzie is, that’s kind of stuff that I do, a lot of testing, conversion, improvements and I think you died head first in to that. And the other – other people just have a gift for product, right, design UX, that kind of stuff and that’s kind of their whole thing. They don’t really know a lot about the metrics and the analytics and they don’t care because they can build such a gorgeous product and they have at least some way to market it. And so, I think you really need to think about more practical things like that in terms of competitive advantages rather than something that is as ephemeral at passion because like you said everyone who’s building an app is passionate about it. So, it’s just not enough to propel your app in the success.

[29:15] Mike : Number eight is that you have to raise funding to launch a startup. And I think that the word startup has been seriously abused over the years. I read something recent from Paul Graham where basically he said, “The definition of a startup is this…” So, I think that there’s a lot of fighting about exactly what it means to launch a startup but at the same time, I mean the stuff that we’re doing on and working on I mean we consider them to be startups whether you want to agree with the definition or not. I mean you’re working on a software startup because it’s a — it’s an – basically a new software company. So, but raising funding is not necessary to launch a startup. You don’t need any money or whatsoever. Didn’t Patrick McKenzie say that he launched the Bingo Card Creator with $60?

[29:56] Rob : I think it was, yeah.

[29:57] Mike : There are definitely ways to launch a product and a company with very, very little money. You definitely don’t need to go raised funding and the fact is that raising funding is not necessarily going to be answer to all your problems anyway. In fact, it may very well create more problems.

[30:13] Rob : Right and I mean I want to be clear, we are no anti-funding, right. We’re not anti-venture capital. I’m anti everyone thinking that you need to raise angel fund and venture capital in order to do a startup, in order to start a software company, in order to launch B2B website. Now, I do know that there are cases where the only way you’re going to grow that and the only way you’re going to be scale it quick enough is with funding. What I’ve seen is that the more money you have at your disposal, the faster you can grow, period because you’re not waiting for your revenue to come in to then reinvest in a business. Once you have a flywheel in place, a marketing flywheel and you know that you’d just need to dump a bunch of money in to it and more will come out at the other end, then you really do want as much money as possible. And so if you’re waiting for one in $2,000 a month to come in to stuff it in to there, you would grow a lot faster if you had 10 or $20,000 a month to put in to that engine. So, once you are ready to scale, I absolutely think funding is an option for people but it’s not necessarily and if you don’t want to go that route and you want to maintain control, this is such, you know, something we espoused so much on this podcast is you don’t need it to get off the ground and certainly not to build a business that will support you and your family and your lifestyle in the way that you want.

[31:23] Mike : Yeah, and I totally agree with everything you said. I mean the one thing that you brought up was that we’re not anti-funding, it’s just that you don’t necessarily need funding and that leads in to number nine which is you need a co-founder. And I have the Single Founder blog but at the same time, I’m not anti-cofounder. I’m just anti the idea that you need a co-founder in order to succeed. So, I know a lot of people out there who are building these one-person companies that they’re the single founder of that company and they’re doing quite well and some of them will bring employee, some of them don’t. It really depends on what their goals are but you don’t need a co-founder to succeed. And in fact a co-funder, I mean I think that Paul Graham wrote an essay where he basically said that that’s actually one of the risks in having a co-founder that somebody you can fight with. He’s like one of the number causes of a startup failing is fighting between the co-founders. I just think that it’s very important to differentiate between having a co-founder is in some way is nice and some way it is not versus that you absolutely need one in order to succeed.

[32:25] Rob : There are obvious benefits to having co-founder, right? It gives you that ongoing mastermind group, it’s the ongoing support from someone you keep each other’s morale of and as long as you’re on the same page and you share the vision of the startup, then it tends to be a good thing. Now, it does mean you have to grow that thing twice as large to get the same type of pay out. So, if you’re going after a hundred million dollar evaluation raising funding, it’s kind of here nor there, right, because it doesn’t actually matter if you take home 50 million at the end of the day or a hundred million because you’re not going to be able to spend that in your life but if you are building smaller niche apps and you’re bootstrapping, it becomes a lot harder to be because you have to then pick a market that’s twice as big. You have to build your app to twice as much before you’re going to be able to quit your job. Well, it add some complications at the lower end, frankly of in common app size, you know, startup size. So, there are definitely positives and I can understand why people want to take on co-founders but in general when people ask “Should I,” I tend to say, “You know, if you’re asking that question and you don’t have someone already in mind, then I would basically stop this through this point if you can get it done on your own, then do that.”

[33:32] Mike : Number ten is that you just need one big break and your business will be huge. And this is another one of those fallacies that people think, “Oh, just if I get listed in TechCrunch or if I do this or if I do that, if I get on that podcast, then I’m going to get a lot of press and that would be the end of it and that will kind of push me over the edge.” And it’s really not about that. I mean what you’re really looking for is this incremental wins that build upon each other. I mean there’s a reason there’s a hockey stick growth curve and it’s there because there’s all these other previous wins that have to happen in order for you to start making up that growth and as you make those incremental wins, they build upon each other. There’s no one single thing that you can do that is going to just make your business huge.

[34:14] Music

[34:17] Mike : And number eleven is to scratch your own itch. And this really means building an app that you need and by definition, other people are also going to need that. And again, this is another one of those things that is not necessarily true and there’s a lot of people who’ll say, “Well, don’t sell to developers because they don’t pay for stuff,” “Don’t sell to designers because they don’t pay for stuff.” And that’s – those things aren’t true either. I mean if you’re selling something that solves a problem, people are going to buy it. That said, just because you have a problem does not necessarily mean that every one else has that problem as well. And it may be true but it’s not necessarily true. So, you really have to start looking at those types of problems that you’re having and ask other people if they have those problems as well. And if they do, then you may very well have viable products but and this also works in the reverse as well. Just because you don’t have a problem, it doesn’t mean that other people don’t see it as a problem.

[35:06] Rob : Yeah, this one the “scratching your own itch” I’m pretty sure it’s popularized by 37signals because they just built software internally and then started releasing it and other people needed it as well. That worked great for them. Obviously, they have a great niche business, people estimate brings in 20, 30 million a year, that’s awesome. The thing is though as overtime, you know, over the past 7 years since they launched Basecamp, everyone has taken that mentality. And so, you know, every business process that I can imagine for designers and freelancers and developers and small software shops and small, you know, small design shops, whatever has been built internally and released it with Fog Creek, right with FogBugz, with was the SourceGear did with their plug in to Visual SourceSafe back in the day. So again, you’re right. It’s not to say this does or does not work, it’s just it has been espoused as something that that’s what you need to do and that’s the only way you should build software.

[36:00] And if you’re not scratching your own itch and you’re not customer number one, then you’re doing the wrong thing. It’s just – it’s incorrect. I do believe that if you are customer number one, you do have an advantage because you do know your customers and you do know what the product should do. It gives you some insight but it’s absolutely possible and I’ve seen many people do it successfully to build an app that doesn’t serve you, yourself, you know, as you stand today. So, it’s like you said, you need to take this with a grain of salt and look in to it more. Then if you do have a need, that’s great but you need to then do more research to figure out who else has that need, how expensive are they to market to, what can you charge for this, is this then a viable product option just because you have a need in solving your pain, doesn’t mean it’s actually a viable product.

[36:44] Mike : And I think what you said there is – also important because if you are customer number one and you have already validated that other people need this product as well, being customer number one definitely helps you. I mean that’s – that’s a definitive advantage over a product where you’re not necessarily going to use it. That doesn’t necessarily mean it’s not a viable product. I mean you can certainly market and sell a product that you don’t use internally. It’s just that it’s probably not going to be as good as if it was designed by somebody who does use it internally in our regular basis. So to recap to eleven software startup myths, number one is owning a business means you can never go on vacation. Number two is that mailing list don’t work and are nothing more than spam. Number three is “I’m going to make billions or I’m going to make nothing”. Number four is “I have to do everything because I’m the one who understands how everything is supposed to work”. Number five is “I don’t know where to start or I don’t any good ideas about anything that’s never been done before”. Number six is to build something that people want. Number seven is that passion is a competitive advantage. Number eight is you have to raise funding to launch a startup. Number nine is you need a co-founder. Number ten, you need just one big break and your business will explode and number eleven, you should scratch your own itch.

[37:51] Music

[37:54] Rob : If you have a question or comment, please call it in to our voicemail number at 888-801-9690 or e-mail us at [email protected] Our theme music is an excerpt from ‘“We’re Outta Control” by MoOt, used under Creative Commons. Subscribe to this podcast in iTunes by searching for startups or via RSS at startupsfortherestofus.com where you’ll find a full transcript of each episode. Thanks for listening. See you next time.

Mike and Rob dispel eleven software startup myths. Mike also sets a launch date for AuditShark.

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Episode 105 | How to Pick a Platform Partner

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Show Notes

Transcript

[00:00] Rob : In today’s episode of Startups for the Rest of Us, Mike and I are going to be discussing some rules for looking at technology platforms, stacks, frameworks and API’s. This is Startups for the Rest of Us: Episode 105.

[00:12] Music

[00:20] Rob : Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Rob.

[00:30] Mike : And I’m Mike.

[00:30] Rob : And we’re here to share our experiences to help you avoid the same mistakes we’ve made. Well, I am glad that I have CrashPlan installed in my laptop. As of what about an hour ago, I’ve jumped online to look at the podcast outline you’d created and my laptop won’t boot up. It just locks up at the Window start screen. So, I’m messing around that I’m sure I’ll be able to fix it this evening but if I’m not stress about it like I’m more worried that I’m going to waste 3 to 4 hours screwing around either reformatting the hard drive or whatever but it really is so different than 5 or 10 years ago where like all your data was on a local disk and you didn’t have it anywhere else or you had like a 2-month backup somewhere but between Dropbox and CrashPlan which runs every night and upload my personal stuff and business stuff up to your cloud somewhere it feels — it feels much better.

[01:18] Mike : Yeah, I feel like I’m — I’m kind of in the same boat. I have probably like several different ways of like backing up all my stuff. So, I have — I have Dropbox running for a bunch of data and I have a SugarSync subscription which backs up another set of data and then I have Backblaze which takes an entire machine backup. And then I also have Acronis running which takes a full system snapshot like every night as well [Laughter].

[01:39] Rob : That’s the way to go. You know, as long as it doesn’t impact your performance, the computer performance day to day, it really is nice to have — have some options. What I wish though, you know, so I now how — have a spare router at all times on deck because I’ve now had two brownouts or thunderstorms in the past 6 years that have blown routers but I’m considering like getting an on deck laptop because I’m losing a bunch of time this afternoon. I guess I have this desktop sitting here but as soon as my wife gets home, she’s going to need it. But what do you — what do you think about that? Do you have a spare router and do you have a spare laptop?

[02:12] Mike : But I have extra switches laying around for exactly that purpose like what I do is I have everything going in to my cable modem and then from there, it goes in to my network and I have first thing that it hits is actually one of my servers. So, I can plug it in to either directly in to a switch or in to my server. Like my server I have behind — basically access another wall between, you know, my network and the outside world but I also zip for like VPN and everything else. So —

[02:39] Rob : Right, I got it. Yeah, this router — all the NEC routers that I use have firewalls built. They have a hardware firewall built in and maybe its software. I don’t know but it’s — it’s built in so I have that as well. I don’t have the VPN capability although there’s certainly routers you can buy with that.

[02:53] Mike : Right but I — I mean I do have extra switches and I don’t know if I have an extra wireless router around but I know what you’re saying and then in terms of extra spare laptops and stuff, I have a couple of spare laptops laying around. I think I have 1, 2 — I have 2 spare laptops on top of my regular one and then plus I have a desktop and —

[03:10] Rob : Yeah.

[03:10] Mike : Yeah, you know, I mean I have a whole army of machines here. I can hire like 30 people and every single person will have their own machine.

[03:18] Rob : Not need to scale up. Yeah, and I mean it seems wasteful to have just a laptop sitting around on deck at all times but I really want to get to the point where when this happens because what, this happens like once a year, you know, and I basically lose a day of productivity when I never — when I don’t have that day to give up. And so I’m trying to figure out a way where I can be completely virtual. I would just love to be able to step to the left and log in to this other laptop or this desktop and just not even notice the difference and that — that day is not here even with Dropbox and CrashPlan. I’ll get my data back but it’s going to take a bunch of time for me to, you know, sort this out.

[03:51] Mike : Yeah, I think you’re best bet would be to do something similar to what I do where I’ve got my entire machine being backed up to — I have it actually backed up to a local drive but I also have an external NAS device that I could backup the entire system to. And it would just store differentials everyday or every couple of days or whatever and if I need to go back to another instance of the machine from several days ago or a couple of weeks ago, I can probably do that. And with something like Acronis you can — depending on how you want to do it, you can back up to the exact same hardware which means you either pop out the hard drive and put a new one in and you restore back to that machine or if you have another physical piece of hardware that you would prefer to restore to, you can do that as well even if it’s slightly different. Basically all you need to do is you just need to switch out the hardware’s obstruction layer and mostly software packages that do that kind of backup have the capability to do that for you.

[04:44] Rob : Nice when someone starts that as a service, call me.

[04:46] Mike : [Laughter]

[04:48] Rob : So I was in Pasadena this weekend with the family. We went down and saw the Space Shuttle Endeavour. They retired Space Shuttle and they flew it all across the country and so and then they took 72 hours. They drove it like four or five miles an hour of down through LA from LAX to this — basically, it’s a science center and just awesome. If you’re ever in LA, you should take your kids there because I moved in Pasadena for five years and never went and this thing, it’s a free science center and it’s one of the best I’ve ever been to and I’ve been at at least half a dozen across the country and in Canada as well. So, it was a lot of fun. I also got to hang out with — with Jason Roberts and his wife and kids.

[05:23] Mike : Oh, cool.

[05:24] Rob : It’s a lot of fun hanging out and talking tech, man. You know, there’s just so few people that I ran in to day to day that I’m able to sit down and just engage in like pretty quickly get deep in to like conversation about serious things, you know, like what we do for a living and have someone understand when — when you talk about a really detailed concept about marketing or about a new idea and actually get realistic feedback and it was lot of fun. He’s a kind of — where I always I leave the conversation about — how long we’ve been talking, I leave feeling like we’re in the middle of a conversation. You know I’m saying? Like we — I have so much more to say but it’s like, “Well it’s been we just had a two and a half hour lunch. We have to leave, you know, I got to go pick my kids up.” It was really cool.

[06:06] Mike : That’s awesome. So, hey I came across a couple of different technology blogs say offering advice for choosing technology and both of them misspelled one of the technologies that they were recommending. It was just really bizarre to me that they were able to make recommendations about things that they — and I’m not sure whether it’s just a misspelling or what but it seems had to believe that somebody could make a recommendation about something like a specific distribution of Linux and then misspelled that distribution of Linux.

[06:35] Rob : Yeah, it’s hard not to discredit when people do that. Just like when I’m hiring people like I would send people e-mails or send them a message on oDesk when I’m thinking about hiring them. And if they reply back with like all lower case text with no punctuation and they’re using a letter ‘U’ instead of ‘Y-O-U’, that is a huge, huge red flag for me and I know the person can be, you know, super intelligent and might just be a style thing but I instantly basically discredit them like it’s a major red flag for me. And I feel like the same thing with this technology. If you misspell it, you’re right. You could just be bad at spelling. It could just be a typo but that — that is not both well for my confidence in your recommendation.

[07:14] Mike : Right and to be clear, this was — this was an actual blog post. It wasn’t like it was a transcript. Like I would understand if things come up in our transcript and I’ve seen it come up before where it’s just clearly misspelled and because it’s a transcript, you know and we are using a transcription agency, I don’t expect them to know the spelling of all these different things and that’s, you know, that’s one thing. But this was an actual blog post that was somebody was trying to convince you, “Oh, these are the things you should look at and this why you should use this particular thing.”

[07:42] Music

[07:45] Rob : So I have an answer to one of our most frequently ask questions and that question that we both get on the podcast and I also get when I do public speaking and just, you know, I feel like it kind of floats around a lot is, “How do I get traffic to my landing page if I put up a landing page?” And Dan Norris from Informly which is inform.ly, he wrote a 3-part case study of 13 pre-launch traffic strategies that he’s used to market his startup Informly that hasn’t launched yet. And so it’s a 3-part post and it’s really in-depth. He gives like the actual conversion rates, how many visitors he got and it’s really cool. It’s on my blog, softwarebyrob.com. The third part just went live today and so that is actually the new place. Whenever — because — seriously, I get this question whether it’s in the podcast or I get it multiple times per month and that’s my new answer is to go look at this case study because Dan did a bang of job of running through the — all the topics.

[08:43] Mike : Cool. So what else is —

[08:44] Rob : In fact —

[08:45] Mike : … going on?

[08:45] Rob : Last thing quick HitTail update, just wrapping up the first integration that’s going live since — since I acquired it and we’re integrating with Basecamp. It’s a pretty simple integration. We have a To-Do list in HitTail. We’re just integrating with the Basecamp To-Do’s and it was going to go live late last week but you do some weird thing and you have 500 To-Do’s and certain page locks up, Ajax, you know, issue. So, we have a little bit more troubleshooting to do but that should go live this week and I’m interested to see what impact that has because I’ve said last week, it’s not that a bunch of HitTail people use Basecamp that we know about, it’s that we want to basically be able to kind of market to the Basecamp audience and to be promoted through Basecamp’s Twitter feed and they don’t have a product blog anymore but to be on their Basecamp integration’s page and to see what kind of impact that has. So, luckily it hasn’t been a ton of effort on our part so we don’t need a huge amount of signups in order to justify but I’ll definitely be updating that in the coming weeks. And we have 2 or 3 other integrations already sketched out if this one goes well.

[09:48] Mike : So are you going to make the decision to move forward on those other integrations base on how this goes or you just going to kind of do one or two with those extra integrations kind of regardless?

[09:57] Rob : Yeah, we’re going to do at least two of those others because the — those other two are much more in our — kind of in the wheelhouse of customers who would use HitTail so their marketing platforms like HubSpot, you know, they have an app area and it’s people who are already trying to create content and market their apps and such and so, HitTail is a natural fit for that. Basecamp, the reason we did it first is, number one, because it’s the quickest. It was just not a lot of work on our end and it’s the first integration we’re doing so I really wanted to kind of cut our teeth and learn how to launch it and learn how to kind of get everything going because we have to get OAuth going and there is no ASP, Classic ASP libraries for that.

[10:36] Mike : Really?

[10:36] Rob : So —

[10:37] Mike : Imagine that [Laughter] —

[10:38] Rob : So, we had — we had some work around there but — so we put in — put in some work to get that done and we’re hoping that we can, you know, rip the investment with the — the next couple integrations and that even if this one doesn’t work out and more like maybe an issue of target market and you know, we figured the next — next couple will be — will be solid.

[10:54] Mike : Yeah, I mean that’s a good idea to at least as you said cut your teeth on a couple of them just to figure out where the — the problem areas of your application for doing those integrations are going to be as well.

[11:03] Music

[11:06] Mike : So, today we’re going to be talking about how to pick a platform partner and essentially this is going to be a guide for how to evaluate whether or not a technology or a solution provider is going to be a good partner for you long term. And the problem is that sometimes it could be really difficult to evaluate the solutions of a specific vendor or specific platforms. So, a lot of these are guidelines. They’re not really hard and fast rules and generally what you’re looking for is for red flags and the absence of red flag is something of a green light but obviously you can’t just take a blanket statement and say, “Well, I didn’t see any red flags based on, you know, what we talked about in this podcast episode so everything is going to be fine,” you know, there’s always going to be the potential for downstream something to happen where things are just not going to work out. And sometimes your hand is just going to be force to go in a particular direction due to price constraint or a specific technology that you’re using or timeline but basically, you’d just want to make sure that you are aware of what you’re getting in to.

[12:02] So, some of the things that we’re going to be talking about today are there’s three different types of platforms that we’re really talking about and the first one is a true platform. So, Amazon Web Services, Microsoft’s Azure, Windows, Linux, Google’s app engine, iOS, OS X, those types of things. The second one is technology stacks and frameworks. And this really falls under things like databases, program and languages, the model framework. For example, jQuery, MVC, Ruby on Rails, et cetera. And then the third category is a company or a product API. So, things like Twilio, Twitter, Facebook, Google, PayPal, Stripe or any other payment processor, Basecamp, et cetera. Companies that have an API that they have made available for their products that you could leverage to either do an integration point or to truly build upon the product that they already have.

[12:55] Rob : We’re just going to group all of those things you’ve mentioned in to one big bucket, right, and we’re calling anyone who provides any of those things platform partners.

[13:02] Mike : Yes. So, the first thing to keep in mind when we’re going through this is that there’s a difference between something that where you’re building an integration point between your product and their product versus someone who’s truly a platform provider where you are completely dependent upon them providing the service and this is the difference between like you said earlier in this episode, you doing an integration with Basecamp where you’re not completely reliant upon Basecamp with the exception of where that particular integration versus something like Justin Vincent’s Pluggio application where he’s completely reliant upon the Twitter API being available for him to leverage in order to make his product function.

[13:44] Rob : Right or even if you think about HitTail, it’s reliant on Google and other search engines passing certain information in their search query string. So, it’s not an — it’s an API of sort. It’s not necessarily a sanctioned one but if they all change that or they suddenly stop providing them information, HitTail really is based on their platforms functioning that way.

[14:03] Mike : That’s right. So, we have five guidelines that we’re going to go through. And the first one is that the vendor or the technology place well with others. The first part of it is especially true when you’re talking about service providers. Basically, you’re looking for somebody who isn’t going to steal the ideas of the people who are building on their platform or steal their revenue streams and I’ve seen companies out there where you’ll build a product on their platform or you’ll build a complementary product for their platform and then they’ll look at them and say, “Hey, that’s a great idea,” and then they go ahead and they either try to work with you to work out some sort of a partnership or arrangement where there is a revenue sharing but if that doesn’t work out for whatever reason, they’ll just say, “Well, you know what? We’re just going to implement that ourselves and we’ll take all the revenue.” And because they’re the ones selling that platform to begin with, they basically have first crack at the customers for that revenue. So, they can essentially push you completely out of the market and I’ve seen companies do this.

[14:56] So, what you’re looking for is people who are not going to do that and Microsoft in the 90’s, I think was a company that was really feared for this type of thing. People did not want to go head to head against Microsoft or anything. And Yahoo is kind of the prime example as a company that said, “No, we are not a technology company,” because being a technology company meant that they were going against Microsoft. They wanted to be known as a media company and that works great for a long time. It really kept them out of the sights of Microsoft. But there’s a lot of other companies that you have to be careful around when you’re making these types of decisions and Microsoft today is a lot more partner-focused than they were back in the 90’s.

[15:33] But today, I think in my opinion if you look at company like Apple, you have to be a little bit careful about them primarily because of the extreme secrecy around what Apple does and I think just recently even with iOS 6, the Apple came in and said “Well, Google has been providing the maps for us the longest time and we’re going to ax that. We’re going to create our own maps app.” You want to be careful about vendors who are going to come and swoop in and essentially try and replace you.

[15:58] Rob : Is this also like Twitter when they bought bunch of — couple Twitter clients and then they basically capping API usage so several of the other Twitter clients that are still out there can’t really grow that much?

[16:09] Mike : Yeah, that be — that be one of those in my mind. I mean because obviously they want to make money in some way shape or form off of this other — the Twitter client that they bought but in another way, they’re basically reducing the level of competition by limiting what those other Twitter clients can do on their platform.

[16:26] Rob : Right and it seems like in the 90’s, Microsoft was known as a predator and so, you’ve kind of — you threaded lightly and you expect that they might come after you if you entered the space that they would feasibly entered. With Twitter, it wasn’t really — I don’t think it was really telegraphed before maybe six or eight months ago that they were going to do the changes they recently made to their API’s. But I think until a company has a business model, until they have revenue, until you know how they’re going to make money, they could pivot at any time and basically, knock any of their partners out of the water and that’s essentially what’s happening with Twitter is now going after this advertising revenue model and they’re realizing that they want paid tweets and some other things where they need to control the client experience. So, that decision to go after that forced their hand and kind of made them pushed out their partners who were using the API.

[17:18] Mike : Right but there’s definitely ways to go about that without killing your existing partner. So, for example, they could have said, “Well, we’re not just going to accept any new partners. Nobody else can build on it.” If you are an existing partner you already have an API, you have an API key that you can reach in to our dataset, that’s fine. You could continue doing it.

[17:35] Rob : That’s basically what they’ve done.

[17:37] Mike : No, they haven’t. Actually, they put limits though on how many API calls those companies can do.

[17:44] Rob : Any they already had limits before. They’ve just changed the way they were calculated and then they said you can have no more than like what is it, a hundred thousand unique Twitter handles if you have like a client now or you could have twice as many as you have now. So, you’re right. There is a hard limit now and there wasn’t before.

[17:59] Mike : Right and that’s kind of what I’m getting at there as they basically taken a very adversarial approach to what previously with their partners and the people who helped them grow to the point that they are at now and now, those people are probably struggling at this point to just try and figure out, “Okay. Well, what can I do? How do I make money off of this that, you know, I’ve already invested whatever amounts of money and time in to this particular platform,” and the provider is kind of shocked, you know, maybe there’s not a whole lot that they can do about it.

[18:27] Rob : Probably, now that they’ve done it, people are really weary of Twitter and there are maybe like a — they are not as predatory as Microsoft was in the 90’s but I think they should be viewed with caution, right? A lot of people are now not building stuff on Twitter’s API because they know they can change it at anytime. But before they started making the changes, I don’t know if that they telegraph that much.

[18:45] Mike : So, I think you’re right. I mean that beforehand it would have been very difficult to make the call and say, “Oh well, Twitter would have, you know, is going to eventually screw you down the road.” I don’t think that that’s really a conclusion you could have justifiably come to. I think that by looking at the number of API changes that they made, you could say, “Well, they’re not necessarily — they don’t care as much about the partners that they have because they were breaking things quite a bit from what I understand but I could definitely see how somebody could look at that and say, you know, this isn’t really a good business proposition for us because they keep breaking things for us and they don’t necessarily care about that. And it’s not so much that they would have — you could look at said and well, Twitter is going to become predatory as just — they just weren’t playing well with others which is a little bit different and that’s kind of the real focus with this particular — the first one as they play well with others.

[19:35] Music

[19:37] Mike : The second guideline for choosing a platform provider is that you find a company that really stays true to their core focus. And some companies are chasing multiple revenue streams or you know, in Twitter’s case, they weren’t chasing any revenue stream, it wasn’t obvious but in the case of companies where they’re chasing multiple revenue streams and they’re really not committed to anyone of them, you have to be at least a little bit cautious. There’s nothing inherently wrong with chasing multiple revenue streams but as buyer or a prospective partner, you should definitely be aware that without some level of commitment from them, they’re going to be less likely to be bothered by issues that you could consider critical to your business. One way to help to filter out the types of companies that stay true to their core focus is that the companies that you’re working with, they don’t try to be everything to everyone and you know, some types of customers are just not going to be right for them and sometimes the partners are not going to be right for them. And if you ask them, they’re going to be honest about it and tell you that upfront.

[20:33] And instead of trying to adapt themselves to meet your needs and do absolutely everything that you need or that you are looking for, they’re going to be able to just be honest with you and say, “Look, that’s not something that we can do right now.” And they may couch it a little bit and say, “You know, we may look at that in the future,” but those are the types of answers that you’re going to get from most people who are going to be honest about it. And if somebody comes back and says, “Oh yeah, we have that slated for next quarter,” and then next quarter comes along and then it doesn’t come out and then it gets push a quarter and gets push another quarter. Those are the types of things that tend to bring up flags when you’re evaluating these thunders.

[21:08] Rob : So, the danger here is that if a company isn’t staying true to their core focus, that they could easily move in to your area. Is that the issue?

[21:18] Mike : Well, that’s — that’s part of it. The other risk I think is that they go in a completely different direction and they just stop supporting whatever it is that you were doing. So, as an example, you can take a look at Fog Creek where they started building CityDesk and you know, they were selling CityDesk back in 2000, 2001 timeframe and then they started selling FogBugz. And they came out with version 2.0 of CityDesk and then they essentially dropped it. They never did anything else with it ever again and if you go to their website or you search around for it a little bit, you can still find it today and it looks like they still have in oral form for it but that product hasn’t been updated in probably close to 10 years at this point.

[21:54] So, because Fog Creek is a company was going after a couple of different revenue streams and then one of them took off the risk that I was talking about was essentially they have two or three different products or a company has a couple of different services and one of them takes off, chances are they’re going to double down on that one and if it happens to be the one other than one you’ve chosen, then you’re essentially out of luck. There’s not much you can do about it because they’ve just abandoned the one that you were relying on and it won’t make anymore forward progress.

[22:23] Rob : And this is a similar danger to building something in — if you build something in Visual FoxPro years ago or VB6 and then Microsoft up in — updates it, you know, .NET and kind of leaves your old coding paradigm in the past and all your — your framework they don’t — they don’t really update the language anymore.

[22:41] Mike : I think Microsoft is notorious on this front just because they come up with new types of technologies and you know, especially when it comes to new ways to access data or new frameworks, it could be really challenging to try and pick the winner I’ll say because they may decide, “Oh well, we’ve got millions of users and you know, only 200,000 of them are using this so we’re going to drop that.”

[23:03] Rob : Yeah, I think there’s an advantage to adapting technologies. It’s funny it’s that balancing act. If you adapt them too early, then you have the potential of dropping on something that never takes off. But if you adapt them too late, then you have these technologies only have a certain lifetime, right? I mean if you look back to where — where web pages were original built dynamic web pages in late 90’s, it was C++, CGI Scripts. Then it was — there was Perl and there was this couple of years of — it was like ColdFusion, Classic ASP 1.0 and PHP came up around then and then really PHP is now on 5.0 which is totally different. If you still had old PHP 1.0, it probably wouldn’t even run anymore. So, you had — would have had to move that up. There were desktop apps in VB6. Those got cut off at the knees when .NET came out in 2002. And so if you’re too early in the curve, something you can honestly really pick one bad, right and then take a nosedive and you really get a lot of support for it. But if you wait too late, the thing could basically not be — be use by many people anymore.

[24:04] And it’s not bad of a technology, I mean here I own HitTail. It’s in Classic ASP which hasn’t been updated since, as far as I know, 2001 or 2002. So, it’s at 10 or 11-year old of web technology which is just a crazy statement to say. But it’s not the end of the world that we’re dealing with that. I mean everything still works. The app still works. It’s just that there’s no community around it and if we run in to a hard problem and the solution is not online, we’re really at the mercy of spending hours and hours troubleshooting it. As well as the fact that there’s no ego system there anymore to develop things as — things like OAuth or integrations with, you know, REST API’s weren’t around when Classis ASP was built. And so that’s a trail off you have is that an old app will still continue to work but when you want to update it, you want to do cool and new stuff with it, you probably will have to use a newer language to then tie back in to it.

[24:54] Mike : Well, the other interesting this is that because ASP is obviously on the down swing at this point is that looking forward, I mean how many more versions of — of Windows servers are still even going to support ASP.

[25:08] Rob : Yeah, and I think Windows 2008 server didn’t have it in by default.

[25:12] Mike : It’s not.

[25:13] Rob : Yeah, I think it was the first year where they — you actually had to go in and install it yourself.

[25:17] Mike : I’m going to look at Window server 2012 to see what’s in there but, you know, that’s something you may have to deal with at some point in the near future.

[25:25] Rob : Uh huh, true.

[25:26] Music

[25:29] Mike : The third thing to look at when you’re trying to choose a technology provider is that if it’s — especially if it’s a service provider that they take steps to be safe with and secure with your data. And this — as I said, it applies to a lot more to the platform service providers rather than to integration partners or to just technology providers. But you have to make sure that if, for example, there’s a data breach, they’re going to notify you and they’re going to let you know that there’s something wrong. And if they don’t notify you, then there’s something fundamentally wrong with that company and you really need to be careful about using them in the future. And I think that you can look kind of all over the internet for different companies who’ve ran in to these situations where they have a data breach and either it shows up on some web page somewhere and they just don’t tell anybody about it or they just kind of, you know, do that several weeks after the fact.

[26:20] And I think we ran in to that at one point with our mailing list provider. People started complaining that their e-mails were getting spammed and you know, come to find out it was — it took probably three or four weeks that we found out that our e-mail provider had a data breach and that was exactly what they did. They didn’t bother to tell anybody. They just put up a web page several weeks afterwards because people have been complaining so loudly and there was never an apology. There was never a notification of what was going on. It was just, “Oh, yeah, this happened,” and that was it. And I think you and I just kind of said, “No, that’s it. We’re done at this point.” And we moved everything off of them and then went over to MailChimp.

[26:57] Rob : Which was a painful transition that was AWeber which is surprisingly enough because AWeber has been around for a long time. I would expect that they would have behave better than that but it was — it was pretty shocking and that was, what, two or three years ago that happened. And it’s obviously, it’s painful to move your mailing list because you just, you know, you’re so in trench in to that API. You have the interface down. You have the form embedded. I mean there’s — it’s not a trivial move but that was enough for you and I to decide to — to move everything over to MailChimp.

[27:24] Mike : Right and that’s just a level of trust. I mean if you don’t — if you can’t trust them to do the right thing, then you definitely need to start looking elsewhere.

[27:32] Rob : Right and it’s not that they got breached, it’s just that they didn’t tell us they got breached and we had to wait for complaints to come in from our prospects and customers saying they were getting spammed essentially by, you know, using specific e-mails they had set up for our stuff and I’m so glad that was over.

[27:48] Mike : Also a part of being safe and secure with your data is that if they lose your data and by lose, I mean, you know, the data gets corrupted and they’re not willing to do whatever they can to try and help and they’re not staying in communication with you to let you know what’s going on, that’s a really bad sign. And again, this just goes back to the red flags and looking for things that — signs of things that could go wrong in the relationship down the road and some of these things obviously, you can’t know them in advance but you can search around and find history on companies that had been in business for a while and see what the — the reaction from their users has been over — over time.

[28:24] A lot of these companies have — there’s websites out there where you can go and find reviews and what other people’s experiences are with them. Don’t necessarily trust all the marketing stuff that’s on their website. Go out and find a legitimate third party reviews. Not to say that the reviews on their website aren’t accurate but they are obviously not going to publish things that cast them in any sort of a negative light as well. I mean you — that’s just not something you do on your own marketing material. But if there are user submitted areas, if they have forums, definitely look through those forums and see if you can find out how they would respond to those types of things.

[28:58] Rob : Twitter is probably not a good place to go to see who they have been responding to and look at those conversations.

[29:02] Mike : I think the only down side with Twitter is that you only get so much history there. I mean you’re only going to be able to look back so far. Really what this comes down to is just are these companies willing to own up through their mistakes and everyone makes mistakes and it’s not a big deal that people make mistakes. It’s really how they respond to those mistakes and you know, just keep in mind not everyone customer is a good fit for every single vendor.

[29:22] Music

[29:26] Mike : The fourth guideline we have is that they’re not stuck in the previous decade. Many people make judgments about a company base on their website and to some extent this is good because if you look at a website and it looks like it hasn’t been updated since the 90’s, chances are it probably hasn’t. And if the technology is visually stuck in the last decade, you have to wonder what’s going on under the hood and how long some of that code has been there. And not that code goes bad but problems change over time. And if the company has been changing everything under the covers overtime, then chances are that that front end UI should have as well. And if the front end UI isn’t changing, it may be an indication that things underneath the covers are not changing to meet the needs of new customers.

[30:06] Rob : Right and I think it depends on the business they’re in, right? If you’re looking at someone that’s providing you with, well I mean like an app like Twitter or like some cutting edge social type of thing, you expect to have a fairly modern UI and you expect to have modern REST API’s, not things that are, whatever like web services from 2001. Whereas if you’re dealing with someone or maybe you’re getting government data for something for housing prices or for some old metric that, you know, some — maybe the company is been up for 20 years, you’re going to give them leniency and they — they can have a website that looks older, an API that maybe was built in the late 90’s and you’re going to give them a little more leeway because, hey, they haven’t updated it and they may not have had a reason to do so.

[30:46] So, I mean I think an interesting look is if you look at MailChimp versus AWeber who we’re just talking about, AWeber API is old. They haven’t really updated their UI in years and I think they retain a lot of the customers that they’ve always had but I think if someone comes at the MailChimp website and looks around, they — there’s a very different feeling. There’s a lot more of a hi-tech startup like these guys are constantly updating their app versus AWeber which is more like I’d say very consistent. It’s a more classic aged app. I mean that’s only a bad thing if — if you want new features to be rolled out constantly. I think there’s these pluses and minuses on both sides. But I have heard complaints from people who are still using AWeber that they wish there — there were some new like split testing and you know, features that MailChimp has rolled out that they wish AWeber would get on as well.

[31:34] Mike : And the fifth guideline for choosing a platform provider is that they are able and willing to help you. If they’re honest and willing to tell you when they’re not going to be a good fit for you or if they have documentation and resources that are available that they can point you to and they will help you in the right direction, then they’re probably going to be of good fit for you. But if they are willing to yes you to death and do anything it takes to land you as a customer and then you find out after the fact that they just really weren’t a good fit or that you weren’t a good fit for their services, that’s obviously a bad sign. And you’re going to have to dig a little bit. Chances are good you’re going to have to get on their support.

[32:11] You’re going to have to ask them some questions. Ask them straight forward and say, “You know, will this work in your environment and if so, how is it intended to work?” If you have any questions about how it’s suppose to work or how your product is going to integrate in to their platform and they’re not able to give you satisfactory answers, I mean they don’t necessarily seem knowledgeable about it, either ask for somebody who’s a little bit higher up or you know, take what they’re saying with a grain of salt. Do some additional testing and this might even be a good opportunity to outsource some of that work to oDesk and see if somebody can build a very, very quick prototype using the technology and the ways that they’ve outlined to see if it actually works or not.

[32:47] Rob : In terms of them being able and willing to help you, how does that play in to something like Open Source Software in to like the Google app engine where there isn’t really support?

[32:58] Mike : Well, I think that those types of things when you’re looking at Open Source Software or anything, I mean is there a community behind it because if that community is there, then chances are good that they’re willing to help you but there are — and I can’t think of one off the top of my head but I can imagine that there is probably an open source community out there where there are very close and very not helpful [Laughter] I’ll say and you try building something would whatever the software is and they’re just like, “Oh, you’re doing it wrong. You have no idea what you’re doing just go — so go away.” I can’t imagine that there is very many of them because I wouldn’t — that they would last very long or get very big but I can imagine that there are might be a couple out there that are kind of on a bleeding edge and there’s just like we don’t have time for you, just leave us along figure it out yourself.

[33:42] Rob : Or if it’s a community that’s really small or virtually non-existent I could see that’s like kind of like not having support available.

[33:42] Mike : Yeah, there’s a difference between having dead air and somebody just being not helpful. I could see dead air being much more prevalent than something like, you know, just people just saying, “No, go away.” Really what you’re looking for is are they willing to try and make whatever it is that you’re trying to do work, you know, are they offering solutions or are they offering places you can go for a help. And not to say that they’ll do it for you but they’re trying to make your life easier as oppose to making you jump through hoops.

[34:15] Rob : Is there any way to tell before you integrate with them whether they’re going to be able and willing to help you because like you said they might yes you to death before the sale and then once you get in to it, you know, you build the thing and then they’re not very helpful. How do — how do you avoid that?

[34:28] Mike : Well, I think they’re building prototype is a good way to do it and for prototype you don’t necessarily have to build everything that you’re looking to do. Just try building one piece of it and if it’s something like doing and a lot integration and that’s just one piece of the entire thing and you think that that’s going to be a problem area, work on that one piece or go to oDesk and outsource it to somebody and say, “Hey, I need you to make this work,” and take a look at the output and see if, you know, is it remotely readable? If the person had to jump through hoops in order to get it to work and you know, if you put them in touch with the vendor and they’re not able to help or unwilling to help, then, you know, that says something about what level of support you can expect in the future.

[35:08] I think the big key is making sure that you don’t spend a lot of money before you kind of get in to it and I’ve heard horror stories from people about spending 15, 20, 30, $50,000 before — before they even get something installed and then having to do all these customizations and then coming to find out, “Oh, by the way, this isn’t going to work because of such and such bug that’s unknown issue.” So, I think that wraps up how to pick a platform partner and as I said before the things to keep in mind are when you’re evaluating the vendor, make sure that they play well with others, make sure that the company is staying true to their core focus, make sure that they are taking steps to be safe and secure with the data that you’re putting in to them or onto their services and make sure that they’re not stuck in the last decade and the fifth one is to make sure that they’re able and willing to help you.

