Resumen de Start Small, Stay Small by Rob Walling
Como parte de mi interés por organizar mejor los aprendizajes en mi cerebro, comparto un resumen de uno de los mejores libros que leí al comenzar mi vida de emprendedor.
I strongly encourage you to buy the book! It may help you as it helped me.
If you start small and make a product so good that your niche is falling all over itself to sign up, word will spread and you will soon find yourself with a product that extends beyond your tiny niche. However, this takes time to grow organically; an approach that outside funding does not allow.
Go to niches
Niche markets are critical. If you want to self-fund a startup you have to choose a niche.
The genius of niches is they are too small for large competitors, allowing a nimble entrepreneur the breathing room to focus on an underserved audience. Once you’ve succeeded in that niche, you can leverage your success to establish credibility for your business to move into larger markets.
Marketing Vs. Product
Marketing is more important than your product. Let me say it another way: Product Last. Marketing First. Your product has to be good. If it’s not, you’ll be out of business.
Start for the right reason
Starting for the Right Reasons Most developers want to build software products for the wrong reasons.
Reason #1: Having a Product Idea
Most developers who come up with an idea know exactly how they will build it, but no idea how they will reach potential customers.
Reason #2: To Get Rich Getting rich shouldn’t be your goal when launching a product.
If you are doing it for the money you will not stick around during those long months of hard work when no money is coming in. If you want to make a million dollars, buy a lottery ticket or start a venture-backed startup; the odds of succeeding at either are very much not in your favor, but the potential payout is big.
Reason #3: Because It Sounds Like Fun
Keys to success: Commitment and Consistency
1. Written Goals– “Those who wrote their goals accomplished significantly more than those who did not write their goals.”
2. Public Commitment — “…those who sent their commitments to a friend accomplished significantly more than those who wrote action commitments or did not write their goals.”
3. Accountability– “…those who sent weekly progress reports to their friend accomplished significantly more than those who had unwritten goals…”
Putting into practice:
One Short-Term Goal I Propose Here’s one question you should think about right now: what is a good short-term goal for your startup? I have a suggestion to help get you started: Strive to build a startup that generates $500 per month in profit. This may sound like an easy goal, but will require more work than you can fathom at this point.
The up-front fear is a big indicator that you‟re going to grow as a person if you proceed through it. And, frankly, the terror wears off pretty quickly. It’s true. Surprisingly, anything is much easier the second time. And the third. And by the fourth time you can’t even feel the hair on the back of your neck, or the sweat in your palms because it’s no longer there. The terror goes away surprisingly quickly.
Have clear goals: Lack of Goals Having no clear, written goals for your startup means you won’t know whether to pursue the white label deal someone offers you two weeks after launch, or to start selling in overseas markets because someone asks you to. Without goals for both yourself and your startup you are flying blind without guidance in situations where there is no right or wrong answer. Answers need to stem from your long-term desires for your startup and yourself.
The idea is that most of the information we consume is a waste of time. Newspapers, magazines, blogs, podcasts, the news…are all enjoyable to consume, but they have a tendency to offer a constant distraction from real productivity.
Those are hours that could be spent building your product. It’s not easy, but scaling back your information consumption will have a huge impact on your productivity.
Hiring a Virtual Assistant
(VA) is a great way to get started with almost no financial commitment and a low hourly rate
Changing Your Time Mindset It’s a big leap moving from employee to entrepreneur. One of the biggest adjustments is accepting that time is your most precious commodity.
Dollarize your time
Dollarizing Your Time In the same vein, dollarizing your time is the idea of putting a theoretical dollar amount on each hour you work. If you value your time at $100/hour it makes certain decisions, such as outsourcing work to a $6/hour virtual assistant, a no-brainer.
Putting a value on your time is a foundational step in becoming an entrepreneur, and it’s one many entrepreneurs never take. Skipping this step can result in late nights performing menial tasks you should be outsourcing,
How to do it?
Approach #1: Freelance Rates If you are a freelance developer or consultant, you probably have an hourly rate. This is a good place to start. If you bill clients $60/hour, then an hour of your time is worth $60.
Keep in Mind: Desired Earnings Realizing your time is worth $50/hour is the first step; the next step is actually generating $50 for every hour you work, and the third step is figuring out how to make your time worth $75 or $100/hour. If you continue to think your time is worth $50/hour it will to stay at $50/hour.
If you are making $25/hour as an entrepreneur you are doing something wrong. Improve your marketing, grow your sales, find a new niche, outsource and automate. $25/hour is not an acceptable dollarized rate for a startup.
In the early stages, your dollarized rate is a mental state but you want to make it a reality as soon as possible. Once you’ve succeeded, then you can work towards increasing it.
