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BI 320: How JazzHR is Succeeding Selling Recruiting Software to SMBs in the Middle of COVID

How a Small Business Software PayByGroup.com is Planning to Become the Paypal of Vacation Rentals

Camilo-Acosta-Interview_0Building a software service isn’t all about the bells and whistles.

Imagine coming up with a killer small business software application. You spend countless hours testing and writing to get all the aspects of the software working flawlessly. After you nail down what you know to be a functional application, you pitch it to people hoping to rake in the clients. The problem is, nobody needs this software.

Part of the software development process should be finding a market to support it. Camilo discovered a need and went about trying to find ways to satisfy it. This is a great episode for any entrepreneurs looking to get into the software business; in fact, it’s a great episode for any new business hoping to better understand and cater to their audience.

Listen now and you’ll hear Camilo and I talk about:

  • (2:30) Introductions
  • (4:30) How did you come up with the idea for your startup?
  • (7:30) How did you develop the first prototypes?
  • (10:30) How did you know your prototype was getting traction?
  • (12:30) What step did you take after you got early validation?
  • (17:40) What happened after you moved to Mountain View?
  • (19:40) What turned out radically different from the original vision?
  • (21:30) What are you doing now to cause growth?
  • (24:50) What was the first step you took to land homeaway.com?
  • (28:30) How much revenue were you doing at this point?
  • (30:30) How much have you needed to raise so far?
  • (31:30) What are some of the big lessons you’ve learned from fund raising?
  • (33:10) How did you begin the fund raising process?
  • (34:50) How did you cover the legal bills for fund raising?

Resources Mentioned

More About This Episode

The Bright Ideas podcast is the podcast for business owners and marketers who want to discover how to use online marketing and sales automation tactics to massively grow their business.

It’s designed to help marketing agencies and small business owners discover which online marketing strategies are working most effectively today – all from the mouths of expert entrepreneurs who are already making it big.

Listen Now

Leave some feedback:

Connect with Trent Dyrsmid:

 

About Camilo Acosta

CamiloAcostaBefore starting PayByGroup, Camilo worked with Frank on Root Orange, a VC-backed domain name startup that split domains by city. Previously, he worked for his family’s government communications firm, and in best practices consulting at the Corporate Executive Board, both in his home town of Washington, D.C. 

Camilo is actively involved in organizing alumni gatherings for his school (Sidwell Friends School) and his college alma mater. He also hosts fundraisers for education reform organizations such as KIPP, and political candidates that support the cause. He enjoys driving on sunny days with the windows down and music up, and doting on his chocolate lab, Kipper.

Camilo holds a B.A. in Politics from Princeton University.

Additional Resources

How Circleci.com Attracted 1,000 Customers in Its First 2 Years

paul-biggar_0

You probably wouldn’t know just to look at him but Paul – at least according to his friends – is an intimidating card shark.

What’s also not obvious at first glance is how this savvy entrepreneur created and funded his company, attracting an impressive 1,000 customers in the first two years. Paul shares with us the details on cirlceci‘s beginning and  rapid growth, including key pricing, marketing, and investor strategies.

He shares what they did that endeared them to their customers (and what he thinks all software companies need do in order to maintain customers).

If you’re interested in software startups, I suggest you take a listen to this podcast. (And check out all our software posts and interviews.)

Listen now and you’ll hear Paul and I talk about:

  • (02:55) Introductions
  • (03:55) What did you do before this?
  • (06:00) How did you get started?
  • (09:50) How did you create a competitive advantage?
  • (12:10) How did you achieve product/market fit?
  • (16:20) How does pricing play a role in product validation?
  • (19:50) Tell us about how your assumptions have gone wrong
  • (25:50) How did you start to generate sales?
  • (27:00) How did Twitter play a role in marketing?
  • (27:20) How did you fund it in the beginning?
  • (28:50) How did you endear your early customers?
  • (29:50) How did you go out and raise money from investors?
  • (32:20) What did you learn from pitching investors?
  • (33:45) What is the most fun part of your job?

Resources Mentioned

More About This Episode

The Bright Ideas podcast is the podcast for business owners and marketers who want to discover how to use online marketing and sales automation tactics to massively grow their business.

It’s designed to help marketing agencies and small business owners discover which online marketing strategies are working most effectively today – all from the mouths of expert entrepreneurs who are already making it big.

Listen Now

Leave some feedback:

Connect with Trent Dyrsmid:

 

About Paul Biggar

Paul BiggarPaul Biggar is the co-founder of circleci, a state of the art automated testing and continuous integration and deployment tool. An expert in his field, Paul has been interviewed by the Wall Street Journal and has been featured on multiple HuffPost Live panels. His presentation at Google on compilers and programming languages was published as part of Google’s lauded Google Tech Talk Series, where it has been seen by over 20,000 people.
Prior to designing and developing circleci, Paul wrote phc, an open source PHP compiler, while doing his PhD on compilers and static analysis in Dublin. After moving to the Bay Area, Paul worked on the Firefox Javascript engine. He’s graduated from YCombinator, and now spends his time focused on developer productivity. He is an active speaker at tech conferences worldwide and spends his free time advising slightly younger companies on how to get started.

Additional Resources

 

Paul Clifford_0

Digital Marketing Strategy: How Paul Clifford and I Launched Our Software Company

Paul Clifford_0

Meet the man who helped me launch my new software, KontentFlow. Paul and I have been working on KontentFlow for a while, and I can happily say it’s now going beta. Paul and I are thrilled.

Unlike myself, Paul has developed multiple successful software applications including many enterprise-level systems. He’s also a savvy business person. So when I had the idea for KontentFlow, I knew he would make an excellent partner.

Listen to this podcast as we peel back the curtain and give insight into the process of software development. We discuss how we got started, how we outsourced our project (effectively or not), when we began marketing (well before the software was completed), and much more. I am excited to see things coming together and I’m sure the experience Paul and I had will provide you with some excellent food for thought.

Listen now and you’ll hear Paul and I talk about:

  • (03:45) Introductions
  • (04:45) What is disruptware?
  • (08:05) How should an entrepreneur get started in software?
  • (11:25) How should you interview a target market to find problems to solve?
  • (16:45) Why do some startups succeed and so many fail?
  • (19:45) After the interviews are complete, what is the next step to take?
  • (24:45) How can you raise some early money?
  • (26:45) How did we find our developers for our app?
  • (28:45) What did we outsource first?
  • (30:00) How should you manage ownership of code during the project?
  • (32:00) How should you manage the relationships with your developer?
  • (34:45) How should you handle QA (testing and bugs)?
  • (39:45) What should you do when you are ready to show customers?
  • (41:45) When should you start the marketing?
  • (49:45) Where can people go to learn more about the software business?
  • (51:45) What is an easier way to get started that involves less risk?
  • (55:45) How does open source play a role in this business?

Resources Mentioned

More About This Episode

The Bright Ideas podcast is the podcast for business owners and marketers who want to discover how to use online marketing and sales automation tactics to massively grow their business. It’s designed to help marketing agencies and small business owners discover which online marketing strategies are working most effectively today – all from the mouths of expert entrepreneurs who are already making it big.  

Listen Now

 

Leave some feedback:

Connect with Trent Dyrsmid:

About Paul Clifford

paulcliffordPaul Clifford is the founder of Disruptware and has 25 years experience as a Chief Technology Officer and a Chief Customer Officer (responsible for customer success) for many large software startups – all of which have been sold successfully.

Paul’s first software tool was a desktop software app (Colleague) in the recruitment industry.  He scaled this and sold it with the founder to a large public company in the UK.  Its since be re-purchased and is still highly successful and a market leader after 20 years.

Paul then built several SaaS applications in contract management, HR and recruitment selling to enterprise customers across 45 countries.  Each business was successfully sold for between $1.6 and $38million.  While doing this Paul was managing large teams of engineers across multiple countries.

Related Posts

Vitaly Golomb on How to Raise Funding for Your Startup

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Someone people say said is print is dead…

Apparently, Vitaly Golomb didn’t hear them.

Vitaly has been a part of one of the greatest moves towards this industry’s revival in the past decade. Find out how he lead the charge to create an InterTech Technology Award-Winning start-up (with other winners including Photoshop in 1991) and change the face of the print business. His thoughts on entrepreneurship and product creation are worth a listen.

Listen now and you’ll hear Vitaly and I talk about:

  • (02:30) Introductions
  • (03:30) How to choose a fundable idea?
  • (05:00) Can you go from a landing page and pre-orders to funding?
  • (13:00) Can you be a founder and be a developer?
  • (15:30) Can you give an example of success?
  • (17:40) What are the 4 paradigms of design?
  • (20:30) What is capital efficiency?
  • (21:30) What are the biggest mistakes you see founders making today?
  • (24:30) How does a lifestyle business differ from a venture-backed business?
  • (27:00) Is the venture-backed path better that a lifestyle business?

Resources Mentioned

More About This Episode

The Bright Ideas podcast is the podcast for business owners and marketers who want to discover how to use online marketing and sales automation tactics to massively grow their business.

It’s designed to help marketing agencies and small business owners discover which online marketing strategies are working most effectively today – all from the mouths of expert entrepreneurs who are already making it big.

Click to Tweet: Vitaly Golomb on How to Raise Funding for Your Startup

Listen Now

Leave some feedback:

Connect with Trent Dyrsmid:

 

About Vitaly Golomb

VitalyGolomb3Vitaly is the Founder and CEO of Keen Systems, a leading ecommerce platform in the $640B printing industry and the Executive Producer of Europe Venture Summit, a major conference for the CEE startup ecosystem.
Vitaly is an award-winning designer and startup veteran since the age of 13. He is an Advisor and Mentor at 500 Startups, Board Member at Happy Farm Incubator (Ukraine), and Mentor at Innovation Nest (Poland) and TechPeaks (Italy). Additionally, Vitaly is a frequent conference speaker, business school guest lecturer, and tweeter (@vitalyg) on design and startups.

Digital Marketing Strategy: Zvi Band on Growing His Saas Company from Near Zero to a Million in 12 Months

ZviB

How often have you met someone and thought, “This would be a great person to add to my network, I really should keep in touch with them”?

Likely too often for you to actually keep in touch all of those contacts on any meaningful basis, right? Well, Zvi Band noticed that he wasn’t the only person with this problem. It wasn’t as though there weren’t a ton of tools to make those connections – from email to LinkedIn to phone calls or cards. What was missing was something to help maintain a number of relationships over a variety of channels. Zvi founded Contactually on the premise that there would be a ton of value in a product that made it easy to do this follow up.

To grow the customer base, he focused on integrations & partnerships, and he shares those details in our interview. He also shares a lot more of what helped grow Contactually to seven figures in just one year.

Listen now and you’ll hear Zvi and I talk about:

  • (03:20) Introductions
  • (10:50) Overview of results
  • (12:20) How they got their first 100 paying costumers
  • (18:20) Overview of how they handled integration and partnerships
  • (23:20) How they financed the very early stage
  • (26:20) How they dealt with the challenge of focus
  • (28:20) Overview of how they raised their first round of financing
  • (22:20) How they got into 500 startups
  • (34:20) What they did after getting the first round of money
  • (36:00) How convertible debt works
  • (40:20) Revenue generation after the 1st round of financing
  • (41:20) Overview of KPIs they watched in 2012
  • (43:20) How they paid attention to churn to reduce it
  • (47:20) Overview of best practices
  • (49:20) Do investors repeatedly invest?
  • (55:20) How and why the hockey stick happened

(If you’d like to hear from more successful software business owners, check out all the great Bright Ideas interviews and podcasts on this topic.)

Resources Mentioned

More About This Episode

The Bright Ideas podcast is the podcast for business owners and marketers who want to discover how to use online marketing and sales automation tactics to massively grow their business.

It’s designed to help marketing agencies and small business owners discover which online marketing strategies are working most effectively today – all from the mouths of expert entrepreneurs who are already making it big.

Listen Now

Leave some feedback:

Connect with Trent Dyrsmid:

Transcript

Trent: Hey, there, Bright Idea hunters, welcome to the Bright Ideas

podcast. I’m your host

Trent Dyrsmid and this is the podcast for entrepreneurs who want to

discover how to use content marketing and marketing automation to

massively boost their business.And the way that we do that is, we bring expert entrepreneurs onto the

show to share with us the exact strategies that they have used to

achieve their success, so no gurus, no theorists.The only people who are on here are people who are actually in the

trenches, just like you, rolling up their sleeves and getting it done,

and this episode is no different.On the show with me today is a fellow by the name of Zvi Band, and he

is the cofounder of a startup software company that is called

“Contactually,” and Contactually, I have discovered as a result of

this interview, is just the coolest thing ever.It allows you to, basically, build and strengthen the relationships

that you have with your existing centers of influence, regardless of

the ways that you’ve been communicating with them, whether it’s been

Facebook or twitter or texting or email or so forth.I really, strongly encourage you to go and sign up for a free account

at Contactually, because I didn’t actually fully get it. I didn’t

understand the value of it, until such time as I did this interview,

and, by the time you listen to the first four or five minutes of the

interview, you will definitely understand that, as well.Now, the results that these guys have achieved have been nothing short

of amazing. At the beginning of 2013, they had just about $5000 a

month in recurring revenue, and, now, at the middle of October 2013,

they are at just shy of a $1 million run rate.So, that is pretty phenomenal growth, and in this interview, Zvi is

going to share with us how they came up with the idea, how they tested

the idea, how they raised their early rounds of financing, how they

further tested the idea, how they communicated with users.There is so much valuable information in this interview that you may

want to even listen to it twice.We’re going to introduce Zvi it just a quick second but before we do

that, I do want to give a shout out to the Bright Ideas Mastermind

Group. If you are a marketing consultant, solopreneur or freelancer

and you want to spend time with other people who are trying to build a

marketing consulting business and trying to use online marketing and

marketing automation to make that business grow faster, then you

really want to go and check out the Bright Ideas Mastermind Group, and

you can do that by going to BrightIdeas.CO/mastermind.There, you will find some information as well as a form to fill out

where you can apply, and you’ll book a call with Yours Truly, and

we’ll talk to see if the Mastermind is a fit for you or if you are a

fit for the Mastermind.So, with that said, please join me in welcoming Zvi to the show.Hey, Zvi, welcome to the show.Zvi: Thanks so much for having me, Trent.Trent: No problem. It’s a pleasure to have you on. So, we’re going to

talk a whole lot about

how you have built your software-as-a-service company Contactually.

Did I pronounce it correctly?Zvi: You got it.Trent: All right. And we got a lot of really good stuff I want to get

into. We’re going to talk

about what you’ve achieved. We’re going to talk about how you got your

first 100 customers.We’re going to talk about how you did your fundraising and what you’re

doing in terms of smart marketing, but, before we get into any of

that, because I’m sure that the vast majority of my audience does not

know who you are and doesn’t know what your company does.Please take a moment and set the stage for our discussion by

introducing yourself and giving your little, introduction to the

company, so that we have context.Zvi: Absolutely. My name is Zvi Band. I’m the cofounder and CEO of

Contactually. We’re

in early-stage startup, building a relationship marketing platform.

What we do is we know how important your relationships are to you.We analyze all of your relationships by pulling in all of your

contacts into one place, help you identify the relationships that are

most important for your business and then help you stay in touch,

proactively, every single day, in order to grow your business.Trent: All right. So, conceptually, that make sense to me, but dumb it

down as much as you

can. So, let’s just use me as a guinea pig or your target customer, if

I’m not your target customer.We’ve got contacts in Gmail and they’re on Facebook and I’ve got

people on twitter and LinkedIn and they’re all over the place. Is your

software solution helping me to make sense of that sphere of people?

I’m not sure that I get it yet.

Zvi: Absolutely. That’s a big part of what we do. As we rely more and more

on email,

Facebook, twitter, SMS in order to engage with the people who are

important for business, you know, they’re all over the place.

I’ve got some contacts in my Google Contacts. I have some people that

I talk to only on Facebook. Then there’s that guy I’ve been SMSing

with. Then there’s the people I’m emailing across the four different

email accounts I have, in keeping that organized is a very hard thing.

One of the first things that Contactually does is it pulls it all into

one place. We will [D-Dupe] it. For example, Trent, you and I have

spoken across two of my email addresses that it found those two and

put them in one place.

We’re also connected on LinkedIn. It found your LinkedIn contact and

your twitter profile, pulled it all into one place. I have a really

consistent idea of who Trent is and all the different ways I’ve spoken

to you.

Trent: Interesting.

Zvi: Then, what we do is we will then help you organize it. So, we can

say, “All right. Trent

is someone who’s important to me,” and then Contactually will then

make sure that because you’re an important person that I actually stay

in touch with you and build a better relationship with you.

Trent: And how does it do that?

Zvi: Absolutely. This is kind of one of the key things that are users

realized, that there’s

so many people who are important to us, but we end up spending most of

our day kind of putting out fires, responding to whatever’s urgent or

responding to who’s talking to us, instead.

What you can do is you can identify, saying, “All right. Trent is one

of my important contacts and all of my important contacts, you know,

make sure I keep in touch with them every 30 days.”

Then, by looking at all of your different online communications, we

can see that, “Hey, it’s actually been 31 days since I spoke to this

person.” Then contractual will see that “Hey, this is a person that

you’re starting to fall out of touch with,” and then we’ll send me a

reminder saying, “Hey, get back in touch with this person.”

For example, one of our top use cases is for a real estate agent. You

know, real estate agent lives or dies by their address book, and if

they don’t stay top of mind, most likely, one of their potential

customers will just work with someone else.

Trent: Absolutely.

Zvi: So, by setting a reminder every day saying, “Hey, here are five

potential leads that you

spoke to last month but haven’t spoken to recently,” they’re able to

better stay in touch and then grow their business.

Trent: And through the interface, am I presented… because I have not

seen it, I don’t have an

account yet. I’d love to mess around with it. So, maybe you could set

me up afterwards.

But is the interface such that I’m going to see you, and it’s going to

show me, in the last 30 days, the ways that we’ve communicated,

whether it was either twitter or Facebook or email or texting or

whatever?

Is it going to be all in that one place and is there going to be like

a kind of a summary or a audit trail of the things that we talked

about? Or, what am I going to see when I’m reminded that it’s time to

call you again or connect with you again?

Zvi: Absolutely. You’ll get a set of reminders from us, via email, in the

morning, and you

can, of course, choose to just drop someone an email and

Contactually’s architecture will pick that up and see, “OK. That you

and I reengage, we’re all set.”

But what you can do is you can click over to contactually.com. We’ll

show you everything in one place. Not only will it show every

Facebook, LinkedIn, twitter, email, SMS conversation between the two

of us, you know, spanning our entire history; I can also record notes

and it will show the notes to me.

Whenever you make a new contact in Contactually, it’ll find all of

their online profiles, like even their Pinterest profile, and pull

that all into one place. I’m basically given this command center where

I can see everything I know about you and everything Contactually is

able to find out about you, pull it all into one place, and then use

that as a way to quickly build a better relationship.

For example, I can send an email to someone and I can see that, “Hey,

they actually were talking about something recently online.” I can use

that as a way to reengage with them, much more quickly.

Trent: Yes. That make sense too. So, for a lot of people, their

contacts might live in Outlook

or, in my case, a lot of my contacts, in addition to being in Gmail,

are also in Infusionsoft. Does your app have any ability to make it so

that I don’t have to have more than one repository of all of my

contacts, so to speak?

Zvi: Absolutely. So, we have a number of different methods. One is you can

easily import a

spreadsheet of contacts. Most people, when they come on board to

Contactually, they’ll [give us], saying, “Hey, I’ve got five Excel

spreadsheets of contacts I haven’t spoken to recently.” They can

easily drop those into Contactually and we’ll automate that.

We also have a lot of integrations with other providers. So, we work

with MailChimp, Salesforce, Highrise, Google contacts, as well as a

whole host of other things. We’re working on an integration with

Infusionsoft and a few other services, but, right now, we also have an

API. So, we have a lot of people building integrations into our

platform, too.

Trent: OK. Any idea when the Infusionsoft one will be ready?

Zvi: I’m hoping, by the end of the year. So, I’ll definitely keep you

posted on that.

Trent: Yes. Please do, because I would be happy to use it and blog

about it for you.

All right. So, now that we kind of have an idea of what it is that you

build, this episode is really going to be about the whole process that

you’ve gone through to achieve this traction that you have done with

Contactually.

In terms of starting with the beginning, or rather the end, in mind,

how many customers or how much revenue are you guys doing right at

this point in time?

Zvi: Sure. So, right now, we have around 35,000 customers on the platform.

Probably

around 6000 of them are paying at the moment. Revenue, I can’t

disclose our exact revenue number, but we are getting very close to

hitting $1 million a year in revenue.

Trent: Terrific. OK.

Zvi: Yes. It’s been a busy year. We were nowhere near that in January.

Trent: Where were you in January?

Zvi: Oh, in January, I think, we’d be lucky if we were pulling in like

$5000 a month, or so.

We had really just spent 2012 proving that we weren’t crazy and that

people would pay for it.

Trent: Yes.

Zvi: And I think it hitting that $5,000 a month is a good sign that, “OK.

You’re not totally

insane,” and have spent 2013 doing nothing but growing it.

Trent: Yes. No kidding. All right. Let’s talk about how you got to the

first 100 customers,

because I think a lot of people are very interested in building

software as a service. There’s lots of competition.

There’s lots of challenges, and actually, the guy behind… Paul

Graham, from Y Combinator wrote a very famous article Do Things that

Don’t Scale. Did some of his advice fit into how you got the first

100, and, if not, how did you do it?

Zvi: Oh. Absolutely. I’d say, even at our stage, we still, constantly, do

things that don’t scale,

and only when they’re a success do we even think about how we optimize

this so we can kind of build a repeatable model out of it.

Going back to kind of how we got our first hundred customers, well,

kind of say “our first hundred paying customers,” getting the first

hundred people to just try out the product was just pretty easy.

Just tell family and friends, you know, post on a few blogs, talk

about it online, etc., but in order for us to get our first 100 paying

customers, we kind of started phasing in our paid model, and we

decided very early on… and this is a little different than what a

lot of, I’d say, Silicon Valley’s mindset is about.

We started out very early deciding that we wanted to be a service that

people paid for, and we ensured that not only were we building

features that people would be willing to pay for, but we were going

after markets of people that would pay for this, and that’s a very

important mindset that you have to have, early on.

Otherwise, you worry about attracting the wrong audience of people who

may like your product, may use your product, may give you lots of

input, but, at the end of the day, they would never pay for anything

like this, because it’s not valuable.

Trent: So, what you’re saying is, you went after markets where people

were expecting to pay

for this type of service?

Zvi: Absolutely. And, I mean, the easy way to figure out who’s going to

pay for a service

like this is who would stand to benefit from their business by using

something like this? For example, a common model that we kept

encountering is there are lots of people who are very, very obsessed

with their network, and it’s very important for them, and they really

like having a strong address book.

But, if you ask them to pay $20 or $40 a month, they’ll say, “No thank

you. I’ll just kind of stick with what I have.”

If you go to, say, a small business owner or a real estate agent or a

financial advisor and say, “Hey, this is a system that will, no

question, help you increase your business, help you get at least one

new client a month. If you get one new client a month, isn’t it worth

another 40 bucks a month? No question.”

Trent: Yes.

Zvi: What we started doing early on is, before we even knew what we were

fully

building out, before the platform could even take credit cards, we

already had a pricing page built in, and we would ask users, as are

signing up, which plan they wanted. That at least helped us qualify

users. W

e could start seeing who would be willing to pay for it, where they

were coming from, what price points they’re going after.

By then, we had learned enough about what features were important to

them and what price points that, when we rolled out our actual ability

to accept credit cards, we knew who we’re going after and we knew who

would be paying for this.

Trent: That was a very smart strategy. I hope people really appreciate

what you just said.

When it was free, I could sign up. Part of that sign a process told me

to pick one of the pricing options, but then I didn’t actually have to

pay for it. Did I get that right?

Zvi: You got it, and, I mean, the whole point of this is you want to be,

especially in the early

stage, learning as much as possible and you want to learn at all

costs, and you should not be trying to go for scale. You should still

be trying to go for quality.

Yes, I mean, of course, we’re not going to spend our time building out

a credit card processing system for something that’s going to change

every day, but you really want to ensure that your learning who’s

going to pay for it, what amount they’re willing to pay and then what

they’re willing to pay for.

Trent: So, when these early users clicked on, you know, “I want this

plan, that plan or the

other plan,” and they were taken… what did you show them next, “Hey,

we’re not ready to accept credit cards yet. Thanks for the feedback”?

Zvi: Honestly, no. We usually barely even mentioned that. People wouldn’t

even notice.

They would select a pricing plan as they moved forward or they would

get turned away and then we’d know, “OK. That’s a good learning

point,” but they would just continue with the sign up process.

Yes, they would just never… you know, they’d never hear more about

how they had to pay, up until we were finally ready to start accepting

credit cards. Then, we would go back and message them saying, “Hey,

we’re finally ready to have you upgrade.”

Trent: Yes. They kind of thought maybe they pulled a fast one and

you’d forgotten to

charge them perhaps.

Zvi: Yes. Exactly. And that’s fine for us. We had accomplished our goal of

learning what

people are willing to pay for.

Trent: OK. So, I guess I want to make sure that we really answered the

question of how do

you attract your first 100 paying customers. You told friends and

family. You got exposure on blogs. You participated in the discussion

in online communities, where you thought your target market hung out.

You got some traction. You put up a pricing page that you embedded in

the sign up process, so that these free users, you were able to

collect data on what they were interested in and what they were

willing to pay for.

Then, armed with the data, you decided, “OK. Now is the time to put

credit card functionality in,” and then you went back to those people

who had gone through that process and said, “Pay us.” Did I get that

right?

Zvi: You got it, and we were not… you know, we didn’t go with the model

of, from day one,

spending hundreds or thousands of dollars on Google AdWords or setting

up SEO pages.

We really just relied on talking to a lot of people, and a lot of

those people ended up being influentials who would help us and spread

out the word.

One thing we also did, just given that we didn’t have a lot of money

and really wanted to focus on getting off the ground, is we also

integrated with a lot of other platforms, and I would highly recommend

that people really consider integrations and partnerships when they’re

getting their early-stage product off of the ground.

I think, from very early on, we were integrating with Facebook, we

were integrating with Salesforce, we were integrating with Google

contacts and Highrise, etc., and, yes, it was hard to build, but, at

the same time, that also provided a link to a product that people were

already using, which made a conversation easier.

Trent: In your case… and, again, I want to make sure that I and the

audience really

understand what you mean by “integrations.” Let’s just use Facebook as

an example. Can you walk us through, specifically, what you mean by

you integrated with Facebook?

Zvi: Yes. Absolutely. So, when people can connect their Contactually

accounts with

Facebook, and what that will do is that will pull in all of your

Facebook friends into Contactually and then create contacts out of

them. It will pull in all of your message history in Facebook and

store those in people’s contact profiles.

Then, when you want to engage with someone, you can choose to send

them a message on Facebook, instead of an email message.

By having that integration, people would say, “Oh. Cool. I do use

Facebook, and this would be a valuable thing for something I already

have. Let me go ahead and sign up for Contactually and connect my

Facebook account.”

Trent: So, key take away there is to build something that increases

the value of something that

I’m already using.

Zvi: Exactly.

Trent: All right. Now you said “partnerships.” Can you talk a little

bit about specifically what

you mean by that?

Zvi: Yes. Absolutely. So, there’s an “integration,” which is just the

technical term. A

partnership can take many forms. So, for example, we have a

partnership with MailChimp, where, if you go to MailChimp’s website,

you’ll actually see in their app marketplace, they’re driving traffic

to Contactually.

