Last year I published a story about how I closed down my old startup and within a month had an idea for a new product. It’s been almost a year and a half since then, and I’d like to share what I’ve learned.
Previously on the series “Vladimir’s Startup”…
- I thought up an idea for a startup, focusing on a problem I encountered myself while working on my previous product. I named my product AcademyOcean and created a landing page for it. From the outside, it looked like the product existed, although you couldn’t sign up to use it; you could only request a demo.
- I wrote a couple hundred cold emails to SaaS companies, asking them if they face the problem that my “product” solves.
- I didn’t get a single response in the first two days. But I continued sending emails, and on the third day I got several encouraging responses in the vein of: “Yes, we’re interested. Show us your product.”
- When I had received about a dozen positive responses, I called each of the companies on Skype. I told them that I don’t have a product yet, but I’m planning on creating one and need their help in order to make it as useful as possible.
- Thanks to these interactions, I crystallized my idea of what the product should be like. Then I was able to start developing it.
But we couldn’t do it right away. At that point, there were three people on the AcademyOcean team (the name caught on and it’s what we started calling ourselves): the CEO (me), the designer, and the support manager. There was no developer to take on the technical tasks. At that point I divided our work into three main focus areas:
First focus area
I looked for the startup’s future CTO. I could write a whole article about this process, but basically it took far longer than I’d expected to find a CTO — I needed about four months. In this time, I spoke at length with 49 people. These were the people who had read my description of the future CTO’s tasks and had taken interest. Of these 49, I met 20 face-to-face and about 30 over Skype. I spoke with many of them 2–3 times. Four of them almost became a part of the team. I spoke with these four on numerous occasions, and they had lots of good advice to give and were happy to share their experiences.
But I became closest with Viktor. The idea of creating SaaS for SaaS inspires him, and he has his heart set on doing it. Viktor is an experienced developer, and I’m glad that he joined the team.
Second focus area
Our designer Serge and I planned the functionality of our future product. He created prototypes, and then the design.
According to our schedule, if the search for a developer got drawn out, I would reach out again to the companies that had responded to my initial email and show them the prototype, so that ultimately the product would be as clear and user-friendly as possible.
That’s what wound up happening: the search was drawn out. Using Invision App, we created clickable mockups based on prototypes and design, which you could navigate almost like a finished product (without a backend). I showed these clickable mockups to the companies that responded favorably to my first email, and I listened to their feedback.
When the developer joined the team, we had already prepared not only the design and layout, but also several Google Docs with the complete technical specifications about how the product should work.
Third focus area
Our support manager Helen and I developed a systematic method for finding the contact information of CEOs of SaaS companies for future email campaigns. We could have bought a database of email addresses, but the quality would have been dubious. We instead decided to gradually put together our own list of contacts.
Angel.co’s “SaaS” category (Software as a Service, or, in other words, cloud-based service with subscription-based pricing) now has more than 13,000 companies from around the world. I’m sure this list isn’t completely perfect — some active companies won’t have added themselves to the list, while others on the list will have closed down — but this was the most thorough list we were able to find. We used this list as a starting point and searched for CEOs’ email addresses using services like RocketReach and Sellhack.
Why did we decide to focus our product on SaaS companies?
- First of all, this is a highly progressive niche, especially where marketing tools are concerned.
- Secondly, the number of SaaS companies is growing by 15–20% each year.
- Thirdly, we are a SaaS company ourselves, and it’s easier for us to understand the needs of companies like our own.
About 4–5 months after the first cold-email campaign, we had assembled a four-person team that was ready for action: CEO, CTO, designer, and support. This was January 2017.
Next came the stage of developing the technical side of the product. We used PHP 7.1 and Laravel 5.4 as the framework. At the same time, we made our site and developed our positioning — how our company would look to our audience. All the while, we never stopped assembling our database of contacts.
In April 2017, we rolled out the first working version of AcademyOcean, and I began to sell the resulting product. Immediately, I made a number of mistakes.
The product was so familiar to me that I didn’t realize that other people might not understand its value right off the bat. I tried to sell the product by focusing on all the cool features it had, but not on the value it brings.
Only after a month of unsuccessful sales did I begin translating everything from “feature-speak” to “value-speak” — and it was around that same time when we got our first paying customer.