What you should expect
Market Comes First, Marketing Second, Aesthetic Third, and Functionality a Distant Fourth The product with a sizeable market and low competition wins even with bad marketing, a bad aesthetic, and poor functionality.
Realization #1: Outsourcing is a Bargain Once you’ve established you’re worth $50/hour, paying someone $6/hour to handle administrative tasks or $15/hour to write code seems like a trip to the dollar store. Outsourcing aspects of your business is the single most powerful approach I’ve seen to increasing your true hourly rate as an entrepreneur. If I didn’t outsource my administrative tasks, my effective hourly rate would plummet.
Realization #2: Keep Work and Play Separate Wasting time is bad. Boring movies, bad TV, and pointless web surfing are expensive propositions. If you aren’t enjoying something, stop doing it. I need to re-iterate here: I’m not saying you should never relax, have fun, watch movies, play with your kids, watch TV, or surf the web. I’m saying that you should be deliberate about your work and your free time to get the maximum benefit from both. In other words: Work hard and play hard, but never do both at once. Numerous times throughout the day ask yourself: At this very moment am I making progress towards crossing off a to-do, -or- am I relaxing and re-energizing?
Realization #3: Wasting Time is Bad If your time is worth, say $75/hour, standing in line at the bank is painful. Sitting in traffic is another money waster — every non-productive, non-leisure minute you spend is another $1.25 down the drain. Since it’s not practical to assume you will never wait in line again, the best counter-attack is to have a notebook and pen handy at all times. Use this time for high-level thinking, something you may have a hard time doing in front of a computer.
Realization #4: Information Consumption is Only Good When it Produces Something The following discussion excludes consumption for pleasure, such as: reading a novel, watching The Daily Show, catching a movie, etc. Consuming and synthesizing are very different things; it’s easy to consume in mass quantity. It’s much more difficult to synthesize information.
But, when reading blogs or books or listening to podcasts or audio books, take action notes. Action notes are short- or long-term to-do items that apply directly to my businesses.
Realization #5: You Need to Fail Fast and Recover If you haven’t already, you will soon need to accept you are going to fail a lot. You will make bad decisions, waste time, waste money, run ineffective ads, miss deadlines, and release buggy code. Each time this happens, you have to accept that you failed and move on.
Realization #6: You Will Never Be Done: But you will never feel “done.” You will always have a list of features, marketing tests, potential partnerships, and new markets to take care of. And while the journey is itself a gift, never having the feeling of completion is something you need to get used to. The idea of building an application and sitting back to collect a check is, unfortunately, a pipe dream. You have to continually invest in both your product and your marketing in order to remain successful.
Realization #7: Don’t Expect Instant Gratification The first month you launch you will be lucky to break $100 in revenue. A product, marketing effort, and a reputation take time to build. But once they build they snowball such that the effort to launch a new version of your product is miniscule by comparison, and your chances of success are much higher.
Realization #8: Process is King Documenting repeatable processes for anything you will do more than once is essential to your sanity. It’s true; you can fly by the seat of your pants and get by, but it makes you a hostage to your work. If you’ve ever been a manager you probably like process and understand its benefits. If you’re a developer you probably dislike process or see it as a necessary evil. The fact is, creating processes will bring you freedom through the ability to easily automate and outsource tasks.
The entrepreneur dream: Automated startup
To get to the point of an automated startup you have to choose your niche and your product wisely, and invest a large amount of time outsourcing and automating your business. Even then, support and feature development is the easiest part to outsource; marketing is one of the most difficult.
Focus on what customer wants
I’m going to take it even further: the single most important factor to a product’s success is not the founders, not the marketing effort, and certainly not the product. It’s whether there’s a group of people willing to pay for it. You can sell garbage to a hungry market and make money.
Fast Company would have you believe that the “million users in 3 month” scenario is the best way to build a startup (because it makes a good story and sells magazines). But the way the vast majority (dare I say 99.5%) of all businesses in this world that succeed in the long-term — be they large or small, high-growth startup or lifestyle business — is to find a market that is willing to pay them money for something.
That something can be dry cleaning services, invoicing software, or hosted salesforce automation. What matters is finding a group of people who need your something more than they need the money you’re charging for it.
Enter Niches A better approach would be to pick a niche market like web designers and build an online accounting system that in every way caters to them. Make the site user friendly, the graphics unbelievable, and have a bunch of pre-set invoice items that relate to designers.
Reason #1: A Niche Requires You to Narrow Your Product Focus Here’s an exercise: Pick one person you know well…your spouse, your brother, your sister, a parent, etc. How hard would it be to design a product that you’re sure this person would use…not very hard, right? That’s because you know so much about the intimate details of their life.
