More Lessons I've Learned as a Serial Entrepreneur – Hiten Shah – MicroConf 2012

0:00I tweet and all of you tweet you guys better be tweeting and if you don't know what the internet is I'll let you know what it is right now so it's what HS em conference HRH meeting and the username and password is both micro and micro in case anyone missed that because I didn't announce it earlier did you know you did okay well there you go again anyways so Jason talked about honesty so I'm actually gonna lie to you guys the whole time all right I got to say though this is one of my favorite conferences for a number of reasons and I'll probably mention them throughout the talk and

0:54everything so I've been doing business for nine years on the web I have similar to Jason in some ways I have a perspective that most people don't I built a consulting company to millions of dollars in revenue I've built a bootstrap company to millions of dollars in revenue and now I have a venture back company that's making millions of dollars in revenue but it still isn't where it needs to be because it's venture-backed and vultures owned my life and no I'm just kidding but really you know I get a lot of questions someone was asking me earlier about should I raise money should I not blah blah blah you know it it's so

1:27individualistic but at the end of the day this is the conference that excites me the most because it's people that are actually building things on their own without anyone else's money and that's that's really commendable so I actually would say let's let's let's clap about that that's really good that that's actually what makes me wake up in the morning and and get really excited is the fact that I've done that for myself and I actually like helping other people do that yes I I'm in Silicon Valley and venture backed companies are everywhere etc but this is really what's exciting to me another thing that's exciting this is

2:06probably why I wake up every morning is that this is a quote I truly believe I want to hear from all of you I don't care if you email me ten times each I'll do my best to respond it might be one word or one URL in a lot of cases I love helping people it's something I learned from my father it's something that you know is it's kind of who I am and what I do so this is my favorite quote it's on the bottom line emails and help me help you so I'll get right into it now just give you guys a quick overview half the

2:37talk is going to be just entrepreneurship lessons across all three companies and then the other half is going to be more lessons learned on how to sort of do a little bit of marketing and scale kind of really early and understand your audience and all that kind of stuff that way I can give you guys some tactical things hopefully give you those three things just in my talk so that everyone I'll steal everyone else's thunder no not quite but anyways the the big thing I've learned over these three companies is embrace the roller coaster it is a roller coaster you're an entrepreneur bootstrap is sometimes you know you might think of

3:10it as a little bit harder because you know your credit card is maxed out and all that kind of stuff I think there's a speaker that's going to talk about maxing out credit cards and stuff I've done that too just for dumb reasons not as good as probably all of you anyway I actually did it in college before yeah I had a target credit card with like a hundred grand and credit line and I maxed out anyways I came out of college like a million dollars though so anyways so the roller coaster embrace it it will it should it should motivate you it should motivate you that you have that

3:42ability to control your whole life your whole destiny and do whatever you want to do I started recently talking a lot of people that you know have certain aspirations they call them crazy ambitions and most of the time they talk about these crazy ambitions to be able to go on a trip whenever they want to be able to work one a day only answer an email for like two three four weeks straight things like that and all this is possible if you're a bootstrap entrepreneur but there is gonna be a rollercoaster and there will be ups and downs but at the end of the day there's a lot of light at the end of

4:13the tunnel I'll be the first to tell you that next this is one that I you know I think it takes a lot of tuning and a lot of learning to get to but really it's it's to me life is all about learning how to ask the right questions and what I mean by that is I've asked questions of people let's say my investors and it was a wrong question to ask them I shouldn't have asked him like they they weren't gonna help me with that and in fact I made the wrong decision because they told me something and I took it and anyway so that's my most painful one of

4:46recent memory but overall you know this is asking questions of your customers asking questions of your partner's asking questions of contractors that are working with you this is one of the key kind of lessons learned that I've had which is ask the right question to the right person at the right time and being able to do that based on what you actually really need to know right now or need to understand I think is really critical and would be in my top kind of three so first is embrace the roller coaster ask good questions and last and this is not least this is probably the most important one and all of you in

5:18this room I know have some aversion to this the only reason for that is I talked to a lot of entrepreneurs and they all have a version to this and I'm looking at you damn anyways I'm looking at all of you on this one so your success requires focus I would say that if there was one thing I would tell like you know my kid as he's growing up if he wants to be an entrepreneur or anybody that's you know in high school and they're like I want to be an entrepreneur I would say start learning how to focus now and I mean with everything in your life focus your time

5:45focus your energy focus your efforts focus your projects so that you only have one and that's why there's a lot in there kill everything else and just stay razor sharp focus I've worked with entrepreneurs for there's an entrepreneur specifically that runs a sort of web design agency has a bunch of software products as well very common kind of theme think Dan knows talking about and this is the one thing I've been working with a lot every time I see you but like dude where'd you I do what did kill that thing what are you gonna stop that when you gonna stop that when you're gonna focus on this one thing and I think now

