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Camilo Acosta RS

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

PAUL BIGGAR 4INX 6IN X 300DPI X FC

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

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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.

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VITALY 4IN X 6IN X 300DPI X FC

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.
Zvi Band 4in x 6 in x 300dpi x FC

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
16. 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_bandZvi 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 4IN X 6IN X 300DPI X FC

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

Kickofflabs

By any measure, Josh Ledgard’s software company has become a huge success. In just two years, Kickofflabs.com has attracted 24,000 customers. Josh lets us behind the scenes to show us how Kickofflabs achieved these impressive results.

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
it. 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
83. 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.

BRENNAN DUNN 4IN X 6IN X 300DPI X FC

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
up. 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
me. 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.

spencer1-150x150

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.

TravisKetchum

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.