Search agency | creates product | from employee dreams | which makes life better | for PR industry
“Nike team in Portland just signed up for a trial. Within 4 hours they sent an email saying “we’re impressed”. Fifteen minutes later they signed up for a team plan. This is so fucking cool. I’m very happy.”
The latest in a string of fist bump emails from Gary Preston, my friend, founder and MD of CoverageBook.com, the software as a service (SaaS) business our company Propellernet gave birth to and has just come of age.
Break even…phew
Rewind…
We had a marketing agency the purpose of which is to make life better for the employees who make life better for our clients. We’d put in the hard years assembling a team and learning our craft. When we reached 50 people and £4million revenue we were top of our game, growing to 100 people and £8million seemed the natural course.
But we liked being 50, there was a good vibe. Adding another 50 could make life worse. Less space, more management, more process, cultural cliques.
If you divide £4million by 50 or £8million by 100 you end up with the same number, £80,000. Revenue per person (RPP) is the best measure of the financial resources available to make life better for everyone in the company, not just the major shareholders.
If we wanted to continue to make life better for all the great people, we needed to stop striving for revenue growth and start striving for revenue per person (RPP) growth. The game was not to increase the £4million to £8million, but to increase the £80,000 to £160,000 (RPP).
We needed to rethink the natural course.
An agency bills clients for employee time. Employees work a 5 day week and clients pay an agreed day rate. To increase RPP you can either increase day rate which clients tend not to like, or increase employee hours, which employees tend not to like.
We needed a product that we could sell a million times over without hiring more people.
Our team had become experts in both Search Engine Marketing and Public Relations. We had spent Malcolm Gladwell’s 10,000 hours charting the peculiar fringes where algorithmic analytics meets creative communications.
Gary Preston had become a bottle neck. If you wanted a great idea you went to Gary, if you wanted to win a pitch you took Gary along. Gary’s reward was to work longer hours than everyone else, while other rising stars were being overlooked.
Gary dreamed about starting a technology product business, so we read a few books and ran a few experiments on the side. We found an intern who could build our ideas. Alan Donohoe was learning to code and looking for a career change.
It wasn’t going anywhere and we didn’t want to increase investment without being sure of getting it right. I went looking for someone who knew how to build software businesses and all roads led to Jon Markwell. A seasoned student of software coding and product startup methodology, fighting the lure of Silicon Valley.
Our minimum viable team needed a product manager, 2 coders and a designer with an appreciation of code. Gary, Alan, Dan, and Stefan.
Jon urged us to design something our agency Propellernet would use and PerfectFit was born. A tool for managing influencer outreach campaigns. Propellernet had been using shared excel spreadsheets which were clunky and crashed when people were updating at the same time.
We built a prototype and the agency started using it so we called a few friends in PR and found that also used excel spreadsheets. Word spread fast and our diaries filled up with demos. We signed up customers who paid us actual money. Validation. Valuation. Champagne?
Sadly not.
People were buying the product but they weren’t using it, so we enlisted Rachel and Laura from the agency to provide them with training.
We thought everyone in the industry would ditch spreadsheets and sign up but PR people were not like SEO people. They did not embrace technology so readily and seemed stuck in the spreadsheet habit.
Jon was also concerned that all sales had taken place in face to face meetings. It seemed scaling this business would require recruiting and managing an army of sales people as well as an army of trainers.
We already had a successful consulting services business with face to face sales turning over £4million with 50 people. To meet our objective of increasing RPP we had to design a business that would deliver £4million with a workforce of no more than 10 people. It wasn’t shaping up to be that kind of business, which hurt because by this point we were financially and emotionally invested.
Jon and Gary started spending more time with clients to better understand their problems and find a more sustainable business model.
In an attempt to increase value we added too many features and overcomplicated the product so we decided to strip it back and test single features. One feature of Perfectfit was the ability to create coverage reports. You find the best mentions of a brand or campaign on the internet and provide the URLs. We generate a nice report so you could show your boss all the coverage your campaign achieved along with all the associated metrics.
We called it CoverageBook.com and offered a prototype as a free tool to see if anyone would use it. Within days it got picked up by the PR media and within weeks it was receiving rave reviews. We were seeing dozens of new accounts set up daily and this time they were actually using it.
We waited until a few hundred people were in trial and then added pricing plans. When the trials expired, you had to pay to continue to use it. We got our first paying customers. This time from people we had never met or spoken to, some of which signed up while we were all asleep.
We stopped working on PerfectFit, gave customers their money back and focussed all efforts on CoverageBook.com.
With validated product market fit we assigned some marketing budget from the agency cash flow and ran some twitter advertising campaigns with good results.
I invited the team to join me in Dream Valley for the Alpselerator project where Gary made a video highlighting the monotony of manually building coverage books which he then used it as the twitter advertising hook which then got shared organically around the PR industry.
We now had 150 paying customers and were adding 50 more each month but Jon still wasn’t happy.
It wasn’t just enough to build a great product, we needed to showcase our knowledge so that everyone knew that the people behind coveragebook.com knew their shit when it came to PR.
Stella Bayles dreamed of getting back into PR so we set her the task of establishing a thought leadership platform. Within 3 months she had interviewed the worlds most innovative PR teams, written a book, was speaking at events and appearing on PR industry panels.
Something else Jon set us off thinking about is how we could apply our make life better philosophy to impact many thousands of people, which again is something that a global SaaS business has the potential to do. The thing we are most proud of is the feedback we get about how we’ve changed the working lives in such a positive way for so many people. And our customers love the dedication we give to support.
We also make life better through ongoing education and other technology such as Answerthepublic.com which receives even more attention that CoverageBook.com. It’s a free tool which helps people create more helpful content and less spam, which makes life better for everyone who uses the internet.
And that brings us up to now.
We have 830 raving customers, most of which we’ve never met. Jon bought shares in the company, has escaped Silicon Valley’s clutches for good and was inspired to organise a one day conference in Brighton for people interested in independently building & growing digital product businesses.
Stella moved to New York where many of our customers are based, not because she needs to see them but because she always dreamed of living in New York. Gary is working a 4 day week so he can spend time with his young family and the RPP of our software child has outgrown that of the proud parent that gave birth to it 3 years ago.
A dedicated product team following their dreams, grateful for the opportunity and committed to repay the trust shown in them. A dedicated agency team working hard to maintain investment cashflows. Dedicated founder shareholders, trading short term profits for a long term investment in a company that could out live them all.
We didn’t start a product business because we thought it would make us more money. We did it because it was the best way to make life better for the people who had earned it.
I shared a draft of this post with Propellernet MD Nikki Gatenby who was reminded of the time we sat down with our employees and made a list of their dreams in work and life.
If you want to life to keep getting better, ask your employees to share their dreams and write a bucket list business plan.