[35:56] Music

[35:59] Mike : If you have a question or comment, you can call it into our voicemail number at 1-888-801-9690 or you can e-mail it to us at [email protected] Our theme music is an excerpt from ‘“We’re Outta Control” by MoOt, used under Creative Commons. You can subscribe to this podcast in iTunes by searching for startups or via RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening. We’ll see you next time.

Mike and Rob discuss how to pick a platform partner using five guidelines.

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Episode 18 | Free and Low Cost Solutions

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Show Notes

[00:00] Mike: This is Startups for the Rest of Us: Episode 18.

[00:04] [music]

[00:13] Welcome to Startups for the Rest of Us, the podcast that helps developers be awesome at launching software products, whether you’ve built your first product or are just thinking about it. I’m Mike.

[00:21] Rob: And I’m Rob.

[00:22] Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. So, what’s going on this week Rob? You getting anymore sleep?

[00:28] Rob: I am. We’re actually getting quite a bit of sleep. So I’m able to get a bit on work done. I’m actually slowly returning to work right now. Probably get a good three hours in today which is – it’s kind of refreshing actually. I was off for about two and a half weeks.

[00:41] Mike: Wait, wait three hours of sleep or three hours of work? [laughs]

[00:44] Rob: Three hours of work. So it’s actually been kind of nice to get back to work. To be off for a couple of weeks and then come back and be productive again – makes me feel good.

[00:54] I did want to talk about this interesting road that I’ve been traveling down. I’m getting my book, Start Small Stay Small converted to Kindle format and EPUB which is compatible with the iBookstore. I just got that first draft back from a contractor today, from an outsource firm, and looks really sharp. It was really cool to bring it up in the Kindle viewer and just to see the book. It looks so nice and professional.

[01:19] There’s a bunch of work to be done, or a bunch of kind a small corks to be ironed out. I assume by the time this airs, actually, there should be a Kindle version available you can buy directly through your Kindle or Amazon. And in the Apple iBookstore, unless…

[01:34] Apple have some weird stuff, so there I could see there being a problem like I heard that you can only do it on a Mac. You can only create it in an iBook compatible version of the book on a Mac. If I can’t do it I can’t do it, but I’m going to definitely give it a shot.

[01:48] This has been more complicated than I thought. I thought that you could just use a converter, go from Word doc to one of these, kind of publish it like it was a PDF doc, but it’s not at all. It needed a bunch of hand coding. So I had to hire someone to do that.

[02:00] Mike: Yeah, I’m not terribly surprised about that, to be honest, because Word has its own kind of format. I’m not surprised that there may be some special constraints around publishing in that format.

[02:12] Rob: I agree. I had hoped that it would be kind of save as PDF and that you could just add something and save as EPUB, save as PRC. There’s not a chance, though. There’s a bunch of hand coding. That’s been cool. So, StartUpBook.net if you’re interested in hearing about that.

[02:27] The other thing is I haven’t done consulting work in well over a year, but a friend of a friend asked me to do just 20 hours of work for him last month. And I worked with this component that was so freaking good that I had to talk about it. Seriously, I was so amazed I told them they need to raise their price. I mean it was one of those experiences where you’re just like blown away by the marketing and the usability and the ease of use, the whole deal in this thing.

[02:52] It’s called PHPurchase.com. I think it’s supposed to be like PHPPurchase.com but its PHPurchase.com. It’s just a WordPress plug-in, and it’s to make a shopping cart in your WordPress install.

[03:05] I looked, I evaluated. I probably spent two to three hours. I have a list of about 12 plug-ins that I evaluated and this one is by far the best. It’s very simple. There are some WordPress cart themes that actually create all the layouts and you enter a database of products. This one is more like you enter some products and it just gives you a “Buy Now” button you can put anywhere in your WordPress install.

[03:28] These guys are top notch so I wanted to mention them on here. I told them I was going to and really impressed with their work. And I actually was looking at other stuff they built because it’s like, man, if I ever need any other components, I’m definitely going to these guys. So that was PHPurchase.com.

[03:43] The last thing is I wanted to give a shout out to a good friend Andy White. He does the Internet marketing podcast right now and he has just started his own podcast. He’s writing a book and he has a blog, and it’s PodcastingAdvisor.com. So if anyone out there is interested in doing their own podcast or learning how to podcast you should definitely check that site out. That’s it for me, that’s kind of the stuff I’d been gathering over the past few weeks.

[04:09] Mike: Very cool. Personally, I haven’t been doing a whole heck of a lot. Because it’s summer I’ve been trying to enjoy the weather a little bit more and neglecting the business side of things a little bit more than I probably should. But I’m putting the time to good use. So I’m trying to work out and get some exercise and lose some weight. I’ve got an upcoming trip down to Disney World later this year and then another one down to the Bahamas next late spring or early summer.

[04:34] Rob: Vacation. I didn’t know you took vacations.

[04:36] Mike: Yeah, you got to take some vacations. And I also took a week off October for the business of software conference that’s coming up. I know you’re speaking at that.

[04:45] Rob: See you there. Yeah, it’ll be cool to hang out, and I think some other folks I’ve been emailing in the Academy who were thinking about going as well.

[04:51] Mike: Mm-hmm, cool.

[04:52] Rob: That’ll be nice. We’ll have to get together and have some dinner and such. And any of you listeners out there, if you’re planning on going, we should definitely touch base.

[04:59] Mike: Yeah. The other thing, I realize this after we had recorded the last podcast, and it was another way that you could use to help make ends meet when you’re starting up your company.

[05:11] One of them is that if you have student loans, you can request a temporary forbearance. Usually this is more applicable to the US based listeners. For student loans, you request for forbearance and what that essentially means is that you still got to pay interest on your student loans, but you don’t have to make the monthly payments. So I’ve done this in the past before and my wife did it at about the same time, and we actually saved ourselves pretty close to about $600 a month by requesting forbearance.

[05:38] Like I said, you still have to pay the interest back and they’re still accumulating that interest, but the interest rate is just so low. So if it’s a choice between doing that and paying credit cards or paying off your credit cards, it’s kind of a no-brainer just because the interest is so low and it’s guaranteed to continue being that way.

[05:56] Whereas a credit card or some of your other expenses you could certainly rack up quite a bit of debt there. For your student loans you’ve got a lot of time to play with. In some cases, it can make sense to do that.

[06:07] The other option is deferment, and that’s actually a lot harder to get. That’s if you are going back to school. The difference between a forbearance and a deferment is that a deferment doesn’t accumulate the interest anymore. So it actually stops accumulating that interest while you’re not paying it. Whereas a forbearance you can request it anytime. You can just say, “I’ve got a financial hardship,” or “I lost my job,” or “I’m quitting my job,” and you need to make ends meet. That’s the difference between those two.

[06:34] Rob: Nice. That’s a good tip.

[06:36] [music]

[06:39] Mike: So for today’s podcast we’re going to look at a number of low cost or open source solutions that you can use for your business. And it kind of ties into the last episode where we talked about 11 different ways to make ends meet while you’re starting up. This one is more about making sure that you have the tools that you need in order to be able to run your business and expand your business without spending a huge amount of money on it.

[07:02] Some of these solutions that we are going to talk about are completely free. Some of them are fairly low cost for what they are, but we’re going to go through about probably 10 or 11 different groups of tools that you can use to build up your company whether it’s operating systems or mail servers, things like that.

[07:20] Rob, I guess the big one is operating systems. That’s one of those things that – you need an operating system to run most computers these days so why don’t we start off there?

[07:28] Rob: Very good. Obviously, the go-to one that a lot of people will think of in terms of a cheap or free option is Linux, and I actually had played a little bit with Ubuntu, although it’s been a year or two. But I have just heard such good things about it so that would be the go-to if I was going to be heading towards the Linux.

[07:44] The other thing that a lot of people don’t know about is Microsoft BizSpark program which allows you to get all bunch of licenses to basically all of Microsoft’s stuff that you would need as a developer. And you essentially get it for free for a couple of years. I think you can opt for a third year, and after that third year you have like a $100 exit fee. So you can get pretty much three years worth of all the OS licenses you need essentially for free, or for a $100 at the end of that three years.

[08:15] Mike: So the next set of tools that are almost essential for any developer are bug tracking. There are a number of different ways to go about tracking your bugs. And of course, people probably start out with Notepad or Excel or something like that. But there’s a number of bug tracking vendors out there who offer low cost or free versions of their bug tracking software.

[08:35] One of them is Axosoft, and you can find them at Axosoft.com. If you download their software you get a one user license for free. FogBugz is another one that you can use their hosted solution, and that one you get two users for free. And then the third one is Bugzilla.

[08:50] The problem with Bugzilla – I guess the major drawback with Bugzilla is that you have to host it somewhere. So if you have your own server, your own Internet connection that you want to host Bugzilla on, you can certainly do that, but at that point it’s easier to use something like FogBugz just because they’re going to host it for you. You still got up to two users and the only real drawback to using FogBugz over Bugzilla is the fact that if you go over two users, you’re going to have to start paying for it.

[09:16] Rob: I have used hosted FogBugz for two and a half years probably. I started off with the startup pack which is free for two users and eventually outgrew that. And it’s worked out great. There is a cost. Once you go over those two users it’s $25 a month per user, so if you have four users, it’s $100. You don’t get the first two users free then.

[09:35] But frankly, for the headache that it kind of has removed from my business life it is well worth it. In early days when you’re first starting up it is free. I mean I went for many months, and maybe even a year, and just didn’t pay a dime for it, and it was always there, and it’s easy to use and everything. Until I bumped into that two user mark, everything was fine. So I definitely recommend that.

[09:57] I tried Bugzilla, I installed it, I did not like the usability at all. I felt it was like ridiculously hard to use. It was kind of that stereotypical open source issue where it just wasn’t nearly as usable as the other two options that you mentioned.

[10:10] Mike: I got into using Axosoft a few years ago because they were running a promotion for their bug tracking software, which is called On Time. Basically, they started a marketing campaign to see how many people they could get to buy their software for $5, and they took every single dollar that they made from those sales and donated it to the Red Cross. It was all going to charity; it had nothing to do with making money off of it.

[10:34] They were just selling all of these five year licenses for $5. And honestly, I went out and I bought it and it literally sat on my hard drive for a couple of months before I even installed it. I just thought that it was a good cause so I just went on and paid $5 and said, “Here you go.” So I kind of count it as more of a donation. But then I got to using it. I was pretty impressed; it was actually a very good product.

[10:54] Rob: The third category of tool is source control, and even as a one person company, we absolutely recommend that you have source control, because it’s not about collaboration, but it’s about being able to save all of your changes, being able to roll back, branch and merge, as well as hopefully to have something offsite.

[11:13] Some of the options that we’ve seen people use successfully, including ones that we use ourselves, are Subversion, Mercurial, Git. There’s a free one user license to Vault from Source Care if you like the old Source Safe mode of check-in, check-out.

[11:28] So to backtrack a little bit and cover these, I’ve actually used Vault with a lot of success. I haven’t it for a few years, but it’s top-notch, high quality, follows the old visual Source Safe model with check-in, check-out file locking. It kind of follows a similar paradigm and I highly recommend it.

[11:44] Then I then switched to Subversion from there and it follows them more of the CVS model where you don’t lock files and you branch and merge things as you update the main repository. Of course, I’ve talked about this before, but I get free Subversion hosting with my web hosting with DreamHost, and I’ve good luck with that. I’ve probably had six or eight developers working on that without a problem.

[12:04] Certainly, Mercurial and Git are kind of the up and coming, and it seems like that’s where everyone is headed. It seems like we’ll all be using that in a few years. Have you worked with Mercurial or Git?

[12:16] Mike: Mercurial.

[12:17] Rob: Cool, And what do you think about that brand, the distributed source control?

[12:21] Mike : I like it a lot. There’s advantages and disadvantages to it in regards to Vault. And actually, Vault, I’ve seen in the options menu that you can use Vault in a CVS-like manner. I never really kind of liked that just because there is always, I guess, in my mind, the risk that you could be changing stuff and you accidentally not check it in or this or that. If you don’t check something in and all your files don’t get in, somebody else tries to get the latest version and it breaks their build. That was always kind of a huge pain in the neck.

[12:51] But Mercurial seems like it gets around that because it basically lumps all of the changes in your set of directories together as a single set of changes. I actually found that I kind of liked it because what I could do is I could be working on my laptop, I could be working on my desktop and I could set up different repositories on the server for my laptop and from my desktop, and I could be doing different things on either of them or I can be working on the same things. And just by pushing or pulling my change sets from one repository to another, which is extremely easy to do with Mercurial, you can be working on whatever it is that you need to or want to at any given time. Plus you get that offsite backup.

[13:31] The reason I always kind of tended towards Vault was just because of the fact that you’re checking files out and you’re locking them so nobody else can touch them, and then when you’re done making those changes you can push them back into Vault and you essentially couple all your changes together. But with Mercurial, it’s not necessarily nearly much of a problem as it was before, plus you’re not locking things for other people.

[13:53] I’ve had issues where I will start working on something on my laptop and then I go to my desktop and I have some of those files locked. It’s kind of a pain, because I then have to go back to my laptop and check them in or go into the administrative tool and unlock them. If I just forgot or if there are changes, I can push them through. It seems to me that Mercurial fits my style a little better.

[14:13] So the next category of tools is backup software. Now, you really need to have some sort of a backup for most of your stuff if not all of them. I personally backup all of the ISO images that I download from Microsoft with my MSDN subscription. But I certainly wouldn’t need to if I didn’t want to. But there’s a lot of other stuff that’s on my hard drive that I’ve gotten from various places or it’s backups of different things that you want to have a backup of. Raid doesn’t necessarily do it because Raid is just creating a copy of it and it’s no good for disaster recovery. You really need to have some sort of an offsite backup.

[14:50] For example, one of the things that Rob and I do for the Micropreneur Academy is that even though our host provider for the academy has all of our videos and all of our audio files and all the content that we have for the site backed up on their systems by basically providing 99.99% whatever percent reliability for it, there’s always that chance that everything could go down. And plus, since they also host Subversion, that could be a problem.

[15:16] So what I actually have is I have it setup so that all of their stuff is downloaded onto a NAS device that I have in my office once a week. So I basically have a copy of everything that’s no more than once a week old, and I backup differentials every single day.

[15:32] Now, that works for us for that particular business, but what about the listener? How do you backup your stuff from your personal location or from your desktop or your laptop to an offsite place?

[15:42] Well, there’s a lot of other tools out there that you can use and various services that are extremely cheap. There is a one called Backblaze, there’s another one called Carbonite, and there’s a third one called iBackup. There are several others as well, but typically these will run you about $5 a month, $60 a year. You can usually backup as much stuff as you want on any given computer. If you want to backup network devices or network drives, there are sometimes some issues associated with that. But you can usually just pay $5 per computer that you’re backing up and then backup as much data as you want or as you need to.

[16:18] I kind of looked at Backblaze a little bit and one of the cool things that they have is just from a technical perspective. They actually show you how to build a 67 ½ terabyte 40 rack mount machine for about seven or eight thousand dollars, and they have these specs on their site. So if you’re interested in it you can go search their site and they actually have this entire article.

[16:39] Like I said, I mean all these services are pretty comparable, about $60 a year, usually $50 or so if you pay in advance for the whole year. It’s just cost effective and almost essential.

[16:51] If they can target a business where they’ve got ten different machines in an office and they back them all up, it’s $50 a month. For a business that’s a great deal. Fifty bucks a month to make sure that all of your stuff on everybody’s computer is completely backed up? That’s an awesome deal

[17:08] And they’re not going to have nearly as much data as you and I. Basically, for that $5, they’re banking on a maximum amount of data for the average user. I think at a data point of around 200 gigs or so for the average user, beyond that that’s where they start to lose money. If you go to the Backblaze blog they actually tell you how much money it cost per gigabyte to store it over the course of three years or five years, and its pennies. It’s dirt, dirt cheap per gigabyte.

[17:37] Rob: Yeah, you know with business pricing, though, like with Mozy in particular, if you’re a consumer you pay $5 a month flat and it’s essentially unlimited. But when you switch over the pro plan, which is the business plan, then it’s $4 for a desktop license plus 50 cents per gig per month. And for a server it’s $7 plus 50 cents per gig per month.

[17:57] That’s probably more of their bread and butter for all of these guises. I’m sure they break even or make a little bit on the consumer side, but it seems like they would make quite a bit more. If you’re happy with it as a consumer, then you’re going to highly recommend it or at least trust it when it comes to backing up your business.

[18:13] Our next category of tools is database software, and everybody knows the standard open source alternative such as MySQL and Postgres. These are obviously awesome databases for Linux installs, and even some folks I know run these on production Windows boxes, which is interesting.

[18:29] What a lot of people don’t think about is the express editions of the otherwise costly databases from Microsoft and Oracle. The express edition of sequel server, which I’ve used very extensively over the past couple of years, is freaking awesome now. It used to be limited, it used to be throttled to five users, but this was years ago.

[18:50] Right now, it’s a shockingly capable database. I mean they really have given you a lot. And I’ve actually had a few clients use this – again it was a year or two ago – they used it on larger sites. They really didn’t run into performance issues until they hit a really high point of growth, at which point, of course, they could afford the fees for getting a SQL Server license.

[19:10] Now, I have never worked with that Oracle Express edition, but I’m assuming that, if they’ve kept up at all, that they’re in-line with the SQL Server Express. You have experience with that Mike?

[19:20] Mike: Yeah, I’ve installed it before. I was working with an enterprise company that was having me do some work on securing their Oracle databases. So I actually used that so I had a test environment. I actually installed that Oracle on a Windows machine. And I know that most people have it running in production on a Linux or Solaris or an AIX environment or something along those lines. But I installed it, got it up and running. I was absolutely shocked because it was one of the few times that I was able to get Oracle installed and running without any problems.

[19:52] So I think Oracle’s come a long way in terms of getting their installer to work properly in different cases. But yeah, it worked fine. I didn’t have any issues with it.

[20:02] Rob: Yeah, I’ve always felt like Oracle was the huge beast to install. But I’ve pretty much only installed it on Windows, actually. All during development when we worked with it…I mean this is back in 2001, 2002 and 2003. Once we’ve got it running on Windows, it was super stable. The management console was freaking horrendous. But in terms of coding against it, it was always a really good engine running on Windows. It was very stable.

[20:25] Mike: Yeah, I don’t think I’ve ever run into any of these four databases in particular that isn’t stable. As soon as you get them installed, they’re fine. At this point, I would probably put SQL Server and Oracle on kind of a level playing field from a startup environment.

[20:41] However, once you get past the limitations of the three versions of SQL and Oracle, as you said, it can be thousands and thousands of dollars for those things. So you really kind of have to pick and choose what you’re going to be running those on.

[20:55] The next one is mail servers. Now, running a mail server is probably not what most people who are building a business should be doing, unless your business is running mail servers. What you should really do is you should outsource that in some way, shape or form.

[21:09] Now, most ISPs are going to offer you free mail hosting. So if you buy a domain name from somebody and you host it there, you can usually get free email hosting as well. But you can also get Google to host your corporate email for just $50 a year, and that gets you 25 Gigs of space in your email. If you’re already comfortable with using Gmail, having Google host your corporate email is a great option.

[21:32] Rob: I’ve actually had good luck going into my web host. I run a bunch of businesses. I have 10 or 12 – I mean depending on what you consider a business. But I have a lot of websites and I need to respond to a lot of different emails as different people; you know, essentially being support for a different website. So once Google implemented the POP where they can send as a POP address, because they’ve always been able to pull emails as a POP, but they just implemented the send maybe nine months ago or maybe a year ago. That was the ticket right there.

[22:03] So you can actually now get email from a mailbox and send as that mailbox from Gmail. It’s really handy. I have probably 10 addresses now that I can send as. Typically, I only do that for the first few months that I own a website and then I try to get that off my plate to a virtual assistant. But for a few months it’s super handy. There’s a lot of flexibility. That’s just the basic free Gmail account I don’t actually pay for it at this point, but I’d be totally willing to. I mean it’s critical to running my business.

[22:31] Our next category is FTP software. Our recommendation is to use WinSCP on Windows. It’s free and it allows you to use FTP, secure FTP, and SCP. On the Linux side, most software is going to be built in to your OS.

[22:46] This was a surprising find. Mike actually recommended WinSCP. I had been using straight FTP through just Microsoft Explorer, and I also had FileZilla, and I had a plug-in through Firefox, and all of those had one issue or another. WinSCP has brought everything together. It has the most features, it’s easy to use, and it’s free. I highly recommend that if you’re not using it. WinSCP.

[23:09] Mike: The other thing is I download all the files and stuff from the Micropreneur Academy once a week. It’s the command line version of the WinSCP tool that I used to do that. I basically just set up a scheduled job that downloads that stuff once a week. It has syncing capabilities built into it as well, so you can sync up between a local directory and a remote directory very, very easily.

[23:33] The next category is PDF writing software. Most people think that in order to create a PDF, you have to have Adobe Acrobat – that’s completely not true. You can just go out and download a utility called PDF Creator or another one called CutePDF. Either one of these, after you’ve installed it, you can simply print to a PDF file.

[23:52] It’s just like Adobe Acrobat. The only difference is that you don’t have the editing capabilities of editing the PDF file. But the vast majority of people don’t actually need that capability. If all you need to do is create PDFs, you can just use PDF Creator or CutePDF, print to a PDF file and you’re done.

[24:09] Rob: If you’re using Office 2007, it’s actually built into it. It’s a free download from Microsoft and you can just “Save As” in Word or Excel or any other Office products and there’s a PDF right there.

[24:22] Next category is content management systems. There are a ton of content management systems – hundreds and hundreds of them. This is a market where we actually tell entrepreneurs not to go into.

[24:31] The content management systems that we’d recommend, certainly WordPress is going to be at the top of the list. Drupal is excellent. It’s a little bit more complex, a little bit more flexibility. And then Joomla! is even more complex with even more flexibility. So, depending on your needs, those are the top three I would absolutely recommend for Linux installs. And then if you’re going to go on Windows, DotNetNuke is the standby. It’s tried and true solution.

[24:57] A lot of developers have some trepidation about using a CMS because they feel like it constraints their ability to, say, write some code or make some type of decision that they want to make. But I tell you, especially with the new plug-in architectures that these things have, it is amazing how simple it is to do anything you want. In addition, if you go for these popular CMS’s, they have this huge ecosystem of plug-ins and themes. And it’s crazy, cheap or free to really get the functionality that you want.

[25:28] So once I started going with WordPress – I pretty much do all my websites on WordPress now, and I can’t imagine going back and building static HTML sites like I used to. I just don’t see the benefit. I really would encourage you. If you’re going to build a public facing website that you consider using a CMS. In the long run it will save you time.

[25:47] Mike: I cannot agree more. So the next tool that we came up with was for file sharing. Now, if you’re doing any sort of file sharing either between your laptop and your desktop or with other people over the Internet, there are two solutions you should definitely look into. One of them is called Dropbox and the other one is called SugarSync.

[26:05] Now, both of these solutions work very similarly. You’ll probably have to sit down and kind of look at the specific features of both of them to figure out whether one is better for you or the other, but they’re very comparable. It essentially allows you to set up these folders on your laptop or your desktop and it will sync them between one machine and another.

[26:23] I use Dropbox all the time because I have a laptop and a desktop, and I want to make sure that there’s a set of files that are always on the other machine, and I don’t have to carry around the USB drive. I mean I do like for extremely large stuff, because I carry around all these ISO images and everything. But for a lot of my smaller files, like my Word documents, some of my business files, I basically just throw in my Dropbox directory and they get synced over the Internet to the other machines that I have Dropbox installed on.

[26:53] Now, in addition, you can share files with other people. You can set up rights and privileges such that they can go in there and they can make changes to those documents and those files, almost like it was a version control system for your documents. You can share one folder with one individual, you can share a different folder with somebody else, and it’s all pretty seamless. It works very, very well. They have a low-end version that is basically free. It’s kind of the freemium model.

[27:21] Rob: Our next category of tools is transferring large files over the web. Typically, this is when you want to just email someone and have the file attached, but it’s 50 Megs or it’s 150 Megs. Maybe you’re dealing with a user who’s not going to know how to FTP or how to even right-click and do Save As, and you just want it to be as dead simple as possible. There are a couple of tools that we’ve used very successfully to transfer. We work with a lot of audio and video files, and these apps work really well for that.

[27:49] One is YouSendIt.com. Another is DropSend.com. And the other one is TransferBigFiles.com. I’m pretty sure all of them have free plans. I know at least the first two I named do because I’ve use the free plans for both of them. Frankly, they’re just really handy for dealing with kind of non-technical users, or even if you want to email something to yourself and are not going to have FTP access at some point, these are kind of good backup plans.

[28:15] Mike: The next category of tools is virtualization. Some people are familiar with virtualization, some people aren’t. The basics of virtualization is that it allows you to run multiple operating systems on a computer without switching hard drives or duel booting the machine. Basically, they all run at the exact same time.

[28:34] There’s two different pieces of software that are extremely helpful. One of them is called the ESXi server. You’re probably familiar with VMware and VMware Workstation. VMware Workstation allows you to run things on your desktop. While ESXi server, if you have a piece of hardware that’s on the approved hardware compatibility list from VMware, you can install ESXi server and it’s absolutely free.

[28:59] The difference between the ESXi server and ESX server is just the level of support and the fact that you can’t connect multiple hardware devices together and do an automatic failover from one machine to another, for example.

[29:14] The other virtualization tool that you can use is a desktop application called VirtualBox. Now, VirtualBox is very, very similar to VMware Workstation. You install it on your laptop or your desktop and you can install operating systems into these files that are sitting on your machine. You can fire them up, shut them down, and allocate resources to them. Again, it’s very comparable to VMware Workstation except that it’s free.

[29:38] Rob: Our last category of tools is one that Mike doesn’t think is a category, but I contend that it is. So we’re going to have a good little discussion about this. But essentially, I added this at the last minute, and it’s time tracking. It doesn’t matter which tool you use. I’ll name three that I know work well.

[29:55] One is SlimTimer – I’ve used this for several years, and that’s the model where you have a bunch of tasks and you just click on a task and it starts the timer and then you click when you’re done. It’s pretty easy. It’s not like a timesheet entry type thing. Then Mike has used RescueTime for quite some time. We know that works well. Then there’s an app called ClickTime that is the original SAS time tracker that launched in the mid ‘90s or late ‘90s. All three of those are solid time tracking apps.

[30:21] But again, it doesn’t matter which you use. I think the bigger issue is I’m a big contender of tracking your time even when you’re not billing that time. There are actually a couple of reasons for that. One is that if at some point you decide you want to sell that business or sell that application, you know exactly how many hours you have spent in its entirety. You can say, “This is 1,500 hours of work.”

[30:43] In addition, you could actually use that as a marketing point when people ask how big is your app, or you could even just kind of bring it up, like, “This is 1,500 developer hours of work.” It shows that it’s a complex app; that someone can’t just rewrite it in a weekend or something.

[30:57] The second point is at the end of every month since I have multiple businesses that I run, I do a big reconciliation and I look at how many hours I spent on each of my businesses, and how much profit each of them brought in. I have an hourly rate for all of them for every month. So I can pretty quickly see which ones are paying off big time and which ones are floundering, and I can adjust my attention accordingly. I can sell off products with a lower per hour profitability, which I have done that in the past. It just gives you a really solid metric to do that from.

[31:29] Now, the one caveat I’ll say is I’ve worked SlimTimer into my workflow. So it’s a no-brainer for me because I constantly am clicking and un-clicking. I just know to do it. So it’s not this big strenuous thing that I go at the end of the day and I think back and say, “Oh, an hour here”. If it was that then I would say screw it and I wouldn’t do it.

[31:48] But I get pretty darn accurate numbers and it’s just a part of what I do. If you’ve been a consultant long term and had to track your time, then this will be part of what you’ve done. So, that’s my recommendation; that’s my pitch.

[32:00] Mike: I guess my take on it is I don’t necessarily track all the time that I spend on stuff. One of the things that you had mentioned is that you track your time so that if you spend 1,500 hours developing a particular product or a piece of an application, it shows that somebody couldn’t just develop that in a weekend. I would actually argue that that’s not necessarily the case, because just because you spent 1,500 hours on it doesn’t mean that there’s somebody out there who’s 10 times more productive than you who is able to bang that thing out in 150 hours.

[32:31] That’s certainly possible, especially if they’re looking at your application and they are, for all intents and purposes, copying it as best as they can, because they don’t have to make design decisions. They can look at what you’ve done and just replicate it. They don’t have to think about things like that. They just say, “Was that a good idea or no? Is that something people wanted or no?” and they can just build it.

[32:51] Whereas when you’re building a product and you’re doing the marketing for it, you’re testing out different things to see what works, what people are interested in, and what people aren’t. The first several hundred hours that you’ve put into a product to come out with version one, you start finding those things out. You start finding out why people are using those things.

[33:08] So I do tend to agree with you that it gives you a ballpark number of how complicated it could be to build something, but I don’t know if that’s like the defining factor in determining whether, I guess, how complicated something is, because I consider myself a very good developer and I can look at something that’s pretty complicated and simplify it in my head very easily. Some people are great at that and some people aren’t. So, I just don’t think time is a great measurement of complexity.

[33:35] I will completely grant you that tracking your time is great for figuring out how much a product is worth, because if you’re only spending an hour a month maintaining that product and that you’re monetizing your time at $900 an hour, that’s phenomenal. You could turn around and resell that at a very high markup because the amount of time and investment that is required to do ongoing maintenance is very, very small.

[33:59] So, I can certainly see uses for it. But I’m more of a person who’s task-driven as opposed to time. I certainly look at tasks as opposed to how long it will take me to accomplish these tasks.

[34:10] [music]

[34:13] Rob: If you have a question or comment please call into our voicemail number at 1-888-801-9690, or you can email it in mp3 or text format to [email protected]

[34:25] I actually want to pause here and give a shout out to Dan at the Lifestyle Business Podcast. He did this thing a couple of episodes ago and I thought it was kind of cool.

[34:33] Basically, we want people to either tweet or email us or call in and tell us that weirdest or the most exotic place that you’ve listened to our podcast. I had a listener call and say that he listens to it while he’s jogging next to this river and I was like, “That’s kind of neat.” But if you’ve ever listened to it at some funky place or if you ever thought to yourself like, “Wow, I can’t believe I’m listening to this here,” please let us know.

[34:59] If you enjoyed this podcast, please consider writing a review in iTunes by searching for “Startups”. You can subscribe to this podcast in iTunes or via RSS at StartupsForTheRestOfUs.com.

[35:09] Our theme music is an excerpt of “We’re Outta Control” by MoOt, used under Creative Commons. A full transcript of the podcast is available at our website, StartupsForTheRestOfUs.com. We’ll see you next time.

Mike and Rob talk about some of the various solutions they have used and evaluated to help run their businesses.

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Rob Walling on How It's Easy to Build the Wrong Thing - YouTube

Episode 1 | What is a Micropreneur?

Show Notes

Transcript

Mike Taber: This is Startups for the Rest of Us: Episode 1.

[music]

Mike: Welcome to Startups For the Rest of Us, the podcast that helps developers be awesome at launching software products, whether you have built your first product or are just thinking about. I’m Mike.

Rob Walling: And I’m Rob.

Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. So Rob, exactly why are we here again? Rob: I have no idea! We’ve decided to do some crazy thing and record a podcast; something that neither of us have ever done.

Mike: Well, that’s true, but I think that the important thing that we are really here for is to share the things that we’ve done in the past and, most importantly, share the mistakes that we’ve made over the past several years in building out our product portfolios and building up our companies.

Rob: Yeah, and I think along with the mistakes come the successes as well, right?

Mike: I hope so! [laughs]

Rob: I mean we’ve learned from both of them. Yeah, I guess if we didn’t have any successes, no one should listen to us.

Mike: Why exactly are we developing this podcast? I mean does the world really need another podcast about startups?

Rob: You know, like we talked about before, there is this obvious gap in the market. There are a lot of podcasts aimed at venture backed startups, high growth startups, but there are so few podcasts aimed at bootstrap startups. And frankly, the ones that I listen to, they don’t tend to have super practical information that you can apply to your startup or micro ISV right away.

There are a lot of interview podcasts, and there is a lot of information that is just floating around, kind of almost superficial stuff that you hear on blogs, and I am hoping we can go a little more in depth with ours.

Mike: Definitely. I mean I think that is the key point here is that we can try to go a little bit further than what you would find on a blog. I mean the point of a blog is partially for information, but some of it is entertainment as well. And to get the right information you need, you tend to go to a lot of different blogs or a lot of different websites.

And one of the key things we would like to bring to the table and share with our listeners is the experience that we’ve had, the things that we’ve done that maybe didn’t work out so well, and then the things that we’ve done in the past that did work out pretty well, and try to collectively show a lot of that information all in one spot.

Rob: We don’t intend this to be another show that interviews startup founders. There are a lot of those, and I think most of us probably listen to them. So we are not going to be duplicating that format. We may have an interview once in a while, but that is not going to be the gist of it.

Individually, you and I have been through a lot as entrepreneurs. And, you know, obviously our goal is to provide real world strategies that have worked for our businesses that ideally will help someone else who is listening to the podcast.

Mike: Right. That’s the goal.

Rob: OK. Let’s get started by introducing ourselves.

Mike: My name is Mike Taber and I am the founder of both Moon River Software and Moon River Consulting. I am based in the greater Boston area. I work for myself fulltime. And I have been self employed since around 2005.

I used to work for a company called Pedestal Software that got acquired by Altiris back in 2005 for somewhere around $65 million or so.

Rob: Holy smokes! I hope you got a fat check off of that!

Mike: I got 0.0001%, and it was actually a little less than that. I did the math on it.

Rob: Wait, 65…1, 2, 3, 1, 2, 3…

Mike: It was about $8,000, so you don’t have to do the math. But needless to say, somebody made out a lot better than I did. So the number sounds big, but that kind of pushed me over the edge and I said, “You know what? Why should I be doing all this work to let somebody else be reaping the rewards?”

And, you know, that is why I started Moon River software and eventually spun off Moon River Consulting out of it. I just didn’t want to be in the position where I was making other people loads of money. I mean I am a smart guy, or at least reasonably smart. My wife tells me otherwise. But, you know, that is what I wanted to do. I wanted to be master of my own destiny. And I’ve said that to several other people, and at the end of the day, that is just what it comes down to.

So what about you Rob?

Rob: Well, I followed a similar path, actually. Over the past 10 years, I’ve had a couple of salary positions, but mostly I’ve done software consulting. And whether that is for a firm that I was paid hourly through, or I spun off my own firm in 2002 that eventually went fulltime a couple years later.

And I realized pretty quickly that consulting is fun, but I had a tough time building things for other people. I enjoyed it, but it really wasn’t fulfilling me the way that I wanted my work life to do. So I started building my own products and launching them. And pretty quickly I found a couple other products that people had launched that weren’t doing well and acquired them. And I started learning the ropes of marketing software, essentially, on a very small scale, obviously. I am not Microsoft. I mean it is me, one guy, and a couple of contractors I have, or a handful of contractors, I should say.

But I found that I enjoyed it pretty quickly, although I blew through…Man, I blew through a ton of money early on! I don’t know if I ever told you, but I dropped $1,200 on Adwords in six weeks one time and I made one $99 sale off of it.

Mike: I blew like $1,500 in a month before, so I know what you are talking about.

Rob: Yeah. Totally, you just have no idea what you are doing. And looking back, I still have the campaign saved, and I look at it and I am like, “What in the hell was I thinking?” It is not set up very well at all.

So anyway, I own a handful of software products, and I build them, I acquire them, and I market them, and I really enjoy it. And that is what I do fulltime now. So I think it is like you: master of my own destiny or master of my own domain, as they like to say, if you have seen Seinfeld. [laughs]

Mike: [laughs] So I guess one of the things that we wanted to discuss son our first podcast was exactly what is a micropreneur, because that was one of the things that you and I had come up with a while back, and just came up with the idea and definition of a micropreneur. And it is not something I have heard anybody else really talk about. It is just something we kind of spawned off on our own. It sort of makes sense. So why don’t you kind of explain to everybody what a micropreneur is.

Rob: Sure. A micropreneur is a word that we made up, essentially. But after we made it up, we found out, of course, other people were using it in different contexts. But essentially what we focused on is a micropreneur as a technical individual, someone with technical skill, and that can typically be software development or web development skill, and someone who wants to launch small software businesses. And whether that is a downloadable software product, like something that you write and runs on a desktop, like time tracking, or an invoicing app, even a game, or it can be a software as a service application, or an iPhone app, a Blackberry app. I mean kind of anything that you can code up that someone will pay you for.

I have owned things ranging from an ecommerce site, to an e-book, to software products, to software as a service applications, a niche job website. I mean kind of all this stuff fits under this umbrella of a micropreneur-something that you can build and sell online.

And a micropreneur is the person behind that. Some people might be confused by: What is a micropreneur versus a micro ISV? And a micro ISV is a one person software company, whereas the micropreneur is the person behind that micro ISV.

We are going to be using that word a lot in this podcast and in the future. So today we are going to talk about six tenants that you and I put together that essentially try to define what a micropreneur actually is. Let’s get started.

Mike: So the first tenant of being a micropreneur is: a micropreneur is a technical entrepreneur who writes software that creates value for a niche market. You can choose to write games, you can make downloadable software that gets installed on somebody’s machine, or you can do software as a service. It could be something like building comic book creation software. It could be software that is used for creating bingo cards. Just about anything is game for a micropreneur to be creating.

Rob: Right. And I think the key part of tenant one is that it is a niche market.

Mike: You are not going to build a Microsoft Word, but you might build a word processor that is designed for people who need to write a master’s thesis or a PhD dissertation-something along those lines.

Rob: Yep. So it is finding and choosing a niche. Since we are only one person, you can’t possibly take on a huge company. And tenant two is: a micropreneur starts with a single product or website but may build or require more once he or she has learned how to market software.

And this is an interesting one, because a lot of developers don’t think in terms of having multiple products. And they think that they are going to find a niche and build a comic book cataloguing software, and that it is going to make 10 grand a month, or five grand a month, or whatever they need to live on. Typically, that doesn’t happen.

But often, you can build something that maybe generates a lot less than that. And if you stack enough of them together, then you can actually build up a reasonable amount of income. This is not for everyone. Certainly, some developers are going to just want to do one product, and that is going to be their goal, and that is totally fine. But we have really talked about the goal, for a lot of people, is going to be to do multiple products. And as a result, there will have to be some automation involved, because, you know, you can’t manage five products and do everything all by yourself.

Mike: And that is actually a good leading to tenant number three, because tenant number three is: a micropreneur is intent on staying small. Now, small is something you have to define for yourself. Is small a one person company? You are going to be a one employee company for however long you want to run the business? Or do you want to grow it out to two or three people? Or do you have a couple of friends who have jumped on board with you and decided to build out whatever the product or products are that you have decided to build?

But essentially, the micropreneur is intent on staying small. And that is in direct contrast to things like venture capital startups or Angel investor startups who want to build out a company and build it as largely as they can and as quickly as they can in order to make a lot of money and cash out.

Rob: And tenant four is: A micropreneur is a highly technical entrepreneur who values time, location, or income independence. Again, some developers, some micropreneurs, may value only one of these things. Some may value all three of them. And let me step through each of them.

Time independence is the ability to be in control of your own time. So as a consultant, even if you work from home, you tend to have to work between nine and five or nine and nine as a lot of us did when we were consulting. Time independence is if you have a software product that you really don’t have any kind of working hour constraints; that you can work weekends and you can work nights, and you can do all types of crazy stuff.

Location independence is when you can live anywhere you want. And then income independence, of course, is being much more in control of your own income streams. So it is not relying on a salary or even consulting clients.

Now, you are never, of course, completely, 100% in charge of your income, because it depends on the market and what is selling. But if you have a product and it sells to 20, 30, 40, 50 people a month, you are really not controlled by any one person anymore. And that is really the crux of income independence, is you are not beholden to a single entity for the majority of your income.

And as you build or acquire more products, you become less and less beholden not only to each individual customer, but to each individual product. So you just have a lot more diversification.

And as I said before, some people will value one or two of these and others really will make it a goal to achieve all three of them.

Mike: Tenant number five is: A micropreneur merges existing technical knowledge with online marketing knowledge. In order to succeed as a micropreneur, you really need to be able to combine technical knowledge with that marketing knowledge. And if you don’t, what is going to happen is you are going to build a great product, but nobody is going to buy it because you are not able to market it effectively.