6:19he's finally there about eighteen months later of me heckling them everyone one two three months so this is the number one lesson that I've learned which is that when I focused magic happens and magic is very hard you know to make magic happen or you know another way to look at it is when I focus I get lucky but I'll talk more about that in a second so continuing on this team of just across all the companies I've started my lessons learned let's get a little specific so I'm gonna start with a venture back one because that's the most uninteresting one to all of you and

6:47to me in some ways anyways the the big one is architecture company Jason talked about company culture and things like that this is what I mean by this think about who you're hiring why you're hiring them and and this is this is a little bit more than even like you know I'm gonna hire employees or anything like that you're working with partners you're working with contractors it really does matter you know if you value honesty is your number one thing that they're all honest with you as well it's all it's one of the things and I call it architect your company because that you're building companies and that's

7:16that's what it is this is like and this this to me the number one thing is actually culture so I'm gonna give you a book recommendation this is a book called tribal leadership and it'll help your architecture company I don't care what kind of company you're running I don't care if it's just you eventually it will not be just you if you have contractors they matter as well this is this is the only book that I've found that actually can give you a practical understanding and a framework of thinking of how to actually build a high kind of a company that thrives I guess as they call it and you have to work in

7:50groups to make that happen so the first book recommendation be tribal leadership it's definitely very research-based they studied a lot of companies they have very good stories in it but at the end of the day to give you a framework of understanding where you're at in your company with all the people involved in it or your own thinking and kind of where you need to go to really build something that thrives and sort of you know works on its own and I can't you know have a talk without talking about metrics so I'll I'll talk about metrics for a couple minutes so basically another lesson learned

8:20especially with KISSmetrics for a number of reasons and some of my other businesses is basically you to focus on the metrics that are actual things that actually matter to your users your customers your people things that are not like pageviews those will actually kill your business if you're just measuring those and they go up into the right or they go down and you're thinking that that's going to have an impact on your revenue for many of you that run software companies probably know that even ten twenty thousand unique visitors every month can result in millions of dollars in revenue every year at least I know that I've seen that

8:56and it's not by focusing on that volume that's going to get you that revenue it's actually by focusing on the things that matter to you that are actionable to your business so I've got a little link there my presentations on SlideShare I tweeted it earlier with the hashtag you guys can follow on click on it whatever you want to do I didn't want to get into this too much because this is just a really big strong lesson I think there's not enough people talking about this yet but I'm sure there will be and next up would be another book recommendation now this book I'm recommending it for a different

9:28reason than you might think it's not the same as like tribal leadership or some other books I'm gonna talk about it's a have any of you read it yet okay a lot of you okay two hands I like that okay so that means it must be good so I think it'll help you understand why certain entrepreneurs have been successful and give you a framework of how to think about your own kind of business and this Lean Startup isn't just for bootstrappers that it isn't just for venture venture backed companies it's for everyone it's not lean means efficient not cheap although all of you pump sure want to be frugal so that's

10:03good anyways I highly urge you guys to read the book if you have not experienced kind of understood what this Lean Startup thing means at its core and on that note this is what it means to me this is a diagram Eric Ries uses and he talks about the process of going through this loop as fast as you can as oft as you can it's build measure learn I'll talk more about that a little bit later but overall the idea is that in any organization when you're trying to accomplish a goal you want to go through this kind of loop as fast as possible and into

10:38so that you kind of are more successful and you're actually building things people want in a lot of cases things people want to buy and the Eric Ries lovefest continues but basically you know this is this is kind of I think a very very telling quote and really sums up the Lean Startup to me which is basically the only way to win is to learn faster than anyone else faster than your competitors faster than the next entrepreneur you know sitting right next to you whatever it is and that's that's kind of the guiding principle that I would use to run any business at this point which is how fast can I learn

11:11it's on how fast can I make money it's not how fast can I get ten thousand users it's actually how fast can I learn and because that learning is what really causes you to achieve kind of the great stuff you want to achieve so now I'm going to talk about how I learned and how my co-founder and I decided to kind of spend our money and our time when we started our first company so her first company was called ACS we started it in 2003 it's basically a consulting company and what we did was basically SEO social media marketing and a lot of internet marketing and this was back in 2003 the

11:45way it started was I got out of college I went to UC Berkeley state five and a half years made made a bunch of money while I was there running a bunch of offline businesses and my co-founder who's who was I think at almost at the end of high school at the time so he was like a senior had one customer paying him thirty five hundred bucks a month for SEO and there's like a local customer and he actually met that customer in like an improv college class or something it's really weird anyways and I got out of college I didn't know what I was gonna do next

