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Archive for the ‘bootstrapping’ Category

How Do You Beat a VC’s Best Companies?

Posted by Bob Warfield on March 15, 2017

I read a great article by Tomasz Tunguz recently called, “The Best Content Marketers In The World.”

Content Marketing is literally the engine that powers my bootstrapped business: CNCCookbook.  It provides me with a very nice living (income on par with public company executives not counting their stock sales) and has grown quickly and consistently for years.  I credit all that to Content Marketing.

CNC-cookbook_logo2b_horiz

Content Marketing is the engine that powers CNCCookbook.com…

Basically, I write articles and people are attracted to the company’s website to read them. The vast majority of my visitors find me via Google Search.  I’ve been at it for a while, but so far, I am the only employee of this company.  I write our software, perform customer service, fill orders, and do all the marketing.  The whole thing is getting to be busy enough that I may have to break down and hire our first full-time employee later this year, we will see.

Tunguz’s article didn’t give me exactly what I wanted, which was to know who these World’s Greatest Content Marketers are.  It’s about a conversation he had with a marketing executive that went like this:

I once asked a VP of Marketing at a top SaaS company how she thought of content programming. What is the right type of content to create? I asked her. She replied with a brilliant little insight, “I look at way the best content marketers in the world do it. The TV networks.”

That’s the sort of remark that VC’s dearly love because not only does it sound smart, it makes them sound smart when they pass it along at the next Board Meeting.  It’s perfect grist for Mahogany Row.I use buttons

And the details are interesting.  They boil down to using an editorial calendar to make sure you’re properly and individually addressing the different marketing personas you need to reach.  I can’t quarrel with it and in fact, I use an editorial calendar to do exactly the same thing at CNCCookbook and have been for years.  I never really thought of it as something TV Networks do, it’s just something that occurred to me when I first learned what a persona is.

Think of a persona as what you get when you answer the question, “What kinds of people buy my products?”  Typically you can create these sort of stereotypes and there will be several of them.  For CNCCookbook I use roughly the following:

  • Professional Manufacturing CNC’ers
  • Hobby CNC’ers
  • CNC’ers who use CNC Routers to work in wood

I could break things down with much finer granularity, but this works pretty well.  I even arrange my product landing pages so folks self-select their own persona by answering a question up front:

PersonaPage

That particular set of buttons isn’t exactly my editorial personas because it works better to map this product’s features to the machines they’ll be used with.

What caught me about Tunguz’s article was the thought of we might measure content marketer’s in order to judge who the best ones might be.  Given that the intended function of content marketing is to create traffic to a site, it would seem that some sort of metric that has to do with ROI on traffic might be the way to go.

I admit I was also vaguely uneasy with the notion that TV Networks are the World’s Greatest Content Marketers. I suspect that on an ROI-based metric, that very well might not be the case. But we digress.

Being still curious about who a great content marketer might be that I could learn from, I wondered who the marketing executive Tunguz talked to might be. I went to his home page at Redpoint, to try to see if a “Top SaaS” company was listed. Alas, no.

But there was the obligatory list of some of his investments in a nice logo block:

TunguzCompanyLogos

Perhaps one of these companies was doing a bang-up job with Content Marketing. I am always trying to find new examples to emulate and learn from. And with the kind of budgets VC Startups have for marketing (insanely out of reach for my one-man company, LOL) and the talent of many of their execs, it seemed a good bet.

HP-10C

Yes, I’m an engineer and this marketing stuff doesn’t come naturally to me!

Now being an engineer (this marketing stuff does not come to me naturally!), I like to be analytical. And I often evaluate traffic metrics for various sites to try to understand who has a clue before I just blindly take their advice. I have over 200 growth hacking-related blogs on my RSS Reading list, and I actually researched the traffic data for each one before I added them.

So, I popped open my favorite tool for this sort of thing, which is called “Ahrefs“. It does a lot of things, but for this task, I wanted to get an idea of Google Search traffic each of those sites was getting.

Here’s what the Ahrefs report looks like for CNCCookbook:

AhrefsCookbook

There are other

There are a number of other services that will do the same thing, and they all share the delightful trait that traffic numbers are an approximation based on their sampling technique.  The takeaway is they won’t match your real numbers (mine for the last 30 days were about 6x that, for example), so use them for comparison only.

In this case, the comparison is against the stats for CNCCookbook and Thomasz’s startups for comparison:

VCStatsA

There’s a couple of ringers in there too as I included a Reality TV Series that as far as I know is the only CNC-related TV Program ever. It’s called Titans of CNC:

TitansTV

It’s your basic Orange-County-Choppers-Does-CNC reality show. Not a bad show, but his content is not doing nearly as well as mine. Wish I had all the money his sponsors give him, LOL!

The other ringer is Haas CNC.  They’re the world’s largest maker of CNC Machines and a publicly traded company.

Here’s the thing I am sure you’ve already noticed–with just one exception, CNCCookbook is beating all these outfits.  That’s with no ad budget, no venture capital war chest, and one guy who isn’t even a marketer doing all the work part-time.  I don’t spend nearly the majority of my CNCCookbook time on it.

If that’s not a ringing endorsement for Content Marketing, I don’t know what is!

Content Marketing works extremely well.  It’s the most efficient form of marketing I know, and the only one I recommend for bootstrapped companies who don’t have the luxury of big budgets.

For those of you who are wondering how I manage to do so well with CNCCookbook’s Content Marketing, I have a system.  It’s very analytically-oriented as you would expect from an engineer.  It is a system that others can duplicate-I have trained a few and they did well with it.  It’s also a system that I’ve proven works in a number of spaces besides CNC.

I have great news for Thomasz and his Startups too.    I am currently hard at work producing an eCourse that will show others how to use this system.  Heck, maybe even Titan will try it.

It will be some months yet before the coures is finished, but it will be comprehensive and complete.  If you want to be sure to hear when it’s available, the best thing is to get on a mailing list I’ve specifically created to keep people posted when the course is ready.

Join the Mailing List

 

Posted in bootstrapping, business, Marketing, strategy, venture | Leave a Comment »

What Can a Poor Dumb Engineer Do That Most Marketers Can’t?

Posted by Bob Warfield on January 12, 2015

This is a tale of bootstrapping and bucking the conventional wisdom.  This is a tale of applying an Engineer’s overly top down facts sifted through logic lens to what is traditionally a touchy feely shoot from the gut discipline.  This is the story of how my little one man bootstrapped SaaS company competes with giants in marketing, even though I am but a poor dumb engineer.  And yes, the title is pure link bait.  Many marketers can do and do-do (uncomfortable with that) this sort of thing.

My company is called “CNCCookbook.”  We are a niche SaaS software company focused on CNC (Computer Controlled) Manufacturing.  Both the CNC and SaaS within the CNC world are very much niche plays.  Public companies in manufacturing software are few and far between, and most VC’s wouldn’t touch it with a ten foot pole.  To paraphrase a more colorful turn of phrase, they wouldn’t invest in it with YOUR money, let alone their own.  Most of the software here is not SaaS–it arrives on a bunch of CD’s and is after much installing, dongling, and license keying, you’re left with a vintage 90’s User Experience.  I love this niche because what I know from working in more progressive markets gives me an edge that I bring to Manufacturing software.  I love it also because it is my hobby–yes, Virginia, I use CNC machines to make things for fun.

I’ve been at it in this marketplace for a while now.  I grew the business to the point where it pays me as much as I have made at any Silicon Valley Startup except those where stock options mattered.  I should know, CNCCookbook is my 8th trip unto the breach, dear friends.  Now what’s all this about competing with giants in marketing?

Let’s start by looking at how CNCCookbook is marketing.  I came across this great infographic from Marketing Tech Blog that shows the conversion rates of various B2B marketing techniques:

B2BMarketingChannels

B2B Sales Channels via Marketing Tech Blog

Strictly speaking, CNCCookbook is both B2B and B2C since the hobby CNC market are decidedly “C’s” while the business CNC market are “B’s.”  No matter.  The takeaway from the article is that a lot of the marketing world is a bit surprised at how some of the tried and true techniques are not working so well any more.  If we look at what CNCCookbook does from this list, we have tried Webinars and Paid Search and found both to be unprofitable and ineffective.  Today, we’re totally focused on our Website/Content Marketing and Facebook/Twitter.  You could call it luck that we wound up on two of the highest converting channels, but we did test an awful lot of different possibilities and I have had the luxury of seeing how things worked for other companies.  The latter meant that I was unlikely to try event marketing, trade shows, partners, or sales cold calling (it’s just me in this company, I don’t have time to cold call), for example.

The Facebook and Twitter work is almost 100% automated–I simply co-announce any new blog posts to those channels automatically with a WordPress plugin and I make sure any non-blog content I publish is also announced in a blog post.  Simple, and effective.  I monitor these and many other channels for opportunities to engage with my customers, but the rest is automated.

What do I spend most of my marketing time doing?

The answer is writing articles for the blog and web site.  I alternate between blog posts and what I call “Cookbooks.”  Cookbooks are in-depth go-to resources that consist of many articles.  I try to introduce a new Cookbook every year and we’re up to 5 of them at this stage. They’re solid traffic producers and what the marketers like to call “Evergreen Content.”  Good reference content seldom goes out of style and accretes links very well.

And how much time is spent on marketing?  My days and weeks divide roughly into 20-40% marketing with the rest focused on software development.  Since I believe Good Customer Service is critical to marketing, I charge my Customer Service time to Marketing as well.  FWIW, I work 7 days a week and often a fair number of hours, but the business is such that I can do the work almost anywhere–from a Cruise Ship Cabin or a leased Condo on an Exotic Caribbean Island (both are real examples).  As long as I have a decent but not spectacular Internet connection, I get by.

That’s a bit about how it’s done, now what’s been accomplished?  What can one poor dumb software engineer working part-time (20-40% time) accomplish by way of marketing?

There are a lot of ways to look at it.  Ideally, one should look at leads, but it’s hard to find out how many leads the other organizations you want to benchmark against are getting.  As a reasonable proxy, I like to use SEO Traffic.  Who doesn’t love free (heh, we won’t count all those hours writing content!) over the transom leads that come from searchers finding your opportunity for the first time via Google or some other search engine?