And the opposite is true as well. If you have great marketing knowledge but no technical ability, it is very difficult to build a great product that people are going to want to buy. So if you are able to merge both of these things, then what you have is a very, very powerful combination that not a lot of developers or marketers are going to be able to match, because it is very difficult to build up both of those silos of knowledge, I will say. And most of us went to school for development and we know how to develop software, and we could do it in our sleep, but it is really the marketing side that is a lot more challenging because there are many things that are just not well defined in terms of the problem space.

So, for example, if something is wrong in your code, if you got a bug, you know what the parameters are around that bug. You know exactly what is going on. And you may not necessarily know why, but you can step it through the debugger and figure all that stuff out.

If something is wrong on your website and you are just not getting traffic, it could be a million different things. And it is just as bad, if not worse than a technical problem, where, you know, you have a finite space of where this problem could be. With a website where the entire Internet could be hitting it or, in this particular case, is not hitting it, you have to figure out why, and it could be just about anything.

And being able to clearly identify what those sources of problems are is really what is going to separate a micropreneur from the average off the street developer who can certainly code his way out of a wet paper bag, but isn’t necessarily going to be able to figure out those problems.

Rob: Yeah. I think this is a really important tenant, and I think it is one that a lot of developers don’t think about. We totally underestimate how important and how difficult it is to learn the marketing side of things.

Tenant six is: A micropreneur is a cross between four things: a software developer, a webmaster, a marketer, and an entrepreneur. We all know what a developer is. A webmaster, the reason you have to have this in your blood, or learn it, or learn to outsource it is that we are talking about selling online. And even today, iPhone, Blackberry apps that don’t run on the web need some type of sales site or sales information. So you are going to have to know or learn something about getting a nice website up.

And the last two are a marketer and an entrepreneur. And these are the ones that take a lot of time to learn and a lot of trial and error. And, of course, Mike, that is what you and I have spent the last 10 years learning, right?

Mike: Oh yeah!

Rob: Those are the ones that cost you money.

Mike: Time.

Rob: Time. Tons of time. Yeah. And you can learn some of it from books. It is like coding, right? You can learn some of it from books, but you need to have a lot of experience doing it as well.

And so the marketing part is learning how to get the word out and get people interested in your product. And the entrepreneur is the person with the vision, and it is the person who can kind of make everything happen, whether they are doing a lot of the work themselves or whether they are just being the visionary and outsourcing them as they go along.

So those are the four things that would be great if they were four different people each gifted in those areas. But realistically, as a micropreneur, all four of them-one person.

Mike: So now that we’ve kind of talked about exactly what constitutes a micropreneur and what it takes to be a micropreneur, one of the things that we also wanted to talk about was what a micropreneur is not.

Rob: You know, the first thing that a micropreneur is not at all is not an Internet “get rich quick” scheme. A, you are not going to get rich, B, you are not going to do it quickly, and C, it is not a scheme at all. So it just has nothing to do with any of that stuff. I mean it really is a long term mentality of taking technical knowledge and applying it in an intelligent, formatted manner, and learning from experience, and, over a long term, building up one or more viable businesses that hopefully generate some income for you and provides some level of independence.

And again, whether that independence you want is just to have a couple hundred bucks a month to help make a car payment, or if ultimately you want to quit your job, that is going to take a couple of years, right? But it is not anything like an Internet “get rich quick” scheme or a work from home scheme or any of that stuff that you hear about online or on late night TV.

Mike: A second thing that we wanted to point out that a micropreneur is not about is being a micropreneur is not about venture backed startups or very high growth startups. It has absolutely nothing to do with any of these large or high competition niche markets. If you wanted to try and create the next word processor, going about it in as a micropreneur is really not a…I don’t even think it is a viable option, to be perfectly honest. I don’t even know how well Google is doing at it with their Google Docs against Microsoft.

Rob: Venture capitalists have portfolios of products, so they can afford for 10 or 20 of them to fail because they have the one that returns such a huge return for them. But when you are an entrepreneur, your portfolio is one company. Or, in our case, maybe it is a few small companies. But realistically, if you are going to go for the venture backed route, you are going to have one company at a time, and it is going to take you 3-5 years to do it, and it is going to take a lot of work and a lot of passion and effort out of you.

So how many of those are you going to be able to do in your whole life? You know, maybe two or three tops? And if the first two fail, you may not come back for a third. So it really is an odds game, and the odds are just stacked against you too far for us to consider the venture world viable.

So that is why, when we look at micropreneurship, the odds of you succeeding, if you do it right, and if you do it smart, are very high.

Mike: I almost look at a micropreneur as essentially a mini VC or mini Angel who has all these different products in their portfolio. And if one of them does great and five of them do bad, no big deal, because you have got that one product that is doing well.

And if you make these products that are small enough that address a problem in the market, something is going to do well. All it takes is doing the research, doing your homework. And essentially, what you are doing is you are spreading out your risks among all these different products. And if you get a product that only pulls in $25 a month, well, OK. Well, no big deal. But for every product that you have like that, how many others is it going to take before you find one that gets $1,000 month or two or three thousand dollars a month?

And the more of these small applications that you crank out, the better your chances are. And essentially, you become that mini VC of your product portfolio.

[music]

Mike: One of the reasons that Rob and I started to put together this podcast was because, individually, we have gotten a lot of questions over the years about: How do you go about finding a market? How do you go about selling your products? How is it that you have gotten successful and been able to do the things that you have done?

And today what we have is a question from somebody who asked us. Here is his question.

Aaron: Hi guys. This is Aaron. I have a question about competition today. I think a lot of people, including myself, get caught up in the discovery phase. At least for me, it has a lot to do with wanting to find that slam dunk-that product that is almost guaranteed to be a success.

What I am finding out is if there is a market for some kind of software product, chances are someone else is already out there offering a solution, and an even greater chance that there are multiple solutions.

So my question is: How much competition is too much competition? And in a related question: How do you compete with free, or do you? Thanks.

Mike: So Rob, why don’t you take a first crack at that one?

Rob: So the first part is: How much competition is too much competition? In my experience, there is too much competition when the cost to acquire a customer is more than you are going to make from that customer.

So if you have a 1% conversion rate, meaning you sell to one customer out of every 100 that come to your website, and your product is a $100 product, that means that every visitor to your website is worth $1. And if it costs you more than $1 to send people to your website, that means there is too much competition in the niche.

Mike: I think my take on it is that determining how much competition is too much competition is more of a judgment call based on your own personality as well. There are cases where going into a particular niche, there is a lot of competition and there is substantial competition. But if you feel that you can overcome the hurdles to garner attention from the people out there searching for whatever that solution is, by all means, go for it.

But you do have to do your homework. You do have to do the research and make absolutely sure that you are going to be tolerant of the risks that you are undertaking in that particular market.

Rob: Right. And I think a key point that both of us made there is neither of us emphasized “if you can build a better product.” That has something to do with it, but not a ton. Right?

Mike: [laughs] Yeah.

Rob: Really, the key factor is the marketing side of it-getting people to your website. Because you can build a better product and, frankly, no one is going to care. No one is going to hear about it. You have to look at the economics of the marketing.

To get a little more specific, Mike, you and I have talked about the cost of acquiring a customer. And it is like if you are a developer and you don’t have a site, you don’t have a product, how do you figure that out? And there are a couple of tools that you and I both used. One is the Google Adwords keyword tool where you can search on a term. And then you have to go to the exact phrase match. A lot of people go to the broad match. You go to the exact phrase match and kind of peek around and get a relative idea, although this thing can be off by an order of magnitude. But get a relative idea of how many people are looking for particular search phrases.

And the other tool that I’ve used that works really well is SpyFu.com. It helps you not only at…If there is competition in a niche, it helps you look at the keywords that they are ranking for and pulling in traffic for. It also gives you an idea of the Google AdWords they are running and the cost they are paying for them. So you can pretty quickly see: “Oh, they are paying $5 per click because they are in the wedding niche. So I really need to have a high conversion rate and an expensive product in order to make it viable.”

There is a lot more math to it, obviously. Maybe we can get into that in a later podcast. But those are some key tools that you will want to check out.

Mike: So the second part of this question was: How do you compete with free, or do you? And I think that that is a much more difficult question to answer, mainly because it depends so much on who you are competing against and what the specific product is.

For example, there are a lot of products that Google offers. I would not want to be in the business of trying to resell email at this point.

Rob: Run away! And an online office suite…I mean any of these things. Yeah, if Google has online calendaring, like, you are hosed. So if you are talking free like Google, then just consider it case closed.

Mike: But at the same time, there are also tons of email providers out there that are still making money because they actually have value. And this is the key part that I want to drill into, because I think that in the vast majority of cases-we can use email as a great example-you really are going to have a hard time competing with Google trying to offer email services, because theirs are free.

However, personally, I outsource my email. And I actually have a hosted solution that I pay for because I get Exchange Server with it. And it has all these advanced features and functionality that I like to use. And I honestly like having Exchange Server running behind my business.

So, for me, it works. And for the company that I am purchasing it from, they are obviously making money off of this, and they are reselling Exchange Email to me and making money off of it, and are successfully competing against Google.

Rob: I think that there are niches around where there may be a free provider that isn’t doing a very good job, and that you can come in and compete with them. I think the way to tell the difference is that if there is someone with venture capital in their back pocket and they are offering a free service, you don’t want to enter that market, because they have deep, deep pockets and you are not going to outgun them on features. You are one person and they probably have a team of developers. And they are using a freemium model, which is very difficult to get to work for micropreneurs. You have to have massive scale.

So competing with them, they are probably going to put out a good product, and I would say not to compete with them.

Mike: There is also the other argument. I saw Eric Sink from SourceGear answer basically the same question from a college student: “Well, why should I purchase a license for SourceGear when I can go out and get Subversion or any of these other open source version control systems for free?”

And his answer was basically that because buying SoureGear’s…you know, whether you are buying Vault or whether you are buying Fortress, that saves you time and money. And the reason it saves you time and money is because your time as a developer is worth something. And the only time that going after those open source solutions where it is going to benefit you is if your time is “worthless”. And I forget whether he actually used the term “worthless” or not.

But I mean he makes a very valid, worthy point. It can take time and effort to get some of these solutions up and running. And if you are working at a company where they are paying their developers $100,000 a year, they don’t want to have to deal with that stuff. They want to be able to call somebody and say, “Hey, your software isn’t working. How do I fix it? I’ve paid you for whatever the license fees are.” And they expect support. They expect somebody to stand behind that product and fix things when they are broken.

Rob: I can see the flames now. “Mike Taber says open source software is terrible! He says it’s worthless!”

[music]

Rob: Now it’s time for This Week’s Tip. So a little bit about this segment since it is the first time we are doing it. The idea of This Week’s Tip is that we are going to try to make this portion of the program about tools and tips that Mike and I actually use day to day. And we are going to try to relate our unique experience with the tools and tips. So Mike, what is this week’s tip?

Mike: The tool is called RescueTime. You can find it at rescuetime.com. And what this tool does is you install it on your desktop and it will track the things that you do while you are doing them. If you go to a website, or if you are playing games, if you are using Word or various parts of Office, or Skype, or writing email, what have you, this software tracks and categorizes all of the different pieces of software that you use. And it assigns values to them to say how productive it thinks that you are being.

And it keeps track of how much you have been working. You can have it set for 24 hours a day usage or only between working hours, etc. But because, as a micropreneur, you only have a limited time, typically, as you start, you have got maybe 10 or 15 hours a week that you can dedicate to being a micropreneur and to building up your products. So you want to maximize the effectiveness of that time.

So by measuring your efficiency, you can essentially help yourself to be more productive. And looking at my most recent efficiency rating, your efficiency can be rated anywhere from negative two to positive two. Email tends to be neutral-it tends to be a rating of zero. Games, I think, are negative two. Something like your IDE’s for development, those tend to be plus two. And you can customize each of these.

But my efficiency for this past week, based on 42 hours of work, was .81. The average user efficiency… which, I get an email every week, so my RescueTime weekly summary that tells me how productive I am being in relation to other people who are using the product.

The average user efficiency of everybody else was 0.10 for 43 hours and 12 minutes, on average, of work. Granted, this past week was a holiday week, so I wouldn’t put too much stock in the fact that I was eight times more productive than other people. But it at least gives me a benchmark to shoot for.

But you can find it, again, at rescuetime.com, and that is this week’s tip!

[music]

Rob: If you have a question or comment, please call it into our voicemail number: 1-888-801-9690. Or you can email it in .mp3 or text format to . Feel free to include your name and your URL if desired. A transcript of this podcast is available on our website: startupsfortherestofus.com.

If you enjoyed this podcast, please consider subscribing to us on iTunes by searching for “Startups For the Rest of Us.” Or you can also subscribe via RSS at startupsfortherestofus.com. We will see you next time.

Rob Walling and Mike Taber define "Micropreneur," a term describing a software developer turned solo-entrepreneur with a hint of marketer and webmaster.

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Episode 89 | Marketing First Steps, To Code or Not To Code, To Cloud or Not To Cloud, and Other Listener Questions

Episode 89 | Marketing First Steps, To Code or Not To Code, To Cloud or Not To Cloud, and Other Listener Questions

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Transcript

[00:00] Rob : If you stick around to the end of this episode of Startups For The Rest of Us, you’ll hear us talk about whether you should pay someone to build your app or learn how to code, figure out how you find datasets you need for an application and talk about the best ways to leverage cloud offerings. This is Startups For The Rest of Us: Episode 89.

[00:18] [Music]

[0:00:27] Rob : Welcome to Startups For The Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Rob.

[00:36] Mike : And I’m Mike.

[00:37] Rob : And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Mike?

[00:42] Mike : I’m a little disappointed. I think I might have to seriously consider letting go one of my contractors.

[00:47] Rob : Really? Is it a developer?

[00:49] Mike : Yeah, it’s unfortunate. It’s a new relationship. It’s not like he’s been with me for like two or three months or whatever but he started about a week ago. And so far he has yet to actually log any time in oDesk. I mean he keeps telling me about this work he’s doing and is it okay if he comes in some hours offline for offline work or whatever but he’s like, “Oh, I don’t feel comfortable using the oDesk tools that track my time because I feel like it puts pressure on me.” [Laughter] That’s kind of what I used to —

[01:13] Rob : That’s a bad sign.

[01:13] Mike : … make sure. I know.

[01:14] Rob : Yeah.

[01:14] Mike : I know.

[01:15] Rob : Yup. I mean I probably — over the years, I have probably had between twenty and thirty contractors work for me through oDesk. That is a big red flag for me. And I know sure there may be one in twenty people who do that and really aren’t comfortable with it but it just — I don’t know. That is the reason we use oDesk, right? It’s so you — if during those initial weeks you do get some insight in to what they’re doing and how they’re doing it.

[01:35] Mike : So I don’t know. If it doesn’t straighten out and resolve itself, probably by Friday, I think I’m probably going to pull the plug if it doesn’t resolve itself rather quickly.

[01:44] Rob : Yeah, I had to something similar just a couple of weeks ago. I had a developer helping me out with some classic ASP work on HitTail and he was a good developer and he was — he picked up the code really quick which is, you know, a fit because the code is not — it’s not well-architected and he was doing a good job but he just wasn’t putting enough time. He was putting in like two to three hours a week or three to four hours a week and I wanted him for ten to fifteen. And there was always something that was coming up, you know, in his other work. “Oh, the servers all crashed. I have to rebuild them.” I was like, “Okay.” And then the second week it was something else and sure enough we were six weeks in and he’s still averaging like, you know, four or five or six hours a week. So I had to pull the plug as well. So luckily my ASP work has slowed down so I may — I may just be able to scrape through with .NET deal we have at this point.

[02:29] Mike : Uh huh, cool.

[02:30] Rob : Hey, so we have a few new iTunes reviews. We have Quentin at Newbie who says, “This is a great podcast for developers or other creative types looking to use their skills to bootstrap a business. It’s great hearing about the ups and downs, successes and challenges with your own projects that you guys discuss. Thanks and keep up the good work.” And then Thomas Benos he said, “Great work. Rob, Mike, I really appreciate what you do, very good content.” So we greatly appreciate iTunes reviews. Mike was just telling me we’re up over 200 reviews globally which is just awesome. So if you haven’t given us some review, you know, we’d really appreciate a five star. Log in to iTunes, search in for Startups and checking us out.

[03:09] [Music]

[03:12] Rob : So today’s episode we’re going to be diving in to some listener questions. We have several on deck and we will see how many we can go through in our time constraint. The first question is how to do marketing for your startup and it’s from Luis Buenaventura. And he says, “Hi, Rob and Mike. I’m not sure if you guys have taken a marketing question recently but I wanted to ask if you could give some specific first steps towards marketing a young startup. My startup Infinite.ly which is Infinite.ly is a tool kit for small business owners. So I’m not sure if we generate the kind of content that would be useful for SEO something that Rob talks about quite a bit on his blog. I’d love to hear your thoughts on this. Cheers, Luis.” And I went and check out Infinte.ly and it — at least at this point, it’s a landing page and there are super simple way to get a website up. So you can just like kind of type in a domain in to their form and build a web page in 60 seconds or less. I imagine they’re going to have additional things that they’re going to add over the years but they are very horizontal. So it’s a pretty broad market at this point.

[04:17] Mike : I think that my first take on would be that in terms of SEO, everything here is all in one page and I understand that maybe it’s just because it’s in beta right now and there’s not a lot that you want to talk about but I think the biggest red flag to me is that it’s really just a one page. I mean there’s no — almost no way to get any good SEO benefits out of it. The second thing that I would say is that in looking at it says choose a domain name and build a web page in 60 seconds or less and that’s kind of the title at the top. And that doesn’t seem to me like it’s loaded with any sort of keywords that would lands you any traffic. So I think that between the two of those things, it’s really hard to promote the site and get any sort of traction through, you know, some of the classic SEO methods that we talked about. I think that, you know, there is a link to a blog and say hello which I assume is just a contact page but the blog is even on its own sub domain. So that’s going to end going to a completely different page and just kind of reviewing some of the things on the blog. There’s not a lot there that would relay to the product itself.

[05:19] I mean the second post that I’m looking at here is talks about Diablo 3 and the Philippines Startup Community and that has absolutely nothing to do with the product. So that blog isn’t getting any kind of help for the product itself. And you know, those are the kind of things that I would look at first. I would probably take some — build some content around solving the problem itself that your product is trying to address. So for example putting up a landing page, create a couple of articles on how to build a landing page, why you would do it, what are the benefits, what are the down sides, what are the problems that people run in to and set those up. It’s kind of an educational area of the site and link to those from your main page and then use those to drive traffic back to the main page and say, “Hey, if you’re interested in this particular type of product that will solve that problem, sign up here.”

[06:07] Rob : Yeah, I think the first step in to trying to market this app is to figure out who really needs it like very, very specifically who needs it and whether that means you actually niche the app and you say this app, it is for small restaurants who want a website or whether you just realized that small brick-and-mortar businesses are going to be more attracted to this business but you really need to figure out because at this point, I would say figure out who is already using it, who’s getting value from it and go market to them. But my guess is perhaps no one is using it yet that you haven’t, you know, actually done any marketing or gotten anyone using the app. And so you can look at something simple like just trying to get a few initial users in to it by doing some Facebook ads but I wouldn’t even know where to start with – with doing the demographics because you can’t advertise to the whole world. If you have a bunch of money in the bank and I mean seven figures that you’ve raised from venture capital, you won’t have as much of a challenge as doing a big horizontal market and trying to advertise to every small business in the world like Intuit does or Mint.com does.

[07:08] But you know, when you are bootstrapping and you’re trying to just get a trickle of users in and trying to use revenue to grow from, you really have to know who your customer is and you have to know what websites they frequent and you have to notice — know how to reach them. So beyond the SEO that Mike talked about, obviously, Google is a great source, organic searches are a great — great way to do it but going out and pitching a guest blog post, pitching podcast, interviews where you’re interviewed about, you know, doing your startup or how you can help people and doing some initial Facebook ads to get some initial interest. I mean there’s — there’s a ton of stuff. Obviously, this could be an entire book. Each of these things we’re talking about could be its own podcast episode because there’s so many details to it but realize that until you figure out initially who it is that should be using your app and who you’re trying to market to and where they are, none of this other stuff is really that important or really that helpful because you can’t target your message. You can’t position them.

[08:03] And this is actually something I did quite a bit with HitTail when I first acquired it. It was going after, in my opinion, the wrong audience. So there wasn’t good product market fit and I’ve kind of shifted that and the people who now come, you know, come up on HitTail and discover it, the positioning is quite a bit different. The conversion rates as a result are quite a bit higher. So I think that’d be our, our initial advice for first steps.

[08:25] [Music]

[08:28] Rob : Question number two is from Pierre and he says, “Hi, guys. I love the show since I came across it via Lifestyle Business Podcast. Something I personally would love to hear the show about would be your advice on how to go about starting a web app beyond drawing up interactive diagrams and hiring someone off at Elance. Well, I’m no a coder. I’ve used web apps like Juno, WordPress and Magento for years. Now I have an idea that I believe has a huge potential, a proven demand and should be relatively technically simple.” And he puts a cough in there. “What next? My concerns are that if I hire some guy off Elance that my inexperience in coding will end up either blowing out the budget or producing something with major unforeseen technical problems at the same time, is it really the best using my time to spend six months learning to code PHP and MySQL which seem to be the advice you guys gave on starting a software-based business in the past. I’d also be curious to hear what your thoughts were on using Kickstarter to fund something like this.” I think we have discussed this exact topic before and I think we said the opposite of what he said we said. I think we said before that you shouldn’t learn how to code and that you should hire someone to do it.

[09:33] Mike : I was going to say the exact same thing. I don’t know if we ever said that. We might have said that it’s probably a good idea to learn how to code but not necessarily be the one to implement everything. I could see myself saying you should at least learn how it’s done and the process but I don’t know as I would advice anyone to go out and spend six months learning how to code because I don’t think that coding is the thing that you’re really selling. I mean you’re selling a product and your vision behind the product and how it’s build and how everything is put together as a whole ideally a lot more important than knowing how put the stuff together on the back end. He said, “Now, I have an idea that I believe has huge potential, proven demand and should be relatively technically simple,” and that’s one of those things where I guess he doesn’t provide the details about what the proven demand is but I guess I wonder what type of proof he got. Is it just talking to people? Is it showing them screen mockups or anything like that but I guess to get more to the meat of his question, I don’t know as I’d really worry about hiring somebody off of Elance or oDesk or you know, any other place to spend some time building this up and produce something. I think my bigger concern would be about whether you’re building something that people actually want.

[10:43] Rob : Bingo and that’s it. He says it’s a proven demand. How are you proving that? Because if it really is as good as what – how be — percentage here, then shouldn’t he be able to find a development partner pretty easily. He should be able to prove that to him and come to him and say, “Look, it’s a proven demand. Here are the numbers, right?” If it’s proven, then — then he has some data about that. That means you’ve talked to ten customers who’ve committed to pay a hundred bucks a month for the thing or you have an e-mail list of a thousand of people who are dying to get this thing. And any of those assets are assets that you can use to convince a developer to come onboard with you and say, “Look, let’s do a prototype in three months. You’d take X percent equity and let’s develop together.” That’s actually the one approach that I recommend when a non-technical founder is trying to find a technical founder is to have a — you either need some money or you need some, I don’t typically say proof but I typically say some evidence that this idea is actually going to fly and it’s not just some random idea that you have. So if you have that evidence, then I would say consider looking for a co-founder.

[11:41] The other avenue you could look at if you don’t want to, you know, give away equity or if you don’t actually have the proof that you need to convince, you know, a developer to come onboard is to go through Code Academy and Code Academy is a free online tutorial but it’s more of like a course that teaches you the basics of coding and there’s been over a hundred thousand people have gone through it and bunch of people are — are just getting in to learn the basics of coding. And so well I don’t think you need to spend six months to learn every element and every class and every aspect of MySQL. I do think that learning how to code so you understand how to hire and how to manage someone is potentially worth your while to spend part time for a month or two to really kind of get a concept of how to build the basic database accessing PHP app.

[12:29] Mike : Yeah, I think the other thing that I would mention is that if you really thinks that it’s relatively technically simple, what he could do is he could hire is he could hire somebody off of, you know, any of those websites we talked about and have them put together something relatively simple and it doesn’t even need to be his application. Just have them put together a very basic website with some very, very basic data access stuff because of it — truly is a technically simple problem. I think that the question that he’s getting in to is what sort of major unforeseen technical problems am I going to end up running in to. Well, I think to work with somebody and trying to manage them, get your feet wet with managing people who are developers and who are technical when you’re not. Putting together just a basic website and it doesn’t need — it doesn’t even need to be your application because it’s just be like the sales website for your application and you say, “I want to capture this data from people when they come to the website,” and that’s it.

[13:21] It doesn’t need to be anything fancy but you’ll get an idea of what that person is like, what is it like to work with them, what is it like to manage them, what, you know, how they do things, and if that doesn’t work out, I — chances are really good that you probably didn’t spend a lot of money to begin with. So you can kind of move on to the next person and try again with either a related site or you know, something else. But again very, very, minimalistic and in terms of technical challenges, somebody who’s good should be able to point some of that stuff to you and you can intentionally make some poor decisions. You go through Code Academy and make some intentional bad decisions and find out if they point them to you and say, “No, you shouldn’t do this because XYZ,” and if they are able to point out those things to you that should be very basic, then you know that you got somebody that you can kind of rely on to help work through those bad times.

[14:10] Rob : Man, I think to what you said maybe have them build the prototype, you know, you said they can do the marketing side or they can do just have you could have somebody do a very simple prototype that you can then show around and show that there is interest. Something else I would say is depending on the niche. If it is something that you’re eventually going to be selling over the web so it’s more of a SaaS play, then think about just going to LaunchRock and getting a landing page or going to Unbounce in getting a landing page or installing WordPress and using John Turner’s coming soon WordPress plugin and try to collect e-mails, you know, because what’s that going to do? It’s going to do a couple of things. One, it’s going to prove to you that it has the value and two, it’s going to prove to a developer whether you, you know, you try to get them onboard for equity or — or whether you’re just trying to convince yourself to actually spend the money, go to the Code Academy and go through the effort of hiring someone on oDesk.

[15:00] It’s just one more point of confidence for you to move forward with. And realistically, it actually if you, you know, we’re going to try to raise some funding, it could also be an asset towards doing that. So Pierre’s second question was that he’d be curious to hear what our thoughts are on using Kickstarter to fund something like this. My gut instinct, I know Kickstarter takes, I think it’s a total of 8% or 10% that includes payment processing plus their cut, so I don’t think losing that 10% is that big of a deal. My inclination though is that Kickstarter is they — they edit heavily like a lot of people submit stuff to them and they don’t tend to want to fund certain types of projects. And from what I’ve heard they don’t tend to want to fund a lot of software projects. It’s more designed and art stuff like music and movie. So my guess is you wouldn’t be able to get this on Kickstarter but frankly, if you are able, I don’t see why you wouldn’t. I don’t know of any drawbacks to it. Kickstarter may be in my future for a project I’m looking to do. It won’t be a web project. It’ll be something else. So…

[16:00] Mike : I’ve looked at Kickstarter before and some of the statistics that I’ve seen basically say kind of the same thing that you just said is that software projects of any kind don’t tend to do very well. I mean anything dealing with technology. The funding rate was definitely less than 50%. It was like 30 or 40%.

[16:17] Rob : Right. There was one called — it was called Light Table. It was like an IDE for Ruby or Python or something and that got funded and that’s a big success story. So yes, there have been those by and large, the — the ones that are really successful that I’ve seen on Kickstarter are physical products, kind of physical manufacturing stuff that actually have larger production class and then there’s kind of the arts and the movies and music and such so, you know, might be worth the try. I know it’s quite a bit of effort to pitch them and my guess is, you know, that your odds of getting in are low.

[16:48] [Music]

[16:51] Rob : Our next question is from Peter Ozoldos He says, “Hi, Mike and Rob. I’ve been listening to your podcast for a while and I enjoy and profit from it despite not having yet made the leap to start my own product. I’m just applying some of the ideas at the firm’s product that I’m working at but I’ve already started tearing around an idea notebook. Some of the ideas that occurred to me would require a comprehensive dataset to be useful at all much like Rob’s College Coach Finder idea described in his book. Well the book glosses over the process, I’ve researched this idea and came across a pristine dataset of the information needed to build the product that could bridge this gap. The problem is that data costs several thousands dollars per year to license. I would love to hear about some of the approaches you tried or would try to discover whether such datasets exist and how it could be obtained. Looking forward to listening to more episodes in the future. Keep up the great work. Cheers, Peter.”

[17:44] Mike : Well the first thing that I’d like to point out is that when you’re looking for pristine data, a pristine data is going to cost you money and there are not a lot of ways around that. One of the things that I can think of that you might want to try, I mean if you’re looking specifically at this dataset, they cost several thousand dollars a year at license, I would try to amass, say kind of a critical mass of people who are interested in the product and you can kind of roll the dice on it and try and get as people on to a mailing list as you can and then actually go out and buy the dataset and plug it in to your engine or your product or whatever and then release it as a product. And hopefully, you’ll get your money back very quickly but it’s something that you’re going to want to prove that the demand is there before you make that investment in the data.

[18:28] Some other ways that I can think of to get what I’ll call less pristine datasets is to, you know, hire some virtual assistants to just go out and start harvesting that for you. I read a book recently. It was from Robert Graham. It was Cold Calling Success Secrets or something like that but basically talks a lot about cold calling and how to harvest data for your cold calling efforts and he’s got some great ideas about how to go about that as well. And you know, one of the things that most people don’t think of is going down to the public library and you can hire VA’s to go do that for you but you know, there are a lot of sources of information at public libraries for different organizations, different state lists that people subscribe to or members or organizations from the government the people are members of because of they’re – they’re in the specific industry or something like that.

[19:18] So there are ways to get that data and you know, just be a little bit creative in terms of where you’re directing people to get it. I mean I don’t think that you need to do all the leg work for getting some of that data but you do have to be a little bit creative about coming up with the ideas of where to get it and then you start directing people to go get that data for you. And hire a couple of people at the same time, make sure that they are both going out and getting the same sets of data or you know, maybe hire three or four people and then just keep the best one or two that you find that who are — who are coming back with the most results and the most unique results and you know, work from there.

[19:54] Rob : Yeah, I agree. There’s no way I’d pay that that licensing fee before I had at least the mailing list or potentially some people committed to paying for the product. And I think the purchase you named are good. I also think that you could ask for some sample data if there is a pristine dataset that cost three to five grand or ten grand or whatever, ask for a small subset of sample data and they’re going to tend to be willing to do that and then you use that to populate your database and assuming the licensing allows you to do this but allow people to come to your site, do a sample search that you name as a sample search, this is what the data will look like and then at the end say, “Hey, you know, we’re basically putting together the full app right now. We’ll totally ping you and you this is live, give your e-mail.”

[20:37] So it’s no just a simple e-mail landing page. You’re actually giving people a taste of what they might see and that’s actually the — the example that — that he brought up is an app called College Coach Finder that I was considering building. This was before the Micropreneur Academy. So this is like three and a half years ago and I eventually got side track with other projects but I still think that’s actually a decent avenue because there was just so much open space in the SEO area and the dataset did cost, I think it was $3000 to license and that’s why I have all the comps all built out because I was going to have an entire, you know, sale site built and allow people to click through and then basically collect e-mail addresses and it was more of an idea validation at that point than it was trying to amass a list of people to sell to eventually but of course, that would have been a good side effect.

[21:26] So really, unless you have a lot of money, if you’re bootstrapping then, you know, you probably don’t want to drop that three to five grand or ten grand or whatever without first figuring out if there’s demand and kind of faking it until you make it, right? It’s like what can you do? How far can you go with just a sample or small subset of data? So thanks for the question, Peter.

[21:47] [Music]

[21:50] Rob : Our next question is from AJ Bovird and he says, “Hi, guys. Just finished episode 85 on my way home from an Azure dev camp. And I can’t wait to check out some of the new tools you’ve introduced me to. I was wondering if you could talk in the future episodes about your experiences or thoughts on using cloud platforms like Azure and AWS which is Amazon Web Services. Well, I’m having a lot of fun learning about Azure’s intricacies in particular. I’m having a hard time making up my mind on whether some or all of the individual components that make up Azure are really going to be that beneficial to me as oppose to traditional hosting. Thanks very much for taking the time each week to produce a podcast. It’s an invaluable resource and a source of inspiration for me.” Mike, you are the resident expert on this. I’d love — love to hear [Laughter] your thoughts first.

[22:35] Mike : I mean I think that you have to have the right type of product to actually build on, you know, a cloud platform in order to make it worth the time and effort of doing it. For example, Azure does a lot of black holes when you start getting involved with it. There is a wealth of information out there but it is I’ll say poorly organize for somebody who’s just trying to learn it. There’s not a good walk-throughs that I have found. I mean at this point I kind of understand it and how it all fits together and how it works but when you’re first trying to figure it out, it’s not that easy and I think that the learning curve is high enough that in most cases, you shouldn’t be looking at it. That said, there are cases where I think that any sort of a cloud platform would be very beneficial for you.

[23:18] So some of the obvious things are, is if you have a very, very large datasets. So if you’re hosting video files or large files or you plan on scaling out to be hosting a large numbers of them, I could imagine if you were running Dropbox or something like that, you could definitely use, you know, the Azure or Amazon platform for that type of stuff. If you’re doing anything that needs to scale across tens of thousands of user and you know that upfront, then those are types of places. Another one is where you can foresee the upfront cost of that hardware being very, very difficult to swallow and you need to be able to manage your cost associated with it. So those are the different places where I could see going in to those cloud platforms and wanting to use them. But if you’re just hosting a small website where you’re going to be able to host everything all on one server, I would be hard press to say, yeah, you should do that.

[24:11] Rob : Frankly, I have a tough time seeing the real value proposition of things like the Azure and Google App Engine. I see some benefits but to me the fact that your app has to be built differently and that you’re essentially locked in to that platform is a huge negative in my mind. Amazon Web Services is just a generic global umbrella of like ten different web services Amazon offers and I’m assuming that he means EC2 which is their Elastic Computing Cloud, that’s different, EC2 is actual virtual server. It’s like VPS as that you can boot up and if I have a Python or Ruby or pitch the app that run on there or .NET app if use their Windows engines, I should be able to move that app somewhere else. I should be able to move that to my own hosted server to a cloud server or somewhere else. There’s no lock-in. So that’s the big difference I see. Azure and Google Engine and I think there maybe one other or — they’re almost — they’re different. They’re like compiled run time environment where you put code in —

[25:11] Mike : Not all of it though. They’re —

[25:13] Rob : No?

[25:13] Mike : No —

[25:14] Rob : Because — could I — could I just take a basic .NET app and run it in Azure with zero changes and —

[25:20] Mike : Yes.

[25:21] Rob : … put my sequel database?

[25:22] Mike : Yup but —

[25:22] Rob : So it’s just basic hosting. Why has no one told me this? [Laughter]

[25:24] Mike : Because —

[25:25] Rob : I heard .NET MVP and I’ve never heard this before.

[25:27] Mike : Because it’s — it’s brand new like that — that came —

[25:29] Rob : Oh I got it.

[25:29] Mike : … just came out —

[25:31] Rob : Oh, okay.

[25:31] Mike : … this year. So like there’s —

[25:32] Rob : Okay.

[25:33] Mike : So there’s a difference between like Azure kind of covers the whole thing. It’s kind of like Amazon Web Services that encompasses like ten or twenty different — different types of services they have.

[25:43] Rob : Right.

[25:43] Mike : The Azure umbrella right now covers, I don’t know, probably fifteen or twenty different things that Microsoft does hosting for, so like they do actually have the capability to just host the sequels for server for you. They have the capability to just host a web application for you. Basically, just upload the web application bits and they host everything. That said, if you want to get in to something like fault-tolerance or scalability, there are other things that you can do and know that — that they do somewhat involve like a vendor lock-in and no matter which platform you go with whether it’s Amazon or Azure or Rackspace, it doesn’t matter at that point. You really are going to have some sort of vendor lock-in if you start integrating in to certain types of their services.

[26:26] Rob : Right. Yeah, I think, AJ, I think my advice would be unless you have a specific need for something that Azure offers that only Azure offers and that you really can’t get elsewhere, I would lean towards more traditional hosting like VPS shared hosting, dedicated hosting. Obviously, there are specific needs and sometimes you may need to do that but as someone who’s likely bootstrapping and you’re going to want potentially want to find contractors who can work on it. Azure it its own — I mean ask Mike, it its own unique skill set. You need experience in it if you’re actually using their, you know, their tools and not just doing their new hosted version that he’s talking about. I would actually see Azure hosting if you could just plug a .NET app in to it, I would put that with – with other hosting options that are available out there. But the one where you specifically have to compile your app in order for it to work and same thing with Google App Engine, I would personally veer away from those unless there’s a very, very specific reason that you think you’re going to have to scale at that level right away. So I hope that helps, AJ.

[27:24] Looks like we’re one more question on deck and this one is from Oak Norton and the subject is “Outsourcing a Help Desk”. He says, “Hi, guys. Just found your podcast last week and I’m fifteen episodes in and loving it. My commute is great now. I have a question and maybe you’ve answered it in one of your podcasts and I just haven’t reached it yet. I’m still working a full time job and I have a pretty cool niche website. It’s riddleme.com,” and it looks like it helps people build scavenger hunts. So it says, “I’ve been selling a simpler version of the software for ten years at riddleme.net and it was very intuitive. The new website is more robust so there’s a few new complexities and the interface isn’t quite a streamlined. I’ve had a few people request refunds lately and I would like to implement a live chat on my site where someone potentially from the Philippines,” there’s kind of a question mark there, “… could be available 24/7 to help anyone that has a question. Have you ever done this? Do you have any recommendations? Thanks, Oak.”

[28:18] My first question would be why do you think a live chat is going to keep people from requesting refunds? Do they request refunds within three or five minutes or ten minutes of signing up? I have never had a 24/7 live chat for any of apps and I have some apps that have gotten a lot of traffic and where people are signing up pretty much 24 hours a day from all around the world and e-mail support has been sufficient for those. So that’d be my first thing is to question whether you really need a live chat or whether you just need a good VA who can check two or three times a day kind of a good intervals to kind of hit people as they’re getting confuse and provide really good support.

[28:57] Mike : Yeah, I think that my thoughts on it would be, you know, start asking people why they’re cancelling. It kind of get to the root of the issue of why they are cancelling. Is it because they didn’t understand the product? Is it different than what they expected? And if so, how is it different? And start figuring out how to alleviate that pain or alleviate that problem so that those sorts of things don’t happen and I understand that that can be very, very difficult because in looking at the website, there’s a lot of information here. I mean just the first page alone is enormous. I’m not saying that it’s good or bad. I’m just pointing out that there’s a lot of information on there and it may be the people are buying it without reading all that stuff and not really understanding what it is that they’re actually buying. I do see a video there. I don’t know how many people actually watch it so that would be something else that I would look at and start taking measurements and try to figure out, are people actually watching the video?

[29:48] You could use Wistia. It has a free plan now. So you could post your video up to Wistia and you could basically plug it on to your website and use their metrics to figure out are people watching it, are they watching ten seconds in and saying, “This is boring. I’m not going to watch the rest of it,” because you may see traffic from that, actually, it’s hosted on YouTube. So you probably have close to no metrics on, you know, how much people are actually watching and what the bandwidth usage of that is. So those are the places that I probably start. I start looking to see what information you can glean from the people who are returning things and you know, what people are actually looking at on your site. There’s something else that I think of, there were a couple of different tools that we’ve talked about in episode 85, I think it was, for monitoring where people are looking on your site. One of them was Crazy Egg. What was the other one, Rob?

[30:37] Rob : Inspectlet.

[30:38] Mike : You could use either of those to find out where people are looking on your website and see if there are sections of the text that you have on this — on this main page that people are just not looking at and maybe tighten that up a little bit.

[30:51] Rob : So yeah, I think that coming to the conclusion that you need a 24/7 live chat as I said before, I think maybe a premature. I think the first thing that I would do is think about going to a service like UserTesting.com or FeedbackArmy.com, I think they’re a little cheaper right now, and getting a bunch of people to come and hit your site and you know, records a video or screencast of them as they do it, you can specify certain demographics try to get people in your target market and they can talk about what’s confusing them and the try to improve those things because it sounds like you’re already aware. You said that the new website is more robust but there are new complexities and it’s not a streamline. So that maybe the real cause, you know, you may not actually need — need 24/7 support. You may just need to — to improve the app overtime and it’ll go away mostly.

