How to Validate Your Idea & Launch to $7k in Recurring Revenue – Rob Walling – MicroConf 2014

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0:07[Music] today I'm going to be talking about my most recent app that I launched it's called drip and what I want to talk about are specific tactics that I took on validating the idea and then building the launch list working out the onboarding and launching and we hit recurring revenue of $7000 in the first month and there's a lot that went into it that's very specific that I haven't spoken about in the detail that I'm going to talk about today so even if you've heard me on an interview talk about this even if you've heard me talk about on the podcast I'm gonna be giving away like exact emails that I sent and

0:44some of the thought process behind that as well as screenshots and other things I'm so hope to make it worth your while I always like to give away as much as possible at micro comp because you know people have come here here to see the exact details of it so what's in it for you whenever I consume media audio books podcasts blogs I know that I'm evaluating like why am i listening to this again why am i giving why are you giving me 45 minutes of your time and so I'm gonna cover four topics today so if you are whether you're in early stages or whether you are already launched I'm

1:20hoping to touch on something for everybody to add to that list of tactics that you can take home and change your change your business so the first one is I'm going to give you an approach to idea validation it's the approach that I use that seems to have worked with drip it's not the only approach but I think it's a good one I'm gonna go into detail on that I'm going to talk about how to build your launch lists and this is perhaps the most common question I get because I had thirty four hundred emails on the launch list it's the biggest launch list I've ever had and I was kind

1:47and once AI was fumbling my way through up and I didn't know I forgot if I got to five hundred or a thousand I was gonna be happy with it and by the time I was thirty four hundred I was pretty impressed with where all the stuff came from so I'm gonna show you exactly where each you know where the five hundred came from and the next nine hundred and all that I'm gonna talk about the benefits of a slow launch and this is the term I use for instead it's kind of the opposite of what Josh Pickford talked about where he said he wants to

2:11he built launched 30 days we built for five months and then launched for three or four months like we were in just constant customer development and then actually launching in these waves and maybe them in a five month launch this is the opposite of that but we learned a ton from it this that is allowing us to start scaling up pretty quickly and then the last thing is onboarding I'm gonna walk through onboarding it can make or break your launch I can make or break your business certainly because it impacts how many people get value out of your app and how many people actually stick around and

2:44don't bleed out of your funnel so you know if even if you have an app now you're probably knowing all the people in here you're gonna launch another one in the next year or two a lot of us do that even if you aren't the onboarding piece I think works for will at least lend some insight for everyone here in the room so these are my kids it was Santa I just added that in because and then I is the Wi-Fi working

3:20insulting Hostel just like Christmas copy that - one - Romeo come 400 for the upper parts of a rogue site in this sector but so far no content copy out get eyes on anything

3:51so we won't watch the whole thing what they do is they they shoot the gates of Vietnam thing right they shoot the guy and they run up and it's a webpage and then they say code 500 the server is down so that is an actual a 404 page if you go to nosh n oh Sh is that what it was and oh Sh comm slash whatever it's bla right it W for for and that video is there I thought that was so cool I love stuff like that alright so I'm gonna cover I have four parts today each one is gonna be between nine and ten minutes

4:21so we'll be out of here in about 40 42 minutes and part one how I'm gonna talk about how to scratch your own itch and how not to scratch your own itch how touching on on both sides of that can can lead to to success so we all know I probably everyone in this room has heard that we need to start with problems right we you don't start with the technology and say what can I build with this maybe if you're an explorer you do but you don't start with your idea of what someone might have a really cool app idea right that's if you're here at

4:52micro comm self-funding you probably do that but I want to tell you a story about a friend of mine who started with the problem and it was a blog search submission he had a bunch of blogs he kept creating this is about seven or eight years ago and he built this service to submit because he had a problem every sec scratch my own itch if I need it everyone needs it right so he goes and builds this spends a couple months launches it actually gets a pretty good chunk of traffic and it works for him it works for several thousand other people but he was never able to get anyone to

5:20pay more than about a dollar or two dollars for it he made started making about fifty bucks a month from it and that was it and so after about six months of nights and weekends he really it wasn't a success there were some learning but it didn't work so he started with a problem he scratches on it it's just one story but that's what can happen and that friend was actually me so this is I built this in 2005-2006 let's go feed shot and I think it's still live on the internet I don't actually own it anymore someone bought off me but this is what I call the

5:52scratch your own it's fallacy okay it's not the scratching of an itch can't work but I think it works a lot less than then it used to I'll put it that way because a lot of us are in these same circles a lot subscribed a lot of our own itches and 37signals it worked great for them in 2005-2006 but we've all built now 900 bug trackers we've all built 900 CRM systems we've all built 900 project management suites now there you can always improve on it but scratching your own itch is it's getting harder and harder and so you know that you're in this this spread the scratcher and it's

6:26fallacy zone if you have a problem that you you desperately have this problem right I totally need to fix this and no other software fixes it the way I want it fixed very commonly heard with project management software you know exactly how you want to solve it you can't wait to start coding because that's what we do we build right we create and you don't validate the market so this is the piece the validating the market that I'm going to talk about here and again there multiple approaches to it but this is the approach that I use so problems this is an actual list this is the this is the mul sky notebook

7:00tattooed on my arm and it's the list of problems that got me to start drip and you probably can't read them from back there but top one is started with problems that startups have startups need blog content startups need an MVP creator you lean startup right startups need virtual assistants startup need email marketing startups need a sales website startups need to retain customers and each of those I went off and started sketching out well how so how would I solve that problem what are potential ways to solve these problems the reason I started with startups and by startups I mean self-funded software maybe venture backed the reason they

