The Power of Product Focus – Janna Bastow – MicroConf Europe 2016

The MicroConf Europe 2016 Talk Recaps can be found on the central hub page.

Website: prodpad.com
Twitter: @SimplyBastow
Slides:

 

  • Started in 2010 by scratching own itch
  • We quit jobs in 2012
  • Launched product in 2013
  • 2015: The year of faffing about
    • Hiring (and unhiring)
    • Some outside help
    • Let’s try advertising!
    • Events and outings
    • Founder “hobbies”
    • Should we raise money?
    • Bonus: New product version
  • Reaching $10k – $20k MRR is the most dangerous period for your business
  • Redesigns/Rewrites suck
    • Splits team attention
    • Temptation to do front and back-end at the same time
    • Mahooosive projects
    • Always more to do than anticipated
    • The unleanest thing you can do
    • No new features
  • MRR Plateau of Doom
    • around $30,000 MRR
    • a lot of products hit that plateau
    • Idea #1: Just ship the redesigned version
      • Didn’t really help, metrics were shit
      • had to still support old version
    • Idea #2: Can we throw $$$ at this problem
      • Additional work in managing investors
      • How much is enough?
      • Uncertainty about future (With funding some sort of exit is expected)
      • Why give up a good thing?
      • Lessons learned:
        • Until you can clearly define what you’d do with investor’s cash AND what the return would be, don’t take it
        • Just the process of thinking about funding showed us we didn’t need it
    • Our goal became to increase the trial-to-paid rate from 0% to 15%
      • Experiment #1: Shorten trial time
        • started with 30 day trial
        • We could say with certainty after 9 days whether they’d convert
        • shortened it to 14 days, doubled conversion rate
        • resulted in lots of customer service requests about increasing trial time
        • logical action: shorten trial time to 7 days
      • Experiment #2: Gamify the trial
        • give us your CC now –> get 5 extra trial days
        • tell us your company name –> get 3 days trial
      • Experiment #3: Persona-specific emails
      • Bonus Experiment: Playing with pricing & introducing annual pricing
  • Results
    • Back to Sky-rocket growth
    • Cash in the bank
    • lots of customer love

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Building and Optimizing your First Sales Process – Steli Efti – MicroConf Europe 2016

The MicroConf Europe 2016 Talk Recaps can be found on the central hub page.

Website: Close.io
Twitter: @Steli
Slides:

  • Started as productized consulting offering scalable sales processes to VC funded startups in the Bay Area
  • Stumbled into CRM space by releasing internal software
  • Show up. Follow up. Close.
  • Sales is not difficult. It is just emotionally uncomfortable.
  • You have to push yourself to follow up
  • Ask for the close in no uncertain words

Sales Process Exploration

  • Goal #1: find a predictable sales process
  • 3 Steps to Sales Epiphany
    • Customer Profile
      • Who is ideal customer?
      • How do we qualify them?
    • Lead Sources
      • Scalable sources for high quality leads?
    • Sales Process
      • Most successful way to sell to my market
      • Inbound/Outbound; Emails, Calls, Demos, Outside/Inside
  • Get steps 1 + 2 right; people tend to over-focus on step 3
  • Sales Metrics
    • Activity
    • Quality
      • You need a minimum 15% reach rate – ideal is 30%
      • If you are below that, you’re doing something wrong:
        • wrong channel – try faxes for doctors, cell phones for students, etc.
      • “Reach –> Qualified” rate should be 50% or higher
    • Conversion
      • “Qualified –> Close” rate should be 50% or higher
  • Sales Stages (Hiring)
    • Founder Driven
      • At first you have to do sales all by yourself
    • Founder Managed
      • Then you can outsource parts of it and eventually the whole process with close to the same results
    • Junior Sales Leader
      • Someone from a company that was at your stage a year or two again
      • They come from the future – they have all the answers
    • Senior Sales Leader
  • You are NOT allowed to outsource sales. You can not outsource your key business problem

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Game Changers – Rob Walling – MicroConf Europe 2016

The MicroConf Europe 2016 Talk Recaps can be found on the central hub page.