[31:35] But the other thing I’d think about doing, if you are still handling e-mail support yourself is to hire a VA at this point and get them up to speed because that’s going to take a little while, have them handle e-mail support first and the nice part about e-mail support is you can work them up gradually to that, right? So they can — if they run in to an issue, they don’t know how to answer a question, it’s not like they’re on a live chat and the person on the other end doesn’t get an answer or whatever or gets an answer that, “Oh, I don’t know what I’m doing,” if you’ve had someone doing e-mail support for thirty, sixty, ninety days and they’ve bounced issues to you, you’ve given them the solutions, they’ve learned about your app, they’re going to be so much more able to do that live chat support. You’re just going to be in a better position for them to handle it. So I would say if you’re thinking about doing a live chat support at anytime, to think to try to get them doing e-mail support first so they can learn your app on the ropes and then move on to it later.

[32:26] So I haven’t ever done this. I haven’t ever seen the need for live chat support but I would definitely, if I would hit oDesk, I’d find a solid VA for e-mail support and slowly working them up to that if you think you need to do it. I mean worst case, you could get something like Olark. You install the JavaScript on your site and then the little popup in the bottom right where it says, “Hey, click here for help,” and just not have someone manning it or you only man it eight hours a day when you’re working and the other sixteen hours a day, when they click on it, it says, “Hey, no one is online right now but you know, just pop — pop your name and your message here,” and then you guys are going to support e-mail so at least people feel like they’ve sent in their issue and it’s pretty easy to do and it’s easy to do from every page.

[33:08] There are obviously some other services that do as well. Olark is just one that comes to mind because I’ve used it with DotNetInvoice. And the other cool thing about Olark is and with most of these is you can get an app on your iPhone and if someone pings your, you know, your site, you can be out and about, your iPhone beeps and you can actually have a live chat on your iPhone while they’re on your website. So hopefully, those are a few good suggestions for you Oak. Thanks for listening to podcast and for sending in your questions.

[33:33] [Music]

[33:36] Mike : If you have a question or a comment, you can call it in to our voicemail number at 1-888-801-9690 or you can e-mail it to us at [email protected] Our theme music is an excerpt from “We’re Outta Control” by MoOt, used under Creative Commons. You can subscribe to this podcast in iTunes by searching for Startups or via RSS at StartupsfortheRestofUs.com where you’ll find a full transcript of each episode. Thanks for listening. We’ll see you next time.

Rob and Mike answer listener questions about coding, the cloud and marketing.

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about 1 year ago

Episode 2 | Stupid Reasons to Start a Software Company

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[00:00] Rob Walling: This is Startups For the Rest of Us: Episode 2.

[00:03] [music]

[00:12] Rob: Welcome to Startups For the Rest of Us, the podcast that helps developers be awesome at launching software products, whether you have built your first product or are just thinking about it. I’m Rob.

[00:23]Mike Taber: And I’m Mike.

[00:24] Rob: And we are here to share our experiences to help you avoid the same mistakes we’ve made. So, Mike, what is going on this week?

[00:31] Mike: Not much. Just working on my product and trying to get it out the door. [laughs] I’m putting the finishing touches on that forum software relaunch.

[00:40] Rob: Oh, cool. OK. What’s the name of your forum software?

[00:44] Mike: It’s still to be determined. [laughs] It’s gone through two name changes and I’m still trying to figure out the third.

[00:49] Rob: Very good. Are you doing the development yourself?

[00:51] Mike: Mm-hmm.

[00:52] Rob: That’s fun. How much longer do you have?

[00:54] Mike: I would say maybe 20 or 30 hours total worth of work, or of development time, left. It’s mostly just finishing touches, like I said. But I rewrote all the back end’s database code and rewrote everything using stored procedures and redid a lot of things. So it just needed a lot of love and care, I’ll say. [laughs]

[01:14] Rob: Right.

[01:15] Mike: What about you?

[01:16] Rob: Well, you know, it is just after the first of the year here when we are recording, and so I’ve been taking a look at 2010 and figuring out kind of what direction I want to head with several of my businesses. And so I’ve been working on a marketing plan for DotNet Invoice specifically, and looking pretty in-depth at some adjustments I want to make to the way I’ve been marketing in the past couple years.

[01:37] You know, we did a redesign of the website and I think it came out pretty well.

[01:41] Mike: I saw that. I think it looks really good.

[01:43] Rob: Yeah, thanks! I just got that live, I think, in November. So now I want to push a lot of traffic to it because I want to do a lot of AB testing and improve conversion rates. With the old site, the conversion rate was so-so, and I think a lot of that had to do with it just wasn’t super-professional. It just kind of looked like a hacked together site rather than something that was professionally designed. So I think I’ll have much more of an easier time optimizing this site and getting conversions up.

[02:11] So that’s something I’ve been focusing quite a bit on. And then I also have an announcement to make. My second child is due in June of this year!

[02:19] Mike: Oh, congratulations!

[02:20] Rob: Yeah. Thanks a lot! I didn’t tell you about that! [laughs]

[02:23] Mike: No, you didn’t. [laughs]

[02:24] Rob: I am literally announcing it on this podcast. So that has actually given me the emphasis to look at acquiring a couple new websites or software products in the next few months and kind of getting them into my portfolio to make up for some time that my wife is going to take off and, potentially, some time that I’m going to take off, so I want to get them under wraps. So I am on the prowl looking for products and apps to acquire.

[02:48] Mike: Mm-hmm. Two is a lot different than one, I will tell you that.

[02:51] Rob: That’s what I’ve heard! Well, you know, I’ve heard both. I’ve heard that two is not as difficult because the jump from zero to one is way more than one to two. And then I’ve heard, just like you said, that it is actually a lot because you have to chase two kids around at once.

[03:05] Mike: Yeah, it just depends on how old the second one is at any given them. Obviously, when they are younger and they are not mobile yet, then it is not really that bad because you at least know what you are doing, kind of like business. You know, in any of your second products, as opposed to your first, you at least know what you are doing the second time around. But it still eats into your time quite a bit. Obviously, I mean you have to pay attention to a lot. So, you know, it is not like you can just put things on cruise control or auto-pilot! [laughs]

[03:34] Rob: Right.

[03:35] Mike: Well, good. That’s very exciting!

[03:37] Rob: Thanks.

[03:38] [music]

[03:41] Rob: Here we are in our main segment, and what we are going to be talking about today are three stupid reasons to start a software company.

[03:48] Mike: Yes.

[03:49] Rob: So Mike and I sat down and we’ve had a lot of discussions about starting software companies, launching products, and there are a lot of misunderstandings going on, maybe, in the developer community.

[04:01] Some people launch products for the right reasons, but most of us, the first one, we do it for the wrong reasons. And so given our experience, we came up with three reasons that we wanted to share with everyone.

[04:11] Reason number one is: having a product idea. And just having a product idea is a bad reason to try to start a software company. And the reason is that there is a big difference between a software product and a software project.

[04:27] Software projects are things that you build for fun, right? And you have this product idea and it is going to be fun to build; you want to use a piece of technology, typically is what the emphasis is. Whereas a software product is something that is actually commercially viable. It is something that someone will pay money for.

[04:44] And it is so easy to confuse these two things — product and project. And it is easy to fall into the trap of looking at a cool, new technology like WPF or even AJAX a few years ago and to say, “Man, what can I build with this?” rather than just start from a market need and to ask, “What would people pay money for?” and then going backwards and actually building that.

[05:08] Those ideas tend to be a little more boring frankly. Not as exciting. They don’t ignite our developer passion as much as using this cool new technology. So just having a product idea is not a very good reason to launch a product.

[05:21] Mike: A lot of things that I’ve seen and, quite frankly, done in the past, I guess distant past, thankfully, a lot of what I had done was just look at something somebody else had done or was in the middle of doing and say, “Oh. I could do that.”

[05:32] I think about the number one example in my mind is Ebay. How many people who are listening to this podcast have the development skills to build Ebay? And let’s be honest: granted, there’s a huge scale that you would have to deal with, but out of the gate there’s virtually no software product has to deal with scaling issues. I mean, no products have those sorts of problems out of the gate.

[05:52] So typically, what you do is you build a prototype or you start building this clone of somebody else’s successful product. And you do it because you either want to prove to yourself or to somebody else that you can do it or you think that you might be able to make money off of it. And the problem with it is that that’s a project. It’s not going to go anywhere because you haven’t really committed to building it into something that is going to make money. You’re essentially trying to prove to yourself that you can do exactly what somebody else did or do it better than they did.

[06:21] Rob: Yeah. I think a corollary that we should add to this is that an even worse idea to launch a software product is because you have a “feature idea.” Have you ever heard someone say like, “Microsoft Word is cool but it just needs to be able to do this.”? Or, “Ebay is cool but it really needs voice chat.” And so someone goes off and builds eBay and then adds voice chat and think that that’s going to make a big different. Whereas eBay can then in a week, implement voice chat and you’re out of business and they have the marketing and everything in place.

[06:50] Mike: Yeah, I mean there’s no feature that is compelling enough that can be added onto a product that will make that a compelling product.

[06:58] Rob: Reason number two.

[06:59] Mike: So reason number two: to get rich. We always hear about the person who wrote some stupid application that anyone with half a brain could have written and made millions. But this, in and of itself, is an awful reason to state a company, especially a software company.

[07:14] If you want to make a million dollars and you want to retire early, you need to do one of the following three things: either buy a lottery ticket, go to Vegas and put $500,000 on black or write a Facebook application, because that’s probably what it’s going to take. I mean, essentially, you’re gambling with your future. And most of us are really not gamblers, or at least we prefer not to gamble with our time, that’s why some people are geared for doing start ups and Angel or VC funded companies and some people aren’t, because they’re just not interested in gambling with their future.

[07:44] If you’re looking for a high risk, high reward situation, then by all means: Angel and VC funder ventures are a great way to go and there’s a number of other podcasts you can listen to that you would probably enjoy a lot better than this one. But if you’re out to get incredibly rich then starting a software company probably isn’t the way to go because it’s going to take a while and it’s not going to be something that you’re going to be able to do overnight.

[08:04] Rob: Yeah. And I think you touched on a good point there. Even over the long term, the odds of you getting “incredibly rich” are just pretty low. The odds of making a comfortable living…

[08:14] Mike: I think those are very high.

[08:16] Rob: I do too, especially over an investment if you stick with it long-term over several years. I think a lot of people would be able to do that. But yeah, you’re right.

[08:24] Mike: That’s a great way to put it, though. If you’re looking at building a software company as an investment in your future and if you’re building these smaller applications that gradually have value or you’re able to tweak them until you get them right and you’re able to start generating recurring revenue from each of those ventures or small businesses, many businesses if you will, that is going to take your portfolio, your software company, whatever you have, whatever entity you set up behind your software products and that will grow that into a investment for you.

[08:57] Rob: Stupid Reason number 3: because it sounds like fun. Starting a software company is a lot of fun; it’s new, it’s exciting. But running a software company is a lot like a relationship. In the beginning everything’s new and fun, but after a while you realize it’s actually a lot of work. It’s easily three to five times more work than you ever thought it would be. Now, why is that?

[09:22] It’s primarily because we’re software developers and we think that the bulk of the work is in building the product, but it’s not. Only about 30% of the total effort of what it takes to launch a product is really in the development of the software itself.

[09:37] Once you have a product you have to worry about selling that product. And it can take a long time to get to the point where you’re actually paying yourself for the development time you put into it. As an example, making money is fun, but do you get giddy every time you get a pay check? After a while, the novelty just wears off.

[09:54] Mike: It’s a lot of work. I mean, that’s the bottom line.

[09:56] Rob: Yeah. Starting a software company has been romanticized by a lot of the blogs we read. I started reading “Joel On Software” eight or nine years ago and I was under the impression that it was this really fun thing to do. And reading Eric Sink’s blog and a lot of these tales of people starting their software company or startup sound like it’s a ton of fun. And I don’t think we get a lot of…

[10:20] Mike: You don’t get the reality of it. You get the picturesque version of starting a software company from bloggers. I mean, they tell you about all the great things and you can get to see all the different places they go, and the things that they do, and the new products that they launch and you just get this heavily romanticized version of building a software company.

[10:40] What they don’t tell you about is the massive amount of bills that you have to pay that are associated with your product. I mean, they don’t tell you about the stacks and mountains of paperwork that you need to deal with at the end of the year with the IRS because they’re saying, “You owe us X amount of dollars because you made this much money last year.” Or you’re dealing with partnerships or things like that.

[11:00] Just the paperwork issues alone are horrendous, they’re terrible and nobody ever talks about those. Nobody ever tells you that you need to file paperwork every year with the state or with the government just because you own a software company. People don’t say that sort of stuff. What you hear about is, “Oh, I launched this new product and it was successful. We had 40 billion users on the first day.” That’s the sort of stuff you hear about. You don’t have to hear about all the back end stuff that needs to get done.

[11:23] Rob: Right. There’s a reason for that, because the backend stuff is kind of boring. If you’d blogged about it, it just wouldn’t be that interesting and that’s fine. But you have to realize that when you’re reading these blogs…And these blogs includes yours and mine certainly; I don’t blog about the boring…

[11:38] Mike: You’re right.

[11:39] Rob: …last week. I spend a few hours every month doing finances and stuff and I’ve never written a blog post about that. Frankly, because it really wouldn’t add much value and it would be kind of boring. So you’re right. It just doesn’t present a really clear picture of it. And as a result, I think a lot of people including myself, eight or nine years, go into the business of starting a software because it sounds like fun. And that’s why Stupid Reason number 3 is because it sounds like fun.

[12:04] Mike: Stupid Reason number four to start a software company is: you think, “How hard could it be?” You think that it’s going to be easy. You read all these blogs and this is something of an add on to reason number three, because it sounds like fun – but you look at all these bloggers who are out there, who own their software companies and are running them, and it just seems like it’s easy; it seems like success comes easy for these people. It doesn’t seem like what they’re doing is really all that difficulty. And as I said, you get this romanticized view of running a software company, building a software company, and it’s not nearly as easy as it’s made out to be from these blogs.

[12:40] Rob: The interesting stories out there tend to be your edge cases. The interesting story that a magazine, like Entrepreneur, or Inc., or Fast Company, or Business 2.0 back in the day, the stories they’re going to write about are these anomalies that don’t happen every day.

[12:56] If you start a company that serves the niche of helping paper companies organize their inventory, that is so boring and no one cares. And you’re not going to make 10 million bucks in revenue the first year, right? You’re going to build up slowly. It’s hard to get an interesting story out of that.

[13:12] Whereas the Facebook apps that have all these downloads, the iPhone apps, that’s what everyone’s talking about. And as a result, it seems like all you have to do is write an app because all these stories about these apps are filled with wild successes. It’s very, very rare you will see a story that is a dismal failure. And typically, when you see one that’s about a failure, it’s always in the past. It’s what someone learned from it and how they parlayed it into their present success. Right? Typically, someone has a success after the failure that they’re actually writing about.

[13:43] Mike: Right. I think you hit the nail on the head. All the publicity that’s around a lot of startups and software companies, they make it look easy. And you look at what they are doing and what they have done and the thing that jumps right into your mind is, “If they can make that successful, how hard could it really be?”

[14:01] One of the things I remember from a long time ago was looking at what other people were doing and what other people building. For example, one of my earliest companies, which was not necessarily a failure but wasn’t certainly a startling success, was I started a company to build computers for people. And it’s certainly not the sexiest business in the world, building a computer, but at the time there weren’t very companies or many shops out there that were doing it. And Dell was doing a horrendous job of it. They just could not build a machine to save their life. Everything that I worked on was always a Dell machine and they had hardware problems all over the place. Hard drives would fail left and right. Video cards would just bomb. None of the drivers seemed to work and it was just a mess. It was a nightmare working on all this stuff.

[14:47] And I’m like, “Well, I can do a better job than them.” And I did. And for probably, I’d say, about two years or so I was pretty successful selling these computers. And I was making probably on average about $300 per machine that I sold. And it was great money, because at the time I was in college and I didn’t really have any other income. And I was just selling several of these computers a month and doing reasonably well.

[15:10] And it got to the point where it was just a lot of manual labor and just wasn’t really worth it anymore. I felt like Dell was a bunch of morons. That’s really what it was. And I’m like, “If they can make a successful company and they’re doing an absolutely terrible job, then how could I possibly not be successful doing almost the same thing? All I need to do is basically do what they’re doing and do it better, and how could I possibly fail?” And I won’t say that I failed, but I certainly got to the point where I just didn’t want to do it anymore. It just wasn’t interesting or fun to me anymore.

[15:42] Rob: Right. Since Dell was the darling of Wall Street and the Internet back then, I’m sure it seemed like you could just build a better computer and you would be Dell soon. And that obviously isn’t the case. There’s more complexity to it than that.

[15:57] Now that’s we’ve talked about four stupid reasons to start a software company, let’s take a look at the right reason to start a software company.

[16:04] Mike: Is there only one?

[16:05] Rob: I think there’s only one and it’s to achieve goals that you define. So you can have multiple goals, but the reason to start a software company should be to achieve some goal or goals that you’ve decided on before you start launching that company. If you don’t have a clear understanding of what your goals are, it’s very hard to make decisions moving forward.

[16:29] Imagine that you’re driving west, you come to a fork in the road. Do you go left or right? That depends on whether your destination is north or south. If you don’t have a destination in mind it’s really hard to make those decisions effectively and to move towards your goals.

[16:43] I think another example is if you’re starting to build a product and someone comes along and makes a suggestion and says, “Hey, don’t you think you should get investors, raise 100 grand or 500 grand, and really go big with this thing and eventually have an IPO and cash out of this thing a multi-millionaire?”

[17:01] That all sounds great and attractive but if, from the start, you decided that your goals were to spend more time with your family, to leave a job that you didn’t like, to live where you want, to have income flexibility, and location independence and time independence, if that’s something that you really sat down and thought about and decided that those are your goals for starting a company, then the suggestion, while it sounds interesting, is something that you probably need to turn down. Or else, what you’ll find is that you’ll chase after this because it sounds so attractive, and six months or a year or two years down the line on your way to achieve this thing that your friend had suggested, you’re going to be really unhappy because you’re not going after what you really want and what you decided on up front.

[17:44] Mike: That’s kind of the difference between, “Do you want to be king or do you want to be rich?”, sort of.

[17:49] Rob: Yeah, that’s right. That’s a good point. And the thought behind king or rich, you want to go into what the difference is between being king or being rich?

[17:57] Mike: Sure. So if you want to be king then it means that you want to build up a company and you essentially want to be recognized for being the head of that company and be somewhat famous in your realm, so that speak.

[18:11] So, for example, Joel Spolsky is famous among developers for what he does at Fog Creek. Jason Fried at 37 Signals, same sort of thing. I mean I think that if you were to offer to buy those companies out, they would turn you down. And not so much because you wouldn’t offer them enough money, but because they enjoy being king of their domain, so to speak.

[18:31] Instead, if you look at somebody like Jason Cohen of Smart Bear Software, he got to a certain point where somebody came to him and gave him an offer that he just really couldn’t refuse. They said, “We’ll give you several million dollars for your company.” And he said, “Where do I sign?” because he made a decision at the very beginning that he wanted to be rich. He wanted to build his company, sell it, and then essentially retire early. And that’s exactly what he did.

[18:56] So the first step is to decide on your goals. The next step is to write those goals down. A study by Dr. Gail Matthews found that people who write down their goals had a statistically higher chance of achieving those goals than people who didn’t. And this research was based on a widely cited but completely non-existent Yale or Harvard study, based on where you hear it from, that there was supposedly 3% of the graduates had written goals at graduation day. And between 10 and 20 years later, those 3% had achieved a net worth of about 10 times what the other 97% of the graduates combined had achieved.

[19:36] And while this particular Harvard/Yale study doesn’t actually exist, the research done by Dr. Matthews shows that it really is true, not quite to the extent that this non-existent study would have had you believe. After all, I’ve never written down that I need to take a shower, but somehow I manage to get it done every single day, or at least most days. [laughs]

[19:55] Rob: That’s not what your wife tells me.

[19:57] Mike: That’s true, but she lies!

[19:59] [laughter]

[20:00] Rob: Well, but this is an interesting point because I hate writing goals down. It feels self-helpy and it just feels like, “What if someone finds these?”, like it’s a diary or something that I don’t really want to put on paper that could be potentially be read by someone else, because it just feels vulnerable.

[20:17] Mike: Is it because it would damage your reputation if you don’t get those things done?

[20:22] Rob: I don’t know. If you just write them down…Let’s say I wrote them down on a piece of paper here in my office and I didn’t put them online or anything. I’m not so worried about reputation…I guess it just feels cheesy to me. It really does. I know that sounds odd, but that’s why I had never written goals down before just a couple years ago, actually. And one of the reasons I’m now a fist pounding proponent of writing them down is because this worked for me. I’m not only a client, I’m the president.

[20:49] Mike: That sounds like the Hair Club for Men.

[20:51] Rob: It was! I really believe that writing down your goals is important, because a few years ago I broke down, I wrote them up, and the interesting thing is that I had forgotten about them for maybe six months or a year. And I came back to them and most of them had come true. And so, you know, I’m not 100% sure what happened there. I just know that I wrote those goals down and I’m very happy I did achieve them. So I think this is a key part…

[21:17] Mike: Of your success?

[21:18] Rob: Of your success. Yeah, of getting stuff written down and getting started with your company.

[21:24] Mike: Well, I don’t think that writing your goals down is very much different than using some sort of project management software to keep track of all the things that you need to get done. There are all these project management software packages out there and typically you set them up and say, “This is the goal I’m trying to reach; these are the tasks that need to be executed in order to get there.”

[21:45] Rob: So one short term goal that Mike and I have discussed, one thing we propose to people who are thinking about launching their first product, is to strive to build a product that generate $1,000 a month profit with less than 2 ½ hours per week of support time.

[22:02] This is a reasonable and an attainable goal, and it has a number of benefits. First thing is it places a value on your time of about $100 an hour. This is also a quantifiable goal, which is a good thing.

[22:14] Second, the $1,000 per month revenue is not millions of dollars. It’s virtually impossible to make a huge amount of money from day one. And if that’s what you have your sights on, you’re going to get discouraged quickly.

[22:26] Your first milestone is one of the hardest ones to achieve. It gets easier over time because you know more about what you’re doing, you’re going to start making fewer mistakes, but setting an achievable and quantifiable first goal is very important to making this whole process work.

[22:45] Mike: It’s just easier the second time around. And I think the only other thing I would add is that what you said about the first milestone being the most difficult is absolutely true. As you do things more and more, you get more comfortable with them. And repetition certainly helps. And I’m actually on my fourth business at this point and every business that I have started has done incrementally better than all the previous ones.

[23:13] And if I were to probably quantify it, I would probably say that each business that I have started is probably more successful than all the businesses I started before each of those. So my second business was more successful than my first and my third business was more successful than my first and second business combined. I think it just takes repetition and experience, and you don’t get that unless you actually get started.

[23:38] Rob: And I think the first time that you start making any money from a product that you launched or a business that you started, and whether that is $100 a month or a $1,000 dollars a month, you passed a milestone. And the next time you try to do that with a business in the future, it’s so much easier to get there. There’s this mental hurdle that you don’t have to clear again because you’re already cleared it.

[23:58] Mike: Do you think that’s because you know that it’s now possible, now that you’ve reached that $100 or $1,000 a month?

[24:04] Rob: I do think so. I think it has a lot to do with maybe some self-confidence and believing that you can do it, as well as the mental hurdle that we all place in front of ourselves not believing that it can be achieved.

[24:17] I’m sure you’ve heard the story of Robert Bannister. He’s the guy who broke the four minute mile. And people had tried for years to run a mile faster than four minutes and no one was doing it. And as soon as he did it, in the next year there were half dozen or a dozen who broke it. And for years before that, no one had done it.

[24:36] So there’s this big mental blockade that we put in front of certain feats. And no matter how much someone tells us, “You can make $500 a month,” or “You can launch this product,” or “You can be successful,” you just don’t believe it until you’ve done it yourself. And then once you’ve done it yourself, then that hurdle is gone; the wall’s broken down and now you can move forward much easier the second time.

[24:57] Mike: Did you say Robert Bannister?

[24:59] Rob: Yeah.

[25:00] Mike: It’s Roger Bannister.

[25:01] Rob: Is it really?

[25:02] Mike: Yes.

[25:03] Rob: Roger?

[25:04] Mike: Yeah, Sir Roger Gilbert Bannister. You’ve been misquoting for years. [laughs]

[25:09] Rob: I have! That’s terrible. I always thought I was named after him. I was his namesake. I’ve been robbed!

[25:15] Mike: [laughs] No pun intended!

[25:17] Rob: No pun intended! All right. Roger.

[25:20] Mike: It’s funny, because when you said that, I’d never heard of him. [laughs] So setting a dollar amount as a goal is obviously one of the things that you can do. But something else that you can do, completely unrelated to money, is trying to get users for your product.

[25:33] There is no shortage of companies out there that are putting their software out there and choosing not to even charge people for it. They are essentially using a free pricing model for their software. You can choose to pay for it, donation — that sort of thing.

[25:47] But you really need to set a goal. And whether that goal is a monetary goal or whether you just want people to use your software, people to use the things that you build. Maybe there is a particular problem that you want to solve. Whether you are trying to make money from that particular product or not, you need to be able to set those goals.

[26:04] So even if your first product you’ve decided, “Hey, you know what? I want to build a software product and I’m not trying to make any money. In fact, I don’t want to make any money from this product. The only thing I want to do is learn the process of how to take a product, build it, put it out there, and market it.”

[26:18] And you can take that knowledge and, as I said, your very first milestone is the most difficult one to get to. And if you can take a product and you build it, and it is a completely free product, you get it out there and you get 10,000 people using it, well, that sets your level of expectations for the next product that you build, because you know that you can get 10,000 people to use your product. Although, sure, there are people who are using it for free, but there are going to be people out there who are willing to pay for your products.

[26:47] Rob: I think that is a good point. It is a good reminder that this is certainly not all about money, right? It is maybe not even a little bit about money for most people. I mean it is about enjoying building and launching a product. It is about learning a lot of new skills. And ultimately, it may be about independence.

[27:04] Mike: It goes back to your goals. It goes back to deciding on what your goals are and whether your goals are to work for yourself, work for somebody else. It is interesting that we are talking about this, because I had somebody who was chatting with me last night online. He is fresh out of college and wants to become a sales engineer.

[27:21] And I had him into my office. I interviewed him. I actually know him personally. I then offered him a job at one point. He ended up going to another company. But one of the things that he was interested in was becoming a presales engineer. And for somebody fresh out of college, that is very difficult. And it has nothing to do with talent. It has nothing to do with ability. It has to do with where you are in your career.

[27:44] And because he’s coming fresh out of college, nobody is going to give him a presales job where he is trying to sell enterprise level software. It is just not going to happen. And the reason is because he is too young.

[27:55] And it is sad to have to say that, because obviously, that comes down to age discrimination. But you and I both know that somebody coming out of college is going to be given, essentially, grunt work to do for several years until they’ve essentially proven that they are capable of doing other things.

[28:12] So essentially, I laid it out to him and I said, “You need to decide what your end goal is, and then, from there, back off a bit and say, ‘OK, well how do I get there?’ And based on what your final goals are, map out your path to reach those goals.”

[28:26] [music]

[28:29] Mike: If you have a question or comment, please call it into our voicemail number: 1-888-801-9690. Or you can email it in MP3 or text format to . Feel free to include your name and URL if desired. A transcript of this podcast is available on our website at startupsfortherestofus.com.

[28:53] If you enjoyed this podcast, please consider subscribing to us on iTunes by searching for “Startups For the Rest of Us.” Or you can also subscribe via RSS at startupsfortherestofus.com. We will see you next time.

Mike Taber and Rob Walling discuss some good and not-so-good reasons to start a software company.

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about 1 year ago

Episode 88 | At Last…the AuditShark Beta Date Announced

00:00

Show Notes

Transcript

[00:00] Mike : This is Startups For The Rest of Us: Episode 88.

[00:02] [Music]

[00:11] Mike : Welcome to Startups For The Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.

[00:20] Rob : And I’m Rob.

[00:21] Mike : And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s going on this week, Rob?

[00:25] Rob : You know, I want to give a shout out to Dan and Ian from the Lifestyle Business Podcast. They just wrapped up their first in-person tropical MBA mini-conference. I think there were eleven or around a dozen entrepreneurs that are kind of in their audience and they just wanted to bring them together in to one place. And the cool part was in the most recent episode of the LBP, Dan had mentioned that us doing MicroConf and talking a lot about kind of the inner workings of it, you know, our behind-the-scenes episodes we’ve done each year, he said that we may had part in influencing him to kind of do an in-person event because — it’s actually an uncommon thing in terms of podcasters who build an audience and you tend to interact with people via e-mail, via the podcast itself and maybe via a blog but it is indeed, you know, kind of a rare occurrence for a podcast to actually blow up in to a full-pledge conference.

[01:13] Yeah, I’d just wanted to congratulate them and it felt good that, you know, we may have been a very small part of the inspiration or at least got the spark going in his mind of, hey we, you know, we should bring folks together in to one place and they did it. You know, we do it in Vegas. They did it in two weeks in the Philippines.

[01:28] Mike : Yeah, I can’t imagine trying to coordinate anything like that overseas. I mean I think that that just be really hard and it’s funny because we’ve gotten a couple of requests from people, I guess more than a couple for us to do like a MicroConf in Europe. And it’s one of those things where it’s — it’s honestly kind of intimidating to even consider doing something like that. For them I think it’s a little different because they knew the area and they know how to get in and out of the country and all these — all the logistics of coming in themselves. But for us to do something in Europe seems extremely intimidating just because we’d have to deal with booking our hotel over there, you know, depending on the country they — we would have to deal with the language barriers and things like that. And I think that a hotel, it’s a lot easier to get by speaking English but I just can’t imagine trying to get people to come in from a foreign country and to actively trying to pursuit that type of an audience and bring them in.

[02:19] Rob : Yeah, I think they, you know, they did it smart. They started small like I said they’re only about a dozen folks there. They didn’t do — I mean it wasn’t like MicroConf where there is a hundred and sixty people there and we fly speakers in from around the world. I mean they just, Dan and Ian led the sessions. This is just based on — listening to the podcast. I don’t have any insider information. But Dan and Ian led the sessions. I think they had — they had Tim Conley from Foolish Adventure and maybe another expert or so. And it was kind of more like a seminar. It was a two-week long thing and it was — people hacking away, you know, kind of day and night trying to get to launch and then meeting during the day and giving inspiration and feedback and all that stuff. So it was just super fast iterations. And I think the whole — the whole program actually run two months, maybe a little longer than that and a combinator in this two-week hackathon. So it was — you can almost think of it as like maybe a Y combinator type of thing where they got a group together and you know, they let them feed off of each other’s energy and then folks gave each other feedback and such.

[03:11] But that would definitely be easier to organize in the Philippines or something if you had someone living there like, you know, Dan. I guess he’s not living there but he’s, you know, he frequents there and you only have eleven people to worry about because you’re right, if we’re — if we had to do something in like France or I don’t know, Western Europe or anywhere, there would be — there’d be some hurdles for us to have to jump in order to get — pull off a MicroConf. And I have seen, yeah, we’ve had at least a dozen requests to do something like on the East Coast to the US or in Western Europe. I think definitely on our radar but that maybe a year or two out until we really have everything, you know, dialed in with our — our West Coast one and then we can think about hiring someone to help us with the, you know, something in England might be the best place to do it actually. It’ll eliminate the language barrier and it’s just, you know, a nice Central easy place for people to get to I think.

[03:59] Mike : Well, having a second MicroConf in Europe would certainly alleviate the problems associated with, you know, keeping MicroConf small because then we’ve had two instead of one. [Laughter]

[04:07] Rob : Yeah and as you know, I mean based on people that write in as well as folks in the Micropreneur Academy, we have a quite an audience in Europe and I think when I first sold my — when I first put my book up for sale, I was surprised that 40% of the sales were from outside the US and there was a big chunk of those were in Western Europe. So I actually do think like there, you know, that we do have enough of momentum there that we probably could pull it off in terms of ticket sales. It’s just all the other stuff that goes along with it that I just don’t think you and I have the time right now. You’re trying to get AuditShark out of the door. I’m trying to grow HitTail and it’s like taking or I have the ball to do, you know, another conference and it doesn’t feel like a wise move at this point.

[04:46] Mike : Just recently we actually got a podcast question which we’ll probably cover in the near future, a question that came in from somebody in Zimbabwe so —

[04:53] Rob : Yeah, it’s always — it’s always crazy. How about you? What’s new with you? Any — any AuditShark news?

[04:57] Mike : Yeah, I’ve been trying to figure out exactly how much longer it’s going to take to get AuditShark out the door and I went through all the different bugs or the majority of the different bugs and cases that are outstanding in order to get AuditShark to launch. And I’ve started cutting things left and right. And it’s funny because things that used to be must-have’s to me if — I guess I’ll say, I’ve dialed them back and [Laughter] then just kind of threw them away and said, “You know what? I really don’t need that.” And it’s just interesting how my perspective has shifted in terms of just trying to get the product launching out the door.

[05:31] Rob : Do you have an example of like a specific feature that you’ve — that you used to think was a must-have and that you’re able to get rid of it?

[05:38] Mike : Yeah, I can — I think one off the top my head which was a — because everything is in Azure, I wanted to be able to run things like reports and things like that on a daily basis or weekly basis or whatever. And one of the issues with running that stuff in Azure is that because everything is distributed, there’s no expectation of concurrency anywhere. So when you deploy an application out there, it has to be written in such a way that it can run on its own or with other copies of itself. So if you have a scheduler for example, the problem with a scheduler is that you can’t just deploy it out there and have everything run because the first part of the problem is, you know, the redundancy. I mean the primary purpose of using Azure is to, you know, rely on that redundancy and if you only have one copy of that Azure worker role or web instance out there, then there’s no guarantee that it’s going to stay up and running.

[06:33] You know, they move things all — all around all the time. They bring things up, they bring things down and you have no control over that but you’re using things on a platform and the expectation that they have basically set forth is that if you build your application correctly, they can bring one of them down and they set up rules so that they’ll be in different machines and different physical hardware so that they can bring one down and then bring you up another copy of it some place else. And your traffic just kind of gets a load balance between them. If you deploy a single instance, you don’t get any of that redundancy and the problem with Azure is that it can drop that instance at any given time and you’ll basically lose everything scheduled during that timeframe until it comes back up again. So it’s possible for the thing to go down and then you lose it, you know, anything that will — was scheduled to go off during that time will basically be gone. It just won’t happen. So whether it’s reports or whether it’s specific tasks that need to go on and that you really have no notification or way of knowing that that scheduler went up and down.

[07:31] Rob : So it’s —

[07:31] Mike : And that’s kind of a problem. [Laughter]

[07:32] Rob : Right, right. But what’s the feature that you had that you’re not going to do?

[07:36] Mike : It has to do with organizing the data and the building reports off of it.

[07:41] Rob : I see. So you had a feature organizing data building reports and you’ve decided to drop it because it’ll get you to market faster. Why the change of heart? What convince you that you could do this now? Is it just looking at it with fresh eyes? Or is it that it’s serving a new market now?

[07:57] Mike : No, it’s more of a I’ve decided not to try and build a redundancy in to it and if it —

[08:03] Rob : Got it.

[08:03] Mike : … hacked out, then there’s only so much I can do about it, so it’s one of those things where what’s the harm if somebody doesn’t get a particular report especially if it happens within the first couple of months of the application being live.

[08:16] Rob : Is it — is it a report that would run in the background that’d be e-mailed to someone or it is someone —

[08:19] Mike : Yes, no. It’s —

[08:21] Rob : Okay, a background report.

[08:21] Mike : … it’s back end process. At that time, there’s this process that scheduled that will kick off and run a report. Well let’s say, 12:04 the — the Azure instance drops and then comes back five or ten minutes later. Well, that scheduled repot is not going to execute. So it will never execute. It actually won’t execute until the next day. So that daily report will not go out pretty much for anybody, you know, for you running this process once a day and just a report is just one example. I mean there’s a lot of other back end processes that, you know, I’m looking at that I might — I may end up scheduling. But if that’s the case, how often could it happen, you know, if you only have something scheduled once day, chances are good that it’s probably not going to it hit very often.

[09:01] Rob : Right.

[09:02] Mike : But I mean there’s a lot of things where people are going to be putting schedules — schedules in to the system. So they’re going to say, “I’m going to schedule my audit to run on my servers at 1 a.m. or 2 a.m. or 3 a.m.” Oh, what happens when those things kick off and —

[09:16] Rob : I see.

[09:17] Mike : I’m caching them on the client sides so I don’t think that that’s going to be an issue. It’s going to be more if the customer decides to make it change in the near, you know, somewhere around the time that audit supposed to kick off and it’s just not going to be able to stop it in time or reschedule it and —

[09:32] Rob : Right.

[09:32] Mike : … I look and I said, well that’s probably not a huge deal right now.

[09:35] Rob : But how hard is that to fix after you’ve launched if it becomes a big deal?

[09:39] Mike : It’s a — it’s a very challenging problem like it does shoot —

[09:41] Rob : Got it.

[09:42] Mike : … it fault tolerance. Scheduler is a very hard problem.

[09:44] Rob : Right, so it’s not — yeah, it doesn’t but it doesn’t become any harder because you do it after launch. It’s the —

[09:48] Mike : Yeah.

[09:48] Rob : … same difficulty basically to do it now and do it later.

[09:51] Mike : Right. And now all —

[09:52] Rob : Yeah.

[09:52] Mike : … I’m doing is just saying well there is only so much I can do. I think it would be a significant engineering effort to make it work and I’ve talked to some people within Microsoft to say how would you actually do this and you know, they’re still trying to get back to me.

[10:05] Rob : Yeah, it seems like — a pretty big limitation with Azure because I have — you know, I’m on a basically a cloud server which is essentially a really beefed-up VPS, right, Virtual Private Server and that’s what runs HitTail. And I have at least a dozen tasks that run in the background daily. They’re — there’s billing that runs every night. They’re, you know, they’re all console apps, right, just Barebones EXE’s that pulls off out of the database and do something with it and then — and then stop. And so there’s — there’s billing. There are — there’s an eMailer that you get keyword, e-mail alerts. There’s a few reports that it actually generates and e-mails to me about the number of trials of previous day, the high volume users, you know, just different stuff so I can keep track of it. And when they don’t run once, it’s actually not catastrophic. I mean even billing has choked a few times. I’ll, you know, upload a buggy version and it’ll crash. And since I’ve written it so that if I run it the next day, it’ll go back the previous two days, obviously, it’ll go, you know, kind of bill everyone who should have been billed by now. But that’s pretty rare that that happens and I can count on it running everyday because I’m using the Windows Scheduler. The Azure doesn’t have anything like that or it doesn’t have an equivalent, you know, mechanism.

[11:15] Mike : You can do those things but because of the way AuditShark works, it’s a little different. At least about the underline architecture for it is such that when something is scheduled to go off, it’s not initiated on the client. So what happens is it’s initiated on the server. So the server says “I’m going to spawn this task and this task needs to happen on the client.” So what it does is as part of that scheduled task on the server, it creates an entry in one of the Azure queues and because the clients are pulling in to the system and saying, “Hey, do you have anything for me to do? Do you have anything for me to do?” It creates that task basically on the fly. So it’s more of the fact that it is time sensitive in terms of the delivery and not the fact that, you know, there’s this report — I mean the reports was just one example.

[12:03] Rob : Right.

[12:03] Mike : And it’s probably not a big deal if it runs, you know, if somebody doesn’t get a report Tuesday night and they get one Wednesday or they, you know, it doesn’t kick off Tuesday night and then Wednesday morning I look at it and say, “Oh this didn’t get out. Let me fire it off manually and just go ahead and do it.” That stuff, I don’t think is a big deal. What is a big deal is if somebody schedules their audits for the middle of the night and then none of them run.

[12:25] Rob : Yeah, I agree. So it’s — it’s early July right now. And you are honing in on — on what timeframe for doing your beta and other stuff?

[12:35] Mike : I was going to say September 1st.

[12:37] Rob : Yeah. So somewhere like first week of September is what you’re looking at?

[12:40] Mike : Yeah, the first or second week of September, probably at the latest.

[12:43] Rob : And that is what — that’s when you’ll have beta to – you’ll let like a handful of beta testers in to start?

[12:49] Mike : Yeah, I mean that’s probably when I’ll start opening up to, you know, multiple private beta testers. I mean I’ll probably be reaching out to a couple of them within the next week or two to see if I can get some of them on in August. So it’ll kind of be, you know, there’ll be some that will come in on August, probably only one or two, maybe three tops and then hopefully, once I get in to September, then I’ll kind of flashed out more of the issues and you know, add in more private beta testers. And then I think that the first, first or second week of October is kind of what I want to shoot for a full blown launch.

