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At Microconf 2014, Nathan Barry, Founder of ConvertiKit, spoke about how practice and the willingness to learn can make small businesses grow impressively.

The video can be viewed here.

Transcript
Nathan: There is a lot of talks here on really really technical things and right now, I’m not going to give you, you know, one weird trick to double your conversion rate or anything like that, but I am going to talk about the things that really made a difference for me over the long term. So we will step right in. If you want to get good at something, what’s the best way to do that? Practice, yeah; like practice – sometimes, practice for a few hours a day, you know, one day a week, may be work on your product, a couple of times a month when you get inspired and you have all that motivation. I don’t think so, but we’ll get into that, but there is this idea that if you want to get really good at something, you should practice it continually, and so, Jason Fried of 37 signals or BaseCamp now, has this idea that just like you would learn to play the drums by practicing, you would learn to make money by practicing’ that it’s a skill! The more you do it, the better you get at it. So he has this story of the first time he got someone he didn’t know to pay him money, and I think that is truly a critical moment in any person’s career of selling things. So he created this product and I heard this story on Justin Jackson’s ‘Product People” podcast.

So Jason talks about how his very first product was an app. he made with [Willmaker Pro 0:01:50] to help people organize their music collections, and he put it up on a share..site, had a little ‘Read Me’ files that, “Hey, if you like this, send me $20. Here’s my current address.” And one day, he got in the mail, a letter, you know, onward from Germany with $20 and a print-out of that ‘Read Me’ file and he talks about this as being an absolutely pivotal moment for him, where he got someone that he did not know at all, that he had no connection to, to pay him money. So what we have to do is you have to start practicing making money. Jason didn’t start out with any of the big products that we know for now. He actually had a lot of things in-between audio file and what we know him for.

So I went through a very similar process, and I’ll show you some of my first products. I’m not going to go quite the full, embarrassing site and show you all the screenshots. I’ll just show you the names. So here’s a few of…products that made a less than $1000. Actually I get into the WordPress theme business with Widget themes, hosting, iPhone app. I think everybody should make like Flashcards iphone app. at some point. I think that’s a requirement, that we sell on the app. store. and so this was me learning, and it took a long time. I had a couple of more apps., you know, that made in the several thousand dollar range, [inaudible 0:03:31] I still have and then you know, I am just working up, making bigger and bigger apps, and you know, I get into selling other books. So this is like my getting into what I consider successful products and then I have a couple of books that have sold really quite a bit.

But overall I have had really a lot of products. So this is all practice. Later on, you know, as products are starting to make meaningful amounts of money, $20000, $30000, $50000, but it took me quite a while to get to that point. So because I share the numbers and talk about the blogging…I blog about all of that, and public with everything, one thing that I hear all the time is, “Oh, it’s great that, you know, you worked on this book and you were an overnight success because of it.” And what people never see is just all the products that completely failed. And so, if you graph my product revenue over…I actually started working on products in 2007, but zero didn’t look very good on this graph, so actually I had little product revenue in 2008 and so you can see that it took me quite a while to actually make any kind of money at all. So you have to start somewhere. You have to start practicing and you have to build up that skill of making money.

Last…at MicroConf. in Europe this last Fall, I had coffee with some of these guys and this team is, the company is called ‘Source’ and they make a Photoshop plug in called “CSS Hat” I don’t know if any of you would say, “It’s really really good,” if you are a designer or developer and you want to get code, you know, quickly; your Photoshop sells out of our Photoshop and into code and so what these guys did when they are all, you know, just barely out of high school or some of them were still in high school. They did a startup weekend and through that process, they were building…they built CSS Hats, you know, the Photoshop plug in, which, if you think about it, Photoshop plug in is a really small product. You know, they built that in a weekend, they started selling it and they have done really really well.

When they launched it, they made, I think it was $10000 in the first day or so, and it was quite successful, but they started with a small product. They could have tried to jump right into SaaS, they could have tried to jump right into something that would require a lot of support or take a long time to build, but they got something small out there and they started working from that. Here’s a screenshot of a CSS Hat. So there are so many businesses that you can get into, that don’t require a lot of time. May be it’s not the SaaS app. or the perfect business that you want to be building down the road, but you need to know that you have to start small and practice making money, get all those small wins, learn how to get people who you don’t know or who don’t know you, how to get them to pay you money and build from there.

So the next thing and when I figured out this lesson, it was really quite a turning point for me. But if we look back to my very first products, the problem that I had was “How do you get customers to know and care about your products, so what you are selling?” You didn’t know that you exist, let alone convince them that you are someone worth buying from! And so probably those first three years that are represented in that graph, and that was all before I figured this out and I got the answer to this question from a bunch of different sources, all at once and that’s what I primarily set in, but the biggest one is from a General by the name of Chris Coyier and who knows about CSS Tricks? Anybody been to CSS Tricks.com? Quite a few people. So if you want to learn web design, it’s a great place to go. I really enjoyed Chris’s site, but when he started way back in 2006, 2007, I was a web designer at the time. I considered myself decent at CSS and I remember reading the first articles that he put out and kind of thinking, “Oh, that’s cool, but I already know it.” And he would put out more articles and I was kind of like, where he is not that much of an expert, because I already know what he is talking about.

But he keeps writing articles and basically what happens is, we are both learning new things. You know, I’m working a mix of freelance and like full time web design jobs. He is doing the same thing and you keep learning. And as I learned something new, I applied on the next project. As Chris learned something new, he writes about it and applies it on the next project and keeps going, and I didn’t really think anything on this, until Chris launched a kickstarter campaign and what he said is, “I want to redesign my website. So I want to take a little time off from my work and redesign CSS Tricks.com. I think, to live…you know, to survive during that time, I needed about $3500, so if you guys, my dear audience, would be kind enough to, you know, put up that much money in a kickstarter campaign or redesign a site, I’ll create some tutorials along the way and teach about this whole process.”

So Chris goes on to raise $89697, a little above his $3500 goal and I saw this and went like, “What!” Remember, we were both designers, we have been improving at the same rate, we had the same skill level, we were both now advanced CSS coders, I guess. So what was different between what was going on? It clearly wasn’t skill level and what it came back to is that what Chris was teaching, I was just working, I was just implementing what I was doing and I know so many people who are doing really really impressive things now, that you never care about because they either don’t think they are not expert to share or may be they don’t care about that kind of thing. But really all you do and all Chris did was he learned something new, and put it up there and he wasn’t, you know, I guess what you consider an expert in that area, would be someone working on the CSS spec., you know, or working in those meetings and the working group or working for a browser or something like that, and that wasn’t Chris at all! He was just somebody who knew something and started sharing it and that turned into a huge amount of revenue for him.

So Jason Fried has the same idea that he talks about, where he says, ‘Emulate chefs.’ You have only secrets! You know, for chefs, it’s their recipes. That’s what they put together and what they craft and perfect and most people keep those entirely secret. There is probably a bunch of people here who are like, “Ah, I would tell you those numbers, but I don’t know.” You know, they are trying to keep their business secrets to themselves. They don’t want their competitors stealing things. Chefs, on the other hand, the ones you’ve heard of, say, “Take everything. I’m going to…I am not just going to tell you my recipes. I’m going to write them down and you could buy them for a $20,” and that’s their craft. It’s what they have perfected over the years and they are basically giving it away. And they go a step further than that, and say, “Let me bring in cameras. We will get in a studio, and you can look over my shoulder and you could see exactly what I am doing and how I make this.” And so, those chefs aren’t worried that people are going to, you know, take their secret recipes, that are now public and open a restaurant, you know, across the street and put them out of business.

Instead, they know that by putting out all that information, by being public about it, they are going to get more people to come to them. They are going to have more fans; the restaurants are going to be booked out weeks or months in advance, instead of feeling desperate to try to get more people. So a huge realization for me is that people don’t teach because they are experts. They become experts through teaching, so Chris Coyier did not start as an expert. He became an expert over time. He built an audience, and that’s how, you know, he was able to have such a successful kickstart campaign. His audience was just, they rolled with him, the moment he gave them an opportunity to and as far as giving away secrets, like chef do, I think if a handful of companies that…you know, there is lots of companies that teach, but then there is a few companies, like I am thinking of [Buffer], where they will give you, they will tell you everything. You know, “Don’t go much further,” and they will say, “Here is exactly how much all of our team members make.” You know, if you go, view the Google Doc, and you will see like there is 60 other people viewing this Google Doc right now, of exactly, you know, how their customer support person, whatever her name is, how her salary gets calculated based on everything and it’s fascinating that they are willing to give away these levels of secrets.

