5 Lessons I Learned When I Created My App or SAAS, with Mike Lysecki and Mitch Russo
Excellent developers are pricey! But they are worth every penny. Finding cheaper, less-skilled developers can be a tempting way to reduce costs — but you’re only truly looking at the development costs. When you factor time spent on analysis, design, QA, support, customer satisfaction and churn, it’s imperative that development is done right, the first time. Why spend money preventing, finding, and supporting development mistakes when you have the option to spend the money that can mitigate those issues in the first place.
I had the pleasure of interviewing Mike Lysecki. Mike heads up software development and drives innovation in his role as CTO for LMN. Now the landscape industry’s most popular business management software, LMN was built from his need to streamline efficiencies as the Director of Operations at TBG, one of North America’s Top 100 landscape companies. What began as a proprietary system to centralize and organize everything from estimating and scheduling through to invoicing quickly grew into a platform that met a broader market need. From there, LMN was born. Today, Mike’s primary focus is to develop and expand the software in a rapidly evolving industry. Mike studied Commerce and Software Engineering at McMaster University and is frequently invited to speak on many business management topics at events worldwide.
Thank you for joining us! Can you tell us a bit about your ‘backstory’ and how you got started?
After starting my career as a software engineer, I crossed paths with our current CEO Mark Bradley. At the time, he had this landscape company that was growing rapidly with the potential to do some great things. After some talks, I accepted a position at the landscape company as an Operations Manager.
Growth quickly got ‘out of hand.’ We were doubling in size each year (both revenue and staff) and were scrambling to keep up. Over the years we’d collected and refined all these great spreadsheets to make more intelligent business decisions. We’d use spreadsheets for business plans, for estimating, and the crews would fill out paperwork each day, which we’d re-enter back into spreadsheets to keep track of everything happening in the field.
As we grew from 20 staff to over 200, we had to make a change. We turned our spreadsheets into web-based and mobile apps. Real-time data gave us an enormous competitive advantage. We had all this information coming back from the field in real-time instead of days later. Through that information, we were able to better empower our staff, make far better decisions (and more quickly) and we were able to secure some very prestigious projects based largely on the professionalism and integrity of our operations.
It wasn’t long before Mark turned to me one day and said… “You know, every contractor could use something like this. Can you build it to scale?” And away we went.
What was the “Aha Moment” that led you to think of the idea for your current company? Can you share that story with us?
Mark Bradley, our CEO, was an active instructor at Landscape Ontario — the association that represents landscape professionals. He’d teach budgeting and overhead recovery to anyone who’d come — competitors or not — with the aim of creating a more professional, sustainable industry.
One day, during a seminar, an older gentleman challenged Mark on how he’d manage his business during a recession — when sales really took a dive. In just a few seconds, Mark opened one of his budgets that we built in our software and walked this gentleman through exactly how we were prepared to withstand a year where sales fell by 50%. The class sat there with jaws wide opened as Mark, using his real company numbers, explained the cuts we’d made and how we would still finish the year at break even. And how, when the recession turned into a boom, we’d still have all our key staff, we’d be financially stable and be ready to take on every good opportunity that came our way.
After the overview, Mark was asked, “What was that?” — in reference to the tool he’d put up during the seminar. You could see everyone leaning in to find out how they could be that confident, and organized, in their decision making.
It was then that I knew a) I’m working for a great leader and b) this software we built could really make a difference in our industry.
Can you tell us a story about the hard times that you faced when you first started your journey? Did you ever consider giving up? Where did you get the drive to continue even though things were so hard?
For me, the hardest part about growing the business was the travel. We based a lot of our marketing and sales efforts on education — and we still do. But in those days, we’d travel to 50+ cities a year teaching contractors to build operating budgets, to calculate and recover their overhead, how to incentivize their crews, and so much more.
But in the early days — we’re talking 2010–2012 here — most contractors had desktops, not laptops. And tablets just weren’t a thing. So we’d travel from city to city with these huge kevlar cases containing 20–30 laptops, adapters, booklets, all kinds of stuff.