So, it’s somewhat of integration, and some of them partnerships. So,

that’s another way.

We also did a bit of partnership with other similar tools. So, for

example, one thing we realized early on is that people who were using

Contactually would also be using a service like SAINTbox. So, for a

while, we were co-promoting each other.

People who were using SAINTbox would get a coupon code and a promotion

for Contactually and vice versa. So, those are the partnerships that

you can build, as well.

There are many different types of partnerships. We also have a

reseller program and affiliate programs as well. Those don’t

necessarily drive as much traffic. You really want to figure out how

you can get a lot of people at once, and integrating with these bigger

tools is definitely an awesome way.

Trent: Just because you integrated with Facebook and twitter and the

various social platforms,

doesn’t necessarily mean that the people who use those platforms are

going to even know that you exist. You still have to get on their

consciousness, somehow.

Zvi: Exactly. Many of the bigger ones have avenues for that. For example,

we have a

highly rated integration with Google apps. So, Google apps has the

Google apps marketplace.

People are going, looking all the time for add-ons they can get to

their Google apps organization, and, hey, Contactual’s there and we’ve

got something like 70-some positive reviews.

That’s a great way of driving traffic and actually getting eyeballs.

Chrome Web Store. We are featured on the Chrome Web Store. That drives

traffic to us every day, as well. MailChimp does also.

Then sometimes it may take a little bit of business development and

proving to them, “Hey, here is why we are beneficial to your user

base,” as we do with a lot of our partnerships, for them to actually

start actively promoting it, but a lot of times these bigger platforms

have avenues of adding onto their system.

Trent: Yes. That makes a lot of sense, because there are people, the

early adopters, are people

who are hanging out in the Chrome Store, looking for cool new stuff to

add into their Chrome, and then, of course, these early adopters are

probably a bit vocal, and, if they like it or don’t like it, they’re

going to be the ones leading you that feedback, which helps to get

more traction and more people and the cycle continues. Is that right?

Zvi: Exactly.

Trent: Interesting. So, in the very early phase, you were spending

most of your time, money

and energy to build these integrations and funding that out of your

own savings, friends, family, that kind of thing?

Zvi: Yes. We probably spent the first four months bootstrapping it out of

my previous

business. We were running a pretty successful freelancing business.

Then, around, actually, two years ago last week, we decided this was

serious enough that we really wanted some capital in order to fully

fund this out and start building a team, and that’s when we took on

our first round of funding.

Trent: OK. Which will get to in a second. Some people, self included,

are probably curious.

How much did it cost to get through that first four months, in terms

of not knowing your time, but if you weren’t writing code yourselves

and you had to hire developers, how much did you have to spend?

Zvi: I’d probably say, given the program that we had back at the time, I

probably say around

$10,000.

Trent: OK. It’s not a huge amount of money, that’s not a nothing

amount of money, but it

is, for someone with enough desire, $10,000 is probably an affordable

amount. You can find friends, family, aunts, uncles, that kind of

thing, who can all chip in, maybe, $500 bucks, and you can get $10,000

if you were motivated enough.

Zvi: Exactly. Now, granted, we were a development shop. So, we did have

resources, in-

house, to be able to execute it. Had we not, we may have gone about it

a different way. We may have spent a lot more time doing customer

development and building a landing page and proving that this was big

enough, before we ended up building out the platform.

Trent: Now, if you had gone the landing page route, do you think you

could have conveyed

the value proposition of what it is that you wanted to build, on just

a landing page? It seems to me like it might be a bit tough.

Zvi: It is a little bit challenging. I think there are definitely better

ways we could have gone

forward with it. We probably would have spent a lot of time thinking

about the sign-up process.

Mainly asking the right questions that qualified users as they’re

going through our sign-up process, to determine, “Hey,” and once they

get to the end, they absolutely need something like this and they’re

thirsty for something like this. We probably could have done that, but

you’re right.

One of the bigger issues we faced early on is we have a idea that’s

big enough and challenging enough that some people may not fully wrap

their heads around it until they actually have it in their hands and

they start to see the value in it that way.

Trent: And that was me, because, when I was doing my research for this

interview, of course,

I went to your homepage and I read all the stuff, but, at the end of

it, I was still like, “I don’t get it. What is this thing for? I don’t

need another contact manager. I’ve already got Infusionsoft. I don’t

need this thing.”

Zvi: Exactly. That’s obviously something… Even though we’ve got the

amount of customers

and revenue that we have, it shows that there is still a lot we have

to do to improve. So, we’ve got a video and a better marketing site

coming out with it.

Trent: Cool.

Zvi: I would also highly stress that video is often a really great way to

convey an idea.

Trent: And that would have done it for me, because I am the type of

person, and, of course,

everyone’s different, but I fit into the category of people like, “You

know, I don’t want to read a bunch of stuff, what if you could make me

two or three-minute-long video and I could just watch it and the light

bulb would go on,” that would be incredibly valuable for me.

Then I would have been able to go, “Oh. That’s why I would use this

thing. Oh. Yes. Now I want to sign up for it.”

All right. So, you got to a point where you had your first 100

customers, or so.

Zvi: Yes.

Trent: You use your freelancing business to fund it and then you

decided, “OK. We’re

getting enough traction, here, that we’re probably onto something and

we should probably try to make it grow faster.” Was that the thinking

that happened at that point in time?

Zvi: Yes. We wanted to grow faster, and, at the same time, one of the

biggest things that we

learned, and it’s a lesson I keep on learning, is the value of focus.

We were being distracted all the time.

By having a successful business in my freelancing business, it was

incredibly challenging to dedicate time to invest in something that

could yield absolutely nothing.

Trent: Yes.

Zvi: So, we knew that, OK, in order to take this seriously, we really

needed a “burn the

boats” type of situation. I knew I needed to shut down my current

business and really focus, full-time, on Contactually, and getting

funding was the vehicle that really allowed us to do that.

Trent: OK. So, you shut down the business? You didn’t sell it? Because

you wanted to keep

all the same people or why did you not just sell the business off?

Zvi: A lot of the employees and resources were coming with me…

Trent: Got it.

Zvi: … to Contactually, and, at the same time, I didn’t necessarily just

fully say… I sold the

business off, in a way. Being 100% client services, I was able to pass

off a lot of our clients onto other people who I knew and trusted,

and, for most of those, you can get affiliate revenue and things like

that.

Trent: Yes. OK.

Zvi: Yes. I essentially sold it off.

Trent: OK. So, let’s dive into this first round of financing, because,

again, I think a lot of

people would be very interested in what you had built at that point in

time and how you went about getting the money. So, let’s, first of

all, make sure that we understand, when you decided to get financing,

how much traction did you have? How much revenue and paying customers

did you have at that point?

Zvi: Now, this is back in late 2011. This was that kind of, I would say,

the height of the

incubator bubble when there were a lot of… it was getting to the

height and there were a lot of incubators around.

It was relatively easy to get into it. Since then, maybe, it’s got a

little bit harder, but, back then, we had around 150 customers. We

didn’t have any revenue at that point, but, like I was saying earlier,

we were putting people through the pricing page.

We knew that people were willing to pay for this and we could convince

an investor and say, “Hey, we’re really onto something. Here are the

competitors in the marketplace, here are the similar big companies in

the marketplace, so we know that there really is a market.

“Here’s the size of the market, and, by the way, we have a working

prototype and people have ‘XYZ’ to say about it,” and that was enough

that we were able to approach and incubator called 500 Startups, show

them everything, laid on the table, and we had an offer in our hand a

few hours later.

Trent: In a few hours. Wow. And are you able to disclose any of the

details of that offer, like

in terms of…

Zvi: Yes.

Trent: … valuation and amount raised?

Zvi: Yes. Absolutely. So, 500 Startups, at least back then, their standard

model was to give

you $50,000. They would invest in your company in and around $1

million post-money evaluation.

They would essentially take 5% of the company, very early on. Then,

you’d be part of their incubator bath for four months and then help

you grow the company from then on.

Trent: And aside from the $50,000, what kind of value do they bring to

the table?

Zvi: During the initial incubator, they brought on an incredible amount of

value by

having lots of mentors and advisers put in front of us. The having a

lot of resources available for us, like discounts for different

things, we could go talk to someone at Facebook or Google if we really

needed help with something.

Then, the most important thing that they really provided was this

pressure-cooker-like atmosphere, and, let me tell you, when you’re

told that you have four months before you’re going to be put in front

of the top investors in the world.

You really have to get your stuff together and you really have to

shine, otherwise you’re going to fail, you work… you put in so much

more work than you ever have in your life. It’s that kind of time

crunch that really allowed us to really concentrate and focus.

Since then, 500 Startups being one of the larger accelerators in the

world, we have thousands and thousands of other start up founders and

advisors and mentors available to us, at any point in time.

We’re still engaged in the 500 Startups community, to this point, and

we’re always able to ask any questions, get any resources we need,

etc.

I would think about, when you’re looking at different accelerators,

incubators, don’t just think about the value add for those few months,

but talk to people who have been in it for a few years and see the

value that you’re still able to provide.

Trent: Yes. I’ll bet it’s significant. By the way, I’d love to

interview some more of the folks

from the 500 Startups incubation. So, if there someone you could

introduce me to, to facilitate that, Zvi, that would be great.

Zvi: Absolutely.

Trent: OK. So, for people who haven’t raised money before, can you

give us some insight

into the process? I mean, it sounds like you guys went in…

So, let’s talk about how you got in. Did you get introduced or did you

just send a cold email in and say, “Here’s what we got” and you got a

meeting, and then a few hours later they agreed?

Zvi: One of the things that Contactually is really powerful about is

building a very strong

network, and it happened to be that I had, before building

Contactually, I had done a lot of networking and built up a really

strong address book here in the local tech community.

It happened to be that through my contacts, I knew one of the partners

of 500 Startups, and so I was able to get an introduction there.

I would say you should never try cold applying to any of these things.

You always want to find a way in and find a warm introduction.

Investors really will never respond to you, otherwise. So, absolutely,

I strongly recommend that you really start building your network now.

You’ll find that, yes, while a particular investor may be a very hard

person to approach, the entrepreneurs that they’ve funded and worked

with in the past, the entrepreneurs just like you and they been

through it and they know how painful it is to reach these people and

they’re able to help you if you can convince them to believe in you.

Trent: OK. So, you got the meeting, you went in, you did your

presentation, and, literally, a

few hours later, they had made you an offer?

Zvi: Absolutely. I think we were at the time where we had proved, just

enough, that we were

really onto something and I had built up enough of a reputation with

this particular investor that they knew that I was able to execute and

I was able to build a team around it and that I was really onto

something.

Trent: Interesting. All right. So, what happened after that first

$50,000? How long did the

money last and what were you able to accomplish?

Zvi: Absolutely. So, we initially focused on raising more money. So, by

that time, I had two

additional cofounders working with me. So, they were focused on

continuing to expand the product and really form that up into

something that people would use and pay for. While, my third cofounder

really focused on starting to figure out our sales and marketing

process.

I was then tasked with raising funding, and, for about four months

straight, initially, I did nothing but meet with investors, get

introductions, learn more about the fundraising process and ended up

raising, within the first three months of the program, an additional

$150,000.

Trent: At a higher valuation than the original round?

Zvi: Yes. It was slightly higher. It was convertible debt. So, with

convertible debt, the

valuation is always a little bit flexible. Instead of [a valuation]

you have a, which loosely translates to your valuation, but that

allowed… that’s kind of the common investment vehicle that allows

founders to raise a lot of money very quickly.

Trent: So, it’s pretty popular to use?

Zvi: Yes. Absolutely. If you look at a lot of the documentation out there,

convertible debt is

kind of the fastest standard way.

Trent: OK. So, for the folks here who are listening, who are

unfamiliar with what convertible debt is, do you want to just give us the

very quick overview of how it works?

Zvi: Yes. Absolutely. Convertible debt is basically saying… a set of

just saying, “Hey, I’m

going to buy a piece of your company at “X” percentage,” you know,

“I’m going to buy “X” percentage of the company at “X” valuation,

right now,” it’s instead saying, “Hey, I’m just going to give you

money now. It’s going to be debt.

It could be something that you have to pay me back at some point,”

but, instead of paying you back in just straight money, instead, it

can be converted to equity at a later point in time.

Trent: At the option of of the person who invested?

Zvi: It’s at the option of the person who invested, yes, but, primarily,

it’s almost never…

people almost never pull the money out. It’s, instead, converted when

there is an equity round of financing.

So, it’s usually written that the first time the founders raise an

equity round, or 18 months, whichever happen sooner, then they are

entitled to buy X amount of dollars worth of equity at that current

evaluation.

Trent: OK. So, let me just dial through this again. So, let’s say that

we, at this point, did a

$1.2 million valuation. I give you $100,000 in convertible debt. Six

months later, you raise more money at a $2 million valuation. I can

get the advantage of converting my debt into equity, back at the $1.2

million valuation? Is that correct?

Zvi: Exactly.

Trent: So, there’s some real incentive for me, for taking that extra

risk, for being the earlier

investor. Now, you, as the founder, were you personally on the hook

for this debt? Let’s say this stuff didn’t turn out very well, they

didn’t convert it, somebody owes them this money. Are they prepared to

take a pill or are you personally liable?

Zvi: No. No. No. There’s no personal liability here. So, I think we have

to be clear about

that. If we didn’t raise around the funding, it would have forcibly

converted over to equity at that valuation, later on.

Of course, we ended up raising funding before that time had passed,

but, no, we would not have been in trouble. I mean, it’s really used

as a vehicle that allows founders and investors to start to work

together, very early on, without the hassle and legal expense of a

full-equity [round].

Trent: Yes, because you could end up spending just a ton of money on

the lawyers.

Zvi: Yes, and when we raised our equity round, it definitely cost us at

least three times as

much to do an equity round as it did convertible debt.

Trent: Let’s say we we’re in that scenario. So, when you did your

convertible round, what did

you have to spend on legal fees?

Zvi: I’m having a hard time figuring out the exact amount, but I’d

probably say, and you

should probably account for maybe spending around, depending on your

lawyer, around $5,000 in legal fees, in order to get the convertible

debt up and running and fully execute around.

Whereas, doing an equity round, if you use the standard off-the-shelf,

series C [docs] maybe it could be around $10,000. Otherwise, it could

end up being quite a bit more.

Trent: Yes. OK. And you’re able to pay the $5,000 out of the money

that’s raised from the

round of convertible debt?

Zvi: Exactly. Yes. I mean, you can work… you can find lawyers that may

give you great

deals. Our lawyer is well known and respected in the area, for working

for startups, and he was able to give it at a discount.

Some lawyers may withhold their legal fees until you raise your first

equity round or until you raise a certain amount, etc. You can often

find lawyers that will negotiate with you for that, because they know

they’re not going to make much money off you early on.

They’d much rather keep you on the hook and make sure you become a big

company before they start charging you.

Trent: Absolutely. What is the name of the lawyer that you work with?

Zvi: We worked with Steve Kaplan [SP]. He’s the lawyer at Pillsbury, Shaw,

Pittman.

Trent: OK. Pillsbury, Shaw, Pittman. Okey-doke. Basically, the first

round was what

enabled you to focus your time on raising money for the second round,

while you… You said you had two cofounders?

Zvi: Yes.

Trent: And one of them is working on sales and marketing and one of

them is working on

product development? Is that correct?

Zvi: Yes.

Trent: All right. So, what happened next in the story?

Zvi: What happened next? The incubator finished up and we were really…

you know, we

moved back to DC, after being in California for four months, and we

really started to grow in the company.

At that time, we had started receiving a little more tech press.

People saw that we were fully out in the market and that we really had

a strong offering. We really started building out the product, just in

terms of turning on page features and actually expecting people to

pay.

We started figuring out the scale of marketing channels that we can

continually go after and started building a sales process and the team

behind that, as well, and we ended up spending most of 2012 focused on

nothing but that.

We hired our first developer and our first internal marketing person

and just kept iterating, more and more, on the product, until we had

reached what we saw was some level of product market fit, meaning that

we were able to continually get people in the door who loved the

product, started using it and would keep using it.

Trent: What were some of the key metrics or KPIs that you were focused

on during that 12

months leading up to the beginning of this year?

Zvi: Absolutely. We looked at just the number of users that we had in the

door. We

looked at the number of paying customers. We look at the number of

website visitors, and then we looked at the number of users who would

keep coming back to our site, every month after month.

We were pretty basic in the metrics we were checking back then. Now,

were a little bit more formal with it.

Trent: OK, and that repeat-users is a pretty important one, obviously,

because if people are

trying your stuff but they’re not using it again, you have kind of a

big problem.

Zvi: Absolutely, and one thing that… I mean, there are two things I

would really strongly

recommend for people, as they’re getting started. One is set up a very

strict process of every week collecting all of your metrics in a

document or in some particular place, and, then, at the same time, pay

very, very close attention, especially if you’re building like a B2B

or a SaaS business, at your churn.

What most people don’t realize is while you may be very happy with

people coming in the door and new sales and new customers, etc., if

you have a leaky bucket with people also leaving in droves, then can

kill you, from an investment standpoint and from a revenue standpoint,

if you’re losing 10% or 20% of your business, every month, just

because they stopped using it.

Trent: Yes. No kidding. Did you ever have a problem with churn?

Zvi: Oh, absolutely. I think that’s definitely something we have spent

even a lot of this

year I’m getting under control. We were sometimes losing upwards of 5%

of our user base a month, and a rule of thumb that investors look for,

they really look for something in the neighborhood of 2% to 3%.

It takes a lot of work, and that’s kind of where the real magic lies,

because you can have a great marketing site or great initial program

to get people on board, but, especially for building a product like

ours where you really need and expect them to come back, month-over-

month, and keep using it and keep getting value out of it.

You have to have a lot of things working correctly, and tracking churn

very early on. Ideally, if, from day one, you’re able to keep churn

under control, you’re going to have a really great business.

Trent: When you identified that churn was a problem, what were the

actions that you took to

try to reduce it?

Zvi: Absolutely. First off, is just learning. You really have to learn

exactly why people

are quitting. I mean, it’s probably one of the more enjoyable parts of

my job, but I still, to this day, call most people who cancel or

downgrade their accounts and ask them why.

Ask them why they signed up initially, what they liked about

Contactually, what they didn’t like about Contactually, what was the

straw that broke the camels back for them that finally caused them to

quit and then what we could have done better?

We do, definitely, a lot of learning, and, ideally, you start to see

patterns emerge. So, we started seeing that, OK, a lot of people just

said that they didn’t fully understand how to use the product. OK. We

have better training programs and we had a much easier to use user

experience.

They didn’t get the support that they needed. OK. We really needed to

invest more time in our support.

Again, it’s a common theme that we keep focusing on, is we learn as

much is possible, and the more you learn, the more things just become

obvious as to what you need to do.

Trent: Did you ask for people’s phone numbers during the sign-up

process?

Zvi: Yes. And that’s also a really great thing to do. Surprisingly, when

we first added a

phone number, we thought, “Oh my God. No one is going to enter this at

all,” but I would say the majority of our people, as their signing up,

have absolutely no problem entering their phone number.

Then, we’ll call them, as their signing up, ask them questions. Then,

as a cancel, we can ask some things, etc. So, whenever we need

anything, we can usually feel pretty safe that were able to reach

them.

Trent: Yes, I’ll tell you, those one-on-one conversations, there’s

gold in them there hills, isn’t

there?

Zvi: Absolutely. Just from an initial customer development standpoint,

it’s important. One

model that works really well for us, that we learned about from

Campaign Monitor is have a model of the inside salespeople who we have

on staff.

They’re not there to sell, but they’re really there to help activate

and to really help coach the customer to become a better user and the

better professional, and if you can help someone get the most out of

the platform that you’re building, it’s no question that, of course,

they’re going to upgrade.

Trent: Yes. No kidding. OK. You mentioned Campaign Monitor, so,

another SaaS

company that you modeled. What were some of the other SaaS companies

that were influential in your thinking about how to create your

product, and when I say product, I mean how it’s sold, how people sign

up, just the whole thing?

Zvi: Yes. Absolutely. It’s hard to identify any particular ones. I mean,

there’s so many best

practices that we took and learned from so many other platforms. Yes.

Our customer guru model was from companies like HubSpot. We definitely

have a higher quality of support, modeling after companies, you know,

spearheaded, like Zappos, where they focus on having really, really

great customer service.

One thing that we definitely strongly believe in, from a marketing

standpoint, and this we adopted early on, is we modeled our marketing

program after HubSpot, where we don’t spend as much time pushing our

product and telling people, “Hey, you should use Contactually.”

Instead, we really focused on evangelizing the importance of

relationships and how key relationships are to our lives and how to

better engage with people, better grow your network, etc., and, hey,

Contactually happens to be a tool that allows them to do that.

We are also users of Hubspot too, which is obviously similar to

Infusionsoft. So, we started implementing their software very early on

and following that inbound marketing mantra.

Trent: Now, I’m on your site. I don’t see a link to a blog.

Zvi: It should be in the footer. If not, I think they’re called “actions”

at the bottom of the

page, for sure. We try to convert most people in order to just sign up

for Contactually, but if you just go to, you’ll see that there are a

few big call to actions at the bottom of the page or midway

down the page.

Trent: OK. Why did you decide to go that approach, versus… And let

me go back to the

homepage here. Your call… What’s the primary call to action that

you’re trying to get… “Sign up and take a free trial,” I’m assuming

is it.

Zvi: Exactly. Yes.

Trent: OK. “For individuals, for teams.”

Zvi: Then, if you scroll down a little bit, down our site, you’ll see that

there are actually…

there’s a rotating carousel offering a few e-books that you can

download, and those, of course, go directly to Hubspot. We’re able to

capture you.

Trent: OK. That make sense. All right. So, where we in the story? So,

by the time that you

were… So, you had… You’d raised this, I think you said $150,000

round, or so, which was the second round, and then it sounds like, if

I’ve got all this correct in my head, it was about a year.

You sort of did that at the beginning of 2012 and then you kind of

existed on that money for 2012? Am I about right?

Zvi: Yes. So, what we ended up doing was, we raise that money kind of late

[in] 2011.

Then, in 2012, the first few months, we raised another $200,000, and

that was kind of more of like a bridge round.

That allowed us to say, “OK. We’re starting to get some traction.

Let’s get some additional money in the door and then really allow us

to accelerate more.”

I would say we never really focused on identifying particular rounds

of funding that we wanted to go after. Instead, we treated fund-

raising as an ongoing process, and we still do to this day.

We raised another $200,000 in kind of mid-2012, and that gave us more

than enough cash in the bank to go until early this year, when we

raised just north of $1 million.

Trent: OK. Is it always different investors, with each round, or do

some investors come back

for more?

Zvi: Some investors come back for more, and that’s a very important thing

that we do. We

still stay engaged with all of our previous investors. We have a

monthly newsletter. We are always on hand to answer questions and take

calls and really kind of ask them for advice and value.

That’s really important, because, especially as you start to bring on

big investors, they’ll often times look back at previous investors

and, if they don’t see them continually investing money, they often

ask “Why? Do we not believe in them anymore?” etc.

We were happy that, over the three rounds of funding, or so, that

we’ve done, we’ve had some investors who have invested every single

time.

Trent: OK. How much revenue traction did you get during 2012, because

you mentioned, I

think, at the very beginning… I don’t know if we were on air or off

when you answered this, but I think you said you were at $5,000 a

month at the beginning of 2013 and now you’re, it sounds like, closing

in around 80, or something like that. So, did revenue not grow much

during 2012?

Zvi: Yes. Revenue did not grow that much during 2012. We only turned on

our ability to

process credit cards, even, I think, in July, and then we kind of

spent the rest of 2012 just iterating on figuring out what our ideal

sales model is, what people are willing to pay for it, etc. In 2012,

we were still in a learning phase.

Trent: How did you facilitate that? So, we knew what the KPIs are,

users, customers,

traffic and repeat users, but I’m guessing there must’ve been a lot of

actual dialogue going on with your existing customers, to say, “Hey,

is this good? Is this bad? What needs he better?” Is that what you

mean by “iterating”?

Zvi: Absolutely. Yes. That was definitely incredibly important for us. So,

from very early

on, we had set up this practice of engaging with our users, sending

out surveys all the time, having an open email line, having a web chat

tool, so we have Olark on our site, so people to chat directly to us.

Then, we used a service called Intercom. That’s just Intercom.io, and

that allowed us to, very easily, identify, “Hey, who are the active

users? Who’s online right now? Who can we message and ask questions?”

etc.

We started building a dialogue and building a relationship with users,

many of whom we still have on board today, in terms of our active

users. We just kept learning as much as we could from them.

I mean, even just two hours ago, there’s a particular new feature that

I’m working on that I wanted to know more about. I built a survey and

messaged 200 or so of our users and ask them, “Hey, could you fill out

the survey and help us learn a little bit more?”

Trent: Very cool, and I’m guessing that the early adopter-type

customers are very, very willing

to participate and give feedback, because they like the product and

they want it to be better.

Zvi: Exactly, and early adopters will come and go. I mean, we definitely

have a lot of early

adopters who are using this because they thought it was a cool tool,

but now that we’re a premium product, it’s not as interesting for

them, and, that, we totally understand, but, over time, we start to

see…

You know, we can just look at the number of people who… Using

Intercom is incredibly powerful because we can just look at the number

of people who have signed in over the past seven days and just order

them by how many times they’ve signed in over the past year, and it’s

very clear, you know, we still see the same group of people who are

continuing to use this and hammer away.

We do things to incentivize them. One thing we do for a lot of are

very active users is we have what we call an “alpha testers group.” We

will release features before they’re ready for the public and allow

them to bang away on it.

That gives them some sense of exclusivity, but also gives us the

ability to have a lot more testers using it than just our team.

Trent: Yes, which is hugely valuable.

Zvi: Yes.

Trent: Then, 2013 rolls around, you guys raise $1 million bucks and

revenue growth

explodes.

Zvi: Yes.

Trent: Let’s talk about that. Why did you want the million dollars,

because I’m assuming

you are still probably burning cash, at that point, and maybe need to

keep reserves up? If that’s right, what you use the million dollars

for and what is it that caused the growth rate to hockey stick?

Zvi: Yes. Absolutely. I think, overall, the trend is we really focused

2012 on proving that we

had a business, and then 2013 focused on growing it. So, we kind of

expanded on all fronts. We obviously raised a much larger round of

funding.

We were five people at the beginning of 2013. Now, we’re just passing

  1. So, we use a lot of our funding in order to grow our team, and, by

growing our team, that allowed us to have a lot more resources. So,

our marketing team went from one intern part-time to, now we have

three people fully focused on it. Our sales team used to be just our

cofounder.

Now we have three dedicated inside salespeople, one enterprise account

manager and things like that, and just having a bigger team and having

more resources, that has allowed us to just consistently grow the

business and, of course, having a very, very strong product behind it,

now.

It’s not just a little prototype that people play with. It’s something

that they use and rely on, every single day.

Trent: Yes. So, you’ve got three people in marketing and three people

in sales. So, the

marketing, are you guys… you’re following the Hubspot model. You’re

producing content like mad and making sure that it’s promoted like

mad, to draw as much traffic to the site?

Zvi: Absolutely. Yes. Then, of course, as people are coming on board or as

people may be to

set a conference or just kind of end up in our top of funnel, that we

educate them and deliver enough value to them and keep talking about

what Contactually is and how they can grow their business, etc., using

our platform. Then, those people come on board and then we do a lot to

educate them, as well.