So there is lots of people in this room, like Reuben from BidSketch, Hiten from KISSMETRICS, who understand that teaching is a fantastic way to draw in an audience, to get people to trust you and then to take it further, you know, like [Buffer], you know, Josh is sharing all of his numbers, being totally public about it and that’s something that his audience, you know, really really loves and that’s going to get a lot of attention and make him really a lot of money over time. So you know, I consider the…I kind of got these lessons from multiple places at the same time. I read Jason saying ‘Emulate Chefs’ and you know, I heard it, you know, that you should be teaching, sharing and I had seen so many examples, but it wasn’t really until I saw Chris and his kick-starter campaign and had all these come together, happen at once, that I realized, “Oh, that’s what’s going on,” and from then on, I became determined to just teach everything I know.

And so you look at people who are teaching and they are, you know, they don’t necessarily have the most revenue, but they are willing to learn new things every day and they are willing to share, and so I would really really encourage you to be much more open and much more public and I think you will see fantastic results from it. So there is a problem that I see a lot in the bootstrapping space and goes back to, there is this guy, you know, [inaudible 0:15:47]. I have known him for quite a while and he has had this idea for a product and he has been working on it for a while. Actually he has been working on it for a long while. It’s a side project, you know. He has got a great software development job; he is paid really well, he is quite comfortable, but he’s been working on this idea for 7 years and you know, being a developer, he was able to write the entire thing himself. He built it out and then he kind of…he’s been improving it, and it’s not quite ready for customers yet. He’s making some progress; he is talking to a few customers, getting there.

That’s taken a couple of years and then he got to the point where, “You know what? That code base is getting a little bit old. I could write some of those things better now.” “You know what? There is this great new library. Let’s rewrite it with that.” So as sad as it is, he’s been working on this one product for 7 years and there is…it’s so easy to have ideas and have things that you are working towards and you totally under-estimate how much work they ought to get done. And so, you just…you know, you would run the risk of becoming that person who always talks about these ideas, talks about the company it’s going to build, the side-project that is going to run and without ever making it happen. So there is a way around them.

But first, I think there is a few people here who have read my blog, so can anyone tell me the name of my first book? Anybody? So it is, the first book that I published is called ‘The App. Designing Handbook’ – that’s about designing iPhone applications. But it’s actually the third book that I started writing. So what were the first two books? And it doesn’t really matter what they were. What matters is that they never got finished. In fact, they never got past an outline and a couple of pages, because I really wanted to write a book and I thought those first two ideas were really good, but what happened is, I would work on it when I was really motivated. So I would get excited, I write out the outline and started writing the book, then I take a break doing something else for a little bit and come back to it, and it will be less exciting, but I would get, you know, another page written. And then my motivation would just kind of die out. And it wasn’t until I learned this much more valuable skill, that I actually made any progress. But it’s from a General by the name of Chris [inaudible 0:18:37] and he said something that really stood out to me.

He said, “I could write a book every year, a 100 plus blog posts, 50 or so guest posts, atleast 2 to 3 business projects” and when he says busines projects, he generally means actually more full-length books, and a few long-form essays and magazine pieces. He is talking like writing for, you know, CNN for their ‘Travel’ section; you know, writing all this stuff and he says, “It is not too hard. I will do all this in a year.” He knew that people would say, “It takes years to write a book Chris.” “I could write a whole bunch in a year.” And the ways that he does it is he just writes a 1000 words a day. So instead of sitting, you know, instead of working for huge amounts of time, and putting, and you know, amazing amounts of effort, he breaks it down and makes slow, consistent progress every day. So I adopted this idea, because I really wanted to finish the “App. Designing Handbook” I was tired of being that person who talked about ideas and talked about the book he is going to write, the products I was going to make and never actually finished it.

And if you guys know someone back from high school or college, who had all those big plans and never executed on any of them, and I did not want to be that person. So I took Chris’s idea and I started writing a 1000 words a day. Well, actually, like any good software person, I first built an app. to help me write a 1000 words a day and then got to actually writing it. This app. is [inaudible 0:20:15] and I wrote that first book; took me a little while to have that going, but wrote a 1000 words a day. After the first book, I finished that and thought, “Great! That was a success.” And the next day my phone pops and says, “We are going to write a 1000 words today.” But now, I finished the book, that was the goal, you know. I shipped something; that was important to me, and then, you know, there is no way I am going to break history…at that time, it was about 75 days in a row, so I kept writing and I wrote another book and I kept writing; wrote another book and I wrote a whole bunch of blog posts and now, I guess I’m stuck!

Like, at this point, I have 600 days in a row, like 620, I think, now and so I guess I am just never going to stop writing a 1000 words a day. But it goes back to that teaching. For me, writing, I can put out all those ideas, I can teach, my reach goes to that person a lot more, but [Joel spolsky] has this idea, where you know, he is applying the same concept software, where he is talking about just making a little bit of progress every day. The idea that your product should be better at the end of the day than it was at the beginning. Even if it was a tiny little bit of a improvement, you have made progress, and so when you are willing to do that, when you are willing to put in that time and that really consistent effort, really impressive things can happen.

So someone else that I really like, name is John Dumas. He has a podcast called “Entrepreneur on Fire” and the remarkable thing that he has done is, he has published a podcast episode every day, 7 days a week, I think, for 550 days in a row and he has seen amazing business growth, because he is willing to put in that consistent effort and put things out so often. For my own app. ConvertKit, things, for a while, really stalled out and got…you know, revenue wasn’t growing, the product wasn’t improving and I found, you know, that decreased my motivation even more. But what I realized is that I was working on it when I was motivated, and so when I started to see things improve again; you know, I started to see revenue increase, I started to see more progress, was when I decided that “You know, I’m just going to make the product a little bit better every day. I’m not going to wait until I have time to sit down and you know, code out entirely new feature or redesign the screen, to make progress. I’m going to add a minimum every day, make something a little bit better, and I’m going to slowly chip away at this.” Because, to be honest, making products is really hard. It’s a skill, like making money, that we get better at over time! But you need to make that consistent progress in order to see the benefit long term.

So the next one is something else that I see a lot, kind of in our world, and that comes from the quest for passive income. When people think, “Okay, I am going to get passive income, I’m going to build this business,” or, you know, “I’m just trying to get the $6000 a month it takes to replace my job,” what they tend to is, and I did this, is that you come up with some interesting niche, and you build a little product and you get it to the point where it’s making $500 or $1000 a month and you go, “Cool! That’s there. Now we are going to go all the way over here and we are going to go to some other interesting little niche, that has a little painful problem that we could solve, and build that up,” and that’s going to get you $2000 a month of revenue. May be you can get bigger, but you now have another idea. “I’m going to go to this other, you know, interesting niche that I can find and I’m going to build up another product,” and the idea is that if this one is making a $1000, this one is making $2000, this one is making, you know, $2000 or $3000 as well, then great! You can replace your day job, you can quit and work on your product business full time. I don’t like that model at all actually!

I think that it prevents you from building something really great, because any work that you put into focusing on this little niche over here, and you are making this product better, is not helping you sell this one over here. They are completely separate silos. So I say now, “I don’t like that model,” but I did…like I did think many people in this room and I ended up with a whole bunch of products that had totally different audiences and didn’t have much overlap. So just as an exercise, I laid them out, kind of as a venn diagram, where you think of each circle for a product represents the audience; the more they overlap, the more overlap there is in that audience. So here is a little graphic…there is some overlap between my two books, because they are both about design. My other book ‘Authority’ is about writing of marketing books and so there is a little bit of overlap there. Then ipad application ‘OneVoice’ which was really for speech language pathologists. Then I had this other SaaS application that was for sign language entreprenuering agencies and any word that I put into, you know, the SaaS application did not help the iphone app, so they all made money, but it was really a pain to make progress on it because they didn’t benefit each other in any way. So I actually killed off everything that wasn’t fairly closely overlapping.