The lesson here is that the narrower you can make your product while still maintaining a large enough market, the more profit you will generate. It’s that simple — if you can find a small group of people and make them amazingly happy, you will make money.
Would you rather sell your software to 100% of the people in a 5,000 person niche, or 10% of the people in a 50,000 person niche? The correct answer: 100% of the people in a 5,000 person niche. The reason? It’s cheaper to advertise to 5,000 people, and the odds are higher that they all hang out in the same place, be it a website, forum, blog, or magazine. The competition is also a lot lower.
Reason #2: Niche Advertising is more Cost Effective The most common mistake made by inexperienced marketers is attacking a market that’s too large. Common sense tells you that the larger your market is, the better off you are. For bootstrapped startups, the opposite is true.
Reason #3: Niches Have Less Competition The market for word processors is pretty much sewn up, wouldn’t you say? Microsoft put the nail in the coffin of Lotus Notes and WordPerfect years ago.
If a market is less than $100 million or so you won’t find Microsoft. This, and much smaller markets, are the spaces where your startup will thrive.
HIGH PROFIT MARGIN
Reason #4: Niches Have Higher Profit Margins In the example I gave above with Nota Bene, did you notice that Nota Bene costs a lot more than Microsoft Word?
Reason #5: Niche Markets Are Not Used to Good Marketing Have you ever compared the ads in the New York Times to the ads in your local paper? How about the national ads run during the Super Bowl vs. the ads your local car dealer runs during the 6 O’clock news?
BUILD REPUTATION EASIER
Reason #6: It’s Easier for Prospects to Trust You In smaller markets it’s easier to make a name for yourself since people are more likely to hear about you multiple times in a shorter time period. If you take out an ad on websites they visit, advertise on AdWords for similar keywords, and have a Facebook group, in a small niche it’s likely they’ll run into you more than once over a short period of time.
Each of these would be considered a warm niche, and introducing a product into this niche will be much easier than choosing a completely unknown market. Remember, you stand a better chance when you know who you’re selling to. Make two columns on a piece of paper. In the header of the left column write “Person” and in the right one write “Hobby or Work Experience.” Now for each row write the name of someone you know, including yourself, friends, relatives or colleagues, and write their work experience or hobby in the right column. These are your warm niches.
From zero to Hero
What you like and know
Approach #1: Look at All Areas of Your Life Examine your hobbies, interests and work experience. Are you into sports, the news, comic books, arts and crafts, health or shopping? Are you fascinated by modern art? Do you have experience building software for dentists? Any of these can be a place to start.
Any target market you choose must be online and you must have a product that solves their problem.
The idea is that if a market has a magazine devoted to it, it’s large enough to provide enough customers and if a full-page ad is less than $5,000, the market is small enough that you’ll be able to effectively market to it.
Is There an Inexpensive Way to Reach Them? The second question you need to ask about a potential market is: how will you reach them in an inexpensive, sustainable manner?
When you receive 50,000 visitors from one of the major media sites you will be lucky to convert five sales. Five measly sales. That has to win for the worst conversion rate ever. The reason? They are not your market. When looking at your marketing plan you should actually be thinking: “If I could get only on the front page of [small-butvery-focused-niche-website].com.” Find the website(s) where your real market hangs out. These are the people who will actually buy your product. The competition will be less and your conversion rates will be orders of magnitude higher.
The Top Shelf approaches focus on two key areas: building an audience and search engine optimization. The good news about these approaches is that while they will bring in sustainable traffic, there are also shortcuts that will allow you to easily test a startup idea for a small investment (typically around $100).
Think of a vertical market as a single industry or hobby. Examples of vertical markets include pool cleaners, dry cleaners, web designers, wine collectors and punk rock enthusiasts. By contrast, a horizontal market cuts across many industries or hobbies. General purpose invoicing software is a horizontal market since it can be used by pool cleaners, dry cleaners, and web designers. From a startup perspective, vertical market niches are superior to horizontal markets for a number of reasons
Reason #1: Members of a Vertical Have Similar Behavior
This also means that a single marketing message will more easily catch their attention than if you are trying to market software to both pool cleaners and web designers.
Reason #2: Members of a Vertical Talk to One Another Small industries tend to have a handful of thought leaders. Even industries like pool cleaners or countertop installers have business owners who are pushing the industry forward, finding and adopting new techniques, and communicating those techniques to the rest of the industry through conferences, trade shows, trade publications, online forums, social networks or mailing lists. This is important for a business selling
1. If your product is good, word of mouth marketing will spread quickly 2. If you can find the thought leaders and convince them to adopt your product, you will receive massive exposure in a short period of time
Reason #3: Members of a Vertical “Hang out” Together Pool cleaners hang out together; whether at local trade meetings, national conferences, or online. Having a handful of places where they congregate makes marketing much easier since you can simply attend (or sponsor) trade meetings or conferences.