Trent: So, at what point do the salespeople get involved. I think you

said it’s one someone

creates an account and they fill in that phone number. Shortly after

that is the salesman making an outbound call to say, “Hey, welcome

aboard. Let’s make sure you’re fully activated and training you and so

forth”?

Zvi: Yes. I mean, we keep iterating with the model, but the general

approach is, yes, as

people come on board, as we see that, hey, “This person is an active

user and seems to fit the criteria for someone who we really think is

going to be successful with Contactually,” we’ll sometimes reach out

with an email.

We’ll sometimes reach out with a phone call. Sometimes, they’ll reach

out to us and say, “Hey, could I have a coaching session to learn a

little bit more?” Then, we usually reach out. We’ll engage. We’ll have

a short 10 or 15 minute conversation. People are very friendly.

We usually have very little, just, you know, “No. Go away. Don’t

bother me,” kind of things, and then we focus on just providing a

little more value than they would otherwise. They know that we’re here

for help, and if they need assistance, they’ll reach back out to us.

Otherwise, they’re just better set up for success.

Trent: That is really, really cool. I’ve so enjoyed hearing the story,

and I’m sure there’s many,

many more chapters to unfold yet. So, before we wrap up, for folks

like me… For example, I’m actually involved in two startups, SaaS

companies that both serve the same market. They just solve different

problem, and that’s why two companies. What advice would you give…

One of them, we’re at 60 customers, 70 customers, and that when I just

became a partner by acquiring half of that company, and the other one,

we’re still in the development phase.

I use my audience here at Bright Ideas because the members of my

audience are the target customer. I’ve tried to do as many demos and

show the mockup and get feedback and so forth.

What am I not even thinking about doing with either one of those

companies? And obviously don’t know everything that’s on my mind. So,

it’s kind of a silly question, but I’m just looking for some advice

that I might not have thought of yet.

Zvi: Yes. Absolutely. So, I’ll give you kind of a couple… I’ll just give

you be one small

thing, one pretty beneficial thing and then just one high-level thing

that we do. So, one quick tip, when people first start to sign up for

your product or first start to get interested, collect their email

addresses, get their email address, and then you’re able to… you

know, then you have them in your system.

Then, most importantly, if they don’t finish signing up for your

product or they drop out at some point, send them an automated email

and ask them what happened, and you will gain so much information.

We just had a failed sign-up process where if someone doesn’t complete

their sign a process in 10 minutes, that we drop them an email and we

learn an incredible amount.

Two, at kind of a higher level, talk to everyone. We talk to our

competitors directly. We talk to users who hate us. We talk to users

who have tried other products. We talk to people who have signed up

and quit.

We just kind of focus on talking to everyone. We utilize Core [SP] a

lot for customer development, and just never be afraid to reach out to

someone and ask for a little bit of their time.

Most likely, you’re talking to another entrepreneur who has been in

your place, and they’re always happy to help you out. Even our

competitors, we honestly don’t consider our competitors as much

anymore, because, it turns out they’re people who are just as

passionate as we are.

Then, at a much higher level, we really strongly push the need for

consistent execution. If you ever get an impasse or you ever spent too

much time debating things or in meetings, just execute and do

something and learn, and we really, truly believe and subscribe to the

mantra that “shipping solves all problems.” We always believe in

releasing features before they’re ready.

If we’re unsure path A or path B to go down, we’ll launch both and

learn which one’s better, etc., but it’s building up the constant

mantra that, even now, as a 16 person team, we still do things that

break and fail and not everyone agrees with, just because we have that

mindset of executing first and then learning from it.

Trent: That reminds me of a piece of advice that I was given years

ago, and I actually made a

YouTube video about it. The advice was called “the best way to succeed

in business is to be in business,” and I didn’t get it at the

beginning, and for folks who maybe just don’t understand it, give me a

moment to explain it.

Or, Zvi, actually, you just did a really good job of explaining it.

The best lessons come not from thinking about what you should or

shouldn’t do, but from doing and making mistakes and falling on your

face and collecting what I call “skidmarks,” because those experiences

give you opportunities to learn what is working and what isn’t

working.

It is, in hindsight, some of the best advice that I was ever given,

and now you’ve given it to me twice. So, thank you for that.

Zvi: I could not agree with that more.

Trent: All right. So, we’re going to wrap up this episode, here. If

you want to learn more about

this, it’s Contactually.com. If you’re in your car, if you’ve been

listening to this, you’re going to be able to get to this episode at

BrightIdeas.CO/88.

I will have made links to everything that we’ve talked about. So, Zvi,

thank you so much for taking some time to be on the show.

Zvi: Thanks so much for your time, Trent. Have a great day.

Trent: You too. OK. So, to get to the show notes for today’s episode,

go to

BrightIdeas.co/88, and if you really enjoyed this episode, I would

love it if you would take a moment to go to BrightIdeas.co/love, where

you’ll find a way that you can leave feedback for the show.

That’s so incredibly important, because, the more feedback ratings we

get in the iTunes Store, the more people that discover the podcast for

the very first time. Whenever that happens, the more entrepreneurs

that we can help to massively boost their business with all the Bright

Ideas that are shared by guests just like Zvi.

If you’re not yet a subscriber, and you’re listening to this in the

iTunes Store, please come to BrightIdeas.co and do become a

subscriber.

When you do, you’re going to get access to my four-part “Conversion

Tactics Video Training Series”, plus, I do a whole bunch of really

other special stuff for subscribers that just visitors to the site

never see or never get to participate in. There’s lots of benefits to

becoming a subscriber.

That’s it for this episode. I’m your host Trent Dyrsmid. Thank you so

much for tuning in and listening to the Bright Ideas podcast. We will

see you again, in another episode, soon. Take care.

 

About Zvi Band

Zvi Band is the Founder of Contactually, software that helps its users to identify and stay engaged with your most important contacts.

He’s also passionate about growing the DC startup community, and  founded Proudly Made in DC and the DC Tech Meetup.

 

Josh Ledgard on How Kickofflabs.com Got 24,000 Customers in Just 2 Years

He shares the groundwork they put in place, including how they came up with the Kickofflabs name, how they defined their target market, and how they used Twitter for research.

Josh also tells how they actually generated all those customers – getting the word out through Quora, directories & lists; reaching out to other people’s audiences; and buying traffic.

For details on exactly how they did all this, as well as what they did for lead conversion and nurturing, you’ll definitely want to give this podcast a listen.

(If you want to learn from other software founders as well, check out all our posts on software development.)

Listen now and you’ll hear Josh and I talk about:

  • (05:10) Introduction
  • (05:10) Overview of a launch and results they’ve achieved
  • (07:10) Overview of how they came up with the company name
  • (10:30) Why didn’t they let competition deter them from moving forward
  • (15:10) How they used Twitter to do research
  • (18:10) How they defined their target market and defined their MVP
  • (25:40) Overview of the developments leading to the very first sale
  • (28:40) Overview of marketing mistakes they made and lessons learned
  • (31:10) How to leverage other people’s audiences
  • (33:40) How posting on Quora has impacted their traffic and sales
  • (35:40) Some refinements they made for lead generation
  • (37:40) How being in directories and lists impacted their revenue
  • (39:25) Overview of how they are nurturing their leads to become customers
  • (45:00) Explanation of how they are using subject lines in their free 30 day landing page course
  • (48:10) How they follow up with costumers that leave and what they learn as a result
  • (51:40) How outsourcing has played a role in their organization
  • (55:40) Overview of how they are buying traffic

Resources Mentioned

Crunchbase
TaskRabbit
Perfect Audience for Facebook
kickofflabs.com

More About This Episode

The Bright Ideas podcast is the podcast for business owners and marketers who want to discover how to use online marketing and sales automation tactics to massively grow their business.

It’s designed to help marketing agencies and small business owners discover which online marketing strategies are working most effectively today – all from the mouths of expert entrepreneurs who are already making it big.

Listen Now

Leave some feedback:

Connect with Trent Dyrsmid:

Transcript

Trent: Hey there, bright idea hunters, welcome back to yet another

episode of the Bright Ideas podcast. I’m your host, Trent

Dyrsmid, and this is the podcast for marketing agencies,

marketing consultants, and entrepreneurs who want to discover

how to use content marketing and marketing automation to

massively boost their business without massively boosting the

amount of time that they have to work every single week. And the

way that we do that is we bring proven experts onto the show to

share what’s been working for them, and this episode is no

different.I am very, very happy to welcome to the show a fellow by the

name of Josh Ledgard. Josh is the cofounder of a software

company called KickoffLabs, and you get to it at

kickofflabs.com. It’s a software services company, kind of as

everyone’s software company is these days, that specializes in

creating effortless landing pages plus smart email marketing and

social referrals, all with one goal: to get you more leads. They

are serving so far over 24,000 customers, and have generated

over two million leads. And the company is just two years old at

this point in time, and very nicely profitable as Josh is going

to share with us very early in the episode.So in this episode, first of all there is one of almost my

record of golden nuggets. I recorded six golden nuggets in this

episode, so you’re going to be learning how to use Twitter to

talk to the customers of your competitors so early on in the

lifespan of your company that you can find out exactly the

problems you need to focus on solving. How to keep in touch with

your early adopters using surveys, and Josh explains how he did

that and how it made a very, very big impact on their company

when it was very young and just getting going. And then how he

also makes personal connections with those same early adopters.

He talked about where he guest blogged, and in particular, he

describes how he chooses where to guest blog so that the

probability of the traffic of the people that are going to read

those posts becoming customers is the highest. So you’ll

definitely want to tune in and hear how he does that.And then he says he works in the library a lot, and there’s

something unique about sitting across from the magazine rack

that has really helped him with his copywriting skills. So there

is a whole bunch more that we talk about throughout this

episode, and I’m really excited to get it going, and in just a

moment we’re going to welcome Josh to the show.Before I do that, I want to tell you about two quick things that

Bright Ideas has going. Number one is that I am writing a book,

and it is on content marketing and marketing automation, and it

will be all the lessons that I have learned, as well as the many

lessons that I have extracted here from the guests on the show.

And you can become an early bird for that book at

brightideas.co/book. And if you run a marketing agency or you

are a marketing consultant, and you are looking for a mastermind

group to join, so that you can hang out with likeminded people

who are in the same business as you, who are looking to become

more successful than they are today, head over to

brightideas.co/mastermind and you’ll be able to get all the info

there.So with that said, thanks very much for tuning in, and please

join me in welcoming Josh to the show. Hey Josh, welcome to the

show.Josh: Hey Trent, great to be here.Trent: Thank you so much for making the time to come onto the Bright

Ideas podcast and share the story of how you have launched and

made KickoffLabs a success. Before we get into all of those

details, I’m sure there are plenty of people in my audience who

aren’t yet familiar with you, or your company, so please take a

moment and just introduce yourself.Josh: Yeah, so I’m one of the two founders of KickoffLabs, and we do

landing pages and email marketing. So our goal is setting up a

campaign that involves a landing page that somebody might get to

via an advertisement or some other promotion, and then the email

capture and promotion delivery via that service are relatively

easy. So our customers range from people starting new

businesses, like a cupcake stand in a mall that opened last week

using our product, all the way to a company like [Kalem]

Airlines, running a contest to get people to register for their

newsletter, register for their deals flying [Kalem] Airlines.Trent: Wow, from cupcakes to airlines, that is a broad spectrum of

target customers to say the least.Josh: Absolutely.Trent: So we’ll get into that, I do want to talk about how you go to

market and how you pick your niche and so forth. How long have

you been in business, and let’s talk about recent revenue, just

so we can give the listeners a bit of an idea of what it is that

you’ve accomplished, so that will make the rest of the story

more compelling for them.Josh: We’re kind of a typical good growth curve. We launched in the middle

of 2011, and we made what I describe as next to nothing that

year, if you look at tax returns. And then 2012 saw us grow into

a business that was paying its two founders, myself and Scott

Watermasysk, decent salaries, and this year has seen us so far

grow to hire a support engineer, a designer, a marketing person,

and also pay ourselves much better salaries that are much more

similar to what we were making in past jobs. So we’re making it

very worthwhile for us.Trent: So that sounds like it’s probably between 500,000 and a million

year run rate at this point?Josh: We’re heading towards that, yeah.Trent: Terrific. And this is a business that you created with or

without any outside funding?Josh: Yes, absolutely.Trent: Without.Josh: Without, sorry, yes.Trent: So that’s why I found this story so interesting, because that’s

what I thought that it was. And there are so many people out

there, I’ve had many of them on my show in the past, Sam Ovens

and Brandon Dunn, two other fellows who have created very

successful software as a service businesses. Neither of them,

like yourself, took outside funding, so I think that there is a

really good story here, so let’s kind of dive into it. The first

thing that I’m really curious about is the name, KickoffLabs. I

think I read on your blog that you had ten product ideas when

you were first starting off. Is that it?Josh: You definitely did your research. When Scott and I got together, we

knew that we wanted to work together to build something, and to

build a business, we had close to 25 one-sentence or one-

paragraph ideas that we were throwing out there as things we

could do. We kind of vetted all those against what we had

personal experience in, and what we did not. What could we

contribute the greatest to? Some ideas even had us selling

physical products, but neither of us had experience with

manufacturing or doing a physical product, so we kind of ruled

that out.We narrowed it down to five or six that we wrote what I would

call mini business plans for, anywhere between five and ten

pages, talking about competitors, talking about the opportunity.

And I loved all those ideas that we had, and we started

discussing them after writing that up. We realized that any

further discussion was just circling around imaginary numbers.

We could have made any of those ideas look good on paper, and

probably they were all good on paper, and had potential in

reality. But what mattered to us was could we get people to pay

with their attention for the idea.So we were like, we should put up some pages and see if we can

get some people to subscribe to email. And then we kind of joked

and said, why don’t we just build a product that does that, and

then in the worst case we’ll have a product that puts up landing

pages. And so that wasn’t actually one of the five ideas at

first, and so that kind of stuck. And there are probably a lot

of people in our position. So the product was built with

ourselves in mind at first, to solve this problem-that would

eventually be called the Lean Startup Movement-had, which was

trying to build an audience for something.I think my answer in terms of why KickoffLabs would be, we’re

terrible at naming. We’d like to have a really catchy name like

Yahoo or Google or something, but I don’t necessarily think it

matters. To me, I think it came from thinking about all of this

as an experiment. It was an experiment for ourselves, and all

businesses are inherently experiments until proven otherwise.And even as we’ve expanded our market, our campaign is

experimenting. You as a marketer might run a contest or a

promotion, and you are betting that you’re going to get more

customers than you’re putting into it, but it’s an experiment.

And the idea that we could make those experiments and those

campaigns quicker and easier to set up and either quicker to

fail or quicker to succeed, there was going to be a market for

that kind of thing, for helping people to experiment more

quickly.Trent: You know, that’s such a profound and important concept that I

think a lot of especially new entrepreneurs don’t have a strong

understanding of. I see people, they put all this time into

putting up a full website, and they write all the copy, and they

do all this stuff before they’ve done any validation whatsoever.

So tip of the hat to you, and I think the KickoffLabs name is a

great name to be honest with you, because it is very

representative of what you guys are doing.So when you first started, there’s things that get in peoples

way from taking action and moving forward, and one of those

things is competition. I see people, they find an idea, and they

go, “Oh, somebody’s already done that. I can’t do it.” And you

came into a space that there’s an 800-pound gorilla, called

Unbounce, which they have a super well-developed product. They

have tons and tons of customers. There are a number of other

ones that are around. Were they there when you guys started, and

were you aware of them? And if that was the case, why didn’t you

let that deter you?

Josh: Unbounce was around when we started, and so were about 20 other

companies doing not just general, because there are categories

of website development. There’s actual website development,

something like [Wicks], something like WordPress. We didn’t put

ourselves in the category of competing with that, we’re more

complimentary. So something specifically around landing pages,

we’ve captured probably 20 to 30 different larger to smaller

players in the space, so it wasn’t just them although like you

said, they certainly had the most professional looking offering

at the time.

But two things, one, it felt like our niche, going after the

basic, just email collection and idea validation market at

first, was being underserved by their product. We knew that from

talking to people that were using their product on Twitter, on

forums, online, so we knew that there were people that felt like

they were being underserved and weren’t necessarily the target

of what Unbounce is going after. The other piece of the puzzle

is when you look at something like keyword trends on Google, and

you start looking at what is your business targeting as landing

pages, and just seeing the number of searches that people were

doing for marketing automation, landing pages, those kind of

search trends have more than doubled every year for the last

five years.

And so that tells me that there’s a market that’s not only

large, but growing, and although a company may look like a 900-

pound gorilla, I’m sure that Unbounce feels that they’ve only

captured one percent of their potential market. So there’s a

huge potential market out there, and I think this is true with

any idea, until you get to Facebook size and you can say, “Wow,

half of the U.S. is on Facebook,” most businesses that will

start out, if you’re looking at competition, there’s not

somebody who truly has 90 or 99 percent of the market share.

Now, if you said your business was going to be a search engine,

I might tell you that there is an 800-pound gorilla in the room,

but if you said your business was going to be a search engine

that specialized in finding gluten-free menu options and scanned

the menus of every gluten free location and went ahead of Yelp

in that sense of doing far more than they did, and you took that

niche and that was going to be your product, I’d have a lot more

faith that you stood a chance of making some money in that

niche. I’d still have some questions if your longer term goal

was to become Google. But in the space that we’re in and the

size of competitors, I never viewed anyone as an 800-pound

gorilla, and I think that the market is healthy, and there is

room for competition.

Trent: Absolutely.

Josh: And personally, I’ll add one more thing. I’ve met the guys from

Unbounce, they’re in Vancouver, and actually I really like them.

We’ve sent customers their way, and vice versa. I have no

problem if someone is met better by some of their product

offerings, then I have no problem telling people that they’ll

have a good experience, because I know that they share some of

our same values around customer support and experience.

Trent: And I’ve used both products, and when I say used, I’ve used

theirs for a landing page, and yours, you were kind enough to

give me a trial so I could get in and play around with it, and

they’re different. Yours is definitely easier to use. Unbounce I

think does more, but it’s more complicated, and as you

accurately put it beforehand, there was a portion of the market

that they weren’t doing a good job of serving. And I think

that’s another very valuable lesson for people too.

You mentioned that you did research on Twitter, so I’m curious

about that. Did you go and find people? Did you set up a Twitter

search, for example? Just talk about how you used Twitter to do

that research and connect with those people?

Josh: Literally, we took a few of the competitors, Unbounce, Lander App, in

the startup space there’s a company called Launch Rock that

opened shortly after we started doing what we were doing, and

had a lot of fame. And we just started looking for mentions of

those services. And I just wouldn’t look for mentions, I would

look for the really positive or the really negative mentions. So

the really positive mentions, like “Oh, I love the product,” I’d

just follow up with them and say what do you love about

Unbounce, what do you like about it? I wouldn’t say, “Come use

our product,” that’s obviously in my bio and some people

probably clicked over, but my goal wasn’t to get people to use

our product, my goal was to learn where there was room to

improve or not to improve.

And once I’d asked what they loved about it, I’d say what do you

hate about it, what do you wish was better? And then obviously

the inverse questions for people who said I’m frustrated by

this, or I can’t figure out how to accomplish this with that

product. So you just sort of have conversations with people

online, and at one point, I was probably sending out 35 to 40

tweet replies to people that were using a potentially

competitive service to ours, to grill them on what we could do

and what paths would be best for us.

Trent: I think that’s an absolutely brilliant idea, using Twitter to

talk to the customers of a competitor. You know, the guy that I

interviewed earlier this morning, we were talking about books,

and he has a particularly good idea that’s been shared with me

now a couple of times, and I just want to pass it along. When

writing a book, or researching any kind of product, he goes to

Amazon, looks at the competitive products, and looks at the one-

star reviews. Because those are the people who aren’t happy, who

are saying it’s missing this, it’s missing that, and it’s

missing the other thing. And I thought that was an equally

brilliant way of getting insights into ways that you could add

value that didn’t currently exist.

Josh: And it helps, because you sort of see where you’re going. You just

have to be careful, because the trap I see some people fall into

is, like if somebody came to us and say, “I don’t like Unbounce

because I can’t do these 50 others features.” And I’m thinking

to myself, Unbounce is pretty fully featured. You want these 50

other things, is not to then add to my work item list, do those

50 things, because then person is not our customer as well,

given that we’re trying to go after the quicker, easier market.

Trent: Absolutely. The next two things I want to talk about are one,

how you defined that market, how you really figured out who your

customer was, and then how you developed an MVP, a minimal

viable product for them? So can you walk us through that?

Josh: So there was some of that research at first, there was looking at the

cross section of what’s the same about all these services and

the competition, that we would say to compete in the space we

absolutely have to have. And we took that list, and we said this

could be our MVP, and then we didn’t do some things that we

probably should have done at that point. We did put up our own

landing page, and eventually moved it over to our platform when

it was ready.

There are some things we didn’t do, like we could have taken

advantage of the people that we signing up to our list, and

sending them surveys and questions along the way. And that’s

what some of our better customers do today that have success,

they’re actually using our tools and emailing people every week

and saying, “Hey, check this screen shot of our product out,

what do you think about this versus that?” And so it was a lot

of what do we need to launch that we could be using as a

customer to get the very first thing out the door? Since we were

that customer.

Once we got the very first thing out the door, and when I say

out the door, we did a really limited beta. We invited maybe 10

people, most of which were friends that we could trust would

give us honest, good feedback, and then we launched it and put

up a “Pay for this” button. We didn’t have an interest in doing

a free beta for very long, because to be honest people who don’t

pay any money give terrible feedback. Once someone is paying

money, they tend to tell you what they really need.

So then we had a free plan signup and a paid plan signup, and

literally everybody that signed up, because when we launched we

weren’t doing tons of business in the first couple of months, I

just connected with them personally. Because what else was I

going to do? I could just spend time writing a feature I didn’t

know if anybody wanted, I could spend time trying to market,

which I did with the rest of my time, or I could start having

conversations with the people we were grabbing and say, what do

you need next?

For example, the first thing that we launched had an email

capture, but there was no automatic reply or follow-up. We

didn’t have that as a feature, and when about the fifth person

who paid us money just for doing the email capture said, “Boy,

you know this great, but what I hate is that now I’ve got to go

get these emails and put them in Mail Chimp or put them in

AWeber, and then I’ve got to go set up an auto responder. Could

you just make email as simple as setting up your landing page?”

And that fit right in with this value that we try to have of

keep things easy and simple. And so we said, obviously, it’s a

one stop shop, why should you have to go to a Mail Chimp to do

email? If you’re doing a quick campaign, why shouldn’t it just

be automatically set up for you that there’s an autoreply?

It seems like a fairly obvious feature, I’ll grant you, and we

waited until a few people who paid us money repeated it, and

said, “If you had that, I’d pay you twice as much.” And we said

fine, pay us twice as much and we’ll do that, and they did. And

so we raised prices, and those people were okay with paying

more, and we added the foundations of some email marketing to

our solution.

That was a good example, because we talked to the customers

personally. I emailed everyone who created an account with us

personally. I looked at their landing pages, I’d give them tips

for their page, and say your copy might be better if you do this

instead of that, and build the trust a little bit, and then get

their feedback personally.

When we got the feedback, we’d separate it into feedback from

people who were paying us, and feedback from people who weren’t

paying us, and it became pretty obvious what things people who

were paying us valued. And we evolved the product along those

lines and values since that time, keeping our core value

proposition in mind, but as people have suggestions along those

lines, if it comes up consistently from people who are paying us

something, then we’ve evolved the product in that direction.

Trent: Very smart. If you can come up with enough of an idea to get

early adoption and paying customers, and then listen to your

tribe, they’ll take you in the direction you need to go.

Josh: Exactly. And it was just looking at how people were using it. We

didn’t used to have a section of themes and templates and

features for people who were running contests, but then we

quickly discovered that people were using our platform to run

contests. It was kind of shocking to me, I hadn’t noticed, and

then one day I looked at the sites that were getting the most

subscribers. At first you have to deal a lot with informal data,

conversational data, but when you start getting more usage, and

you start running some queries, and you say what were the top

viewed pages across our landing system for the last month?

And then those top viewed, what are getting the most

subscriptions, and then of those, what pages are those? And a

third of the subscriptions were coming to contest pages, and

we’d never even marketed for people doing contests before. So I

reached out to a couple of those customers, and they said, “Oh

yeah, I just love it. We just set up simple contests all the

time, and we run them with your system. We love your system,

it’s great.” And I was like, we’ve got to get a case study out

there and actually market and do some features for you guys, and

evolve the product that way too.

Because it’s the same thing, it’s a campaign, it’s something

that people want to be able to set up and close really quickly.

We had some features like the referral feature we do, we have a

built in refer a friend feature that works really well for

contests. It made sense after we saw that data, but it was not

something we thought of before.

Trent: Talk about being able to extract the most valuable insights

having access to all that data, that’s absolutely just a gold

mine of brilliant, or I guess I should say bright, ideas.

Josh: It’s definitely a gold mine of ideas. You have to have a question

that you’re asking first. The question that I was trying to

answer was, what are people using our product for today? What

are the usages for it? That’s why I had to start digging the

data, and dumping it all into a spreadsheet, and categorizing

things, and really scrubbing it to figure out how we could

leverage that?

Trent: So I know there are people who are listening to this now who

would probably love to create their own software as a service

business. And maybe there are some limiting beliefs standing in

their way, and I’d like to see if we can knock a few of those

down. So first of all, are you and your cofounder, are you guys

coders yourselves?

Josh: We both come from the technical background, so I was the VP of

Engineering at the last company. If I remember, Scott was the VP

of Architecture, so he was much more technical than I was, so he

led the overall design and architecture of the product, whereas

the rest of the engineering staff, the testers, the designers,

the product managers reported through me.

Trent: How much time did it take you from no code to when you were

able to put up that very, very first buy button?

Josh: About four and half to five months of time. We started toward the end

of February and we launched at the end of June in 2011.

Trent: Okay, so that’s actually quite a bit longer than I thought.

Josh: It took us longer. I think we got caught up in some traps that people

get caught up in for building the first version of a product.

And I think both of us, until we started to see some results,

were maybe not necessarily 100-percent committed at the time.

Trent: So during those four and five months, this wasn’t your full-

time venture?

Josh: I was doing a couple of things on the side at the time, and it wasn’t

necessarily full time for me during that period.

Trent: Okay. So what advice would you give to someone who wants to

start their own software as a service business? They want to

tackle one problem, so we’re not talking about building another

InfusionSoft or anything like that. Do you think that if they

don’t know how to write code, they shouldn’t do it?

Josh: It’s really hard for me to answer that question, because I want to

just say no, because especially lately has we’ve hired people

and outsourced some development work of features and parts of

the product, we’ve realized that the coding part is some of the

least valuable pieces of what we can do for the product. But at

the same time, we would have eaten through a lot more of the

savings we had to fund it if we had to pay for that stuff

initially.

So the approach I see working now for some people is going about

building a related information product, selling that to get some

funds that you can then use to fund the development. I can’t say

that you don’t have to. I think it’s been really helpful, but at

the same time it’s held us back, because we didn’t know how to

market a product at first. We had no marketing experience. And

so we would have gotten to success a lot more quickly after we

had the product had we understood how to properly market it. And

not necessarily wasted the second half of 2011 making very

little money.

Trent: I want to talk about that, but before I do, I want to give a

link out. So I had a fellow on my show by the name of Sam Evans,

you can get to him at brightideas.co/69, and Sam did pretty much

what Josh just said, although he didn’t use an information

product. He did consulting work, and he used the profits from

that work to fund his software business which is Snap Inspect,

and it has taken off big time, Sam is now doing very well. But

definitely go and check out that interview. So Josh, you’ve

mentioned that you made some marketing mistakes. Can you talk

about the mistakes that you’ve made?