And so I don’t have a single audience now, but I have two that overlap. So I would like to talk about two things; I would like to talk about design and marketing, and so I ran some numbers on my email list. I have a email list of about 17000 people and you know, I tagged everybody, as they came in, based on what interest they had, and so, sometimes when I come out with a product or a blog post, if it’s pretty design-heavy, I’ll just send it to the people who are interested in design or vice-versa, I will just send something that is more marketing purpose. So there is about 10000 or 11000 people on the design side and there is about 8000 people, may be 9000 people on the marketing side and when you notice that those two numbers add up to more than 17000 and so that difference is, there is about an overlap between the two groups, of about 3000 people, who exist in both groups. So the words that I put into promoting a design book does help promote the other products and in the same way I could talk about the sales…you know, the sales results from a launch, teach and share that information and it does benefit my other products, and that’s really helpful.

So what you can think about ideally is having a single audience, where you’ve different products with different price points, all served within that audience, so may be the outside circle is your email list, and the inner circle would be a book, getting further in from that could be a SaaS application that’s for, you know, even fewer people and then you know, in from that could be an expensive training course. Brendan Dunn is a fantastic example of this, you know. His entire audience is targeting freelancers and he has the whole range from the free email course to the $1800 workshop with a SaaS app. in there and everything else.

Someone else I also really like, his name is Sean McCabe and you can kind of see him in the background, but he does this fantastic hand lettering and illustration work and so he’s been creating that for a while and he has effectively three different products or categories of products. Everything on his site is focused on design, but he started out with his store which is a [inaudible 0:29:03], so he would make these great illustrations, and these club of posters and he would sell them in his store and that made some amount of money, and then for the designers in his community or you know, reading his blog, he created a private community where they can pay, you know, I think $15 a month and get some of his time, have a place to gather and all of that. That still targeted the same audience, and then most recently he launched a course called “Learn Lettering” that actually made a $100000 in his first week, which was really impressive, but all of these things are focused on the same audience, so he is able to have a suite of products and he is able to build multiple things.

You know, he is not somebody you might think of stuck working on one thing for a long time. He is able to experiment, try out, you know, because building new products is fun! But Sean keeps it all targeted within that same audience, so that any work he puts into promoting his store is also going to somewhere help benefit his course or his community. Going back to these guys, the woo and the team behind Source in the Photoshop plugins, they didn’t stop with just CSS app., that first plug in, and they didn’t switch to an entirely different market, with their next thing. It said they focused on designers – people who are on design tools and they made more Photoshop plugins and they have gotten into training and other things. Now they have a suite of products they can cross-sell. They are running an impressive business now and they are doing it all by focusing on one audience. So the habits that have helped me to build a product empire are first to start small, practice making money, make consistent progress each day, serve a single audience, and to teach everything you know. So that’s it for my talk.

Thank you guys.

[Applause]

Male Speaker: So do you build a landing page first to check the demand for the book that you’re about to write and then make a decision or you just write away anyways?

Nathan: So I see two different ways to validate a product. They both have advantages. The easy way, and they are both great ways to go. The easy way is to put up a landing page, drive as much traffic to it as possible and ask for an email address and then you can make assumptions based on quality of traffic and that kind of thing, and you could make, “Yes, okay, may be one out of every twenty people who puts an email address is going to purchase. Okay, there is interest, that’s great!” And that’s what I typically do for a book. Now something bigger like when I went to make ConvertKit, which is a SaaS application, if that goes wrong, there is a lot more money and time on the line than there is for a book, and so in that case, I do pre-orders and I think that’s ultimate validation, where you ask people, “Will you pay for this?” And if you can get people to pay for a product before it exists, where you’re like pitching them one-on-one, you really got to work on finding a market, a diferent market or we could set up a line of product entirely. So I would say yeah, a landing page for every product, collecting email addresses and do that no matter what, and that’s one way to validate. The other way is ask people to pay you money.

Male Speaker: I am just wondering in terms of being open – you just start being open, once you are targeting more the entreprenuerial community, and founded the value of that or was that something that you would advise in other industries?

Nathan: It definitely works in other industries, but this is something I struggled with for a while and Jason Fried and I were actually talking about this at one point and I have a video somewhere over, where he is like, he would tell you he is frustrated, in the conversation, because… I’m just not getting it, because I keep thinking, like cut along the lines of your question, like, well, that works…basically they are the same hemis. [US] could talk about “How you build BaseCamp” and all that because you are targeting web designers and if you kind of …that we are not just targeting web designers, we are targeting, you know, all small businesses and they use referencing, you know, the articles that he writes for Inc. magazine and all these…and so he came out with a bunch of examples as to how they are teaching and sharing his drawings into big audience, but it’s definitely true where you can have an audience that you have nothing to teach them and I ran into that problem with my iPad app. that was for speech language pathologists.

I have nothing to teach speech language pathologists and so if teaching is a marketing method that you want to try and I think you really should, then you should definitely consider going after a market that you are a member of. And this is just fantastic for a long term caring about your audience and all that, but you know, I am a designer and I sell a lot of my product to designers. I am an entreprenuer; I sell my products to entrepreneurs. And there is, you know, there is a lot of range in that, but if you list out, you know, all your own characteristics and that could range from everything to the ones I mentioned, you know, like I also add things in. I am a father, a husband, a snowboarder…you know, there’s a lot of attributes that you have, where you could choose any one of those and target an audience that you are a member of and if you do that, it’s way easier to teach.

Male Speaker: Thanks. If you haven’t made your first dollar yet, do you think it’s better to focus more on validation of a “good idea” or if you can just get something out within a couple of days that might be $20? Which approach is better to do? Write about the validation, that kind of stuff and start small, stay small or just, you know, get something out there and try to get someone to buy it for a dollar or whatever?

Nathan: Well, if you are taking the advice from anybody, like all the people who pitched me their product ideas, back when I did web design, “You should build like a big marketplace first,” I think it’s good to start small, but you don’t want to work on something that you don’t care about or have any interest in, so if it’s a problem that you want to solve and you can get it out quickly, I think that’s good. You know, I talked about all the early products that I had, that didn’t make it anywhere. You could put a big practice lable over all of those – that was me practicing making money. I cared about all of them, I thought all of them could be the thing that carried me for a long time, and they just eventually fizzled out. It’s hard to know, but I would balance it based on how long it’s going to take you to make that first dollar. If your big idea is going to take you a year before you think you’ll make any money off on that and you are not experienced, I would say, “Wait for a minute. You could do something like an iphone app., a WordPress theme or Photoshop plugin, something where there is an existing ecosystem that you can sell into; you know, you can sell on a marketplace, and it’s much easier for you.”

Male Speaker: So with regards to breaking the streak…like what do you do if you get really sick or your wife is giving birth or something like that or do you just break the streak and start over?

Nathan: So I have been a little bit flexible with it, where writing a 1000 words for every day, so sometimes things that happen, where I miss a day, so I just write 2000 words the next day and if I go on vacation, usually what happens is, I will do a little bit, go on vacation because I like it, but you know, I will build up in advance and sort of like quite a bit ahead and then you know, usually I’ll be may be a day or two behind by the time I get home, and then I’ll catch up. The great thing about making rules like this, is that it’s your thing, so you can do however you want to make the rules as flexible as you want. The important thing is that you just keep making progress.

Male Speaker: I have been with writing for the last couple of months and I found that I do a lot of editing for the stuff I write, so do you write the 1000 words and then you spend a couple of hours editing? How does your edit cycle work?

Nathan: For me, if I do a lot of editing, that can count as my writing for the day, like really a lot of editing, because editing is a painful process and so, you know, if it’s you, then your habit, you can make the rules, so you know, whatever works for you, if you want editing to count, I did a video course for Photoshop design, so I, you know, did a whole ton of recording videos and that counted, so I get to make the rules.

Male Speaker: Thanks again Nathan.

Nathan: Thank you.

[Applause]

At Microconf 2014, Josh Pigford , Founder of Baremetrics (SaaS metrics for Stripe), spoke about how he founded Baremetrics and what led to it becoming a successful business.

You can view the video here. The detailed presentation can be viewed here.