12:15and I liked the internet I didn't know that much about it besides having a computer you know since I was eight years old and so we basically started the company and since we started that company we realized really fast within the first year that we were not technical I'm not technical I kind of faked it now he doesn't and we needed to learn how to build software because we wanted to build software we're gonna run software companies because the internet was where it was at so what we learned the hard way is that it takes time and money to learn and what I mean by that is that

12:50you know with from Eric Reese's quote to kind of my own experiences prior to even understanding kind of what he was talking about or even knowing him for me the way I've made advances in my life whether it's in my businesses or even in my personal life or whatever is by learning as fast as I can as much as I can but really staying focused on what I want to learn at any given time so what we did in our consulting company is we actually I think the numbers somewhere around between 70 to 100 but essentially 75 plus contracts what I mean by that is not people paying us it's us paying

13:23people so we you know started making you know several million bucks and revenue pretty fast because it was consulting and we built our brand and all that stuff and so we spent about over a million bucks had dealt with a you know close to 100 people where we hired them so this was web designers we'll have developers anyone we could find to work with to try to help us learn and help us build stuff this is how we learned because we were actually making money at the time if we weren't making as much money or our businesses weren't scaling I would have probably started learning how to program and my co-founder

13:52would've probably started learning something else likes like more sales tactics or something like that based on kind of how we divide and conquer our businesses and this has provided us with infinite gain meaning I'm here today because of the effort I put into learning by hiring people could easily started writing code at that time instead of hiring people but we we got into this sort of IV drip that I'm sure a lot of you understand which is the IV drip of consulting which means someone will pay you to make you know someone will pay you and you can do stuff for them and it'll make you money but that

14:24doesn't mean you're furthering your own life or your own kind of progress as a entrepreneur and so I would urge all of you to kind of think of think of this think of ways to learn it doesn't have to be with money that was just my example it can be with a lot of other things so big lesson here for me it was it's always you know it takes time I would almost say it takes time or money to learn but really time and money would be a better way to look at it another thing was make lots of friends so I can't even I mean this seems very

14:52obvious to people but these are these are three people that we made friends with back in you know many years ago now this is Matt Mullenweg who is a founder of automatic WordPress o Malik who is the founder GigaOM and Jeremy Schoemaker who runs shoe money comm I'm sure all of you are familiar with one or all of these guys and this is just this is not this is not representative at all there's just a ton of people we know and the reason we we know all these people is because we we always looked at ourselves as wanting to help others and as a result we've helped

15:20all these people and they've helped us back and this has resulted in kind of things that you know I can't even describe in terms of what what those relationships have done for me and my co-founder and my businesses and all that kind of stuff all these guys are personal friends I've got a lot of them now but but the thing I would say is like it's very easy to get caught up in hey I'm gonna go you know sit down sit on my desk and like just work on my project work on my business and that's it instead I think it is important to dedicate some of your time to either you

15:49know whatever way you want to do it maybe you don't help others but you start you know commenting on their blog or you get engaged with something that other people are saying it's really about making friends I think you know we're still very early in the internet era if you want to call it that and there's there's a lot of you know room a lot of people and a lot of a lot of people are open to talking and and all that stuff so that's a big one so with one of those friends we decided to start a one of our kind of I'd say the story is about 20 or

16:15so different ideas that we failed at and one of them was called fruit cast I've talked about it before I'm going to talk about it a little bit differently here with the more lessons we learned doing this one and so with this one it was basically a podcast advertising network and this was when there was a oh do and before a lot of the itunes podcasting stuff really came out and so we were trying to connect basically podcasters with advertisers and you know use use that kind of use give them both a platform to essentially coordinate making ad money and you know launching their podcast and marketing him in this

16:51case though even Michael Arrington knew something that we did it about our business and really at the end of the day our customer so this this lesson I would tell you guys that we learned the hard way on that business the primary lesson was you got to focus on your customers so what what he knew about our customers was that they would not pay our prices and we didn't even know that and what I mean by that is we had ad Tai's errs who were paying for who we wanted to pay for these advertising these podcasts and they they had a you know the amount we were trying to charge

17:24me they wouldn't they don't even pay on radio ads basically so there was no business there we didn't talk to that customer segment we actually only focused on one of our customers which was a podcaster so we built a lot of tools for them instead we should have also talked to advertisers because without advertisers that whole business doesn't work so focus on your customers I know everyone says it but when you go through pain like building something people don't want spending you know we spend about 6070 grand on that project you know this is what ends up happening is it fails its debt so this was

17:57basically how it died our car found our friend that we worked on with it and we were talking multiple friends on this one but was waiting for he was hoping we'd find some magical combination of events that would jumpstart it have you guys ever heard anything like that before from anybody like they're waiting for magic yeah so magic doesn't happen you make your own luck and you do that by having friends you do that by a lot of the other things I mentioned you also do that by focusing but you know in in that business like we were all just building something we didn't really think about the customer