[13:21] Rob : Because Labor day is September 3rd and that’s a holiday. So, you’re looking at September 4th or you’re looking at the September 10th?

[13:28] Mike : I was looking at September 10th because –

[13:29] Rob : Right.

[13:29] Mike : … if I’m talking to these people beforehand, you know, the Monday afterwards or the day after and say, “Hey, would you like to beta tester?” I want to talk to them beforehand. I’m going to talk to them in August at some point.

[13:39] Rob : Let’s say a date. Let’s say it’s September 10th and it’s just so that we can revisit this in — I mean that’s basically two months away because it’s July 10h today. So you have two months to get — get your stuff together. What happens between now and then? Is that all feature development?

[13:53] Mike : So some of it is feature development, I’ve still got that back end tool that is being built and that, you know, working through a number of different usability bugs right now but I have to have more conversations with people about what their expectations are for what the tool tells them because the engine, you know, the engine works the way that it works. It grabs data from the machines and puts it out on to the servers and I can run at least minimal reports at this point. But what I really wanted to find out from people is what things they’re interested in knowing about their machines. Are they more interested in — in like the vulnerability side of things or they’re more interested in path side of things? Are they more interested in industry standard configuration policies?

[14:35] I mean I’ve been reading a lot lately more of to gaining marketing material for my website and in looking through different ways that machines are — are hacked in to or compromised, a lot of those breaches come from system misconfiguration. So that was kind of really what my goal was. But I want to know is that people or something to people are actually really concerned about or is it, you know, just the data there, out there is telling me hey, this is a scenario of serious concern and it becomes more of an education process because I don’t want to have to educate people as much as possible. I really like to have them to say, “Yes, I recognize this is the problem. I want you to tell me what all the issues are with it.” And the product can do it. It can do all of those things. I just really need to figure out I guess what my landing point is in terms of the content that’s loaded in to the system. So —

[15:25] Rob : Very cool, man. Two months obviously we’ll be talking about it between now and then but I’d just kind of want to get — get something on the calendar so we can check it out as it — as it gets closer.

[15:34] Mike : So I have a question for you. You —

[15:36] Rob : Yes.

[15:36] Mike : … you had done this, the articles for HitTail and you had started pushing that to people and having them be able to request articles based on the keywords. How is that going?

[15:47] Rob : You know, it’s — it’s going quite well. It’s actually going better than I thought it would. I knew that there’ll be interest in it but there had been multiple articles purchase pretty much everyday. And so I did almost eighty articles. It was like seventy five articles in June that were sold and then looking to — I’m actually on track to beat that in July. And so what that’s done is I talked a little bit about it last time but in effect as raised the lifetime value of a customer because that revenue aside from the — the money that goes to pay the authors, that revenue is now — it’s pretty much pure profit. It just — it goes straight to the bottom line and as a result if I divide that whole, you know, the big bucket of revenue by the number of active customers, I have this — this bucket of money that’s basically increasing lifetime value and it means I can now spend more money to acquire a customer and that really was the original goal. I mean I talked about this in MicroConf talking. It was definitely the goal was to increase that lifetime value because aside from — from increasing prices or keeping people from canceling like lowering churn rate, selling extra things to people, extra value, extra things that they need is one of the best and easiest —

[16:58] Mike : Yeah.

[16:58] Rob : … ways to kind of increase a lifetime value of a customer. So you have more money to work with when you’re doing your marketing. So I’ve been pretty happy. I’m actually getting in to some paid acquisition with HitTail to haven’t done up till now because the funnel was so — it was a leaky funnel is what the phrase I use. People were just bailing during the trial and then the churn rate was high but I got that tamed and so now I’m actually, looks like I’m going to be able to use some — some paid acquisition and make money out of it pretty easily. So it’s — it feels like a good time to be — to be doing this. I’m really glad the articles have worked out to say the truth. And I think for the amount of hours that I spent building it, it’s probably been the most profitable feature that I’ve implemented in the past almost year that I’ve owned HitTail now.

[17:41] Mike : That’s really cool. I mean a lot of that sounds very similar to just basically selling additional products to your, just say, audience.

[17:49] Rob : That’s what exactly what it is, yup. So with DotNetInvoice when we wanted to increase lifetime value, we added on. We have a QuickBooks Integration, you know, little modules that’s like 99 bucks. And so it’s along the same lines, right? It’s just selling one more thing that people probably have already requested or maybe they haven’t but you know that it’s a good compliment to the service and create a lot of value for both you and the users doing that. The funny thing is maybe the punch line to the whole thing is yes, my — my revenue, my profit went up but I have this monthly milestones I’m trying to hit and typically it’s like I want to grow by a thousand dollars month over month, right? So it’s a small growth right now but I missed the milestone by $14 this month which I did two —

[18:29] Mike : Oh.

[18:30] Rob : … months ago as well, right? So it’s like one more article would have pushed me over the revenue mark. But again, it comes back to, okay, so fairly, you know, by — by comparison to 14 bucks it’s a pretty large number and I missed it by 14 bucks like it actually doesn’t really matter because I’ll blow past it next month, anyways. But it was just funny to add those numbers up and be like, “Oh, it’s going to be close, it’s going to be close. Oh…” That the agony —

[18:54] Mike : [Laughter]

[18:54] Rob : … just defeat, you know. But it’s nice to see – to see the growth coming. I’m actually I saw a big rush of traffic because I did the AppSumo deal in June and that went well. It sold a lot and so I should be expecting a big chunk of cash from that that I’m done hoping to feed in to my paid acquisition funnel to just, you know, be able to leverage that cash in to buying some ads through some different channels I’m trying out and hopefully, continue to grow the recurring revenue because the AppSumo deal is all one-time revenue, right? They basically bought a year’s worth of HitTail for a discounted price but I want to take that cash and put it to good use by building recurring revenue and that was really — really the goal of it.

[19:31] Mike : Now, did you include the — the money from the AppSumo deal in to your June numbers or no?

[19:37] Rob : I did not, no. Yeah, I know the AppSumo deal I bet will do between two and three times my monthly June revenue that I will — I will net two to three times the month of June revenue purely from that AppSumo deal. That’s — the audience is huge, dude. So they, you know, it’s a really quick influx of cash is what it is.

[19:55] Mike : Uh huh. So basically based on what you just said though, you know, what you’re supposed to do generally when you’re doing accounting for these types of things is when you get those one-time revenue spikes that are for a year in advance, you’re supposed to take that whatever that number is divide by twelve and then amortize it over the course of the next twelve months. So realistically, you did probably —

[20:15] Rob : Right.

[20:15] Mike : … hit then.

[20:16] Rob : I did.

[20:17] Mike : That $14 is covered I think. [Laughter]

[20:18] Rob : Yeah. Oh, it definitely is. I’m just not — I’m just not going to do that because I’m going to — I get paid, you know, in about a month. They pay net 60. So I get paid in early August and I’m basically going to just reinvest that right back in and I’m not — probably not going to count – I’ll probably put an asterisk in my little revenue tracking sheet and say this month, you know, I took away X thousands of dollars from the AppSumo deal but I’m not even going to — I’m really way, way more interested in recurring revenue. This one time burst in revenue even if they are high four and low five figures, I won’t say it’s not interesting to me but it isn’t as nearly as interesting to me as something that is building up that monthly recurring flywheel, right? It’s the flywheel that I want to get. So just because I can — if I can license something or you know, do one big sale that goes in one big influx of cash, I want to take that money and just reinvest it back in to creating more flywheel revenue, more recurring revenue.

[21:09] Mike : No, I understand that. It’ll make sense to me. I mean I was just saying that in terms of your the charts and stuff that you’re putting —

[21:15] Rob : Yup.

[21:15] Mike : … in for, that was just probably, you know, divide by twelve and then add it in every month for the next twelve months.

[21:22] Rob : But yeah and based on accounting and tax accounting and all that stuff, I’m sure that’s what I’m supposed to be doing but it’s kind of yeah, I’ll just lump it in with my annual revenue at the end of the year. Hey so, you’ve been working four tens.

[21:33] Mike : It’s going pretty well although I’m not particularly thrilled about getting up at 5:30 in the morning. I mean I’m sure there’s people who listen to this and are like, “Oh 5:30 is nothing. I get up at 4 or 3.” I am not a morning person by any stretch of the imagination. I mean if I — if I were a president of the United States and I could had the power to abolish mornings, I totally would. Like no work anywhere, would get on before noon. [Laughter]

[21:55] Rob : So but you’re — but you have Fridays free now, right? You’re basically able to get — if you’re traveling, you’re able to get home a day early and —

[22:02] Mike : Right.

[22:03] Rob : Have you been able to put in time on AuditShark on those days?

[22:05] Mike : Yeah.

[22:05] Rob : … just spent and do another stuff.

[22:06] Mike : No, it’s been on AuditShark so, you know, I’ve been getting home late on Thursday evenings or you know, really early in the morning on Friday but then I get up Friday morning and then I have pretty much all day to work on AuditShark which is really kind of nice. And you know, because I have — I’m off to five contractors working for me right now. So I have all of them doing different things but managing them, you know, in the evenings is much more of a full time job than I thought it’d be because —

[22:32] Rob : Yeah.

[22:32] Mike : … I have to direct people all over the place and say, “Oh, you need to do this,” or “This isn’t right,” because I have everything going through FogBugz, you know. And it’s nice to be able to manage all that stuff in there but at the same time, I feel like there’s times where I have to micromanage things because they are all contractors. And I think maybe this is a little bit of a difference between employees and contractors where contractors will not do something unless you explicitly tell them to do it —

[22:57] Rob : Yes.

[22:57] Mike : … versus employees who will probably look and hence say, “What should I be doing to kind of move —

[23:01] Rob : Yeah.

[23:01] Mike : … forward?

[23:03] Rob : Right.

[23:03] Mike : So I felt like —

[23:03] Rob : Right.

[23:04] Mike : … I’m doing a lot more micromanaging than I would like to be but I don’t know if there’s another choice right now because it’s not like I have the money to hire — hire somebody full time.

[23:12] Rob : Right, you know, that’s what I’m going to say. I think as you move up to chain, what I’ve discovered because I’m starting to move up to chain with a few oDesk contractors with kind of some positions that I have and what I mean by moving up to chain is you start making money for my business that we’re working on and then you have a little more budget to pay them because you’re not just syncing money in to it. And so I’ve sort of hiring people that are a little more expensive than I would have originally hired. And I’m finding that those people tend to be more forward thinking even as contractors and I have people who are making suggestions about improving my business which is super helpful and it means that you’re exactly right, you don’t have to micromanage when you start getting good people like that but they tend to be a little more expensive for sure.

[23:55] Mike : Yeah, I mean I have one guy who’s been with me since January so he’s — he’s done things like that where he’ll see something and he’ll just do it and I’ve told him upfront in numerous times like, “Look, if you find something or see something that should be fixed or could be done better, just go ahead and do it.” And there’s been several times where he’s just like, “Oh and by the way just to let you know, I did this,” and I was like “Wow, that’s awesome. Great. [Laughter] You know, great. Thanks.” So he’s definitely aware of those types of things but, you know, I don’t — obviously, I don’t get that from everybody. One of the things that I’ve had the contractors worked on is the AuditShark’s sale site because I — the site is out there right now. It’s okay. It was just kind of meant to have a website but I’ve put a lot more thought and effort in to the website itself as a, you know, kind of sales machine at this point. So what I did was I hired out to design and had somebody build everything for me and then I had to put together. And basically, what I did was I generated all the content for all the different pages and one of the things I found was remember that survey, the Wufoo survey that I was running a couple of months ago?

[24:55] Rob : Yup.

[24:56] Mike : What I did from that was I was trying to build like the FAQ page because most larger applications are semi complicated applications have an FAQ section. And what I did was I went through that and one of the questions in my survey was “What concerns or questions do you have about AuditShark?” or “Would you have about, you know, a service like AuditShark?” And I basically was able to fill out my entire FAQ based on what people answered there.

[25:23] Rob : Nice.

[25:23] Mike : Oh, the nice thing was it was people raising objections. I mean and that’s really what —

[25:29] Rob : Sure.

[25:29] Mike : … what the people were saying —

[25:30] Rob : It’s perfect.

[25:30] Mike : … is like, you know, “This is why I wouldn’t use this product.” And I was able to say, you know, somebody — somebody said “I would be concerned about the quality of the code,” for example or “I would be concerned about how trustworthy the application is.” And of course, you know, how do I answer that because I’m a small company and that basically just laid it out in the sale site and then the FAQ and just said, “Look, you know, I’m one person. I’m building this but here’s my online profile. Here’s my LinkedIn account. Here’s the podcast that I run. Here’s the conference that I helped run. I’m all over the internet. I have absolutely no intentions of starting my — my entire online identity over again.” And you know, and that’s basically what I’m kind of relying on for my initial trust. I think that it’ll change overtime as it becomes I’ll say more corporate and I established a lot more generalized credibility in the field but you know, for now, I don’t really have a whole heck of a lot to rely on. So…

[26:24] Rob : Right. And I think you’re — you’re ahead of the game because when I bought HitTail basically the trial to conversion funnel was just a bit small. I mean it was like, I don’t know, 1% or something of people who started trials converted. And one of the things that I did after I relaunched in January was e-mail. I had my VA e-mail everyone who canceled during their trial and asked why they canceled. And he did that for a few weeks and I got this great list of essentially were — they were objections. And so you already have that and you haven’t even launched yet. So that’s awesome. But what I did is I took those objections. I categorized them and there were seven different groupings basically and there were things like, “I don’t have time to use HitTail,” and so I said, “Okay. What’s the solution?” The solution is they should be able, you know, write articles with one-click and that’s why I built the one-click article feature.

[27:13] Another one was “I don’t understand the difference between this and Google Analytics,” or they’d say things like “I get the same information from Google Analytics.” And the fact is that it is just not true and so I was like, “Okay.” So the solution to this is to educate them. And so during the trial now, I had the 30-day trial, people receive about — it depends on how often you log in and some other things you do but you receive about between four and six e-mails during that 30 days. And some of them are purely educational on like SEO, you know, on content generation and other ones are — are more specifically to HitTail and so one of them is just two questions. So it’s kind of like the two most important questions I think people have and it has the questions that has kind of a one sentence answer. And then it says, “You know, here’s a link to a 60 seconds screencast that does even — an even better job in answering these questions specifically.”

[28:06] And so if they click through from the e-mail, they go on to my FAQ and there’s a big video, you know, that they can watch right in their browser and it answers that. It’s my voice. It’s me doing a screencast and I have Google Analytics on the left hand side and I have HitTail on the right and I show how you can have 1000 keywords someone found before in Google Analytics and HitTail has the same 1000 but then the suggestions are only twenty or thirty of those. Like it’s picked out the best ones you should target and that’s the key difference between the two things. So that’s just one example but there were like I said seven different objections essentially and that’s — those seven objections that I packaged together, you know, in a document, that became operation retention, right? And I talked a little about that a few episodes ago and that operation retention essentially doubled my conversion rate. The original 1% [Laughter] the trial to conversion rate went way up when I relaunched and I added credit card, you know, needing a credit card before a trial.

[29:00] But it had – still, it did not gone up as much as I wanted and so from there, I’ve now, you know, increased it by a hundred percent using this — this operation retention. So the nice part I mean the way it ties in to what you’re doing is you already have some of those objections. Certainly new ones will come up later. Once you launched, some people cancel, you know, you want to do the same thing and find out why they canceled. But you’re definitely ahead of the game on that to already have those and be able to put them in an FAQ and then I would suggest, of course, during their trial that you do like I did. You already have the info so you can just maybe call them out. You could put them right back. You could even put the text directly in to an e-mail, you know, and do one of the e-mails during the trial or you could link out to them. But definitely I have seen a noticeable increase in my conversion rate because you’re essentially able to communicate with people, you know, using the phrasing and the same questions that — that other people have had.

[29:46] Mike : Yeah and that’s been the great part of it. What I’m planning on doing the private beta that I’m doing is talking to people and asking them, you know, kind of what they’re objections are to the products then and help and use that to essentially set up the — the auto responder for when people do sign up and be able to send them some of those things upfront. I might actually — I might gather some of that information upfront and then not implement it and then wait a little while like wait maybe a month or two and just measure my conversion rate and then implement it and see what my conversion rate is afterwards because if I do it upfront, I’m not going to have any idea whether it had an effect or what kind of effect it had. I’m not real sure which way I’m going to go on that but, you know, it’s definitely something I plan on gathering.

[30:30] [Music]

[30:33] Mike : If anyone out there is using inDinero, they probably seen this already but basically inDinero decided that they were going to do away with their free plan. I mean we talked about it at MicroConf and you know, the idea is that if you’re going to be eliminating the plan or changing your pricing or something along those lines then typically what you do is you grandfather the people who were in that plan before hand and you just let them keep using it and then you start charging all of the new people. Well, they didn’t do that. They basically said, “All you people who are using the free plan, you have until July 31st and then we’re going to get rid of everything and you have to upgrade between now and then or you’re basically going to lose your data.” So I kind of understand, you know, I sent them an e-mail and said, “Look, what’s going on here? You know, this is a pretty unusual to see this kind of thing.” And I didn’t get a direct response back. I got this generic response from their CEO probably the next day or the day after kind of explaining their decision. But the initial contact that I got was just “Hey, by the way, you have to pay for this within the next thirty days or we’re going to close your account and delete all your data.”

[31:35] Rob : So they just fumbled, right? You can’t do that. If you’re — if you’re going to do that and cancel people’s accounts, you have to give them three months, six months. You got to give them a lot of notice. You’re still going to piss people off when you do that but then at least, you know, you’re giving them time to do it and I don’t see then — the logic of doing this. This really is the whole why free plans don’t work thing. Everyone thinks a free plan is a great idea. It’s going to be a great marketing approach but in the end, it rarely, rarely works unless you have doves of money in the bank and you know exactly what you’re doing, almost it never works. I’d say 99% of free plans that I see, they get removed. You can probably name a handful of free plans like Dropbox and — that’s the only one I can name right now but —

[32:16] Mike : Gmail. Gmail.

[32:16] Rob : Gmail, thank you. Well and Facebook is free, right? I mean there are free apps but these are enormous, enormous apps. If you don’t have apps with hundreds of millions of users or a huge bank account balance, it’s very unlikely that free plans work. And we talk about this before with like MailChimp. They have a free plan now but they didn’t have one for years until they were enormously profitable. And now that they are — I mean MailChimp is minting money basically. They have added —

[32:45] Mike : They handed it differently though. They handled it pretty differently.

[32:47] Rob : I know they added a free plan — they added a free plan back in. They didn’t have one to start and so they’ve added it. Now that they know their funnel, it’s optimized. They know how many free users will confer all the stuff. They can now afford to do that but to do it from the start and then cancel it like this, it’s — it’s bad news, man. And inDinero seems to do this. They seem to fumble the ball on this kind of hard, what do you call it? It’s like a decision. It’s a decision that you make that’s going to piss people off and they don’t seem to be able to handle it very well.

[33:14] Mike : And like I — I would have been okay with it if they sent me an e-mail like before they even did it, you know, like I understand its decisions like this they sometimes have to be made and I would have been okay with it if I gotten an e-mail that says, “Hey, look. We’re really sorry. We put up this free plan and not only is it not working now but we are actively losing money. And we need people’s help and this is what we’re going to do. We’re got — we have to start charging for this plan if you really want it and we’re going to leave it in place until the end of the fiscal year,” because this is financial data so the problem is that because they did it after I forget when I got the e-mail, I’m pretty sure that it was last week, but it was basically after the six-month mark.

[33:54] So basically most banks and stuff, they only let you go back six months after that — or three months and — and pull out the data electronically once you get past that three or six-month mark depending on the back, it’s kind of a pain in the neck to go back and get stuff from beforehand. So like even if you’re doing QuickBooks or pull in transactions through QuickBooks, a lot of them only allow you to go back three months, so that means that there’s like three months of transactions that I would have to manually pour over some place else.

[34:21] Rob : Yeah.

[34:21] Mike : And it’s just like you’re totally screwing your “customer-base” who kind of helped make you popular enough to get you to the point that you are. And I got no notice and that’s really what pisses me off about it. It’s like I got no notice. It’s financial information and then say, “Oh, and by the way, if you don’t want to lose this, you know, you’re going to have to pay us, you know, $30 a month.” And I basically have to until the end of the year. I’m not happy about it. I already signed up. The other thing that they had said in their e-mail was “Oh, you can log in and you can get your data.” Well they replaced the log in with a popup like a modal popup. They come up and says, “You know, your free trial has expired. Please enter your credit card information.” See, you can’t even get your data out unless you pay.

[35:01] Rob : Yeah, yeah, that’s — that’s a bummer. Have you e-mailed — I wonder if you e-mailed them directly if they had export your data but —

[35:06] Mike : I did and they did —

[35:08] Rob : Yeah.

[35:08] Mike : … sent it to me. And they said —

[35:09] Rob : Okay.

[35:09] Mike : … “Oh that’s a bug we’re fixing it,” but…

[35:11] Rob : Right. In full disclosure, I have three inDinero accounts that I’ve — that we’ve been paying for; the Micropreneur Academy and MicroConf has one and then I have one for all of my Numa group businesses and DotNetInvoice has one because that’s a separate partnership. And so I’ve liked inDinero. I like some of the stuff they do. I think we commented a couple of months ago about how they kind of flub the thing around tax time where they removed a bunch of or a couple of different types of categories and it basically wracked my data right as tax time was coming and then I e-mailed them and didn’t get back to me. It took them like ten days to get back to me. And I had — I spent like three or four hours doing manual updates to it. So that made me mad.

[35:49] But in general, they — they have hustled and they’ve done a decent job at the product and it is one of the better products out there for doing this, so I’ve always cut them a lot of slack but this kind of thing is in my opinion and I’m not even — I don’t have a free plan so I’m not like directly being affected by this but this is — it’s a bad sign for me, right? It’s a bad sign that they aren’t being more careful with the kind of changes that they’re making to their apps and giving people more of an opportunity to — to get their data and to upgrade gracefully and that kind of stuff. Do — we received an e-mail right? Someone suggested a different app that does something similar?

[36:23] Mike : Yes, somebody sent an e-mail. Well, actually it was unrelated. They had sent an e-mail to us commenting about episode 85 where we’re talking about free and low cost solutions for entrepreneurs and it was called Wave Accounting. And it looks largely similar to inDinero. I haven’t signed up for it yet. I probably will but it looks very, very much like inDinero except that it is free. Basically, the way they make money off of it is kind of like Mint where they make recommendations and suggestions to you for different products and then they get paid commissions on those products.

[36:58] Rob : Right. Yeah, I got to be honest, with then trying to launch with free I’m very skeptical. I would not, personally, would not —

[37:05] Mike : No, it’s —

[37:05] Rob : … put my accounting on it because I know they have a revenue model but they’re going to hit scale and if they don’t, they’re going to come back and probably pull the same thing that inDinero has.

[37:12] Mike : They — they — I don’t know. They’re claiming they’re getting tens of thousands of users signed up every month and they’ve — I don’t know how long they’ve been around. I haven’t really dug that far in to it.

[37:22] Rob : Sure.

[37:22] Mike : But I’m definitely going to start looking at it.

[37:24] Rob : I’m just telling you I’m —

[37:26] Mike : I agree.

[37:26] Rob : … personally hesitant to base my business accounting because of how complex it is on an app that that is free. But I would prefer to pay. If Wave was this good and they charge me and I was able to pay, I would prefer to do that. And obviously not for — like for an app like Facebook, I’ve, you know, I would prefer to use it for free because that’s how it is and it doesn’t — doesn’t matter if Facebook went away, it wouldn’t bother me. But if I’m in Wave Accounting and I’m six months in and suddenly something catastrophic happens or they have to shut down because they don’t have money or they, you know, pull this — this thing like inDinero did and they suddenly want to charge everybody and they’re going to lock my data up then, you know, that’s not going to work.

[38:02] Mike : Yeah, I mean for me, it’s not about having to pay for it. It really isn’t. It’s about —

[38:06] Rob : No, like hey —

[38:06] Mike : … how it was handled. I don’t mind paying for it and I mean this is — the business that I have this for is more of a shell company at this point and I’m just not — I’m not really using the data but I kind of need —

[38:18] Rob : Yeah.

[38:18] Mike : … to have it some place. So I threw it in — in inDinero because I knew that it was going to be under their fifty-transaction a month limit.

[38:24] Rob : Right.

[38:25] Mike : So —

[38:25] Rob : They’re not grandfathering thing it is, that’s a big deal.

[38:28] Mike : Yup. I got to tweet about it and you know, from them saying, “Sorry, please contact our e-mail support,” “Sorry you’re unhappy, please contact our e-mail support.” I think that they could do a better job handling it. It’ll be up more of upfront about things but I don’t know, whatever.

[38:42] Rob : Yeah. You know, I had to shut down HitTail’s free plan after I acquired it because it was just tanking the server. There were so many people using it for free that had been using it for years and years. And I basically I approached them with kid gloves as what I tried to do. I mean just e-mailing, letting them know they had a long time to — as much time as I could give them, I could — they could export their data. I offered them a discounted plan, you know, I kind of went the whole nine yards and was apologetic and said it was — I mean the reason that thing was having outages was could — which because there was too much load on the server and there wasn’t enough revenue coming in. So I’ve been through this myself and I wasn’t able to grandfather people in. There was a very real reason why I wasn’t able to grandfather people in but at least I won’t say I did it perfectly. Certainly, I had a few complaints but I guess I thought — it seems like I thought through it a little more because I knew people are going to be upset. I almost — it almost seems like inDinero maybe didn’t think anyone would be that upset about this.

[39:35] Mike : I — I don’t know like I said I’ve been — there’s — there’s a few different things. One was being completely locked out and not being able to get back in the short timeline, you know, their complete lack of notice. I mean if it been three months or six months or something like that, that’d be different or if they just said, “Look, in October or November or something like that, then we’re going to have to stop offering this free plan,” but it was just — there was no notice or whatsoever and then just the way that they’ve handled it since then, I just turn — it turns me off to them completely at this point.

[40:03] [Music]

[40:06] Rob : Well, listener if you have a question or a comment, you can call it in to our voicemail number at 888-801-9690 or e-mail us at [email protected] Our theme music is an excerpt from “We’re Outta Control” by MoOt, used under Creative Commons. Subscribe to this podcast in iTunes by searching for Startups or via RSS at StartupsfortheRestofUs.com where you’ll also find a full transcript of each episode. Thanks for listening. We’ll see you next time.

Mike finally announces the date for the AuditShark Beta.

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Episode 87 | Whether to Build Multiple Websites, Creating Residual Income and How to Run a Beta

Episode 87 | Whether to Build Multiple Websites, Creating Residual Income and How to Run a Beta

00:00

Transcript

[00:00] Rob : On today’s episode of Startups For The Rest of Us, we’re going to be talking about whether you should have multiple websites for multiple products and some ways to generate residual income. This is Startups For The Rest of Us: Episode 87.

[00:12] [Music]

[00:21] Rob : Welcome to Startups For The Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Rob.

[00:29] Mike : And I’m Mike.

[00:30] Rob : And we’re here to share our experiences to help you avoid the same mistakes that we’ve made. What’s the word this week, Mike?

[00:35] Mike : I have completed the code merge that was giving me absolute nightmares last week. [Laughter]

[00:39] Rob : Oh, the merge. So to give the listeners a little background, you had a couple of developers working and like they were both checking coding that would conflict.

[00:46] Mike : Yeah.

[00:46] Rob : Is that right? And you would have to do manual merging? Why wasn’t Subversion or Git handling that?

[00:51] Mike : It’s because it was the Visual Studio’s .Designer files which Microsoft for some reason decides that they’re going to reorder things when they go back in to the designer files. So if you two different people make changes, you’re not guaranteed that the changes in each of those files are going to be in the same places and because it’s kind of an auto-generated file, there’s not much you can do about it. So I actually wrote a utility that would sort the contents of the file and make it so that it was a lot easier to merge.

[01:19] Rob : How interesting. Yeah, I never ran in to that. I think when I was on big teams doing .NET development we use Vault or we did used Perforce but we had the lock file checked. So there if you check something out, it was locked to avoid this kind of thing.

[01:33] Mike : Yeah.

[01:34] Rob : You know, so two people couldn’t edit the file at the same time and maybe that’s why — maybe that’s why they did it at those companies.

[01:39] Mike : It could be. It could just be the type of file too. I mean because everything else merged fine. It was just a couple of .Designer files and a couple of .resx files and you know, I found a utility that would sort the resx files so it’s a lot easier to manage but the .Designer file, I couldn’t find a utility for that. So I just — I wrote one. It took me probably two or three hours to write it where it’s going through by hand. I probably spend six or eight hours before I just kind of gave up [Laughter] and turned to writing a code.

[02:06] Rob : Yeah, that’s brutal. So I guess it’s been about three and a half weeks now, I launched the article feature, one-click articles on HitTail and it’s continuing to do well. I finally sent out an e-mail to all the paying customers. Before that I basically just had a splash screen when people logged in that they would see, you know, articles were available but about a week ago, I finally sent an e-mail to everybody who’s paying and they, you know, continue to ramp up. So I think we’ve done over sixty articles in like twenty five days. So it’s been a nice pace and as a result, the lifetime value of my customers has, you know, assuming this pace keeps up as increased quite a bit. So it’s definitely been, I mean the entire goal really is to increase the lifetime value so I have more leeway when acquiring customers that I can do more creative things and some things are getting little more expensive.

[02:56]So it’s been — been a good experiment. We have had three kind of returns. One I was able – we were able to fix. My admin fixed it himself and then actually, the other one he fixed as well. There’s only one where we had to… gave someone’s money back or we asked for kind of a rewrite. That’s what we’re going to do is have a hundred percent money back guarantee on the article quality. So I actually, to be honest, I expected by the time we got to sixty articles, that there would had been a lot more just manual labor like trouble, you know, support issues, keeping that like an articles or just different things that had happened and so far, it’s just been kind of a walk in the park. I’m knocking on wood right now because I don’t want to jinx it but so far I’m really happy with the level of effort we try to expand versus the revenue that we’ve received from this feature.

[03:41] Mike : And you kind of did a soft launch with it too, right? I mean it’s not like you just blast it out to everybody and said, “Hey, there’s this brand new feature that we think you’re going to love.”

[03:48] Rob : That’s true. Yeah, the soft launch was just the splash screen and so it was very slow going because only thirty to fifty people log in a day and so some trickled in for several days and you’re right, I did fixed several issues during that time and so by the time I e-mailed, gee, as close to a thousand people that really had helped that I had fixed those things, you know, that I hadn’t just on a big launch without tweaking it first.

[04:10] Mike : Cool. I think that by the time we record the next podcast, I’m going to have a definitive date for when I’ll be starting my close beta for AuditShark.

[04:18] Rob : I love it. So that will be next week. We can have a count down timer.

[04:22] Mike : Great.

[04:22] Rob : Mike’s timeline.com and it’ll be a JavaScript count down timer. I like the idea.

[04:27] Mike : Isn’t there some website where you can — you go there and you have to pledge something or you give them a picture of you from high school and you have to meet your launch date and if you don’t meet it, they tweet it out and they e-mail it out to all your friends and family.

[04:42] Rob : I like this. If you know that URL –someone send it to me.

[04:46] Mike : About the other thing is I think along with my launch date, I’ll at least know what the date is but I’m definitely going to start my closed beta program on that date and then I’ll probably give myself maybe four or six weeks to give myself time to get some feedback from people and talk to people and get some of the different bugs and stuff fixed but I’m feeling good about it. I mean things are — things at the back end are starting to really come together with the code merge that I did and the guys had been making really good progress on the back end code. And it’s just been more of — I’ll say it, I feel like more like a project manager than actually a developer at this point.

[05:19] Rob : Right. And when your tight on time, sometimes it’s the best way to be.

[05:23] Mike : Uh huh. And I switched over to four by ten hour days for my consulting work for the next month or so. So that will give me an extra day every week to work on stuff and I’m still working on things in the evenings to get everything done. But so far things are progressing nicely.

[05:36] Rob : Nice, four tens. That’s a nice schedule.

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[05:42] Rob : All right, so shall we dive in to our first question?

[05:44] Mike : Yeah, what we got on deck?

[05:45] Rob : Our first one is from Andrew and he says, “Hi, Rob and Mike. I’m in a process of launching my first SaaS product and the help you guys give on the podcast has been invaluable. While researching and developing my app, I came across another product opportunity in the same niche. I’ve already coded the second product and it’s ready for launch. I want to launch this product with the goal of bringing in some cash as well as building another source of potential customers while I finish coding my original idea. My question is whether I should launch this as a standalone product with its own website or as part of a suite of products that would eventually include both applications. There will be a big crossover in the original content I can create and blog around the two products. So from a marketing stand point, I’m leaning towards the later approach which is the single site that has two products. What are the advantages and disadvantages you can see for each approach?”

[06:37] Mike : I think it’s a tough question. I’m not real sure which direction I would go with this but I think that I might lean more towards one site and then kind of split it in to a couple of different subdirectories and that would be more for I think technical reasons than anything else. It probably would also give you a little more credibility in the website itself because it is a new product and credibility is one of those things that is I think a little difficult to establish early on but if you have two different products with different marketing material around them on the same website, then it tends to lend each credibility to the website itself. If you have your own website that is essentially forming social proof for the website but at the same time it can work because you do have the two products there and the people who look at your website and they see that you have two products, they’ll say, “Oh, this company is legitimate,” “They have a legitimate product,” “They have, you know, legitimate customers presumably” and it does reinforce that a little bit.

[07:31] But I also wonder how difficult it’s going to be to do both of them at the same time because I’ll be honest, I mean I’m in the middle of doing multiple things at the same time and it’s very, very difficult. So I think my advice would probably be to start with one product on the site and build it for just the one product and then integrate the second in to it when you’re ready. I don’t think that trying to do both at the exact same time is probably the way to go on this one.

[07:57] Rob : Yup, I agree with that last part. I think trying to do multiple products is the kiss of death and the only way you can do multiple at once is if they’re like information products and you don’t have the support and adding features and all that stuff to go with it. You can kind of write it like an e-book or something or screencast. You can build it and then it’s done and you know, you don’t really need to put a bunch of time in to it. Yeah, I do think it’s definitely a mistake to try to do both at once. And I also would agree that you want to get one of them out there, get it marketed, get — you know, get the blogging going, get the SEO going, get whatever other channels you have going and then introduce the second one to add a later time once you’ve once you feel like you know the market better and really hesitant to put two products on one website. And there’s a bunch of reasons why but I think the most prominent one is that there’s a lack of focus.

[08:42] Anytime I come to a website and it’s trying to sell me multiple things, it doesn’t do a very good job at any of them. So as an example, Mike, you and I, basically have kind of a suite of products if you think about it. We have the podcast. We have a conference, MicroConf. I have a book that’s related to the same genre. We have the Academy. These things were all related, right? So in theory, you could say well we lend credibility to each other so could just have a single landing page that’s like the Micropreneur landing page and then have a drop down list or have four things in the top and have — and have conference, book, you know, online startup school and podcast, But when you think about that, it doesn’t lend itself to a lot of things. Number one, it doesn’t lend itself to SEO very well because the content is not highly focused and Google likes small articles that are focused.

[09:27] And the other thing is it just — it overwhelms people when they arrived at the website. There’s too many decisions, too many choices and people often wind up just doing nothing. There’s too many paths to follow. What I would recommend if it’s at all possible is to create basically a chain or a long funnel and so you figure out which of these products is lower cost and which of them people are more likely to buy first. And then you set up a website for that and you market the crap out of that and you get, you know, people to buy the product. You support the product. You provide way more value than people pay for and now you have these paying customers and now, just like we do at the podcast and just like we do with MicroConf and the Academy and the book, it’s like you can kind of start tying them together. And you can say, “Hey, since you bought this, I provide quality stuff. You have the experience. You know that I took care of you and now, here look at this other thing I created that’s equally as good and it’s in a similar niche.” So I almost see this as a more of a back end product so you’re doing them in serial rather than trying to market them in parallel.

[10:24] Mike : I think one of the situations where I could see this working really well is if the products are, you know, if one of the products is actually a plugin for the other product or there is a huge integrations between them but as you said, I mean you need to start somewhere I mean even with something like, you know, the products from 37signals. You know, you look at the marketing material for them and they’re really on their own and it’s only until you get in to them and you start using them that you see that there’s additional integration points in them and that you can sort of leverage data between them and kind of stay in one interface. It’s pretty well hidden I’ll say. But I definitely agree with what you said that trying to separate them and if they are in the same niche market trying to figure out which one people are going to buy first and then use the second product as essentially an up-sell from the first.

[11:11] Rob : All right, hope that helps. Thanks for the question Andrew. Our second question today is from Ryan Higgins and he’s asking about top performing residual income generators. He says, “Hey, guys. I really dig your show. Appreciate all of the grassroots tips and have employed many in my online work. Over the past three years I’ve had success selling professional services online but I find this time consuming and often very demanding as I promise response to online clients within twenty hours from receiving their e-mails. I’ve also created modest revenue through AdSense ads and downloadable e-books I’ve written on various subjects. To be honest, I much prefer this later business platform as it seems to run automatically whether I tend to it or not unlike the online services part of my work.” So obviously, he’s talking about products versus services, right? It’s consulting dollar for hours versus building a product that’s much more leverageable.”So my question is what are some other creative ways you’ve seen people generate self regulating income online? And keep up the great work. Ryan, a Canadian in Shanghai.”

[12:10] I’ll take a crack at this one first. So Ryan is basically asking about, you know, other ways that he can monetized his knowledge and monetize his experience but not just trade dollar for hours. And obviously, there’s a big challenge upfront when you’re trying to build the products it’s that you need to find out products that people need or want and you have to spend the time to do it and there is a risk that they may not buy. And that’s where, you know, consulting is such an easier road because you can just have someone pay you X dollar for certain amount of hours and you’d just kind of cash it upfront. But on the flip side, that doesn’t — it doesn’t scale at all. It’s not leverageable over time. It’s just it’s not a way to really build a sustainable business. And so I guess Ryan is looking for other creative ways for people who generate online income and I mean that’s — that’s basically like this entire podcast is about and kind of what the Lifestyle Business Podcast and Smart Passive Income and Foolish Adventure.

[13:04] I mean I would listen to all of those podcast. It’s basically about taking your expertise and starting blogs, podcasts, writing e-books, building software, providing value and in a productized form that, you know, helps people get what they need done. And you can see this all over the place. I think maybe the best example I’ll bring up is like Foolish Adventure. If you never listened to that podcast Tim Conley has this thing called Three Product Approach and it involves having a free product and that’s typically a blog or a podcast that you’re giving away for free and then your second product is also free but you ask for an e-mail address so that’s where you build your newsletter up. And then your third product is when you sell. So that’s typically like maybe an e-book. Sometimes it can be a membership site and that’s his flow and he kind of came up with that concept then it gets — it’s really good.

[13:52] So I mean that’s one way to do it. I think that’s a creative way but I think, you know, there are certainly other ways. Mike and I throw a conference and it’s not, you know, massive revenue-generating thing but it is something that that raises our profiles and it’s fun to do and it does make some money now. So that’s — that could be a creative way. Obviously, writing e-books, writing physical books like I did, you know, paper back books and starting online membership websites are all great ways and if you have desire and you have experience in software, then that’s of course what we, you know, that’s something that Mike and I focus a lot on, on this podcast is building apps, building plugins, building something of value. I mean we know number — a number of entrepreneurs who’ve seen a lot of success in the Micropreneur Academy building WordPress plugins for folks, for in all types of niches, building SaaS applications, building desktop applications, building mobile apps, all that kind of stuff. So you know, I hope that gives you some starting points.

[14:43] Mike : One of the things that you mentioned kind of in passing was something I was going to bring up which is membership sites. And it sounds to me like what you’ve said was “I’ve created some modest revenue through AdSense ads and downloadable e-books I’ve written on various subjects.” And if those e-books are on related subjects, then I think you could probably take a lot of that material and put it in to some sort of a membership site where you’re charging people, obviously, to be a monthly member of that site and provide them access to that material but because it is a membership website, I believe that you could probably charge them significantly more than if you’re going to take all that information and just distribute it as an e-book. So essentially you are would be able to migrate the content from your e-book and into the membership website. And I think you obviously you want to add additional things in to the membership website not just, you know, do a direct copy from the e-book that could significantly boost revenue for you from that particular, you know, line of products as well.