7:37started theirs because I do have some reach I decided for the first time ever I was gonna maybe have some reach into my market because apprentice Limon jobs and dotted invoice and wedding toolbox and even hit tail none of those were markets that I ever had an audience in I never had reach and so when I was starting from scratch on this realizing I was gonna spend a couple years on it I thought I might as well take a little bit of a competitive advantage for the nine years that I've invested you know to build the audience and do all that stuff so that that's what I started so

8:03you may not start with startups you may start with countertop installers and you may have to cold call we have to cold email you may have to cold it's a cold snail mail and that's okay you may not have reach into the audience but either way it can work so I was able to email some folk that I know whereas Robert Graham who's here when he went after whitetail deer ranchers he literally I mean it yeah he cold called and he had a hundred percent success rate of getting people on the phone of getting ranchers on the phone and being able to find out what is your

8:35problem he built software it was successful it wasn't until there was a regulatory lobbyist passed something that actually shut it down but he had a successful business and the white-tailed deer niche that he really didn't have any reach into he later wrote a book cold calling book net about his whole experience doing customer development there and I really recommend it Ted Pitts and Harry Hollander are in the countertop installer niche they did this same thing they had no reach into this market they sent out snail mail right cold snail mail and which is just crazy we would never think of that but but they did it

9:08and they pulled it off in there eleven years into a very successful business so it can work online obviously if you have to reach into a market and you know their problems it is easier but don't think that just because you have a problem because you talk to a few people who have a problem that you validated the market so once I had the problem I picked it out and I started writing code right away all right good someone did someone say no somebody was listening so market first approach this is what I go after right I want to try to find the market is are there enough people that

9:36want it and how am I gonna how am I going to find those people in the future right so my goal was to get to find 10 founders 10 software product owners 10 people really who wanted to who were willing to pay ninety nine bucks a month for one of those items on my problems list that you saw in that moleskin notebook now by this time I had narrowed it down I looked at each of them and realized like startups may want virtual assistants but it's kind of stretched it's a behavior stretch some people do some people don't I want to get into a market where I was doing too much

10:08education I knew that there was a lack of maybe a lack of of really good email marketing tools for startups because I a bunch of folks I had talked to we're saying MailChimp wasn't cutting it Aweber wasn't cutting it infusion stuff wasn't cutting it there's like no middle ground so I I felt like there was a niche in there somewhere so I went after founders price point was 99 bucks a month and I emailed 17 people over the course of eight weeks I did two at a time and I emailed some founders I emailed some info product folks that I know and I emailed a couple

10:42bloggers I kind of ran the gamut I was trying to just do research here this is exact email I sent and oh I'm gonna give you a link at the end you can download all these slides so you I know you can't read this but the four people that I didn't know really well I said hey question about an idea I'm working on that's what the subject line is and then I go into a question for you it's about an idea and I say I'm not really looking for general feedback but more of a quote would you pay X dollars per month for the service I can send

11:12over a more thorough explanation if you're up for it Cheers so this is the email I sent to Todd garland of buy sell ads and I also emailed other people in this room I mean I could Patrick McKenzie Rubin Jeff from ambassador just folks that I had at least some of them I knew pretty well in which case I skipped this whole pleasantry thing because Todd I you know haven't seen in a few years so I at least wanted to get in just want a cold email and with this big email people I knew well I just skip right to this one which I know you can't even come close

11:36to reading but at the top it says thanks I appreciate it as he had said yeah send it over and I talked through a couple things I said here's the idea and it's in one sentence and it's called courier at the time it wasn't called a drip and then here's the problem and it's about email marketing and then here's an example of it working because we already had a prototype working on hit ale that have been doing a little well for us here the benefits here's the price important here's the price because I don't want to know if this is interesting I want to know would you pay

12:05$99 for it there's a big difference between those two things and then the last question is that's the idea would you pay for it try it out and see what kind of ROI it provided even if you just reply with it yes or no that would be helpful because I know everybody's busy everybody replied with paragraphs of text which is really way more valuable than anybody's 99 bucks a month because the people I was talking to or a pretty knowledgeable and product pretty knowledgeable in yeah just didn't get something going so over the course let's see yeah so emails 17 and I got 11 commitments at 99 bucks a month took me

12:40two months to do it and all of the people who who said yes were software they were either said there were other SAS there was downloadable software all the people who said no were bloggers info product and there was one other and I forget but it was really quickly I saw what and the the reason people didn't want to buy was price they said it's not worth 99 bucks I can cobble this together with other tools people who saw the value in it really said 9 bucks is a no-brainer well that was right who I was going after right let's let's make that work so we started

13:18coding December when I say we I mean Derek who's out here it's in rails and I don't know rails so December 1st 2012 this is our github code activity thing and it starts on December 1st so a lot of code went into that that was my validation and you'll see later that it worked and that it was leading me down a path but I want to conclude this part with the lessons so the lessons are start with problems right I had the most kind list problems with an itch now you can do a mejores say it was a safari the sales safari amy who does it you can do

13:53cold calling book net like Robert Graham you can do customer development Patrick Velasco Fitz's he wrote a book on it there there are other ways to do it if you are in a niche it's easier to come up with it just by having some conversations niche down I mean anytime you hear me say anything and involves a niche right that's my whole deal is to start small get the wedge get I was going after software SAS and then we're gonna expand into into other things but for you you don't want to solve it for all contractors everyone who does construction you want to solve it for

14:26countertop installers you don't want to solve it for every rancher in the world you want to solve it for whitetail deer ranchers because then you can own the market and if you're one two people with no funding that's what you have to do you have to do that first in the email you want to describe the value you will provide not screenshots don't jump to code screenshots data models specifics don't get too specific and if I have a criticism of what I've done that email was too damn long like as I read that I'm like who the hell what these guys waited through this like thank you you know if I sent this to you