Transcript

Josh: Like Rob said, my name is Josh Pigford and today I’m going to talk about what I’ve learned, building Baremetrics and specifically taking it from Idea to $5k a month in recurring revenue in 5 months. So there is me and that stuff. So Baremetrics – what is it? Baremetrics is one click, zero setup SaaS Analytics for Stripe. So you connect the Stripe, you import all your data, turn out a bunch of stuff and you get lots of tasty metrics. So you can check out a demo, a Demo.BareMetrics.io and kind of thinking there is that the numbers that, if you go to Demo.Baremetrics.io, the numbers there are are actually Baremetrics own numbers, so you can see my lifetime value churn, monthly recurring revenue, all that stuff and you can spy on me.

So quick history here, so how did all this come about. Like Rob mentioned, I have a couple of SaaS products that both have used Stripe for a couple of years, have all this data in there, so it’s kind of like, you know, the data in there or how do I get out the business metrics that I need? So hooking up to other Analytics platforms were always kind of a hassle, like I was duc-taping stuff together to make it happen. There was so much work required on the [inaudible 0:01:17] side of things and then I felt like, “Well, I probably missed something,” so I didn’t trust it. So I decided to just build something myself.

So October 14th, I have the idea. It’s like 7 ‘o’ clock at night and I’m frustrated with all this stuff and so I tell my wife, “Honey, I’m building business tonight,” and so I stayed up all night and in the morning, I am going to have a new business. So if you are …like light treading all this stuff, and you see like three hours later, [good night 0:01:48], so I did not stay up all night because I’m too old for that. Then launched on November 14th, so literally like idea on October 14th; at the door, people are giving me money on November 14th. Now, the timeline for that – first month, nothing, because I’m just designing and developing everything, but this is the first month that it’s available for people to give me money, so a $1000 of recurring revenue and a couple of dozen customers. Month 3 – 1650 and a few more customers and then something interesting happens on Month 4 – I double recurring revenue and double the customer count. I’ll talk about what happened, how that came about and then Month 5, to the day, I crossed into $5000 in recurring revenue. So this is Idea to 5k in 5 Months.

So then today, this flyer is actually a couple of weeks old. It’s actually at about, I think, appears like 8000 something on the recurring revenue and a 120 something customers and then like any good startup, I needed hockey sticks somewhere, so what I have done is I have taken my current growth rate, monthly growth rate, and I’ve made the assumption that it would be the same for the next 12 months. So next trip MicroConf. I’ll have another recurring revenue of $4.1M and a…ton of customers. So I’m excited. I will go Opera New, if I have $4.1M. New Car! So five takeaways here from the past 6 months of building Baremetrics and really a couple of years worth of building products in general, kind of the philosophies that I throw at stuff to get stuff out the door.

First is: Build what you need, not what you think others need, so we could debate into the ground whether use some scratcher an itch or not. I’m in the camp that, “Yes, you should scratch that itch.” So I think that when you kind of got this pain point, it’s a really easy sort of a segway into building the start of the business by trying to solve your own problem. It’s certainly no guarantee that it will turn into a sustainable business, but it’s a start, right, and chances are you are not like this rare unicorn of a business that has problems that no one else has; chances are there are other people that have similar issues that you have, so if you are solving a problem you have, you can probably find other customers…again, it may not turn into a viable business, but it’s a start. So it’s a runway to atleast build something which can be a jumping block, rock, something into something else. So in worst case, even if it turns out nobody wants to give you money for, you have solved your own problem, so that’s a win!

Charge from Day One – This kind of hits on what Hugh said about, like we have this aversion to charging, but you need that. You need to charge money, right, and when you are building a sustainable business, the thing you need more than anything is validation and so you’ve probably read lots of tips about how to validate an idea, how to do Adwords Campaigns or send out emails, and you’ll validate your business idea. Unfortunately they are all bogus and there is only one validation tip that matters and it’s making money. So if you charge money for it, you get atleast on some level, some validation for it. That’s again, it’s not guarantee that this will turn into this some huge business, but if someone says, “Yeah, I’ll give you money for that,” then they have atleast said “You solved a problem for me on some level.” If you can’t get anybody to give you money for it, then you have a problem there and you need to do something about it. But again, like, we have this like psychological barrier to charging money and it shouldn’t be scary.

Lot of times what will happen is we are afraid that we put something out there, that we have worked for months and months on, we are afraid that someone will tell us, ‘No’; like, ‘I don’t want to pay you for that. All the hard work that you’ve put into that is not worth it for me.’ So we do things like have a over-generous free plan that kind of gives away the farm and then we tell ourselves, “Well, I’ve got a 1000 people on my free plan, and that’s a valid…that means my business idea is validated.” No, it’s not! Like they are actually sucking your business dry by having all these people on your free plan.

So you know, even if…I guess, for me, like the rule here is, if you are saving someone time or money or creating value for them anyway whatsoever, you should charge for it and as everybody says, you should charge more for. You are probably also not charging enough and not giving yourself enough credit. So charge for it. And then even if you think your product is not ready, it probably is. So go ahead and get it out the door as soon as possible, which kind of takes us to our next point.

Stop trying to attain the perfect product – Reid Hoffman from LinkedIn has this quote; you’ve probably heard this before. “If you are not embarrassed by the firs version of your product, you’ve launched too late,” and that’s true, that’s so true because when you spend, say like, 6 months or a year or even a couple of years building a product, like you are in this tunnel of this turning point stuff and when you put it out there, you kind of…there’s been all this time that you could have been charging for it, but instead you have kind of…you make a lot of assumptions when you are just working in the tunnel without customers and a lot of times you make wrong assumptions there.

So for instance, the first version of Baremetrics had like half the metrics it does now; they were all forced into these individual calendar, months. You can do like custom date rank just to compare metrics and it all did once a day, if that; half the time that didn’t even work, but the first couple of $1000 in recurring revenue came from that version and that kind of had a interesting benefit for me, in that, it bought me time. So I knew what Josh’s problem looked like and I needed the solution for that. I knew what that looked like. That’s why I built the initial version for, for myself because I needed the solution.

But I didn’t know what that looked like on a larger scale, across lots of different business models and more importantly across lots of different ways that people were using Stripe. So Stripe’s got this great API, but you could use it in a like infinite number of ways. So that led me, it bought me, literally bought me time to kind of figure out what this looks like on a larger scale. So what I did was I scrapped the entire…so two months after, I scrapped the entire code base; literally started a new [inaudible 0:08:23] project throughout the previous design, all the front-end code and then over the course of 2 weeks, I rebuilt it from scratch, and then I relaunched it. And the result was doubling the recurring revenue – that was between Month 3 and Month 4 – that happened when I relaunched things because what happened is I created all this additional value, so people who previously wouldn’t have got enough value out of the first version, now there is a lot more value to be had with this new version. So they are more than happy to pay for and to continue paying for it, which takes us to our next point here.

Ship fast and ship frequently – so the first version of Baremetrics, in reality was about 80 days of design development, that was sort of man-hours, me sitting in front of the computer. That was spread out over the course of 30 days of juggling other client work, two other SaaS products and I was out of the country for 10 days with no option to really even think about Baremetrics. So you don’t make excuse. Ship it! But I…that applies after the fact too, so you have got something out the door, but you can keep shipping it quickly. So, a feature for instance. You have got some feature that lots of people have been asking you about or you’ve got some idea that you want to implement, instead of spending months…again in that tunnel, just working out some feature, you can go ahead and ship it quickly just to really basic version and then see how people actually interact with it, because the stuff that people will tell you via email or even be a phone call, a lot of times it’s pretty different from how they actually end up using the feature or they may not actually use it at all. So if you go ahead and ship it quickly, you create small amounts of value a lot faster. So instead of, you know, risking some big amount of value that we can get out the door, warranted after a lot of effort, you can ship small bits and then adjust accordingly and that make us mini-waves or tick off customers as quickly, so shoot for small pieces of larger features.

And then final point is the price for the customers that you want. A $9 customer is an entirely different customer than a $99 customer, whether that’s $9 a month or just for a single product. They are entirely sales process. They are an entirely different…they were usual product entirely different ways and more importantly, that $9 customer will create a large portion of your support load. They will nag you the most; they will demand the most and they are the most likely to jump-ship when your competitor creates something that’s $8 a month. They are not loyal at all! But the $99 customer, on the other hand, tends to be pretty loyal, and they are not price-conscious. So for me, I want to focus on customers that are not price-conscious.