18:31we we thought you know we knew their pains because maybe some of us had you know done podcasting before or tried to do podcasting but at the end of the day we didn't make any luck there and there was no momentum there's nothing there and and everything that I've done that's been successful or everything I've seen other people do is they end up creating this momentum when they focus when they really think think about how other people can help them and all those kind of things and they end up making their own luck and this is just a kind of something that every entrepreneur doesn't really need to think about but

19:02just needs to understand that this is how luck works you make it you don't get it and this was the the brand and the company and the logo of our hosting company and we we ran some other experiments after that we also built like a buzz tracker or social media monitor system with the same brand but first was our hosting company and on this one we actually never went live with a single customer and we spent a million dollars working on it and it was because we were so hung up on the solution and so the story here is my co-founder Neil actually stories pretty complex but we actually ended up buying

19:42a house in Texas the data center was in Texas we had a whole bunch of racks and servers all over that house in the garage and everywhere and we had air conditioners and there were people living in the house that were working on it and we got into the situation with one of those basically contract houses that we did that we contracted with if we decided to do this idea with them and we were you know my co-founder Neal ended up flying down there and learning all kinds of things about switches and networking that he doesn't even care about anymore apply doesn't want to talk about we bought you know somewhere in

20:12the mid six figures in terms of servers and stuff like that product never went live we designed the website we did all of that kind of stuff but what we really didn't think about was the problem we were really trying to solve I mean as all of you know hosting is a crowded market as Jason has shown there's problems there that can be solved if you're focused and honest apparently and and so we didn't do that we just kept building and building and building and we didn't think about the customer we didn't think about the problem we're trying to solve for them we just thought it was such an awesome

20:41idea because all these other people were making tens of millions of dollars on hosting and that was what drove us which was bad so in contrast to the millions of dollars we spent on contractors and trying to learn this was not learnings this was three years over a million bucks burned and there's infinite loss here yes we learned but I would say that out of everything I've done this project wasn't when I learned the least on and that's because I didn't really know what I was trying to learn we were just trying to pour money into something and you know we thought we'd get lucky so

21:13this is that's the first half that was about just lessons learned across everything and I know it ended on a painful note for me at least maybe not for all of you because I don't think any of you have dreams of starting hosting companies besides Jason anybody else starting a hosting company or thinking about that right now anybody else have one ever had one thanks possible uh-huh so Jason you're a lone ranger there I like that that's good anyways so I'm gonna talk about crazy eggs so for those of you that don't know this is what I what I call not the one that got away but the one that kind of

21:46worked and it was one of our 20 projects that we worked on I talked about the other two or three and there was numerous others but those were the two or three that were most painful and kind of some kind of learning whether it's just how stupid I am or not but with crazy AG what we did is we and what it is is it's uh you put a JavaScript on a website and it creates heat maps or people are clicking on a page and you might think that's a common thing because it is now but we essentially helped pioneer that category of visualizing clicks on a site back in

22:172005 so that's when we kind of launched it so what I'm gonna go through now is actual tips and practical advice on and in a thought process and a framework on how to actually think about your market think about your customers a lot of it's inspired by Lean Startup stuff a lot of it's inspired by just multiple ways and businesses that I've done this with that are my own so getting started with that you know one lesson here would be always begin with a hypothesis so for us whether it's marketing sales features to add a new idea we have like completely new idea although we shouldn't have new

22:50ideas for new businesses should stay focused is we always start with the hypothesis and I'll explain what that is in a second but we got another kind of book recommendation here so my friend Brant and Patrick wrote a book called entrepreneurs guide to customer development it's actually a cheat sheet to the first part of another book called by this guy named Steve Blank do all of you know what customer development is who knows what customer development is cool a lot of you okay great if you don't this is the first book to get on on the topic basically it helps you understand this whole process i'm gonna

23:28i'm actually gonna talk through and explain and helps you do it for yourself so it's a very practical book it's only 100 pages pretty inexpensive that's probably if you don't do anything else i would read the book and start practicing these principles i mean that that's gold for all of you that don't don't know kind of this stuff and this is all kind of more newer stuff it's really starting to bubble up then last 18 to 24 months where people are starting to understand that they have to do things with a more iterative approach and with more focus and so for crazy egg our problem hypothesis and this is all

24:01hindsight we didn't actually have one at the time we got lucky but what it was was people who are responsible for improving web user experiences have a problem communicating what needs to be improved so that was our hypothesis and or that would have been our hypothesis if we were to start today the reason I say that is already we have a lot of data points to prove this so with crazy egg it visualizes where people are clicking it's a tool that's not always on so you actually have to turn it on and off to analyze your different pages you have to pick what pages you want to