It was a gruelling schedule. But never did it dawn on us to give up. After every workshop or seminar, we’d have people thanking us, sending wonderful emails, and eventually those emails started to become actual success stories. We had this amazing software which, once you had learned how to plug your numbers into it, was having this profound impact on these entrepreneurs’ lives. As hard as the travel was, we were rewarded every week with gratitude from our leads & customers. It made the grind much easier.
So, how are things going today? How did your grit and resilience lead to your eventual success?
Fantastic! We’ve got one of the largest user bases in our space, we’ve opened US training offices, our staff is growing quickly, and our revenues continue to grow every year. Our early grit and resilience built a stable base of customers (and cash flow!) and really honed the company culture that represents us today. We started — before we even had a product — helping landscape contractors to become better business people. That’s still the motivation that gets all of our staff out of bed and into the office each day.
What do you think makes your company stand out? Can you share a story?
One of the biggest differentiators with our company is that we’ve walked-the-walk in our customers’ boots. We’ve grown a landscape company from a two-person startup to one of the largest landscape contractors in North America. We know what our clients go through each day, month and year.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
I believe a lot of young entrepreneurs should know that they might need to get very close to ‘burn out’ in order to thrive. There are hundreds of thousands of people out there with great ideas, and there’s so much technology available now to help bring those great ideas to life. You likely need to have a great idea and be the hardest working person in the room in order to truly thrive.
It’s not much different than reaching elite levels in sports. If you pace your training, you’ll likely miss your window or get passed by someone who is training harder and longer.
To really thrive, you might just need to push yourself to the brink of failure. That’s what will build your resiliency, experience, strength, and determination. Approaching burn-out is not necessarily a bad thing. It’s like a right of passage for most entrepreneurs. It will develop your limits and your purpose. Rarely does any great story lack adversity.
When you’re thriving, then you can (and should) concern yourself with balance. Just like in sports, it’s far easier to stay in the pros than it was to get there.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
Outside my peers and partners in the company, I couldn’t be where I am without the support of my wife. For years I had a very heavy travel schedule — often being on the road five or six days a week. She made many, many sacrifices to ensure the kids were well taken care of, our home life was in order, and ensured that I had the time and space to focus on growing the business.
Approximately how many users or subscribers does your app or software currently have? Can you share with our readers three of the main steps you’ve taken to build such a large community?
Right now, we have about 50,000 users who touch our software (daily) in one way or another. Three of the main steps we used to grow our subscriber base was:
- Partnerships — we’ve partnered with over 40 landscape associations across North America to bring best-in-class business education to their contractors. Many of the contractors who attended our classes have become dedicated users.
- Features/Function — it is important for our customers to have fewer systems in their business. No one wants to have 7 different applications handling 7 different departments/business functions. Expanding our product features to ensure that our application touches everyone in the company is not only good for our customers, it’s also played a key role in expanding our user base.
- Education — from the day we launched, we sold our software through education. It’s helped our customers internalize why they want to use our software and a better understanding of their business has certainly helped them get better results from the software. Education has played a huge role in acquiring new customers, and it’s also really helped us reduce churn.
What is your monetization model? How do you monetize your community of users? Have you considered other monetization options? Why did you not use those?
We follow a fairly traditional SAAS model for pricing our software. There’s a base monthly rate that varies based on the package (feature set) chosen by the customer, and then there is a small monthly per-user charge on top of that. We have no contracts and there is a ‘freemium’ version to help attract new users.
We’re actively considering other options for monetization — including discounted annual contracts and partnerships that help generate additional revenue without reaching into the pockets of our users. Many of our customers are small businesses. They have limited IT budgets. Collaborative partnerships that add value for our customers, create business opportunities for partners and increase our MRR/ARR are what we’re striving to create. Once you have a large user base, you have the luxury of creating some unique and creative monetization strategies that couldn’t possibly have been pursued as a start-up.