Reason #4: Members of a Vertical Have Similar Needs Imagine building an invoicing application for every small business in the world. The number of features would be overwhelming. How can you possibly provide a solution that works for pool cleaners, web designers and dry cleaners at the same time?
Building an application that satisfies their needs exceptionally well is a feasible task for a one or two person development team.
I would advise you to take another look at your warm niches and try to restrict your product to a vertical. As a general rule, horizontal markets are too large and expensive for self-funded startups to navigate.
How to get traffic
If we can rank high enough for enough keywords to garner 500 organic search engine visitors each month, it’s a pretty good bet the other two categories (incoming links and direct traffic) will fall in line. Not a guarantee, but a reasonable assumption. These guidelines apply a few months after launch. The first several months, your website traffic will be erratic and the most likely situation is that you will receive a trickle of traffic from incoming links and paid advertising, but not much else.
Look for influencers
I should mention that looking at search queries is only one way to gauge demand. If you have access to a group of people through a blog or a mailing list, a survey can be an excellent source of information. But assuming you don’t have a large audience at your disposal, search engines are the best option. However, they are not fool-proof for determining if your product will fly.
The Mini Sales Site
The idea behind this approach is that if you ask visitors whether or not they would buy your product, you will wind up with inaccurate data. The only way you know if someone would try or buy your product is if they think they are really trying or buying it when they visit your sales site.
Using the approaches above will require you to invest some time and money. But realize that if you invest 8 hours now and the test works, you will have confidence that will keep you going through the next 4 months of development. If it fails miserably, you’re saving yourself hundreds of hours and potentially thousands of dollars building a product no one wants.
You should aim to master all three in the long-term but at the start, place emphasis on the latter two to determine if the idea will fly. Once you know you have a market and can execute, then you can improve your product. For this reason this book focuses on the latter two steps. This is also the reason why hiring out construction of your product is a viable option; it doesn’t have to be the masterpiece you picture in your mind in order to be successful.
Something to notice: the chance of someone coming all the way from seeing your URL to becoming a buyer is small. The chance of them doing it on their first visit is almost zero. After you launch your website you will need to test different approaches, copy, buttons and bonuses for each of the steps shown in the sales funnel to improve and hone them for maximum benefit.
Don’t Plan to Sell to a Customer on Their First Visit The first rule of sales websites is that the most common approach is wrong. That is: You shouldn‟t plan to sell to a customer on their first visit
In chapter 2 we talked about conversion rates and I mentioned that typical conversion rates are between 0.5% and 4% depending on your price range and customer base. What that means is that for every 1,000 website visitors, between 960 and 995 will show up and leave without doing a thing. If you’re paying 50 cents per click for your traffic, it can become expensive rather quickly. Not only that, but it’s not cost effective if the price of acquiring a customer is higher than your product purchase price.
Your number one goal, even beyond selling your product, is turning browsers into prospects. A prospect is someone who has expressed at least a small amount of interest in your product. On the web, this is typically achieved by asking someone to provide their email addresses. Convincing someone to give you their email address is much easier than convincing them to buy your product. Once you have an email address, you have the chance to begin building a relationship with the customer, as well as to gently remind them, through relevant emails, to return to your website. In order for someone to provide you with their email address you must do three things: 1. Establish Trust– Your visitor must believe that you aren’t going to spam them, sell their email address, or send offers for V1@gra. 2. Establish Relevance– Your visitor must believe that your product is relevant to their need and that anything you send to them via email will be relevant. 3. Establish a Reward– We are predictable creatures. Offering something in exchange for an email address is guaranteed to work better than offering nothing. On DotNetInvoice.com I had an email sign-up form where people could receive email updates on our product. We received 3 sign-ups in 8 months. I switched to offering a chance to win a free copy of DotNetInvoice…30 sign-ups in a month. There’s still room for improvement, but it’s headed in the right direction. Now, when I send out the winner’s announcement I’m going to include a small snippet about the new features available in our latest version. The best rewards are: a contest, a relevant fouror five- day email course, a relevant white paper, or a webinar.
Your goal should be to understand what your ideal customer wants to find on your website, what they want to find in your product, and what triggers will make them buy. To begin, imagine your ideal customer: Are they married? Do they have kids?
Now imagine how your ideal customer feels when they arrive at your website: What do they want to find there?