Josh: They’re so numerous.

Trent: Well, this is where the best lessons are, so this is why I want

to get into this.

Josh: When it comes to KickoffLabs, there were lots of mistakes going into

  1. We got hung up on typical stuff like logo design, and design

of the marketing site aspects of the product. And none of that

stuff really mattered, and we focused so much on those kind of

designs, and not enough on the copy and writing down compelling

reasons for people to buy or use the product or sell the

product.

And even when we did focus on copy, we did the classic mistake

that an engineering focused team will make. We focused on the

features, and not the benefits. So we would say, we’ve got this

feature, and that feature, and we’ve got referrals, and we’ve

got easy put up pages, and great templates, but not putting up

the why or the benefit that people would get. We weren’t

speaking to customers, and that’s just the stuff we learned

after we launched.

Before we launched, we didn’t do enough to build an audience.

We’d had a few hundred people sign up for our list, but the way

we’d gone about building the audience was trying to leverage

people we knew in our own networks in a poor way. So we would

just say, tell your friends about our idea, or check this out,

like us on Facebook, and sign up at our page if you like it. We

were trying to use our own megaphones, as opposed to finding

other people’s audiences and megaphones.

And I see this mistake with some of our customers as well, we

set up a blog and started blogging. We said, you’ve got to have

a blog, you’ve got to post on your blog, but if no one comes by

to read your blog, what value is that post doing you? Especially

in the short term? Now, in the long term, a blog post can have

some great long tail, SEO effects, but in the short run, where

you’re just trying to get a burst, and get an audience, and do

that initial launch, and make more than 10 dollars in your first

month, I don’t think a blog is very helpful for that. Because

you don’t have an audience to start with.

So what is more helpful is leveraging other people’s audiences.

So stuff we learned along the way includes going to public

communities, like Quora or the Internet Marketing Forum, going

to inbound.org, and participating in those communities, and

building a reputation with just a minor link back to your site,

those are much more valuable, because you’re leveraging other

people’s megaphones . . . or going to other people’s blogs and

writing a guest post. You’re leveraging somebody else’s

megaphone to get attention on what you’re doing. Where can you

play up somebody who has a bigger but related audience to yours,

is a lesson that turned out to be really valuable for us that I

wish I’d known sooner.

And a lot of our customers do this much better than us. They go

out and they just set up the landing page, they don’t even have

their own blog, and they go out and they market the landing page

in these kind of communities and forums, and other people’s

newsletters, and instantly they’re able to get few thousand

people in the course of a few months sign up. And then they have

their own audience, then they can start email marketing, then

they can start promoting their own blog posts. But that initial

building of new audiences by leveraging other people was

something that we didn’t do very well at all.

Trent: Have you ever heard of a fellow by the name of James Clear?

Josh: No.

Trent: It’s very relevant to this; I’m going to bring it up. I spoke

to James; I did not record this interview I had with him this

morning. I was referred to him by another fellow that has been

on my show, and it’s just so timely I want to share it.

So James has a blog at jamesclear.com, that at the beginning of

2012 had 500 subscribers, and I think he had about 11,000

visitors in that month. He now has 20,000 subscribers and he’ll

do over 100,000 visitors this month, and what he did was

literally reposted his content on medium.com, on [Quora]. He

hounded the hell out of the Huffington Post until they published

one of his articles. He hounded the hell out of Life Hacker. And

he said, much to my surprise, that he’s been getting great

results from using Google Plus.

And I asked him, has there been any negative impact on your

traffic from SEO as a result of literally cutting and pasting

the HTML of the entire blog post onto one of these other

platforms. He has his little byline at the bottom. Everything

leads back to one very simple landing page, which causes his

subscribers to grow. And he said, “No, not at all.” No negative

impact on SEO, no penalties for “duplicate content,” and as a

result of warming up that content on, we’ll call them these

outposts, his lead capture page, which is incredibly simple,

converts at over 80 percent. It’s mind blowing.

Josh: It’s lower now in the last few months, but going through 2012, a

third of our revenue came from posts on Quora that we’d made,

and so people that I could track back, their original referral,

where they heard about us from, a third of our revenue was

coming from some questions that we’d answered on Quora about

landing page best practices, launching a new campaign, launching

a business. We answered all sorts of those questions, and that

was leading to a significant amount of our revenue. I’ll go and

post stuff as answers and use that as inspiration for our own

blog. And the ones that get popular, where I can probably write

this up, do a better job of it, and put it on our own blog, and

so I’ll take some of the better answers and repost them to our

site as well, so we get the long-term effect.

Trent: It was a big eye opener for me, and something I have not been

doing a good job of, so you can bet that like you I’ll probably

be making some experiments very soon.

So what should we talk about next? In terms of lead generation,

we’ve talked about a fair amount already. Is there anything that

has worked very well for you Josh that we have not yet

discussed?

Josh: It’s some refinements of things that we’ve talked about, in terms of

lead generation. For example, when people look at guest

blogging, I think it works best not to just look for this person

is an influence or in marketing, but does this person have an

audience that’s willing to pay money? So some of our best guest

blog posts have been with complementary products. We’ve done a

few guest blog posts on the User Voice blog, on the Kissmetrics

blog, for example. Those are complementary products that our

customers are also using, that charge money for something. So

the audience there is already familiar with the concept of

paying money for a service online, and although those blogs have

a smaller audience than some what I would call influencers in

the marketing space, the conversion results are much better from

those locations.

So when you’re looking for places to post content, thinking

about where there are people that spend money, hanging out and

reading, and going for it that way. So we’re participating with

Joanna from Copy Hackers, who is doing a 30-day boot camp course

with videos, and we’re contributing one of the videos, because

we know that when we do a promotion with Joanna, she’s got a

segment of customers that are already willing to pay for copy

and marketing services. So I know that while that video might

not get a million views, the views that it does get are going to

be really valuable for us.

The things I didn’t expect to convert at first, the things I

kind of ran a checklist that I went and did, because we tried a

little bit of everything, we’re about experimenting, being in

directories and lists related-whenever anyone would make a list

of the best landing page tools, trying to email the author and

get into that directory. And even just straight up directories,

like editing our entry in Crunchbase, editing our entry in other

places where there are just tools you can use. There are all

sorts of these directories and list building services, and as

long as you write up a couple of standard answers to questions,

and have a couple of standard screen shots you use, you can even

outsource that and have people submit you to 25, 50 directories.

And there are a couple of these directories that I would have

never guessed would drive us traffic and referrals. But for the

cost of having someone push promote us to a couple of those

directories, we get a good amount of revenue every month, and a

good amount of conversions every month form those locations.

Trent: Which were the top three, the best three locations for you?

Josh: I’d have to look that up. We do get a lot, in terms of directories,

from Crunchbase because in our market, people do look for a

competitor too, and they’ll type in a product. And Crunchbase

has a good tagging of competitors, so we made sure to tag all

the competitors, that we are a competitor to them. Which then

adds them to our listing, but then we get the vice versa listing

as well. And that’s been probably the biggest. To go beyond

that, it’s a lot of onesies and twosies that add up over time.

So I’d have to go back and look at the data to tell you. I don’t

have that in front of me.

Trent: Fair enough. So capturing leads is one thing, but as anyone who

has done that will know, not all leads are created equal. Some

people are ready to buy, some people aren’t, so there is a

process of nurturing those leads to lead them towards a

conversion. Can you talk a little bit about how, I’m assuming

you have an automated funnel that’s doing that for you?

Josh: Yes.

Trent: Can you talk about it?

Josh: Yes. So what we do if somebody comes, and they’re not signed into our

website today, they’ll see a pop-up that comes up that says,

“Sign up for a 30-day email course.” And so the email course is

all about how to design and write landing pages, so it’s called

Landing Pages 107. The point is, we’ll send anywhere from eight

to twelve emails throughout the course, we’re constantly

refining and playing around with it, but basically walking

people through researching for a landing page, designing the

landing page, writing the copy for the landing page. We’ve got

some downloadable worksheets that go with it.

It’s my belief that the best ads are educational in nature. Even

if you think about some of the best Apple ads, for example, that

talk about the iPhone, they’re showing people how to use it.

They’re showing people, here is an app you can download, and

here’s a finger actually using that app, to show you how simple

it is to do it. I think that’s genius, because it’s not just an

emotional play in the ad. They’re great, because they combine

the emotional play as well as this educational play, but what’s

often overlooked about great ads is the educational value of

them. The better we can do through this nurturing process of

helping people with education, and getting a better

understanding, then the more trust they’ll have for us, and the

more they’ll come back and spend money.

We get anywhere from 10 to 20 percent of conversions from people

who only ever signed up for the email course, and then decided

later to come back later and sign up for a free product, and

then maybe upgraded down the line to a paid product. The numbers

are potentially higher, but it’s sometimes hard to measure when

people go back and search. I ask people all the time, I have

kind of a vague how you found us, and they’ll say, “Oh, I took

your course,” and I’ve got no way to see that they did. I’ll go

back and look them up, and I can’t tell that they did, but

they’ll say, “Oh, the course was great. Somebody told me about

it, and so I signed up for the product,” but then they used a

different email address.

So you just have to ask constantly how people heard about your

product, because the best tracking and automation online doesn’t

always capture what’s bringing you leads. But I can tell you it

was 15 percent last month, people signing up for this course. So

we do that, and then after the 30 days are up, we have them on

our continuing education newsletter list, so every other week we

send out a tip or an article to promote something that we’re

doing. And we also sign people up for newsletters on

KickoffLabs, when they sign up for a free account, then they’ll

start getting alternating every other week between that

continuing education email and a new feature or announcement or

promotion with KickoffLabs that goes into it. In terms of

marketing automation, I call it human automation. I also wanted

to keep that concept of having a personal touch with customers

and following up with them.

So we have an email that comes out every day to the support

person, and it shows them new customers, new landing pages

they’ve created, whether they’ve paid or not, and some

information about the landing page, with a link to the page

they’ve created. And we’ve got essentially almost a sales script

developed, where, depending upon the stage that that customer is

at in their lifecycle, we’ll have him follow up, give them some

tips, and ask them some questions.

Now, you could say, why don’t you automate that, because

obviously the product knows roughly what the person has done,

what they’ve accomplished, whether they’ve published the page or

they haven’t? That script could be automated, and over time we

may do it, but there’s a huge value in personally reaching out

and saying, it looks like you’re setting up a contest, because

that’s a determination probably only a human can make on a

landing page, it looks like you’ve got about all the copy in,

but it doesn’t look like you’ve got a video in yet. Or it looks

like you haven’t set up the follow up email yet. Can I help you

with that? Here’s a link to a resource that helps you with that.

And so that is semi-automated, in the sense that there’s a

script and a path that people go through, but we get a lot of

follow-ups from customers that say, “Wow, great, thanks for the

tip. I don’t have anything right now,” but I can tell from the

follow ups that we’re getting that it’s creating a positive

impression and people are more likely to buy, or continue to be

customers from month to month, because they know that not only

are we available via support, but that we’re already helping

them proactively. And so there are those two things, being very

automated on the email side, and then the semi-automated

scripted human side of the follow up are the two big marketing

automation tools that we use.

Trent: So while you were talking about the free sequence, I made a

little not to myself, subject lines. And what I meant by that

is, that everybody gets a ton of email. So there’s always this

huge challenge of writing a subject line that’s going to get the

email opened. And there’s a fine line between too much hype and

not enough. In your educational series that goes over the 30

days, what style do you have with your subject lines, as I have

not opted in and seen your subject lines?

Josh: It’s a mix. I tend to believe that although headlines grab people in,

the headlines should match the style of the content, so the

content is very varied. Because I believe when you are doing one

catch-all for marketing, like this 30 days course that gets

thousands of people to go through it, there’s not necessarily

one email that’s going to drive them all to sign up. You never

know what will drive that particular person, so we try to vary

the style.

So within that course, there’s one that’s learning about the

design of landing pages, so the style is very much a play on see

how Apple designs the best landing pages. So that subject line

works really well, because people associate Apple with design,

and we do have a case study that walks through some Apple

developed landing pages, and why they’re tremendous landing

pages. So people love that follow up, but then we have another

one that’s a list later on, so in the measurement section, the

classic ten things you should be measuring, and that tends to

work really well, but it pairs with the email, because the email

really is ten things you should be measuring.

I go to the library a lot, and I work from there, and sometimes

I’ll sit across from the magazine section. They’ve got a huge

magazine section at the library, and I see all these headlines,

and it’s just great fodder, because you can see the Cosmo

headline, right next to the Economist headline, which is a weird

mix. I don’t know how they order the magazines, but you get on

one end “The 10 Secrets your Boyfriend is going to Love in Bed,”

and on the other side of it, you see “The Cause of the Economic

Collapse and what So and So does to Prevent It.”

This great mix of headlines is an inspiration. I recommend

anyone go to a magazine stand and just borrow from those

headlines, and then create the emails that really map to that

headline. Because there’s nothing I hate worse than a bait email

that then doesn’t match up with the article. Not one style per

se, but we’ve leveraged all these classic headline formulas to

improve the open rate of the course over time.

Trent: And what open rate do you have, overall? And I realize that’s a

really hard question, so it’s more of an opinion.

Josh: Yeah, because it varies. And so the different tools you use give you

different answers, but I’m pretty confident in saying that we go

anywhere from 25 to 35 percent open rates, depending upon the

email that goes out.

Trent: That’s pretty good. Is there anything on nurturing that we have

not yet talked about?

Josh: I think we covered the stuff that I meant to cover on nurturing

leads. I’d say that the piece of it that a lot of people

overlook is the following up. So there are two pieces. One is

following up when people leave the service. It’s not necessarily

nurturing a lead. Well, it is like nurturing a lead. There are

two categories of people who leave a service like ours. There

are people that are done with their specific campaign, and we

can tell that by looking at their page and the note they’ll

leave in the reason box. And so we’ll follow up personally with

everybody that leaves, and it says, “Did you have a great

experience? What can we do to make your next experience or

campaign better?” And just follow up with them to remind them

that we might be able to offer this for you in the future and do

an even better job of that in the future, and we see a lot of

those people come back for campaigns down the line.

The other category are people that leave because they don’t feel

like they’re getting the results that they wanted. So then you

can follow up in terms of why don’t you think you were getting

the results that you wanted? What could we have done better on

the product? And it turns out that we end up turning some of

those people around as well. And if somebody had good results,

we’ll say, “We noticed that you had good results. Do you mind

sharing them with people?”

So this is the second part of it, personally asking for

recommendations. And a lot of people don’t do it, so when people

do email support, and somebody says, “Wow, thank you, that

totally solved our problem,” a lot of times they’ll get a reply

back from us that says, “Don’t thank us, go on Twitter or

Facebook or your blog, and tell 5 to 500 of your closest friends

about us, and that will be thanks.” And people do, and it works

a lot better than just having like us on Facebook as a button.

When you have that as part of the process and the workflow, when

you’ve caught people at a time when they’re feeling great about

your service via a successfully resolved support case or a

question that you’ve answered for them, to actually say right

then and right there, “Don’t thank me. Go on Twitter, and

promote our service.” I’m not saying it that directly, but if

you see a lot of positive stuff about our service out there,

that’s where it started from.

And I’ll tell people, “Hey, did you know you can get your next

month free if you write a blog post about us? So if I see

somebody who’s got a blog, and someone who’s had a successful

support story, I’ll tell them, “Write a blog post about us, your

next month is free.” I’m not beyond bribery, it works. And we

get a blog post written about us. And even if the person doesn’t

have a big audience, you get enough of those over time, and the

onesies and twosies build up over time.

Trent: That’s a very good investment in marketing. I’m jotting that

one down too. I don’t know if you know this, but I always talk

about these golden nuggets in the episodes that I record, and

you have up to six golden nuggets so far.

Josh: Sweet. Don’t tell me what the record is, because I’ll try to beat it.

Trent: Actually I don’t know what the record is. I’ve not done a good

enough job of keeping track, but you’re close. You’re in the top

20 percent at this point, because I only have five lines on my

sheet, and so I’ve had to make extra space for yours. So folks,

if you want to be able to get to all of the show notes and so

forth for this episode, that’s going to be at brightideas.co/82.

All right, so continuing on then, and we’re going to wrap up

pretty quickly, I want to know if outsourcing has or does play a

role in your organization, and what your thoughts on using

overseas outsourcers are.

Josh: I haven’t had much success with overseas outsourcing. We’ve tried a

couple of small projects, we’ve tried a range. We’ve tried from

content creation through to some development projects, and have

not had much luck with those two categories of things. We’ve

ended up doing a much better job with onshore offshoring, if

that’s a term. Because I’m in Seattle, my cofounder is in New

Jersey, the marketing person is in New York, the support person

is somewhere else. Since we’ve done a great job hiring around,

it has been easy for us then to take on and give some projects

to people that live in the middle of nowhere, so they then have

a cheaper requirement for their rate than if I was to go hire

somebody in Seattle, to be honest because it’s not cheap to live

here.

We’ve had more success in coding and content creation projects

looking for other people within the states. The area we’ve had

some success with outsourcing, and it ended up being overseas

outsourcing, has been in smaller design projects. So, if we need

to have a banner ad created, we did a banner for our WordPress

plugin, and I wanted it to look much nicer than anything I was

doing, and I didn’t want to take our designer and do it. I just

put up a mockup on freelancer.com and said “Do this as a

contest.”

For banners, we’ve generally run contests or gone back to one or

two people, and gotten designs that have worked out well for us

in the past, and that seems to work well for an extremely

scoped, non-mission critical design thing. And there’s a lot of

those that you end up needing over time to have done. So that’s

where the offshore outsourcing works. For everything else, core

development, core design, core content and marketing, we haven’t

figured out how to make that work with the offshore labor yet.

Trent: Okay. Things that I’ve had a lot of success with offshore labor

are tasks that are checklist oriented, where you can really

detail step one, do this, do that, do that, do that, repeat.

Things like research, if I’m going to write a post, and I want

to be able to cite other examples, I can say, “Go Google these

terms, catalog these results,” that kind of thing. I think

that’s an area where it works really well.

And folks, there is a fellow who is going to be on my show

sometime in the near future, Chris Ducker, and if you go to

chrisducker.com/101, Chris is the founder of a company called

Virtual Staff Finders. They’ve had a lot of success and built a

great reputation for themselves, and in that post, you will see

an example of 101 things that Chris feels are very suitable to

be outsourced.

Josh: You did remind me, I guess I did do that once. When I talked about

the research that I did on people using our service, to

categorize all the landing pages we had, I did like the first 10

or 15 or so, and then I realized it was going to take me

forever, so I used Task Rabbit, and wound up with somebody

offshore from Task Rabbit to go and categorize the rest of the

stuff on the spreadsheet.

Trent: I haven’t heard of Task Rabbit before, is that like an oDesk or

Freelancer kind of thing?

Josh: Yes, and it’s built more so around you have one single task to do.

Their UI is much more like, I’ve got this one job to do, not I’m

going to keep rehiring this person hourly to be like a virtual

assistant. But if you’ve got one specific job that you know is

going to take you a day, that somebody else could be doing

instead of you.

Trent: Cool, there’s another little golden nugget for us. Thank you

very much. That’ll be in the show notes as well. All right, so

let’s wrap up with this. Are you doing any paid media to drive

traffic to help boost the growth rate?

Josh: Yes. We do campaigns. We’ve done retargeting through Perfect

Audience. We’ve done standard Google AdWords, and we’ll run

Facebook campaigns as well. And we’ve run Twitter campaigns.

Facebook and Twitter straight up campaigns that are not

retargeting campaigns have not worked out as well as the AdWords

and retargeting campaigns have done for us.

Retargeting, I like it, it makes a lot of sense. You did the

work to get them to a page, and no matter how good your initial

conversion rate is, the vast majority of people are going to

leave your page once they got there, so reminding them that you

exist for the case a month down the road where they’ve got an

actual need for you, and it’s more dire at that point, seems to

work really well for retargeting. And then for straight up ads

to draw in a new audience, using AdWords it took us a long time

and a lot of wasted money, but we’ve got a few campaigns that

seem to work really well now, in terms of refining it. Maybe it

was just not knowing enough about AdWords at first.

I wound up contracting a couple AdWords experts to teach us how

to do AdWords better, and through the lessons that they taught

us, some of the stuff they set up on our campaigns, they’re now

profitable campaigns on AdWords as opposed to audience building

campaigns, which is my nice word for unprofitable AdWords

campaigns. At least they’re helping to get the name out there,

even if they’re not profitable. But it’s better if you can say I

make money on this ad, rather than I’m just getting my name out

there.

Trent: So you used the term retargeting, and I think there’s a lot of

people who don’t know what that is, so just quickly explain it

if you would.

Josh: Retargeting in a lot of services, and Google offers it now, is just

the concept that you have somebody that may have heard about

your product or your service or what you do. They visit your

website, and they visit it once, and they may click around a

little bit, but they don’t do anything to give you their email

address or sign up or give you any information. Retargeting

systems in advertisements let you essentially stalk that person,

for lack of a better word, across the Internet, wherever there

are banner ads or other places. Wherever there are retargeting

spots that I end up seeing, I’ll go to a news website and it has

banner ads, all of a sudden I’m seeing these banner ads for

other [SaaS] products I’ve seen recently fill up my screen.

And it actually is good, because it reminds me that I did mean

to go try out this new service, I did mean to go try out this

new support tool that I visited and checked out. And also

through Facebook. Perfect Audience is a product that allows you,

when somebody visits your website, then serve up Facebook ads to

that person from within Facebook. And that seems to work pretty

well as well, getting into their social feed. I wouldn’t have

thought that it worked well, because at least in my case I’m

interjecting business into what I would think would be a

personal thing, but it tends to get people to sign up for our

course and it gets people to sign up for the product. They come

back to your site when they’re ready to take action, and then

they sign up.

Trent: Does Perfect Audience work only with Facebook, or is it like Ad

Roll, where you can retarget anywhere?

Josh: It’s primarily Facebook. We used AdRoll as well, and had a little bit

less success. I honestly didn’t like the fact that I had to come

up with as many fancy banners that I had to for AdRoll. It was a

little heavier weight than I was looking for, whereas Perfect

Audience is a little lighter weight, and easier to get started

with.

Trent: Okay, that’s one for me. I’ll have to check that one out too.

All right, well with that said, I think I’m going to wrap this

up here. If anyone wants to get ahold of you Josh, or they want

to try out your stuff, what is the best way for them to do that?

Josh: They can try out our stuff at kickofflabs.com. Our email course that

we talked about a couple of times is at landingpages107.com, and

then if you want to email me directly, it’s

josh@kickofflabs.com. And I’m Josh A. Ledgard on Twitter.

Someday I’ll hold the person who has Josh Ledgard at Twitter for

ransom, but so far they have not given me my name.

Trent: Why landingpages107? Everyone does 101, you did 107. What’s the

significance?

Josh: Because everybody does 101. Because we want to look different. It was

a tip I learned from a [Mixergy] interview about using odd

numbers to promote things. We found out that on our homepage,

instead of saying we’ve served 20,000 customers, to actually say

over 21,582 customers, that tends to convert better on our

homepage. And I’ve been applying that to other things. I did a

presentation I’ve done a few times on getting your first 989

customers, as opposed to saying your first 1,000, because

everybody does your first 1,000 customers, this is just your

first 989. And it leaves people wondering, how do I get the next

11 customers to get to 1,000? And when people ask the question,

they’re a little bit more engaged. So that was just the reason

we did landingpages107, because ours is better and it’s a higher

number, and it’s different.

Trent: Absolutely. Well thank you so much Josh for making the time to

be on the show, it has been a pleasure to have you on board.

Josh: Yeah, it was a lot of fun. Thank you.

Trent: Okay, so that wraps up this episode. To get to the show notes,

go to brightideas.co/82. After we stopped recording, Josh was

kind enough to extend to me an explanation of a contest he wants

to run, and here’s what we’re going to do. He’s going to give

away three promo codes, so in other words three free licenses

for his landing page software, to the best comments that are

left on the post, and you’ll get to that at brightideas.co/82.

Now this post will be going live on November 12th, and this

contest will run for a full 30 days after November 12th. So make

sure you go and leave your comment, because number one you’re

going to get an answer to the question that you ask, but number

two you stand a decent chance of getting a free license to

Josh’s software.

Now the other thing that I’d like you to do if you would is to

please head over to brightideas.co/love. When you are there,

you’ll see a prepopulated tweet to help spread the word about

the episode, and as well there is a link and a video to show you

how to go to iTunes and leave a rating, hopefully a five star

rating if you’ve enjoyed this episode for the show. And it

really means a lot to me when you do that, because it helps to

get more exposure in the iTunes store, and whenever that

happens, more entrepreneurs discover all the bright ideas that

are shared with them by the guests here on the show, and it just

helps a whole bunch of people, self included obviously.

So thank you very much in advance for doing that. So that’s it

for this episode, I am your host, Trent Dyrsmid. I look forward

to having you tune in on the next episode, which will be number

    1. We’ll see you soon. Take care, bye-bye.

About Josh Ledgard

JoshLedgardJosh Ledgard is the co-founder of KickoffLabs – subscription software for landing pages, online forms, and email marketing – and the author of My Toddler Perfects Your Sales Pitch and Landing Pages 107.

Follow Josh on Twitter @joshaledgard.

Digital Marketing Strategy: Brennan Dunn on How He Launched His SaaS Business in Under 4 Months

The software business – like so many others – is extremely unpredictable. If you’re not careful, it can suck up more time and money than you ever thought possible, and never generate enough cash flow to even get off the ground. But it can also be one of the best businesses, with the potential to progress very quickly from cash-guzzling monster to cash-generating machine.

If this is a business model you’re considering, you’ll want to learn from others who have already had success. Someone like Brennan Dunn, who has taken his Software as a Service (SaaS) business from concept to launch in under four months.

Brennan shares his story, as well as valuable insights for other new businesses (software or not). He provides insights on how to come up with an idea worth developing, how to attract potential buyers and generate cash flow even before your product is ready, and how he structured his marketing automation so that once he started paying for traffic, he got a 10 day ROI on his investment.

Quite impressive!

Listen now and you’ll also hear Brennan and I talk about:

  • (5:00) Introductions
  • (7:00) An overview of Planscope
  • (11:00) How to come up with a software idea
  • (14:00) How he developed his minimum viable product
  • (17:30) How to build software if you aren’t a developer
  • (20:30) How to attract leads
  • (26:00) How to generate cash flow before the product is ready
  • (30:00) Lead generation that doesn’t scale
  • (33:00) How he created his newsletter each week
  • (36:00) How and why he wrote his first book
  • (40:00) Why he was able to charge for content that he also gives away
  • (43:30) How he’s using drip email to generate leads
  • (45:30) How he’s structured his funnel to give a 10 day ROI with LinkedIn paid traffic
  • (48:30) Why he chose LinkedIn for paid traffic
  • (57:00) An overview of his concierge service product
  • (58:00) The biggest benefit of using Infusionsoft vs Mail Chimp
  • (1:03:00) An overview of an experiment he’s running for SaaS signups
  • (1: 07:00) An overview of how he manages his time

Resources Mentioned

Themeforest

FreelanceSwitch.com

HackerNews

Reddit/freelance

freelancersweekly.com

PerfectAudience.com

GetDrip.com

More About This Episode

The Bright Ideas podcast is the podcast for business owners and marketers who want to discover how to use online marketing and sales automation tactics to massively grow their business.

It’s designed to help marketing agencies and small business owners discover which online marketing strategies are working most effectively today – all from the mouths of expert entrepreneurs who are already making it big.