24:33turn it on on and so a lot of things we commonly hear about it are that people use it to basically end debate on what to work on or where there's problems so you know a you know stakeholder and a company might want to leave the search box where it is well if you do a heat map on that page you might realize that no one's clicking the search box it's not a really important piece of real estate on the page so there's a lot of those kind of things that we've learned and so I came up with this hypothetical hypothesis but knowing what I know today

25:03if I had this hypothesis everything we would have done on how to launch the product and all that would be actually quite a bit different because what we would be doing is trying to invalidate essentially this hypothesis aggressively and what I mean by that is I'm not trying to prove that I'm right I'm actually trying to prove that I'm wrong and the reason for that is of course I'm right on my entrepreneur like if I try to go prove I'm right I'm gonna find a way to prove I'm right so what you have to do when you have a hypothesis like this is start talking to customers start

25:33talking to people and start trying to figure out whether you're actually right I'm sorry whether it's wrong to really figure out whether you're actually right and it's a very tough thing to do because it's a mindset that you're not necessarily used to as an entrepreneur what you want to do is pick up the phone and start telling people about your awesome idea well what you really need to do is talk to people about the problems they actually have so that you can balance it and understand if these are problems that you can solve for them or these are the most painful problems again that book I mentioned it'll go through it the

25:59URLs custom com see you stdev comm and it'll help you kind of map all this stuff out this is like what I hand out to people on my team I've handed it out to everyone on my team including the tribal leadership book a lot of these books are all ones that I share with as many people as I can because this is at least there's a framework in a way of thinking about things so what we did with crazy egg that worked really well was we actually made our product really simple even to this day it just does one thing yes there's a few more features and things

26:30like that but at the end of the day just one does one really simple thing and what it does is this it helps you see where people click that's the proposition that we kind of came up with and double down on once we kind of started understanding our market and understanding our customers and understanding what they wanted this doesn't do mouse movements it doesn't show you all these recorded visits of people and what they did individually it's really about the aggregate data to help you see where people click and this is actually when you look at any other product in our market today that does any of the stuff they actually don't

27:02understand this that this is the core problem that at least we were trying to solve and the core problem we discovered those type of people I mentioned before had and we were able to release a really simple product as a result of that so now I'm gonna go through kind of how he went through that process and how you should go through it so you know another kind of big lesson is you start with a specific audience so for Jason I'm picking on him because he talked earlier it's people that are in a very specific mindset and have a kind of what I would call this middle market need for a

27:37wordpress hosted blog so he mentioned you know for if they're kind of a a consumer he'd probably show them wordpress.com and say hey you can just sign up there and get a quick blog to talk about your recipes and your cooking and all that and maybe one day you'll get much bigger and start making money you can come to me I'm sure you said something like that on the other end you can go with WordPress VIP if you're you know willing to pay thousands of dollars a month and have these like crazy kind of crazy amount of traffic and crazy needs so he's filling a gap in the

28:06market so I think he figured out what audience he needed to go after when you talk to most people in that market I've done that I talk to people that use WordPress a lot he's actually hitting on a very sweet spot a good sweet spot that even the folks at automatic don't actually want to attack as far as they've told everyone so they've been on record on that so I think he found a really good niche in the market even today when I think of where do I host like my company blog I'm better off hosting it on there on wpengine than anywhere else because it really hits on

28:38a certain customer segment so you have to start with a specific audience I know all of you might already have products and you're like oh well I already have a product I built it and I have all these people using it now what do I do you can still go back and do this process and actually understand who's using it why they're using it and figure out which segment you actually need to double down on and so that's something that is a constant kind of question I get but it's still possible it doesn't matter if you have something or not so there's no black magic to this stuff it's not

29:08something where it's like you know you can't do this so I'm gonna go through three simple questions you can ask yourself including the hypotheses and and all that stuff but then in the day you just want to understand a few simple things about your customers to figure out how to essentially start engaging your audience before you even actually release something and the reason you want to do that is you want to understand what problems they have it's not a marketing exercise exactly it's more so a way to actually get attention for what you're doing and get access to people you can talk to so I want to be

29:40very specific here we do this all the time even in our own product even though we are marketing it and all that when we release a new feature that we think is going to hit a different segment of the market or get us new customers we think of it like can we go figure out who these people are and sort of walk through this process even for a single feature and I'll go over that in a second so first question is who are your customers again you know there's a lot of people in this room that have generic products that have lots of different customer bases I've talked to many of

30:10you about that and there's some that have very specific and they understand their market if you go look at the people that are actually growing the fastest today they actually have a specific persona specific customer that they're thinking about when they build their products so with crazy.i we knew it was we didn't say it was web designers we said it was people that that were designing web user experiences the reason for that is there's user experience professionals ability folks there's marketers all those people are involved in designing the web experience and so we made it a little bit broad in the in the case of that product but it worked really well