14:57thank you for not responding with an expletive because it was just a long email like I really should have boil it down a little little tighter I think so go for the value the value of drip at that point was hey I'm gonna try to help you get more conversions through email easy email capture there's some other stuff valium drip is not then there's this screen where you can enter a user's like no one cares at this point write a name a price if you don't name a price you're really not getting at the core of who is going to pay because if I hadn't named that

15:29price there were those other six they'd have been on the fence they would have said yeah maybe I wouldn't really have learned very much and I would have been going after bloggers and info product marketers and other other folks and then hold your idea loosely this was the last thing because as I received feedback I started to realize ah the idea is good but it's not exactly what people want and that was the valuable part right hearing back from from Todd Garland or from Jeff and Rubin and these guys who were saying yeah I could use that but it really needs to do this as well in order

16:01to be worth 99 it's like okay I can't be married to what I thought was a brilliant idea and even though we all know we're not supposed to be it's pretty it's pretty easy to be so I had to alert change it real quick so in the end we what we built was really a Minimum Viable Product no like buttons - there was no delete buttons you could create all this stuff and you couldn't delete anything you can barely edit things you know it was just all like really rudimentary but the idea behind drip is there's a JavaScript snippet that you can install in every the footer

16:32of every page of your site it gives you this little widget it's like a ole arc pop up either in the bottom left or on the ride or whatever and you can time it and say pop up after nine seconds and if someone closes it don't show it to him again for 12 days and all that's configurable so it's just a way to instantly everyone your site get captured without having to start embedding forms you know and then we actually helped we have a concierge service and this I'm touching on later because it's have been a big big win for us is we help folks we ought to give

17:00huge templates of you know here's five emails here's an entire email mini-course paste your content in poof you're done or give us a link to five blog posts we will paste them in for you for no charge poof okay and that's that was something the whole last section is on on that and then we do metrics all types of this typical metrics and then we track conversions and this has been a big one there's an actual screenshot of what drip does for hit tale and this was after a few months so drip is very successful with the hit tale customer base so it's made hit tell a lot of

17:33money just being an autoresponder sequence so this is why the initial scene came up and you can see why we built this thing for hit tail as a prototype and I said boy it solved the problem holy crap it's making us a lot of money code go code code but I didn't do that right I still went out and it was actually pretty hard to be honest to not go out and just start building the damn thing and derick up Sam when are we gonna build this when we're gonna build this and I was like we gotta get 10 or 11 people so that was the validation

18:03this next thing that I did I said derec boom start coding here's what I want and here's the idea and let's get a landing page up that was the next thing and I figured to be honest that I would get like I said five hundred to a thousand people and so the question I get is how did you get thirty four hundred emails this is the concentric circle marketing which I have talked about before there's I see it as concentric circles in terms of your reach or your involvement with them and so the first concentric circle is your audience so everyone here has even 100 or 200 Twitter followers most people

18:40here have a blog with even a few hundred or a few thousand visitors most people maybe some people maybe have a podcast some people maybe have just a network a mastermind group it's anybody who who you have their ear and you're not trying to sell you're trying to gauge interest and so what did I do actually my skip to the what did I do I'll do on the next slide but circle one is the innermost circle and concentric circles go out so that's what circle one is I got about 500 emails from that they did not convert very well because a lot of people were just like hey I just want

19:15to see what you're up to and that's cool right they wanted to see how I was marketing it and learn from that and that's fine but that converted so so I got 600 emails from circle to and this is your friends and colleagues networks right so you have friends and colleagues who have blogs podcasts Twitter feeds tumblr you know this anything Pinterest and that was another 600 and I didn't go out cold spamming my friends and saying can you do this for me but you'll see on the next couple next slides what I did and then there was about 500 that was pressed I'll talk about that that's kind of erratic 900

19:52from Facebook Ads which was really the initial thing I was going to do because I Facebook ads are pretty pretty good for this and then I wound up getting 900 from a powered by link in the bottom of the drip widget so when I walk through each of those briefly circle one as I said is my audience podcast blog micro Kampf just wherever else I just did a few talks and stuff so I've got 500 which actually to be honest isn't that many considering how like how many interviews I do and how many podcast and all that stuff and they convert it okay but so I but it was no I was gonna be

20:27talking about at creating content anyways I mean you're gonna be tweeting about stuff anyways so write it don't just write a post hey I'm launching a new app but write like something I've learned about launching this new app right and then that people want to read that everybody in this room wants to read something like that circle - like I said friends I was going on foolish adventure anyways I was going on cap Brian castle had invited me to come on his podcast and texting and product people so while I was on there actually they were asking it like I heard about drip what is and I'm like I don't want

20:57to talk about it yet because we're like two weeks into development but the more I talked about it the more traffic it sent to this landing page and then Patrick McKenzie was happy you know cool enough to mention it in one of his email blasts and I think he'd seen screens by then and then Brennan done was an early user and so he wrote it up just kind of mentioned in plan scope and so it was again I didn't really ask for these you could though but it was why not being about 600 out of that that thirty four hundred the press was an interesting one

21:24I don't press it's just not my thing I've never gone after it I don't see it as a repeatable scalable I'm just not that good at it but the more people the more influencers that I let in people would email me so as I was getting the list started building then I started emailing screenshots of what was going on I started getting these replies so when the list was about a thousand I start again like I'd send out a blast here's what we're building I'd get thirty replies that would be like oMG I totally want to use this if I didn't know the person that doesn't I don't

21:54know why I can't let you in now but someone like you know Brennan done or just someone that I knew and knew who would give it give me great feedback and who would probably actually use it and be willing to pay for it would email and I'm like well yeah of course once you just check out what we have it's pretty much alpha right now the more that that happened people just start started talking and so they have influencers in using your product early is a big pretty big deal and I hadn't thought of this before and in retrospect it's like well of course of course it is