To do this comparison, I like to use SEMRush.  It’s been a valuable tool for me in a lot of ways (keyword research, understanding pay per click which I ultimately have given up on, etc.).  You can get quite a lot from it for free even.  Here are a set of comparative SEO stats drawn from SEMRush that compare CNCCookbook’s traffic to others in our industry:

SEOIndustry

CNCCookbook vs Industry Comps for SEO Traffic…

Pardon the length of the list, but I do this for my own analysis purposes and didn’t want a cherry-picked list.  These are real companies that are big names or names of interest to me in the CNC Manufacturing world.  Some will be familiar like Autodesk, but most are probably unknowns unless you happen to be familiar with this market.  We can pick out some highlights though:

–  Makezine and Hackaday reflect the popularity of the Maker Movement, and so I wanted them here to gauge my impact on that world.

–  Practical Machinist and CNCZone are the two biggest online communities in the space, so were obviously of interest.  Amazing to see CNCCookbook is doing better than CNCZone as it is quite a big community.

–  Haas Automation is the world’s largest maker of CNC Machines and has in excess of $900 million a year in revenue.

–  IMTS is the industry’s largest trade show and an online magazine as is mmsonline.

–  Kennametal, which ranks immediately below CNCCookbook is a $3 Billion a year company that makes cutters and other tooling for CNC.  Iscar is a tooling company that Warren Buffet paid $2 Billion for not that long ago, and I can assure you that tooling companies don’t have zillion to one valuation ratios nor would Warren Buffet buy one if it did.

The point is there are a lot of solid businesses on the list.  Many are quite large and no doubt have large marketing staffs and budgets.  Yet CNCCookbook has been able to make its mark by joining their ranks, at least in terms of search engine traffic.  What a triumph for content marketing–if ever there was a reason to believe in it, seeing a guy work part time to deliver these kind of results ought to be it.

Here’s another list, this time with names that will be more familiar to Smoothspan Blog readers:

TechComps2

Startups, Tech Marketing, and other Tech Related Comps…

These are startups, tech marketing companies, software companies, and other tech related startups I wanted to compare to.  A lot of these are talked about a lot.  A lot of them are in the business of telling others how to do marketing (sometimes I wonder if I should be in that business too, lol).  Considering the amount of resources available to these companies and the fact that as many of them are marketing companies selling to marketers who therefore should know a lot about how to do this, I feel good about how CNC Cookbook ranks alongside.

What Should We Conclude From This?

There’s only one takeaway I would encourage you to have: engineers with limited resources can successfully market their bootstrapped companies.  There are broader ramifications perhaps for broader markets and audiences, but I’ll let others decide whether they want to jump to those conclusions.  I know what I did for my market and what results that produced and I’m very happy with them.  We live in a time when this sort of thing is much more achievable than it once was because the Internet is so much more ubiquitous.  For those who want to follow a similar path I would urge you to choose your market carefully and find one where content marketing (also called inbound marketing) can be extremely effective.  You don’t need to be the world’s great graphic designer (I am so not that!), but you need to be a good writer, you need to have passion for your subject matter, and you need a market whose audience never gets enough content to satisfy their thirst for more knowledge.  If you can put all that together, it’s hard to see how you wouldn’t build a following.

If you’d like to learn more about how I grew CNCCookbook, check out my Entrepreneurship blog: BobWarfield.com.

Posted in bootstrapping, business, Marketing, strategy | 5 Comments »

Secrets of When and How to Talk to Customers at a Startup

Posted by Bob Warfield on October 9, 2014

elephant-with-blind-menJason Lemkin says forget building wireframe UI’s and start out interviewing 20 customers, because you just won’t understand your customers until you do.  Here’s the gist of why you need 20 interviews before you do anything else:

And you have to do 20.  I know it’s hard to get to 20.  But it’s the right number:

  • You need the First 5 Interviews just to truly understand the white space and the current opportunity.  Yes, you probably think you already understand it.  But you are the vendor, not the purchaser.  You need to understand your prospective app from the purchaser’s perspective, for real.
  • You need the Next 5 Interviews to confirm your pattern recognition.  You learn from the first 5, you confirm in the next 5.
  • You need Interviews 11-20 to Nail Your Pitch and Hone Your Thesis.  Once you truly understand the white space from a buyer’s perspective, and you’ve figured out the nuances and challenges … it’s time to nail your pitch for real.  And by doing this, you’ll also hone your thesis and strategy.   That’s what interviews 11-20 are.  To get real critical feedback on what you’ve learned.  To learn about corner cases that may in fact be critical insertion points for you to win.  To dig in on what is really 10x better, not just 2x or 5x better.

And let me tell you, at least from my experience, don’t expect all 20 to be positive.  Many of My 20 Interviews in both my start-ups were very critical.  Or worse, lukewarm.  Lukewarm is even worse, because it says yeah it’s sort of interesting … but no way I’d buy … and implicitly … your idea is a huge waste of time.  I’d rather get the negative feedback 😉

I get the Steve Jobs thing.  You just have to build it.  You do.  But this is SaaS.  You’re solving a business’ problem.  They don’t know how to solve it, or what you should build.  But they do now how to express their problem.  Acutely, and thoughtfully.

Here’s the funny thing–in some ways I agree with Jason and in others I totally disagree.  It depends really on what it is you’re trying to learn from your 20 interviews.  Jason says you’re trying to understand the white space and the current opportunity and that you’re trying to nail your pitch and hone your thesis.  He’s thinking about it like a Sales Guy, more power to him, someone in your company ought to be.  But there’s more to life and startups than Sales Guys.

Here is what I worry about validating in the early days of any startup:

1.  What is the problem we’re trying to solve for customers?

2.  Is it a real problem?  Do a large portion of customers believe they have this problem?

3.  Will the solution we’ve imagined actually solve that problem?  Do the customers agree that it solves their problem?  Can we charge enough to make a real business for this solution?

4.  Do we have a pitch that communicates we have a real and effective solution quickly?

I see Jason’s 20 interviews as helping to solve #2 and #4, but not really making much impact on #1 and #3.  Moreover, I see #4 as being pretty tactical, unless, of course, you need that finely honed pitch to convince investors.  It’s tactical because we won’t need it until it’s actually time to get customers to deploy beta product.  In other words, we have quite a lot of time to solve it.  #3 is not so tactical.  In fact, if we don’t solve #3 right up front, we could easily spend the bulk of our time building a product that we think solves the customer’s problem but that customers aren’t confident in.

Let’s drop back and work on each one of these 4 critical questions and see how and when in the startup cycle they should be tackled.

1.  What is the problem we’re trying to solve for customers?

This is a tough one for many entrepreneurs.  I’ve seen a few decide to try to find a hard problem to solve by interviewing potential customers.  What keeps you up at night?  What do you hate about your job?

Ugh.  That seems so hit or miss.  None of the ones I met who’ve tried this got very far with it.  They got problems that software was just simply not the cure for or they got problems that are more conditions of the human race than anything.  Jason says customers, “Know how to express their problem.  Acutely, and thoughtfully.”  Actually, they don’t, not so much.  They know how to resonate with a problem that you’ve stated acutely and thoughtfully.  They know how to resonate when you state a problem as a near miss to how they really think about it.  But customers are not product designers nor company founders for the most part.  They’re severely myopic.  As Henry Ford famously put it,

“If I had asked people what they wanted, they would have said faster horses.”

So don’t rely on customers to tell you what the problem is.  Really on them to confirm you’ve found a problem they feel.  Later, they’ll remember it as you having discovered the problem from them, but that’s not really how it works most of the time.

There are a lot of reasons for this.  The myopia is one but another is they just don’t know much about the medium you work in–software.  They have little idea what software can do for them.  They think of most software in terms of software they already have, which is another form of myopia.

You are not going to figure out that problem, in all likelihood, through a few simply interviews.  You’re going to have to live the life of your customers for a while, walk in their shoes, and feel their pain.  You need to know their domain intimately, which is not something that’s going to happen in 20 interviews, no matter how good they are.  That’s how two great Sales Guys wound up creating two great CRM companies–Tom Siebel with Siebel Systems and Mark Benioff with Salesforce.com.  I interviewed with Tom Siebel when he had less than 20 employees and the one thing that was absolutely clear about the man was that he knew the domain and its problems cold.  That’s the kind of solid domain knowledge you really should have in your startup.  Who can you point to who has lived and breathed the problems and knows them cold?

Is that the only way?

No, there are plenty of exceptions.  There are proxies available too.  Finding a large online community of your desired customer can give you huge insights into what their world is all about.  What do they ask questions about most frequently?  What do they complain about frequently?  These communities are so helpful to startups both for gathering information as well as for getting out the word that I’m not sure I’d want to do a startup that couldn’t identify an online community specializing in its customers.  In this age of Content Marketing, it seems to me that such a community would be a very valuable indicator that the market was going to be reachable and at reasonable costs.  I don’t want to have to advertise or cold call my way into existence, though many have certainly done so.

To put this into the perspective of Jason’s 20 interviews, you need domain knowledge for your startup before anything else.  You won’t get it from the 20 interviews, and it is just table stakes that you have to find.  Maybe you’re counting on a founder for it.  Maybe you have the world’s ultimate advisory board.  Maybe you’ve sold to these poeple in a former life and know all about them.  Maybe you’ve spent a year studying and interacting with their online communities.  Whatever it is, you’d better have it.

 

2.  Is it a real problem?  Do a large portion of customers believe they have this problem?

Having gotten your domain knowledge together, you believe you’ve discovered a real problem.  Now that you can articulate that problem, it’s time to confirm it with potential customers.  Jason’s 20 interviews are perfect for this stage.  I don’t know that there is anything magical about 20 or that this even has to be done via interviews.  If you’re going to be using feet on the street to move your product (e.g. a scratch golfin’ highly paid salesforce), you should probably get started with interviews.  If your Sales Guy can’t line up 20 interviews in his sleep, there is something wrong, so may as well set him to the test.  If you weren’t planning to get a Sales Guy until later and you can’t line up 20 interviews on your own, you better get the Sales Guy sooner.  There’s a lot of good that comes from achieving the 20 interviews and here Jason and I agree wholeheartedly.