I want customers who say, “Hey, you’re solving the problem that I have. Here’s money. I’m glad to give you money to take away the pain that I have or to create new value for me.” They are more than happy to do that. And on top of that, the general rule for me is, the businesses that I am after, so the customers that I want, are businesses that also make lots of money from their customers. So if the business that you are targeting does not make much money, so they are making like 5 bucks off a customer, you can’t possibly expect to be getting $50 from them. You are taking from a small pie; they don’t have…there is not much to go around whereas a larger customer tends to have a little bit more money to go around.

So wrapping up, build what you need, charge from Day One, stop trying to attain the perfect product, ship fast and frequently and price for the customers that you want. That’s my info and then slides for this are: [JoshPigDummy.Ideato5K].

Thank you very much.

At Microconf 2014, Brennan Dunn, Founder of Planscope (a project management and estimation software), discussed about how his software helps businesses streamline their processes.

The video can be viewed here. You can also view Brennan Dunn’s presentation here

Transcript

Brennan: So this is a list of everything I do. I am a Solopreneur; I work entirely by myself. I do not have any [SAF]. I used to run consultancy and I had 11 employees. Nowadays I’m kind of working to never do that again. So I’m going to be talking of Planscope, which is my first product business today, but I also have written 2 Books. I’ve a Membership Site, a Workshop; I have a Podcast and I have a Newsletter, and this is all kind of like my weekly to-do list of things, to kind of work on. But why I do all of this is for these three people up on the wall and I guess we are showing kid pictures. I don’t have 5 like Jessie, but you know,…I guess.

So this is why I do what I do and this is my arch nemesis. This is my home office and I try to do whatever I can to spend as little time up here as possible. I grew up on computers. I spent, you know, high school and college, playing around computers. I love computers in that, everything that I’m doing in my business is optimizing toward that. So a lot of what I am going to be talking about today is ways that I have put into place, automation, that allows me to focus more on this and less on this.

So why do we all come out to the desert every year for MicroConf.? We all come out here because we want to grow; we want our businesses to grow. We want to…it’s strange because you leave more…like almost every talk I just want to renounce the hallway and just kind of like, you know, sit on the ground and just plug-in my laptop and just happen stuff, because I get inspired to change and to do things and to implement new stuff, but on top of that, I just walk away. I mean, one thing I love about this conference is everything is so actionable, everything is so “Do this and get this result!”

So with that being said, that is what I mean to focus on in this hot seat. Who’s been here or knows what this is? Don’t be ashamed. Okay, this is ‘World of Warcraft’ which consumed much of my early marriage because I realized that being poor newly-weds, it was actually pretty cheap to just pay $30 a month for two accounts versus going out for movies, and you know, having dates, and everything like that. So as my wife who lived off her [inaudible 0:02:24] and we had a WorldCraft for a while, one of the really interesting parts about this game and really any role-playing game is, the idea is you want level off. You want to get to the next level, and you get to the next level, you gain experience points and experience points can be gained in a few different ways.

You can kill stuff or do quests or whatever, but you start to realize eventually that there are better ways of getting experience than otherwise, and this is just, this is like business. I mean, this is…there is so much overlap between like sling level one boards and getting to that next revenue board, or you know, getting a 5-Figures a month versus 4-Figures a month of recurring revenue and when I realized this, you know, we’re all here in this desert and in Vegas yearly, because we want to walk away with ways we can build a better business, that we can get to whatever goals matter to us.

What matters to me as I mentioned – my family, but for you, it could be really whatever matters to you, so when you focus like this on Planscope, which is my SaaS business, it’s a to-do list, if you really think about it, but it’s business …I’m focusing on consultants. So freelancers who are really consumers, but wearing a business owner hat, so you know, they are an individual, but they are…it’s funny, like as a former freelancer or consultant, I would drop hundreds of dollars in training or software that helps my business, and then I would go into the apps. store at night, from my phone, and reluctantly bought the 99 cent app., so it’s so weird… So Planscope is my main [SAP] or my main product business and it’s been around. I launched it two and a half years ago; it’s doing pretty well, but the surprising part that people ask me, so lot of people write in, you know, or they are …support to get sort of just…my initial email was: “I’m the Founder..tell me why you signed up?” and so on and I get a lot of people asking, “So how big is your team?”

And my common response is, “Well, it’s about 0.25 on a good week,” because I really only spend may be three or four hours a week maximum on Planscope. I don’t spend a lot of time and my goal is not to do an 80-hour a week startup. If I did do that, it probably would be much bigger than it is now, but again, there are more important things in life than I’m optimizing for. So what we are going to do is, we’re going to talk and my wife hasn’t seen what pictures I use, so this is all computer, so we are going to talk about 6 things that you can do to spend more time with, you know, unlike these people…you know, these aren’t the three …you want to have as your goals, so we should talk, but, you know, whatever is important for you. So was it Samuel? I think you had a chart that was…I [inaudible 0:05:17] hold this yesterday, right? Yeah? So this is kind of the all-important SaaS sales funnel. You have Visitors, percentage of them, usually much smaller percentage of them become Trials, percentage of them Activations and percentage of them Paid or Pay and then you have the secondary funnel, which is, “Okay, now that somebody is Paid, how long until the churn out?”

So you know, a churn is basically what percentage of your paying customers are you going to lose every week or every month rather, so these are the two kind of charts that we’re going to focus on and what I’ve done is I’ve kind of picked up different pieces or transition phases, so crowd pick or crowd activated or Visitor, Trial or Activation and Paid and over the last year I have really looked at these; I have realized, you know, these are tweakable. They are like knobs, you know. If you tweak one, it influences everything that comes after that, so if you can get more visitors converting a trial, you get more paid customers, you get more activated trials, you know, and so on. And likewise with churn. If I can decrease that drop-rate, I make more money. And so we are going to now identify and tweak different points of optimization on these two charts.

So the first is reacquiring drive-by, so I got the term ‘drive-by’ from Rob in ‘Drip’ and I think it’s a great way of kind of representing the idea of somebody comes to your site, doesn’t leave anything behind and just bounces. So we are going to talk about re-targeting. So does anyone here currently re-target? Good success? Okay. Everyone knows what re-targeting is. Okay, I will just, as you can see, there is 1% that doesn’t know the idea of being…if you’ve been to like a random, like gardening website and see like a [inaudible 0:07:09] ad, like no marketer, the sender’s name did not say, “You know what? It would be great if we advertized on, you know, home gardening.com,” or whatever, like re-targeting is basically…it’s, you see ads of sites you visited, so I extensively use re-targeting across trans-group, with all my businesses and the typical…what typically happens is you Google a site or you get to a site and then you get tagged and then that site will just start promoting their marketing site to you everywhere you go. I get really angry whenever I go to Facebook and I see the ad for a service I had seen into a few hours ago because I mean, they are literally burning money on marketing me on the customer.Anyway that is an aside.

The two kind of…like really the two kind of ways I look at re-targeting or information versus product, so when people find Planscope or people find anything on Planscope, there is two paths that they come through. There is the first step which is “Hey, they are Googling. How do I raise my rates out of your clients? How do I do…?” whatever, and they head to one of my blog posts. So do lot of content marketing, like, you know, we have been …on BidSketch and lot of us, I think, do want our product blogs, the idea being not everyone is looking for software, but they’re looking for the things that kind of correlate with something…you know, if you are a freelancer, you’re looking for how to get clients, how to charge more, how to get…you know, whatever, which is a good overlap for selling software to freelancers.

So the first kind of acquisition channel, I guess, is or is people heading to my blog and you know, getting tagged and so on and they bounce and go back to Google or may be read the next article and then the next is people are saying, “Hey, I need freelance project [inaudible 0:08:58] software. I need a software,” or they get a direct link to my marketing site and these are kind of the two different types of people.

The first probably don’t even know about Planscope or the software; they don’t care. They wanted the article; they wanted the info and they have other, read a few articles…or whatever. Second part know that they are looking for software; they are in…my marketing sectors seeing screenshots for seeing, you know, ‘Buy Now’ or ‘Try Now’ links and what I’ve really come to determine is having one size fits all retargeting is a really bad idea. And what I mean by that is when somebody is on Facebook, like if you are on Facebook, you are looking at wedding pictures, you are looking at like buzzfeed articles or you know, whatever you like; that’s what you are looking at. You are probably not in a purchasing mood. You are not in the mood to buy software, try software or whatever else. And what I have started to realize is if I can push people who only see my blog or are looking at or happen to tag by me around Facebook, there is something like an email course which has very little friction. You know, “Give me your email address and over the next week, I’ll teach you everything you need to know about how to make more money as a consultant.” That is something that has a very high conversion rate, because people are…that’s not distracting them from looking at buzzfeed articles.