22:24right yeah you want influencers in there but I didn't realize I guess how quickly it would spread so Mashable who have never pitched the next web Cris Leymah beta list is something you can do anyone could be ready just submit to bait a list and then Mark Marcus marker Marcus just posted I think I got two or three hundred emails from that converted so so but that was another 500 and then advertising this is really where I was going after Facebook Ads because AdWords too expensive right now and for what I was shooting after LinkedIn ads are okay but I mean I tested the crap out of the

22:59headlines out of the how many people in these different niches because they're kind of three different groups of people who could use drip it was the software and startup people it was the email marketing people and it was online marketers right you know SEO and digital marketing and that kind of stuff and I tested different headlines with each of them I sent them to all these landing pages I was just doing all types of stuff I got 900 emails but I wore of Howie Bolden probably is 900 is by the time I got to launch I knew okay here's who's gonna be getting value out of this here's who's most interested in

23:29which features and here's how much it's going to cost to reach them if I want to run more ads so I spent a twenty five hundred bucks to get nine hundred emails but more than importantly to learn about it the last one is this viral loop that I did not count on and to be honest this paid for micro come for me last year because Heaton Shah stood up and said if you have something with a UI you know UI component have a powered by link on your on your lower-end plans that people can get rid of if they have a higher plan and as that happen I was in

23:58the back of the room holding the mic for QA and I walked up to Derick and I said are you you know I said are you noting this down and he said I'm building it right now so because we both of us it was like how did we not think of this so this that's a big deal right 900 out of 3400 so if you do have a UI component there's a couple ways to do at a UI component on your users site or if you're sending out emails on their behalf some people put it in the footer like you see MailChimp do this you see in fresh books you know

24:24it's a fine line in terms of letting people buy out of it or opt out of it but there's there's it's been very valuable for us and that just keeps going red that actually scales because the more customers we have the more traffic we get in for that we and it isn't if it is an affiliate link so when so the person whose website they click through so let's say Brennan done has it installed on plan scope someone clicks thrown plan scope and signs up he does get a commission just so it's not like we're keeping all the money and they can get rid of it you can get rid of it on

24:55high plans as well like I said you can buy out of it the there's two valuable pieces to having this list one is the three four hundred people that you can eventually launch to and hopefully get you know a few thousand bucks in early revenue because that makes you feel really good and it makes it sustainable a space for someone's salary the other thing is it tying in to Sherry stock it's a few months into building drip though I started talking to more people and I had this I had this qualitative data right of these ten or eleven founders I'd emailed with but then we kind of went radio silent for a few

25:29months well starts creeping in doubt just starts going into the back your mind and you start thinking am I really building something that people want anymore have I just wandered off the track you have a few conversations hey you're gonna include marketing automation you're gonna include you know behavioral email you're going to include an Android app and you're just like no no no I'm no suck we're going down right so it's like there's no you start losing confidence so the other thing I did is I but when we got it's about twenty five hundred emails poof I sent him a survey and this was a little bit for my own anxiety to

26:00assuage it but also to confirm that I was still on track had quantitative dick way like qualitative data from those early get from that 11 I wanted quantitative data yeah alright I'm not swapping those quantitative data right I actually wanted true survey and true numbers see I know you can't read this it's a Google survey I put it together well you put it together in two minutes but it takes it 30 minutes to write it right you gotta be very careful with the wording and this is what I learned from it the first thing is I asked them what email marketing problem do you really hope drip will fix and I

26:32gave him very fixed choices because I didn't want people just fill it in a text box I was really trying to guide him towards things and I learned that folks wanted more website conversions a heck of a lot more than they wanted more leads right this thing's are similar they're related but they're not the same thing more conversions versus more leads it's different language I also learned that but email workflow like behavioral email was pretty important to people but we couldn't build it it's like a four month feature to be able to move people in and out of lists based on their behavior we're actually launching that I

27:03means a year later now we're launching that in two weeks it just it took forever to build but I saw how important it was early on I also learned well some stuff we were already building was gonna nail it for people I said anything else trip needs to do in order to crush it for you and 41% said split testing of emails and sequences BAM we had most of that bill another one was Analytics conversion tracking BAM that was a core you know piece of the product already and then 13 percent said they liked our cool pop-up opt-in form so I that kind of that was

27:33like all right I got this dialed in a little bit and then the other things were which email marketing platform do you currently use and it was like a huge percentage so only about 62% like use MailChimp but then everything else was just scattered and so I knew that integrating with MailChimp could be a win for us and the next question then was are you planning to jump wholesale to drip or are you gonna stay with drip I'm sorry to stay with like MailChimp and you just want us to feed leads into to MailChimp and 77 percent said yeah I really kind of want to stick with drip

28:04for a while I'm sorry stick with MailChimp for a while and feed my stuff into drip so kind of have their feet on both islands right they didn't didn't trust us as a start-up yet which is fine but this instantly meant we to do a MailChimp integration now this is where I stumbled a little bit here because now that we're at a place where we are more of a standalone app it's not great to basically be placed second fiddle to other people and have people always canceling because they say well everything's in MailChimp anyway so there's really no you know it's not that hard to switch and in addition yeah it

28:38confused users early on they said well what's the use case of this integration cuz why am i paying MailChimp 50 bucks and then now I'm paying you 50 bucks what more value do you add so they're add a lot of complexity there and then the last thing I asked was how do you spend your days because I wanted to find out who were the founders who were the email marketers who were the online marketers and then I could segment and say how did the founders respond to all of these questions how did the email marketers and online marketers and it was just one more data point so this