But in addition to 20 interviews, I highly recommend a few other things.

One of my mentors has used the method multiple times of creating a web site that’s all about the proposed problem and solution.  He sets it up like there’s a product ready to go, except there’s no way to order it.  You can simply request more information.  He gauges the quality of the idea by whether he can get many information requests.  And yes, he understands the need to do some tuning up before giving up.  This is a case where having online communities of your potential customers is awesome.  If you have a simulacrum site as described (looks like a real company and product), you can ask the folks in the community what they think of the company and idea.

If you don’t like that approach because it just feels a little too funky, try my approach.  I started a blog before I started my current company and I waited to see if I could drive significant traffic to that blog discussing the kinds of problems I wanted to solve.  I would talk about how people were solving their problems today, rather than how I proposed to solve them.  I measured traffic using all of the standard web analytics to see what resonated and what did not.  I built a lot of credibility and I had a following already in place that I leveraged to a significant Beta test and significant cash sales when I was finally ready to launch the product.  But, before I started building the product, I knew from how people were reacting to my writings that I understood the customers and their problems very well.  I achieved what I call “Content-Audience Fit” (a precursor to Product-Market Fit).  More about that below under #3.

 

3.  Will the solution we’ve imagined actually solve that problem?  Do the customers agree that it solves their problem?  Can we charge enough to make a real business with this solution?

Here’s where I probably disagree with Jason the most.  He says, “So if you haven’t started yet, as fun as it is to just build the wireframes and get a codin’ … do the 20 Interviews.”

Here’s my problem–as I’ve mentioned, the Customers really can’t articulate their problem unaided.  They can only resonate with your articulation.  We may have to agree to disagree on that, but figuring out how to resonate well is a huge function for Sales precisely because the customer can’t do it for themselves.  They often need help even in how to present it to each other to get buy-in within their organizations.  When you go interview them, you’re going to get a variation on the three blind men encountering an elephant for the first time.  One touches the trunk, and thinks it’s a snake.  Another touched the tale, and thinks it’s like a straw fan swishing back and forth.  While the third touched the legs and pronounced that elephants are like trees.

When it comes to envisioning a solution, especially in software, things get far worse.  At least they have all experienced the problem, even though it may appear to be a snake, a fan, or a tree.  But nobody outside your company even has a glimmering about your proposed solution.

I’ve done lots of focus groups over the years and lots of the kinds of interviews Jason talks about, and I am here to tell you it is pointless to do either if you expect to get feedback about a software solution unless you have at least some wireframes and storyboards to show.  With modern tools, it’s just not that hard to produce these things.  I’m working on our third product at CNCCookbook.  I was able to put together a UI prototype that is substantially what our finished product will be with about 6 weeks worth of effort.  It’s been hugely valuable in securing feedback for the product and I have learned an awful lot from it.  Perhaps the biggest problem it has is people start to mistake it for a finished solution or they assume it’ll be ready much sooner than it will and they get too excited.  They’re ready to buy immediately.

Yes, it may be fun to build wireframes, but it is also fun to have real meaningful conversations with prospective customers about your proposed solution.  You’re going to learn so much more about everything if you can do that around a real demo.  You’ll learn about positioning, sub-problems and edge cases that as Jason says are critical insertion points to win.  You’ll learn whether your proposed solution really fixes the customer’s problem in their eyes.  You’ll feed on the enthusiasm they have for what they see, and that enthusiasm is valuable fuel for your startup, for convincing critical new hires, and for any potential investors you may have.

If it’s really going to be hard for you to get interviews with 20 real prospective customers, people who are solid citizens in their markets and who are not your buddies.  People who will give you the straight scoop, help guide you, and who you’re hoping will be early adopters.  If it’s that important and that tough, I can’t imagine wanting to do it without bringing along a UI mock up.  It isn’t just my current venture, I have done this at every single one of the 7 startups I’ve been with.  I have done it for every new product release.  It’s actually integral to how I approach the Agile Software experience.

If your Sales Guy can’t get 20 meetings, get another one.  If your Product Guy can’t get you a UI prototype quickly, get another one there too.  Both are equally as important.

One more thing–that last part, “Can we charge enough to make a real business with this solution?”  That’s critically important to answer ASAP.  It’s also nearly impossible to get a very good answer to it without a UI prototype.  Yes, they will give you some answers, but I am talking about real answers that will hold water when it’s time to cash the checks. Don’t you want to know whether customers will pay up for what you’re going to build as early as possible?

 

4.  Do we have a pitch that communicates we have a real and effective solution quickly?

This is what I call “Content-Audience Fit“.  I believe achieving that fit needs to come ahead of finishing the product if for no other reason than that you won’t know if the product is finished nor will you be ready to efficiently leverage content for product traction unless you do.

Jason’s 20 meetings go towards this end, but it’ll take more than 20 to really nail your pitch.  Personally, I don’t like to burn real perspective customers, investors, or other scarce as hen’s teeth resources for a company if I can find another way to test this stuff out and perfect it.  The online world and Content Marketing are your gateway to doing so. Once you can resonate with those audiences, break out the Rolodex (kids you’ll have to look up what that is) and start asking for meetings.  You’ll be bringing to that meeting a laundry list of good-as-gold asssets:

–  By this point you have a UI prototype to demo.

–  You have verified that you can talk about the problem and with the audience with enough credibility that they’re at least starting to come to you for answers.

–  You’ve had the opportunity to test a number of things with your growing audience.  You’ve probably even been able to do some surveys.

–  You have a corpus of content that you can point potential meeting invitees to that helps establish your bona fides and gets the conversation off on the right track.  If done right, this can be a warm call and not a total cold call.

Most importantly, none of this is all that expensive or time consuming.  You can do it on your own nickel without waiting for a Series A VC round.  I know I have more than once.  I’d set a goal of 3-6 months to get to this point.  If everyone is firing on all cylinders, you’re producing good content, you’ve gotten through your UI prototype, and you’ve made contact with a decent sized audience, you’ve accomplished a lot at your startup.  You’re right where you need to be.  Now line up those 20 meetings, get in there and make those 20 people your first Beta tests, and hit the ball out of the park for them.  They’ll love you for it and you’ll have set the stage for your next 6 months as you drive to launching the Beta and eventually real Sales.

Posted in bootstrapping, business, enterprise software, saas, strategy, venture | 1 Comment »

23 Great Websites for Entrepreneurs: Plus Some Radical Advice from an Entrepreneur-Bootstrapper

Posted by Bob Warfield on September 24, 2014

advice_bad timeI recently came across two giant lists of websites for entrepreneurs, courtesy of Jason Lemkin (whose blog is listed in both):

Inc.com 50

Forbes 100

Now for some radical advice: the vast majority of the sites listed in those publications won’t help the vast majority of entrepreneurs at all.  In fact, many of them will be counterproductive in the extreme depending on what your goals are.

I can already hear the refrain:

Whoa, hold it right there Bob–them’s fightin’ words!

True, to a certain extent, but hear me out before you pass hasty judgement.

The vast majority of the sites listed, and I went through both lists carefully, are of interest to those entrepreneurs that are dead set insistent on going the path of Venture Capital.  Nothing wrong with that–I’ve been down that road on the majority of companies I have founded–3 were VC funded and 1, my latest is bootstrapped.  But I always ask every would-be entrepreneur I meet why they want to do a VC-funded startup and I wish I had gotten around to bootstrapping a lot sooner than I did in my life.

I’m not here to sell you on bootstrapping versus VC.  I have other articles that talk about my bootstrapping experiences and there are certainly many who will talk to the virtues of each.  But what I will tell you is this–Venture Capital does not equate to success for entrepreneurs, you can be wildly successful without it, at least unless you need to do a deal that is tremendously world changing or that makes you hundreds of millions of dollars.  If millions of dollars and running your own show will suffice, bootstrapping is an easier and less risky way to get there.   Most of the good VC’s, the ones you’d want on your board, that I talk to will freely admit this.  They encourage lots of entrepreneurs whose ideas and companies are not suited to the VC model to carry on without VC.

When you show an idea to a VC, they are predisposed to see it in VC terms–would it be a good investment for their portfolio?  A lot of their advice is going to boil down to pushing the idea in a direction that makes it a better investment for VC, and this is not necessarily a direction that makes it a better investment for the entrepreneur.  Because of that, I think you, my entrepreneurial friend, need to figure out whether you want to do a pure bootstrap or bootstrap your way into a VC deal as early as possible.   Ideally, you want to figure it out from the start.  If you’re going to do a pure bootstrap, take those long lists of websites for entrepreneurs and cull them carefully.  Most of the blogs written by VC’s, while they can be fun to read, have no bearing or guidance to speak of for your venture.  You know, the one you’re funding out of your own pocket that can’t afford to get a bunch of eyeballs now and figure out how to monetize later.  There are sites listed that want to walk you through all sorts of legal things and other artifices that are really only relevant when there’s quite a lot of money in play.  Not necessarily money in the form of revenue, but money invested and the expectation of Big Money in the future.

So forget most of the VC authored blogs.  Forget blogs that seem to be mostly telling you how to raise VC.  If you don’t have the real deal, you can’t game the VC’s well enough to fool them and you’ll regret it if you do fool them.  Forget most of the blogs by guys who were successful VC founders who want to tell you what worked for them or what they think about everything.  Most of it is too high level and many first time success stories have no idea what they did right versus what was luck.  Forget the inside baseball and gossip rags. AllThingsD and Techcrunch have almost nothing to tell you if you’re not doing a VC-funded startup.  You don’t care who got funded for how much or who bought what for how much.  You don’t care about the latest Culture du Jour piece.  Forget the musings of rich guys who’ve forgotten more about being an entrepreneur than you’ll ever know.  Their vacations to Lake Cuomo may be fun to hear about, but how is that really helping YOU to succeed?  And skip the self-help pump-you-up pieces.  If that stuff works for you, great, but attitude is not enough, and if you don’t really have the eye of the tiger deep down, you better get it before you start down the entrepreneurship road.  You get the idea of what I want to leave out from those big website lists.  Yes, it’s radical and harsh, but what should be left in are sites that give you real actionable insight into how to grow your business.