So I get a lot of Opt-in. I get about a 30% – 40% conversion rate from this book to my email course, which again has a very high… and that’s pretty much like what ‘Drip’ is all about, the idea being not everyone is ready or in the mindset to buy software, so if you can atleast build a relationship with them over time and explain to them the…explaining the ‘why’ – like why should they care about transparency when it comes to the clients or communication or whatever else and then the ‘how’, which is your product can kind of come in at the end. So I’ve been doing that extensively with Facebook Ads and also people who have only have my blog whenever someone walk inside. Conversely, if they see my marketing site and they are using…and they are being shown ads on the display network, which is, you know, website’s Banner Ads, not Facebook, these are people I’m driving back to my marketing site because they are much more…I mean, I have done lot of experimentation around this, you know, and what I found is Facebook is really really bad, for me atleast, at getting people to try my software, but the display network is lot better.

So I would really consider trying to segment out your visitors into people who have read content versus people who have actually seen product and try to target differently and try to promote differently. A few different things that you can try out, I wish more people would do this. Retargeting shouldn’t stop when somebody gives you their email address or signs up for your product. We all have like [inaudible 0:11:50] emails, with [inaudible 0:11:51] kind of condition; people who are doing the trials sequence, but you can augment that effort by retargeting ads for a webinar you might do weekly that kind of showcases how to use your product or how to make best use out of it; could be, if you do one-on-one founder onboarding, have your smiling …shot show up on a Banner Ad, someone is going to say, “Hey, you are the founder of that software you are trying now. Put this to go to my calendar.” I mean, that works well!

You could post key studies, success stories, usage guides – I mean, these are things that when somebody is doing a trial, I mean, that is such a valuable, like if somebody said, “I want to try your product. Now it’s your turn to convince me that it’s worth paying for,” these are people that you should really make an effort to retarget and we are so used to, I think, thinking of advertising as getting somebody…you know, getting that first bit of info from somebody, right? Getting what we need in their email address, getting them to sign up for a trial. We don’t really think about it as a way of conditioning, so I would encourage you to give that a shot.

Additionally, you can use retargeting as a way of forced RSS. I mean, you can, if you have an active blog and you are pushing new updates to your product, you can retarget paid customers and push product updates in your Facebook Feed. Definitely be doing this via email anyway, but it’s a good way to kind of augment that, through a different medium. Alright, let’s talk about segmentation. So niching is good. We all know that, right? But the reason niching is good is because people want a product that’s made just for them, so I teach this all the time with when I teach consultants, but if I am a designer or a web designer who specializes with medical sites, and I am up against a generic web designer, if we are talking to a medical clinic, chances are, I am going to win the contract, even if I am more expensive, because I’m [lower rates]. You know, I’m the one made just for that medical clinic. Same applies to products. We all want that product that’s made just for us; it fills everything we need.

So one of the things I do is early on in the sign up flow, I figure out: “Are you team? Are you a solo? Do you need a design or do you develop any?” And “How do you…what’s your rate and how do you build – daily, weekly, hourly, fixed?” And that influences literally everything that follows afterwards, so ..emails are going to, if you say you are a ‘Development Consultancy’, you bill $10000 a week. You are not going to get stories of my freelancing days. You are going to get stories about when I ran a consultancy and I’m going to say, “As a consultancy…,” if you chose, agency, I would say, “Agency” – the onboarding. You are going to get a sample project with development team tasks and the budget that’s plugged in is going to be set to $10000 a week. In that messaging, the way reporting language works, the way I set up labels, it’s all going to reflect what you have quoted and again, the goal is to make that product for one.

Further ways that you could try to individualize your product – this is a big one. If you are listed in a third-party integration marketplace, say, ‘BaseCamp [inaudible 0:14:56]”, even if they were base camp and they have the integrations database, if you see BaseCamp.com as your…, cookie that person and then when they go to sign up, the first thing you should do is, “Hey, let’s give you set up, connecting your BaseCamp…” I mean, it’s such a no-brainer and it’s just one of those things where like they don’t need to think…like people don’t want to think; they just want to be like, “Oh, wow!” Like, “Okay, I clicked that one from BaseCamp and you already asked me to integrate the BaseCamp, it’s great!”

So also create specialized landing pages for each of these different types of people who could buy. I mean, these are great just…because I have gotten people saying, “Hey Brennan, 20% shopper, there is no way that your software will work for me,” or “There is no way software that works for freelancers could work for me and my team,” which it will, but you know, there is…people think that there are core differences potentially that would make it so…a product that serves a certain niche, won’t serve their niche. So specialized landing pages, even specialized…you know, I’ve seen a lot of products worth of sale like 4 agencies or something at the top and you click that and it’s a landing page, just for agencies.

This is kind of my master [inaudible 0:16:08] technique. I’m not doing it, yet I would love to, but you know, if you can figure out where people like googled and stumbled upon your blog, and what they were reading, you could tailor what comes next, when they actually sign up for an account, based on…googling around for pricing stuff, they had something about pricing, you could tailor parts, utlize, segway those for instance, around that. It takes code and automation and set up to do, but it works. So, you know, when non-programmers do…program, you assume that, you know, doing that full day or I do rocket-science or whatever. I would like to say, it’s like a [inaudible 0:16:48]board; I just do a lot of ‘If then’ statements and to me, that’s literally what I do for a living, and it’s so easy for us to just do a lot of conditional instance that are reflecting what somebody said they are. So if they are development shopping, you have an ‘If’ that says, you know, “If Developer, show Yes,” or whatever or, “If from BaseCamp,show this.” These are really easy for us to do, like they are technically really easy for us to do. I just don’t see a lot of people utilizing it and I would encourage everyone here to do that.

Trial scoring – so anyone have a background in sales? Okay, cool. So lead scoring, the idea being not always are [gritty] people, right? So I, within last six months I have started scoring all of my new trials and I scored them based on usage and what they are doing, because I occasionally do a manual operative, try to, you know, talk to people and figure out, so “Why are you not engaged? Why are you engaged?” and trial scoring is probably one of the best things I’ve done. It’s a very simple thing …set up, once you do it and it’s a good way to see like…I’ll show you what I do around that. So you know, the goal here is to learn and to optimize, so we want to learn why are people activating or they’re not activating, why are they paying, why are they not paying, and we want to then optimize what we find, both quantitatively through our trial scoring, but also qualitatively through talking with people and make our product better, so we have more page conversions.

One of the things I do is I, when somebody converts, when they buy, when they pay, I take a snapshot of everything in their database and save that, because I want to know what is common about people who are buying Planscope when they convert? What I’ve realized is these are the common attributes that like 90 plus percent of people who convert have done all this. They have obviously created a project, they have invited atleast 1 client to join their project, they had invited a team member to a team account or they had integrated with a third-party invoicing app. They’ve logged 20 hours…actually that is 22 hours, but for the sake of presentation, about 20 hours, so knowing this, I set this up as a perfect 100% score or 100 score and everything, you know, blowed out…the higher you are to 100, the more likely they are to statistically convert.

So I think this is probably the only code you will see in this conference, but hopefully it’s readable, but this is my ‘Trial Happiness Score.” You know, what I am doing here is on just summing up…I have, you know, 0 to 100 and I come up with the score, based off of how frequently, when do they log in and there is also decay, so if they haven’t logged in for a while, the score kind of decays over time. You know, added it to client or team members, so add 20 points. How many hours they have logged? Again, decay,…well, that would have to be 0 to 20 score and not just a 20. We get 15 points of that as invoicing; you get another 15, upto 15 if they have got ‘Added comments’ and done stuff internally. And what this turns into is something like this.

This is an order; I changed some stuff around, so not many people were engaged, but what I’ve done is this is my active trials and the brighter the green, the more engaged they are an these are the people that I am going to reach out to and really make sure that they you are having a good experience and really nudge them towards conversion. What’s even more important is the scores, if you remember Patrick’s Optimyzer with the trial expiring emails, you would have 2 different emails – one for good trial, one for bad trial. If ‘Trial Happiness’ is about 60 – show this or use this copy; otherwise use that copy – it’s pretty simple.