Calls to Action The final aspect we’re going to look at is calls to action. In a successful sales website, every page has a single, primary call to action. That is, an action you want your user to take. Think of your sales website as a tunnel (or a funnel) you are trying to move your visitors through. Initially you want them to provide their email address. Any page they land on should include a prominent call to enter their email address, and perhaps a secondary call to purchase your product (or learn more about it).
Seven Rules of Sales Site Design
Rule #1: The home page will not necessarily be the most visited page on your website. Search engines and deep linking have changed this.
Rule #2: As a result of rule #1, every page needs a call to action. A visitor may first interact with your website through your Tour, Testimonials, or Pricing page. All of them should urge the user to take an action that gets them closer to providing you with their email, trying your demo, or making a purchase. Look at the bottom of every sub-page at DotNetInvoice.com for an example.
Rule #3: Every page needs a single focus. Think ruthlessly about eliminating extraneous functionality and duplicate information from your website. Each page should serve a single purpose and contain nothing to distract the user from that purpose.
Rule #4: Everything should be within 2 clicks. From any page, a visitor should be able to demo your product, buy your product, or provide you with their email address with two clicks, including the click of the “submit” button. This makes for a small and tight website with a single focus.
Rule #5: Accommodate different reading patterns. Use headlines and bulleted lists for skimmers. Keep paragraphs unnaturally short for those who read every word.
Rule #6: Make buttons look like buttons. Make your buttons so clickable that people can’t help but click them.
Rule #7: No One Reads. Text is a terrible selling tool; audio, video and images are always better.
The #1 goal of your home page is to convince your visitors to click 1 link. That’s all you have to do to convince them not to leave is click a single link. The key metric with home pages is abandonment rate (the number of people who leave without clicking a link). The book Web Design for ROI estimates that home pages have a 40–60% abandonment rate on average before they are optimized. This means that around half of all home page visitors leave without clicking a single link.
If you choose to have an image for your home page, choose one that shows the result of your product. For example, a home loan website should show people living in a house; a backpacking website should show people on top of a mountain, and an online proposal tool should show an image of a completed proposal.
One of the most difficult pieces of marketing to create is your hook. Your hook is your four-second sales pitch and it should be the headline of your home page. It’s the single sentence that grabs the reader in and makes her know she’s in the right place.
These are 5–7 word summaries of your product. Each one conveys an image in your mind. Each one describes what the product does and (in most cases) who it’s made for. To find your hook you can take one of three approaches: 1. Explain what your product does and for whom. Such as “Simple proposal software made for designers.” 2. Make a promise to the customer espousing a benefit of your product, such as “Save Time. Get Paid Faster.” 3. Describe the single most remarkable feature of your product, such as “One Thousand Songs in Your Pocket.”
Once you’ve decided on a hook, you should put it as the header on your home page, and consider using it as your tagline. This hook is what will allow you to tell someone in 3 seconds what your product does, or at least why it’s so cool that they need to check it out. Tour Page My recommendation for your tour page is to include mediumsized screen shots of the major screens filled with data, along with a one-minute screencast (video demo) of each page.
Testimonials This page can also be titled “Buzz” or “Who uses [Your AppName]?” and it’s one of the most important pages on your site. Do not launch without testimonials. You will have beta testers, friends and colleagues who try your software — get a handful of testimonials and create this page. Monitor mentions of your product using Google Alerts and add choice quotes and backlinks to this page. This not only adds to your list of buzz, but shows people that you will link to them if they write about your product. Include any relevant logos to break up the page — otherwise it will be a boring page of text53. Needless to say, people won’t read all of your testimonials so put your most important ones at the top.
Toll Free number
In addition, always provide a toll-free number, even if you let it go to voice mail and return the calls. Many customers are turned away when they see you don’t provide a phone number. Also, including a physical address will inspire confidence for some visitors. I’ve found now that DotNetInvoice has a lot of testimonials and has been around for a few years people don’t ask anymore,
Include an Upsell. If you have add-on modules or services offer them here. If you have nothing else, allow customers to buy an extra year of support at a discount, or purchase priority support for an additional cost. If you don’t offer a free trial, then at least offer a 30-day, no questions asked, money back guarantee. It may sound like crazy talk to do this with something like software, but the number of people who try to rip you off will pale in comparison to the number of people who purchase the product because of this guarantee. I’ve had a money back guarantee at DotNetInvoice for years and I’ve never regretted it.