29:06actually lifted my spirits quite a bit and this is the second value like I said there's two pieces of value in having this large list number one is hopefully you'll be able to provide value to a lot of them and have a nice first month the second thing is that you can keep your confidence up and get some qualitative data points on what the hell should we build so I'd like to have intermissions in my talks because well just because and it's to kind of break it up so that I'm not just I spit out a lot of tactical stuff and it's overwhelming I know so anyone heard of Dollar Shave

29:41Club all right so I like this it's just a startup that did they send well you'll hear what they do but I like the way they did it and this went viral and it's just kind of funny hi I'm Mike founder of dollarshaveclub.com what is dollarshaveclub.com well for $1 a month we sent high-quality razors right to your door yeah a dollar are the blades any good no our blades are great each razor has stainless steel blades and aloe vera lubricating strip and a pivot head it's so gentle a toddler could use it and do you like spending twenty dollars a month on brand-name razors 19 go to Roger Federer I'm good at tennis

30:24do you think your razor needs a vibrating handle a flashlight a backscratcher in ten blades your handsome-ass grandfather had one blade and polio looking good pop up stop hand for shave tech you don't need and stop forgetting to buy your blades every month Alejandra and I are gonna ship them right to you we're not just selling razors we're also making new jobs Alejandra what were you doing last month not working what are you doing now waking I'm no Vanderbilt but this train makes hay so stop forgetting to buy your blades every month and start deciding where you're gonna stack all those dollar bills I'm saving you we are

31:05dollarshaveclub.com and the party is on [Music] so that video cost them like nothing to make that is an AK Alejandra's an actual employee of his I mean it David did it in a way you know it's like awesome and it was it was millions of views so that gives you a break from hearing about this for a minute all right two more parts this one's about the slow launch then we're gonna dive into onboarding and how valuable it was and what we did with it so this slow launch that I'm talking about comes in two parts the first part is more you might think of it

31:40as customer development it's like we're launching to one of the shortlist member the 11 that I got to say yes we're launching to one at a time and we're building what they need and then moving on to the next and finding out do we have everything yeah well we need one more thing okay let's do that so that you think of that more is like still building the product then the second part is this slow launch to the 3400 people because you can't just email 3,400 people and actually get them in your app and having a healthy experience at once unless you have a staff and we

32:09don't have staffs because we're self-funded so the keys to the slow launch are I think I have three here first one is to pick the right early customers this is huge if you pick the Rif I'd pick the blogger as my first early customer would have been catastrophic for me so you really have to figure out who is going to be easy enough to work with that's not gonna demand that's not gonna be really disappointed if I don't build if I don't build a feature that they want me to build who's gonna throw a tantrum who is is gonna have the patience to work with me for a month trying to kind of get on

32:45board because it can easily take a month to get your first customer on if you really have built kind of a minimum viable thing so picking the right early customer is critical second one you essentially become a developer for hire you are like a unpaid consultant and this is the way we did it and I don't know how else we could have done it Derek basically worked 40 hours a week just on this one customers feature requests and I work 10 or 15 just emailing skyping figuring out what we're building how we were gonna build it that kind of stuff and the third step or the third key is to rush but to take

33:18your time and the idea here is that you rushing as fast as you can through the features they're asking stacking them together it's doing sprints but take your time in getting the next person on don't be in a hurry to get customer 2 3 & 4 on that's easier said than done so I had this list of 11 and I picked a friend of mine Ruben here's here in the audience the reason I picked him is because he fit all the criteria he knows product I know he's not gonna be upset you know if we don't build something and I felt like he could help help guide it

33:49so we spent a month just listening to Ruben say he already has his whole email marketing thing he's already using MailChimp and we said all right here's drip and he looked at me he said dude you don't even have an embeddable HTML form seriously and so we had to build that right it took a week because all we had was our little pop-up we did you we didn't have a way to embed into HTML poof so we built that then he said wait you can't send broadcasts all you are is an autoresponder thing and I was like yeah well it was this cool idea and he's

34:19like oh I'd send broadcast like once a week okay so we got to build that that takes a week or two then he says I kinda need to pause something and I'd like to delete a couple of these things because again we had no buttons to do anything so we spent a week doing stuff like that and then he was still had enough people in MailChimp through some other reasons that we did we did build the MailChimp integration for him so that he could get leads through drip have him in drip getting a sequence and then pop him in to MailChimp for his that was kind of a

34:45central repository for email and then after a month we hit a big roadblock and a big rock so this is one of those times where you feel like you get punched in the stomach because you spent a month and you've already spent five months six months building and you get someone in you spent a month building everything they need and you still don't you can't get them using the app you're like for crying out loud I want one customer to be paying me but we couldn't do it and it involved a complexity he was using MailChimp's api to like send different welcoming rewards to different people based on landing

35:18page it was just too complicated we didn't even have an API and so at one phone call I was like oh my gosh we totally let you down and he said I think you should not build this and he said I think I'm too complicated not not build rip he said I don't think you should build this feature that I need I think you should find another customer it's not you it's me he didn't say that but I took the hit so so we did so we moved on and customers two and three were actually the first two customers have dripped we're a jeff from ambassador and this awesome picture of

35:50Brennen done look at that sorry Ben and that was a man that was the biggest picture I could find if you I know you look all goofy in it but anyways these guys what was interesting as we moved on and I was all downtrodden because I thought whoa we just pissed a month away but it turns out both of them needed embeddable HTML forms broadcasts the ability to pause things MailChimp and you know they were both using that early on and so we hadn't wasted any time even though it that first month was kind of a failure in my eyes as a founder so we do