Listen Now

Leave some feedback:

Connect with Trent Dyrsmid:

Transcript

Trent: Hey there, bright idea hunters. Welcome to the Bright Ideas

podcast. I am your host, Trent Dyrsmid. I am so thrilled to have

you on the show with me today. This is the podcast for marketing

agencies, marketing consultants, and entrepreneurs who want to

discover how to use content marketing, and marketing automation

to massively boost their business. The way that we do that is we

bring proven experts onto the show to share the details of how

they became successful. I don’t have people on here who are

gurus who aren’t doing it. Everyone on the show is living,

eating, and breathing it.On the show with me today is an entrepreneur by the name of

Brennan Dunn. To say that he is doing well online is just an

understatement. He is bringing in multiple six figures from a

variety of sources, all of which we talk about to a certain

degree during this interview. He has authored a couple of e-

books that are being sold. He has consulting training at $1,800

a pop. He’s got a SaaS application called Planscope, and we’re

going to talk in detail about that during this episode.This is also an episode that is absolutely stuffed full of

golden nuggets. Now those of you who haven’t heard my episodes

before, a golden nugget is one of those ideas that makes you

want to pull over and write it down, because you know that the

second you hear that idea you can put it into action and start

to see immediate results in your business. You are really going

to enjoy this episode. There is some really good stuff. At about

the six-minute mark, we are going to talk about how he came up

with the idea for Planscope, his software as a service

application. At the nine-minute mark, we’re going to talk about

how he came up with a minimum viable product, so if that’s not a

term that you are familiar with, you definitely want to hang

around and learn what that is.If you are not a software developer, and you’d love to develop

some software as a service, he’s going to talk to you about how

you can get that done. Just to give you an idea of how good this

business can be, by the way, he is doing just over $10,000 a

month from that one product alone. It takes him about two hours

a week of his time to maintain that particular business. In the

episode, we are going to talk a lot more about what he is doing

to grow it, but as you can see the profit margins are really

crazy. You don’t need millions of customers. You figure $50 a

month, 500 customers-that is a pretty phenomenal business.When we get to the fifteen-minute mark, we’re going to start

talking at length, we spend about half an hour about how he is

attracting leads. There are so many people who have come up with

software, but they don’t sell any, or they don’t sell enough,

and so the business ends up not being successful. So if that’s

you or you think that might be you, and you are struggling with

how to attract more customers for your business, you are going

to love this episode, because we go into a lot of detail on

which social networks he’s using, how he is incenting them. He’s

given specific examples of landing pages, landing pages by the

way with opt in rates of 30% and 40%. One of them he said was

47%, which is phenomenal. We’re going to talk a lot about that.

Then we are going to talk about the specific tools that he uses

to generate leads and how he has structured his sales funnel so

that he can get a ten day ROI on his paid traffic. He’s using

LinkedIn for that paid traffic and we are going to talk about

how he does that as well.Finally, we are going to talk about how he’s using InfusionSoft

to automate a whole bunch of the portions of his business so

that he is not working a gazillion hours a week, and he can

still be a husband and father of two. This is really going to be

a wonderful episode. When you get to the end of it, and enjoyed

it, please head over to iTunes and leave some feedback, because

that really helps the show out.With all that said, please join me in welcoming Brennan to the

show. And one more thing, I am a big believer in masterminding,

because it is a way to surround yourself with other like-minded

entrepreneurs, and Bright Ideas now has a mastermind available.

It is called mastermind elite, and you can learn more about it

at brightideas.co/mastermind.Hey Brennan, welcome to the show.Brennan: What’s going on, Trent?Trent: Just sitting here recording a podcast with another successful

entrepreneur who has a very good story to share. Welcome aboard,

and I’m really happy to have you here.

Brennan: Awesome, looking forward to it.

Trent: For the folks who are listening, who don’t know who you are or

have never heard of Planscope, just very briefly take a minute

or two to introduce yourself, who you are and what you do, and

then we will dive into the meat of what we are going to talk

about today.

Brennan: Sure, so my name is Brennan Dunn. Planscope is probably my

primary business, though I have quite a few different things

that I am working on. I’ve written two books, Double your

Freelancing Rate and The Blueprint. I also teach two online

workshops, and I write a weekly newsletter that is targeting

consultants that just passed 7,000 subscribers. I am juggling a

lot of different things, I guess.

Trent: Yeah, no kidding. One of the questions that I wanted to get to

eventually, but I will bring up now, because it seems so

relevant, is VAs. Are you using a lot of VAs in your business?

Brennan: The only real assistant that I have is somebody that helps me

with the coding of Planscope. I still handle all of my front

line support. I still book all of my interviews manually. That

is getting better now that I am doing some automated things to

send out booking requests and everything. When it comes to

person to person communication it is still just me.

Trent: Here is what we’re going to talk about and why I asked Brennan

to come on the show with me. I want to talk about his company

Planscope, because so many people, myself included, want to make

a success of a software as a service business, because the model

is so compelling. For the folks that aren’t familiar with you,

let’s go right to the results. Well first of all, let’s say what

is it and how well it is doing financially right now?

Brennan: Planscope is a project management app for specifically for

freelancers and consultants. There is Base Camp, there are a lot

of different, it’s a very saturated market. It’s a very niche

project, and it’s doing very well actually considering that I

don’t even work on it full time. We just crossed five figures a

month in recurring revenue. One of the benefits, I’ve done SaaS

and I have quite a few different transaction products like books

and workshops. The amazing thing about SaaS, and I think the

thing that attracts most of us to it, is that I’m going to wake

up October 1st, and I’m going to know how much money, at a

minimum, how much money I will be bringing in through Planscope.

Trent: How much is that going to be?

Brennan: There’s no restart. With books, you kind of always need to be

promoting, or doing something to keep sales up. With a SaaS app,

you have a churn rate, meaning a cancellation rate, and a growth

rate, and as long as churn is less than the growth, it is just

going to keep moving up and to the right.

Trent: Which is right where you want to go. How much comes in on

October 1st for you?

Brennan: It’s going to be, it’s hard to predict, but it will be about

$10,500-ish, I would imagine.

Trent: That’s not bad. Now is there much cost in running this

business?

Brennan: My total overhead, if you include my time, or if you don’t

include my time rather. I put up a challenge, kind of like an

apprenticeship challenge, and I have a part-time developer that

is at $1,000 a month. I also have my webserver that is at $80 a

month. Then I have a few different monitoring apps and

everything. My total is probably about $1,200 or $1,300 a month

in expenses.

Trent: How many hours a month of your time does it take to operate

this business?

Brennan: The baseline is most likely two, maybe three hours a week.

That’s for maintenance. Right now I’m working on a lot of high-

touch sales with bigger, more enterprise, great clients. That’s

requiring a lot of phone time, but if I were to do nothing and

keep the standard trajectory that we’ve been at for the last

year and a half, I could get away with two hours a week. That’s

really just support, and something that I could eventually

delegate out to a VA, to do at least the front line “how do you

do this,” copy and paste jobs.

Trent: That’s pretty phenomenal. One thing I hope the listeners take

away from this, and we’re going to talk about costs and how he

funded it and the whole thing, but you don’t need this world-

changing idea and you don’t need a gazillion dollar marketing

budget to make a very, very nice-I guess I’ll use the word

lifestyle business for lack of another word, for yourself that

you can run from anywhere in the world, and Planscope is a

really awesome example of that.

Brennan: Thank you, like you said, actually I just started doing paid

advertising. That’s sort of just retargeting, so it doesn’t even

count as much. If you know what you are doing, and know what

problems people have, and can build at least the minimum to

solve it, you can get something off the ground, usually pretty

quickly.

Trent: Absolutely. That seems to be a big stumbling block for a lot of

people. They say, “I don’t have an idea.” What would you say to

them?

Brennan: I would say look online, and find people that are willing to

pay for problems to be solved, and look for consensus. Look for,

or do a Google search for, “Why Base Camp sucks,” and find what

people are talking about, or what a certain segment of people,

or what I like to call a cash flow of people, that is people who

are all willing to pay money to solve the same problem. Look for

consensus. The way I look at it is my price point is between 24

to 200 a month. My average customer monthly recruiting revenue

is about $50. So it is about $50 a make on average per paying

customer. I don’t need more than 500 of them to do pretty well.

500 people on the whole wide Internet is not a lot of people.

Trent: And that makes for a very nice life. By the way, with respect

to discovering that idea, is that what you did? Did you start

off with “why Base Camp sucks?” Or was there a more specific

process, or did you have experience in this space already?

Brennan: I built Planscope largely for my own consulting business.

Before Planscope, I had an eleven person consultancy. I was just

frustrated with the tools we had. Specifically, I was frustrated

by the fact that I couldn’t find any project management app that

actually cared about money or cared about budgets. I wanted to

build one that took into account, is this project going to get

done for the money that we are hoping to get it done for? That

was sort of the core premise that I built Planscope around.

What was nice about having that pain of knowing that myself and

a lot of other people I talked to and a lot of other consultants

that I have talked to were frustrated by the fact that there was

a disconnect between invoicing and project management. I wanted

to build the minimum viable product, and it’s a cliche term, but

it’s an accurate term, that somebody would pay for to solve a

part of that problem. As I’ve developed Planscope, it’s

continued to solve more parts of that problem. I think the

biggest hang up that people have is that they look at a mature

product and say nobody will buy it unless it rivals this company

with 20 full time developers working on it. They just give up,

because it’s such a big undertaking.

Look at an app like Buffer. It was a simple, plug in a tweet and

we will post it at a certain time. Now it is much more complex,

but at its beginning, and this is true of just about any product

you find on the Internet, at its beginning it was much different

than what it is today. I think people get hung up on the whole,

it needs to be huge, it needs to be perfect, it needs to do

everything that the competitors do.

Trent: So the minimum valuable product. Let’s go back in history. When

did you decide okay, “Hey, I’m going to build something?” Then

how long did it take to get your MVP, your minimum valuable

product, out the door and how much did it cost?

Brennan: Okay, so I have two things going for me. The first is that I’m

a developer and designer in one body. The second is that I ran a

team of ten other people at my consulting firm who effectively

paid my bills for a few months. I bootstrapped it. I’ve never

taken any outside funding, and I really don’t plan to. I decided

to break ground on it in late October 2011, and I had my first

customer February 1st. We’re looking at about four months or so.

Trent: So four months of development or was it sort of two months of

digging around, making sure that the idea was really accurate,

talking to a lot of people. What did that phase look like?

Brennan: It was really all at once. Development really has never ended.

What I would do, first off was to put together a one-page

landing page. The benefit of when you’re not focused more on the

idea, but on the problem that you are solving, you don’t need to

put up screenshots, you don’t need to put anything up really

about the product. You just need to say, this is the problem

that you have that I empathize with and here’s the solution that

I’m proposing. If you’re interested, put in your email and I

will keep in touch.

I had that kind of opt-in page, and I develop each week, and

then sometime during the week I would email that list as it grew

and let people know what I would be working on next and solicit

feedback with real life examples of how a new feature that I

might be working on to build the app, and if it was a worthwhile

thing that they had a problem with. I kept a conversation going

at scale, and I learned specifically about what I could do

either make a company money or make it lose less money, because

those are the two big things that if you nail one or two of

those, people will pay you if you can make them more money or

you can help them lose less money than they’re paying. That was

the big focus for me.

Trent: That’s not unlike the focus of my old business where we helped

them to lose less money and we built a couple million a year

revenue as a result of that. I will say, though, that having

been in two businesses, one where I help you to lose less and

one where I help you to make money, it’s a whole lot easier to

sell something that people believe will help them make money

oddly enough.

Brennan: That’s right.

Trent: Now, I’m not going to turn this into a call about the technical

of how it was developed and so forth, you already said you were

a developer and designer, and obviously if someone isn’t a

developer, do you think that that should stand in their way?

What advice would you give them?

Brennan: I was in the business of building SaaS products for non-

developers. That was my consulting firm. That’s what we did. I

saw a lot of them that never took off. The reason that they

never took off wasn’t really a product or technical issue. If

you pay a competent developer and point them in the right

direction and let them know what you need, you can get what you

need built built.

A lot of my clients had an issue with shipping. As a non-

developer they had a very binary perspective of products, I

think. They either saw a product as not done or done. The issue

that I would see time and time again was that we would build

something and they would keep tweaking little bits and just

never getting it out and never launching anything.

One of the most depressing parts of my consulting career is how

many clients I had that we put months into their project and

they never shipped it, never put it live. I think just

understanding the, it’s kind of a black box for a lot of people,

software. If you don’t know how to write your own software it

can be intimidating I think. I think the best thing that you

could do is go to Treehouse or one of these online coding

platforms. Don’t even necessarily, the goal isn’t for you to

write your own app necessarily, but the goal is for you to know

how to program out a problem that then you can at least have a

little more context when working with a developer that you hire.

That’s what I would do.

In terms of design, you can go to Theme Forest and find a really

good looking landing page for nine bucks. Most buyers don’t know

necessarily that it is a template, and as long as the copy and

the messaging and everything else is good, it probably shouldn’t

matter. Copy writing is one of those skills that I think, it’s

somewhat a technical skill, but for the most part-learning

Photoshop requires a lot of time, learning how to code requires

a lot of time-good copywriting just requires knowing the English

language and knowing enough about sales, persuasion, and things

like that I think.

Trent: Yeah, there’s definitely a format to follow when producing

sales copy. Just as a side note for folks, I used to be really

intimidated by building software. Start small. I went to

freelancer.com and I put up this description of this WordPress

plugin I wanted to get built, and miraculously it got built, and

I’ve sold almost $20,000 of it so far. I really encourage you

not to let limiting beliefs, by the way, I only paid $1,000 to

develop that thing, so commercially it’s been quite successful,

and it taught me a lot. If you’ve never done software before and

if you are listening to this thinking you could never do that,

banish that thought from your mind, because you can do anything,

and if you have enough vision, and you can get your MVP

developed on the cheap, you will also be able to find investors,

because it is a compelling model. Building it is great, but if

you don’t have any customers, then who cares, right?

Brennan: That’s the reason, I think, 90% of startups fail is that you

focus too much on the product and that idea that you completely

miss first of all, how do I find people? And secondly, am I

actually solving a viable problem for them. For me, the way I

found customers and the way I find them still to this day is to

engage with them more on the product as it relates to their

company. What I mean by that is, when starting out, I would just

loiter around Internet forums where consultants hang out.

There’s a sub-Reddit for freelancing. There’s a lot of these

different community sites.

Trent: Can you list a few of them off? I want to put them in the show

notes.

Brennan: Yes, there’s freelanceswitch.com. They have a somewhat active

message board. There is Hacker News. It’s not exactly a

consultant community, but there are enough consultants on it

that it was viable. Then there is Reddit slash freelance I

think, which is a sub-Reddit dedicated to freelancing I think.

Trent: So that first one was freelanceswitch.com?

Brennan: Yes. So I would just kind of hang out here, and I would look to

see what kind of problem, the thing about Internet communities

is that the same topics keep coming up again and again. What’s

the common stuff that people keep talking about? Considering I

had a lot of experience when it came to consulting, having built

an eleven-person business, I decided to start writing about

those topics. I put together a blog, for Planscope, and just

started writing general purpose consulting and freelancing

articles.

Usually what I would do is instead of replying in the community,

I would reply, and I would put in a few sentences of copy and

then I would say that this relates to something that I wrote in

my blog and I would include a link to my blog or to the article

in question that relates to that topic. It definitely was not

scalable, but starting out it helped me build up an announcement

list of about 300 people, and when I launched within four months

I had people ready to go.

The biggest mistake that you can do, and I see this all the

time, is that you collect an email address and then you sit on

it until you are ready. So six months later you vaguely

remember, but don’t really know who they are and why you should

care. Then all they do is talk about themselves and say, “We are

ready, us, us, us,” but you just delete the email. I really

build up the conversation each week, while building Planscope,

and by the time I was ready to go, people were eager to get in.

Trent: That’s very good advice. I’m writing like mad on post it notes

for stuff I need to do for my own SaaS application, which we are

coding like mad right now, and I have not yet put up a squeeze

page, shame on me.

Brennan: You’re violating the number one law of selling anything online?

Trent: I’ve done a different thing. I obviously here with the Bright

Ideas podcast have a fairly sizable audience of marketing

agencies, and I have done demos, because we developed a mock up

for $500 to get a mock up done and Twitter bootstrap, and I have

been showing that mockup one on one with people for some time to

validate, “Hey, are we actually solving a real problem? Would

you pay for a solution to this?” You can sort of get a feel from

the tone of peoples’ voices when they see stuff. For one portion

of the application, we actually have a desktop version that is

fully coded and we’ve sold quite a bit of it. People say that

it’s awesome and you know that it is resonating.

Brennan: You know what I would put on top of that, I would say, “Okay,

would write me a check for it now.” The thing that I’ve

discovered, and I know from talking with a lot of people about

this is that people don’t want to be critical, necessarily. When

you can actually put them on the spot and say, “Will you pay for

this? Great, pay me now.” You can learn a lot about really what

people think and if it something that they would actually pay to

implement in their business.

Trent: I can hear the collective limiting beliefs of a few of the

people in the audience, and I’ll throw, myself under this camp

as well. They say they don’t have anything for sale yet, how can

I ask someone for a check, so what do you do?

Brennan: I didn’t presell Planscope, because I didn’t know enough about

preselling back then, but I have presold both of my books and

all of my workshops. Workshops are kind of a no brainer. You

typically collect payment and then you have a workshop some

point in the future. With a book, though, the way that I was

able to establish that early cash flow, with both my books.

I’ll talk first about my first book, because at that point I

didn’t have an audience. The second book was a little easier,

because once you’ve already written a book and successfully

delivered it, people trust that you are going to be able to do

it again. But with the first book, the same rules applied. I

talked about pain, I presented a solution, I countered

objections through just knowing about why people would buy this

and talking with a lot of different people about how to set your

rate. I knew kind of what common things people kept throwing

back at me when I pitched the book over Skype.

I had this long-form sales page. At the bottom, I had a

prepurchase link. With my first book I did a discount, so I did

20% off. On my second book, instead of doing a discount, I kept

the price what it would be on launch but I included an exclusive

one-hour webinar. If you preorder the book, you get the book

first before I go public with it, and a seat in this webinar

that you and all the other preorder people would get. Both sold

very well. The benefit was, for me at least, when there’s money

sitting in your account, and it’s really a liability, because

you need to actually deliver something, otherwise you are going

to get charge backs. It really lights a fire for you to get it

out there; wrap it up, get a production ready and ship it. I

really focused on that and having preorders was a really smart

move on my part.

Trent: I’ll echo that, because maybe a year ago, I think I did a

mastermind group for some people and I had about $12,000 in

preorders, and I hadn’t developed any of the content, but then I

knew that I was going to really knock their socks off with the

content that I promised. It was only twelve people, but they

paid $1,000, so I wanted to make sure it was really good. When

you already have the money, it makes it so much easier to put

the time in, because you’re like, “I’ve been paid for this now.

I have to make sure that I come through for everybody.

Brennan: Right, it’s a good solid move and the best proof you can get of

your product. It’s much better than an email address.

Trent: Yes. Okay let’s go back to… Here’s the thing in case

listeners want to know why they should keep listening. I want to

cover a little more on generating leads and converting those

leads to customers. Then we will talk a little more about

outsourcing. Brennan, do you use InfusionSoft?

Brennan: I do.

Trent: We will probably spend some time on how you are taking

advantage of all of the horsepower that InfusionSoft offers. If

time permits I also want to talk about some of the paid traffic

that you’re using, if you’re using any, to sort of ramp things

  1. That’s where we’re headed.

With respect to lead generation, you did this thing, you said it

didn’t scale, but it did work very well. Every startup, I wish I

could give credit to the guy who I’m about to quote. He was a

very well-known VC in the valley and he said, “In the

beginning,” I think it was Dan Morris that sent me this article,

“you need to focus on stuff that doesn’t scale.”

Brennan: That was Paul Graham’s article on doing stuff that doesn’t

scale.

Trent: Thank you. Exactly. That’s what you did by hanging out on

Freelanceswitch and Hacker News and Reddit in the beginning.

What did you do after that?

Brennan: It lasted through Summer 2012. It was in the Summer of 2012

that I started writing my book. The thing you’ll discover about

SaaS, if you eventually get one, it’s very slow to ramp up.

Twenty percent growth rate month to month when your income is

$100 is a very slow growth. But given the law of time, give that

three years and it becomes a very large investment.

What I realized is that I wanted to do a lot of things. I wanted

to go to a conference in Europe and I just didn’t have the

money, so I decided to write a book. Actually doing this was

probably the best marketing decision for Planscope I ever made.

The thing that I’ve learned about building a B2B heavy duty SaaS

that people need to convince themselves to use, and, in my case,

then switch their team and clients to it, is that isn’t an

impulse thing. You’re asking for a lot. If you’re sending

traffic to your marketing site, you probably don’t have any

rapport built up with that person yet.

What I ended up doing was I started really promoting this book I

was working on, and the thing about a book is that it is an

impulse buy. You spend $50 on an e-book, and you get the value

within a few hours. You read it, you get that value out of it,

and it’s done, and there’s very little risk, right? There’s very

little risk for will you extract value out of it. So I did a

book.

Trent: Brennan, I’m sorry to interrupt you, but the dog barking in the

background, is there a door or anything you can close?

Brennan: It’s downstairs. Let me get the nanny and tell her to put the

dog outside. Can you hold on for one second?

Trent: And we’re back, no more dog.

Brennan: What was I just talking about?

Trent: So the question that I’d asked you which got us going down this

path was how long did you focus on things that didn’t scale?

Then you talked about the book.

Brennan: So I started really writing this book and building excitement

around the book. I did the same thing I do with Planscope, I

started writing the book. In this case, the book prepurchase

list grew weekly, and I felt like I had to then. If they already

paid me money, I don’t want to take their money and disappear

and come back in the future at some point with a book. I just

started writing them about what I was writing about in the book.

I would just kind of extract chapters and sum it up in a

newsletter format. And after launching the book, I just kept

doing it. I realized I could stop, the book was out, and my duty

was done, but I converted it into a newsletter.

Trent: Paid or free?

Brennan: Free newsletter. By buying the book, you get on the newsletter.

Eventually, people outside of the book wanted to get on the

newsletter, so I started putting opt-ins on the Planscope blog.

The thing about a newsletter is that if someone just reads a

high-quality article of yours and you say that you deliver

things like that to an exclusive list, I mean my opt in rate for

my newsletter squeeze page is something like 40 or 45%, which is

something I’m very happy with and frankly could be higher.

Trent: What is the URL for that?

Brennan: That is freelancersweekly.com. I would send a lot of traffic

there and have opt-ins on my blog posts. I just started building

a list and started writing to them weekly. These weekly emails

weren’t kind of your typical graphic heavy newsletters. They

were more or less plain text-ish from me to them. I just kind of

built up a relationship with people over time.

What ended up happening was, I would drop very soft and subtle

relationships to Planscope like, “Here’s my thoughts on

estimating, and I actually built into my product Planscope,

things that actually correlate or complement this philosophy

towards estimating.” Actually, these days, more than 60% of my

new Planscope customers come from my mailing list first. They

are usually on it for months. They will sit on my list for

months. They might buy my book a month into it, then my second

book a few months later. Then they sign up for Planscope and

then six months down the road they buy my $1,800 workshop.

The thing is, what I’m doing, I’m able to really, everyone on my

list and all of my products focus on consulting. They focus on

freelancers and consultants. They’re all just different facets

of it. The Planscope, my SaaS, focuses on helping consultant be

more transparent with clients, and be basically better at

managing their projects. My first book, Double your Freelancing

Rate, helps consultants price higher. My second book helps them

deal with inbound marketing better.

All of my products are complementing a different part of

somebody’s business. For a lot of them it’s sort of natural

like, okay I paid Brennan $50 and he helped me raise my rate,

and I’m making $10,000 more a year this year. I’m very open to

spending more money on him and his SaaS business or SaaS

product, and expecting that same sort of investment to output

ratio.

Trent: So your book, without going into a ton of detail, I’ve never

heard of anybody say I needed money to go to a conference so I

wrote a book. Most people say I went out and got a new client or

something like that.

Brennan: I could have done that, and I’ve thought about that for a

while. What I realized is when you’re working with a client

project, I compare it all the time to crack cocaine. It’s

immediate gratification. You work an hour and you get paid for

that hour. With a book or any sort of product, the delay is

longer, if that payoff even ever comes. Secondly, you’re

building equity in something long term. By focusing on the book,

and making that money through presales, that I could have made

through consulting, I built up more long term equity that to

this day I still sell a few copies a week. I’m really not doing

much to make that happen. Secondly, it’s building up my personal

empire of consulting products, which further strengthens things

like Planscope.

Trent: But a book. Isn’t that a big deal? How many pages are we

talking here?

Brennan: So it is about 110 pages. I did it in about a month. I focused

on writing daily and making it a habit.

Trent: Like an hour a day, or six hours a day?

Brennan: I want to say I spent about 100 hours total, so we’re talking

about an hour per page. I mean I’ve been so comfortable with

blogging a lot that writing this stuff wasn’t really, I wasn’t

needing to pull teeth. It was things that I’ve been talking

about to a lot of people over email and phone calls and things

like that. The material was all up in my head. I just needed to

commit it to paper. I did it, and I’ve got great reception. I’ve

sold something like 3,000 copies. I don’t know specifically what

it is off the top of my head. So 3,000 times 40 to 50 a piece

depending on whether they had a coupon code of it was during

presales. I mean that is still, for 100 hours, and that’s just

as it is right now, and I’m still bringing in at least 1,000 to

2,000 in revenue from it.

Trent: That’s very nice passive income. How big was your list when

you started to do presales for the book?

Brennan: I had the Planscope list, but they thought they were on a list

for a project management app, so I didn’t really have a list.

The book started my list. I heavily cross promoted to my

Planscope list, which at that point had about 2000 people on it

at that point. Through Twitter, and really through a lot of

content. I would just extract the best parts of my book as I

wrote them, convert them to a blog post, and promote them. And

people would go on the different aggregator sites and… I’m not

afraid to put my best content forward for free as a way to

generate leads.

Trent: That’s a very good point, and I am so pleased that you brought

that up, because I know that when I first got online, and I know

a number of listeners can relate to this, I really struggled

because I had a membership site, “Well, what do I put on the

blog for free versus what I put in the membership site that is

not free?” Can you talk about with a book, or anything that’s

behind a paid wall of any kind, why do people pay for stuff that

they can get for free? And is it unethical to charge for stuff

that you make freely available in some other format, somewhere

else?

Brennan: I don’t think so, and here’s why. I think when you are selling

something to somebody wearing the hat of a business owner or

wearing the hat of a general business, there is no such thing as

free Internet research anymore. The best example I’ve ever heard

of this is my friend Patrick once said he put together a video

course on life cycle emails, and he got a lot of rebuttal from

people from Hacker News and other websites saying all this stuff

is available for free online. He said sure if you want to go

around and Google and get hit or miss articles for two weeks, go

for it. Or you can spend $500 and get a very curated, to the

point, start to finish overview of life cycle emails.

He put it in the business perspective that you are trying to

sell a CEO on having one of his developers implement a life

cycle email campaign. The CEO does not want to write a payroll

check for $10,000 for two weeks of this person’s time that has

in the memo field, “reading free information online.”

There’s two things. First off, you’re able to put it into your

own voice and into your own way of thinking about a problem.

Secondly, it’s up to you, as a content provider, to organize it,

make sure it’s relevant, make sure it’s cohesive and so on. I

say this all the time. When I’m confronted with a problem, do I

want to Google around for a week finding articles that might be

crappy, or outdated, or whatever, or would I rather pay $50 and

get the concise guide to it that I’ll have all that info pretty

immediately?