First, you will never email someone without their permission. You will only send relevant emails to a small group of people who signed up to receive them specifically from you. Second, every email you send will include an unsubscribe link so your recipients can unsubscribe at any time. Lastly, you will never sell or rent out your email list. To do so would destroy the trust of your list. Handle your subscribers with kid gloves and you’ll be lauded for the information you provide to them. Abuse them and you will hear about it. I’ve been on Joel Spolsky’s mailing list since 2001. I’ve never once regretted the emails I receive from him, and if I did I could unsubscribe at any time. According to a comment he made on the Stack Overflow podcast56, Joel’s mailing list is in the mid to high five-figures. When he wants people to know about something he can get the word out quickly. Don’t let other peoples’ abuse of email scare you away from an otherwise viable marketing channel.
How to attract customers:
If you sell beach towels, offer a free report on the Top 10 Expert Tips for Saving Money on your Beach Trip (an actual report I gave away on JustBeachTowels.com). I recommend shooting for a PDF report from 5–15 pages. The key is finding a topic that your audience will not only be interested in, but will be ravenous for. Once you have the title, you can create this work yourself or hire a writer to handle the leg work. I’ve had good luck finding writers on Elance.com.
Offer an Email Course It sounds a bit hokey, but offering a free, five-day email course can be an exceptional draw. In general, more technical or websavvy audiences prefer a longer report or white paper, while more non-technical users prefer email courses. But there’s not a definitive line here, and the key is to test: 1. First create your report and offer it as a PDF download for one-month. Note the number of sign-ups you receive. 2. Next, break the report up into a five-day email course and offer it for one month. Compare results and go with what works.
a series of emails sent in a specific order to new subscribers with pre-determined gaps between each email. With an autoresponder series you can write content once and have it be re-used for years. As long as you don’t cover topics dealing with current events, you should start your mailing list not by sending broadcast emails every 2–4 weeks, but by building your autoresponder series with a 2–4 week gap between each email. Then, the first person who signs up will receive the first email, then a two week gap, then the second email. And the 500th person who signs up a year down the line will receive the same first email, a two week gap, and the same second email.
When you need to send time-sensitive information, such as a product launch announcement, simply send a one-time broadcast to your list. Your email autoresponder series won’t be impacted. You can always go back and edit or delete emails in your series if they become out of date.
High relevance is critical to keeping people subscribed.
Idea #1: Monitor Current Events If you have the option to go with an information list instead of simply product updates, the next step is to monitor the following news sources and report to your audience on new happenings in their niche: Google Alerts Digg YouTube The popular blogs in this niche Take this information and share relevant links with a small amount of commentary. These are the best kinds of posts — easy to write but containing a lot of value for your audience.
Idea #2: Q&A Another great source of content is questions from customers or prospects. Answer the question in your email to solidify your place as an expert in this niche.
Idea #3: Interviews Short email interviews with a current customer on how they use your software are always interesting. You could also leverage a well known blogger in the industry. These shouldn’t take more than 30–45 minutes to put together since all you’re doing is sending a list of questions to someone (once you have their permission) and publishing them in your email. In exchange, the customer/blogger gets exposure for himself.
Idea #4: Hire a Writer Hire a writer from Elance59 and have them write an original short-form article on a subject of your choosing.
Time of Day/Week — It isn’t apparent at first glance, but the time of day and day of the week you send your email will have a major impact on how many people open it. The real answer to “when should I send?” is to test for yourself by splitting your list and sending the same email at different times.
Never Send Attachments– They hurt deliverability and many will be stripped by spam filters. Upload the file to a server and send a link instead.
Pay Attention to Your “From” Name & Address– Look at an email in your email client — notice how the “from” address reads. It’s surprising how many emails I receive with “Admin” in the “from” name.
Your Subject is Your Headline — Perhaps the only factor that determines if your mail gets opened is your subject line. You must hone and craft your ability to write engaging subject lines in 7 words or less. Here are some guidelines:
a. The shorter the better. b. Ask a question in your subject and answer it in the emails. Example: A DotNetInvoice Super-Bowl Ad? c. Make a partial statementwith “…” at the end and continue the sentence in your email. Example: A Free Copy of DotNetInvoice Every Day… d. Use the recipient’s first name in the subject line. Example: Rob, DotNetInvoice is Free for 24 hours… e. Include your product’s #1 benefit in the subject. Example: Save 5 Hours of Time This Month f. Don’t exaggerate. Deliver on anything your subject promises. g. Avoid spam filters by watching your spam score.
Step 1: Six Months Before Launch Six months before your launch date, use your audience on Twitter, Facebook and your blog to send traffic to your startup’s home page. The home page gives a brief description of your product and offers them a deal if they provide their email address to be notified of the launch.
Step 2: Over the Next Six Months Over the next six months create buzz around your product by guest blogging, sending interesting updates to your social networks, commenting on blogs and forums and generally engaging your target audience, always sending them to your home page.