Website: SoftwareByRob.com
Twitter: @RobWalling
Slides:

Part 1: The Early Years (2005 – 2009)

  • DotNetInvoice, WeddingToolbox, LinemanJobs, JustBeachTowels, DIYDuckBoat.com, CMS Themer
  • no SaaS, most products were acquired
  • Why I got into products
    • Freedom
    • Purpose
      • Personal & subjective
      • For me: learning & teaching
      • I produced/started all my content (book, blog, podcasts) in just 18 months
    • Relationships
      • Having time and headspace for friends & family
    • Stability
      • Ability to not have to worry about next month’s revenue
  • Solution: Recurring Revenue

HitTail

  • Took all the money I had in the bank and bought HitTail (recurring revenue)
  • Full Story here
  • grew it to $300,000 Run Rate
  • BUT…
    • low price point
    • churn was high
    • $100 LTV
    • Google would change things every other month
  • I still didn’t have Stability, because Google threatened HitTail

Part 2: Drip (2013 – 2014)

Part 3: Drip 2015 – 2016

  • Drip is making profit starting in March 2015
  • Growing companies are rarely profitable
  • Big question: how long am I willing to forego profit for growth?
  • “$25k in a checking account, no car and a rented apartment in walking distance to my office” – Rand Fishkin @ $12.5M ARR
  • My state of affairs mid-2015
    • Freedom
    • Purpose
    • Relationships
    • Stability

Part 4: Drip Acquisition

  • Lesson #1: Never leave your phone unlocked with kids in the house
  • We had many offers for acquisition/funding
    • 2-3 emails per month offering funding
    • several potential acquirers in 2 years
  • What about funding?
    • It would cut down on monetary stress within the business
    • BUT would delay profitability for years
  • All my income hinges on Drip – no fallbacks if things go down south
  • “Startups are bought, not sold”
    • You get maximum $$$ when they need you
  • Objections to selling
    • “My startup is my baby” – don’t get too attached
    • “Selling is selling out”
    • “What else would I do?” – teaching, writing books, angel investment
  • My Deal-Breakers
    • “Sunset” Money
    • Can’t screw our employees
    • Can’t screw our customers
    • Keep doing podcasts, MicroConf, etc.

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Zero to $20k MRR in 20 “Easy” Steps: The Story of Rubberstamp.io – James Kennedy – MicroConf Europe 2016

The MicroConf Europe 2016 Talk Recaps can be found on the central hub page.

Website: rubberstamp.io
Twitter: @JamesKennedy
Slides:

 

  • Launched multiple products over the course of 7 years. Had to resort to consulting each and every time to stay afloat
  • “Find out what people want. Go and get it. Give it to them – in that order”
  • I suddenly knew what I did wrong all that time

Piehole

  • Piehole was the first time I headed that advice
  • Piehole is a marketplace for voice overs
  • We started to travel the world, starting with Argentina
  • Only $20,000 revenue –> essentially trapped in Argentina. Couldn’t return to Dublin if we wanted
  • Read “Instant Cashflow” by Bradley J. Sugars
  • Implemented weekly schedule
    • Monday: increase # of leads
    • Tuesday: focus on conversions
    • Wednesday: increase average $ per sale
    • Thursday: increase # of transactions
    • Friday: increase margins
  • Problem: 50% churn was killing the business
  • Steps 1-5
    • Find out what people want
  • Attended MicroConf Las Vegas 2013 and heard Jason Cohen’s talk about the ideal bootstrapped business
    • B2B
    • recurring pain point
    • non business critical
    • big market
    • finance dudes pay more
    • No marketplaces!
    • $45/$99/$249
    • CPC = MRR / 25
  • Meanwhile in Dublin my co-founder-to-be had two customers with identical pain points
    • Idea for rubberstamp.io was born
  • Did sell only one copy at $49/mo in the first 12 months – almost gave up
  • Found one customer who cut us a $20,000 check
  • We used the Tesla approach to marketing:
    • embraced customization first
  • Steps 6-10
    • Watched Jason Cohen’s Talk
    • Found a partner I could trust
    • Used the Tesla Model
    • Picked up the phone
    • Did a Brexit
  • Had links from app directories link directly to signup page (App directory IS the landing page)
  • Offered a $20 Amazon voucher in return for a review of our software
  • Steps 16-20
    • Financial planning for maximum motivation
    • Ordinary things, done consistently…
    • TechHub in South Africa
    • Got funded
    • Went to Barcelona

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Lessons from the SaaS Metrics of 1500 companies – Patrick Campbell – MicroConf Europe 2016

The MicroConf Europe 2016 Talk Recaps can be found on the central hub page.