Let’s face the other thing–the vast majority of small businesses that start up in the world don’t have the luxury of VC money.  They’re restuarants, retailers, machine shops, auto garages, and a host of other things.  This is the world my own bootstrapped company (CNCCookbook) works with.  These people could care less about things that will only work if you can invest millions of dollars over time.  They don’t ever expect to be running a billion dollar company (or maybe they do and don’t want to give away most of it to their financiers).  They’re having the time of their lives starting and running their own businesses.

It is for the audience of those people (having the time of their lives running their own businesses) as well as for any Venture-funded businesses that are interested, that I have put together my own high octane feedstock of sites that will help you build your business.  These are tried and true sites that I read religiously because their insights are actionable and they make me think.  You want deep strategy and tactics that can be made to work for any business, not just VC businesses.  They are in no particular order, so here goes.

Saastr

I have to give Jason the nod here.  After all, he did put me on to writing this article and I do read his blog religiously.  There are many ideas there that are only suited to VC startups, but there are also ideas that I’ve found actionable for my own business.  Jason is a VC, but he did a number of startups before that and it is his operational knowledge that he largely shares.  We go back and forth and I often disagree, but it is always interesting.  Do a search here on Smoothspan for “Jason” and you’ll see some of what I have written about his thinking.  Better yet, just subscribe to his blog in your reader.

Seth Godin’s Blog

If you don’t read anything else, stop, do not pass Go, do not collect $200–read Seth Godin’s Blog!  The daily posts are short and pithy.  Taken in total they constantly explore every aspect of Godin’s unique tribal approach to marketing.  He understands marketing at its core in the way the every small business needs to understand it.  Read his stuff.  Let it provoke your thoughts.  Let it seep in constantly.  It will do you no harm and probably a lot of good.

Firehose Press

This blog is a total unknown.  It’s unadorned and has no editorial content of its own whatsoever.  It’s one of my blogs.  I list it early in this list, because it is a shortcut of sorts.  You see, Firehose Press is what I’d call a “clippings” blog.  I post a brief excerpt of every blog article about building a business or marketing and sales that was valuable to me on Firehose Press.  Believe me, I have a couple of hundred blogs in my reader and having somebody curate all that for you can save a lot of time.  The only question you need to ask is whether my taste in curation results in articles helpful to you.  The answer is easy enough–go look at it and decide.

Signal vs Noise

These guys have some of the original great material on Bootstrapping that really got me fired up to do a Bootstrap.  They are not as prolific on the topic as they once were, but they’re still a good read.  Aside from bringing Ruby on Rails into the world, they’ve built a great company and lifestyle for themselves.  All entrepreneurs should be so lucky.  If you’re on the road to VC and read blog’s like AVC, the corollary for the bootstrapper would be blogs like this one.

Techmeme

I deleted so many other blogs of limited value to me (Techcrunch, ReadWrite, and many others) simply because Techmeme catches and serves up their best stuff.  I scan the headlines quickly and frankly delete most of it.  But at least if I’m off to lunch with a fellow Silicon Valley cohort, I will have heard about the trending topics.  And frequently, I latch onto a whole new source of the really good stuff because it popped on Techmeme.

Totango

These guys are on to some radical thinking.  They want to tie marketing (of a sort) with the customer experience as it unfolds pre- and post-sale.  Being able to do this well is one of the many things that I think will really separate the awesome products from the also-rans.  Read it and think about what they’re doing and how it applies to your software.  I certainly did!

KissMetrics

Analytical marketing insights and ideas.

The Buffer

Productivity hacks for marketing and social media.  My business doesn’t get great value out of Social Media, though I have experimented with it a lot.  Having a resource that helps me squeeze a lot out while investing as little as possible is helpful.

Succesful Software

Andy Brice is a fellow bootstrapper who often has some great insights for that life, at least for software bootstrappers.

Moz Blog

When the Gods of SEO speak, it usually shows up here.  As a dedicated content and inbound marketer, I hang on their every word.  Seriously, SEO is easier than you think and you can do it yourself without a high paid consultant if you pay attention.

SaaS Growth Strategies

More good basic marketing for software companies.  Much of it would work for many kinds of companies.

QuickSprout

Neil Patel can have a lot of good insights to share, but I warn you in advance, you have to penetrate his wall of Marketing Spam to get there.  His site demos every trick in the book to sell you while you’re trying to dodge all those “Let me close you now!” bullets and get a little value.  It’s worth it, but don’t say I didn’t warn you!

Marketing Experiments

Sometimes I just need an idea, something quick to implement or A/B test.  You know, a marketing “snack” I can get done quickly and see if it helps.  Plenty of inspiration for that here.

Marketing Technology Blog

It’s not just about Marketing Technology–lots of actionable strategy and tactics may be found here.

Jeff Bulla’s Blog

Tons of marketing and selling ideas for small business.

Inbound Hub

I love inbound marketing, and these guys popularized it and IPO’d a company on it.  There’s good info here.  With that said, quality seems to have diminished a bit in favor of quantity.  Scan the headlines and cherry pick–there’s still plenty of ripe tasty insights to be had here.

I Love Split Testing

More A/B testing ideas to snack on.  Your business needs to constantly be trying new experiments to optimize its marketing.  Get this kind of feed stock stimulating ideas ASAP.

Heidi Cohen

Great ideas from Heidi for Content Marketing.

Digital Marketing Blog

Every business needs more growth.  Digital Marketing is the cheapest way to get there, so take in all you can stand about the subject.

CopyBlogger

More great ideas for Content Marketing.

Convince and Convert

Content Marketing and Social Media.  Great content on those topics and surprising candor about how some of these things are not always the perfect Silver Bullet.

ClickTale Blog

Take a sexy technology that tracks what user’s are doing on your site almost better than the users even realize and you get some worthwhile insights.

Smoothspan Blog

Another shameless plug for my own content.  Smoothspan frequently covers Strategy as it pertains to this world of entrepreneurship.  The thing about good strategy is its hard to come by, but it is so valuable when you can get a true strategic insight.  Or, as I heard someone say one time:

Strategy is what we do to make winning easy.

I’m a student of Strategy, so I write it up often.

Conclusion:  What’s Here and What’s Missing?

If you made it this far, you will realize that a tremendous number of those websites have to do with helping your business grow.  Many of the things on the Forbes and Inc lists had little to do with that.  They might refer you to sites with CPA terms (I kid you not) or perhaps sites that tell a small business how to secure health insurance.  These are all valuable things, I’m sure, but they’re not life-threatening for small businesses and entrepreneurs.  They’re not problems that can ultimately never be solved, only worked away at indefinitely.  Growth is that sort of problem.  It is both life threatening and a problem you will probably never solve.  You’ll always want more growth and if you stop trying to drive it, your business will likely slow down.  So get used to the idea of constantly absorbing and evaluating new ideas for growth.  It’s all part of being an entrepreneur and it is the oxygen your business needs to keep going.

Posted in bootstrapping, business, strategy, venture | Leave a Comment »

Best Way to Succeed as a Solopreneur: Go For Fewer Customers

Posted by Bob Warfield on July 29, 2014

I’m reading with interest some posts that are hot on Techmeme at the moment from Jared Sinclair and Marco Arment about succeeding with iOS apps and as a Solopreneur.  Jared’s blog post is a cautionary tale for those who would like to bootstrap a small venture well enough to quit their day jobs.

Many weigh in with various comments and based on his latest post, it looks like Jared was inundated with a bunch of notes from people who thought he just didn’t market the app enough.

I’ve been a solopreneur with some part-time helpers trying to make the gig into a multi-person bootstrap for some years now.  I’ve managed to create a business that now throws off more cash than I’ve gotten at any Day Job I ever had short of being an exec at a public company.  It’s been an extremely happy experience and I thank my lucky stars and my awesome customers every day for making it possible.  I want to talk through what Jared has bravely reported about his venture and compare it to what’s different about my own CNCCookbook and talk about how I think those differences matter to a successful solopreneur.

First the Results of Both Companies

Jared starts out presenting his financial results from his iOS app, Unread:

FirstYearSalesUnread

Unread Cumulative Sales in the First Year…

It’s pretty easy to see why Jared is unhappy–most of the action happens shortly after he shipped the initial application.  Yes, there’s steady growth afterward, but the actual sales per week or month (remember, the graph is cumulative) had to be pretty disappointing if you want to live off that income.  The app only costs $4.99, so Unread has actually been extremely successful in terms of the number of customers it has attracted–looks like somewhere between 6,000 and 7,000.

I wanted a way to provide some similar insight into CNCCookbook’s apps, but I’m not as interested in Jared in giving away my exact finances (sorry folks, you’ll just have to do some back of envelope calculating to figure it out).  Here is the cumulative graph of software license years sold for CNCCookbook’s software:

CNCCookbookCumLicYearsSold

CNCCookbook Cumulative License Years Sold…

I’ve been at it for a few years now, and the growth has been steady, almost hockey-stick-like–this is a very happy business!  The big bump between 10/22/12 and 10/22/13 reflects the launch of our second product.  I’m hoping to get another bump like that in the next 6-12 months as I launch our 3rd product.

With all that said, I want to make some suggestions about what I think has made CNCCookbook successful.

Suggestion #1:  Lead With Subscription Pricing for Recurring Revenue

First, what is a “software license year sold?”  CNCCookbook sells both subscriptions and perpetual (you buy the software for life with one payment).  Recurring revenue is essential for Solopreneurs because it means they’re getting new revenue without much new work other than keeping the software vibrant and useful.  Getting new customers is hard work.  In a minute I’ll discuss how CNCCookbook goes about it, but suffice it to say I have created a business where my biggest problem is having enough software to sell my customers moreso than getting the new customers.  Part of that is due to the recurring revenue stream.  If you’re a fan of the SaaS/subscription model as I am, you’ll realize that once one of these revenue engines gets up sufficient momentum, they’re almost unstoppable.