Based on your experience and success, what are the five (5) most important things one should know before one wants to start an app or a SAAS? Please share a story or an example for each.
- You’ll likely spend more to market your product than you will to build it. When we started our application, it was always about how much we were spending to build it. There are a lot of new and non-traditional ways to get your product in front of potential customers, but it’s expensive to compete for people’s attention. You’ve got to build a product — but don’t underestimate how much it’s going to cost to earn revenue from that product.
- Be very careful with partnerships. We first launched our product in Canada — and our first 100-or so customers were primarily Canadian. It’s where we were located and its where we had very strong relationships and education partnerships. When we made a concerted effort to grow our US customer base (which now represents over 80% of our revenue), we sought out a partner who could help us get our name out there. The potential partner was promising — they had really great credentials in our space, lots of pre-existing relationships, and they were great people to work with. But… they wanted a significant percentage of all US sales because tracking business back to them was going to be prohibitively difficult. We spent a lot of time considering the deal. It was certainly plausible that it might be better to give away a percentage of US sales vs. not having those sales at all. At the end of the day, we walked from the deal as the percentage was just too high for our comfort. Not only did we meet other, larger partners who didn’t ask for any percentage of our revenue, but that decision would have cost far more than I care to calculate today.
- Pay very close attention to UI/UX as it pertains to user adoption/churn. It’s an expensive battle to market and sell your application. But confusing UI/UX can turn an interested prospect into a frustrated cold lead in a heartbeat. Whatever you spend on UI/UX is likely to pay you back over and over again, if it’s effective at reducing churn. Losing a customer is very expensive. You lose your base revenue, you lose any additional revenue you might be able to generate from extra services, and you incur acquisition costs to replace your lost customers. It’s more expensive upfront to get your UI/UX done right, but it’s far cheaper in the long run to have done it right.
- Build less and release more often. Most things in life are over-engineered. Software, for sure, is one of them, but so are our appliances, electronics and more. It sounded great that my washing machine had 24 different modes depending on what we were cleaning, but 95% of the time, we just set it to Normal and go on our way. Washing machines become a little more complex with all these modes — they are still simple enough for most people to figure out. Software, on the other hand, gets very complicated, very quickly as you add more features and functions. Most of the features we build rarely get used — and that’s a good mindset to have going into every feature request. When you do add features, let your first release be ‘just enough.’ Release smaller chunks more often and you’ll end up with a less complicated software that actually does what users need versus what they think they might want.
- Excellent developers are pricey! But they are worth every penny. Finding cheaper, less-skilled developers can be a tempting way to reduce costs — but you’re only truly looking at the development costs. When you factor time spent on analysis, design, QA, support, customer satisfaction and churn, it’s imperative that development is done right, the first time. Why spend money preventing, finding, and supporting development mistakes when you have the option to spend the money that can mitigate those issues in the first place.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
I love to help small businesses and entrepreneurs become better business people. I realize there are many, significantly more altruistic endeavors that would help more people, but I’d like to focus this answer on something I could realistically achieve.
Helping entrepreneurs is like a grassroots movement to help the economy. You’re giving individuals more autonomy over their lives, and you’re teaching them the necessary skills to improve their standard of living. But it’s much deeper than that.
Business is like a game. And when you teach an entrepreneur the rules and — more importantly — the strategy of the game, you help this person achieve more out of life. Not just income, but the satisfaction of achieving the goals they set for themselves.
By extension, you’re also helping them improve their family’s lives. Their children will have more opportunities, they can all enjoy more family time, and some will even go on to pass the legacy of their business to their children, and their children’s children.
Even deeper — you’re helping these entrepreneurs create opportunities for their home communities. As companies grow, they need more employees. They need key employees to step up and take on more responsibility but for more pay — which creates better lifestyles for their families and their children.
I love the fact that every day, on a tiny scale, my line of work is playing a small role in that movement.
How can our readers follow you on social media?
You can follow LMN on the following social media platforms:
Visit our website at www.golmn.com
Thank you for all of these great insights!