36:26have to build a few things to get from there until we actually started getting all 11 folks on this is kind of our list from fog bugs of features we implemented so it's it's not it's this is why it's called this slow launch like you have to build if you're gonna start at this point and then I started sending the emails drip is ready for you that was the subject line and boy that's really small I'm gonna let you just read that later but it was basically to be honest I honed this email it got shorter and shorter and this is to John Pocket risk and it basically says we have no on

36:56boarding in this email it says that we have no on boarding but here's your three steps you need to go install the tracking code you need to go create your campaign publish it and then set a goal and you're done let me know if you have any questions right so this worked really well and it got the book of those people on boarded to be honest them the list by this time had grown up to 17 because people kept emailing me wanting to go on and people referring people so if we went from 11 to 17 and I think ultimately like 10 to 12 of those

37:25we're using the app and started paying for it so it was it was worthwhile now the pricing I dropped down to 49 bucks trying to think if I talk about that later if not you can ask me later because I don't don't have time to talk about it here but it was just a better it was a better price point the more I talk to people the one wrong turn I did take is based on a recommendation I let a blogger into mine early access and I know in the back of my mind that I shouldn't do this and it's not bloggers or great people but my app is not

37:54targeted the bloggers you know it just and I knew this from it I don't know why I'd do this but it was it was about a week's worth of my time on and off 25 emails back and forth he was like oh there's a bug in this it's like what that's not a bug you're not thinking about it the right way or technically you yeah you don't really heat a non technical so we didn't know what he was looking at and which is my problem right this is my problem is that as the founder but he wanted like deep WordPress integration with all these metrics he wanted an Android app in an

38:22iOS app to look at his metrics he wanted drag and drop template building and a dragon drop visual email building on and on he wanted me to build MailChimp and obviously as a non developer you just that weed the sweater used to write he's been using MailChimp so he wants very sophisticated tools and I said boy that's like a year that's probably a year for us and be hiring other developers so the what I I killed some time on this one so this is where you can coming back you can easily make a wrong turn and I'll be the first to say I made a lot of mistakes like this

38:53during this whole process I don't want it to appear like I'm in hindsight I can tell you I did some things right but I did probably just as many things wrong other benefits kind of side benefit is I had a literal FAQ I didn't have to make up any of the FAQ because I kept getting these questions over and over they were frequently asked I got a via email via these 17 people and so all this is is a text talk of people's they would email me I'd answer it and then I poofed poof into a text doc boom boom and so by the end I had

39:21like 12 questions I was like everybody's been asking these we need to make our onboarding better and there's is going on the FAQ so that was kind of cool so the lessons from this this is the member this is the first part of the slow launch and the lessons are to pick the right early customers that makes all the difference to pick early customers with similar needs right who are kind of if you have a lot of software founders they're going to need some other things you get a blogger in there their needs are probably going to be different go high-touch I was probably 22 well in

39:52the end it was probably 25 hours a week I was spending on email and Skype to onboard the 17 people over the course of about 60 to 90 days very very intense and then naming your price upfront I already talked about so but when I would email I'd be like hey it's right for you it so again it's 49 bucks a month we're not going to charge you now let's wait till you see value if you never see value you're not gonna pay if you do that's it so I had people with unlimited trial lengths basically don't charge until a customer receives ample value and this is in that early list right

40:24this is not the mass emails because then you have to have a controlled if you have 300 people onboarding you can't do this this is that first 17 at your first folks that have opted in your customer development people and the last thing is save correspondence to build FAQ and trial emails a little bit of an aside but I I was surprised at how much of that I reuse this stuff that a hand wrote and then said oh this is perfect for like my whole trial email sequence all right one more intermission then part four and we are eating dinner who'sa calm I'm a bit of an iconic West

41:04a rebel I rejected the dogma of other languages and how things are supposed to be that's why I use Ruby on Rails sure I could I could program in PHP but I could also use a sundial to tell me the time people ask me if we have like a programming schedule I'll tell you a programming schedule you ready it'll be done when it's done [Music] boom we add lose I have a model when it comes to programming fast good and cheap you get two out of those three and the two have to be fast and cheap we're all on it good booze and calm is um it's

41:49kind of like the office it's a bunch of little web snippets that are like that it's a whole company that they're like making fun of the liens and the startup stuff so it's pretty cool all right oh goodness all right I'm gonna that's five twelve so I'm gonna move a little fast on this one this is onboarding and this is one of the keys to how many people we actually got in and got value we're able to get value out of yep so this remember the setup email I sent to John earlier that was basically just hey here's these three steps so we're not have onboarding do this do that do

42:23this that was our onboarding like I realized those are the only three steps someone needs and I started realizing as I thought about this I took huh MPA the minimum path to awesome that's what you have to find the minimum path until someone gets the awesome experience of holy crap I just got my first person who purchased or I just got my first email subscriber is what I later learned that was the awesome experience for a lot of people and so some people have a more complicated one some people have a very very much simpler one but with drip which is you know think about MailChimp

42:59what does it name and path the awesome and MailChimp you kind of log in the first time and you're all disoriented I don't know you don't know you you don't really know what to do right waits rip I said we got it we got to get you down and I'm gonna have two steps first thing is we need to encourage people to install the tracking the JavaScript snippet because without that we're really not worth much because you don't have analytics you can't embed the form you can't do a bunch of stuff second thing is people don't get value until they have a few emails that they

43:25can send out and build this course so that people can can actually publish it on their site and say hey sign up something to encourage folks to give their email address and so with these two steps in mind and the optional third step of setting up a goal like a purchase goal this is what we did and what you'll notice is when you log into the app the first time as soon as you enter your credit card poof you're here this is the app and there's a blank slate behind it right there's a blurred out image that's just gonna show you what you're going to see later and we