30:42but in the beginning it wasn't like that so I'll explain that in a second the other thing you want to answer after you figure out who that customer is again it's a reason to be very specific is where do they hang out so where are they where do they hang out what you know how can you engage them these are all the kinds of things that come out of this so you know last one is how should you engage and you know this is like my typical line when people ask me well like I don't know if I can reach that customer is a beg borrow lie steal

31:12because that's all you need to really do you know think of it like that and I don't mean you do anything you know it's dishonest or immoral or whatever but at the end of the day you need to reach this customer you need to figure out where they are I've been in exercises where people would go out to like AAA meetings and wait outside and try to talk to those people right so you know it's it's totally beg borrow lie steal might come up with a really creative ways to reach these customers you're not trying to do marketing you're actually trying to find them so you can engage

31:40with them my two examples I'm gonna give are four crazy egg and KISSmetrics but we still kind of went through that same process so four crazy egg it was people who design websites and we made some friends so these couple these people are my friends a couple one of them innocent but that's all good so we basically made it for people who design websites and that was our customer so that was a very straightforward easy customer that we could go for and back when we started there was actually a big kind of blogging network does anyone remember nine rules okay awesome so we we were one of our blogs was actually in the

32:17network and so we had access to their private forum that they had where he had quite a few of these folks already in the forum kind of you know designers just talking about design stuff and so we leveraged that and you know the way we actually engaged one was we helped them be more awesome and that's what we did for them and this this is this is the truth I'm not even trying to be coy about it like at the end of the day what we realized about them is they want to be more awesome they want to they want to help you know they want to understand

32:47how effective their web designs are and they want their customers to understand or their clients to understand how awesome they are or their stakeholders in the company and so by building our tool and by thinking about it this way we were able to actually engage with them and help them understand that we're we're trying to help them focus on help them communicate their design to communicate the effectiveness of their designs in a very visual representation in the visual form and T's since these were designers they appreciated our design aesthetic and stuff like that versus just you know looking at lots of Google Analytics data and all that

33:19remember those were vanity metrics so what we did then was we started to build an audience really early and this was back in O 5 when I don't think too many people were thinking of things like this there weren't that many landing pages like this but since we knew who we wanted to attract we knew how we were engaging at least some of those early people we just put up a landing page this was our original teaser it was like a design comp this is very old but that's what it was and it kind of gave you an idea of what it would do and if

33:45you you know kind of look through it it has a lot of the same kind of see where visitors are clicking and all that kind of stuff on there which is the same the message we wanted to share this was before we actually we did this even before we had a product when we were just designing it still so what we were able to achieve here is 23,000 pre-launch emails we did pay for some of them because what we were doing was we had the money but we also knew that they a lot of our users beyond the nine rules crowd hung out on CSS galleries because

34:13that was when CSS galleries or the hot-shit and so and nobody was actually advertising on was very cheap so it was like I think less than a dollar per email or something like that that we spent is there's very little money I you know I I said I said something to somebody yesterday where if I were to do it today I can do two hundred thousand emails for free you know and it just takes tight a little bit of time and effort so in the same scenario same type of product that's the scale we can achieve today because of the number of people on the web and all these

34:40different platforms that exist which I'll talk about a little bit later so we've gotten to over 200,000 customers I don't remember the exact count right now and well over seven figures in revenue at this point as a result of what we did early and I attribute a lot of our success you know today to the strategies that we use in our thinking around actually reaching the audience you know hindsight is 20/20 so the way I laid it out is a lot more structured view on what happened but at the end of the day like the the reason I like kind of all the other things I shared in the

35:11process and the frameworks and the Lean Startup and all that is it's quantifying what a lot of entrepreneurs already do very naturally what many of you might have already done or a certain piece of this but helping you understand how it can actually help you how you can learn more I can actually grow grow revenue and things like that as a result of it so the next example I'm gonna give is for KISSmetrics and what we did there so our customer was online marketers with websites so I got my co-founder cuz he's one of those guys Jeremy shoemaker because he's an affiliate marketer and Shaun Ellis up

35:41there who has was VP I'm working at a log me in and another company called up or and kind of they've been companies out of IP out and then he's helped a bunch of popular kind of famous companies in the valley I guess like Dropbox and Omni and so we had a specific customer in mind and this was mind you this was all before we even knew exactly what product we were gonna build and how we were gonna kind of market it or any of that we just needed to attract these people and make sure that we were kind of engaging with them and in the conversation so in this case

36:11what we found very interesting is that the early adopters of kind of you know of Twitter happened to be like techies and geeks and all that stuff and there they ended up kind of congregating around this hashtag it's a measure hashtag it's on Twitter anybody know the measure hashtag at all no analytics looks cool yeah of course you do that was Patrick McKenzie he knows every hashtag on Twitter around this stuff anyway so and I'm looking forward to his talk to you we'll get into that later so it was a measure hashtag and it was where all the analytics geeks and the marketers hung out and so we quickly