[15:45] The other thing I would mention is that if you already created some sort of a modest revenue through some of these e-books, I would look in to trying to distribute them further and trying to get them out there. I mean it seems to me like a lot of the products that people have with things like this is they get to the marketing stage and they don’t do very well with it and they give up too easily and they don’t necessarily find the upper balance of where they can take something. So a lot of times they’ll give up early and you know, just not push it far enough and they’ll say, “Well, I need to look for a new product because this one has tapped out.” And the reality is it may not have tapped out, you know, are you sure that it has. And so those are the things that I would definitely look in to as whether or not those e-books can be pushed further, whether he could do additional marketing around them and increase the monthly revenue from them.

[16:30] Rob : Nice. So I give generalities on this one and you give the specifics. High five.

[16:34] Mike : Virtual high five. [Laughter]

[16:36] Rob : All right. Our next question is from Rasmus in Denmark and he says, “My product and question is around generating a valid amount of relevant traffic within a reasonable period of time to be able to validate my idea. I know you briefly mentioned AdWords to buy traffic but are there other channels or sources of relevant traffic. It would also be relevant to know more about the AdWords source, for example, volume, time span, et cetera as well as what volume you see as a reasonable validity. I know about setting up AdWords campaigns and get throwing keyword limits et cetera. Personally, I don’t have an established audience like you guys have. So how do you validate an idea if you’re starting from scratch? Would love to hear a podcast allocated to this topic. All the best, Rasmus from Denmark.”

[17:18] Mike : So I think that the things that we’ve talked about previously definitely applies to this. I mean, you know, you’re not going to be able to do SEO and drive a lot of traffic in a reasonable amount of time and I’ll define reasonable as in, you know, two to four weeks, something like that because SEO does take time. You’re going to do some stuff and it’s going to take Google two or three weeks to just either indentify your website or to put in to the rankings and then you’re going to have just take time to figure it out what changes you need to make. And it’s just, you know, a long convoluted process. I think you’re much better off trying to identify people who you want to target and then either use AdWords, Facebook ads or Twitter advertisement to try and drive traffic to your website. And from there obviously, a number of different methods you can use to try and figure out whether or not your idea has legs but two that I would look at is one, seeing if they’re actually clicking through for to the buy now button and then another one is if you will put some sort of a survey out there and start asking people, you know, is this something you pay for and how much would you pay for it. Maybe put a newsletter out there.

[18:22] And I wouldn’t do all three these things at the same time. You know, maybe put the pricing page there and after they click through for pricing or through the buy now button say, “Sorry, this is unavailable but sign up for our newsletter or take the survey.” Or you could kind of chain them together and you have buy now button and then sign up for the newsletter and then after that you can ask them to take a survey. But definitely don’t put all three of them on the same page at the same time. You want to chain them together to get better results for that. But those are the types of things that I would look at. I know that Rob and I both have a decent number of Twitter and RSS subscribers for the podcast or the blogs and everything but I don’t see those as very big generators for at least half of the business ideas that I have. I just don’t see those as legitimate ways to send traffic mainly because it’s untargeted.

[19:10] Rob : Yeah, I would agree. Typically an audience like the one we have isn’t actually that great for the products we’re launching. I experienced very low signup rates from blog readers and Hacker News readers when I relaunched HitTail in January and that was not unexpected. I mean I just don’t expect. You know, a lot of people are just getting started out to really want to pay monthly for a service that they probably can’t use until — until down the line. So Jason Cohen experienced the same thing when he launched WP Engine and he said they got — he got a handful of customers from his blog audience. What an audience gets you more of is it gets you the ability to partner up with people, to raise funding. It’s much, much more about relationships than it is about actually, you know, driving traffic and trying to get people sign up for a mailing list for a product that’s not related to it.

[19:54] I have a couple of thoughts on this. First thing is Rasmus, you got to ask is your audience online is your niche that you need to reach? Are they online at all? Because if they’re not then, you know, all this online stuff we’re talking about just isn’t going to work. You’re going to have to resort to a more offline stuff. So if he can determines they actually are hang out online, I wanted to take a step back and say, don’t just rely on driving people to landing pages and getting their e-mail addresses. Talk to people like try to meet with them in person if they are within driving distant from you. Try to get them on Skype to have a conversation. It is so much more valuable for you and for that person if you can actually have a conversation instead of just a simple e-mail survey or simple e-mail conversation even. I would say that well all the stuff that I’m going to list and Mike talked about is good and it’s good for driving some traffic and getting an idea, getting a list that you can then contact, that’s not the end goal. The end goal is actually engaging with people and having conversations.

[20:48] I’m going to throw out some ideas. I think the first thing you should do is look at if there any conferences within a few hundred mile radius of you that caters to this audience and try to go to that conference so they can meet people in person and have discussions with them, get and idea if what you’re building is at all going to serve them. I would also look for forums that cater to this audience. Obviously, examples to that in our niche since I know them because I hang there or things like Hacker News and you could totally do an Ask HN if you have a product coming out and you can post a link there and that would bring people to the landing page, you know, you can ask them what they think to the idea. You can go on Corra and you can either ask questions or you can answer questions. And you’ll know that none of these are scalable solutions. You’ll never just going to turn a dial in this and bring million of visitors but that’s not the point. At this point, you have to do things that don’t scale and it’s going to take a lot of time. You either need a bunch of time or need a bunch of money and I’m assuming that yet at this point, you don’t have a bunch of money. So I definitely think Corra is under use for that.

[21:44] I also think that creating an infographic right off the bat. I mean you can get an infographic created a pretty nice one from between two and three hundred bucks. I found people both on oDesk and Elance to do that. That’s a great way to drive 30,000 people to your website in 24 hours if it goes viral. And if you make it good, you make it for that niche. You know, it’s a nice way to draw a lot of traffic for a small spend. You brought up AdWords, yes, its the old main stay. If you’re in a tough niche at all that’s competitive, you’re going to pay three to five bucks a click. So AdWords these days for me is more of a last resort but, you know, it could be something you can look in to and I think those four other ideas I’m going to try.

[22:23] One, I would look in to Facebook ads since the demographic targeting is so good and that you can test a lot of ads at once. It’s not about where to go. You can get some pretty cheap clicks there and then StumbleUpon. You can get 10 cent clicks but you can’t just send people to a landing page. You have to send them to some content like an engaging by a blog post that then links over to a landing page. If you send them just to a landing page, they will bail. And then the other two Mike mentioned actually. He mentioned Twitter ads which I have heard some people getting some decent success and then I guess the last one Mike didn’t mention which is Buy Sell Ads and that’s the display advertising. You buy them month at a time and they have your bunch of different niches now and you can spend as little as maybe twenty bucks and you’ll get a fairly low click-through rate because they are banner ads but you can definitely get niche traffic from a service like that.

[23:11] So those were like six or eight ideas kind of off the top of my head. But this to be honest, this process right here is what I did when I was creating the HitTail marketing plan. For the months leading up to acquiring HitTail, I would sit down for fifteen minutes at a time and sketch out a huge list of ways that I thought that I might be able to market HitTail and I just kept stuffing them in to that doc. And overtime it became a really good corpus of all these ideas. There’s about twelve pages of it and I’ve been working through it since I acquired it eight months ago. And I recommend if you’re thinking about launching your product, think about doing the same thing. Make the huge list and then start peeling off ideas and using them, you know, to send traffic at the landing page and some of them are going to work well and then you’re going to reuse those when you get to, to actually launching your product. So I realized that’s a lot of information but I hope that helps Rasmus.

[23:59] All right, for our fourth and final question today, we have an e-mail about beta phase. It’s from Kevin Marshall and he says, “I was wondering if you guys could speak a little bit about closed beta test versus just letting everyone all in at the beginning. I see a lot of startup websites in a beta stage. Sometimes they even close it off at the start and require you to sign up for a request invitation. Sometimes you may get that invitation, yet often you don’t. Overall, my question is how important is it to even have this testing phase? Is a customer more turned off because they see and realize their inner beta or they’re more turned off when they realize that a site they felt was fully polished and ready to roll is not?”

[24:40] Mike : I’ll take a first crack at this one. I think that if you’re putting together a beta and you are telling people that they have to sign up to get an invitation request and they’re not actually sending those out, my inclinations I believe that they’re doing something wrong. I don’t know if that’s a good idea. I don’t think it’s a good marketing tactic. I don’t think that in 95% of the cases that that generates any sort of anticipation or demand for the product. That’s the sort of thing that Apple could pull off or Microsoft could pull off. It’s not something that much smaller companies like us can do. It’s just doesn’t work. The purpose of a beta is usually to flesh out the bugs and make sure that there are no major problems that are going to be encountered by people once you open up the gates. And I think that if you’re going to do a beta, I think you typically wanted to do some sort of a closed beta first. I don’t know if having an open beta is really going to do anything for you because you’re really just not getting the information that you want from people. If you have a close beta, then you can essentially hand select those people kind of categorize them by the type of people they are.

[25:46] So if you had a mailing list and you are asking people information about them before you got them on to mailing list and you can essentially categorize those people. You might say, “Okay, well I want to grab five people from the low end category who would be on the lowest plan five from the middle and five from the top end. And you would essentially arrange it so that hopefully, you can get all five of those in there from each of these categories. But if you can’t, you go to the next person in line and the next person until you find people who are willing to actually sign up and use the product whether they pay for it or not is a different story. I don’t know. I have to give a little bit of thoughts to that but I also think that it depends a lot on the product itself as to whether or not you want people to try and pay for it. It depends mostly I think on where in the product development process you are and whether or not you’re confident that there’s a market for it.

[26:35] So part of it comes back to the purpose of the beta and what your purpose is because different people have different reasons for running that beta. Some people, they’d just want to use it to, you know, flesh out any major bugs or many major process problems that are in the software. So there’s other people who want to use it to actually test the code because they didn’t test it themselves or they aren’t really sure about it and there’s people who are trying to get people in to the beta program to essentially test to make sure that they have a product that was worth selling. And if you’re at that point, then it’s kind of too late for that. I mean you really should have done a lot of that leg work upfront but even if you haven’t, working with people individually is going to give you a lot better feedback than if you just open up the floodgates and try and get a lot of people in.

[27:17] If you segment your audience in to groups of ten or fifteen people what you’ll find is that all it takes is I think the number is twelve people to individually talk to them one on one and those twelve people will give you exactly what you need which is the same as you would get from having more of an open beta from like ten groups of fifteen people because people are going to be much more willing to give you that individual feedback that you’re really looking for if you interact with them one on one whereas if you’re doing something that’s more like a focus group where you have a lot of people in it they say, “Oh well, I’m not going to answer this. I don’t really have time. Somebody else would do it. I don’t have to.” So as soon as your response rate plunges and you have to talk to more people whereas if you — if you get down where you’re talking to people one on one, you’re individually working with these people who you’ve put in your beta program. You’re going to get the information back that you need is, you know, directly relevant to the goals that you put in place for that beta.

[28:13] Rob : Yup, you nailed it with that last one. It’s called the diffusion of responsibility and it’s psychological concepts that when, you know, it explain like when a group of people all get an e-mail, typically, most people will just not do anything with it but if you e-mail each person individually, then they know kind of your eyes on them and they’re much more likely to do something. I would agree with you. You’re going to get far better feedback if you have a much smaller group and you deal with people individually and you let them know whether you’re going to deal with them individually and that your beta list is only five people or your beta testing group is only five people or ten people. If I had a list, let’s say I launched was to 500 people, I would probably invite hand-pick five of them and they would either be friends who are in the niche or acquaintances who are in this niche that I’m targeting who are actually going to use the product and would pay for it long term or you know, if I didn’t have any of those, I would probably just randomly pick the top five of the list and e-mail them and invite them and let them know that it’s a very, very small group.

[29:11] This allows you to do a couple of things. One, it allows you to get a lot of detailed feedback because they’re going to be more willing to give it to you. It also allows you to kind of burn through your beta testers because you haven’t run a beta before what typically happens is you’re bringing a group of people and they look through the app and they look through and a lot of them find the same things, then you go away for a week and you fix all that stuff and you approved it. And then you come back to them and when you ask them again, they will tend to just go in for about three minutes and breeze through and make sure you fix the stuff they asked and that’s it and so you kind of do you burn through beta testers. They aren’t just unlimited resource but if you have that list of 500, you let five in, then you e-mail another five and you say, “Hey, this is like my second round of beta.” You kind of do the same thing with them and you get another around of feedback until you feel like you fix the major bugs and you fix the major usability issues.

[29:58] So kind of just to summarize I would definitely keep it small between five and ten people each round. I would only go multiple rounds if I needed to and I would keep the rounds as short as humanely possible. If you can do five days, seven day iterations, that’s what I would do. I would not do two-month long betas unless it was absolutely necessary. The other two points that I’ll touch on is what’s nice is if you get the beta testers in early and they like the app and you work with them one on one, you kind of build relationships and you build some early users and those early users can be real champions of your product long term. If they get in, they feel like they have a little bit of ownership, they’ll be the first ones, you know, when you launch, you can ask them to tweet it out or ask them to tell their friends. And they’re much more likely to do it then just this blanket list of 500 people because you’ve actually kind of build that kind of relationship.

[30:43] In terms of offering them a discount or comping, I say it would depend on how much work they actually give you. I think upfront, I would say, “Will you be a beta tester, spend some time and know in exchange for a lifetime discount on the product,” and I would just leave it at that and not specify it. And then some people are going to do so much work and give you so much of value that it’s going to just be worth comping them for life period, like I’ve done it in the past. It’s totally a no brainer and then other people are going to do less work and you know, maybe you give them 40% off or 50% for life assuming it’s a recurring product. I think the last point, the one that I didn’t cover is Kevin asked is this phase is even important to have, should you have a beta, a beta round. And I think even, you know, a simple as this article functionality that I just wrote in to HitTail was I mean it’s really just one single feature, even as simple as that was I essentially had a beta phase. It was only a week or two but it led a trickle of customers come in. There were absolutely bugs. There were usability issues. There were some minor things on certain browsers but having that was invaluable for when I kind of unleashed the firehose on it.

[31:50] And so yeah, if I was launching an entire product and I’d only done some usability and unit testing and you know, some integration testing but I really hadn’t had the actual users use it, I would be concerned with mailing out to my 500-person list and letting in a horde of people who I’m trying to sell the app to. I’ll be concern about doing that without having at least one round of testing and you know, preferably if some stuff was found going through another round until it — it just feels like it’s clean and it feels like the app is improved. I can almost guarantee you no matter how good the app is, no matter how good your feel it is, until you’ve done this round of testing and that an actual users use it, you are not going to uncover probably 70% of the issues that are going to rise as soon — as soon as people start doing it.

[32:33] [Music]

[32:36] Mike : If you have a question or a comment, you can call it in to our voicemail number at 1-888-801-9690 or you can e-mail it to [email protected] Our theme music is an excerpt from “We’re Outta Control” by MoOt, used under Creative Commons. You can subscribe to this podcast in iTunes by searching for Startups or via RSS at StartupsfortheRestofUs.com where you’ll also find a full transcript of each episode. Thanks for listening. We’ll see you next time.

Rob and Mike discuss whether to build multiple websites, creating residual income and how to run a beta.

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Episode 86 | SaaS Pricing, Accountability Partners and a Micropreneur Success Story

Episode 86 | SaaS Pricing, Accountability Partners and a Micropreneur Success Story

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[00:00] Mike : This is Startups For The Rest of Us: Episode 86.

[00:02] [Music]

[00:11] Mike : Welcome to Startups For The Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.

[00:19] Rob : And I’m Rob.

[00:20] Mike : And we’re here to share our experiences to help you avoid the same mistakes we’ve made. So what’s going on this week, Rob?

[00:25] Rob : Well I was down in Los Angeles hanging out with some friends and I managed to hook up with Jason Roberts who lives in Pasadena. Jason Roberts is a co-host TechZing. My wife and our two kids went over to his house and his wife, Sandy, cooked us some burgers and we just had a really good time. It was cool to meet his family, you know, you heard about them on the podcast. Yeah, they’re just like — just like he describes. They are all blonde. They look Swedish. But we had a really good time. So thanks. Thanks to Jason and Sandy for hosting us and we got to just — it’s so good, you know, to sit down and just talked tech and we talked startups and we talked podcast. We talked behind the scene stuff. He’s going to do a lot of meaty stuff sitting around a pool, drinking glass of wine and watching the kids.

[01:04] Mike : Did his wife get in on that discussion?

[01:06] Rob : She and my wife actually did and they started talking about how they neither of them listen to our podcasts and then Sandy joked and said, “You know, we should record a podcast about what it’s like to be married to a startup founder.” And we’re actually looking at putting something together like that and I think it’d be really interesting for Jason to interview the two wives or perhaps my wife to interview them as a couple to find out the dynamic. So anyways, we’re talking about doing something like that just about kind of how to have a family and keep sane and trying to launch your startup and there’s — there’s a lot that could be learn from hearing other people’s experiences.

[01:41] Mike : I think I remember Scott Hanselman. I think he had his wife on at one point and they were talking about either possibly writing a book or actually they were in the process of doing it and putting something together that was along the same line. But I definitely recall something from the Hanselminutes Podcast about that.

[001:59] Rob : Cool. Yeah,I know he’s had his wife on a couple of times but I didn’t know that they’re writing a book till today.

[02:04] Mike : Yeah, I could be misremembering that.

[02:06] Rob : How about you? What’s going on?

[02:07] Mike : Me, in Ohio right now, Columbus. I got a free room upgrade for Father’s Day. So I’m in a king size suite. Kind of spent some time with the kids by the pool and got a pool cover for the pool which I didn’t think it would make that much of a difference but it adds about ten degrees to the pool.

[02:24] Rob : I couldn’t say —

[02:26] Mike : It’s in the mid 80’s.

[02:26] Rob : Yup. At some point, it gets too hot. When it gets to be about one, it’ll get up in to the one like 109 or 110 in Fresno for a few days during the summer and the pool gets too hot to swim in like its feels like a hot tub. It’s not that it burns you but it is not refreshing at all.

[02:41] Mike : Ahh.

[02:41] Rob : Well hey, we have some new iTunes reviews just in the past few days, some of the good ones actually. One is from a Rich Hart. He says, “Great advice and cut AuditShark lose.” [Laughter] People are — people are starting to make comments in the iTunes reviews which I think is funny. He says, “Mike and Rob, I absolutely enjoy your weekly podcast. It’s always timely relevant and informative. Since I’ve started listening, I’ve created an internet business. Cut my teeth with using VA’s and find myself pushing everyday to make something happen.” Then he comments he says he thinks it’s time for you to let AuditShark in to the wild.

[03:12] And we also got a great comment from Zach and he says, “The art of enlightening others, I have to say I’ve learned more from these guys than I ever learned in business school. It just goes to show there’s no substitute for experience. Thanks, Rob and Mike” And then I like his comment. He talks about how we commented on needing a conference coordinator for MicroConf next year and he says, “I disagree. What you need is a franchise.” So [Laughter] we’re — become McDonald’s. He says, “You’ve already built the model, why not spread the love. Imagine hundreds of mini MicroConf’s across the country managed by local micropreneurs. The mini MicroConf’s remain small, personal and retaining the value of points express by past attendees.”

[03:35] Anyways, interesting suggestion. Don’t think we have any plans to do that right now. That would be more like franchising it in to almost a meetup group. So I mean Lean Startups certainly has experience a lot of success with that. I think there are several hundred Lean Startup Groups around the world.

[04:01] Mike : Yeah, I think so. You know, micropreneur meetup groups is really any difference is just there’s a huge difference between having a full-blown conference versus something local where people get together on probably a more regular basis.

[04:13] Rob : Right.

[04:14] Mike : But you and I talked about putting on something even smaller than MicroConf and just the level of effort, it’s just hard.

[04:21] Rob : Right. It’s hard to justify it, right? If you’d just do a regional conference, you can’t get the same level of speakers. You can’t get the same level of attendees. If you try to do it one day, people won’t come in from further away than, you know, a few hours drive and you just — you kind of lose a lot of what we considered to be the magic of MicroConf. With that said, there are several meetups. And I’d say I’ve probably been contacted by six or eight people who say they are basically doing like a micropreneur meetups. And there’s — there’s one in Australia that we’ve already mentioned. There are several kind of in the Midwest and a few on the east coast. So there are things springing up. Yeah, maybe long term we’d figure out a way to better help facilitate that.

[04:53] Mike : I’ve been to a couple on the east coast. Usually it’s more me kind of organizing it or saying, hey, I’m going to be in this area for the next week or two weeks or whatever and then people going to reach out and three or four or five people want to get together, then we just go out some place to have dinner or something like that.

[05:14] Rob : Right. And the meetups I’m talking about are more like accountability meetups and sometimes they get a speaker to come in or they’ll share knowledge that that one of them maybe discovered over the past few weeks. I’ve actually done some video Q&A with a couple of them as well where they’ll just Skype me in and then we’ll have like a 30-minute thing and they’ll talk about the projects and we’ll just chat about it. Any updates from you this week?

[05:34] Mike : Well, I had an interesting discussion with Patrick McKenzie this past week about AuditShark pricing. One of the things that he’s been doing lately is he set up this training area of his website and I just — I signed up for it because I like hearing the sorts of things that he talks about. The first one was a video that talks about how to make your first product experience awesome and then he followed it up with I think it’s called the Black Arts of a SaaS Pricing which was pretty interesting. And it’s kind of timely because I’m looking at pricing for AuditShark right now.

[06:02] So I e-mailed him and just say, “Hey, this is what I’m doing. What do you — what do you think of it?” And he had some interesting takes on it. His idea was actually to instead of doing like a per server pricing for AuditShark, essentially use different levels. So you know, maybe the first level and say — he was just throwing numbers out there but say $50 a month for up to five servers and then up to $500 a month for twenty five servers and then I think the next level was fifty servers for $500 and then five hundred servers for $5000, then above that, contact us for enterprise pricing.

[06:34] Rob : Are those the specific tiers he laid out?

[06:36] Mike : Yeah, those are the tiers that he laid out which I found interesting because of the numbers and I was like, well it seems to me like one server and $50 would probably be more appropriate than, you know, five and fifty but I was also looking at that thinking to myself, well, if you do one in $50, it doesn’t give you a lot of leeway to do some of the techniques that he kind of outline which was if you change your pricing tiers and then measure kind of the before and after conversion rates and you also calculate the profit margins from each of those, it allows you to change the numbers on the page without changing the actual prices.

[07:12] I found that interesting. I didn’t realize it until after the facts but obviously I said, “You know, you don’t need to reply to this. And this just got my internal thoughts.” But then I started beginning to think about that. I was like, oh that makes sense. You can just change those numbers without changing the pricing because obviously changing the pricing on your page is kind of a big deal but if you just change the features that you’re associating with each of those pricing levels, it’s not nearly as big of deal.

[07:35] Rob : Absolutely on with HitTail just within the last month as about a month ago based on some advice and discussion in one of my Masterminds some guy said, “You know, you should raise your pricing.” We kind of discuss how to do that and what I did was I kept my pricing the same and I lowered the number of visits that each tier gets. It is the same pricing just like you’re talking about. That’s resulted in zero changing conversion rate which is awesome because it means that I’m essentially making more money, right? Because I’ve essentially raised my pricing because these people are signing up, you know, they’re being upgraded in to higher tiers. I can totally see that. I hadn’t — I’d never thought about the advantage of having that when you’re split testing pricing but it’s definitely a good tip to have.

[08:12] So I’m intrigued, I’ve actually giving this quite a bit of thought because there’s been several apps that I’ve been — been kind of working with some entrepreneurs and they’re looking at having that strict per seat pricing that you and I have discussed, you know, you’ve always kind of have that number per month, per server or per seat for AuditShark and we batted that around. Even over the past week, I thought about like the advantage of tiers and that you can essentially segment customers. So it’s not just this linear escalation of pricing but it’s to add one more server, you know, they only had ten bucks a month but they actually have to jump up a tier in essence, right?

[08:48] And now, as soon as they go to eleven or they go to sixteen, they kind of go over your tier than they do have to make a substantial jump. And that’s how most apps work now, right? That’s how SaaS apps work. I mean if you look at, you know, Basecamp or Highrise or any of these, it’s not a gradual — it’s not a per user cost. It’s actually doubles. It’s – the rule of thumb that I’ve always use as you pick a price and then you double it and you give them more than twice the amount of stuff they get at the lower plan. And so his pricing though it sounds like he was doing 10x.

[09:15] Mike : Yeah.

[09:15] Rob : He had 5500 and 5000. That’s typically a broader range than I do. I mean I would think of 4999, you know, 199 but —

[09:23] Mike : It was five servers for $50, twenty servers plus some sweetener for five hundred or two hundred servers for 5000 and then two hundred plus was call.

[09:31] Rob : Got it —

[09:31] Mike : That’s what it was. It wasn’t 550 or 500, it was — the point I was kind of getting at was at the very low end, it was not one server, it was five and that was kind of the starting point. He said that the idea was that if you have ten servers, you’re likely a very, very different business from somebody who has only two, you know, regardless of whether they are high-value servers or low-value servers. You know, somebody with ten servers has — well, like what he likes to refer to as a metric ton of money. And he said that it doesn’t really makes sense to charge linearly from one to ten in his estimation.

[10:02] Rob : Then that totally makes sense. And that’s why there’s a couple of guys that like I said I’ve been talking to and I’ve recommended they do tiering as well. And I think I’ve always look back at the FogBugz model. I’m realizing that I’m not a fan of that model and I see lot of disadvantages to doing it that way.

[10:16] Mike : I think that with FogBugz once you get past a certain point, it actually becomes much, much less expensive. So for example, I’m looking at their pricing now, from 24 to 150 users, they have a tier which is 599 a month or 719 a month for both FogBugz and Kiln. And then the next level up is a 151 to a thousand users and that one is $1,199 per month for both FogBugz and Kiln. So you can —

[10:42] Rob : So that’s insanely cheap.

[10:44] Mike : Yeah, I know it is. That’s — I found that interesting that they —

[10:46] Rob : Yeah.

[10:47] Mike : … kind of go to that at the higher end, they’re not charging–

[10:49] Rob : I agree.

[10:50] Mike : … targeting exponentially more.

[10:52] Rob : Yeah, that’s tough. That’s a tough sale for me. They either know something about their numbers that we don’t or they’re leaving money on the table with that. I wouldn’t discount stuff that much at the high end because like Patrick says and this is been very obvious in every business I’ve ever had, the people who are at the higher end tend to have more money to spend. And in general, you can’t just charge them more per seat, right? You can’t charge the little guy in a less per user and then as you go up, you actually charge more. I mean you have to give — you do have to give some kind of discount but it’s a huge mistake in my opinion to have an enterprise plan where 80% discount or something, you know, if you have a thousand users. That’s the way everyone does it and your competition does it, that’s how you have to price it and that’s fine and that maybe the case here. But I’ve never had a business where as it gets to the high end, I give substantial discounts.

[11:36] Mike : Yeah, what I find really odd is that it’s $30 a month for both FogBugz and Kiln and then if you just kind of extrapolate that and say well for a hundred users that would be $3000 a month but on their pricing tier, that’s unlimited and in fact, their low ends tier goes from 24 to 150 people and that’s only $700 a month.

[11:56] Rob : So they give a really big price break as you go up.

[11:57] Mike : Yeah, when you started getting in to enterprises they expect like —

[12:03] Rob : Yeah.

[12:03] Mike : … a 50% discount, you know —

[12:05] Rob : Right —

[12:05] Mike : … that’s — that what they expect.

[12:06] Rob : And I bet FogBugz competition which is where it’s like Atlassian and a few others, I bet they do the same thing and I bet this is more of a competitive move. If you publish pricing on the web, you’re going to have to be competing with those folks whereas if you have a product that, you know, doesn’t have a direct competitive, then it’s a lot harder to do that.

[12:10] Mike : Yeah, I think that Atlassian specifically targets enterprise customers with their pricing.

[12:30] Rob : Yeah, they do.

[12:30] Mike : So there’s — there’s this considerably different but it also requires considerably more resources in order to run it.

[12:35] Rob : Right. Okay. So no final notice on your pricing but it sounds like you’re working on it.

[12:40 Mike : Yeah, I’m working on it and I’m definitely going to move towards a some sort of a tiered pricing model, you know, I’m having my designer rework my sales page, my pricing page a little bit so that it’s got four different levels there instead of three. And as somebody pointed out to me when they were kind of reviewing the pricing page was that I had green check marks and red X’s next to some of the different sets of features and they’re like that looks like a warning flag to me of “Oh, don’t choose this because of this.”

[13:08] Rob : Right.

[13:08] Mike : Which I found interesting so I’m going to — I had talked to the designer already and said, “Look, you know, you got to remove those red X’s and they have to be like grayed out X’s instead. So —

[13:18] Rob : Right. But once you get started with your pricing stuff, I would guess that first ten or twenty customers you have, you’re going to be negotiating pricing and then you’re going to trying to figure out what works for them and then you’re going to learn more as you go. I mean the bottom line is when you’re starting out, you’d just have no idea what people are willing to pay. You can ask them all you want and make a best guess at it but we’ve known several founders who, you know, go in to it in the first twenty or thirty customers all get different pricing based on how they’re — how they’re able to pay.

[13:46] Mike : Right. Yeah and honestly, we’ll probably do the same sort of thing when I launch AuditShark. I mean I’m going to go to the people and you know, I probably won’t specifically publish pricing out there. I mean I’m going to go to my list and start talking to people individually and start signing them on. They’ll probably all have different pricing and till they get in and start using the product and then I can get feedback from them to say, “Now, that you’ve seen it, is this worth what you’re paying?”

[14:10] Rob : That’s the thing. Yup, you have to figure out if you’re providing the value that because you can convince someone with marketing to charge them, you know, a little lot higher than you otherwise could but then when they get in there if your churn rates really high because they’re like, “Ahh, this isn’t worth it” then you need to adjust pretty quickly and it’s such a heavy learning experience the first several months you have an app out because it’s just so young and you’re trying to figure out which way to where to go that try the most value for them.

[14:32] Mike : Right. And I think you can definitely short change yourself in many ways on that on some of the pricing. I mean you can say, “Oh well yeah. I’m only going to charge you $10 a month” when you should really be charging them a hundred and they’re getting a hundred dollars worth the value out of it.

[14:44] Rob : Right. And but I think the thing is early on like when you only have ten or twenty customers, some people are going to get in and they’re going to get, you know, a lot more value. You’re going to under charge them, bottom line and you’d just have to do that and just grandfather them in and move on. I mean that’s just the way it goes, right? Because you’re not going — this app is not going to have ten or twenty customers. You’re hoping to have hundreds if not, thousands of them. And so if you’re really mucking around with pricing early on which you should be to figure out that the optimal, you’re going to make some mistakes both high and low as you go forward. And so I don’t think, you know, if someone is paying ten bucks a month that they really are getting hundred dollars worth of value, well, good for them. Thanks for being a charter customer. I mean that’s —

[15:18] Mike : Thanks for the feedback. I mean that’s —

[15:19] Rob : Absolutely.

[15:19] Mike : … what you’re doing. You’re basically paying for them in a way for their feedback. I mean sure they’re giving you money but you know, feedback.

[15:26] Rob : Right, right. And I don’t believe in large betas. I believe in very small betas and you can give discounts to beta people. I wouldn’t use that as a reason to kind of under charge everyone. You know I’m saying? I mean I might bring in a handful of people four or five and give them a discount but I think beyond that, you really got to start getting to where people are basically getting the value out of it that they’re paying.

[15:45] Mike : Right.

[15:46] [Music]

[15:49] Rob : So I got a e-mail this week from Tope. He’s a long-time Micropreneur Academy member and he’s a founder of App Design Vault. And this is a great e-mail. He says, “Just got an e-mail from AppSumo today and it made my day. HitTail was featured alongside my product App Design Vault.” And then he took a screen shot of it and attached it. “I’m a lifetime Academy member and a lot of what I learned went in to the marketing and the DNA of App Design Vault. I quit my job seven months ago and making — and I’m making a full-time living from the business. So definitely seeing your product and mine in the same context is a good thing to see. Thanks for all your help on the podcast and the Academy. Thanks. Tope.”

[16:25] So this is just — it’s another one of those success stories like this is a stuff a love hearing, right? This is [Laughter] why we’re doing the podcast. This is why we started the Academy. Frankly, App Design Vault kicks ass. I’ve always love this idea. It’s basically iPhone App design templates. And he’s got a great call to action on their home page. If you’re an iPhone app designer, it’s a no brainer. He says, “Give me your name and your e-mail. I’m going to send you an app design worth $70 to your inbox just for doing this.” And then, you know, he says, “Join over 2000 users who are making their apps rock.” And it’s just a big gallery of all kinds of different iPhone app design templates. This is just such a great market to be in right now, right? Because instead of actually building the app, they’re selling the tools for people to build apps and since it is such a growth market, everyone is talking about it. There’s just a lot of search going on and there’s a lot of people talking about it. So I love — I love the niche and he executed it well. So thanks — thanks for letting us know, Tope.

[17:15] Mike : Yeah, that’s really cool to hear. I mean I saw the AppSumo e-mail come in as well and I saw HitTail right next to App Design Vault and that was — it’s pretty cool to see. I mean it’s that point —

[17:24] Rob : It is.

[17:24] Mike : It’s nice to talk to people but then to see the social proof I’ll call it, it’s very cool app.

[17:29] Rob : Yeah. So you have that — the AppSumo deals are going to pretty well. They run their deals for longer now. It’s kind of a different set up. They used to just do one day and they would e-mail everybody but it’s like they have the list segmented now.

[17:39] Mike : Uh huh.

[17:39] Rob : So it’s kind of several weeks that I have to wait to really — I can see daily updates but it’s not like this big massive traffic like it used to be. Used to basically be on e-mail support all day for eight hours [Laughter] because you get so many questions because their list is like 6 — 700,000 people. So when they e-mail out to, you know, it’s — it’s a rush of traffic. But so far, it’s doing very well and sales are going well.

[18:02] Mike : Yeah, I hadn’t thought about how to manage a list like that but it does make a lot of sense that they would segment their list like that so that way they probably evens things out a bit. So it’s kind of space little things out and they level out the traffic a little bit.

[18:14] Rob : Right.

[18:14] Mike : It’s very cool. I somehow landed an accountability partner for AuditShark this morning.

[18:20] Rob : Sweet. How did you that?

[18:22] Mike : I didn’t actively try for it. Somebody contacted me through my blog and basically in a very nice way said that “I’m going to e-mail you assuming that it’s okay with you, I’m going to e-mail you every week until you get AuditShark launched and out the door.” So I thought that was really cool. And I had — we had an e-mail exchange back and forth a couple of times to kind of let him know where I was with AuditShark and what sort of things were going on. I sent him an e-mail link to the temporary sales website that I’ve been working on just so he could kind of see what it looked like and where the things are at. And he said he liked it. He had some good suggestions for it. So I’m going to take some of those in to account and you know, rework a couple of different things.

[19:02] One of the things that I got was that I keep hearing from people that they think that I’m waiting until everything is perfect with AuditShark before I launch it and you know, people are saying, “Oh, you got to launch it. You got to launch it.” And it’s not that I’m holding off until everything is perfect and that, you know, all my I’s are dotted and T’s or crossed. It’s just things are just not ready. I mean I can give it to somebody right now and it would work and would do what it needs to do, the problem is that the back end of it is kind of builds around this idea of a set up policies and a library of these control points that you select and you can push down to your machines and pull it back the results for.

[19:40] But the problem is I don’t have that library built and I don’t have a good way to get things in to that library. So that’s what the tool developers that I’ve hired are working on right now is they’re working on the tools that will build those control points and build the policies that will then go in to the library. So I’m hoping that they’ll be done with that within the next four or five weeks but the UI is complicated So you know, until that stuff is done though, I can’t really move forward with pushing the product out which sucks in a way but at the same time, you know, I’ve also got other things to work on while they’re doing that.

[20:11] Rob : Yeah, I think I mean to summarize, you built AuditShark yourself for a couple of years. You spent two years. You were – or maybe a little more than that and you were focusing on banks and you thought that banks were going to be your market. You had it in there and as it got towards at the end, you found out there were a couple of things. One, that your — kind of your customer development, your discussions with banks were misunderstood, right? They were talking about one thing. You interpreted it differently. When you finally got to it, it turns out you hadn’t actually built what they wanted. And B, the sales process was going to be so high touch that you decided you didn’t want to go down that road.

[20:45] Now we can go to on all types of discussion about whether, you know, what you could have done earlier to avoid that and all that stuff but that’s fine. Once you got there, you realized, I can’t do this. I’m not going to go forward with this and so you decided to pivot. And then you were saying, “Okay, I have this code base that does something and it can help some group of people. Where is that market?” And as MicroConf came around, you started asking folks there and it turns out you’re going to be probably pivoting towards servicing people who have web servers and app servers and you’re going to be scanning for like vulnerabilities and that kind of stuff. That takes retooling of your app, right? Bottom line like you needed then figure out what the new feature set is. You don’t have to rewrite the whole app but you absolutely have to either you or have someone else write some code to now get AuditShark to do what this new market needs.

[21:15] Mike : Yeah. And the thing is there’s not a lot of that piece that needs to be done. It’s just the fact that there’s this library in the back end that needs to be populated somehow. And the —

[21:39] Rob : Right.

[21:39] Mike : … only good way to do it is to manually do it at the database

[21:42] Rob : So there is work that has to be done whether it’s code or not and some work has to be done to make it fit this new problem you’re trying to solve. You’re now trying to reachieve problem solution fit, right? Or achieve it. Period. So now you’re trying to achieve it with this — this new market, this new group of people and that is going to take time. You do a lot of consulting. You consult, you know, most of your — of your full time hours during the week and you’re also doing a blog and a podcast and doing this other stuff. So it’s not as if this is your full-time gig. So the fact that it takes you a couple of months to pivot is not surprising to me but it does seem like a lot of comments are coming through that are saying why haven’t you launched yet.

[22:19] And while this has been a long, you know, a long process, a two or three-year journey of you figuring this app out. Some mistakes were made. At this point, I don’t think you can launch like you have to get this stuff done before you do it and of course, I would love for you to pull a bunch of all nighters and launch next week but that’s just — that’s not realistic. If you think Mike should talk to more customers or get in to more detail or do more customer development, that’s fine like I can deal with that as like a more valid opinion. I just don’t think it’s reasonable for you to say, “All right, you should just launch tomorrow because the app is actually not done. It doesn’t solve the problem that you’re trying to solve at this point.

[22:50] Mike : Yeah, that’s definitely accurate. There’s a couple of tools that need to be built in order for the product to really work in this market. And right now, it’s just not there.

[22:59] Rob : Our relationship is never really been about like keeping each other accountable with our apps like I don’t come to you and say, “Hey, I need feedback” or “I need you to keep me accountable on this” and you haven’t either and that’s why the accountability episodes where we really dove in to AuditShark, we’re kind of weird because we don’t necessarily have that relationship. We do have a business partnership with MicroConf, the Academy and the podcast but aside from that like I don’t particularly like unsolicited feedback, let me put it that way. So when people give me unsolicited feedback and they tell me how they think I should run my business or how they think I should develop my product, I don’t like it and I irritated with those people in general.

[23:31] And so I don’t feel like I should sit here and tell you unsolicited, “You should do this, that and this with AuditShark” because it implies that somehow one of us knows better than the other or something like that. Now if you came and said “Rob, you know, I really want your feedback” which you have. You’ve actually done that offline several times where after the podcast, you’ll show me your sales site and you say what do you think? But to sit here in a public form and for one of us to kind of dictate to the other, “Well Mike, I think you’re doing this wrong and you should do this, that and this” I just, yeah, I just don’t know how – how helpful that is and you and I don’t particularly have that. We just don’t have that relationship, right?

[24:02] Mike : Yeah. I mean you made some points. I mean I’ve gotten some unsolicited feedback from people saying, “Oh, you should do this and this and this.” And I’m looking at that feedback saying I understand where you’re coming from because I haven’t share all of the information with you but you’re so far off in left field but that’s just not even remotely close to accurate. And I don’t even know where to address how many problems there are with what you just said. So it is hard and you know, I try to share as much as I possibly can on a podcast but I obviously don’t share everything. I think this particular episode we’re doing a lot more just because we’re focusing more on, you know, what sort of things we’ve been working on but I don’t think that everybody wants to hear about AuditShark every episode or HitTail every episode. I mean that’s not —

[24:40] Rob : Right.

[24:40] Mike : … what this podcast is about.