Step 3: One Week Before Launch Approximately one week before launch (preferably on a Tuesday, Wednesday or Thursday), email your list of targeted email addresses. Let them know that your product will be launching next week and that since they are on your mailing list, they will receive a special price available only to those on the list, but that the price will only last for 48 hours. Tell them the day and time they will receive the email.
Step 4: Launch Day On launch day, email your list. Almost immediately, sales will start rolling in. You’re going to have the best sales day you will see for a while. Conversion rates on targeted mailings can be 20%+. A few hundred sales of your $19/month SaaS application is not a bad way to kick-start your startup.
Step 5: Thirty Six Hours After Launch Send your list a final email informing them that the deal will end in 12 hours. You will receive another few sales before you close down your special pricing. There are more complex variations to this, but it’s a simple, proven approach to increasing your launch-day sales by tenfold. Without some variation of the above, you will be lucky to sell 10 licenses in your first week.
Marketing is Not One Size Fits All If you take away nothing else from this chapter, know this: Many approaches will not work in your market.
For example: using Twitter to market to pool cleaners is not going to yield great results. Targeting web designers in the same way could be wildly successful. This is so important that I want to say it one more time: only certain marketing tactics will benefit your startup.
Gaining an understanding of your marketing is your first step to building a successful business.
The Importance of Traffic Quality Traffic quality plays a huge role in how well your website converts visitors into customers. By quality, I mean the following: how close each visitor is to your ideal customer and how much of a relationship you have with that visitor. High quality traffic means each visitor is very close to your ideal customer and they know and trust you. This is why TechCrunch traffic is not profitable for startups. Unless your niche market is other startups, it’s completely untargeted traffic and you have no relationship with the audience. Using our definition above, this traffic is of low quality.
Your conversion rate for these visitors will be astronomically higher than your standard website traffic; as much as 10x higher in fact. This is because the quality is so much better. This is important because it means you can focus your energy on driving high quality sources of traffic. If people from your email list convert at 5–10x the rate of If people from your email list convert at 5–10x the rate of 10x the effort getting people on your mailing list and still have a break-even ROI. Likewise, if you see the massive amount of traffic from organic search, you have to know how many of those people are buying your product. Without that knowledge you are flying blind and cannot properly allocate your time. Luckily, Google Analytics61 can spell this out for you using goals62.
While it’s nice to have several thousand people visit your website, if they don’t convert, they may as well have not shown up at all. Don’t think you’re building a brand — you’re not Coca-Cola or Johnson & Johnson. The minute those users leave your site you are out of their minds forever. The Two Tiers of Traffic It’s impossible to say which source of traffic is best for every website, but having launched or revamped over 20 revenuegenerating websites and worked with hundreds of software entrepreneurs, there is a definite pattern to which traffic strategies can sustain a business, and which serve as supplemental.
The Point The point is to understand that investing time in Twitter63 and Facebook64 is a fun diversion and can bring traffic or notoriety to your business, but the way to build long-term, sustainable traffic that will sustain a real business is through Top Shelf traffic strategies.
The benefit of PPC (in particular Google AdWords) is they are easy to get started, fast to turn off, and you can make adjustments in near real-time. This flexibility comes at a price, which is pretty sure to rise over time. So instead of looking at PPC as a long-term marketing approach, use it as a shortcut for finding keywords that convert and work on ranking organically for those terms.
Over time, your list will become an incredible asset. If you treat your list right, offering insight, discounts, perks and useful information, over time it will become invaluable to your business. The best day revenue your startup ever has will be the day you cash in a bit of your list equity and email them with a timelimited promotion. You will be shocked at the number of sales you can make in 6 hours.
Blog is second to a mailing list in most markets because blog readers tend to be more passive. Mailing lists come into your inbox where you must read or delete, whereas blog subscribers are much more likely to hit “mark as read” on a list of blogs.
However, blogs are not 10-page, static websites (whereas most sales sites are). Blogs have several advantages that play right into what Google wants: 1. Google views a website with constantly updating content as alive and relevant, and it will rank higher. Blogs are made precisely for this purpose. 2. Google likes large quantities of content and blogs tend toward that direction over time.
Link building is the “hard” part of SEO. Links are a challenge to build, they take time or money, and the link economy of the web is complex.
Guideline #1: Not All Links Are Created Equal The ideal link for your website is a link from an aged website that itself has tons of incoming links. The ideal link would come from a page with a high PageRank and few outgoing links
Guideline #2: Vary Link Text The search engines are smart these days. If you build a large number of links pointing to your home page in a short period of time, all using the link text “Invoicing Software,” you’re going to set off a red flag.