So, my graph shows how many years of subscription were cumulatively sold for both products over time.  I plugged in a figure of “6” for any lifetime sale because that’s more or less how I think about my lifetime pricing.

Suggestion #2:  You’ll Want Perpetual Pricing Too, and the Subscription Helps Justify a High Price For It

 FWIW, I mostly wind up selling the lifetime version during sales, but that’s okay too because having a fairly expensive lifetime version does a couple of things.  One, it addresses the needs of customers who just don’t like getting tied to a stream of payments.  This is a very real audience, and if you don’t give them an out, you’re not going to reach them.  Why not choose a perpetual price where they’d have to keep resubscribing for so many years before you come out ahead that everyone can see it as a win-win situation?  Why leave the perpetual hole open for a competitor to come in and take over?  Once you have both pricing models, it gives your customers options.  Do they prefer to preserve cash flow?  My subscriptions do that, just like the lease vs buy decision on a car.

Suggestion #3:  Find the Sweet Spot on Price and Insist On It.  You Probably Want Fewer Customers Willing to Pay More.

My first product offering was $69 for one year.  It seemed like a lot to me at the time, but it wasn’t.  It was actually less than the product was worth–I raised that to $79 with no impact on the units whatsoever.  More importantly, it was and is too low for a business you want to have be your sole occupation.  This gets me to the point of my headline–figure out a business model that requires as few customers as you can easily sell to achieve your financial goals.  Jared’s Unread sells for $4.99–pretty typical for an iOS app.  But it took him almost a year of very hard work to produce it and it isn’t paying the bills.  It’s not really a matter of promotion–he has a ton of customers.  It’s a matter of the customers not paying him enough cash for each sale.

A solopreneur can only touch so many people.  You can only get the word out so far.  There is an upper limit on how many people you will have a chance to sell to when you launch, and on how fast you can grow that audience over time.  You need to be cognizant of that fact and find a product opportunity that can be priced accordingly.  Be brutally honest about how many customers you can close.  Forget models that require too many.

Advertising?  Fuhgeddabout it.  No hope in heck.  I’ve estimated that charging for your product is about 2000 times more effective than giving it away free and relying on advertising revenue.  Why make your job 2000 times harder?  It’s so attractive to sell Free until you realize the sheer magnitude of scale you must achieve.  Those are VC-only deals, folks.

Cheap Phone Apps.  Based on the information I’ve seen, Jared’s information, the problems with finding apps in the app store, and the platform owner’s huge tax of 30% on sales, I am strongly thinking phone apps are not a good target for bootstrapping or solopreneurs.  It’s too hard to market the apps, the platform owner has too much control over the walled garden, they get too big a share of your revenues (30% is huge if they’re not driving huge demand your way, and they’re not), and you aren’t able to charge nearly enough in most cases.

Phone apps have been a dilemma for me in my own business.  My audience would love one.  I have done the work to actually keep one code line running on PC, Mac, iOS, and Android, and there has even been a prototype run on iOS.  But the thought of the work involved finishing the app and questions of whether I’ll be cannibalizing my existing sales with sales that have a 30% tax to Apple or some other big guy has given me pause.  The project has been on indefinite hold while I look at other more promising ways to invest my time.

To get an idea of what you need to charge, look at some successful bootstrappers.  Take Basecamp–it’s $150 a month.  There are cheaper plans, but they limit the number of projects.  Eventually you will be likely to upgrade.  At $150 a month, you only need about 140 customers to be making $250K a year.  I see all these Solopreneurs talking about their $60K a year businesses and wonder why they aren’t aiming higher.

Or, if you have something with more mass market appeal, say like Smugmug, you an charge $40-300 a year.  It’s going to take a lot more customers than Basecamp, but if their average sale is say $60 a year, that’s about 4200 customers to do the $250K a year.  Given how many love photography, that again seems like manageable adoption to be able to succeed.  Either number is a lot fewer than Jared has already sold.

I mention that I thought my pricing was too low and I mean it.  $79 a year requires me to find 3200 customers to get to $250K per year.  It can be done, but I surely didn’t get there in 1 year or even 2 years.

If I had my druthers, I’d be looking for a niche that needs circa 1000 to 2000 customers to get to that $250K.  Hence, we are charging $125 to $250 a year or at least $99 a month.  Look around.  There are quite a few SaaS businesses at $99 a month.  I use a bunch of them to help me with CNCCookbook marketing–Wordpress hosting service Page.ly, SurveyMonkey, MailChimp, my shopping cart provider, etc., etc..

Things are priced where they are for a reason, and not simply because it’s what the market will bear.  It is not only what the market will bear, but it is also what can support a happy healthy growing business.

Suggestion #4:  Debug the Marketing and the Market Before You Ever Write A Product

Many solopreneurs are software developers.  I tell my non-developer friends about my business and they are envious, but can’t see how a marketer can get a product written without paying an engineer, at which point they’re no longer solo.  Engineers, OTOH, seem to think they can bump along and do a decent job of marketing.  As my marketer friends are fond of saying–everyone consumes marketing so everyone thinks they are an expert on it.

Here’s the thing: as a software developer, you know you can get the product built.  That’s pretty low risk.  It’s fun to dive in and start slinging code and pretty soon the demo starts showing some life.  But so what?  As I said, you know you can get the product out.  What you don’t know are two very important things:

1.  Are you solving a problem anyone cares about?

2.  Can you successful reach that audience to sell them your product?

Now here is the truly amazing thing:  you can answer both questions with very high confidence as a solopreneur in a relatively short time.  You can even do it fairly comfortably while holding down your Day Job–even better.

There’s a short list of tools and skills you’ll need to master that I’ll get to shortly, but in order to solve those two big marketing problems, you need one critical talent:

You’ve got to be able to tell a story people want to listen to, and you have to be able to do it in writing.

If you can’t tell a story people want to listen to, I think your future as a solopreneur is probably not going to go well because you’re going to be left either needing someone else to tell your story or just buying advertising.  I keep playing with advertising every six months or so.  I am very analytical and well versed in how to do it.  I have conversion hacked landing pages with great results and done tons of A/B ad testing to try to improve the results.  My conclusion each time I try the experiment is that it just isn’t very profitable.  It costs me so much to sell a customer using AdWords that it is hardly worth it.  I’ve talked to a slew of bootstrappers, and their mileage varies.  Many report something similar.  Many do not keep good enough analytics to even know, they just budget for it and spend the money, hoping it will work.  I guess if you want to depend on ads, this is also something you can know up front.  You can try ads that lead to a page and see what it costs you to get people to that page.  The trick is in what they do when they get there.  In my case, they sign up for a free trial.  That’s one conversion event.

The next thing is to convert them from the free trial to a paying customer.  That’s a second conversion event.  I do very well on the latter–about 20% of free trials become paying customers, which is very decent.  Where I fail is getting enough ad click throughs converted to the free trial relative to what the ad costs.  You can do the math:

1.  The ad costs $1.50 per click through, for example.

2.  The page converts 27% to click through to the trial signup.  Conversions for me are better if they don’t sign up on the landing page–that’s being too pushy for my audience.

3.  Once on the trial page, 25% successfully register for the trial.

4.  As mentioned, 20% of the trials convert to paying.

So if I get $79 for the sale, I can afford to pay $79 * 20% * 25% * 27% = about $1 to break even.  $1.50 is very unprofitable.  Even if I can buy ads for 50 cents, which I very seldom can, it still seems like I am giving Google the Lion’s Share of my hard work.   OTOH, if I am Basecamp, all that changes because I am looking at an annual value of $150 * 12 = $1800.  I can afford to pay quite a lot for advertising in that case.

Working through those numbers is how you debug advertising as a marketing possibility.  There’s still one other big advertising drawback even if you can afford it: it doesn’t create a sustainable marketing asset.  Once the ad has run, you quit getting value from it and you must spend more money on ads.  That’s one reason why I much prefer inbound or content marketing.  If you create great Evergreen content, and own the searches for those subjects, you own a marketing asset that keeps on giving without your having to do much.  You can spend time adding even more Evergreen content.  That model scales well for the solopreneur and small resource-limited bootstrap.

With that model, you’re relying on giving away great free information to attract people via referrals and search engine traffic.  This is the one you can really debug well without even starting a product.  This is the one where you need to be able to tell a story.  The reason is that you can start a blog aimed at your audience with an email mailing list for that blog and find out what works.  Do they care about a problem you want to solve with a product?  Write articles about the problem and see if anyone comes to the party.  Can you reach this market?  Go forth, read the relevant blogs, visit the relevant social sites, and find out what they’re talking about.  Find out what they’re interested in.  Start talking about that on your blog.  If they show up, start building your readership.  Collect their emails and start a weekly blog digest newsletter. Track your progress.

Now do some more back of envelope.  How many do you need in your fold?  I’ve typically been able to sell 4 or 5% of the folks on my email newsletter a new product.  So if I must sell 1000 to reach my financial goal, I had better have 20,000 folks reading my email newsletter.  I recommend you spend 6 months to a year building up your online content (blog) and building your newsletter before you even start writing your product.  Get a sense of how long at your current growth rates it will take you to have enough that you can meet your financial goals and plan it so that by the time you finish the product, the audience are already there, eating popcorn in their seats, and waiting to see what you can offer them.

This is what I mean by debugging the Market and Marketing before you start a product.  Nothing could be more frustrating than to turn in a ton of cubic hours building a sweet product only to have it fall far short of your financial goals for it.  You need to discover whether you can tell stories well (or write ad copy or whatever) enough to attract an audience without a product.  If you can do that and give them a sweet product,  you’re much more likely to succeed.

What about those skills and tools I mentioned?  Yeah, there’s time to figure all that out too during that 6 months to a year when you start creating content.  You have to figure out how to run a blog, (I have 4 or 5 kicking around here somewhere).  Just go get WordPress, don’t even mess with anything else.  Figure out how to use plugins.  Don’t write custom code, that’s a distraction.  You need to figure out how to collect the emails.  That’s a WordPress plugin plus an email service.  I use AppSumo’s List Builder (not here, on the CNCCookbook blog) and MailChimp.  Then there’s all the techniques of creating landing pages that convert and SEO and all that jazz.  It’s not that hard.  Seriously.  I have a clipping blog I call Firehose Press.  Every single great marketing how-to article I have ever read is there.  Read it and digest it and you will know nearly everything I know about marketing.  Go back over the articles in this Smoothspan blog.  There’s plenty of posts that chronicle various epiphany’s I’ve had about marketing along the way.