[24:43] Rob : Right. The issues that we discuss here a lot deeper and a lot more complex than we probably play them out on this podcast. I got a good e-mail. I thought it was funny. It kind of relates to this topic of maybe someone outside your business thinking they know more, you know, they know what’s best for it. I got — I got an e-mail. A guy was canceling HitTail and he said, “Thanks for canceling my account. If you guys offered a plan of $4.95 a month that allowed the X visitors a month rather than, you know, whatever your currently offering, I’ll definitely be back. At this certain level that’s when I started to see proper visitors and feel free to passes feedback on to your people, I’m sure you’ll get a lot more business doing this as well.” And so basically he’s saying to lower your pricing. Funny thing is I get — probably get an e-mail like this maybe one or two a month from the several hundred people that signed up for trials. That’s right —

[25:27] Mike : Is it your lowest plan $10 a month?

[25:29] Rob : It is.

[25:30] Mike : So he’s saying that this extra $5 a month is just not worth it.

[25:34] Rob : That’s what he’s saying, yeah.

[25:36] Mike : Oh, okay.

[25:36] Rob : And it’s so hard to make money at $4.95 a month for anything but the implied message here is that the best price is less than– it’s always less than whatever you’re charging. The best price is always that, right? And whenever you get these e-mails and the second thing is always imply to charging less will always result in loads of customers. And neither of those is accurate as we’ve known.

[25:57] Mike : As single support e-mail would totally blow that $4.95 out of the water.

[26:01] Rob : I know. When you are living and breathing and inside something and you know all the numbers in the metrics, I know that I do not want customers at $4.95 like it’s just wouldn’t work. It would lower my lifetime value too much. So I will pass, you know, on customers who want to pay $4.95 and if they’re able to get value out of it at $9.95 and up — I mean I have customers paying a hundred dollars a month and are very happy with the app and I want to get a lot more of those.

[26:24] Mike : No, I totally understand and I completely agree. It’s so hard to explain to people that they’re wrong because they don’t have the data but you don’t necessarily want to share the data with everybody either.

[26:35] Rob : Yeah, I don’t — I didn’t want to say explain to them that they’re wrong. I don’t know if it’s about right or wrong. I think it’s more about how you, you approach the business, right? It’s like if you want to take your business up market and try to make it like more valuable and find the people who are willing to pay the higher end prices, then you go about things a certain way. But if you’re trying to go for a freemium product, I mean that — frankly when I bought it, it was — there were some freemium users and people were saying “You should start a free plan and you’ll get a bunch of customers and…” I’ve never seen it work with bootstrappers.

[27:01]I can’t think of a single bootstrap company that has ever kept their free plan around. A lot of people launch with it and then they winded up cutting it out. There’s that Why Free Plans Don’t Work blog post that Ruben did on my blog that was on softwarebyrob.com. It was quite a successful post because he pointed out this fallacy that we can use the same approach as like a venture funded company trying to do the freemium model and what freemium can work is very, very difficult to pull off. So I need these most people’s images of how a product should be launched and the pricing and all that stuff is sorely warped if they haven’t actually done it themselves.

[27:35] Mike : Yeah, I considered a free plan for AuditShark but I couldn’t think of a good way to actually make it work and provide enough value that people would view it as a valuable service but limited enough in such that they would want to upgrade and I just couldn’t come up with anything this kind of — it’s not worth of time and effort, really.

[27:54] Rob : Right. So anyways, I think kind of to close that loop. We were talking about AuditShark and whether you should be launching right at this very minute or whether you are in process of pivoting and that you need a little bit of time to pivot. If there’s one thing that I would say, I would like to see you talking to consumers like actually talking to them on Skype or pretty intense e-mail conversations. But before you build something, I want to make sure — I would like to make sure that you’re building really what they need.

[28:19] Mike : Yeah. At this point, I mean the product is what it is and there is not much but the core of it is going to change. I mean it can pull back results from a machine pretty much anything that you want. I think what I really need to find out is what sort of format they’re looking for the data to come back. I mean what underlying problem is that they’re to solve and for the most part of the people that I’ve talked to have said that they want some level of assurance that somebody is looking over their shoulder and making sure that they’re not doing something dumb on their machines. I really feel like there’s a big difference between what the small people want versus the big people want.

[27:01] So like the large customers, they basically want to save money because to them a data breach is obviously is a huge deal but it takes them forever to close the loop on that and notify customers whatever the statistic was. There was something like $43 per record loss. So you lose a hundred thousand records and you know, there’s a couple of million dollars in cost associated with that because you’ve got all these other things that you need to do and this is more for like losing credit card information. But for a small customer that, you know, let’s say that you were using AuditShark for, you know, your server and what it would cost you if your entire HitTail server was cracked open and hacker stole all the data. I have no idea how to even estimate what that would cost. I mean I have no idea how many customers but let’s say that it’s a thousand customers for easy math and you know, $43 a record that’s, you know, $43,000.

[29:44] Rob : Right.

[29:44] Mike : Is it realistic to say that that’s how much it’s going to cost you? You know, I don’t know. I’m not — I’m really not sure when it comes to things that are not credit card related. I mean you can look at all these studies but it’s very skewed because those much smaller businesses don’t report that information. They’re not statistically significant, you know, because regulators don’t come down on those small companies. So it’s just very hard to translate those larger customers and the fees that they pay for those data losses into the much smaller customers. So I think the motivations for buying AuditShark are going to be radically different.

[30:18] Rob : Right. That’s what you’ve started to pin point, you asked that question in the survey kind of why would you need this, what would your pain point be. Your working that in to your — your copy, your marketing materials and that’s what I’m saying. I think that going deeper into those issues and trying to figuring out if there is one or two or maybe three issues that you kind of segment people in to that they’re trying to combat and figuring out which one of those to attack first but keeping it as simple as possible. I mean it’s like, you know, I’m coming back to the HitTail feature I just released with the articles. I started off with this awesome spec and I drew it up like a true developer should and it was gold plated and had all this logic in it and I looked at it said “God, that’s going to take a month to build.”

[30:57] And I just threw everything out and I said I’m not going to — I was going to offer three different levels of quality. I was going to offer all these choices of length. I was going to offer all these — there are all these features, you know, with the market place, rather market place I’m working with that I could choose and I basically just hard coded all of those in the code and I made one length, one quality level one price. You click the button to order or not. And as a result, I could totally simplify that you and I are in the entire integration. And it sets, you know, it’s a really minimal feature. Basically, I stripped it down and I think that’s where you’re probably headed or I hope you’re headed, you know, it’s to figure out what that minimally viable feature set is in order to get that those first customers onboard.

[31:37] Mike : Yeah, I’m not so worried about the feature set because like I said I mean the product’s library is what it is. I mean the product does what it does. I’m not changing that at this point. How I portray to the user is a little different. I mean I may need to massage that stuff a little bit but I mean in a fundamental level, it tells you whether something is configured properly or not. There’s an error message that could pop up as well or there is something that comes up and it shows up as purely information. So you know, like the operating system it’s Window 2008. Okay, well that’s not right or wrong. It’s just it is what it is. And then you’ve got, you know, you might say, well it’s the latest service pack installed, yes or no. And if it’s not, that’s a bad thing. If it is, then that’s a good thing, you know. So you’ve got your okay’s versus not okay results. And then the fourth thing that can come out is honestly an error. And that covers pretty much every single case you could possibly think of for pulling back configuration information.

[32:27] [Music]

[32:30] Rob : So I think I’ve selected my next product idea.

[32:33] Mike : Oh yeah? What’s that?

[32:34] Rob : Yeah, well at this point, I’m going to keep it under wraps.

[32:38] Mike : [Laughter]

[32:39] Rob : The thing is I’m months — I could literally be six to twelve months out for even starting to work on it because I’ve got — I’m trying to stay focused and I’m dying because you know, like us entrepreneurs, we totally want to do the next thing because the next thing is way cooler than anything we were working on now. Yeah, right now I’m like focused with an exclamation mark, right? I’m like trying not to wander off the path like HitTail. I’ve just gotten the funnel optimized. I’m starting to market it again after a few months off and things are really starting to take off. They’re starting to do well how about I said that way. As much as I’d like this next idea and I think that it could provide value to a lot of people, I don’t want to have a bunch of ideas going at once, you know?

[33:14] Mike : Yeah, I talked about it in our previous podcast where I said that me having AuditShark going and then this Altiris Training site, then my forum —

[33:21] Rob : Yeah.

[33:21] Mike : … software is kind of being reworked and I’ve actually had sales requests and questions and stuff come in for all three of them in the past week and it’s just — it’s a juggling act. It really —

[33:32] Rob : Yup.

[33:32] Mike : … in a way kind of sucks. You know, it’s my own fault for putting myself in this position but I’ve had people sign up for the — the training site and there’s things that are just not ready yet. And then I’ve had people come in and say, “Hey, can you get the demo up and running for your forum software? I really like to see what it looks like specifically so that I don’t have to buy a site unseen.” There’s all these things going on and as I said before, my worst fear is that everything is going to kind of come to a head at the same time and that’s starting to happen. So I —

[33:58] Rob : Right.

[33:58] Mike : … I would definitely hold off. [Laughter]

[34:00] Rob : Yeah — and the thing is I mean I say I think I’ve settled them my idea. I haven’t settled any idea. I’ve settled on the fact that there maybe a need for certain thing is and what I really need to going to do is start talking to people, getting out there and if there really is a need and verifying and all that. And frankly, I don’t have a ton of time to do that right now and I don’t have the focus to do it. I totally could outsource it like I could sketch stuff up and send it to a developer and have them starting building it. But I just — I don’t want — I don’t think that’s a right decision right now. I think that I need to do more on research upfront to make sure that it’s solving the problem and I need to basically not be doing either those things because I really — I’m struggling to fight off the urge to start this product and I should just stick with HitTail for now.

[34:41] Mike : Yeah I have several other things that I have thought about and I’ve got them in a Google doc somewhere and I’m just looking at them. Every once a while, I look or I’ll glance at it and say, “Man, I’d like to do that but there’s just not now”, you know.

[34:52] Rob : Yeah.

[34:52] Mike : And I don’t think that there are market opportunities that are going to go away anytime soon.

[34:56] Rob : Right.

[34:56] Mike : So I feel like I’ve got time.

[34:59] Rob : I am coming up on a one year anniversary of owning HitTail.

[35:02] Mike : Oh cool.

[35:03] Rob : … that crazy? Anyways, you had I think one more thing you want to chat about.

[35:06] Mike : Yeah, actually. Do you have like a build server for any of your products?

[35:10] Rob : I used to.

[35:12] Mike : You used to —

[35:12] Rob : I don’t have at this point.

[35:13] Mike : You don’t okay? Okay. Because I was wondering how you – right now I’m starting to run in to some issues because I’ve got multiple developers working on, you know —

[35:20] Rob : Oh yeah.

[35:20] Mike : … the same code base.

[35:21] Rob : Yup.

[35:22] Mike : So merging code and making sure the check-ins from different people are all —

[35:26] Rob : Yeah.

[35:26] Mike : … working and it’s starting to become kind of a pain in the neck. I did start taking my build server and moving it out, you know, in to Rackspace that I didn’t had it hosted locally so it could do everything out there. And it’s one of those things where it’s like I would love to have that build server up and running right now so that it could do all those automated checks and everything else. I just don’t have the time in it.

[35:46] Rob : Does it — do any of your developers have the expertise to — I mean isn’t it CruiseControl? Is that still the standard because a couple of years ago, last time I set it up that’s what I used. And most developers knew how to — most .NET guys they know how to install that.

[35:57] Mike : Yeah. I’m using Final Builder. So –

[36:00] Rob : Okay.

[36:00] Mike : … it’s a little bit different. You know, I don’t know. I might be able to hand it off to one of my guys.

[36:04] Rob : Kind of give it off. Yeah. Obviously —

[36:05] Mike : Yeah.

[36:05] Rob : Obviously, you have to check it and make sure it’s done right but that might be — might be the better solution. You’re using Source Control at this point, right?

[36:11] Mike : Yeah, yeah.

[36:11] Rob : Were they able to merge? Okay. So it’s not like they have standard copies.

[36:15] Mike : Right, right. And I mean everyone is using Kiln and you know, they’re checking their code in and the issue that I’m running in to is just it’s like certain times not everything is being checked in so that in compiles on their machine but it doesn’t necessarily compile for anybody else.

[36:30] Rob : Right.

[36:30] Mike : So that’s one of the issues.

[36:32] Rob : That’s a big one. Yeah man, as soon as you ramp up to two developers from one, it is such a big deal, right? It is like a big leap. And then going from two to three, it’s not as big of a leap because you get these processes handed out.

[36:45] Mike : Right. And that’s what I’m trying to figure out is how do I put this process in place without actually having to do [Laughter].

[36:50] Rob : Yeah. Now, I hear you.

[36:53] Mike : So I mean part of it, you know, making sure that the code is good quality and everything else. So I’m going to have to do some of that anyway. I mean I’m going to have to review the code which is not that big of deal. It’s just making sure that it’s all following the rule. So I think there’s FxCop or something like that. I used to use it. It’s basically to make sure that all the code was following specific standards but I haven’t used it in a while. But I was had the issue. It would flag a lot of different things and say oh, this is wrong or that’s wrong and it’s like, no, that’s fine, don’t worry about that. And I never really dug in to it enough to figure out how to tackle some of those switches. So maybe — maybe you’re right. Maybe I just hand it off to one of these guys and say, “Hey, can you, you know, work with the build server and just straightening out all the stuff?”

[37:32] Rob : Or you could at least give it a shot.

[37:33] [Music]

[37:36] Rob : So if you have a question or a comment for us, you can e-mail it to us at [email protected] Our theme music is an excerpt from “We’re Outta Control” by MoOt, used under Creative Commons. You should subscribe to this podcast in iTunes. You can search for Startups or you can go to StartupsfortheRestofUs.com and subscribe via RSS where you’ll also find a full transcript of each episode. Thanks for listening. See you next time.

Rob and Mike discuss SaaS pricing, accountability partners and share a success story of an Academy member.

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Episode 63 | Listener Questions: Generic Product Names, Offline Marketing Techniques, and More…

Episode 63 | Listener Questions: Generic Product Names, Offline Marketing Techniques, and More…

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Transcript

[00:00] Mike: This is startups for the rest of us episode 63

[00:05] [Music]

[00:12] Mike: Welcome to start ups for the rest of us, a podcast to helps developers, designers and entrepreneurs to be awesome at launching software products whether you build your first product or just thinking about it. I’m Mike.

[00:20] Rob: And I am Rob.

[00:21] Mike: And we are here to share our experiences to help you avoid the same mistakes we’ve made. What’s going on?

[00:26] Rob: Hit Tail is done sir.

[00:27] Mike: Good.

[00:28] Rob: Yeah I am stoked, I just within the last hour I wrapped up all the work that I had, you know, talked about in the last podcast so.

[00:36] Mike: Cool.

[00:37] Rob: So it’s done in terms of code complete and I have tested it, you know I am pretty confident it’s going to work. Of course uploaded it to the server and like all the stuff crashed because of, you know, configuration stuff so I have some troubleshooting to do. But it’s still early in the week and I am feeling good about hitting my deadline next week, so it’s been nice. You know I have had to take a little crash course in jQuery, I really hadn’t done much with it. The last time I did a lot of front end stuff was maybe four years ago and it was just coming into prominence. So that’s been kind of cool to realize its super elegant, have you worked a lot with it?

[01:07] Mike: I have worked some with it not a lot. What little I have worked with it, I mean I know that it’s pretty powerful and have seen some of the things that it can do and the way you attach functions to different pieces of the UI, I mean that stuff is really kind of neat.

[01:21] Rob: Yeah so it’s been a pleasant surprise and it’s also been pretty nice working with Stripe. You know I am a big PayPal proponent and I have several accounts. I basically pay them a pretty nice car payment in commissions each month just because of all the money I funnel through them. And I applied for the website payments Pro things which I already have one account for a different website. And that just allows you to process credit cards on the back end. Because right now the way Hit Tail does it is it uses, there are basic subscriptions which as you know are kind of a nightmare. You can’t update them; they cancel themselves all the time for random reasons. So you really don’t have control of your customers, you can’t run reports, there’s all kinds of trouble.

[02:00] So I am just going to do basic you know, back end HTTP post to process credit cards. So to do that you get the website payments Pro. So I applied for it, it’s basically a merchant account and you know and a gateway, and they rejected it. And I was like what is the deal? And they told me that it’s because I had to fill out what type of business Hit Tail was. It basically helps SEO like online marketing that kind of stuff, and they replied with like internet marketing, there are too risky internet marketing businesses are. I am realizing that like there is a certain meaning to the phrase internet marketing right? It tends to be more of the, I’ll say the more scammy stuff.

[02:37] Mike: And it’s more just the term than anything else not really what you are doing.

[02:40] Rob: Absolutely.

[02:41] Mike: Yeah.

[02:42] Rob: Absolutely it’s not all right? Basically I have a SaaS App that helps legitimate businesses, I mean my customers are like legitimate businesses making money online selling real products, often you know a lot e-commerce sites. Os it’s just comical and there is like five years, no there is almost six years of history in this PayPal account. Because they were saying there could be too many charge backs because its internet marketing. And I said look at the last six years, there have been I don’t know like five charge backs or something in six years out of thousands of charges. And but they were like nope, we are not going to budge. So then I would grrr, kind of like it comes back to roost. But anyway all that, I went with Stripe.

[03:17] Mike: Cool.

[03:19] Rob: So yeah it’s been pretty cool, they’ve got a nice API, I think my one complaint is that they only have libraries, like service Ad libraries for PHP, Ruby and Python and that’s it. And it’s just like wait a minute, now there are third party libraries and stuff but they are not complete.

[0:03:33] Mike: Right.

[0:03:34] Rob: That seems like an oversight to me. I mean I am in Classic ASP, note expecting a VB script implementation. But I was kind of at one point because I have been doing it in Dot Net and I had to go to like some third party Randall things that, you know was missing some calls and such.

[03:46] Mike: Yeah I see it, I am looking at it now. I do see that they have, you know, like a Stripe Dot Net library that somebody has contributed and there’s a bunch of others that people have contributed which it’s nice that those things are available. But at the same time it sucks that you have to rely on a third party library instead of one you know that they offer because if they ever make updates to their API or make some changes, it could be you know weeks or never before those APIs get updated.

[04:12] So you know if they break something, you are going to have to go in and fix it. And that’s something that all the open source proponents have said oh its open source you can fix the code anytime you want and its like, well, I don’t want to have to.

[04:24] Rob: Yeah.

[04:25] Mike: Just give me the library, I mean you guys are the ones who are offering this as a service that’s why you sign on with those services.

[04:30] Rob: Right, I think the one saving grace is that they do version their API. So it’s you know it’s like Stripe.com slash V1 slash blah. So if they update it I am they will put it in a V1.1 or a V2.0. And hopefully not break the back, kind of backwards compatibility.

[04:47] Mike: Right.

[04:48] Rob: Ideally. But I do hear you I would much prefer to have a supported full API, because even with the Dot Net one there was some stuff that I was going to do with it where the calls just were implemented in the class library. So anyways, yeah I had some hesitations about going with Stripe, they are a startup, I mean its basically like if they go down that’s catastrophic for me right? If they go out of business, of they start charging an exorbitant amount, I mean I know PayPal can be a pain in the ass but they are pretty stable. And if Stripe has to do some big thing because their pricing is very odd, there is no monthly fee at all.

[05:17] Mike: Yeah.

[05:18] Rob: And it’s like 2.9% on every transaction, I cannot see that as a sustainable pricing model at all. Because PayPal is by far the cheapest right and they’re 2.9% plus 30 bucks a month. And Authorise.net tends to be around 2.1 to 2.5% per transaction but they are between 50 and 100 bucks a month depending on who you get. I just don’t think its viable having worked in the credit card industry knowing the amount of fraud and expense that goes purely into risk management and reducing fraud, I mean that’s why you pay so much for these credit card accounts, you know these merchant accounts and such.

[05:54] I mean and because that Authorize.net you know wants to make an exorbitant amount of money. I can see being a little bit cheaper maybe than PayPal, maybe. But I just not doing a monthly fee I don’t see as sustainable. Maybe they will grandfather existing customers in that will be fine, and maybe down the line they will start charging 10 ort 20 bucks a months and again I will be fine with that. But my only concern if suddenly they just have to, you know, they are going under; they are out of their VC money, because I’m sure that what they are on at this point.

[06:21] I haven’t researched them but I am imagine that’s what they are going and they are running out and then they just have to do a –what was it? Chargify that was like a bunch of people connected to their API and then they just, they had to like double or triple their pricing. And everyone was just pissed because it’s like you’ve already invested all this time you don’t want to leave and they didn’t grandfather people in. So yeah looking forward to getting this new design line and I will point people to that after its all done in the next week or so.

[06:44] Mike: Cool.

[06:45] Rob: And how about you, what’s new?

[06:45] Mike: I decided that I was going to run a bit of an informal survey on my blog and I ran it inside the academy and asked a couple of people if they could comment on it. But basically the survey was around WordPress and whether people had any thoughts about the security of it, whether ether were concerns about it. And so far I am not necessarily surprised by the results of the survey, I mean its still going on, its still listed on my blog and I threw it out on Twitter a couple of times.

[07:17] But roughly, let see here, about 25 people have come in and weighed in on it so far, and of those about 30% have said that they feel that the security of their WordPress sites is a problem that needs to be addressed and the other 70% have said no. They don’t think that it’s an issue.

[07:31] Rob: So all 25 have used WordPress or use WordPress currently?

[07:35] Mike: Yes, that’s one.

[07:36] Rob: Okay.

[07:37] Mike: Because that was one of my first question was how many sites do you have running WordPress and not one person who said none. Six said one, nine said two to five, three said six to ten.

[07:46] Rob: Got it.

[07:45] Mike: One person or two people said 11 to 20 and three people said more than 20.

[07:49] Rob: So either people self selected and didn’t answer if they were—if they used a WordPress…

[07:54] Mike: Yeah.

[07:55] Rob: Or just a lot of people use WordPress, a probably a little of both.

[07:57] Mike: Right and I said hey if you use word press then please fill this out, you know, I didn’t ask people who weren’t using.

[08:04] Rob: Got it okay.

[08:05] Mike: I try to self select…

[08:05] Rob: You self selected okay. So what do you think? I mean what are your thoughts on that or why did you do that?

[08:10] Mike: Well I did it more because I have been thinking more about what directions I want to go with Audit Shark and how I want to push it into the small banking industry and it really seems to me like, you know, I have to pick something that people are going to be more familiar with. I don’t know its configuration—I think configuration management may be just a little bit more advanced than most people are ready for. And I don’t want to go through the process of educating them about why they should be doing it. I just I don’t want to have to do that.

[08:37] So I think that if I were to kind of take kind of a step down a little bit in terms of the complexity of what I am doing, then vulnerability management or patch management kind of is the next step down that, you know, I can still use all the code that I have basically I just need to build different rules for the engine to run. And I haven’t really built very many rules to begin with so its not really like I am creating any more work for myself I just have to decide which of those directions I want to go. And the primary advantage of something like that is I can sell it online, I don’t necessarily have to walk into somebody’s environment to be able to sell it because people are generally familiar with what virus scanners and patch scanners do.

[09:12] So I think that poses some definite advantages. But one of the other things I was looking at was are there other places where I could build kind of a very specific version of the Audit Shark engine and use it for something like that. So auditing WordPress installations seemed like it might be viable so I want, you know, I just wanted to do the research a little bit before I actually went and built something.

[09:35] Rob: Got it, yeah there are—now there is already at least one service, I’m sure there are more but there is a service, I have no idea what its called but I used I when I got hacked by the TimThumb Vulnerability the last couple of months. And it had some weird name, I am sure if you put WordPress security scan you will find it in Google. Yeah you can do as many free stands as you want online and then it was like if you wanted it to automatically scan they charged you know 99 bucks a year and I think then it did a daily scan or something or hourly, who knows.

[10:05] And it would let you know of stuff and I think it might even help, or at least suggest how to clean it up. So you might want to take a look at that because that’s what you are suggesting right? Perhaps going in that direction?

[10:13] Mike: Yeah I didn’t really fully flesh out what my idea around what I was going to do was, I mean because one of the questions that I asked was, you know, what would you want to see in a product for monitoring your website? And the responses were kind of all over the place, I mean some people said I am all set, other people said I want something that will notify me the second the new vulnerability comes out that I am susceptible to. And other people said that they wanted it to be able to take backups and snapshots and make sure that their WordPress installation was able to be reverted if things changed at all. It was really all over the map.

[10:47] Rob: Right, yeah that seems like just kind of a whole different market than, I know the code can be similar or you can have overlap but like completely different structure.

[10:55] Mike: The code is identical that’s the funny part.

[10:56] Rob: Well not to do all, just to do a scan right? Just to do a scan and look at vulnerability, not to do all the stuff people are asking for.

[11:03] Mike: Right.

[11:04] Rob: But I think once you get into it, like the real money that—the loss leader would be the scans because a lot of people I would guess have done that. But it will be like to make the real money you would have to add all these advanced people are asking there will be additional code. And in addition you will have to figure out if you want to sell direct to you know consumers like myself or if you want to go to like web hosts and try to sell them you know large licenses for, I mean I don’t know, I think of Dream Host or DWP Engine or someone who manages thousands of WP installs if they have something like this or would license it from you.

[11:35] Mike: Right.

[11:36] Rob: So yeah it just seems really different than going after the banking market.

[11:38] Mike: Right.

[11:39] Rob: But of it’s a pivot it’s a pivot you know, if you figure out that’s the way to go.

[11:43] Mike: Yeah and like I said it was just an idea that I was kicking around so I said hey why not do a little bit of the market research and see what people think of it.

[11:51] Rob: Right, I realized I never mentioned it on the podcast but I returned my Kindle Fire within the 30 days. Yeah I remember I brought it up, I really liked it and I couldn’t justify keeping it and having an iPad was the problem. I mean I just, I felt so lame. So I returned it.

[12:07] Mike: Did you postpone because you were lame?

[12:09] Rob: Yeah I did, I said I just have too much money to spend on gadgets. No I decided to return it but I am still like recommending it to people. You know, if my mom was going to get a tablet, I would kind of ask her what she is using it for. Its like I said, the Kindle Fire not as good as the iPad for web browsing, but pretty much everything thing else I tried to do with in terms of content consumption was awesome. So I just kind of wanted to update folks and close that loop that I still have faith in it.

[12:34] And I mean honestly for 200 bucks for less than half the price of the low end iPad, if I ever got my kids a tablet or something it would be something like that. And the form factor was pretty nice too, it was a little thick, a little heavier for than I’d wanted it to be but for a kid it was very small and it was just perfect for him. He was playing Angry Birds, you know it’s an Android engine so it has all the games that you would want on it.

[12:53] Mike: I see, yeah the only other thing I have is I finally got around to updating my SSL Certificate for Audit Shark which was a lot more of a nightmare than it should have been. I want through, what was it? Comodo the first time and I didn’t realize that they basically gave me a 90 day SSL certificate which I sort of vaguely recall there being this 90 day limit on it but I thought I could renew it and that I would have to renew it every 90 days. It turns out that’s not the case. And they ask you to renew it and then they want to charge you, I forget what the price was but I think it was a little bit higher than their regular prices.

[13:27] So I looked at them and said well, you know what else is out there and I took a look and I went with Rapid SSL instead and they actually offered a pretty good price. I think it was $55 or something like that for two years. But the process of getting it was an absolute nightmare because you don’t have an account when you go through them because Rapid SSL is owned by Geo Trust and Geo Trust I believe, if I am not mistaken, is owned by VeriSign. So you’ve got these three different SSL companies but they all do exactly the same thing its just everyone knows who VeriSign is and you ,may or may not have heard of Geo Trust or Rapid SSL.

[14:03]Because they don’t have an account management system you cant really log into your account and get your SSL Certificates. They just—you don’t have an account to log into so they rely on email. And for whatever reason I was not getting emails. I mean I applied for the certificates like early this morning, I literally just got them. Not the certificates but like I just got some emails with like some confirmations of stuff I was trying to get from their website. And its probably 10, 12 hours alter that I finally got these emails that I would have expected to have a long time ago.

[14:35] Rob: Right.

[14:36] Mike: So it’s just a little irritating, but whatever it’s over and done with now so.

[14:41] Rob: Yeah I guess it’s a little bit of you get what you pay for type thing?

[14:44] Mike: Yeah kind of, I mean I applied—I think my biggest disappointment is that SSL Certificates just seem like a great scam and I am just very disappointed that I didn’t get in on it years ago.

[14:54] Rob: Sure.

[14:54] [Music]

[14:58] Mike: I think we have what? Three questions from listeners to kind of talk about today?

[15:02] Rob: That’s right I think this will probably wrap up our listener questions series, we had a bunch of them back logged and now we are getting them done. So today we are going to be talking about, let’s see there are some things about launching around Christmas, generic product names, offline marketing techniques and that kind of stuff. So let’s get with our first one, it’s a voice mail.

[15:22] Caller: Hi I have two questions, the first one is on the 58 th Rob mentioned that he was hurrying because he didn’t want to wait too long to market his product. My question is if it’s a good idea to like launch a product just before Christmas? My second question I am a app developer for Android, my questions is if I should go for a generic name for example Electrician Calculator for my app or if I should look for a name that will differentiate my product? If this like makes a big difference my URL is rfxlabs.com where you can see more about the Electrician Calculator and give me any feedback, thanks.

[16:00] Rob: Alright so good questions, I am going to take a crack at both of them. The first is about launching around Christmas time, and I had talked about Hit Tail, I mean I was trying to get the redesign done in, you know, November basically, October, November. And one it hit the first week of December I knew it was too late because basically the business world goes dead in the last two to three weeks of December. And I mean Dot Net invoice takes a huge hit every December. Anything that does not recur in revenue basically plummets, at least in my experience, in my, you know, eight to 10 businesses.

[16:35] The SaaS revenue, recurring revenue obviously continues but it doesn’t grow. You know I was actually talking with another SaaS founder and he was trying to run like some split testing during this time and we were both remarking on just how little traffic he actually had just for the past, you know, seven to ten days. And frankly people, I mean everyone is just kind of in the mindset of buying presents and taking time off. So I don’t think anyone really wants to make any big purchases during that time. So yeah once I hit the first week of December I knew that it was going to be the second week of January, I was going to wait about four to five weeks to do it.

[17:09]And I would give that advice to anyone I have actually have there has been a couple of folks who have emailed me and said hey I am just getting ready to launch and you know it was like December 10 th . And I basically said unless there is a real compelling reason to do it, don’t do it now.

[17:21] Mike: I totally agree I mean I think like any time in December it’s just a bad idea. I would have to argue that even in late November its probably also a bad idea unless you have already got a mailing list that you have been kind of hammering on a little bit I don’t think that launching in the last two weeks of November is a good idea either.

[17:38] Rob: Alright because there is thanksgiving in the states and there is just people are geared up for the holidays. I think the one exception is what you mentioned we run a special in the academy we tend to do it in December. And that’s because we already have relationships with people and we do it fairly early. I mean you can do that but in term of launching a brand new product and trying to get press and trying to promote it I think that’s a tough sell.

[18:00] Mike: I can think of actually one notable exception to that is that somebody inside the academy I saw what they were doing they were building a website called elfontheshelfideas.com

[18:11] Rob: Oh yeah.

[18:12] Mike: And it was all about different ways that you know if you are not familiar with it there is this thing called Elf on the Shelf a little I guess doll that you can get for your kids and try to convince them essentially that Santa Claus watches them through that elf and that elf reports back to him every night and it moves around the house. But people have problems trying to figure out what to do with the elf after the first conflict is because there are so many so many places that you can put it. And if you go to elfontheshelfideas.com they show images of what other people have done with the elf on the shelf. So like there is actually a video there of somebody who had taped it to an overhead fan and turned it on.

[18:50] Rob: Nice.

[18:51] Mike: There are various sorts of things but that’s probably the one exception that I can think of. So if its holidays specific then sure go for it but otherwise I would say it’s probably a bad idea any time in November or December.

[19:02] Rob: Right okay the second part of this question was about he has a product that is basically an Android app and it’s a calculator for electricians and dealing with voltages and all kinds of resistance and whatever something they would use in the field. And which I think it’s actually a really cool idea I used to be an electrician and I looked through the feature set and there was a lot of handy things and you know I used to do by hand in the field. Question was whether he should try to name fancy name or use a generic product name like Electrician Calculator?

[19:30] The answer of course is it depends right it depends on what you are building if you have a new social network you probably want some fancy dancy name. If you have a product like this where people are likely to search for it, they are likely to search for it by that generic name and a tool in that ecosystem meaning the Android ecosystem does not already exist with that name I would go with the generic name. Because if me as electrician I was going to go search for it what would I type into the android search box? I would type in electrician calculator, electrical calculator something like that and so if you have that name you will tend to rank number one for that term.

[20:09] And so even though there may not be a huge amount of traffic any traffic that does come for it is going to come to you. In addition if you can all get the dot com the exact match dot com .net or .org domain name so electrician calculator or electrical calculator.com, .net or .org, figure out which of those has the more searches in Google get that domain name and build a product website. Again it won’t get waves of traffic but you will get the, you know the trickle traffic that’s people typing that into Google. You’ll just rank really high with an exact match domain name you rank really high pretty easily.

[20:40] I think the flipside is picking out like a fancy name of I don’t even know what you would call it but you know the Shezzame machine calculator or whatever especially in that niche I just I don’t really see a lot of value to it. I just don’t think you need to be so fancy, I don’t see much of a reason to do it.

[20:55] Mike: Yeah I would have to agree I mean I think that going with some sort of fancy name that doesn’t necessarily indicate what the product does because its designed for Android and I mean it’s not like somebody is going to sit there on their computer and keep be looking on the web for that sort of thing. I mean if it’s made for Android they are going to be searching for it there and to get the maximum screen time and I don’t know how the Android search mechanism for apps works.

[21:20] But I would assume that it’s going to be keyword based and having it in the products name is going to help you a lot more probably than if you have it mentioned a couple of time inside of the description.

[21:31] Rob: Exactly so obviously if there were already five or ten electrician calculators out there and you really wanted to differentiate yourself then maybe you would think about that.

[21:40] Mike: Or you would name it something very similar and then say Pro or something along those lines to indicate that it is better than the other ones so they may see along side of it because you know why would you want the light edition if you can get the pro version.

[21:53] Rob: Right and it potentially invite lawsuits do.

[21:56] Mike: Yeah

[21:57] [Music]

[21:59] Rob: Our next question is from Adam and he is at bookingtimes.com. And he says Rob you mentioned that Mike should go out and meet customers face to face. I am also about to launch my new web app but I am also convinced that there is a huge untapped offline market that will involve other marketing techniques. I think Booking Times is like a practice management its online clinic practice management. So I’m not sure if that’s a medical clinic or psychiatric but something like that.

[22:27] My only thoughts for other marketing techniques are cold calling and face to face meetings. I think direct mail would also fall into those during trade shows that kind of stuff, that was my little insert there. What would you guys recommend for a technical person to do this when they don’t have a customer signup list? Well first of all why don’t you have a customer sign up list because that having that its even if it’s only 10 or 20 people it’s great to have those beta testers. But if you don’t my thoughts are number one Google them.

[22:56] So this is still Adam, my thought are number one Google them see if they are currently online or offline. If they are online see if they are a good fit customer, if not look for reviews and see if I can help them. Number two ring them and ask if they would into discussing how they can best utilize the internet into their business and number three go and see them face to face. I could create a fake account in my app and copy their logo etcetera into my site and show what it can do for them personally only it takes five to ten minutes. I’d be interested in hearing what you guys have done in the past.

[23:23] Okay so a little more info about Booking Times it appears that’s mike was just bringing up an example that he might be targeting like let’s say dental clinics and some of them may not be online at all. Some of them may not have internet access, they may not be able to use a SaaS app. You know Adam is saying that’s he would contact them and find out if they are a god fit for his service and potentially bring up maybe some reviews that people have commented on their dental practice and even try to educate them and get them online. So with that said he has some different thoughts on how to do this Mike why don’t you go first and kind of riff on this and then I will I will add some color.

[24:00] Mike: Sure. So some of my thoughts were as soon as he mentioned Googling them to find out whether they are online or offline I assumed that he is probably going to target companies that are local to him. And that makes sense because those are the types of people that he would be able to easily go visit you know if you can target people who are within the 20 or 30 or 50 mile radius of where you live it’s much easier to go see them than if they are across the country.

[24:24] When you are doing something like that I would probably recommend finding a VA because that can be a time intensive activity. I mean it will take you a long it can take you a long time to identify those people. And it will probably be a lot easier for you to simply hand that off to a VA and say, hey find me as many of these people as you possibly can as opposed to trying to do it yourself. It’s not that you can’t do it yourself it’s just that there may be a lot of them and doing some of that initial pre qualification may just take a lot more time than you think it would.

[24:56] Rob: And I think that’s a really good idea. I actually have a VA doing that right now for Hit Tail it’s been a great use of time.

[25:02] Mike: Yup. So that was my first thought on that. And then depending on who you get as your VA your VA could actually make some of those calls for you and essentially act as not necessarily a sales rep but essentially as somebody who is going to prequalify those people. So you are not wasting your time talking to people who they already have something or they just don’t care about it, it’s not a big enough problem for them. If the VA can talk to them and say, hey would you be interested in talking to somebody further about this? Then you can go ahead and have the VA try to set up appoints but I think that those are my initial thoughts.

[25:35] The next one that I have is more of a big thing it’s switched to something that I am kind of dealing with with Audit Shark is the fact that going to meet with customers eats into your time that you are doing for other things. And even though it may not be too much extra time like maybe 20 minutes 30 minutes extra out of your day the problem is they are going to want to meet with you during business hours. And if you have other things going on during your business or during their business hours such as a fulltime job or consulting clients it’s going to be very difficult for you to get way in order to go meet with perspective customers for a product that you are trying to get off the ground. That’s one of those reasons why I am looking to do something a little bit different with Audit Shark while I am trying to move it more online.

[26:15] Rob: Got it. Yeah I think the bottom line is this is you know this is true outbound marketing and this is going to be super time intensive like this is traditional outbound sales trying to get a funnel, cold calling, mailing and face to face meetings. And to have a product like this succeed you are going to have to charge a lot of money for it. I think that charging anything less than 99 bucks a month, I am assuming it’s a SaaS app, charging anything less than 99 bucks a month there is no chance it will work.

[26:43] And my guess is as you try to scale up if you try to hire people and not do everything yourself you will probably have to raises prices to 199 a month as a minimum. These are just rules of thumb but I look at any company who does this kind of app and sales and they are quite expensive. Often they are 200 to 500 bucks per month at their lowest plan. You look at like HubSpot they are 199 a month for non profits and they have a huge they have 200 employees 200 and something employees. More than half of those I think it’s like 67% are sales people right.

[27:11] They have just a very sales heavy organization. And that’s the way its structured they are an outbound sales organization and you can be very successful with that’s. But you really got to invest lot of time, you have to have to know what you are doing or invest lot of time or frankly do both. I can recommend a book that is awesome for this it’s called the Ultimate Sales Machine. If you haven’t read it and you are going to do be doing outbound sales like this I highly recommend it.

[27:36] The other thing I would mention is I really would look for some way to start getting some inbound traffic for this. I cannot imagine that this market is that competitive when it comes to SEO and you know social media potentially even some advertising avenues. I know that’s not going to be you are not even going to build 100% of a business via those routes you are going to get a lot more business by doing the outbound stuff. But my guess is your cost per customer acquisition for the customers you can get through those inbound marketing approaches will be substantially less than you know the face to face and cold calling techniques.

[28:06] [Music]

[28:09] Rob: And for our final question of the day we have an email from Joe Moore and he says, hey Mike and Rob it’s a question about outsourcing versus keeping someone in-house. First I just want to say how much I enjoy the broadcast I especially appreciate the shows consistent format that you have established which perfectly sets up the occasional deviations like when Mike forgets the opening line or something. I love that, nice he does that pretty often.

[28:32] Mike: I do not.

[28:33] Rob: We live in one out of ten of the screw ups. So my business partner and I are currently bootstrapping a web start app and I am the design guy not because I am that good at design but rather due to our original design guy bailing on us. My plan is to pay someone to take my place designing the website themes in the future as soon as we can afford it.

[28:49] Here is my question; with both quality and values in mind but mostly quality do you think it would be better to outsource that work on a case per case basis like through Elance or to bring a designer on staff with a monthly salary? In what circumstances would each option be more appropriate? Thank you so much Joe in Albany New York.

[29:07] Mike: So here is my thoughts on it unless you have a fairly large organization where you are consistently churning out new stuff that needs to be designed on a very very regular basis, do not hire somebody to do design. And the reason for that I think is very simple. I mean what you really what is you want the best design you can possibly get and going to outsource that is probably your best bet. And the reason for that is because you can go to a number of different places where you can get multiple people who are going to try and submit designs for whatever it is that you are looking for 99 designs for example.