43:56have this big this big div in the center pop-up and then we have this thing in the upper left this whole header is all about onboarding and I received a lot of compliments on this approach actually and Josh Kaufman yesterday was very kind he said yeah I'm in drip and I'm I'm not finishing some of the steps because I just want to see what emails you're gonna send me next I want to collect them like I want to I want to see you know how you're approaching this and so you know if you see what this says it says you're all the way in the upper

44:22left says you're in setup mode and there's a red X and it says create your campaign you can really do two things you can learn more and you can do it now so learn more is a video screencast of me talking do it now is we take you to the page to do it and that's what same with these two buttons they do the exact same thing down here you can click around the app if you want you're not like locked into this page but it is kind of a wizard walking you through so as you start to go through your name your campaign you give it a

44:46title and a headline and then you get at this point and this is where it's like alright son you need some emails and it's like this is where everyone started bailing right so this is where we came to the concierge and we said some people want to do it themselves let's give them as a bunch of templates like entire sequences where they just paste in their content five-day sequences a month sequence blah blah blah let's also offer to do it for free for them I have a support guy taught him how to do it if you send an e-book to us or you send a five blog links that are kind of related

45:16we build the course for free started charging for it early on that was not a good idea right the lifetime value is in that getting them using it not in this upfront fee and then so the free concierge is they're choosing a blueprint is the middle one and then totally custom I pass along my cost I pay a copywriter 500 bucks totally custom email course and they build it so this is the idea is to like go one step how do you go one step further than MailChimp right MailChimp is not doing this they're big and they're very successful but how can I be different and this is the approach so this gets a

45:49lot of people past this step because a lot of people just say well yeah this have you build it you're at blog content it's a piece of cake I don't have to do anything and those are some of the templates that we you can take a look at them later and then if they do that may get it live then JavaScript comes next you know you see now that one's clear and then this little red X is basically the JavaScript snippet saying install that and then once they get done the header goes away and they can actually use the app so that's the basic aspect the basis of the onboarding I do have

46:22one tip if you're in if you need someone to install JavaScript tracking code integrate with segment IO because there's quite a few people using that how ins if they're using if your customer is using segment at i/o and you've integrated with them then installing your app is one click in the segment dot IO dashboard right because they take segments that iOS code and they put it in their footer and then they'll just settle out and activate drip and hit tile on Google Analytics and poof poof poof poof poof and it puts it all there it renders it out so segment two that was pretty cool I

46:51both hit tail and drip integrated if you're installing tracking code it's a good idea last couple things trial emails this is the raw text from a couple of them but we basically say the same thing that we said in the app but we start saying it in the email with a little bit of a value proposition welcome to drip this is a welcome email right our goal I don't go on and say hey welcome to drip get signed up or you know get this thing going I say our goal is to help you make more money but enabling you to easily create an email mini course I don't know so first thing

47:21is here's the value this is my goal and then it says you know it's setting up takes three steps and it's the same it's the two steps plus the optional that I've already mentioned so you're basically saying the same thing again a couple times so the lessons from this part are to determine your apps minimum path to awesome guide your new users through it using some kind of a wizard approach some type of something in the GUI so they're not abandoned when they sign in and then do it again via email right which is really what what I've done here and finally to consider a concierge you can swing it at all it's

47:55made a huge difference and this is the results like by the time we were done getting thirty four hundred people on sixty percent of them were activated fully activated they hadn't so we got 60% of trials to install JavaScript and get a five-day email course live I know if you realize how hard that is but it's that's a very high number for that kind of effort so it's good I want it to be more of course but it's pretty good so last and I got two slides remaining maybe the slow launch part two the last part of this which it was funny is the hard work was done before I emailed the

48:34first of the thirty four hundred people right I have thirty four hundred people now to email but I know that a huge chunk of them are gonna be able to get on board it automate it because I've done all this hard work with the first seventeen so by the time the launch came the hard work for us was done so it slow launch part to wait until onboarding is working wait until you have at least a few people who've done it divide your list into cohorts so I had thirty four hundred you may have to say you have a thousand take ten to twenty percent of them send that email sequence

49:06get him on board you send this launch email sequence with a time-limited discount this is my formula I've been talking about for years when you get the slides that link launch email sequence our thief it's a four sequence four email sequence the exact emails I sent for drip and has all the images and all the stuff so you can see how I did it and I'm probably gonna take that down in about a week I haven't published that anywhere and I don't really plan on it so being a micro conf you can download I think it's a big zip file of Word docs that's what it is then you wait trial

49:35length days trial length is 21 days whatever 14 you wait because you got to see who gets through where do they have problems and then you repeat it until your list is done and that's that we did three to six hundred people at a time we on-boarded thirty four hundred people not all of them honestly but as many signed up over the course of trying to think of that took three months I think it was three months to do that and the result of course was seven thousand bucks in recurring revenue in month one I robbed Erica market vibe I'm so excited about your talk because I feel

50:11like we're twins in a way it's weird we just launched with the 10 customers thing and we did it by invite only we're doing similar customers I was taking frantic notes the entire time so I really appreciate everything that you said and I just sent our CTO a message and said we need to integrate with some segments ago so I was wondering and this is this is I guess kind of a weird question and maybe an obvious question but we have three people currently full-time with us and we have one says that makes enough money to pay one person full-time but not three we've tried to close that gap with funding and

50:46do the same kind of slow launched and I was wondering how did you work it out with your employees so that you could pay them while you did the slow launch or did you not pay them I'm all about Derek wouldn't have been happy if I didn't pay him you know my approach is like long-term and repeatable like that's kind of been my whole thing is a few thousand bucks a month in two thousand five and just build that up what paid Derek's salary and my salary during this time was was hit tail was my last project so for me I like to eat his words self-funded I am self-funded I've