Conclusion

I didn’t write this article to knock Jared’s efforts–he’s done well by getting so many customers.  He obviously built a sweet app.  If I were to suggest differences, it would be in two areas.  Jared had wanted to succeed with his launch and with blog and social media mention.  In my mind, that’s too passive.  You have to create an engine that you can control with a throttle you can push when you need to.  My throttle is to write more and better content.  I suspect that the lack of controller marketing that could be invested in is what made Jared’s sales graph so flat, while a price that was too low is what made it so hard to live on the revenue from the product.

I didn’t write it to beat my chest about what I’m doing.  It doesn’t matter, it isn’t that big a thing, and I don’t believe it will help CNCCookbook in any way despite what some marketing folk say about such things.

I wrote it because I love being a solopreneur and bootstrapper.  I think it is the greatest thing since sliced bread.  I’d really like to see as many people as possible get a shot at it, so I’m trying to pass along what I’ve learned along the way.

As always, there are many strategies that work.  I certainly don’t have the One True Path.  But if I’ve helped clarify things even a little bit, then I will have accomplished what I wanted and I thank you for your patience reading through the post.

Posted in bootstrapping, business, Marketing, strategy | 5 Comments »

Authentication as a Service: Slow Progress, But Are We There Yet?

Posted by Bob Warfield on July 11, 2014

BankVaultSmallAuthentication as a Service solves a problem every Cloud Developer, mobile or desktop, has to solve.  As one player in the space, AuthRocket, puts it:

Do you really want to write code for users, forgotten passwords, permissions, and admin panels again?

To that I would add, “Do you really want to have to be a world class expert on that stuff to make sure you don’t leave some gaping security hole out of ignorance?”  I think the answer is a resounding, “NO!” to both questions.  Why do it in this world of Agile Development, Lean Startups, and Minimum Viable Products?  It’s one of those things everyone does (and should do) pretty much the same way from a user’s perspective, so there is no opportunity for differentiation.  You have to do it right because the downside of security problems is huge.  You have to do it right up front to protect your customer’s data and your investment (so nobody gets to use your products for free).  There’s basically very little upside to rolling your own (it’ll only slow you down) and tremendous downside.  Hence, you’d like to buy a service.

I keep going around this block for my own company’s (CNCCookbook) products, and I surely would like to get off that merry g0-round.  I wanted to buy this some time ago, and have written about it for quite a while.  For example, in an article I wrote 4 years ago on PaaS Strategy (Platform as a Service), I suggested login would be an ideal service for a pass to offer with these world:

Stuff like your login and authentication subsystem.  You’re not really going to try to build a better login and authentication system, are you?

I sound just like AuthRocket there, don’t I?  I’m sure that’s not the earliest mention I’ve made, because I’ve been looking for this stuff for a long time now.  As I say, I had to roll my own because I couldn’t find a good solution.  I would still like to replace the solution that CNCCookbook uses with a nice Third-Party service.  I only have few very generic requirements:

–  It has to offer what I need.  Basically that’s Email + Password login with all the account and forgotten password management interactions handled for me.  It would be very nice if they do Federated Login using the other popular web services like Amazon, Facebook, Twitter, Google, or whatever.  It would also be very nice if it could do 2 factor login.  The latter two are optional.

–  It has to work well.  I judge this by who has adopted it and how it is reviewed.

–  It has to be here for the long haul.  I’ll judge this by size of customer base and quality of backers.  AuthRocket, for example, is still at the invitation-only Beta stage.  That’s too early for me.  I have mature products and don’t want to have to change out this service too often.

–  It has to be easy for me to access the API’s.  I prefer a nice RESTful API, but I will take a platform-specific API for my chosen development platform: Adobe Flex.  And no, I don’t want to debate that platform, it has worked fabulously well for me, the products are mature, and I am not looking to switch.

–  It has to be easy to tie it back to securing my data in the Amazon Web Services Cloud.

–  Optional Bonus:  It helps me solve the problem of disconnected data access.  My apps are Adobe AIR apps.  You download and can run without a web connection for a period of time.  This is important to my audience, but means I’ve got to use data models that keep local copies and sync with the Cloud when they get connected.

While my apps are not yet available on iOS or Android, all of those things are almost exactly the same problems any Mobile App developer faces.  Therefore, this ought to be a hotbed of activity, and I guess it is, but so far, I still can never seem to find the right solution for me, and I don’t think I’m asking for anything all that crazy.  But, I have yet to find a solution.  Let me tell you a little bit about my 2 most recent near misses.

Amazon Cognito

I was very excited to read about Amazon’s new Cognito service.  At CNCCookbook we’re big Amazon believers, and use all sorts of their services.  Unfortunately, at least until Cognito, they didn’t really have a good service for solving CNCCookbook’s authentication problems.  They had IAM, which is a very complicated, very heavy-weight, very Big Corporate IT kind of solution.  It looked kind of like maybe you could do it if you had to, but you’d still wind up writing all the darned password management stuff and it looked like it was going to be a real ordeal.  Mostly, I think of IAM, as the tool used to define roles for how broad classes of users can access the various other Amazon offerings.  I wanted another service of some kind to be the sort of simpler, friendlier, front end to IAM.  Enter Cognito, and it sure sounded good:

Amazon Cognito lets you securely store, manage, and sync user identities and app data in the AWS Cloud, and manage and sync this data across multiple devices and OS platforms. You can do this with just a few lines of code, and your app can work the same, regardless of whether a user’s devices are online or offline.

You can use Amazon Cognito directly from your mobile app without building or maintaining any backend infrastructure. Amazon Cognito handles secure app data storage and sync, enabling you to focus on your app experiences, instead of the heavy lifting of creating and managing a user data sync solution.

A guy like me loves the part about, “You can do this with just a few lines of code” followed by “without building or maintaining any backend infrastructure.”  Now that’s what I’m talking about, I gotta get me some of this!

It’s nearly all there:

–  Amazon is an outfit that can be trusted for the long haul.

–  REST API’s are no problem, that’s how Amazon prefers to operate.

–  Tie back to other Amazon Web Services?  Puh-lease, who do you think you’re talking to, of course one Amazon Service talks to the others!

–  Sync?  Yeah, baby, that’s what Cognito is all about.  More potential time savings for yours truly.

Oops, just one little shortcoming:  it only does Federated Login via Amazon, Facebook, or Google.  That’s cool and all, but wheres my Email + Password login so I can seamlessly move customers over to it?  Maybe I missed it, maybe it’s coming, or maybe Amazon just doesn’t think it’s important.  Can I live with forcing my users to make sure they have either an Amazon, Facebook, or Google account?  Yeah, I guess maybe, but we sell a B2B app and it sure seems kind of unprofessional somehow.

Amazon, can you please fill this hole ASAP?

Firebase

I hear fabulous things about Firebase, I really do.  People seem to love it.  It’s chock full of great functionality, and on the surface of it, Firebase should fit my needs.  Yet, when I dig in deep, I find that the login piece is kind of a red-headed stepchild.  Yeah, they advertise Email + Password Login, and they even tell you how to do it.  But there’s no RESTful API available for it.  They list all the right operations:

–  Login, and returns a token
–  Create a new user account
–  Changing passwords
–  Password reset emails
–  Deleting accounts
etc.
However, it appears that those things are handled by a client library which is in a very dev platform specific format.  If you use one of their chosen platforms, it’s ok.  If not, you can only use their rest API’s for the Cloud Database–no login functionality.  That’s going nowhere for me.  It would’ve been so much nicer had they packaged what’s in the client library in their Cloud and provided RESTful API’s for the functions I’ve listed.  As I told them when I made the suggestion, that makes their offering accessible to virtually every language and platform with the least effort for them instead of just the few they support.
Conclusion:  Crowd Sourcing?
Hey, I’m open to suggestions and the Wisdom of the Crowd.  Maybe someone out there knows of a service that meets my requirements.  They seem pretty generic and I’m frankly surprised I still can’t find such a thing after all these years of building almost anything you can imagine as a service.  We’re not very far away from it.  Either Amazon or Firebase could add the functionality pretty easily.  I’m hoping maybe I’ll get lucky in the next 6 months or so.  If anyone knows the right people in those organizations (or their competition), pass this post along to them.

 

 

Posted in bootstrapping, business, cloud, mobile, platforms, saas, service, software development | 3 Comments »

Let’s Try Another Verse of Your SaaS Company Does Not Need a Sales Force

Posted by Bob Warfield on May 23, 2014

MorpheusNoSalesForceIt’s time for another installment of what some of the Enterprise Irregulars have called the Jason and Bob show.  Jason and I have disagreed on a fair number of issues over time, though we have also agreed on a lot.  Jason’s had a great run and is now in the rarefied atmosphere of VC’s.  All of his material is thought provoking and well worth a read.

Today, we’re going to talk about Outside Sales or indeed the question of whether SaaS companies must have a sales force at all, inside, outside, or otherwise.

Jason’s post today is “Inbound or Outbound Sales? The Answer is Yes.”  In it, he argues that

There’s a meme, a CommonThink, among certain segments that Outbound Sales is Bad, or at least, a Little Unseemly.  And maybe a lot bit Old School.

That we’re in a new world of sales, a new consultative world, where leads come in, prospects can try and learn before they even talk to a human, and then, a sales rep thoughtfully answers questions, models business process change, and helps them decide how and why, and if, to buy.

And that’s true.  We are in that world.  Inside sales is terrific.  Warm leads are great.  Live trials of easy-to-use-and-deploy web services really have changed the game.

And yet …

The reality is, by revenue, this isn’t the way the majority of the world buys.

My role here today is to cast a dissenting vote, and to explain why.  In fact, this one’s been argued between us before so I’ll just refer you gentle readers to my original response to get the ball rolling:

Does your SaaS company have to have a sales force?