[29:46] Essentially what you want to do is you want to go to find people who are going to be able to do exactly what it is that you want. Now there is going to be cases where you want something that’s got more of a cartoony feel or you need something done in flash or you need something that is done in HTML. There are very few designers that have skills that are going to go across the board. Most of them are going to be able to give you overalls design stuff, most are going to have some sort of a niche that they fall into.

[30:15] For example the same applies to programmers I mean you go hire a programmer if you want somebody to do Pearl programming that’s great you know you find somebody who does Pearl. But what happens in three to five weeks when you need somebody who knows ColdFusion or you need them to know PowerShell or something along those lines. Don’t get me wrong a developer can learn them. But it may be a lot more cost effective for you to hire somebody who has those skill sets because the time window for them to utilize those is going to be so small.

[30:43] You may want to hire a designer but how long is it going to take them to become proficient with flash? At that point you may as well just outsource and you are going to probably find with designers that you are going to end up outsourcing a lot even though you have a designer on staff which is because they just don’t know how to use those other tools.

[30:58] Rob: I would agree I mean it sounds like he said there is going to be website themes in the future that they are going to need. So they are going to need ongoing design work but I completely agree hiring someone on salary is just it’s such a burden that you take on. You really got to you have to have to a lot of design work ongoing to keep someone busy you know for 40 hours a week. And I have seen fantastic designs I have received fantastic designs from outsourced designers.

[31:22] So I think building a relationship with a single outsourced designer is definitely where I would start with this. And then you can always move to employment later I mean if the man or woman really works out I mean you can always hire them later if they want to be brought on or if they don’t want to be you can keep using them or you know find someone else.

[31:39] Mike: I think that the other thing is that just as exactly as you said I mean if you find somebody else and you decide that, hey we really have a need to bring somebody on fulltime you can offer them a job assuming that you like them enough. But it gives you an opportunity to essentially test drive that person and figure out how well they would work out as an employee. If you hire somebody out of the gate I think that you feel a lot more invested in that because you have hired them fulltime you probably went through this process where you interviewed people and brought them in and you spend a lot of time and effort talking to all these people and you don’t want to throw that away.

[32:16] I mean I have gone through the same thing myself I mean you don’t want to get rid of somebody because they don’t have the skills you need or the work isn’t coming in quite as well as you would like. So you tend to hold on to them a lot more than you would if you had them just as a contractor. I mean if its contractor you just don’t give them work if you don’t have it.

[32:32] Rob: Yeah and if you are going to go out and look for designers like Mike said 99 designs is a really good place to go. There is this other cool site that I found it’s called dribbble.com and its D-R-I-B-B-B-L-E it’s got three Bs. And it’s basically designers who are kind of dribbling out their current designs that they are working on. So a lot of them are actually you know working on client designs and they are putting them out. And so I have found a couple of good designers on there including you know one of the most recent ones that I used to help me with some parts of Hit Tail.

[33:02] Mike: That’s cool I haves never heard of them.

[33:03] Rob: Yeah it’s like a designer social network you know. And I feel like as you look at it you get the inside look at what designers are doing and how they kind of relate to each other and stuff. And so and its cool because it’s all visual I mean it’s a little bit like http://pinterest.com/ , frankly you just all visual and as you flip through you can just click on somebody’s stuff. And then of course they typically went to their portfolio you can contact them or get an idea of what kind of work they do.

[33:24] Mike: I see that’s pretty cool.

[33:26] Rob: Yeah so I would recommend that

[33:27] [Music]

[33:31] Mike: Well I think that pretty wraps us up for the day Rob?

[33:34] Rob: (whispering) Oh I’m on the wrong page.

[33:36] Mike: Leave it in.

[33:37] Rob: No don’t leave it’s in.

If you have a question or comment please call it into our voicemail number 888-801-9690. Or you can email it to us at . Our theme music is an excerpt from “We are out control” by Moot used under creative commons. If you enjoyed this broadcast we will have a review in iTunes you can search for startups and you can subscribe to us in iTunes as well. A full transcript of this broadcast is available at our website startupsfortherestofus.com. Thanks for listening we will see you next time.

Rob and Mike answer more listener questions covering generic product names, offline marketing techniques, and more...

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Episode 62 | Listener Questions: Landing Pages, Questions to Ask a Web Designer, and More…

Episode 62 | Listener Questions: Landing Pages, Questions to Ask a Web Designer, and More…

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[00:00] Rob: This is startups for the rest of us episode 62

[00:03] [music]

[00:13] Rob: Welcome to startups for the rest of us podcasts to help developers, designers and entrepreneurs to be awesome at launching software products whether you have built your first product or you are just thinking about it, I’m Rob.

[0:00:20] Mike: And I’m Mike.

[0:00:22] Rob: And we are here to share our experiences to help you avoid the same mistakes we made. What’s going on this first week of the year Mike?

[00:28] Mike: I am sitting next to a barrel of beer.

[00:31] Rob: Is that right?

[00:32] Mike: I’m sitting in my in my home office my wife got me a home beer making kit for Christmas.

[0:00:38] Rob: Oh that’s cool awesome. How long does it take to ferment and all that?

[0:00:41] Mike: The marketing on the box says two weeks but the reality is its four plus. It depends on you know how much time you want to give it, it recommends a minimum of seven weeks for like the first stage and then another, sorry seven days for the first stage and then another seven days for the second stage. And then after that you can condition the beer for however long you want.

[0:01:03] But you know you make multiple bottles of it kind of all the time, all at the same time in a single barrel. So obviously you put them in different bottles when you start bottling. But it’s kind of unclear ass to how long that conditioning process should actually take and I think it’s more of a trial and error sort of thing than anything else. As I said the marketing says 14 days but it’s really month plus.

[01:24] Rob: Right 14 days if you want to make really crappy unconditioned beer and if you want it to taste good it’s…

[01:29] Mike: Yeah.

[01:30] Rob: Well it’s just some…

[01:31] Mike: I think so.

[01:32] Rob: Well cool I am just coming off of vacation. I have been off for oh yeah I’m trying to figure out exactly probably a week and a half. I was going to be off for and I will be off later this week as well. But I am kind of coming back to work because I wanted to record the podcast, I had a mastermind meeting this morning and then I need to get I have like four between four and six hours of Hit Tail work left and then new side will be ready to go. And my goal is you know it’s to have it done by the second week of January until they launch it to the customer.

[02:03] So I just have such a tiny amount. I worked many 2:00 in the morning nights before vacation and in an effort to get this done because I really didn’t want to have this six hours work right I wanted to get it all done at once but just couldn’t swing it. So I’m very excited I finally I got the new design integrated into the back end which was it was definitely more difficult than I had anticipated. I don’t regret doing it I look at my other options which would hire someone to do it or to have it rewritten in another language and both of those would have taken five to ten times as long. In the end it took me little over a week and since I am on a pretty hard you know hard timeframe now I am glad that I did it. But it was a big man I put everything else on hold, I have tons of emails to answer and all that kind of stuff so.

[02:46] Mike: Yeah I remember we talked about the possibility of porting that completely to a different language and you know you pointed out that it’s really just not worth it to go to a completely different language.

[02:58] Rob: Yeah and even you know I started specing it out before I started integrating the design into the app itself I started writing a spec because I was going to hire a developer to do it, to basically rewrite it in ASP.Net or ASP.MVC. And sure enough the deeper I got into that spec the more I realized how complicated these pages actually are. Even though they seem to be simple grids with sorting and paging and you know hey you can do that in three lines of jQuery I mean that’s totally what I was thinking. But as I got deeper I was like wow there are some really complex stuff.

[03:27] I still have a spec that’s probably 60, 70% all the way done so if I ever you know need to revisit it but it gave me a good idea. I mean I guess this is where that whole you know there is the specs argument should you write specs should you not. What’s nice for me I write really lightweight specs for outsourced labor. I have developers work for me and they’re solid developers but I can write really lightweight specs but it allows me to fully think through the problem. And if I had not done that and I had just gone with the no spec approach you know I know 37 signals talks about that and a lot of other people.

[03:56] And I had just sort of moving forward with it it would have been I would have probably gotten a couple days in and then realized that this was way more difficult than I thought. I don’t know when I do stuff myself I don’t tend to write specs but in this case it actually helped me out quite a bit. So I was glad I did.

[04:10] Mike: Yeah and honestly I think that that’s exactly the problem that I run into with Audit Shark over the past few years so because I didn’t write a spec for most of it. I kind of had mentally had it in my head all this has got to get done that’s got to get done. And I never really dug far enough into write a full blown spec to really figure out exactly how long most of the stuff was going to take. So a lot of it I just said, oh it will take me you know three or four days to get through that or a week to do that. And the reality was it took me significantly longer just because I really wasn’t thinking through the full problem the way that I should have been.

[04:46] Rob: No exactly and even lately you know as I was writing code and trying to figure out how I am going to make all this work and trying to plan out the timeline my spec for myself at least consisted of a couple of sheets of paper and bullet points of task items. It could have been in Excel as well but I just happened to do it on paper. And then writing you know I will estimate next to it and break them down into tasks that are less than a day. And it will give me a much better idea of I mean I know people who don’t even do that right its all in their head. And I don’t know if that’s how you did it or not but I feel like that’s really cruising without anything if you don’t even have a bullet list of tasks left to go. You know you are burned down type of thing

[05:22] Mike: Right yeah what I did was I put everything into FogBugz as individual cases. And some things were really high level that I just kind of left as place holders and I knew that’s there was more of a major undertaking. So I just kind of left it as it is and just said implement X. And then there were other things where I went a lot further in and I implemented maybe 10 or 15 different cases for an individual feature that I wanted to accomplish. So I dug a little bit deeper on some of it but other things were just kind of a one high level case that I would kind of stay. And then as I started working on it then I would start generating more cases out of that.

[06:01] Rob: Right. Hey I had this tip I wanted to give listeners. With this Hit Tail migration there is the upside which is the backend reporting once you log in that’s what you see. But then there is the front side which is all the marketing stuff and normally when you know these days when I build a SaaS marketing site it’s a handful of pages right. It’s like five pages homepage, tour page, pricing page, maybe features, contact, about and maybe an FAQ you know it’s really a short list.

[06:26] Since hit tail already had a couple 100 pages of content the tip is if you acquiring a website and you are going to migrate the pages to a new design go onto Google and type in site colon and then your domain name so site colon and then hittail.com. And it will show you all the pages that Google has indexed for your domain.

In essence it’s how like 1000 or 2000 pages indexed so when I first ran that, ran a query I was like oh lord I have so many you know so many pages to migrate. But it turns out the bulk of those are form posts and blog entries which is cool because since those are blog and form engines you can kind of just change a theme and you are golden

[07:05] It turns out there is somewhere between 150 and 200 actual physical HTML pages HTML and ASP pages. So what I did next is I hired a developer he went through and migrated all these pages to the new design. But he is not a design expert and he definitely not a marketing guy. And so what I then did is I went into Google Analytics and got maximum use of my time since I didn’t want to go through all 150 of those pages. I looked at the pages, the content that gets the most hits. And so I took the top 20 to 30 pages and those got at least ten views a month from search engines. So I know people just kind of wander into them.

[07:40] And what I did is I took each of them and kind of first of all made sure they all look nice and it did take a little bit of tweaking here and there. Second of all at the bottom or at opportune places I put a like a nice button that says “now try our plants” or “now check out our plants” or “now try 30 day free trial” depending on what the page was and what it was talking about. So the idea is that I am trying to take this wide and this long tail of search traffic that I am getting and I don’t have time right now this week to fix everything.

[08:06] And so what I did is I took the low hanging fruit, the thing that most people see and I am funneling all of those users back into my main funnel that is really hardcore, good information about the project and that is going to encourage people to buy. You know it basically encourages them to do the free trial and such.

[08:22] Mike: Very cool

[08:23] [music]

[08:25] Rob: You talked to a perspective customer last week?

[08:28] Mike: Oh yes I did. I was able to get in and schedule a meeting with somebody who I have been kind of in contact throughout the past year or so. And I came into his office talked him for probably about half hour 45 minutes or so and started walking him through Audit Shark and showing him exactly what it was, what it did and how it could apply to his environment based on one of our previous discussions. And what I found was that what he is really looking for is more or less a vulnerability scanner as opposed to configuration management product.

[09:02] And from that I kind of extrapolated a little bit and I said, well wait a second maybe I am missing the mark a little bit. I walked through the path of what the progression is for people addressing security in their environment and I kind of realized that it really put in perspective when I was talking to him and showing him Audit Shark that progression is essentially IT managers start out with patch management because it’s really the lowest hanging fruit. And then once they have got patch management under control they start looking at vulnerability management.

[09:28] So they start looking at things that aren’t necessarily patches for but they want to be aware of those things so that they can you know address the risk with whatever the vulnerability is. And then once they have got that under control they kind of go to an advanced level where they are doing configuration management. Now Audit Shark can do all of these things but I was really thinking of addressing the configuration management piece not necessary the patch management or the vulnerability management.

[09:56] And based on our conversation it almost seems to be like I might want to I guess it would be shifting gears a little bit to go more towards vulnerability, scanning and patch management scanning versus going for configuration management. Because like I said the product can do all three of those it’s just really a matter of how do I want to market it to people.

[10:13] Rob: Sure that’s true so it’s a positioning more. Now is it setup right now out of the box that you can do vulnerability scanning patch management or would it take actual code different code?

[10:24] Mike: No it can do it. I would probably have to build some specialized reporting I need to enhance the reporting the product anyway so it’s not like that’s really a big deal.

[10:32] Rob: That’s pretty weak right now right?

[10:33] Mike: Yeah so if I wanted to do that kind of stuff it’s not a stretch for it to go after those areas. Because really when you talk about something like patching how do you determine whether or not a specific patch is installed? Well on Windows its fairly straight forward you look at the registry and you figure out whether or not that patch has been installed either through the ‘add remove’ programs. Or you go to where the files are supposed to be located on the operating system, look at those locations and check the versions of the DLLs or the executables.

[11:04] And if they don’t exist at all then chances are you don’t have the software installed that you know requires that patch. If they are installed you check the version numbers and say do they match this and if not are they of the lower version and if so then you have to have to have this patch. So it’s really not that much of a stretch to make the product do that because the product is capable of all of those things. The difference between configuration management and vulnerability management is really just the rules that you are write and what you are looking at. And because the core engine can do pretty much anything on a machine I have the capability to do that.

[11:39] Rob: So the good news is that you have the capability, the other good news is you get to talk to more customers to figure out if they are right because you don’t want to go on one customers recommendations. So you get to go and talk to how many more do you think you are going to talk to five?

[11:51] Mike: I think five on the high end probably three to five I don’t know if it should be more than that.

[11:54] Rob: Right I think it will be interesting to hear how it pans out as you go if one guy says, oh we would totally want it for freaking configuration management you know what you do if you just position it as configuration and go there first or how you handle that so.

[12:06] Mike: Yeah I think it really depends on what foot I want to lead with you know.

[12:10] Rob: Absolutely.

[12:10] Mike: Because I have looked out there at some competitive products and some of them say flat out we do vulnerability management and configuration management. It doesn’t seem like too many of them combine patch management as well but it’s certainly possible.

[12:23] Rob: Sure I would lean towards getting really good at one. I mean especially since you are one person trying to do this and its probably teams doing the other your competitors I imagine it’s larger companies I would consider really focusing on one and positioning it like the best X instead “we do X and Y look at us we are kind of good” but not great.

[12:42] Mike: Right I know what you are saying but as you said I mean its all about market and positioning at that point because its not a technological problem for Audit Shark. It’s a matter of how its viewed by people and how do I want to pitch it to people.

[12:56] Rob: Right

[0:12:57] [music]

[12:59] Rob: I want to give a shout out to Rudy and higherflow.com that’s higherflow.com. Just want to thank him he send me a really nice email that was you know, I’m very experienced MVC he has his own startup which is higherflow.com he just offered to basically have a conversation with me in terms of if I decide to move to MVC things I need to look out for and things I should keep in mind. So I just appreciate that it’s cool when listeners to do that you know offer their time for basically for nothing just to help us out.

[13:28] I’m stoked men we got 71 ratings in iTunes. And most of them are I think 6, to 7 or 5 stars. And we have a bunch of new comments from November and December and there was some really cool moments. One of them says it’s from Tess Falcon and it says I love this broadcast, I have heard too many stories of 16 year millionaires and they never failed at anything stories. This guy seemed so much more believable since they didn’t get started until they were older, didn’t hit a homerun with everything and actually failed before they were able to put the pieces together.

[13:56] And then the other one, gosh there is about a half a dozen I wont read through them all but this one said its from Wood in wire where and he says, listened to your episode six and updates today after finding you guys in a browse for interesting dev related podcasts,. Episode six was really helpful particularly the ‘when to pay someone to help you’. So I’m surprised that you guys stuck around because from what I recall our first half a dozen episodes were not very good.

[14:17] Mike: You know funny that you have mentioned that because when I ran out of podcasts I started listening to our old episodes and…

[14:25] Rob: Were they?

[14:25] Mike: I thought I would be yeah I really thought I would be completely appalled and I wasn’t.

[14:30] Rob: Oh that’s cool. So that’s the thing I haven’t listened back to them in a long time in well over a year and I remember feeling stiff doing them and feeling kind of ashamed of putting them out.

[14:40] Mike: Right.

[14:41] Rob: But that’s good you know I think I need to go back and listen to them so that’s I stop saying that because if they are not that bad then I need to not brag on them.

[14:45] Mike: Yeah.

[14:46] Rob: Some people might yearn for the glory days or they are like the first ten were the best you guys were terrible though.

[14:51] Mike: Yeah the first one was it seemed a little bit stiff a little bit forced but I think after that things straightened out pretty quick.

[14:58] Rob: Yeah so we got a bunch of new reviews where we encourage folks you know this is what helps us rank in iTunes, which gets us more listeners which encourages us too basically to continue doing the podcast. So if you haven’t been on there we would love a five star rating, a comment all that stuff it’s just awesome. And like I have said before we have such a high number of comments and ratings compared to other podcasts that have many more listeners than us. So we know that that’s you guys out there we appreciate it

[15:22] [music]

[15:24] Basically we are going to be answering as many questions as we have time for. As we talked about last time we still have a big backlog of listener questions from the past several months.

[15:32] Mike: Right.

[15:33] Rob: It’s been cool doing this every week. The first question is questions to ask a web designer prior to hiring. And this was on Twitter and it’s from @ReadTree and he says questions to ask a web designer prior to hiring from the point of view of a consumer wanting a website made. In essence I ask very few questions to web designers. To me hiring a web designer is the easy part because they have a visual experience right, they have a visual display that you can look at and says do I like that or not. Hiring coders, ten times harder even for me who write you know I’m a coder it’s still really hard to evaluate and all that stuff.

[16:09] But for designers the first question is always portfolio like if they don’t have one they are no go. So the first thing I look at is how much I like their designs, the second thing I ask obviously is rate because budget is important. I have four different designers I use depending on the project. Well four different ways I will design a site the lowest end is WordPress and getting the premium theme that’s under a hundred bucks. But it’s a little cookie cuter it’s not nearly as nice as the other three designers that I have you know who go up to ten grand for a website or more depending on how big it is.

[16:40] But with the Hit Tail design I went with my high end guy and I paid the front end design was six grand and the back end was a couple grand. And then it was PSD to HTML was you know probably two to three thousand more because I had to get high end or the low end HTML and I wanted super slim down markup and a lot of stuff. So I have never spent that much on design. But I totally don’t regret it in my opinion it’s a good design.

[17:00] The other question I would asks beyond budget is how long do you take to deliver designs, how many revisions do I get? That’s pretty much it and typically I will have a Skype call with someone even though I don’t do Skype very much I tend to do email. But when I am hiring someone like a designer I really need to know that we can work together. And it’s good to have just a little bit of face to face so that the person understands kind of where you are coming from because you are going to have emails we are going to be critiquing their work and I always want to have a little bit of relationship with them when I am doing that. I don’t tend to spend too much time worrying about what’s to ask when hiring designers because I do find that people who do really good design tend to deliver well for me.

[17:39] Mike: The things that are important to me at least are the number of revisions because some people will hand it over and depending on who the designer is I mean if they are, you want to avoid somebody who is a little bit flaky where they’re just like oh this is my work and its top notch and you get what you get. So you do have to be a little bit careful I mean most designers are not going to do that to you if you have never worked with designers before you just have to be careful you don’t get stuck with that.

[18:01] And then the other things are pretty straight forward, the only other thing I thought about asking on occasion but I have never really dug much into it in conversations is what their workload is like. Because I kind of want to know if I have revisions or changes or if I am under a time crunch for something are they going to be able to respond in the time that I need.

[18:21] Rob: That’s a good point you know there is a difference between turn around time on revisions which you are hoping is like a day or less ideally. The best designer I have worked with he would turn around in a couple of hours which was just sweet. There is a difference between that and the total timeline. You know you can kind of ask a guy what’s your typical timeline for your average five page web design? And they should have an idea right out of their experience they do this all the time, they know that it takes from your first description of it to when he delivers PSDs it could be two weeks it could be four weeks depending on his workload.

[18:54] Mike: So I think it also depends on what their typical timeline is for the mental discovery phase. You can describe something to a designer and they can say okay I have got an idea of what you are looking for at least conceptually let me think about it for a little while. And while they are designing other things maybe they toss around some ideas in their head or you know they are out to dinner one night. And they are just kind of thinking about it not too in depth but you know something just kind of crosses their mind hey that will be a great way to do this particular project.

[19:25] So you know you may get one designer who says three weeks and the other one who will say it will take me five, its not like its actually taking the person an extra two weeks. There is time that they kind of build into that for more of a creative process than anything else. And that’s as you said that’s not necessarily as important as what their actual turn around time is once you get to the revision events.

[19:46] Rob: Right and I think the other thing I will point out is these days I haves found that a lot of designers only go to PSDs. And then there is this whole other subset of folks very specialized who are doing PSD, slicing them and turning them into HTML and five years ago my experience was there were a lot of designers doing all of that, that whole even 10 years ago especially doing that all gourmet. But I found that it’s become more specialized. So I would recommend actually if possible finding a designer who just goes to PSDs and then using someone else who is very good in specialized that PSD to HTML. And we actually have folks we recommend inside the academy for that stuff and if someone has a question they can, you know ,email me directly.

[20:24] [Music]

[20:27] Question number two is examples of “coming soon” pages. So this is from Sumit Gulecha and he says thanks a lot for the podcasts and they’ve helped me and inspired me. Based on your advice the first thing I want to do is get the “coming soon” page out and start collecting emails, good move. There was a question about this that you answered on a recent podcast, it was helpful but I have a further question, I am wondering if I need to tell people about myself, my background. I got the gist of your answer that the goal is to tell people just enough for them to be able to decide whether or not to sign up for the notification mailing list. But I expect to figure it out soon as I proceed but it would be helpful if you can provide some examples. So I will answer his question about providing background about yourself, it depends.

[21:09] I would lean towards not, especially if you are selling a product like a SaaS app people care more about what does it do. They don’t so much care about who you are or what you do until you ask them to buy then I would prefer that you have an “about” page with a picture, you know it kind of makes it more personal. At this very early stage I would tend not to do that, the exception, the reason I say it depends is because when Mike and I put on MicroConf, we did mention on that page who we were because if people are going to be interested in the conference they do want to know who is behind it.

[21:39] And the fact that we both have blogs and podcasts and ran the academy and have the start ups, I mean this stuff is important to people. So we actually just linked out to our blogs, and when I did my landing page for my book and if I do future, you know, products like that in the future I always have a down at the bottom you know hosted or written by Rob Walling or something just that kind of mentions, because I do have some name recognition in the sphere and so the name actually is important.

[22:00] Mike: For most products or most applications you are not going to want to bother putting your own personal information on there especially if it’s just a “coming soon” page. But once you get down the road where you have got people on to your mailing list and you start emailing them, talking to them about the product and then when launch day comes a long when you are trying to actually sell to them they are going to want to know who you are. And for MicroConf and even your book I think those situations are a little different in that those are a bit more personal.

[22:32] Rob: Yeah it’s almost like they have something to do with personal branding. We do have some type of name in this space. And so if you somehow had written a bunch of articles for veterinarians and you were known in that space at least a little and you are putting out veterinarian software, then of course you are going to lend your name to it a little bit right?

[22:49] Mike: Right.

[22:50] Rob: It may not be the foremost thing but it’s like if people know you in that niche then yes it’s probably worth something or if you have some specific experience that really relevant. But even then we didn’t put an “about” page, anything like that on MicroConf. It was like one sentence and it said brought to you by, I think it was like brought to you by the guys by startups for the rest of us and the MicroConf Academy, Rob Walling and Mike Taber and it linked out to our about pages, like our you know respective blogs or blog about pages. So I don’t think you want to add a bunch of clutter, landing pages should be pretty darn slim till you get to the full site that I would recommend building out a full “about me” page.

[23:25] Mike: Yup.

[23:26] Rob: And if you are—Sumit also kind of asked about landing page examples, and there are some really good examples on bounce.com and we can link that up in the show. But frankly if you to Google and type in landing page examples you will see some pretty quick. There are also a lot of pretty decent WordPress themes at Theme Forest and Woo Themes that are landing page themes. And so you can kind of filter through them and even if you don’t use WordPress, they still look attractive and they show you, you know, give you an idea about how much text looks good on those pages.

[23:54] Mike: And speaking of WordPress and it’s completely, you know, not relevant to this, I doubled the load speed of some of my WordPress installations.

[24:03] Rob: How did you do that?

[24:04] Mike: I cut out some of the plugins, so for example there is the jet pack analytics that was kind of bargain things down. Then I also used the Contact 7 plugin.

[24:14] Rob: Yeah.

[24:15] Mike: And I found that the Contact 7 plugin loads a lot of CSS and additional files that don’t need to be loaded on every single page of your site.

[24:25] Rob: I see yeah.

[24:27] Mike: Even though you only use the Contact 7 plugin for one page for example like your contact page, it gets loaded on every single page so all those extra files get loaded every single page. So there were several plugins where I found that that was happening so I had to go through them and tweak some things. Then I am actually going in with my, with DreamHost right now and asking them some questions that I just got an email a little while ago saying oh this is potentially why some of your images are loading a little bit slow.

[24:52] Rob: Got it, well I’m going to need to talk to you more about that because my DreamHost virtual server has been eating more and more you know processing power and such and I just keep cranking it up. And I know that it’s got, it has something to do with or imagine it has something to do with my WordPress installs.

[25:07] Mike: Yeah.

[25:08] Rob: And I have gone through and disabled some of the plugins. But I use Contact 7 on a few, I didn’t realize it was hogging so many resources. If you find someone to hire to just handle that stuff for you let me know because I need someone you know good who can just go in and do these kind of stuff and optimize and all that.

[25:25] Mike: I was seriously thinking the exact same thing of just hiring someone to do that but…

[25:30] Rob: Yeah well I started to look on Odesk, I started a post one day and then I got side tracked with Hit Tail stuff. So of like someone who knows DreamHost and knows WordPress and can go in and do stuff without breaking it but they can make recommendations to me of like I think we should do X, Y and Z, Z, Y and Z. And then that person can then go do it, you know what I’m saying? Like the whole deal, I don’t want—I just want you to be a consultant and to take care of everything so.

[25:52] Mike: Right.

[25:53] [Music]

[25:55] Rob: Question three is a quick tip, it’s from Sean Murphy, he has written several questions and he has a landing page at hvacpracticetests.com. and HVAC is a it’s like mechanical contracting so there is electrical and then heating, ventilating and air conditioning is what it is. And obviously there is a test that people have to pass in order to become a contractor. He says the primary goal of the page is to collect email addresses and he had a secondary action that he wanted users to take which was to complete their survey.

[26:26] And originally he had just added the link to the survey to the bottom of the page with a bit of a call to action copy. But obviously it wasn’t working because people were entering their emails and going through and never coming back. So he changed the success message after the user submits their email and instead of saying okay we will be in touch, it says okay we will be in touch now go take the survey, and he linked that out. And he said the change worked really well, he now gets…he continues to get the same amount of emails and he now gets a good percentage of people taking the survey. And so he basically he went from trying to do parallel to serial processing right? He is now doing it in series.

[27:01] I love this idea; I’ve done this before with wanting people to take an action and struggling with it. I did the same thing, I put them both on the page and I knew before I lunched, I knew it just wasn’t the right thing to do, you know, to have these two calls to action. There was no…they are going to do one or the other and you are going to lose them. And so changing it up and giving that second call to action after they have already done the first I just think it’s a golden tip.

[27:23] So I want to thank Sean Murphy again and we will get back to him, I think he has another question in our queue somewhere that we will probably answer in the next few shows. Okay our next question is about having a physical address. It’s from Richard Cocovich at segal.org. It says hi guys I have been enjoying the podcast since the beginning and I regularly refer to Rob’s book whenever I can grab some time to work on my start up idea. I’m in the process of getting my mailing list and landing page set up correctly, according to CAN-SPAM I have to have a physical email address to associate with the mailing list or so MailChimp tells me.

[27:58] How do you guys handle this? Earth Class mail is not cheap, its 25 bucks to get started and 20 bucks a month. I am trying to spend as little as I need before I have income especially for thing like this that are not directly related to the product. Thanks for your time and keep up the great work on the podcast.

[28:10] Mike: You know Rob uses Earth Class mail and I use Mailbox forwarding which at the time was only $10 a month. I think their cost, I think the cost for that has gone up to $15 a month. So I am still fortunately on their $10 month plan. But I get virtually zero mail and that address is really just to satisfy those mailing requirements that for the CAN-SPAM laws. The other thing you can use it for is if you get, and I haven’t tried this yet but I’m expecting that it would work for like the extended validation for SSL certificates, but I’m hoping that that will pull through for me.

[28:47] Rob: Got it, yeah so I also use it for domain registrations because I have so many, you know, gazillion domains out there. So I’ve got to be honest…

[28:53] Mike: I used to use a proxy for that.

[28:55] Rob: Oh do you? Okay.

[28:55] Mike: Yeah.

[28:56] Rob: But that’s extra money right? That’s like 70, 80 bucks per domain?

[28:58] Mike: No like if you do it through Dream House it doesn’t cost you anything they do it for free.

[29:02] Rob: Oh how cool, so I’m through Go Daddy which if you’ve heard about the SOPA boycott I’m thinking about hoping from them. But yeah I know I have, I don’t know what is it? 70, 80 domains through Dream…through GoDaddy. So I try to keep them all registered in one place and yeah they charge of course, I don’t even know what it is, seven bucks a year or something for a proxy to keep it private. See I actually like, that’s interesting when its proxy does it show up as being private, because when they see that in the domain registry I get a little bit of a red flag because I’m like huh is that person trying to hide something?

[29:33] Mike: It shows up in the Who Is listing as some sort of proxy, it actually says proxy in it.

[29:40] Rob: Got it, okay so I would then prefer to have just a normal address instead of a proxy because my experience dealing with like affiliate marketing and there are some kind of shadier neighborhoods of affiliate marketing. And people always use those private registrations because they don’t want to give an address. So if I were to search for Who Is and see it, most people probably won’t see it but my inclination would be like ding! Huh a little bit of a red flag there.

[30:03] Mike: Right.

[30:04] Rob: So that’s why I already had, I mean that’s one of the big reasons I got an address is because I wanted to be able to put one there and not have to use a proxy.

[30:10] Mike: I think it’s because you are more technical. Let me ask you a question, I assume you bought Beyond Compare right, we talked about that before?

[30:18] Rob: Yes.

[30:18] Mike: Did you go do Who Is look up on them before you bought the product?

[30:21] Rob: No I totally didn’t. No I don’t typically do that.

[30:25] Mike: Right and that’s my point.

[30:26] Rob: I don’t typically so.

[30:28] Mike: Yeah I don’t think in the vast majority of cases it actually matters.

[30:30] Rob: But Richards’s question, so Mailbox Forwarding is 15 buck a month. You can go down and get a P.O Box for is it a 100 bucks a year for the smallest one?

[30:39] Mike: Something like that.

[30:40] Rob: Yeah at the post office it’s actually quite cheap and if you only use it for domain registrations and or, you know, this, the mail stuff you won’t get mail there and you don’t ever have to check it.

[30:50] Mike: You’ll still get junk mail though I think.

[30:52] Rob: That’s the reason why I went with Earth Class Mail even though its more expensive than the post offices because I never….everything is scanned in and it you know emails me GIFF of the front and I can see if its junk mail and if it is I just recycle it and if it’s not, because a few things have come through based on like state filings I have made that have actually been I wanted. And so then I can them forwarded to me or they will scan them in then I can just print them out at home.

[31:16] Mike: Yeah.

[31:18] Rob: So that’s nice, but I get Richard’s point right? He doesn’t want to pay 240 bucks a year on something he really doesn’t want, you know he doesn’t want to have to use.

[31:25] [Music]

[31:28] Rob: Fifth and final question is from Mathew Holmes and it’s about getting started in programming. And it say thanks for the great podcast with its excellent content, your insights have been great. I’m probably somewhat different than most of your listeners in that I am coming from a place of more experience with marketing and zero to little experience with programming. I was wondering if you could do an episode of resources for those getting started in programming.

[31:51] I am teaching myself PHP, MySQL and I am having some success using Tizag.com and W3Plus looking at blogs for specific questions. But I can’t help but feel I am missing the overall big picture basic grounding information. It’s not feasible for me to return to school so any tips would be appreciated, many thanks, Mathew.

[32:08] Okay so I have so many thoughts on this. My first thought is if you know marketing why are you going back to learn programming, like why do you need to do that? Because in my opinion having the marketing experience that’s really the hard part, outsourcing marketing, really hard, outsourcing development not nearly as hard even if you are not a developer yourself. If you get a basic idea of what it takes to do PHP MySQL and you have decent project management skills, I would not learn it myself. I just think it’s a time investment that could be spent doing other things.

[32:40] Mike: Well I wonder if the issue is that and this may very well apply to most people is that you know you want to get started building your own products and marketing them and you’ve got maybe the marketing experience because you’ve got no real background in programming. So how do you get something built? Well you and I would look at it and say well outsource it, pay somebody to do it. What if you don’t have the money to actually pay somebody to go do it? I mean you are kind of in between a rock and a hard place where how do you get started without money to get started because you know…

[33:09] Rob: Yeah so…

[33:10] Mike: You know what I’m getting at?

[33:11] Rob: I do, no totally. And we’ve actually talked specifically about this. So obviously there are two resources that you need. You need one or the other, you need time or you need money to get this thing going. So if you have an exorbitant amount of time, I mean a lot of time maybe 15 to 20 hours a week to teach yourself programming then go do that. But if you are trying to learn programming on five hours a week you are nuts, there is no chance.

[33:33] I remember I went through college and got a computer engineering degree which although it’s more hardware focused I had programming classes. I have been writing code since I was eight and when I got out and tried to build my first web app I had no idea how to do it. It took me weeks and weeks of nights and weekends to figure out how to build the app. Then I got my first job doing it, I was doing it forty hours a week and I learned more in a month than I had in the previous five, ten years of trying to do stuff once I had a real product I was actually trying to build.

[34:02] All that to say it is super time intensive to learn how to program if you’ve never done it, it’s very I mean very time intensive. And so I would encourage that if unless you have a huge amount of time and absolutely no money, I would encourage you not to learn how to do it. If you have even a few thousand bucks and you are a little more strapped for time I would lean towards trying to become more of the entrepreneur, of a project manager and a marketer and finding someone solid on Odesk who can build the product and then keep him around for maintenance and upgrades and stuff.

[34:35] What I am trying to think is the amount of money that you need to get started reasonably well right? And I don’t know what that number is I think it depends a lot on what you are trying to build. I think if you are trying to build iPhone apps you can get them fairly cheap because they are so small and self contained. And if you are trying to build some big SaaS application, I would say that you may be going down a bad path. If this is really your first app that you are going to build yourself and you have an idea for a really big app, I would suggest pairing it down or figuring out a different idea and finding something that can be built for under 5000 though a contractor. What do you think Mike do you think I am too heavy handed here?

[35:08] Mike: I don’t think so I think to become good at programming it takes a while. In your argument you come across very strong on it and I don’t necessarily feel compelled to argue against you because you know I’ve got that computer engineering background just as well as you do. And I think that the marketing side is, I mean I think we both agree on that the marketing side is a lot more important than the code. I mean you look at any enterprise software companies out there and if you look under the covers of the stuff that they’ve got most of it is crap.

[35:38] Rob: No I think you are right yeah.

[35:40] Mike: And the fact is it’s not very good code and it’s not very well written and it’s because those companies understand that they are not selling code, they are selling you know, they are selling a product. And if some things don’t work, okay well the support department can handle that. And I understand that you know when you’ve got your own products you’ve got to deal with everything. But what sells the products is not the product it’s the marketing behind it.

[36:00] Rob: This is our sixty second episode, I feel like we have said that at least once per episode for 62 episodes. That is our theme, I mean it really is and we have nothing, like we are coders, we love to code. If I had a, you know, my dream job it would be like to code half time and do other stuff the other half like I love doing it. The drive to code or the…everyone things they need to learn how to code to start a startup and coders think that all they need to know how to do to starts a startup. And we are basically here to say no it’s kind of the opposite.

[36:30] Mike: It is, I will be honest it’s painful to say that that’s not the case it really is you know because there is a program. I want to say yeah the code is important and the reality is it’s in many ways it’s not. I mean even for Audit Shark. I mean there is—and don’t get me wrong and there is a lot of good engineering and effort that went into it. But at the end of the day it’s not going to sell itself, it’s all the marketing effort that goes around with it.

[36:49] Rob: Right it’s important that you have some code, just getting it done and you having learned to code to write is not the critical part that’s going to make your business succeed okay?

[37:00] Mike: And I think that if you go down the path of validating, you know doing the marketing staff upfront and validating that there is a market for it, it’s a lot easier to plunk down $5000 that you are keeping close for, you know, a rainy day or you really can’t necessarily afford to spend it. But if you’ve got validation of a market and you know that there is a market there for that product then it’s a little bit easier of a pill to swallow to pay somebody to go do it. Even though maybe it’s your last $5000 but if you know that there is a market for it it’s not so bad because you can be relatively confident that you are getting it back. It’s not like you are going to Vegas and putting $5000 on black.

[37:36] Rob: Yeah I totally agree, instead of spending 10 to 20 hours a week for six months, and in fact if you don’t know how to code it’s going to take three months to figure yourself out and then six months to build. So I would put you in nine months of 10 to 20 hours a week to build this thing and its going to be such a hard road. Instead of doing that I fully agree with what Mike said, go out, do some lean startup stuff, cold call some customers, talk to people, get some data, get some demand, get your first five customers lined up.

[38:06] Once you’ve done that you can either be more confident that you can drop the money or with that data that’s the kind of stuff that you need to go to a developer and say look, let’s start a company together. Go to a developer now and ask him to partner with him, him or her, it’s not going to work. I get this question honestly, once a week I get an email through my blog or my book or whatever and someone says I am non-technical, how do I find a co-founder? And I always tell them it is very hard when you are not a technical co-founder, what you need to bring to the table is marketing experience.

[38:34] You need to have proven experience, you need to show people look you brought this years of coding experience, I bring all these valuable marketing stuff. And I validated the idea, I know it’s going to work let’s do it, you know what I’m saying? Like you are such a leg up, like go out and hustle before you want to build the product. Like build the product last, figure all these other stuff out first.

[38:52] Mike: Mhm, it’s all I have to say about that, Mhm.

[38:55] Rob: Yeah seriously. So that we answered five questions this time, we still have a big back log. I don’t know next episode that will be all questions or not but we appreciate everything joining us and we wish everyone a happy New Year. This should be out just a couple of days after the New Year and then we will resume our normal schedule starting next week.

[39:10] Mike: And if you have not gone and done so and you are interested, please go to www.microconf.com and sign up for the mailing list to find out about when MicroConf 2012 will actually be and you will be on the mailing list and get some of the first notifications of when tickets come out. Other than that if you have a question or comment you can call it in at our voicemail number at 1-888-801-9690 or you can email on an MP3 or text format to .

[39:38] Our theme music is excerpt from We Are Out Of Control by Moot used under creative commons. A full transcript of this podcast is available at our website startupsfortherestofus.com. If you enjoyed this podcast please consider writing a review in iTunes by searching for startups. You can also subscribe to this podcast in iTunes or via RSS at strartupsfortherestofus.com. Thanks for listening we’ll see you next time.

Rob and Mike answer more listener questions, ranging from landing page specifics to questions to ask a web designer before you hire one, and more...

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