Guideline #3: Build Links Over Time Did I mention search engines are smart? If you build 120 links in a month, or 10 links per month for a year, the second scenario is going to play out far more in your favor. The engines know that authoritative websites receive constant, ongoing citations from around the web. Receiving a big chunk of links at once is only helpful if you continue to build links at a steady pace each month.
Guideline #4: Stay Out of Bad Neighborhoods “Bad neighborhoods” are areas of the web that search engines look at with disdain. These are your link farms that consist mainly of free for all links (FFA) pages. Their links are worthless.
Ideas: Offer a Free Academic/Non-profit Version of Your Product in Exchange for a Link Do some good for the world and get a link out of it. The best part is that academic and many non-profit organizations have authority status in Google because they are long-standing websites and don’t link to many commercial sites. Their links can be easily worth many times that of a link from a typical website.
Testimonials Contact companies whose products you use and offer to provide a testimonial if they will include a link to your website. When you send the testimonial, be specific about your link text, which should include your keywords if possible.
Buy Links This will be the most controversial strategy discussed and is considered a questionable approach by some.
Dont automate everything!
Agile Development, meet Agile Business. Through a bit of outsourcing to a VA, you can get to market with less up-front expense and in dramatically less time than if you try to automate everything.
Every hour spent writing code is wasted time if that code could be replaced by a human being doing the same task until your product proves itself.
Point #1: Developing a Proof of Concept In the DotNetInvoice case study above, I used a VA to shortcircuit my product development time so we could begin to prove out the product’s concept with much less effort than if we had built everything in code.
As a startup, one of your advantages is that you move very quickly. You can roll out new features much quicker than your competition. And being able to manually process some parts of a task can often reduce your development time by 50–80% which allows you to get the feature out the door and in front of customers.
But that’s ok, because every task you outsource to someone making $6/hour is a task that frees you up to develop new features and focus on marketing…things that make you a lot more than $6/hour.
Point #2: After Your Product Launch The next most important time to use a VA is once your product has launched and you need to begin supporting customers. Customers make it necessary to put processes in place for marketing, sales, support, and back-end administrative tasks. Any ongoing work that can be described in a written process can be outsourced to a VA and save incredible amounts of time for the founders.
Don’t fall into the trap of needing to handle everything yourself. You are now an entrepreneur.
No book, blog or conference could ever teach you more about your customers than you learn from watching them use your software.
Option 1: Automate It Given the low valuations of software products and web applications (which we’ll discuss in the next section), the option to automate your startup tends to be the best approach. You spent months building your application and bringing it to market — if it’s profitable and you spend no time on it, why sell?
Micropreneurship is different. With Micropreneurship you can run multiple companies at once, albeit tiny companies.
The effort of any Micropreneur product is front-loaded. The effort put into building the product and automating marketing, support, etc… are huge unpaid up-front time investments.
Having a $2000/month niche to yourself is much better than having a 20% market share of a $10,000/month niche. No competition means lower ad rates, less SEO competition, and as the market grows your income will automatically increase since you own the entire market.
Being self-employed is risky business, but it’s even riskier if you own a single product.
Advantage #3: Attention Diversification Another part of diversification is it allows you to try new ideas over time to see what works.
Section 2: The Pitfalls of Multiple products
Pitfall #1: Task Switching The biggest downside to owning multiple products is the task switching. There’s no doubt about it — switching tasks is not efficient. You will be more efficient if you have only a single product on which to focus all of your energy.
Pitfall #2: Outsourcing and Automation are Crucial If you are not willing to outsource and automate extensively, do not consider being a Serial Micropreneur. If you need to make every code change or answer every incoming email, you will not survive running multiple products. The workload is too large.
Do not build or buy your second product until you have outsourced or automated as much as you possibly can with your first product. Only when you begin to feel like you have a lot of free time while your first product continues to generate revenue should you consider making the move to Serial Micropreneurship.
Question #1: When Should I Put a Product on Auto-Pilot? With every product I owned I found a natural plateau to earning levels. With basic marketing in place and automated, your product will bring in X dollars per month, give or take 20%. Breaking through that plateau requires a substantial time investment; it often means moving into an entirely new market.
Every time you receive a support request, your first thought should be “how can I make sure I never receive this question again.” You will make a time investment beyond a simple reply, but it will pay for itself for years to come.
First Things First: Profit
If your startup does not turn a profit, the odds of making an exit for anything more than a few thousand dollars is remote. Forget the image of unprofitable YouTube selling to Google for $1.65 billion…that doesn’t happen unless you have millions of users and exponential growth.
The Lesson Is: Track Everything Even if you never plan to sell your startup, you should be collecting and reviewing the data that will ultimately allow you to facilitate an easy sale.