But it would be wrong to say that our product stood idle for that whole first month. Before the release, I offered to let several successful SaaS companies try our product free of cost. For them, the benefit was clear: they got to use a product that costs several hundred dollars for free. For us, the benefit was that we got our first real users, who used our product, listened to all our questions, and asked their own. These first companies really helped us. They gave feedback that was crucial at the first stage of our startup.
One of these companies, Serpstat, used AcademyOcean to handle the upsurge of activity that resulted when they were promoted by AppSumo. I published a case study about Serpstat, as a company that gets thousands of warm leads using an academy. Now Serpstat has twenty courses in several academies:
What exactly is the product that we offered these companies?
We invited them to make a new section of their site that would be called an Academy. It’s a content-marketing tool that would allow potential users to dive into content created by the SaaS companies in a new and engaging way. And it’s something their competitors don’t have (as opposed to commonly used blogs, ebooks, and whitepapers). They create their academy using our platform, and it attracts new leads, validates them, and scores them.
Example 1: Suppose you already have a decent amount of content in a blog or ebook. You take this content and transform it into a course format. With our product, this process takes no more than 1–2 hours of work on the part of an employee at your company, usually the marketing specialist.
A course, with its interactive elements, is a far more interesting format for readers than something static. Visitors find it convenient and easy to learn your content step-by-step, since the course is broken out into small lessons. You not only get each “learner’s” contact info (just like you do with an ebook or whitepaper), but you also get detailed statistics about what interested them. You can validate learners/leads by having questions or quizzes automatically appear within lessons that they must answer. You can even send the percentage of content read by each potential customer to your CRM.
As a result, instead of getting content that’s presented in standard formats (long reads, ebooks, whitepapers), you use a fresh, new approach and get much more data. Your competitors haven’t made it this far yet.
Example 2: You don’t have content yet, but you’re planning on making it. You choose a topic that’s interesting to your target audience — for example: “How to save X hours on Y business process” or “How to become a pro at Z.” The course’s content will be related to your product, but you don’t have to delve into an explanation of which buttons actually need to be clicked. At first, give readers valuable information and tell them the benefits they can get out of using your product. Once they’re interested, you can easily teach them how to work with your product. But first, grab their attention! An academy helps you do this.
When the course is ready, you get the word out just like you would for other new content (using social media, newsletters, messages, etc.). What’s interesting is that the appearance of a course generates much more interest than the appearance of a new ebook or whitepaper, or especially a blog post.
In the end, you get another source of leads. Moreover, these leads are immediately ready to engage with you and your product (seeing as you’ve become an expert in their eyes and have taught them something). For example, we recently wrote a case study about an academy made by one of our clients. That client gets 200+ warm leads per month, on average, with the help of their academy.
Some globally known companies that use academies are SalesForce, Unbounce, and Hubspot — and there are many others.
The period between the beginning of development and getting our first paid customer was fairly tricky. Some get through this period much more quickly than we did. But getting those first paying customers gave us a huge burst of energy and strength.
Actually, at that time we had a big sheet of paper on the wall with our plan for the year. When we would reach a goal, we would all get together and add a checkmark in marker next to the completed item. This was fun and motivating for us.
Then we reached an important and interesting stage: participating in Y Combinator Startup School. Y Combinator is one of the biggest accelerators in the world, and it’s very difficult to get in. I know that some companies get in only after 4–5 applications. Selections are made every six months.
At that point, we had already applied twice, but both times we had been turned down. Then, as luck would have it, Y Combinator announced that they were having their first online group, which they invited us to join. This put a new spin on the work we were doing for our product.
In short, it was two months of hard work on the part of people from various teams and countries. There were interesting lectures, there was mentorship, and I made a lot of new acquaintances. What I liked most of all were the weekly conferences with the startups from all the groups, during which each participant had to talk about what they accomplished that week (with the emphasis on what they ACCOMPLISHED, not what they TRIED TO ACCOMPLISH).
I wrote a separate blog post about my time in this startup school. By the way, this post turned out to be pretty successful and made its way to HackerNews, getting more than 10,000 views and 4,700 full reads:
It’s good to do a bit of a recap at the end of the year (and seven months after release). For now, we’re far from a profitable startup, but every month our monthly recurring revenue (MRR) grows. Now, several dozen academies have been created on our platform. In total, more than 9,000 people from 135 countries have gone through our clients’ academies.
Why did I say at the beginning of this article that we’re making AcademyOcean in stealth mode? Because we’ve actually never made a single advertisement. Only now are we planning to step up our game and launch our first ad campaign.
How will this turn out? Follow my posts to stay in the loop : )