36:50identified that we also knew that Twitter was an emerging platform at the time and people hadn't figured out how to grow an audience on it luckily I was one of the first three or four thousand users so I'm like three thousand something and my personal account already had some traction but without using that too much we started building up the KISSmetrics account but because I had an audience already and it was funny the reason I had audiences back in the day when there was like tens of thousands of people on it or hundreds of thousands they had a like featured profiles and my my picture would just

37:22get rotated out through there so I kind of got lucky by being early again another reason to be early on some of these platforms but so I already understood how Twitter work and I felt like you know this was a good way to kind of attack the problem so we started engaging people on Twitter and the result and this is the results today is that we've had we've tweeted about 10,000 times which is not as much as my personal account I've treated about 18,000 times on that account and this is our main KISSmetrics account there's 88,000 followers and this is all done with the zero budget and literally me

37:53doing it there's no one else that's really worked on the Twitter account beyond some design work and stuff like that I still manage it it's just something I like to do I don't think I need to manage it but I do have a certain quality bar so has anyone ever clicked a link on the KISSmetrics Twitter feed from the customer's Twitter feed awesome great yeah that makes me happy so that's me anyways I'm just pretty good at curating content and and finding content really fast and all that stuff so it only takes me a couple hours a week to manage that account and keep tweeting awesome stuff

38:23now the thing that we've know that this has helped us do though is we first had a Twitter account so we built an audience and then we launched our blog and with that Twitter account why while we were still working on our product we would throw out you know customer development surveys we would you know link to our landing page and collect email addresses and all that kind of stuff and you know we we had a tremendous amount of email addresses for free before we launched because of our Twitter account and the scale we get it too and this is still a core marketing strategy for us today but it didn't

38:56start with marketing it actually started with how do I reach this customer I'm trying to reach so as a result of all this we've actually quantified our cost per sign up and what I mean by that is we we don't spend any money on marketing in terms of paid marketing this is all between our Twitter account and our blog and that's really what our primary generator is and we do some guest blog posts and other places so it's all inbound marketing and we've been able to drive the cost down to seven dollars and 35 cents per trial sign up for KISSmetrics and this is like quantifying the amount

39:30of time at the writers and literally all in this is this is the cost for bait most of it generated through our blog and our guest blogging and then obviously the Twitter account so in our space people are paying at least a hundred dollars they're paying like 20 bucks per click on Google there so they end up paying per signup it's sometimes I've heard numbers as high as two three hundred dollars all the way up to like thousand two thousand dollars if they want enterprise leads and we get enterprise leads at this price as well so that's just telling the dream on why this stuff is really important why it

40:06matters next up would be kind of what I'm going to talk about is things that other speakers are going to talk about too so I'm not gonna get too deep into them the one thing I gotta say is we use Twitter before that we use the CSS galleries which are essentially webs other websites today there are so many platforms that can help you reach your customers and I'm not again I'm not talking about marketing I'm talking about how to build channels yourself things that are sort of your own earned media things you build out where you build an audience so these are just examples I am almost 100% sure at least you know

40:42most of these are used by all of you in some capacity for marketing or to engage an audience I know someone in the back of the room that actually uses Apple's App Store like crazy and he's turned it into a business so all of these can be used to engage an audience and learn and and you know Instagram is another interesting one that I'm seeing some companies leverage there's a company called sincerely that built a product called posta Graham you should check out their Instagram account it's amazing what they do and how they engage our audience and all that stuff again this is not marketing this is engaging with

41:14other people that's what's really important and the key I want to say about this you do some stuff with Salesforce if you want to reach sales folks it's another platform so these are all essentially platforms to reach customers not just for marketing but to actually have conversations with them and depending on what you're doing the different platforms can be relevant to you so there's been a you know a hygiene oriented product that blew up on YouTube I have a Blendtec their main marketing channel as YouTube I know folks that are going crazy on tumblr between you know posting random you know photos on its stream to even

41:46somehow and haven't figured this out yet completely actually no I know how so there's an ad network out there that their primary channel of acquiring basically impressions is by building a tumblr theme and basically marketing it and you know another example would be the folks at air B&B there's but there's a big blog post about this I've got a link in the next article that for a bunch of articles on how to do this stuff and what it's actually called now where they actually were leveraging Craigslist they actually weren't the first there's been a bunch of companies that actually find ways to grow because of Craigslist so these are all the kind