You can do a lot with this. You can do a lot of enough, kind of nudging, because our goal is really to get people to get higher scores, so they convert. So once I have these scores, I start to question like, so “How did these people get to a 90 score? How are these people stuck at 30?” and I try to figure out by talking with them, “Why are they at the score that they are?” and this has shed a lot of light on where people are getting stuck, you know, what’s confusing, what’s…you know, what’s losing people versus getting people engaged and this has been tremendous, just giving me the info I need to better my onboarding. our number one job as software sellers is to nudge people towards converting and when you have that, kind of that milestone, that 100 score, it becomes a whole lot easier to figure out, you know, how to do that.

So takeaway – I tried to increase the takeaways or kind of actual things you can try. It could be automated or replace your…, try them manually first, like just give them through gmail, and you will send these …emails and kind of really [inaudible 0:21:33], spot testing and see what works and what isn’t working and then eventually, when you figure out what works, you know, store it in Cronjob or Customer io or whatever you happen to use. Okay, next, educate everyone. So Jessie gave a really good talk on how education is prime or you know, the prime focus of ‘You need a budget 0:21:51.’ What we don’t always realize is that our product is like a really small part typically of somebody’s entire business and the more we can kind of better the whole business, the better, the more likely they are to actually become quick customers of ours.

So when somebody creates an estimate in Planscope, instead of saying, “Well, click this button now, put in a price and do this and do that,” what I do is I send them advice, you know, tips-educational on how to close the estimate because my job is not like, “I want them to close that estimate,” because then they are going to realize, “Hey, this tool helped me and converted or getting this new client. You just paid me 5-plus figures. This is awesome!” So the email I use, it’s hard to see it, but when I send out the slides, you can probably read that a little better, is when somebody creates their first estimate, I send out, you know, this thing that says, “Hey, you just created your first estimate. My goal with this email is to help you raise likelihood that your client works up to two to three times.” It’s not about software, you know. It includes software, the overall theme is “This is software that’s helping you close this estimate.”

For my goal here is to say, “Hey, I have consulted 3 years.” Like, “Let me tell you what I’ve seen networks…so you can close this estimate,” and I have an internal dashoard that when somebody actually closes the estimate, it puts a little ‘To-Do’ on my dashboard, that says, “Hey, reach out to this person.” Say, “Congrats on closing that estimate!” and i send that manually through gmail. It’s not a automated email and that’s like the perfect way of saying, you know…they reply to that email, it instantly becomes testimonial for…If I can say, “Hey congrats, just saw you post your first estimate. Any advice you can give me on how it could have been more painless?” That is a great way to kind of get that quality to data to help you grow.

Right, like I said, yeah, celebrate the customer’s successes when they close estimates. When they do key actions, that are the reason that they signed up for your project or your product, you know, celebrate that with them. Alright, so, the takeaway – try to figure out reflecting your product, what are the key actions, what are the things that could dominate, not the like creating database or …but what are the actions, what are the goals that people actually sign up for your product or product to do and make those kind of celebration networks or whatever around that. Okay, so this is the one thing that I want to recommend. If you haven’t done this, I expect everyone who hasn’t done this to, you know, go up to the room after this talk and spend 20 minutes coding to get this done.

We all have these kind of funnels, right, that tell us why people are dropping off, why people are using our software, why they are cancelling – we can kind of quantitatively figure out what’s going on, but it doesn’t always give us the big picture. So there is a lot of reasons to…I mean, Rob and Mike gave a really good episode of their podcast few weeks ago about why you should collect credit cards upfront. The biggest reason I think people should collect credit cards upfront is it requires people to cancel, if they don’t want to be billed. when you don’t do that, people just drift away, if they don’t use your product, where like it’s, that’s spurn the other end never show up.

When you require people to cancel, otherwise you could get billed, you can slap a little quality text area and say, “Why are you cancelling?” or, you know, I would say something like, “Please help me improve by letting me know why you are cancelling your account.” I would stick a little required [inaudible 0:25:26] true flag on that text area and the backend is literally, you know, take that text area’s content, slap it into mail or send it to me with this subject, have a gmail photo that just sticks it in a label; it’s very hi-tech, but it only took about 15 minutes to write and this slogan is like one of the best features that I have ever written for Planscope, because it’s given me so much data about why people are cancelling like trials or not converting and so on.

So again, my gmail label is basically lot of emails that, you know, I capture lifetime value, I capture their account and everything else, but you know, I keep this on in gmail and occasionally I just go through and I normalize it into a spreadsheet, set up, you know, columns like, you know, it needed features that weren’t there, it was a bad picture, their company…you know, may be they switched to some competitor or whatever and having this kind of just plain text data seems like a non-scalable whatever thing, but it’s just, you know, I’m looking for trends; I’m looking for, “Is there some like feature that is missing?” or “Is there some environmental factor?” Like that is just keeping like, lot of people will say, “Well, I really want to work,” you know? To me that’s a ..”Hey, what if I could give you more work?” right? Like that’s…giving you more work, you could say stay around and we both win at the end of the day.

So I categorize every cancellation into two columns – the first being a product reason; could be something like “It doesn’t do ‘x’.” “It’s too confusing to get set up”; “It’s too expensive”; “It kept breaking”; “My clients wouldn’t use it”; “My team wouldn’t use it.” These are kind of product-related things and there is environmental – “I got a cancellation.” “I got a inaudibe 0:27:12]” Okay, like, you know, great! Or they stop consulting. And then there’s a few that I kind of put an astrix next to it because it’s not exactly, really a valid cancellation reason; it’s…I wasn’t using it. That’s great; that then means I can follow up, and say, “So, let’s talk,” like “Why weren’t you using?” and “What can I do to make it so future people or if you come back, that you actually use the product?” I ran out the client…we are not a business. These are great ways or great reasons also to have that kind of new-found audience, where you can sell educational content because if I can get people to stay in business, it benefits both of us.

What I have discovered is people are at the high watermark, their emotional entanglement with your product, when they go to cancel, and that’s why if you have ever tried emailing people after they cancel, saying, “Hey, could you tell me why you cancelled?” response rates are so low because by then, they are done with you, like gone! But if you have this blogger text area and I get about 5% of people might ASTF that form, but 95% of people actually give me legitimate feedback that really helps me, so like if your cancellation page is just a button, add a text area; takes few minutes, get a [inaudible 0:28:24] and it’s probably like the one, the best, like few minutes coding you will do in a while.

Right, so lastly, let’s talk about ways to increase lifetime value. So the goal of the trial is to establish product fit and when that’s been completed, we charge. That’s why, you know, I am really impressed with Josh Pigford in how he doesn’t have a trial; he charges immediately because his product gives you value the second you connect, you know, connect to straight down stats thing, that’s what you came for. But not all of us have the luxury, you know; lot of us kind of need time to kind of prove that our product is valuable. So going back to lead scoring, if I can figure out, you know, when you get to a certain threshold, what if I ask them, “Hey, why don’t you upgrade now? Pay now? Yeah, you have 12 days left, but you know, why don’t you pay now and I will give you this book in exchange?” Rueben Gomez gives, I think, an extra tea course? If this happens, which is another…like if you can make that happen, you know, give something away that just makes it a no-brainer to upgrade early and that can add…you know, it’s not much, may be 10 days of lifetime value, but still that’s something, right?

So I have added a few minutes or a few hours rather coding. Not much, but I have added about 3200 hours in added lifetime value by adding, like subtracting about 10 or 11 days from a number of…that 100 something peoples trials and it’s, you know, it’s money. Another thing, I was talking to, I was up in Philadelphia at a little Summit where Natalie and Chris of [inaudible 0:30:07] were there and they were talking about something that they do, where they figured out like one of the given plan is typically churns, like average and a month or two before that, they will send, “Hey, I want to give you this free coupon,” or “This Coupon, this lifetime coupon that is automatically going to be applied to your account, and I’ll give you 20% off your life.”