51:21funded myself from my previous efforts and I started with hip feed shot that made 50 bucks a month and I put that and then I gotten an invoice that made two thousand bucks a month one to two thousand and then I leveraged that and it you know i'm sanna and i leveraged each one so I did pay him it's because I had a previous something so yeah I was curious about of all the people that you had sign up whether or not they actually stopped putting their feet in both camps of mayochamp bands Trevor just went whole hog for one versus the other yeah you know I don't have exact data on it I

51:56know that there are there are still people doing both my at this point we aside from like fancy email templates and drag and drop and Android app and iOS a bunch we don't have but we have the basics so we have a lot of people who have stopped doing the MailChimp thing because it's just you know easier to stay with Europe but we all we do have people doing both I got to be honest I hope to fix that but you can't fix it on day one you know Sam like day one you have a four-month-old product and MailChimp's like nine years ahead of you and so and again I'm not chasing male

52:28super actually going in the email marketing automation to be honest we're going after infusionsoft office autopilot that's that's our next market and that'll be in the next one to two weeks but yeah it was it's a good question it definitely was a bridge I don't regret building the mail we build MailChimp Aweber a couple others I don't regret building those because it allowed people to feel more comfortable using drip and not feel like they had to you know they couldn't stand on both islands I think but I think it's a we'll leave them in but it was more of a temporary thing I don't think we're gonna build 50

52:55integrations mad Mimi and all these other things you know how did you figure which price you would set for your products especially since in your first initial eleven people you are at seven was at seventeen and in turn at eleven he said you wanted to see what response was and then some bloggers would say eh it's not worth the price but maybe it would have been five people would have been okay with a 99 but not the rest there you could have tweaked it I'm just curious yeah so I did I you know Josh Pigford said earlier 99 do you want a nine or a $99 customer and so when I originally

53:31thought of drip I said I want an app I've already done hit tail write which is 10 20 40 80 dollar price points and I realized that wanted the bottom end to try to be a hundred that was my goal was to do my next app bigger and which means the bottom end should be larger so that was my initial goal the further I got into it the further I realized I'm gonna need like a year to get there so ultimately once we've launched this marketing automation people will be grandfathered in who are using it but we're gonna raise prices because then it's worth it because all the other

54:02we're gonna have the same feature set or very close to things that charge 300 and up so yes I want to get there but I realized I was trying to jump the gun and say hey look we coded for five months and I want to charge everybody 99 bucks it's not a no brainer price so that's why I backed off actually had a conversation with Patrick McKenzie and a couple other people who I trust I'm in two masterminds and I asked everybody and we batted it back and forth about the pros and cons and looked at everything and eventually I decided it was a gut call but it was the

54:29feedback I was getting was 99 bucks it's not a no-brainer and you're not you'll have a name recognition yet you know and so I said all right yet right you don't have it yet so that's what we're working for how did you iterate on each new launch that you did yeah and was there something or a few things specific that you learned as you went right converted each new bit better than the last yeah that's a good question so you know you have this thirty four hundred people and then you send an email the three hundred you look what happened what do you change right for the next

54:56300 think there I made some changes but it was nothing so big that I think it made a difference to be honest I didn't split test if I had more time I was in Europe for a month of this at micro conf Europe and if I had more time I would have split tested emails and done all that I didn't do that to be honest yeah and we did we did update the onboarding because some people got confused so it was more user feedback stuff where it was like oh do I really need to do this third step we had goals built in you have to enter a goal you have to say how

55:30much you're gonna get if someone buys something and people were like only 10% 15% of people knew what that was so we did make that optional in the end and really toned it down I got a couple feedback from a couple people who said you know your emails are kind of like feel like you're pushing your agenda rather than trying to help me so I toned the verbage instead of saying get on board and get on boarded I was kind of like hey drips here you know it can do this for you so I did stuff like that but I never I didn't I wasn't super

55:57analytical and a/b split testing about it which normally I would be but yeah just on this one there's only so much time you know yes was the last question about the where you segmented the the emails out to the customer 10 to 20 percent yes and it was whether I changed him from launch to launch I tweaked some little things the answer was but I didn't make dramatic changes well actually that was my question so okay cool thanks awesome talk how did you come up with the budget for your Facebook Ads to get those 900 emails I didn't come up with a budget what I said was

56:31I'm gonna go and spend a couple hundred and see how much I have to pay per email and then do a judgment call and I've ran out you run quick math on it right and I got to whereas between three and four bucks per email collected so they click through and you pay so much and then wherever it was converting and I started doing math of like alright if I get thousand people from Facebook I'm gonna spend three to four thousand dollars this is little under three bucks right cuz I think I said I spent around 2,500 but let's say I spent three grand on Facebook Ads if I'm charged in 49 bucks

57:02a month most people no lifetime value is gonna be between 6 and 24 months even early on and so do quick math you don't have to convert many of those thousand people to pay for itself so as long as you have that self-funded bucket I was spending as much as I could as much as I could manage and still get the app done I was just crank in the facebook ads that was as much as I could spend at the time so maybe want one more it's pretty well yes alright so do you have other ideas about a viral loop that you mentioned about hard wet grip what what

57:32other methods are there I don't know because I I'm not a big viral like that's never been my I the tool belt right things I know and virality has never been one so we literally stumbled upon it when Heaton said it we implemented it it worked fantastic I would say go to someone like Andrew Chen you know go to his blog and read about it alright there has to be someone if you heat and who knows a lot about virality and who could a viral loop Heaton said there's a lot of content online in most cases you don't need it what you did with the powered by is as good as it gets or in

58:06the bottom of an email or something I mean yeah I don't know that have more on it because I just haven't it's not my wheelhouse you know it works great but I yeah that's what it is that's it a thank you