42:20of things that you can do in all these platforms I've seen every single one of these I've seen people go crazy and if you look at Pinterest if if it matter to me I would my business would probably be super early on Pinterest except that the demographic they go to go after isn't necessarily our demographic but I've seen crazy traffic coming from Pinterest to things that are very relevant so there's a there's a wedding company that does things around weddings and engagements and stuff like that that's just going crazy just because of the things they post on Pinterest and how they get the audience engaged so build

42:51your own channels that's the big lesson here that I would throw at everybody and build them early build them now and there's this is like the tip of the iceberg there's so many channels that I can't even like begin to put them on one slide literally that you can leverage today and there's gonna be a lot more and last but not least so I think on the previous slide that's something Patrick McKinsey is going to talk about at the end of the day tomorrow the last talk and this this thing about growth hackers is something Dan right there is gonna talk about today Dan yeah today so I

43:25don't want to get too far into it but what I would say here is especially for you know what we've been doing how we did all those other things was essentially growth hacks like basically hacks that help you grow there's ways to do them if you're an engineer ways to do them if you're not an engineer you don't have to be an engineer I didn't without being an engineer and they all worked but the whole idea is especially if you're bootstrap you need to find ways to grow you need to find ways to grow and leverage other people's platforms and you don't necessarily have any budget to do it so that's a definition

43:52a growth hack in my mind again it's not just for marketing it's also for engaging your audience it's all kind of meld into one but this is kind of what you would call it and this this this is one of my favorite quotes about the topic but essentially if you've heard what I've talked about him some of my big lessons it's really you have to connect your target market and your solution and those things need to be married and so growth hack a growth hacker essentially does that so I would say that I think all of you are growth hackers one way or another especially if

44:21you're building these kind of bootstrap micro printer sort of businesses that could one day be really huge and so I've got a link there on some growth hacker 101 you'll start hearing this term a lot very soon I'm pretty sure that's it for me I got time for questions I think great luck

44:44excellent who has questions we have time for a couple then we'll do some teardown all right mr. Foley

44:55sometimes when thinking about various ideas it's harder to engage people in terms of problem instead of solution and so when you have can I give a specific example something about trying to it seems intriguing to me the idea of creating virtual badges for events like this virtual swag essentially how do you know that's such a esoteric idea maybe it's just a bad one but how do you translate that into a problem and talk with someone like Mike without giving you know without focusing on my idea yeah so just off the cuff the hypothesis that I would go for is people that attend conferences have a problem

45:39getting recognition for their attendance that's a hypothesis you go after so you wouldn't go you you're thinking there's a solution there you have in mind what I'm saying is there's actually some core problem list it out like that and then go talk to conference attendees don't tell them I'm gonna do this virtual badge thing although all of them know now but you know ask them hey well you know how do you actually keep track of how do you keep track for the conference conferences you attend right after before how do you you know have some like very very kind of problem statement questions I'm trying to get them to tell

46:10you stories about things that they do and so the things I didn't really talk about is if you talk to enough people you start getting bored after a certain point once you start getting bored that's when you need to analyze that data so hopefully you've recorded it already written it down not even hopefully you need to and then you find what I call the patterns of paint so you figure out what's the most painful thing for people so for example you know for you know just playing it out a little bit let's say for a conference attendees it could be something like oh I learned a lot of stuff but I don't remember any

46:36of it right where did where can I find that information that might lead to a specific solution you might you might have and it might have nothing to do with these badges so you have to like like I was saying you have to pretty much marry the problem not the solution so in every solution I hear from someone every idea I try to get them to agree that no you're really trying to solve this problem let's go folk you figuring out if this problem even exists or not and then work my way from there yep so you're talking the beginning about having focused on that one specific idea um then your talk you

47:08talked about like a lot of different ideas and businesses that you're working on I'm not sure if you're working on concurrently or not so how do you strike that balance between having focused but it also sounds like you're involved in just a lot of stuff sure so so for me it's do what I say not what I do I'm kidding I'm totally kidding totally can I I was very we were very unfocused when we started our first company our consulting company like more than I more than I can even imagine like I don't know how I would I would deal with that unfocused us today with the mindset I

47:40have but all of the things that I basically described happen in some sequence and now my main focus is KISSmetrics and our crazy AK business basically runs runs itself today there's about four employees on it it's more profitable than apple per employee and there's a lot of systems we've built yeah I threw that one in there there there's a bunch of systems we built to automate a lot of things and that's that's time for another talk or something but essentially we've automated so much of it that it's it kind of runs itself there is a lot of growth in it though and if we invest more in it you know that's great so for

48:17me I consider that a hobby at this point and maybe I'll spend an hour - every month on it just to make some meaningful talk to someone on the team there but overall like it's not it focuses what it's gonna take like it's very hard to kill projects but even recently we've started killing projects and you'll hear more about that even in KISSmetrics we're starting to kill stuff so I gotta say that like it's very hard but you have to do it all right round of applause thank you [Music] you