It’s kind of like I think it’s a little morally dubious if…I don’t know; it’s just a way to say like, people are less likely to potentially cancel if they know that they have this coupon that they might never get again, because a lot of… like with my project, people cancel when they don’t have work, but you know, I am always trying to…like I am building in things that make your account more valuable with age, stats that really just can’t be exported and imported. So you know, come up with ways that make their account more valuable, make it less likely that they are going to just kind of ditch it when they don’t need it and they come back later, you know, and so on.

Okay, so just to kind of classify all of these 6 different techniques I have covered, they inter-correlate with one of these transitionary phases, so you know, we have learned traffic. The goal there is to increase the visitor trial conversion rates, although could also possibly for trial to paid conversion rates, based on some of the stuff we talked about. Segmenting – increasing trial activation. Score – use score to learn and optimize, that’s to increase the number of paid customers I get, right, so that all helps increasing the customers. Same way the…you know, enriching the whole customers through education, and discovering why people cancel, helps to be [inaudible 0:31:47] and also helps me convert more people to paid and likewise increasing LTB versus churn. What this has done for Planscope, it’s been…it’s not like huge visitors; there is no like a big …but about a 1% visitor trial…a thing to write down about, but the trial activation stats are going up by 15%; 7% left in activation paid and what this has meant is a 33% left in paid accounts. because they are stats together, right?

So these are the things like that have just played with over the last year and again, I am only…this is a part-time project for me and to be able to add a third new paid accounts, just through things like this that I am constantly experimenting with, has been pretty motivational for my business. So to go back to our World of Warcraft metaphor, look for reputable quests. I can give you the..next couple of…you know, look for the easy kills; the quest that just give you great loop and great [inaudible 0:32:58] and …

So you can get all the slides at Bitly/microconf/bd. I’m Brennan Dunn on Twitter and Brennan at Planscope.io. Thank you. [Applause]
Male Speaker: So geographical people with privacy like issues, where you know, like use email and say, “Hey, I just saw you got your first estimate…”

Brennan: Yeah, I mean, I don’t say like grads. are making 50 grand; like I don’t say that. I think it’s just expected that no one’s ever complained. I think that probably wouldn’t be true if I were saying, “Congrats in getting Bob to sign off on like a $50000 project.” That will be a little spooky, but…yeah.

Male Speaker: I do the same thing in both HitTail and Drip. First conversion or first…whatever and …

Brennan: Do you send it manually or automated?

Male Speaker: It’s automated, but there is no details and no one’s ever…I mean, I probably sent 1000s of these and no one’s ever had an issue.

Female Speaker: Thanks for a great talk, Brennan. When I first signed up for Planscope a few months ago, I got immediately personalized email from you, which was not an auto-responder obviously, so I just wanted to…how often you do that and..?

Brennan: Constantly, yeah. I am constantly pausing auto-responders and just…like there is days where we spend a little more time on Planscope and I will send it all manually, yeah.

Female Speaker: I don’t use it like on a regular basis, but whenever I decide to cancel, I just remember that and then I remember your own value-based approach, so that keeps me from cancelling and just come back like in a few months and use it again, so…

Brennan: That’s good.

Female Speaker: Thank you very much.

Brennan: No problem, thanks.

Male Speaker: Hey Brennan, awesome talk! Regarding your customer happiness scores that you create, based on the actions, as of those were weighed, do you weigh those based off of the probability that any given one is going to result in them converting ultimaely or…?

Brennan: Yeah, so like remember that a 100 score is typically what most people who convert look like, right? So if you have 22 hours logged, you are going to be given 20 points, but if you have 10 hours logged, you are going to give them 9 points or whatever, that would be…so it’s weighed in that sense, scale, because it’s just more [inaudible 0:35:14], but some number flag, like if you have added, if you’ve integrated, you get 15 points. So let’s go as people who decay over time, so if somebody has no log in for a few days, the score will just go down. Yeah, it wasn’t anything scientific, yeah.

Male Speaker: When you kind of do like this, you know, part-time effort on Planscope, how do you kind of maintain the state of your mind so that you know, “I get to playing with the kids for a week on a Friday morning,”, when you don’t work 4 hours on… You can really be effective during that time, in terms of moving the needle up here?

Brennan: Roger, honest answer? I …those are times where, like I was in a habit of getting up really early by then, before anyone else’s awake and mornings I work best and with no distractions, so it’s usually just like, I will just get inspired and you know, just knock out the week’s work in a few hours that one morning or something. So I do a lot of…I mean, I have a weekly newsletter, I have a lot of other stuff going on, so I can’t…like this summer, I’m actually going to dedicate more time than ever to Planscope, but yeah, I don’t know. I don’t [inaudible 0:36:28], but I will schedule like Tuesday morning will be, for a few hours I will work on Planscope. And obviously support is intermittent, that is actually lot of the times comes from…because I do support too, so that’s kind of like on a as-needed basis.

Male Speaker: The amount of variables that you have for your retargeting and for your segmenting, seems like you would need to generate a lot of content based on, you know, you are tracking where they come from and why they sign up and then what they are looking for, what they do, and you are trying to create different content, different means of doing all this, it seems pretty heavy. How do you find a balance with that, with a little amount of time?

Brennan: That’s…I think that stat actually is generating content, so the good thing is once you do it, it’s kind of set in stone. Obviously you want to, like you want your creatives to change over time. People, if they see the same ad, like you know,you want to switch things occasionally, but yeah, I mean, that is one sort of retargeting. I mean, I didn’t touch the …products that are retargeting, so I do a lot of it and it’s…yeah, I mean, a lot of it can be…it could be a simple list like a creative that goes to, like your schedule once link for booking a time [inaudible 0:37:43]…it doesn’t need to be anything fancy.

Male Speaker: On the cancellation form, when someone goes to cancel and you pub up the form, have you tried or experimented with any, like giving them an extention to the trial, if they actually fill that out or saying, “I could give you next..” If it’s a 7-day trial, give them a 14, you know, extra 7 days, an extra month or something and then send advice that feedback?

Brennan: So Alan Branch of LessAccounting saying just something really cool. He has radio fields that he selects first and this is actualy good because if somebody just puts in, “I am not using it, ” that doesn’t tell me anything and I think Reuben of BidSketch also was telling me that…I think he does radio fields now, where one of them might be, “I am not using it,” and then you check that and then the text field will, the label will change and say, “Can you tell me why you are not using it?” which is a little more actionable, like you don’t get any action out of, “I am not using it.” But yeah, Alan Branch of LessAccounting, I think if you say something like, “I didn’t get a chance to try it” or whatever, it will automatically say, “Hey, we are going to give you another 30 days” or whatever and also “I will give you like lifetime discount coupons,” if you go to cancel and you have been a member for a while or…so I think he blogged about it. If you go to the LessAccounting blog.

Moderator: And we have time for a one more.

Male Speaker: My question is based on, earlier, you talked about how you have two different ways that people come into your debits or to your website, to your product website, either from your blog or from the..that product, and in the content marketing side, do you have any problem with, like doing a lot of content, may be not all that is around creating, that would be related to product, specifically if it’s more about help with freelancers? Is that working better for your different products or was that working pretty well for your SaaS app as well?

Brennan: So actually, I found that…I played with having a ‘Call to ACtion’ go to the marketing site versus going to like my newsletter or a email first or something. It just blows it away, going, tracking people to like information or you know, recourse or something versus like ‘Click here to go, view Planscope,” or whatever. If that doesn’t work, because again, people aren’t…you need to often understand that like people don’t know that they have a problem that requires software. You know, my biggest competition isn’t other PM tools, it’s Excel and email.

So you know, I get a lot of people who don’t know that they need a project…software, so lot of my onboarding newsletter, for instance, clarifies the need for and then the [inaudible 0:40:20] software, so I found it’s better to drive people to…even if you don’t have info products, driving people to like an email or course or something versus driving people to refer to your marketing site…I mean, there is lot of friction, like with Planscope, you need to ditch whatever work flows you have, you need to commit to clients and move over, you need to commit to your team to move over; potentially you might not have a project ready to go for, like there’s lot of…there’s more friction in just sign up the account, right, like there is a lot of mental stuff. So I found it’s…I would rather…it’s better for me to just get somebody in my ecosystem and condition them over time and build that relationship over time versus driving them straight to the marketing site.

Male Speaker: Thanks again Brennan.

Brennan: Yeah, thank you.

[Applause]