Plus, I back everything of mine with a money-back guarantee. If

you don’t think it’s worth more than the $50 you paid, write me

and I’ll gladly refund you. I think I’ve had 3000 sales and only

five total refunds. It’s a great way to kill an objection people

might have and a worthwhile thing to include I think.

Trent: This is kind of a parallel to the best way to attract the best

clients is to raise your prices. That might sound unrelated to

this, but what I’m trying to say is that by charging for stuff,

you are going to attract people who really and truly understand

the value of their time, and therefore your time, and those are

the ones that are the most enjoyable to deal with. And in your

book about how to raise your prices, I’ll bet that’s probably in

there somewhere.

Brennan: It’s almost funny. The people in the highest tiers of

Planscope, the people paying $200 a month, they hardly ever

reach out for me when it comes to support, or anything like

that. A lot of the $24 a month people can be very persnickety.

Trent: Yep, so very true. Are there any other ways that you are

generating leads, because we are still actually on that thread,

for Planscope that we have not talked about yet?

Brennan: Yeah, I have a drip email campaign that I have set up. This

kind of crosses into the paid advertising realm, but I’ve done

two different ways of acquiring eyeballs, I guess. The first is

something I started doing a long time ago, which was drive,

through LinkedIn ads, traffic to my page because I saw it had a

high conversion rate. If that rate was consistent, I could make

a pretty good return, probably, from LinkedIn advertising. I did

that and it paid off pretty well. I got about a five to one

return and still do to this day off my LinkedIn ads. That is

really just driving people to my newsletter. I don’t really have

a lead [magnet] or anything, I just have the opt-in page. I get

a pretty good amount of people who sign up through that and then

I have about one out of every ten people who join . . .

Trent: Let me interrupt you, you’re sending paid LinkedIn traffic to

freelancersweekly.com?

Brennan: That’s right, yep. I do have an auto-responder sequence set up

that actually asks three questions. The first email that I send

out says this is who I am and this is why I think I am qualified

to talk about consulting and freelancing. The second email is,

what is the number one problem you have right now with your

freelancing business? The third email is, here’s what the number

one problem that people have told me is and that happens to be

about undercharging, so I promote my book there, and I get about

a 10% conversion rate just then off of paid traffic to buy my

book. Considering what I pay to get the click, I pay about $5 a

click, I’m basically breaking even when it comes to acquiring

people through LinkedIn.

Trent: Yeah, but you’re doing that in a week, you’re getting your

money back in a week.

Brennan: Actually ten days. But the benefit of that is that the book is

just a stepping stone, I guess. I have a more expensive book

that gets up to $250. I have Planscope, where my average

lifetime value is between $200 to $1,000. I have my $1,800

workshop. I’ve had people who I’ve spent $5 a conversion on who

I broke even on with the first book, but I’ve had products

waiting in the wing that were contextually relevant to them that

then they bought and everything was pure margin, I guess.

Trent: That’s a very nice sounding funnel. You’ve mentioned earlier

that it was okay to save people research time by packaging up

knowledge and putting it all in one place so long as it was done

high quality. You have a lot of products, so I think some of the

listeners are thinking it might take me forever to create all of

those products. Do you think it’s okay for somebody to say, “I’m

going to produce a report on whatever, and I am going to go and

do all that research, and I am going to curate like mad, and

give credit where credit is due of course, and assemble my

workbook, for lack of a better term, that is the result of all

of my research on whatever topic it is, and I’m going to sell

that?”

Brennan: I think that if the deliverable is going to measurably impact

somebody’s business in such a way that it outweighs the cost of

getting that product in their hands, then I don’t see any

problem with that. I would just complement that by-it’s so easy

for a virtually 100% margin product for a book or an e-book to

put a money-back guarantee, that look, if my product doesn’t

help you, I only want you to buy this if can deliver $500 in

value to you. I think that’s a great way to do it, and if

somebody doesn’t take value from it, don’t take their money.

Trent: Its’ really about being clear with setting expectations up

front and backing it with a guarantee.

Brennan: That’s right.

Trent: For people who have not yet bought any paid traffic, why did

you choose LinkedIn over any number of other sources like

Facebook, Google PPC?

Brennan: Okay, so I actually have done Facebook also. I did Facebook and

LinkedIn. LinkedIn was a little better overall. So I phased out

a lot of the Facebook ads. I’m using Facebook, now, for

retargeting, which is amazing actually.

Trent: You should explain to people what is retargeting.

Brennan: Retargeting is when you go to a website that is using a

retargeting advertising provider, what happens is, when you go

to another website, like Facebook, you will start seeing ads for

the website you were on before. It’s kind of like when I was on

a gardening website, and I saw SendGrid, which is like an email

service provider, ads. I knew that SendGrid is not spending ad

budget on a gardening site by default. But because advertisers

know that if you have been to their website in the past, you’re

more than likely in their demographic, so you have a higher

click through rate for them, which means more money in your

pockets. But for the advertiser, it’s more money in your pocket

ultimately.

I heavily used Facebook retargeting. Now that they have newsfeed

ads, which if you’ve been on Facebook and you see advertisements

in your newsfeed, that also are websites that you’ve been to,

that is why. Those ads, I get 4 to 5% click through rates

sometimes on that. A good click through rate is sub 1% usually,

so I am kind of using both.

Trent: Are you using AdRoll for retargeting, or is Facebook itself got

its own retargeting service?

Brennan: I’m actually using a service called Perfect Audience, which is

a [Y-combinator] startup, and they do display ads, so they do

your general website banner ad retargeting, but they also do

Facebook ads. One thing I like about them, I don’t know if

Adderall does this, is that they allow for email for targeting.

Considering that I have a big email list, I’m able to put in my

email template the pixel ad for Perfect Audience, which will

then start retargeting for my list.

You can also segment that list to say not to show ads to people

who already have an account or already bought this, then you can

make it so that only the right people who, so if you have a free

newsletter, instead of hammering your newsletter with book

stuff, you could have your newsletter have this tracking pixel,

and then in somebody’s Facebook feed, you put a free email

course that directly relates to your book. You put your picture

and your name on it, and they already know you produce awesome

content. They join that email course and the goal of that course

is to sell them on the book, which is one really clever way to

sell your products through a newsletter.

Trent: So everything that you just explained in the last three minutes

or so, you can achieve using Perfect Audience, is that correct?

Brennan: That’s correct, yep.

Trent: So you don’t have to be some coding genius to be able to figure

out to do everything.

Brennan: No, if you are able to put Google analytics code on your

website, you will be able to figure it out.

Trent: Okay, and folks, the show notes for this episode where I will

be putting all of these links is going to be found at

brightideas.co/77. That’s just the number 77. All right unless I

missed something, I think we pretty much talked about how you’re

attracting leads. Is there anything else that you are doing for

lead generation that we have not talked about?

Brennan: It’s pretty much give away great content. Get people into, what

I call, my ecosystem. You know, get them to know who I am. The

amazing thing is when people reach out to me with support

requests for Planscope, they almost always start out with, “Hey

Brennan” comma. People know that I’m behind Planscope. I make

that a very public thing. It’s just a different medium. The

books are one medium, Planscope is a different medium, but they

all achieve that same goal, which is to help make somebody have

a better consulting business.

I have a have a very stepladder approach, where at the bottom is

my newsletter, and from then on up it goes to my impulse buy

with the book, and then bigger purchases, and ultimately

Planscope and my workshop. People sell segment. If somebody

spent $50 on you and got a great return, those people are more

than likely to spend $1,800 on you for an even bigger return.

It’s funny, I can go to my workshop customer database and plop

any of their email addresses into my CRM, and all of them bought

a book of mine a few months ago, or something. I could drive as

much paid traffic in the world as I want into an $1,800

workshop, no one will register. There needs to be a gradual

approach to doing that.

Trent: How much do you spend on advertising in a typical month?

Brennan: I spend about total, I want to say, maybe 400 or 500 a month.

Trent: Okay, and what would you say your annual run rate for your

revenue is right now?

Brennan: So my workshop, I do now just about every other month, and

that’s $1800, and I sell 14 seats, so whatever that would be.

That’s about $20,000 or so. I usually consistently sell them

out. My books bring in total about $3,000 to $3,500 on

autopilot. Planscope just passed five figures. It’s hard to say

for Planscope, because that one keeps growing, which isn’t a bad

thing.

Trent: No, definitely not, so somewhere between 25,000 to 30,000 a

month.

Brennan: About that, yeah. That’s pretty consistent.

Trent: For a business with one programmer, and only $500 a month in

advertising. You’re doing pretty good.

Brennan: It’s funny, when I was consulting, I was billing $200 an hour.

If I was full time, I would be bringing in $32,000 a month. I’m

actually making less than I would at consulting still, but it’s

a lot better.

Trent: Because your income is not so directly tied to the amount of

hours you work now.

Brennan: That’s right. If my primary client fired me, I’d be out, but if

one person decides to quit Planscope, it’s whatever.

Trent: Right, no big deal. Do you still have the 11 people in the

service business working for you? Did you shut that down, or

sell it off? What happened?

Brennan: What I did is promote my business development guy to run it in

my absence, and I basically converted everyone to a 1099,

because if I was inactive, I didn’t want to deal with having a

fixed, expensive payroll each month. Some of them still relate

to us, but for the most part, a lot of them are just kind of

independent consultants now, so it’s intentionally gone

downhill, but the goal wasn’t to keep it alive.

Trent: The service businesses can really be wonderful. I interviewed

another guy by the name of Sam Ovens-that’s at brightideas.co/69-

he also has a SaaS business, but he, like you, funded it on the

back of his consulting business. So service businesses can

really be wonderful. I’m doing exactly the same thing. Bright

Ideas makes money from doing services in our agency and we are

taking that money and reinvesting it in assets and recurring

revenue products, because ultimately that’s where I’d like to

have the money come from.

Brennan: Yeah, I actually think that there’s a lot of room for what we

think of as turn-key products like SaaS businesses to have more

concierge services to it. If you look at something like, Rob

[Walling] who has a new project called DripOut, which is a very

simple throw this job description on your page and you will have

an email course option widget on the bottom of your screen. One

of the things he’s doing is have a concierge service where yes,

he has a platform that will help you plug in all of your email

courses, but you can pay him X amount and they will write them

for you. It’s kind of like consulting, but it’s kind of your own

marketplace in a way. You have the product that people are

paying you monthly for, but you have these transactional one-

offs that allow you to charge significantly more to deliver

personal value, I guess.

Trent: And what website should people go to for that?

Brennan: That is getdrip.com

Trent: Okay, I’ll put that in the show notes as well, so if you’re

driving, don’t try and write that down. All right, I’m such a

big InfusionSoft fan, I can’t help but ask you some questions.

We’re going to finish up the interview with how InfusionSoft

fits into all this, so if you don’t care, you’ll probably have

gotten all out of this that you wanted to, but InfusionSoft is

some of the most amazing marketing software on the planet, so

we’re going to talk about it. What do you think is this biggest

benefit to your business of using InfusionSoft versus AWeber,

GetResponse, iContact, all the cheapies?

Brennan: So for the longest time, and still to this day, I haven’t fully

transitioned everything yet. Before I was doing everything

through MailChimp. Kind of the pain for that was, there wasn’t

really, I have one massive list, while you can’t segment or

group something out, it’s very hard to say something like, “Hey

I’m putting together a workshop on recurring revenue next month,

if you’re interested, click this link.” The only way to really

do that with MailChimp would be to drive people to a landing

page where they would then need to type in their name and email

address again, submit the form and opt in for a new list.

Right now, I’m using InfusionSoft for all of the life cycle

emails for Planscope. It’s kind of nice, because you can do

things like, well the first email they get from me is, what’s

the number one thing you want me to help you with? The three

options are, I want you to help me estimate, I want you to help

me better manage my clients, or I want you to help me better

manage my team. I ask them to click one. It’s the standard where

I have a goal that is to click on a link. Depending on what they

choose, it creates a task in my InfusionSoft account, where then

I will follow up with them manually and ask how I can help them

estimate.

Again, if I had a thousand new accounts a day, there is no way I

could keep doing this, but what I’m doing is actually using this

to build out an eventual email sequence for each of these three,

so eventually clicking the I need help estimating will spin off

a sequence that’s all about estimating that’s going to be based

off of the conversations that I’m having now. That’s one cool

thing that I’m able to do.

When somebody activates or pays, I tag them, and then I have

certain sequences kick off from that; likewise, when somebody

churns. The biggest thing for me is having a centralized CRM,

where I can know this person that just bought Planscope bought a

book three months ago. Before that was a very manual operation.

I had to cross reference things to figure that out. I can better

do things like when somebody joins my newsletter, if they happen

to stumble upon the Planscope website, using the web analytics

InfusionSoft capabilities, I can then start getting in touch

with them selling them Planscope.

It’s a very nice, from that point of view, where everything is

in one place, and I don’t need to have multiple lists and juggle

things around it. Instead of having a Planscope list, a book

buying list, a general newsletter list, and a workshop list, I

just have one list, but I’m better able to kind of know who on

that list has done what.

Trent: And what enables this is called tagging. Tagging is I think it

is the greatest thing ever with respect to InfusionSoft, because

it allows you to categorize the people that are in your

database, it allows you to trigger automation based on their

activity. I could probably do an entire podcast just talking

about examples of how I’m using tagging, and it’s pretty awesome

stuff. It’s so much different than, like you said with

MailChimp, where you have a list for this and a list for that

and it’s really painful to get one person from one list to

another and there is a lot of friction, whereas, with

InfusionSoft, it’s effortless.

Brennan: That’s right. Considering that the value of a team account,

where a bigger enterprise account is so much more valuable to me

than a freelancer account. When somebody says, “I need help

managing my team,” I prioritize that task. That’s permanent. Now

I know that this person is probably running a team. Then they

are the ones that I promote my higher value, more team focused

products to versus the college student who is moonlighting some

additional revenue on the side.

Trent: Absolutely. That’s right. All right, I think we are at about an

hour here, and I could ask you so many more things, but in the

interest of keeping my episode to just an hour, I think we are

going to stop here. Before we finish up, is there anything that

I have not asked you about, which you particularly stoked or

want to talk about? Number one.

Brennan: I could talk about an experiment that I’m running now if

anything is interested. It’s a sort of SaaS logistics. So before

I was doing a credit card up front sign up process, where you

would need to sign up, put in your credit card, and you would

have a two-week trial. If you didn’t cancel in two weeks you

would get billed. I did this for a while and it worked well. I

was having a 40% conversion rate from trial to paid.

What I’m doing now, I kind of have a squeeze page for

Planscope’s website. Instead of having a full blown marketing

site, it’s really just type in your email address and a password

and jump directly into Planscope. What I do is I have a very big

on-boarding process that has like an interactive video. At the

end I ask somebody to create their first project for a client,

because when somebody is using Planscope on a client project,

they are deriving business value out of it. It’s no longer about

seeing if the interface is friendly for them or whatever else,

and what I do then is capture their card then and bill them

immediately, but I put a 60-day money back guarantee.

I launched this on Friday. I don’t have enough data yet, but my

earlier site would get maybe a 1% conversion rate to trial and

now I am getting about a 10 to 11% trial rate, which means more

email addresses that I can build up relationships over time

with. So fewer drive-bys right? A lot of people, they stumble

across Planscope and they don’t know who I am, they’re not going

to give me their card, any of that stuff. Now it is much quicker

to get in, but I charge you immediately, so if you’re going to

be using this for a client project, I’m going to charge you

right now, but you have a full two months to ask for your money

back. I’m excited to see how this will work.

Trent: Are you doing this right from the homepage of planscope.io

right now or is there a different landing page?

Brennan: No, so you go to the homepage, planscope.io, there’s really no

navigation except for signing in, type in your email and

password and get started. I’m getting an 11% conversion rate on

this page.

Trent: Is that connected to InfusionSoft?

Brennan: Yes, it is.

Trent: Is that just an InfusionSoft form behind the interface or is

there an API?

Brennan: I’m using an API to do it. The form actually submits to

Planscope, and creates an account and inserts a bunch of stuff

into my database, and then I’ll replicate it over to

InfusionSoft.

Trent: Okay, so if someone says, “Hey, what’s my password,” you would

be able to tell them, because it is going to be stored-obviously

you can get it out of Planscope-but it’s in InfusionSoft, yes?

Brennan: I don’t put password info in InfusionSoft. I actually encrypt

all the passwords so you’d need to reset your password if you

were locked out. All I send to InfusionSoft is their email

address. Once they activate I get the account name and the first

and last name, so I’ll update the record then, but for most

people I just get the email.

Trent: Okay, I’m going to ask you one more question. How on Earth do

you manage your time? I know for me it is a massive struggle.

There are so many projects on the go, so many things you could

be doing, from tweaking the sales funnel, to testing sources of

paid traffic, to split testing landing pages, to creating a

podcast, to getting a guest, to writing a post, and on and on

and on. You seem like you get a lot done.

Brennan: I work fast. I like to say I live in organized chaos. I think

the best thing that I do is I usually get up at around 5:00 or

6:00am. I’ll start before the world is awake, I guess, and I’ll

just bang stuff out. I’m trying now to really focus on bucketing

where I’ll have a certain day be Planscope day and another day

be newsletter day, and another day be new product day. That in a

perfect world would be ideal, but the biggest issue for me right

now is how much my day is spent in my inbox. That’s actually the

biggest problem that I have because one of the things that I ask

people with a lot of my newsletters are, “Reply and tell me what

you think about this.” And I label it all in Gmail, and it’s

great for-one great marketing lesson is throw people’s words

back at them. So if you know how people describe in their own

words a problem, and you reflect that on your marketing site,

it’s better overall for sales.

Now that I’ve got quite a few thousand people, I send out an

email and say, “Tell me what you think about this,” I might get

200 or 300 replies. And I tell people, “I’ll reply to everything

I get.” That is starting to get pretty hard.

Trent: I want to offer up a resource for that. Chris Ducker did an

interview with Amy Porterfield. Her last interview on

AmyPorterfield.com, and Chris is actually going to be on my show

coming up soon too, and he’s the guy behind Virtual Staff

Finder. He actually describes at length in the interview how he

outsourced his inbox, and he has a VA do the first round of

filtering because he’s much like you. He says, “I want to get

people back answers,” but many time as I’m sure you’re aware,

the answers are the same or more or less the same over and over

again. So you can absolutely train a VA, or even have something

like [YesWare] installed on your browser, so your stuff is

already prewritten and someone else can go through that first

round for you, so when you log into your inbox, it’s only the

stuff that nobody else could actually answer for you.

Brennan: It’s a great idea. I think there’s a benefit in that it’s the

author’s own voice replying to you. Frankly, there’s a lot of,

especially if somebody’s emailing me about spending $1,800 in my

workshop, I’m going to talk to them as myself. I’m not going to

hire a VA to do that.

But I think you’re right. For at least delegating to me what’s

important or what needs my focus is a great idea. I’ve never

been good with delegation admittedly. It’s one of those things,

I’d love to be much better at it than I am now, but it’s more of

a mental hurdle I think for me.

Trent: I think it is for a lot of people. You eventually get to the

point where you decide I can have either massive growth or

massive control, but I can’t have both.

Brennan: That’s a good point. That’s a really good point.

Trent: You just can’t do it all. There are not enough hours in the

day. Brennan, thank you so much for doing this interview with

  1. I learned a whole bunch and got lots of notes going into the

show notes here. There is going to be a transcript. Again folks,

you going to be able to get to that-I’d like to say, “If you’re

just tuning in . . .” But that doesn’t happen with a podcast,

you’re either here from the beginning or you’re not here-at

brightideas.co/77. All the stuff we talked about will be right

there.

Brennan, if people want to get a hold of you what is the one

easiest way for them to do that?

Brennan: Easiest would be my personal website, that’s brennandunn.com or

I’m the same thing on Twitter, @brennandunn.

Trent: Okay, terrific. Thanks so much for being on the show. I look

forward to crossing paths with you again soon.

Brennan: Awesome, thank you, Trent.

Trent: So that’s it for this episode. To get the show notes and all

the links that Brennan and I talked about head to

brightideas.co/77. And please do me one other small favor, head

over to brightideas.co/love, there you’ll find a tweet you can

send out, as well you’ll find a link to go ahead and leave

feedback in the iTunes store. So if you thought this was a

valuable episode and you found some golden nuggets, I would

really love it if you would take the 60 seconds or so that it

takes to fire up iTunes and go leave a five-star feedback for

the show. When you do, more ears get to hear the show in the

future because iTunes ranks it higher and the more entrepreneurs

that we can help to boost their business with all the bright

ideas that are shared here by guests like Brennan.

So that’s it for this episode. I am your host, Trent Dyrsmid. Thank

you so much for tuning in. I really cannot wait to produce

another one of these fabulous interviews for you in the future.

If this is your first exposure to the show, you want to make

sure you never miss another one, head over to brightideas.co, go

ahead and opt in, and you’ll make sure you get notification of

every episode we ever produce. Thanks so much. Have a wonderful

day.

About Brennan Dunn

brennan-dunnBrennan Dunn provides great software and products to freelancers and consultants.

He is founder of Planscope, a project management software for contracts and freelancers; author of “Double Your Freelancing Rate“; and owner of We Are Titans, a consulting company that focuses on improving their clients’ profits.

Digital Marketing Strategy: How to Build a Profitable Software Business Without Writing Any Code: A Case Study with Spencer Haws

Do you have a great idea for a software but you don’t have any coding knowledge and experience to transform it into an actual product?

Are you looking for an effective means of marketing your software to your target market?

To discover how to create and market a software product without writing a single line of code, I interview Spencer Haws of Nichepursuits.com in this episode of the Bright Ideas Podcast.

More About This Episode

The Bright Ideas podcast is the podcast for business owners and marketers who want to discover how to use online marketing and sales automation tactics to massively grow their business.

It’s designed to help marketing agencies and small business owners discover which online marketing strategies are working most effectively today – all from the mouths of expert entrepreneurs who are already making it big.

In this episode, I interview Spencer Haws of NichePursuits.com.

Watch Now

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Transcript

An Interview with Spencer HawsTrent Dyrsmid: Hey there Bright Idea Hunters, thank you so much for joining me for the Bright Ideas Podcast. I’m your host, Trent Dyrsmid. And this is the podcast for business owners and marketers who want to discover how to use online marketing and sales automation tactics to massively boost their business.And in this episode I am joined by Spencer Haws. Spencer is an online business owner, a blogger and a software developer from Richland, Washington. And back in 2009 he started off by building a portfolio of niche websites that made quite a bit of money with Google adsense. And that led to a successful blog called NichePursuits.com which then led to an even more successful software development business and that’s what we’re gonna be talking about in this particular episode of Bright Ideas.So Spencer thanks so much for making the time to talk about your product Long Tail Pro and how you’ve made it successful. Welcome to the show.

Spencer Haws: Hey thanks Trent. It’s great to be here. I know we’ve chatted quite a bit over the last year too so I’m more than happy to do an interview here to talk about Long Tail Pro.

T: We have indeed Spencer. I started off much like Spencer did. He was very generous with information for me back then. I’m no longer in that business but I definitely appreciate all that past advices. It was very helpful. So for the people who are in this audience which is predominantly small business owners and marketing agency owners they’re probably thinking who’s this guy, why do I wanna listen to this interview. So please just start off with who are you and what do you do?

S: Okay absolutely. Yeah you gave some brief information about what I’m doing now. Before I was a full time entrepreneur which I am now, I quit my corporate job about 2 years ago, it’ll be 2 years in just a few months. But I was involved in the financial services industry. I got my degree in Finance and worked for a large bank after that in business banking.

And so being involved in the internet and building websites was really nothing that I had a background in. It started as a hobby for me. Probably back in 2005-2006 I built my first site just to see if I could do it if I could get something online. And that led me over the next few years sort of moonlighting after my corporate job to building sites and learning and beginning to understand how Google works, how to get things ranking in Google and that led me then to finding niche sites. And that is a big part of my story.

I started building lots of small niche sites that could rank very quickly for small keywords because the big problem that a lot of people have is they see a really big keyword that gets tons of traffic and they try to build the site targeting that one keyword and the problem is they never rank for that keyword because it’s so extremely difficult. Everybody else is trying to rank for that keyword in Google and they’re nowhere to be found.

T: So this is probably that a lot of small business owners do. Let’s say there’s a guy with a plumber or a flower shop or whatever and they make this mistake of trying to rank for that keyword instead of maybe what we call the long tail phrase where if they were to attach a city name or a town name or something so that they’re drastically reducing the number of competitors that they’re against or are competing against rather and have a much easier time getting traffic to their site.

S: Right absolutely. I mean if you take a flower shop in Richland, Washington if they try to rank for the keyword flowers it’s just never gonna happen. There’s too many big corporations trying to rank for that. But if they try to rank for something like flowers in Richland, Washington they have a much better chance of doing that. So it was understanding the long tail keywords for me and I’m kinda going to why this will matter to everybody else as well but that’s what led me to quitting my corporate job. I did very very well with these niche sites. I built a couple of hundred of these, monetized them with Google adsense and that was in March of 2011 that I quit my job. And then I started a blog at almost exactly the same time NichePursuits.com where I blogged about how I was building these small niche sites and what was working for me, how others can rank those sites and all sorts of tactics that you could do to essentially do what I was doing.

And also around the same time I started building Long Tail Pro and so I continued to sell Long Tail Pro. It’s a keyword research tool that I built really for myself because I was frustrated with how long and how slow the keyword research process was using other tools. There’s lots of other great tools out there but for my needs where I wanted to find lots of keywords very quickly and be able to analyze if I could rank within Google quickly I decided to build my own tool and now I sell out Long Tail Pro. So we’ll dive into that a little bit more but that’s what I’m doing now.

T: Okay so for the folks who are listening there’s really kind of 2 main ideas that I’m hoping to get across this interview. One of them is for all those small flower shop owners and whatever type of business that you’re in local markets there’s a great benefit to be had by figuring out a plethora of long tail keywords that you can create content for and individually these keywords they don’t add a whole lot of traffic but they’re very easy to rank for and when you do them in aggregate you can actually translate into quite a substantial amount of traffic and it’s really not very difficult to do. However, you have to know which keywords that you’re going to go after because that’s where the science is. And that’s why you created Long Tail Pro.

The other audience is the folks who are thinking hey I might like to get into the software business. I’ve been thinking about creating an application for a long time so we’re gonna really focus in on that. So let’s give some results so that people who again don’t know you think oh yeah hey man, Spencer’s done really well. So how much revenue have you done with Long Tail Pro?

S: Yeah Long Tail Pro and it’s a long story as well because and maybe we can dig in to this with some of the mistakes I made early on and how I fixed those mistakes.

T: Yeah that would be good.

S: Yeah I created a first version of Long Tail Pro which is not the current version that you see today. That I guess quickly to answer your numbers to get the numbers out then we can maybe drill in to what happened. But I had a first version that I launched in right around January of 2011 and I only sold it for about 3 months from January to March. But it’s sold maybe $2,000 or $3,000 a month. I didn’t do much marketing at all. I didn’t have much of a blog or a list at that point but it was enough for me to know that there was interest.

T: Absolutely.

S: So that first version maybe did $10,000 or so. Then I went back and again I’ll explain why I did this but I hired a new programmer to develop an entirely new from the ground up, a new code, everything, new version of the software which I launched in beta form around July of 2011 and really didn’t launch until October publicly October 2011. So from about, with the new version I’ve done about a $150,000 in revenue. About a $100,000 of that this year 2012. So I get you a rough idea of what I’ve done and I’ve got big plans of course for the future as well.