In that article I make the case that, no, your SaaS company doesn’t automatically need Outside Sales. It’s a function of who you need to sell to and that’s a function of what your solution costs. The more money involved in an individual sale, the more likely you need Outside Sales.  This isn’t really news or something I made up, by the way.  I learned it at the knee of one Geoffrey Moore, he of the Chasms and Gorillas and such.  I find it makes a lot of sense to think about how you need to sell based on the size of the transaction involved.  In hindsight, it’s obvious that a very expensive purchase carries a lot of risk and that a large organization will need to involve many people and ultimately a highly placed decision maker to get it done.

Jason does tip his hat to this notion with some remarks about selling to SVP’s, but I believe it’s something that startups need to think really carefully about very early on.  Horses for courses. What’s the right way to sell for my specific product and opportunity?  You need to make a conscious choice during the very early stages of the startup about what your strategy will be in this respect, because it’s going to have a profound impact on what sort of company you’re building, what kinds of skills you will need, and even the capital needs of your venture.

Jason mentions the “meme” that Outbound Sales is Bad.  Surely that’s damning with faint praise, but there are sound reasons why that meme is out there.  He says, “by revenue, this isn’t the way the majority of the world buys,” referring to purchasing without the need for Outside Sales.  Au contrare, Jason.  I don’t believe it and I have never seen any data to support it.  In fact, you don’t have to look far to see that the biggest revenue is associated with offerings that don’t require either inside or outside sales. Think Apple, Walmart, et al. Their selling is totally self-service and marketing-driven. Not software? How about Google or Facebook? Oh, not business enough? What about Github, Amazon Web Services, or many other ventures that are hugely successful.  While we’re at it, let’s look to where the majority of the profit, not the revenue goes and the differences are even more stark in favor of finding models that don’t require Sales.

What if that’s the real opportunity–start something that works and doesn’t require Outside Sales.  Or if you prefer, consider the potential for disruption that going into a market with a product that can work without Outside Sales offers. That’s exactly what PC’s did to the Minicomputer vendors. The Rolex-clad, scratch golfing, Armani suited crowd with good haircuts laughed at the little computer stores and the pathetic IBM PC.  Ken Olson himself laughed at them all the way to the point where DEC disappeared and was never heard from again and in a very short span of time.  Hitting an Outside Sales-driven industry with a solution that requires no sales creates the Mother of all channel conflicts for the poor sales-driven company.  It is just as toxic to companies with Sales Forces as Subscription models are to Perpetual License models.

The other reason the meme is strong is capital requirements.  Outside Sales-driven opportunities are going to require more capital to finance their longer sales cycle.  It’s unavoidable when you have to wind your way through the organizational complexity that’s there to stop a company from foolishly spending its money without proper checks and balances on your expensive solution.  SaaS itself is already capital inefficient because it pulls expenses forward and pushes profit out over time relative to getting it all up front in the Perpetual License model.  We live with it to get to the pot of gold at the end of the rainbow, but what if we could at least mitigate it by selling a product cheap and easy enough that it didn’t need Outside Sales or even Inside Sales?

That’s how the companies I’ve mentioned got to be so big so quickly.  That’s why this so-called meme is a real business strategy that’s disruptive and must be considered by any startup.

Figuring out how to leverage strategies like this in new markets where you can be supremely disruptive to the incumbents is what successful startups are all about.  Don’t be a slave to tradition.  You’re not here to build another SAP.  You’re here to build the next generation by disrupting SAP and Oracle.  SaaS is probably not enough to do that, though some argue otherwise.   I think many of those are confusing disruption with room at the bottom (great link from Jason, BTW).  The thing is, everyone’s doing SaaS now, so what’s different about your story?

 

Posted in bootstrapping, business, enterprise software, Marketing, strategy | Leave a Comment »

Evil VC Seeks Minions for World Domination

Posted by Bob Warfield on January 30, 2014

EvilSeeksMinionsIf we substitute “Venture Capitalist” for “Evil Genius”, the placard on the right describes the Silicon Valley Startup Culture perfectly.  Yes, you young hopefuls, your friendly neighborhood (that’d be the Sand Hill neighborhood) VC really does expect you to sacrifice your lives in a play for world domination.  They don’t care about building a nice little $100M a year software business–that’s peanuts, doesn’t move the needle on the fund.  Son, it’s just not enough tonnage.  Must be prepared to work 24-7 for fascist psychopath for close to no pay.  Yep, that’s about the size of it.  They won’t even try to hide the fact–they write about how you should accept as little pay as possible.  In 2008 Peter Thiel went on record saying the best predictor of startup success is low CEO pay.  Really?  That’s the best predictor VC’s have come up with?  Thiel is not the only VC to suggest it, not even close, and they’re largely successful at getting what they want–75% of founders pay themselves less than $75,000 a year.

What about that business of “Messy death inevitable?”

I suppose it’s a function of how you define “Messy”, but the “death inevitable” part rings true.  VC’s these days want startups capable of reaching $1B in revenue.  The reason, as one explained to me over drinks, is that they make their exit when the startup IPO’s.  But in order to IPO at a reasonable valuation, they have to be able to paint a picture for those buying public shares that the company has years of growth left.  That’s how the Greater Fool theory works–you can never let people discover they’re the last ones and the valuation has peaked.  So what happens to $1B Unicorns?  First, by quantifying things at $1B, we learn that the Utility Curve for VC’s is drastically different than for most Founders.  Offer Most People $10M after 10 months of effort when they’ve never made even $1M, and an awful lot of them will say, “Yes.”  The VC’s will resoundingly say, “No,” and they’ll tell you that anyone who says “Yes” never should’ve raised VC in the first place.  BTW, I have been through that scenario personally and I can tell you it was a harrowing experience.

Getting back to that $1B Unicorn, the odds are not at all good.  Only about 0.07% of Consumer and Enterprise VC-Backed companies become those Unicorns.  That means, Dear Impressionable Young Founder, that your odds are one in 1428.  The odds of winning on a single number at roulette are nearly 40x better, and you don’t have to bet years of your life on the roulette number.  One in 1428 odds of achieving World Domination.

That Messy End will come about because of the inevitable terms in your legal documents with your financiers and because of how the system operates.  Consider if you had worked hard to achieve a modicum of success and sold a company for millions but none of the founders or employees got anything at all out of it except a job with the buyer while the VC’s saw a positive (but inadequate in their eyes) return.  Wouldn’t that be a messy end?  The key term in your documents that leads to tears is the “Liquidation Preference.”  Supposedly the market standard is 1X but I’ve seen numbers as high as 3X in some cases.  Now let’s suppose you’ve got a company that is sold for $50M.  That’s a lot of money: many would regard that as a successful company.  But, it’s only successful to the investors to the extent it generates a return on their investment.  Suppose they’ve put in $40M and have a 1X liquidation preference.  That means they get back their $40M right off the top.  Now there’s $10M left to split between the investors, founders, and other employees.  You’re probably diluted pretty good at this time, so let’s say non-Investors are getting $4M.  Suddenly your $50M sale is getting you more like $1M than the $5M you and your co-Founder expected.  It gets worse–with a 2X or 3X liquidation preference, you get nothing.

Make no mistake–the VC’s feel perfectly justified in all of this and see it as emminently fair.  Fred’s example from that link sure sounds fair, but as some of his commenters point out, it attaches no value to the sweat equity of the Founders and employees.  They may have worked years of their lives at sub-standard pay ($75,000 a year?) and not be entitled to a dime in a scenario where VC’s are getting all of their money back.

“NO Weirdos?”

Yes, the VC’s prefer to invest in the Old Boys Club.  Minorities and women will have a tough time breaking in, not that they are Weirdos in any sense, but the homogeneity of the VC Startup Club and especially of the VC’s themselves is strong.  You need to have gone to the right school and have the right background.

The VC’s BTW, are (mostly) not really Evil.  But they have certainly done everything in their power to create a set of rules that overwhelmingly favors their own success, even at the expense of Founders.  Looked at in the cold light of reason, it’s hard to argue it isn’t pretty much as the plackard about Evil Geniuses suggests, at least metaphorically.  Why then do Founders seek Venture Capital?

After talking to lots of Founders seeking advice (I’m on my 7th Startup, have founder 4 of the 7, and have had 3 happy liquidity events), I have concluded the primary motivator for Founders seeking VC is that they want to reduce their risk.  It’s ironic.  VC’s these days don’t accept Founders until they’ve forced the Founder to remove as much risk as possible.  You have to create a Product, find an Audience, and demonstrate Traction before they’ll put a dime in.  Or, you have to give away a surprising amount of your company for surprisingly little capital if you go the Incubator or Angel route.  Yet, these Founders are largely worried about two things they believe can reduce their risk.  First, they want knowledge.  They want people who have succeeded to tell them how to succeed.  Second, they want connections.  The Incubator promises to put them in touch with the VC’s when the time comes.  The VC’s promise more VC’s, talented executives, and many other contacts.  Founders want to be part of the Network.

Experienced Founders are less about the connections or knowledge, they’ve realized they can get connections and knowledge more easily in Silicon Valley than almost anywhere in the world.  Scratch the push for connections and knowledge up to inexperience on the part of young Founders.  Experienced Founders just want the VC’s check.  They want to get where they’re going faster and with the certainty that plenty of money in the bank promises to bring.  VC’s hate to be courted simply for a check.  It eliminates their view of how they differentiate their firm and belittles the possibility they will make a contribution from the Board.  Yet, even many VC’s share the view of many experienced Founders that aside from Cash, VC’s often add negative value.  No less a personality in the VC world than Vinod Khosla says 70 to 80% of VC’s add negative value.  If you look at the impact forcing a company to take unlimited risk in the quest to becoming a $1B Unicorn has, I would suggest that many companies that could have been successful by any non-VC standards and happily profitable got pushed too far and left behind a smoking crater when they fell short of joining the Unicorn Club.