T: I’m sure.

S: In the future there’s more marketing as well.

T: So we should take into account the cost of the first and the second version because it is part of the reality. What do you think that you spent, coz you’re not a software developer, you don’t write any code, correct? Coz I don’t want people to think I don’t know how to write codes so I can’t build an application coz that’s not true.

S: Yeah absolutely. I’m not a programmer by any way, shape or form like I said my background is business and finance. So I hired somebody else to do the code completely. I just had the idea, I paid somebody to do it for me.

T: And what did you spend to develop this application?

S: Yeah the first version was very cheap and this was my mistake. I hired the cheapest programmer that was overseas and he was able to produce something and I really think that he essentially used some code that he already had which was why he was able to do it so cheaply. But it was about $3,000 to $4,000 to just get that first version up and running. It was pretty bare bones at the beginning. But it quickly had lots of bugs and issues that made it stop working. And I guess maybe now is a good time to explain what happened but it needed lots of attention.

And so I would go back to my programmer and say hey this little parts stopped working, it’s got a bug, can you fix it and he would do the best he can but because he was overseas he didn’t speak english well it was difficult to work with him, to communicate and get things done in a timely fashion. And so I decided I think I just want to hire a different programmer to take the existing code that I can work with that speaks english that I know I can count on for the future. And so when I asked the original programmer for the code he said no, not gonna happen. He said pay me $15,000 and the code is yours. And I mean you have to understand I paid like $3,000 to $4,000 and I thought that was it originally. And also when I posted the job I did this on a freelance website I figured hey I was protected and that’s what I paid for was the source code originally or so I thought. And I probably could have gone through the dispute process on, it was Freelancer.com and perhaps gotten the original code but it would have been a huge headache probably taken months to go through.

And so I was essentially faced with the dilemma of hey I can pay this guy $15,000 and get the original code which I know is kind of buggy already. And then just hire somebody else to fix it. Or I can scrap the project completely, I can just hey I made a few thousand dollars, just tell people sorry you’ll refund them or whatever. But what I decided to do is fire the old programmer and completely start from scratch. Just hire a new programmer, have him create his code from the very beginning and that cost me about $15,000 to $20,000 to do anyways. So I figured I was about even whether I got the old code or the new source code and because I did it from scratch with the new guy the source code I knew was mine. I hired a very programmer who spoke english. Things have been much better since but that was some pretty trying times. I learned quite a bit in those early days. I made quite a few mistakes that made me dig in too deeper but yeah that’s sort of what happened there early on.

T: I think that that is not uncommon at all.

S: Unfortunately.

T: I know personally I never get anything right the first time. I should call myself Captain Do Over coz I always need another time to assess all the errors that I made and try and fix them on the next go around.

S: Yes. So the one point I will make just very quickly that one of the big things that I learned in software development is that hiring cheap usually is not the cheapest in the long run. I would advice what I do now whenever I hire a programmer is hire the absolute best. Even if they’re more expensive they’ll typically get the job done quicker so they’re spending less hours even though they have a higher hourly rate. They do it quicker. It’s done better and there’s less maintenance down the road. So absolutely I would hire the best from the get go.

T: And how did you find the second programmer? Did you go back to the same site and just pick a higher quality person or did you go to like a local meet up and meet someone face to face? What did that look like?

S: I probably could have gone back to freelancer. I actually went back to elance or over to elance. So it’s another freelance website. But I just did a lot more due diligence and paid a lot more attention to the higher quality high end developers whereas before I was just looking to get the job done. I posted a job and I figured hey if they get the job done I don’t have to release my money until I get my product so right, I’m covered but no. So the second time around I just looked at the higher end developers and hired them.

T: Quick side bar for the listeners I have interviewed another fellow by the name of Travis Ketchum who you can find it on the blog. He developed some software as well and his experience is very similar to Spencer’s and the version 1 was unsuccessful coz he hired the cheapest person. So if you’re thinking about doing software in addition to listening to this interview make sure that you go and do a search for Travis Ketchum on BrightIdeas.co and you’ll find his interview.

Now back to you Spencer, you just mentioned due diligence so let’s not skimp pass that because that’s an important part of how you selected your contractors so can you share with us what did you do to do due diligence?

S: Absolutely. And I recommend this whenever you hire any freelancer not just a software developer. Essentially I tried to communicate as much as possible before I hire anybody. The instant messaging, email and I would essentially ask them questions like do you understand the job, can you restate in your words what exactly I’m looking for. And so I would try to exchange at least a few emails so that a) I knew that I could communicate with them, that their english was good and they understood what I was saying.

I ended up hiring somebody here in the US so that’s not a problem but exchanging those emails helped me to know the depth of their knowledge of what I was looking for and you can really see the good freelancers or programmers when they bring up potential problems. They say hey I see your job but have you thought about this, this and this. And those are the people you want to key it out on. Key in on and say no, I didn’t think of that one, let’s discuss. And so that’s great when they can come up with potential problems before you ever hire them.

I actually spoke to a couple of different people on the phone and that’s a big plus to know if you could develop a good rapport and then basic things. I looked at their past jobs, what they were rated on those jobs, pluses and minuses from previous people that have hired them. I looked at resumes and things like that. But I would say the big thing is definitely pre-hiring interview questions and just getting to know them a little bit better and making sure they fully understand the entire project.

T: Did you check with any other references?

S: You know, I didn’t and that is certainly another step that I could have gone to ensure and that’s not a bad idea at all. But just after talking with the programmer that I hired I felt pretty comfortable.

T: And when you say talking did you have a voice conversation with him as well over Skype?

S: I did yes.

T: Especially if you’re hiring someone from another country it’s not to say that there aren’t any good programmers outside the United States but in my experience you really need to have a verbal conversation with them because when you’re trying to explain post production or after the fact issues chatting and skyping and emailing in a non-verbal form can only go so far.

S: Yeah and absolutely. And what I didn’t fully understand the first go around with Long Tail Pro is that I figured software development was a one time deal. I get my product, it’s a package that’s done I sell it forever, right? But I mean that’s not the way software usually works and particularly something as intricate as Long Tail Pro where we’re using lots of different resources any time there’s a small change we have to tweak our software. And so I understood fully the second go around that this was a long term relationship with this software developer. I needed to know that they would be there a year down the road to continually develop and fix bugs or changes that may come up. So that was very important.

T: So coming up over we’re gonna talk about how Spencer marketed and sold his software but I have one last question for him on how he got it developed and that is when you created the scope of the project, coz I’ve been involved now at 2 software development projects myself. One of them we’re just getting ready to release and it’s done and the other one we’re very early in the development phase. And in both of those projects we put a lot of time into screen shotting so that you could have a conversation with your developer that says when you click this button this is what’s supposed to happen. Did you go through a process like that or did you have a different way that you did it?

S: I would say it’s a similar process. I did a lot of referring to similar tools that are out there. So I say hey here’s some similar tools to what I’m looking to have created. Here’s what I like about them, here’s what I don’t like about them. And yes I did take some screen shots. But I wrote out a very detailed explanation of everything that the software needed to do, what was required of the programmer. And just really divided it up into each function of the software. Here is the keyword research function. Here’s what it needs to do and maybe here’s some examples of other tools that do this and here’s what they look like. So yes I did very detailed write up and even more so the second time around.

T: So the interface design that you ended up with, was that really the developer’s interpretation of your detailed instructions?

S: Yes. And it was something that he came up with that we really worked on together. And that was also part of, that’s one of those points where I posted my job and before I hired my programmer that was one of his points. About hey I see a problem here or this is something else we need to talk about is the overall interface. He asked do you want me to do that or do you want to hire somebody else to do that. I ended up hiring him because he also have a lot of experience doing user interfaces. But yeah that’s something that I worked with him to come up with the design and the look.

T: Okay. There’s a lot more we could talk about obviously with respect to how to build software more than we could cover in a short interview. So I’m gonna leave the development side alone now and let’s go on and talk about marketing. So you obviously, just walk us through your marketing plan and what executed and maybe highlight a couple of things that worked really well and maybe if there is things that didn’t work well maybe you could talk about those as well.

S: Okay. Yeah my primary marketing plan early on and a big part of the reason that it worked for me is because I am the target market. I was the target audience essentially. I created this software for me so I fully understood the needs, the problems, what was going through the head of the potential market. And also because of that I already started a blog at NichePursuits.com essentially my target audience is for people that are trying to build websites whether they were niche websites or large blogs or local businesses building websites that wanted to do keyword research more quickly and effectively.

And so I essentially started marketing the software to my blog audience. That’s from the get go I essentially emailed out that hey I’ve got this software that’s available and even before it was done I was very open about my developing a software. I made posts on my blog about this. And so that’s essentially how I marketed it from the get go is just to my blog audience. And that’s a big thing for anybody out there is that if they can have a blog that they’re building out and building an audience it makes launching any product so much easier to have the audience built in. And so that was my primary way of marketing was just to my blog that already existed.

I marketed a little bit on some forums like the warrior forum essentially putting up offers on these forums for people to purchase. And then I reached out to a few other bloggers that were in the same niche to do either webinars or get them on as affiliates to help me promote that.

T: So the percentage of your revenue that came from your own list versus affiliates, what would you guess that was?

S: Well early on I mean it was a 100% me starting probably the first several months was essentially just me. I didn’t go out and I probably could have done this better. I didn’t go out and try to do a big launch with other affiliates and all. It was essentially just me. I threw it up on my blog and emailed my lists and said hey it’s ready, go buy it. And that worked enough to know that people were interested. Now the breakdown this year I don’t know the exact number. It’s still the majority is coming from me and my blog but it’s maybe 60% is me, 65% is me and 30-35-40% is affiliates.

T: Okay so people listening to this are gonna know how popular your blog is or isn’t so is there any in terms of size of your list or daily traffic stats or anything that you feel like sharing?

S: Sure I’ve got about 10,000 subscribers to my email list and to my blog so that gives you kind of an idea of that. So it’s a decent amount.

T: Okay so a reasonable amount. And I think that the key take away that I’m hoping that the small business owner, coz I remember when I ran my technology services company prior to this business and this was from 2001 to 2008 when I sold the company, I didn’t blog. I didn’t know what blog was. In hindsight I just wish that I would have understood the power of blogging. You can create so much engagements, so much relationship, you can build that subscriber list and if you’re a small business owner and you’re listening to this and you haven’t started blogging yet you really need to.

And if you’re thinking gosh I don’t have time hopefully this story with Spencer here and the story of other guests and even my own story because the reason that I do Bright Ideas and the reason that I give all of this content away is to build a list for my software application that is in development currently. That’s my monetization strategy. So when you say I don’t have enough time to blog coz I’m doing all these other stuff it can be a really really valuable activity if you learn how to do it right. And there are lots of other guests and interviews here on Bright Ideas that have lots of success blogging. And in those interviews we go into some particular and I’ve got some how you can do that.

So sorry for hijacking a little bit there Spencer but I really wanted and so passionate about it.

S: Absolutely.

T: You wanna talk to so I’ll stop right now.

S: Yeah well I was just gonna say I can tell you 2 other stories very very briefly of people blogging that has really driven sales to their business. And these are both local business owners who own a small company so maybe it will resonate well with your audience. One is Marcus Sheridan who owned a small pool company in Virginia. And I’ve done an interview with him on my blog but he install pools, fiberglass pools and all they had was just a website. I’ll try to make this story short. But essentially they were about to go financially bankrupt. He finally discovered content marketing. He decided to blog about everything and about fiberglass pools. His website started ranking for every single question that the customers could ask about how much does a fiberglass pool cost or everything that his customers were asking. And within a year they completely turned their business around. They’re now doing millions of dollars in sales and it’s literally, and he contracted because he does this very well, that those sales have all come from his blog. And it’s because he’s targeted these long tail keywords, ranked in Google and so literally changed his business.

The other story I’ll tell briefly is actually my cousin. John Haws, who I also interviewed on my podcast, he decided he wanted to build niche sites. He has a background in landscaping so he built some websites about landscaping in his hometown. He was in Chicago, Illinois at that time going to nursing school. He built some niche sites targeting landscaping in Allen, Texas. Within a couple of months people started calling him saying I want you to come on my lawn. He wasn’t even there, didn’t have a landscaping company. He put them off until the summer until he was off school. He built up a customer base before he even had a business. He went home during the summer and he’s never gone back to school. His business now, he’s done like $70,000 in 6 months, his very first 6 months. The majority of it is online that people are typing and finding him because he blogs about landscaping. And he plans to never go back in his nursing degree just to build this landscaping company.

So that’s 2 small examples and I can tell you if I owned a small local company I would be blogging the heck out of it.

T: Yap coz if you’re not blogging you gotta be doing something. And the cold calling while it can be very effective, it’s not a lot of fun. It used to be a bit mind numbing and the direct mails takes and costs a lot of money. There’s a lot of other things that you can do but blogging you can do it from anywhere. You just flip your laptop open. And I’ll refer to another interview, his name is Peep Laja, it’s here on Bright Ideas there’s an interview. He got 50,000 visitors in his first month. He had no list, no affiliates and it’s a very interesting interview because he talks about how he adopted the reporter’s style of blogging. Then again I’m not gonna go down that rabbit hole, just go check out that interview if you wanna learn more about it.

Alright, so in our off camera talks, Spencer, you shared with me that you were getting quite a bit attraction with small business owners. Can you talk a little bit about that and how you think that happened?

S: Yeah absolutely. So you’re right. I’m starting to get a lot of my readers on NichePursuits.com are actually small companies. I don’t know the total variety of types of companies but at least that have emailed me recently have a pest control company and these are people that have purchased Long Tail Pro and are actually using it. Pest control company, lawyers, real estate agents, small printing company and I’m sure there’s dozens of others that I just am not aware that they’re using my software. But lots of them are starting to really understand the power of the internet, content marketing and ranking in Google just like we described those stories of people that are turning their business around. And the reason for that is because customers nowadays go online and they search everything on Google.

So I mean people used to go to the Yellow Pages now they go to Google. And so these small business owners are becoming savvy and so they found out about me probably from reading my blog, trying to figure out how to rank their business websites in Google because I talk about how I rank my niche sites. And those tactics apply directly. I mean it’s the same process, the same thing just different keywords. And so these small business owners are now definitely very interested in keyword research. And they should be because these are the companies that should be ranking for landscaping in Richland Washington and things like that because they provide the service. And so they’re very interested in doing the proper keyword research, analyzing whether or not they can rank in Google and then making it happen.

So definitely lots of small business owners are using Long Tail Pro and I see that definitely as the future for my own company that they are most certainly part of my target market where I may have not thought that originally when I created the software.

T: That’s one of the things that I really love about being in business and I’ve referred to this previously as I called my green dot theory. You have this idea we’ll call it we’re selling green dots. So you decide to start and a lot of people don’t do that. They let fear get in the way and hopefully this interview will help them to get over that cliff. But once you start to be in business you uncover all these other opportunities which you probably would never have discovered have you not first started to sell your green dots.

And those extra little nuggets that you find can often turn into phenomenal business opportunities and yours is a good story of that. You started off building a software product for internet marketers that wanted to build little itty bitty websites to make money with Google adsense or Amazon affiliates or whatever and now you’re tapping into this market of main stream business customers who have these needs and you’re starting to create brand awareness with them and recognition to the relationship there’s so much that you can do with that for the years ahead. That had you not started you probably wouldn’t be thinking about these things and you wouldn’t be exposed to those opportunities.

S: Absolutely.

T: Alright so we’re getting to the end of our time window for this interview so there’s a couple key things that I wanna cover off. No. 1 is I know that you have recently released, this interview will be published after the release but I think that your special would have ended, but you’ve recently released a very updated version of Long Tail Pro and you have for Bright Ideas listeners you can get the product for $77 instead of $97 if you go to LongTailPro.com/BrightIdeas.

And I guess the last thing, Spencer, if people wanna get a hold of you they know that they can do that on NichePursuits.com. Is that the best way to get a hold of you?

S: That’s probably the best way. I’ve got a contact page there. They can certainly use that, that will send me an email and we’ll communicate that way. Or leave a comment, I’m very responsive on comments. They can certainly follow me on twitter. It’s @NichePursuits. So yeah those are couple of ways they can definitely get a hold of me.

T: Okay. And I also noticed that you have a free webinar that you’re doing. I guess maybe you do it every week or something like that on how to get traffic. You can find more information about that on Niche Pursuits. So last question I have for you, what books are you reading these days? Maybe give us one or two if you’re reading any.

S: I am just about to finish The Lean Startup which is a good one. I’m sure you’ve maybe talked about.

T: I haven’t read that one yet actually.

S: Okay. Yeah it’s definitely a good one. Other than that I don’t have any books I’m reading. I enjoy reading my wired magazine. That keeps me up to date with some pretty interesting articles as well. But yeah that’s sort of what I’m reading now.

T: Okay. Spencer I wanna thank you very much for making some time to come here on the Bright Ideas podcast and share your experience with building software and turning it into a business. It’s been a pleasure to have you on the show.

S: Absolutely Trent. I appreciate it. It’s been good to be here. Thank you.

T: Alright, if you wanna check out the show notes for today’s episode go to BrightIdeas.co/17. And while you’re at Bright Ideas you may also wanna go and get the massive traffic tool kit. To do that just go to BrightIdeas.co/massivetraffic and enter your email address. When you do you’ll be given instant access to the tool kit. So what is the massive traffic tool kits? It’s a compilation of all the very best ideas that have been shared with me by my guests here on Bright Ideas and some of those guests or all of them in this case are absolute power houses at getting traffic to their sites. And the really cool thing about the tool kit is that you do not need to be an SEO guru to be able to execute the strategies that you’re gonna learn. Everyone can do all the things that are in the massive traffic tool kit.

So this brings us to the end of the podcast. I’m your host, Trent Dyrsmid. If you loved this episode or even if you just liked it please do me a huge favor and head over the itunes and give us a 5 star rating and leave a feedback of some kind. Whenever you do that it helps the show to go up of the rankings in the itunes and more people can learn about what we’re doing here at Bright Ideas. And the more people that learn, the more people that we can help to massively boost their business. So thank you very much. It’s been a privilege and I’ll see you in the next episode. Take care.

About Spencer Haws

spencer1-150x150Spencer Haws was a business banker with an MBA who quit his job as a Business Relationship Manager at Wells Fargo Bank to build websites full time. He has more than 200 small niche sites that he monetizes primarily with Google AdSense.

Spencer is the owner of the popular blog nichepursuits.com, where he details his methods as well as his results. He is also the creator of Long Tail Pro, a keyword research tool that niche website builders can utilize to create the right content that targets the right keywords.

Digital Marketing Strategy: How To Build and Sell Premium WordPress Plugins (and make $100,000 in 90 days) with Travis Ketchum

Are you looking for a way to quickly build a list of qualified buyers for premium WordPress plugins?

Would you like to discover a method for building a software product that does not require you to be a programmer?

To discover how to build a WordPress Plug-in AND hear how my guest brought in over $100,000 in just 90 days, I interview Travis Ketchum for this episode of the Bright Ideas Podcast.

More About This Episode

The Bright Ideas podcast is the podcast for business owners and marketers who want to discover how to use online marketing and sales automation tactics to massively grow their business.

It’s designed to help marketing agencies and small business owners discover which online marketing strategies are working most effectively today – all from the mouths of expert entrepreneurs who are already making it big.

In this episode, I interview Travis Ketchum, Founder of Contest Domination, an Entrepreneur and extremely smart marketer.

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Transcript

Trent Dyrsmid: Would you like to create your own software product but you don’t know how to write any code? Today’s guest built a WordPress plug-in whose launch was so successful it did $100,000 in its first week and it continues to passively bring in $3,000-5,000 a month in revenue and he’s going to share with us exactly how he made that happen.Finally, if you don’t have a big list and you want your launch to be a success, you’re going to love hearing how my guest made that happen for him. All this and so much more.Hey, Travis, welcome to the show. Thank you so much for making the time to do the interview with me.Travis

Ketchum: Yes, thanks for having me on. I’m happy to be here.Trent: As I mentioned to you before we started to record, you and I have a mutual friend, a guy by the name of Chris Guthrie. [sp] Chris was kind enough to make an introduction to you. This all kind of came about after I heard an interview you did on another site where you had some pretty spectacular success by launching a software product. It was a plug-in as a WSO. Real quick, how much revenue did you do with that?Travis: Yes, with Contest Domination as a WSO, we did a little over $100,000 in sales over just a couple months so that was pretty exciting.Trent: A hundred grand, that’s pretty awesome. This was like, what, your 10th or 12th WSO?

Travis: It was my first WSO.

Trent: Confession: I knew it was his first but damn, dude, that is awesome. That is absolutely spectacular. Did you have any idea when you went into this that that amount of revenue was going to be possible for your first WSO?

Travis: No. I mean, I didn’t know anything about WSO. I had seen people do them and people like Chris had told me, “You’ve got to do it. You’ve got to launch a WSO. There’s good money there,” I looked at them and usually the sales pages look kind of clunky because it’s in a forum. I was like, “How much money are these guys really doing on these things?”

They just don’t look like they would perform that well because they fly in the face of everything you expect from a high-converting sales page. We sold like 2,000 in the first 24 hours, 2,000 copies of the software so that blew me away.

Trent: That’s 2,000 new customers into your sales funnel, which there’s all sorts of fantastic things about that and we’ll get into that a little bit later. Before we get into that, I know there’ll be people listening to this show who have never made a dime online and there’ll be people listening to this show who have an existing business but they are struggling with, “Well, how do I get more leads for my business?”

The reason I thought this would be such a great interview is one of the things that people who aren’t familiar with WSO’s might not understand is they’re not only good for making money when you sell stuff but they’re also really, really good for generating leads so we’re going to get into all that.

You had a strategy of not trying to make money on the launch and just getting leads, I mean, giving 100% of whatever was paid on the WSO to the affiliates just for a lead grab.

Travis: Yes, yes, absolutely.

Trent: We’re going to get into all of those details here in just a few minutes but I don’t know you very well, well, I don’t know you at all. This is our, really, first live conversation. We’ve traded a few e-mails. I know my audience probably doesn’t know you so tell us a little bit about your background. You probably went to school and had this vision of corporate life or what have you. I don’t know. How did you get started?

Travis: I don’t know if I had a vision of corporate life per se. I was definitely an entrepreneur kid. I was the one going around, everyone else wanted to go hang out at the beach and I wanted to do that too, but I was more motivated to mow 10 yards and wash 50 cars and grind out an extra buck, even though I didn’t have anything specific I wanted to buy with it. I just knew that if I hustled I had money, if I had money I had options and that started really young.

I did go to school for marketing at Washington State University. I started my first business, actually, when I was in high school, my senior year, after I turned 18, which did pretty well. It went like gangbusters for a few months and all it really ended up being was a arbitrage play in eBay where I was drop shipping hundreds of laptops a day at narrow margins but it scaled well.

Trent: Really?

Travis: Yes. That worked pretty well for awhile until two things happened. One, more people caught on to the opening of the market and so margins were getting pinched. And then, two, this was in 2006, and eBay had a rush about midway through the summer of fake bidders. They were going to “but it now”. It was ending the purchase cycle but it was a fake bid and they were like, “Oh, I’m sending the money through Western Union,” which is obviously not OK.

It went from insanely profitable to kind of profitable to actually costing money just because of the time and effort of going through arbitration with eBay about, “Hey, this wasn’t a real bidder,” and just screwed it all up. I was 18 and I was like, “Hey, I just made way too much money for being an 18 year-old,” I had to pull the plug on it.

Went to school knowing that I wanted to start something else but I wasn’t quite sure what yet. Someone turned me on to Shoe Money. I was like, “Man, there’s got to be some more options here,” I dabbled with a few other ideas that didn’t go anywhere. They were crap.

Trent: Give us an example because we all come up with crap ideas in the beginning.

Travis: One of the ones that I was most jazzed about, I was like a freshman in college, is I wanted to call it DropBox and I actually owned a typo on the domain DropBox because DropBox hadn’t really been launched yet. That wasn’t like a common brand like it is now. The idea of it wasn’t software for synching.

The idea was I saw all the Greek systems creating t-shirts and I thought it would be cool if you had an online configurator for t-shirts where, if it was a frat or a sorority, they would fill out a profile ahead of time and advertisers could subsidize the cost of the t-shirt printing.

Like if you’re doing an event shirt like for a rafting weekend, maybe Coca-Cola say, “Hey, our male consumption 18-24 isn’t as high as we would like,” and they could subsidize the cost of printing fraternity t-shirts or group events. So if normally your shirt would be $12.00 a shirt based on your volume, maybe Coke wants to pay a couple bucks to buy a sleeve or buy the backside, obviously, a lot of moving parts there and sponsorship problems. Yes, that’s an idea that I spent time on that just went absolutely nowhere.

Trent: How much revenue, like goose egg?

Travis: I never even actually fully launched it. I got to the stages of qualifying what it should be and all of my advisors at school were like, “This is a terrible idea. You should just not ever do this.”

Trent: OK. Like everybody else in the beginning, you didn’t light the world on fire. How did you get to the point where you thought, “I’ve never built software before but I’m going to make software.” Or maybe you had built software before. I’m actually some things which I shouldn’t do. How did this Contest Domination idea get up in your head?

Travis: A series of events happened that kind of put me into the affiliate world and as I got more comfortable and familiar with it in my own kind of affiliate mini campaigns, nothing crazy, I ended up being a JV manager for a couple different people because I could always talk to people and make a biz-dev type deal. So because of that, I’ve kind of had this intense focus on performance-based software and marketing.

I was watching all of these people that were willing to share things like Groupon and everything else where they were incentivized to share and the amazing power that had for leads. Then I looked at the readily available kind of prepackaged contest market and most of the stuff there I didn’t feel like was hitting the nail on the head because it either did one of two things.

It either only rewarded the user for the act of sharing and not the performance that came from it, so that doesn’t reward your influencers that can maybe tweet once and give you an extra 100 leads. That only rewards people that are on every social profile but might not actually have a following. Or they were overly complicated, where it’s like to get points you’d have to go create a YouTube video with a backlink or you’d have to do all this crazy stuff which, again, only rewarded someone who had the time to do that.

I wanted something that was simple, that was e-mail-based as far as collecting entries and if an influencer came through, like if Michael Arrington decided to enter a contest and tweets it out and it takes him less than a minute, that’s obviously infinitely more valuable than even 300 maybe qualified people taking the time to create a YouTube video for you with no following.

I thought that if I could focus in on something that was performance-based yet simple, that there might be something better. Then I started the journey of finding a developer and a designer and trying to put the pieces together.

Trent: We’re going to get into that. I want to hang around here this idea, the genesis of the idea for a minute. At this point in time, you’ve never built any software. You don’t write code, I’m assuming.

Travis: I don’t write code. The closest I ever really came to writing code, and I said this in the Mixergy interview too, is being like a stubborn, defiant nerd in high school. Instead of learning, back of my hand, most of the formulas you were supposed to memorize, even though I was good at memorization, instead of spending the few minutes to just memorize the formula, I figured out how to write the applications on my TI-83+.

It would just ask for the variables and then spit out in long form the solution so it was perfect every time. The thing that used to make me angry is I would mess up little, basic math stuff sometimes, like in the sequencing and it would screw up my end result. I’d get dinged the whole way through it. I got really upset about that, so I would write and bug test these apps that would ask for the variables and spit out the perfect answer every time. Then I would go through and just make small, little errors at the end so that I didn’t get 100% because they didn’t like us to do that.

Trent: Yes. I don’t even know what a TI-3 is. What is that?

Travis: It was the Texas Instruments, the high-end graphing calculators and you could actually write your own codes. It wasn’t crazy. We’re talking maybe 15, 20 lines to make it all happen but I was like going through the manual that comes with to figure out how to write an application that would graph or show me in long form how I got an answer so I could then write it on the test. I guess that’s technically cheating.

Trent: OK, You’re really not a software developer.

Travis: No.

Trent: You decided that you wanted to create some software. Tell me a little bit about just kind of the psychology that went into it because a lot of people who, and I know I’ve fallen victim to this, I thought about building software years ago and I’m like, “Well, I don’t know how to build any software,” so I never did anything with it. What was it that gave you the belief system that made you think, “Yes, I could do this”? Did you have someone in the mastermind? Did you have a mentor? How did that happen?

Travis: I knew that the way I was currently doing things, which was very much tied to opportunities of working for someone else was only scalable so far. I knew that if I wanted to scale my income and I wanted to scale the end production of my time, it would require some kind of unit, software unit of some kind. I went beyond just trading hours for dollars. Even though I was working for myself and that was great, I knew I needed some function that could accelerate that.

That’s only really possible through software to extend your total production value and you had to own it. So to own it, that means it has to be developed under your company so you have to hire a developer and a designer but to me that was a worthwhile risk because if you do the same thing you’ve always done, you’ll get the same results you’ve always gotten, right?

Trent: Yes.

Travis: I kind of went on this little bit of a witch hunt so that was my main driving mission is like, “I don’t care what it takes. I have to figure out a way to get a quality developer, a decent designer, to help me make a product that actually solves a real problem.” Finding the real problem was actually the easy part. Then it became the execution of it.

I asked people that had done it well, I was fortunate enough to have the Chris Gutherie’s in my life that have done something like that before to kind of set the ground work of what’s even involved, to give you kind of an overview. There are still quite a few blanks to fill in but it’s such a worthwhile thing to do.

Trent: And what were you doing to put food on the table? Obviously you’re at zero revenue from your software at this point in time, so were you just running JV’s and working for other people?

Travis: Yes. I was promoting some different JV programs for some speakers and authors. I had my blog, which I had written about just kind of my experiences doing that and what successful campaigns have looked like in the JV world. Then obviously there’s a handful of affiliate type things so I wrote simple guides like “How to Set Up WordPress on Bluehost,” the affiliate Bluehost, little things like that, affiliate links and stuff like that was enough to cover my base plus a little. It gave me enough breathing room to make a bet on developing my own thing.

Trent: OK. Let’s go into the development process. The very first thing that you had to do before you ever go to hire a developer or a designer was what?

Travis: Decide what had the greatest profit potential while solving the biggest market problem that wasn’t currently being solved. Most people that are entrepreneurs have thousands and thousands of ideas. At some point through the day there’s just fire. You can’t help it. There’s like, “Oh, this would be cool,” or, “This would be cool,” and just keying down to kind of like saying, “Maybe that’s not as cool as I thought it was,” or, “Yes, this is really cool,” and you looked it up and there’s already 10 people doing it.

Just kind of qualifying down that lead list of ideas until you get to maybe 5 or 10 that sound like they have some promise and then going through your due diligence process of, “How big is the market, really? How much do people make that are in my marketplace? Can they afford to buy what I want to build them but not quite afford to build it themselves from scratch?” Figuring out the different market information like that and then deciding, “OK, this is something I want to build. I think it’ll be successful. The price points seem to be bearable by the marketplace. Now how do I build it and bring it to them? How do I get it in front of that audience?” is the next part of it.

Trent: How did you figure out who your market was going to be and how did you figure out if they were going to be able to afford it or not?

Travis: It’s relatively open data, especially for WSO-type launches. People were loving to buy WordPress plugins. WordPress is obviously a popular platform and I saw a use for it not only in the Internet marketing space but for – I’m going to say this loosely – real businesses and regular businesses have a use for contests as well so I thought, “OK. I can focus on the Internet marketing space to launch this but there’s growth ability above and beyond that.”

WordPress seemed like a natural first step because it was relatively cost effective to produce. People could understand it. It was simple to use and that gave me data on what people are willing to pay for a list-building WordPress plank.

Trent: How did you find out what they were willing to pay? Was it because you were looking at what else was selling and looking at the price points?

Travis: Yes.

Trent: OK. All right.

Travis: So that gave me a ballpark of where it could sell and then I also looked at ClickBank, which is the main marketplace I launched in to start with and I saw that most things there were selling for $97.00, $147.00. There’s another contest software out there for $147.00. I thought, if I wanted to expand on an Internet marketing space and I want to get the Mom&Pop shops in this, I don’t think they’re willing to spend $150.00 to then pony up their own prize and so on and so forth, so I priced it low. Even on the ClickBank side of things I priced it at $37.00.

I knew that if they were interested and they sought out a contest solution, that if $100.00 is what they’re willing to bear and I can make it better and make it $37.00 and the math on my Excel sheets still says I can turn a profit, we might have a winner.

Trent: Yes. OK.

Travis: That was the train of thought anyway.

Trent: OK. So you’ve researched it. You’ve conceptualized. You still had to figure out, because you can’t just go to a developer and say, “Hey, I have this idea in my head. Make it,” so there’s still some stuff that happened before you could actually engage a developer. Can you talk a little bit about that?

Travis: Sure. I think pretty visually so when I think about an idea, it kind of starts forming in my head, loosely, kind of like a foggy picture but it’s there. Like I said on Mixergy, I actually took a really basic, kind of like Paint program, like the equivalent to Microsoft Paint but it’s a free one for the Mac. I did a really ugly, hideous wireframe of kind of like, “This is what a user would hit in step one. This is what a user would hit in step two,” and then just try to conceptualize it in words what I was trying to achieve.

Then I gave that to a developer and said, “Hey, do you understand what I’m trying to build here? Can you bring it back to me in developer-speak – ‘if this then that’ – kind of talk and make sure we’re on the same page? If we are, how much will it cost me for you to develop this?”

Trent: OK. You had something that was enough information that whoever you were going to hire was basically going to be able to grasp the idea.

Travis: At least get the gist of what I was trying to do and maybe fill in a few of the blanks.

Trent: Your first developer, it didn’t work out so well, did it?

Travis: No because I went cheap and it bit me in the butt.

Trent: It’s a valuable lesson so if you don’t mind sharing it, I’d love it if you would explain what you did wrong maybe.

Travis: Sure. At first, since I was on my own, I was totally self-financing it. It was kind of a solo gig. I was like, “OK. I know I need to spend money but I don’t know how much. Less is better if I can get away with it,” and that is the wrong kind of thought, I now know.

I wanted to start by just asking my network because I do have a decent amount of one or two tier away connections so I thought, “Hey, I’ll just throw it out there I’m looking for a WordPress developer. If anyone has a good recommendation, make an intro please,” and I put it on Facebook, Twitter and Google+.

I know a guy who is a Google app engine developer who has a pretty big following on Google+ and he’s like, “Hey, I’ll repost it and I’ll see if I can’t get someone for you.” I got a referral through him who I later found out they didn’t even really know each other, that he just happened to be, bumped into each other on Google+, which is kind of a weird community to start with. I got this referral and he gave me a cheap price and Chris referred me to someone and he gave me a much higher price. I’m like, “These are pretty dramatically different.”

Trent: What were the prices?

Travis: The cheap price was $750.00 and the expensive price was like $4,000.

Trent: OK. That’s a big spread.

Travis: Yes. There was one other person that was kind of in between but they even, just flaked out. I was like, “OK. Well, so it’s really just these two options without having to scavenge the Internet to find a development agency.” A lot of time agencies are people that have a big reputation for developing marketing-related products will be like, “Oh, $20,000,” something crazy, so I went with the $750.00 guy and that was one of the worst experiences of my life.

Not only did he infinitely delay it to start with but then the code he gave me was total, utterly useless crap. The way I tried to explain it when I passed both developers ultimately, booked both offers to make it, as I said, “I realize that I’m a little more technical than most people but I need to you build this as though a 15 year-old, female, fashion blogger in Florida or wherever is trying to set up a contest on her blog, she needs to be able to use it. That’s how simple it needs to be. Just upload, unzip. Like we all know, install, activate, fill in the blanks and you’re good to go.” That’s what it should have been.

The first developer’s idea of that type of usability was like going into your C-panel, installing PHP Scripts, even stuff that I’m like, “What? How do I do…?” and I’m not an idiot. I work with hosting quite frequently even I was like, “Are you kidding me? I can’t use this. This is totally unusable.” There was a big debate as far as him delivering or not. It was just a mess.

I went to the new developer and was like, “Hey, I know you’re more expensive. I know I should have come to you in the first place. Can you use this code? I paid for it,” and he looked at it and he was like, “It’s garbage, dude. I can’t use any of it.” I ended up paying the $4,000 plus the $750.00, which, shame on me. I deserve to pay a little extra.

The first guy took months to try to get it to me and the more expensive guy, because he was sitting on a big code base of his own from prior projects, it took him days from the time that he said, “I’m starting on it,” to, “Hey, here’s the first beta,” and it was pretty close to done.

Trent: In a couple of days.

Travis: Couple of days. It’s crazy.

Trent: That’s pretty awesome.

Travis: He was that good and he was sitting on that much code. He was good, he had been hired so frequently that a lot of these functions were similar to other projects and his contracts always say he can reuse his own code. He wrote it by hand at one point but he just compiled it and then did some unique things for this plug-in.

Trent: For people who are listening to this who have never built software before, I’d like it if you’d expand on that a little bit because they might not understand this whole process of having objects that are premade and already available and building software, kind of like, Legos. D you want to talk a little more about that?

Travis: Sure. Probably the best analogy I could use, is imagine if you need to do some kind of remodeling project in your house. If you want to do it yourself, you probably don’t have all the tools so you’ve got to drive to the store and get a special kind of hammer and a special kind of nails and, oh, you forgot this other tool.

You’ve got to go back to the store and get a saw blade, whatever. If you hire a carpenter to come in and do it, he shows up, his truck is full of everything he needs and even though it’s a new project, he can knock it out in record time because he knows how to do it and he’s got everything that he’s used in prior projects to do it.

That’s probably the best analogy I can think of because you think about it, “Yes, you can do it. You can save some money but you take a lot of time and you have to get everything you need for the first time.” That’s an infinitely slower process than someone who, that’s what they do. Is that a good explanation?

Trent: Yes. I think that’s an excellent explanation and I think folks who are listening who have never built software before will get that.

Travis: Hopefully they’ve never had to remodel their own wall.

Trent: Yes, that as well. One of my questions, and you’ve already answered it for me, was, what’s the number one mistake that most people make when they’re going to build software? I think I know what the answer is. I think you’ve given the answer but just in case I’m offbase, what do you think the number one mistake is that people make?

Travis: They trip over pennies to try to get dollars. Obviously, in the long run, that $750.00, we make that back in a matter of days now. The $4,000 is roughly a month of income on that plugin now even many months after the launch.

Trent: You mean it’s still doing $4,000 a month for you now?

Travis: It varies. It goes anywhere from $1,500 to $5,000 of profit a month after paying an affiliate without any active promotion, just hanging out.

Trent: Wow. That is because of the ClickBank product that you created?

Travis: Yes.

Trent: We’ll get to all that in a minute. Before we get to there, I want to talk about the WSO – and if anyone’s listening to this, they don’t know what a WSO is, well, I’ll let you explain it. What’s a WSO?

Travis: I didn’t really know what it was either until I decided that this is something I wanted to launch. A WSO is just a warrior special offer, which is the marketplace, essentially, warrior forums, which is a forum dedicated to Internet marketers.

Trent: Most discussion forums you’re not allowed to say, “Hey, buy my stuff,” but in the warrior forum they have this section called “Warrior Special Offer”. I think it’s still $40.00, isn’t it, to run a thread?

Travis: It’s like $50.00.

Trent: Is it $50.00 now? Yes. Boy, the guys are making money running that thing. Anyway, so you pay your $50.00 and you can put up your thread and you can say, “Buy my stuff.” There is a little bit more that goes into it than that. Now you’ve got your product done and you need to sell lots of it, and you did, 2,000 units I think you said, in the first 24 hours.

Travis: First 24 hours of the WSO but the WSO wasn’t the first thing I did.

Trent: OK. Let’s back up. What was the first thing you did?

Travis: The first thing I did is, because I wasn’t even convinced that I wanted to do a WSO yet, I had gone through all of the approval process and everything to get it onto ClickBank. Then I just opened it up to my very small, existing audience and it did a couple thousand dollars in profit in the first month.

It was on ClickBank exclusively for about a month before I did a WSO. I didn’t make all of my money back but I made about half of it back with very little promotion. I was like, “OK. If I can do that once I get some real JV’s onboard with this and do a real launch, then we might actually have something.”

Trent: When you did that very first launch just to your own list, how many people were on your list back then?

Travis: It was kind of embarrassing. I only put it on my blog list, which was like 400 or 500 people. It was like nothing.

Trent: OK. What’d your sales page look like? Was it just a video demonstration of the software and a “buy now” button or what was it like?

Travis: Actually it looks just like it does now because I hired one of my friends to help me crank it out and he did a nice job.

Trent: What’s the URL?

Travis: ContestDomination.com. It has a product image. It goes through the features. Now that I’ve had it in, since then, some social proof now that I have more people using it and I can take snapshots of the actual performance. It’s pretty basic and straightforward, no video, just text and a couple of images.

Trent: Very simple. That’s a thesis theme, it looks like.

Travis: It’s actually not. It’s a custom woofing.

Trent: It is. OK.

Travis: Yes. They did a lot of custom stuff to it though.

Trent: OK. Very cool. You test market it on your own. It did well. Then you thought, “All right. Clearly I have something here that the market likes, that they think is worthwhile. There’s people buying it.” By the way, did you track your conversion rate on this sales page when you ran it to your own list?

Travis: Yes. I’m a numbers guy. With that small of a sample size, it’s pretty inconclusive. At the end of the day, that sales page converts around 4-6%.

Trent: Wow. That’s pretty good.

Travis: With my own list, it’s not even a fair comparison, to be honest, because those people knew me really well. It was a small group. They’d been following me for a couple years and I had kind of teased them that it was coming up so I don’t even want to say the number because it’s totally outlier. It’s irrelevant. I understand why you’re asking but it’s not a number that people should get excited about because it doesn’t indicate the real market success.

Trent: No, but now we’re all curious.

Travis: It did like 30% from my list.

Trent: That’s pretty awesome. That obviously speaks to the relationship that you had with your list. I think that that’s something that’s important for people to understand and that’s why it’s so important to blog or put yourself out there and build a list because this is one of the things that can happen.

Now you thought, “All right. This is a great product. People love it.” You’d sold some copies. You got some feedback from your customers. Was there any revisions to the software that you made between your first release and when you did the WSO?

Travis: No but there was one almost immediately after launching the WSO because once I had thousands of people using it, the squeaky wheels made a lot more noise then.

Trent: All right. We’ll get to that in a minute. Let’s talk about the WSO itself. You’d never done one before. There is a very specific process to creating a successful WSO so at the kind of high-level, in the interest of time, obviously we don’t have time to go into absolute detail, but what are the steps to a successful WSO?

Travis: You talked about credibility and I’m glad you brought that up. I had never, in fact if you look at my profile now, it still says technically 0 posts because it doesn’t count posts on a WSO thread. So I didn’t have my street cred in the Warrior forum. People didn’t know who I was. Everything I was doing was kind of below the radar or for other people. My work was out there but it just didn’t have my name on it so no one really knew who I was.

I was like, “OK. Well, obviously credibility’s huge so let’s find someone who is well-ingrained in the Warrior forum and has repeatedly been successful launching products and let’s just work out a term sheet that makes us both happy.” Essentially they end up being like the JV manager for that particular launch because they’ve got the JV connections.

People trust them on the forums so let’s kind of leverage their brand equity a little bit and their connections and just share the revenue because it’ll be significantly more successful than if I just get on there, blazing, as my own because then I’m just giving a discount to people who just didn’t buy on the first wave of my tiny list. That wasn’t the goal. The goal was new leads, new revenue, new people I’ve never been exposed to before.

I partnered with a guy named Mark Thompson. It was a great experience. He repeatedly gets WSO of the day, which is the product, for those who don’t know, it gets kind of hand-picked as the best product for sale of the day, which then gets further promoted by the forum guy himself.

Mark really helped lay out like, “Hey, we’ve got to do this for the forum. These are the price points. This is how we should tweak your existing funnel to work for a funnel for the Warrior forum and then he just leveraged his connections in a way that was awesome and drove a ton of traffic to the WSO.

Trent: So what did the deal, if you’re at liberty to disclose, and you don’t have to say, obviously, anything you don’t want to, but what did that deal look like with Mark because you didn’t know him before? Did you get referred to him?

Travis: I got a referral to him and I had kind of heard of him before, mainly because he had another list-building product and I just sent him a cold e-mail. I was originally interested in putting his list-building product as an upsell on the ClickBank sales process of Contest Domination. Then over a couple weeks, as I was looking into the WSO and realized that he actually had a big footprint there as well, we decided to, instead of integrating our ClickBank product, to just do a WSO with it because we’d get more leads and more money.

Trent: OK. Essentially there was no relationship there, contacted him. Do you think it was mostly the fact that he looked at the product and thought, “Hey, this is a really kickass product. I know I can sell a lot of this. Sure, I’ll work with this guy that I don’t know,” or was there anything else that happened in there that got him onboard.

Travis: I think he realized the product was a quality product that hadn’t been launched, like nothing like it had been launched in the Warrior forum before, which is important. But I think what ended up happening is we both got on a couple Skype calls and just talked to each other. You have to kind of do a gut check and say, “Is this a decent person? Are they going to do what they say they’re going to do? Can I trust him at least somewhat and is this potentially beneficial?” You have to take a leap of faith.

With him, I kind of get the feeling that he’s a straight shooter. His terms seemed generous that he threw out. I said, “Hey, let’s just jump on it. Let’s do it.” It took just a couple minutes talking on a call after a few e-mails exchanged for us to decide to work together because we quickly found amicable terms and we both felt comfortable with what each other did, I guess.

Trent: What did those terms look like?

Travis: I ended up sharing a percentage of profits that was a large percentage but less than half because I had had the cash outlay myself.

Trent: Yes. You have gross revenue, then you have affiliates getting paid, after that is profit and he got a meaningful percentage of that.

Travis: Correct, Yes.

Trent: OK. And that worked out for you, obviously.

Travis: Yes. He, at the end of the day, probably made more on the product than I did because he had a bigger list to promote it to as well, which counts under the affiliate payment but that’s fine. It’s deserved. It’s his asset and he brought a lot to the table. I feel like it was money very, very well spent.

Trent: I think that that’s something that some people maybe get hung up on. I remember maybe two, three weeks ago, I found these guys that had this software and I thought it might be applicable for one of the niches that I was in. So I called them up and we had this conversation and they didn’t know anything about marketing so I had proposed some ideas and I said, “What do you want to share?” and they said, “Well, 25%.” End of conversation.

I thought to myself, “Man, you guys just don’t get it. Having someone like Mark,” – and I’m dwelling on this because I hope there’s some people listening to this interview who are thinking, “I built it. I should get the bulk of the revenue.” If that’s your thinking, you’re going about it the wrong way. I know why I think that is but, again, I’m interviewing you so I want you to share with the audience why you think being really generous is worth it in the long haul.

Travis: Well, especially if it’s your first product, it’s even more important, I think. You have to look at it this way: it’s guaranteed profitable user acquisition, guaranteed profitable user acquisition. For anyone who’s serious about Internet marketing, they know that the real money is in the list. I’ve made a multiple since then off of the list. I’m not saying that to brag. It’s the legitimate asset that I walked away from with that.

It’s what I can leverage into new products. It’s what I can leverage into a new version of the first product. That’s my list. That’s my communication with my users. That’s my asset. There’s no way, starting out, that I could have added 2,000, 3,000, 4,000 people to my list in a matter of days. Guaranteed profitable on the Internet plus including the promotions that happened after the fact.

So be generous. Reward people for their time because then they’ll want to work with you again too. If you come out with something else, they’ll be like, “Man, I made a killing working with this person. I definitely want to work with them again, no questions asked. I love it. I’m in. Let’s do it,” and you’ll get another wave of thousands of people.

The next thing you know, you have a big list that not only are you making money on your front end launches, but then you’re making $2,000, $4,000, $8,000, $20,000, $30,000 a month off of an e-mail list. That’s not unrealistic if you do it right over time.

Can you tell us a little bit because you talked about the list and you alluded to some of the things that you’ve maybe done since? It sounds like this launch was really a game changer for you because I’m going to guess that your average monthly revenue before this product was launched was a very different number than your average monthly revenue now after the launch, even though the launch is over, so to speak.

You kind of alluded earlier in the interview or maybe it was before we started recording and we were talking, there’s this kind of cash that keeps coming in without a whole lot of promotion. Can you tell us a little bit about why getting that list is so important and then what it is that you’re doing to make this a residual income product?

Travis: Sure. But just to give some context to it, it’s not like I was making chump change before. I was working my tail off for other people and getting compensated well for it. I don’t have to work as hard as that anymore. I put in hours but it’s not as stressful and I make about three times as much, just to give some context, of what I made before and, like I said, it wasn’t terrible money to start with.

Trent: Do you feel like sharing the number?

Travis: Not really. All I’m saying is you can have a decent job and if you can leverage that into a product and a list, you can make exponentially more money for the same amount of time and less stress, in my opinion.

Trent: OK. That should be sufficient to convince people.

Travis: It just works. Trust me. As far as what I’m doing since then to make it more of a residual income is two things. The one, I still have kind of an evergreen sales process for the plugin. It’s still doing quite well because there’s either reviews out there about it that people are sending traffic to the sales page.

On the sidebar of the contest, since it works so well as a tool, people will use it frequently, and on the sidebar is an opt out for them where it says, “Powered by Contest Domination” so we get a handful of hits everyday from people who are running contests and leave that enabled. They can just put in their ClickBank ID and get a commission for it. I’m cool with that.

Trent: Oh, so everyone who’s using the plug-in by default, unless they turn it off, they’re actually an affiliate that’s promoting you.

Travis: They have to put in their ClickBank ID so by default it’s just promoting it. They can put in their ClickBank ID or disable it. There’s not a ton of options. It’s not like it’s hidden or buried. I try to be upfront about it but it is an opt-out versus opt-in. That alone keeps a steady stream of new people coming in. These interviews are great, just kind of spreading the word about it. That organically does pretty well. The only overhead there at this point is really support because the same technical overhead I have, it’s a blip on the radar for everything else that I have to pay for anyway.

Then when you have those leads to, I try to do about two campaigns a month where I promote a paid product, someone I know that I’ve vetted, that I’ve tested the product myself. I think there’s a real use case for it. I think it’s relevant for my audience. About twice a month I’ll do a paid promotion to other plug-ins where they pay me an affiliate commission and to keep those leads warm I usually try to send out free actual content, just kind of keeping them nurtured and warm with content.

Twice a month is a paid campaign where they pay 50% or more of an affiliate commission on what’s being paid out. That alone is just easy money. It’s not abusing my users because, like I said, I always vet the product. I know the person is going to take care of my users. It’s actually useful and I can see a use case for it and they’re happy to get it when it’s still cheap.

Trent: Absolutely. Absolutely. All right. So some people listening to this are thinking at this point probably, “Hey, Travis seems like a pretty smart guy. Is there any way I can get a hold of him?” How do people get a hold of you? Obviously they know the plug-in is at ContestDomination.com. I don’t know whether we can offer any kind of, do you have any kind of discount codes that my listeners could be able to get or anything like that?

Travis: It’s a pretty rudimentary process, so I don’t have any discount codes on hand that work automatically but if anyone shoots me an e-mail after purchasing saying they saw this interview, I can send them a version that has additional skins for free.

Trent: Cool.

Travis: How’s that sound?

Trent: Yes. That’s excellent.

Travis: Ten extra textured skins to help them change the look and feel so if they thumb through a buy a license and just forward me the receipt and say they saw this interview, I’d be happy to upgrade the product they have access to.

Trent: What’s the e-mail address they would have to use for that?

Travis: Just travis@contestdomination.com.

Trent: OK. Obviously if anyone wants to get a hold of you for anything else, that’s probably a sufficient e-mail address for them to use.

Travis: Yes.

Trent: All right. It’s been a fascinating interview. I’ve learned a whole bunch, Travis. You seem like a very, very smart guy. Congratulations to you on the success that you’re having.

For those of you who are listening to this, thank you very much for tuning in. If you have questions or comments of course, please just use the form that is below the interview.

If you’re not yet ready to be a BrightIdeas Premium member, but you would like to get the transcript or the audio file so that you can download it onto your mobile device, there’ll be a way just below this video that you can opt into the list. It’s totally free and you’ll be able to access all of that stuff.

So that’s it for now. Thanks very much, everybody. Talk to you again in an upcoming interview.

Here are some of the things you’ll discover in this episode:

How To Build a WordPress Plug-in and Earn $100,000

In this episode, Travis shares with us exactly how he created his own widely successful software products without knowing how to write a lick of code. Travis will tells us about what he did to make his first software launch a massive success.

In Travis’ own words, he went from working his tail off to earning “exponentially more money for the same amount of time and less stress”.

You’ll hear Travis discuss the software development process, his marketing plan, and how he recruited a super-affiliate to help him ensure his launch was a huge hit.

Listen to Travis outline the step by step process he went through to make this happen.

What Makes Him an Expert

After a small launch to his own mailing list, Travis debuted his software as a WSO.  In his very first WSO release, he attained ‘WSO of the day’. There is an extremely high level of competition for WSOs, so this was quite an accomplishment – in addition to having a product that people want to buy, there are so many details to get right.

Travis not only got it right, but he also brought in over $100,000 in his first 90 days and added 2,000 new customers to his list.

If you don’t yet know what a WSO is, you’ll hear how you can use them to generate revenue and build your list.

Software Development Made Easy

You’ll hear Travis talk about the development process, the exact psychology that goes behind software development, and how he arrived at the decision that he needed to create a software product.

Travis shares what you need to consider to make certain your product will be a big hit.  He provides a list of questions that you’ll want to ask even before the first line of code is written.

Next, Travis imparts his process he uses to outline his idea and convey it do a developer.  It’s so simple that you may not believe how quickly his developer was able to go from concept to final product!

Listen to the show to find out more about software development for the non software developer.

What Travis Did Very Right (& Very Wrong)

Travis reveals how he gained instant credibility with customers who had never before been exposed to him or his brand.  This was a key component that enabled him to land so many new customers in such a short period of time, and was something that Travis did very right as he sold his software.

I also asked Travis for the  #1 mistake people make when they’re going to create software.  Hear Travis share a story about a huge product development mistake that bit him in the butt, but turned out to be a valuable lesson for him and us.  Once he corrected his mistake, he was able to create a product that sold like hotcakes.

This one lesson will help you manage expectations and will create a better product, much more quickly than you might expect.

If you’d like to save money, time and frustration, listen to the show now.

About Travis

I’m into marketing, but I have a sense a humor and very particular way of doing things.

I don’t settle.

Currently located in Seattle, WA and having attended Washington State University (whose Entrepreneurship program is notably & consistently in the top 10), I’m surrounded by motivated geek culture that inspires me every single day.

This is after all the land of Microsoft, Amazon, too much caffeine and the great outdoors.

I do my best to “do right” by the clients I work with & the people I hire.

Feel free to ask anyone I’ve done considerable work with before – they will tell you the same.

More important than being featured or mentioned across some of the top blogs and websites in my field, I just want to make cool things and help people do the same.