One of my favorite bloggers is Seth Godin.  He writes about this odd conundrum perfectly in his short post, “How much does it cost you to avoid the feeling of risk?”  He’s talking about the risk of putting yourself out there, and it’s no different for Founders.  The VC’s are asking you to do most of the work of creating a successful company before they put any money in.  They’re asking you to do it on your dime.  Unless you have it thoroughly in your heart and soul that  you won’t be happy until you’ve created a Facebook or Google-sized success, forget the VC.  Finish the remainder of the work to create a profitable company instead of raising VC.  That’s the real essence of reducing your risk.

Turning your happy little company into a VC Startup is the first step on the ladder of radically increasing your risk because you’re committing yourself to swinging for the fence.  No bunts, no singles, doubles, or triples.  Swing for the fence, and if you miss, you’re a failure.  Make no mistake about it:

VC’s increase your  risk.

Posted in bootstrapping, business, strategy, venture | 2 Comments »

Everything You Need to Know About Email Marketing in One Tiny Little Post

Posted by Bob Warfield on December 13, 2013

seths.headTake the time to go read Seth Godin’s post about the 8 things you really need to know about email.  It’s short, totally to the point, and exactly the way my bootstrap business CNCCookbook tries to pursue email.  It has worked great for us and I get tons of love letters back as a result.

If you have all of Seth’s bases covered, you will too.  As I mentioned recently, we use Mailchimp (sounds like he does too) to automate as much of the email process as possible.  Interestingly, I have not heard a word from them about my post on their becoming less user friendly over time.  That’s got to be a first.  OTOH, as Seth points out, they’re just a tool and not really the important part of the equation.

 

Posted in bootstrapping, business, Marketing | Leave a Comment »

Why Pay for Mediocre Marketing Advice When Good Advice is Free?

Posted by Bob Warfield on November 22, 2013

snake-oilOkay, it’s time for somebody to call BS on a practice I’ve seen for a long time.  This will probably get me some negative press, but it needs doing.  The practice I’m tired of goes something like this:

–  Entrepreneur starts up a bootstrapped business.  Enjoys modest success and quits Day Job.

–  Suddenly, they are the World’s Foremost Expert on Marketing, and they want to sell that expertise.

–  Often the expertise costs more than the product that let them quit their Day Job and often they make more on the marketing advice than on their “real” business.

I see this happen countless times, and it just strikes me as wrong.  Sure you made a few bucks with that obscure product that teachers love.  Sure you’re on a jihad against unicorns or who knows what.  Sure you quit your Day Job.  But are you really that big a deal that people should be beating down your doors to buy your marketing advice?  Well maybe.  Perhaps you even say you’re kind of a big deal, and in that particular case, you probably are.  But a lot of these folks just haven’t enjoyed that much success.

Ask some basic questions:

1.  What was their signature success that qualifies them to be your marketing mentor?

2.  How big was that success really?  How does that compare with what you hope to achieve?

3.  How many times have they succeeded like that?  Silicon Valley is filled with one trick ponies.

4.  Did they succeed only in frothy bubbly times, or do they have some success when times were tough?

5.  Did they product a big liquidity event or earn a great income year after year?

6.  If their core business is so great, how come they have time to be selling marketing advice?  Why are they selling marketing advice?

7.  If this advice is so special, are the other marketing luminaries quoting them?  Are they even part of that set?  Or are they just being quoted by their customers?  You know, the people that buy these things because they don’t know?

Young Entrepreneurs are vulnerable.  They’d have to be to give up a big chunk of their company for very little cash just so they can be part of an incubator they can learn from.  That’s another one of these deals that’s in the same category for me–you’re paying a lot for some advice that seems mediocre relative to what you can get absolutely for free.  Yeah sure, maybe you’ll make contacts that matter.  Guess what?  It’s not that hard to make contacts and there are cheaper ways to network.  Most successful people are surprisingly generous with their time and advice if you approach it right.

OTOH, maybe this incubator thing is just something you do so somebody will hang a credential on you that dispells some of your insecurity. You think that credential is so others will respect you, but mostly people respect success, not the promise of success.  A lot of this stuff is just getting in the way of getting on with it.  There is no group you can join, no person you can talk to, no degree you can get that will guarantee success.  It’s all up to you, and one of the first things you have to learn is how to sift through all the inputs and get what you really need while ignoring the rest.

I just hate to see people being taken advantage of out of ignorance or insecurity.  I’ve done 7 startups now, founded 4 of the 7, had 3 successful Big Exits (2 acquisitions and an IPO), 3 failures, and 1 very happily still going company.  That’s a pretty reliable track record where small business is concerned.  You don’t get that many hits accidentally.  I did my first run straight out of college in Houston, Texas at the tender age of 23 where there weren’t any incubators or anyone to ask for advice.  Most people thought I was weird or nuts for trying to start a software company instead of getting a real job.

When I was first getting my current bootstrapped company, CNCCookbook, going, I bought a bunch of those marketing products I’m railing against.  6 or 7 of them.  Each one was $75 to $300.  There was LOTs of information there to read.  Lots of formulas for success.  I was hungry to find the knowledge that had to be valuable because it wasn’t available for free.  I had everything from how to get 10 zillion followers on Facebook overnight to the you-betcha-sure-thing Guide to SEO.  But a funny thing happened.  Not one single one of those expensive products taught me anything I hadn’t already learned for free–not one of them!

We live in the age of Content Marketing, Inbound Marketing, or whatever you want to call it.  Many people are giving away extremely high quality information for free, just to get your attention, so they can sell you a real product or service.  You don’t need to pay a bunch of money for Joe-Average-Entrepreneur’s-Startup-Secrets-Snake-Oil-Course.  Real success stories are dying to tell you everything they know.

How can they do that?

It’s a time honored tradition in modern marketing.  So long as they have something else to sell, they give away valuable content free to earn your trust, interest, and attention.  I’ve used this method to build my CNCCookbook web site up to 2 million visitors a year–huge for the CNC Machining niche market.  It’s not that hard to do, but it takes some time, it takes some determination, some love for the subject matter, and the ability to write.  Personally, I think establishing contact with an audience via your content is a critical first step every startup needs to take–even before they have anything to sell.  I didn’t invent this idea–really talented marketing people did, and they’re out there today desperately trying to give away their best ideas to you!

Where’s the good free stuff?  Metaphorically, it is falling from the Internet sky on marketing blogs everywhere.  Seek out the most successful marketing software companies.  You know, the ones that really get content marketing.  There is a vast amount of great information pouring forth from their blogs.  You can even get materials a lot like the “marketing courses” these other guys sell by signing up for a white paper–no charge, they just want you to fill out a contact form.  You gotta believe marketing people who can successfully sell marketing software to other marketing people might just know a little something about marketing!

Here’s my short list of great blogs from marketing software companies:

KISSmetrics

Unbounce

I love split testing

MailChimp

ManageWP

SEOMoz Daily

Buffer Blog

Totango Blog

WordPress.com Blog

ComScore Voices

Get Elastic

Next, find companies selling marketing services such as SEO or other services.  Or they may be marketers that don’t sell anything to other marketers, but they’re just driven to write.  I guess I consider myself in that category.  I love to share information and ideas.  Again, there’s a ton of them with great blogs:

Analytics Talk

Chris Brown’s Branding and Marketing

Convince and Convert

Digital Marketing Blog

Futuristic Play by Andrew Chen

Heidi Cohen

Seth Godin

Quick Sprout (He’s Kind of a Big Deal)

IdeaLaunch

Jeff Bulla’s Blog

Marketing Tech Blog

Marketing Experiments Blog

SaaS Growth Strategies

Spatially Relevant

These people know each other.  They quote each other.  They respect each other.  If you want to learn from an expert, see who the other experts listen to.

Entrepreneur Resources abound too.  Get the word from fellow entrepreneurs and VC’s, but don’t pay for it.  You’ve got Hacker News full of from the horse’s mouth information by entrepreneurs and for entrepreneurs.  You’ve got more and more VC’s going on line to tell you what they think.  You’ve got tons of bootstrappers from 37Signals to SmugMug on down to guys like me, all telling you what they think and how they did it.  And they’re telling you all of that for free, or in some cases for the modest price of a cheap book like 37Signals or Seth Godin.

Stick all of those feeds into your RSS reader, then go find more.  Click through the links in the articles from these blogs–they lead to other rich sources of information.  Fill it up until you’ve always got a few hundred unread articles.  But try very hard to at least scan everything until you’ve got a good feel for what you’re missing if you don’t read.  While you’re scanning, start a ToDo list.  These are ideas from the articles you want to try and topics you need to research more fully.

Too much to read?  What’s the matter, you don’t have time to actually learn what it takes to be successful?  You need to be like a sponge early on, and none of those wanna-be-pay-me-for-my-sure-thing-courses are going to make that any easier than just reading this stuff that’s available for free.  In fact, they’ll make it worse.  They will also bury you in content, then they’ll send you endless emails trying to sell you even more content.  The difference is you are paying them your cash before you even know what you’re really getting.  Plus, you’re reading from one or a few sources and you don’t get to see what correlates and corroborates and resonates across many sources.  These guys I’m pushing above are giving it away for free and you can scan it and delete it if it isn’t of interest.  You’ll get the Gestalt view of it.  You’ll get a gut feel for how it all fits together.

What could be a more valuable way to invest your time?

Still not enough time?  You can add my own clippings blog, Firehose Press, to your RSS Reader.  Those are articles I culled from the Firehose–I subscribe to about 200 blogs–on marketing.  Articles that were good or that moved me to add something to my own personal ToDo list.  It gets updated less and less frequently because once I’ve learned the lesson, I don’t bookmark the same lesson over and over again.

Once you reach the stage where your ToDo list is getting long and you are skimming and deleting more than you’re seriously reading, you’ve lifted the plane off the runway.  Hopefully you’re reaching and audience and your next challenge is to get better at it.  You’ve now got an RSS Feed that’s filled with new ideas for your hopper every single day.  New A/B tests to try.  New tactics and strategies.  New ideas for content.

Good for you.  Instead of buying fish, you’ve now learned how to fish.  Go forth and be prosperous.  But don’t package up what you learned into some cheezy course or seminar.  You got there standing on the shoulders of others.  Help the next guy–reach down, grab their hand, and boost them up.

Posted in bootstrapping, business, strategy | 6 Comments »

 
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