Website: priceintelligently.com
Twitter: @patticus
Slides: http://www.priceintelligently.com/microconf

 

  • Premise: “Building a software company is getting harder, not easier… and it’s going to increase in difficulty.”
  • LTV/CAC Ratio:
    • less than 2 results in 4-12% churn
    • 2-5 results in 3-6% churn
    • over 5 results in <3% churn
  • What % of total sales is expansion revenue: 10-15%
  • How much should you be growing YoY: As much as possible
    • no fixed growth target set by VC, because we are bootstrapped
    • Your growth rate goes down the bigger your annual recurring revenue (ARR) is
  • Our world is more competitive, making switching costs easier.
    • 5 years ago: Average of 1.5 competitors per surveyed SaaS app
    • Today: Average of 8 competitors per surveyed SaaS app
  • The value of features is declining over time
  • CAC is increasing over time
  • You need to know your buyers on a granular basis
    • valued features
    • least valued features
    • WTP (Willingness To Pay)
    • CAC (Customer Acquisition Cost)
    • LTV (Lifetime Value
  • Problem: We don’t do a lot of cust dev conversations
    • 75% of companies have less than 10 customer development conversations per month
    • 78% of companies are sending 0 customer development surveys per month
    • 50% of companies do 0 marketing experiments/tests each month
  • Looked at over 25,000 growth blog posts
    • 80% are written about Acquisition
    • less than 10% are written on Retention!
  • Looked at 6,324 companies
    • 90% are building for Acquisition
    • <5% are building for Retention
  • C-Level/Founder spend their time on
    • 85% getting more logos (Acquisition)
  • Impact of improving each growth lever by 1% results in the following growth in your bottom line:
    • Acquisition: 3.32%
    • Monetization: 12.7%
    • Retention: 6.71%
  • We want customers, but don’t know what to do when we get them!

How do we fix customer development and focus on monetization

  • 3 ways to better monetization
    • Quantify buyer personas
    • Implement a pricing process
    • Utilize a multi-price mindset
  • Example: ProfitWell
    • Noticed that one of their consulting clients about to IPO were calculating MRR the wrong way
    • ==> We can build a product that will calculate everything correctly
    • Immediately got compared to Baremetrics and Chartmogul
    • We noticed there are 37 other competitors…
    • We went back to the playbook: Persona-Pricing Fit
      • Startup Steve vs. Miderprise Marty
      • For the love of God. Talk to your customer.
        • set a target – e.g. “we talk to 10 customers each month”
    • Right way to set prices: Value-based pricing influenced by cost-plus pricing & competitive pricing
    • have multiple tiers of your product – differentiated by enabled features
    • “Please rank the following features on a scale of 1 to 10” will show you that every feature is important
      • Better: “Of the following options, which is LEAST and MOST important to you”
      • can be used in conversations, not just surveys
      • much better data quality
      • correlate answers to size of business of your customers ==> tells you what small customers care about vs. what big customers care about
    • How much are your customers willing to pay?
      • “At what price point does PRODUCT become too expensive that you’d never consider purchasing it?”
      • “At what pp does PRODUCT start to become expensive, but you’d still consider purchasing it?”
      • “At what pp does PRODUCT become so cheap you question the quality of it?”
      • WTP for enterprise customers was $150-$250/mo
      • CAC ~ $3,000
      • LTV: $1,500
      • ==> “Oh shit!”
    • WTP for Churn Recovery for enterprise customers: $3,000 / month!
    • WTP for Revenue Recognition for enterprise customers: $2,500 / month
  • Implement a pricing process
    • Timeline for changing your pricing (repeat every quarter)
      • week 1-4: Customer/Market Research
      • week 5-7: Communication Plan, Impact Analysis, Customer Advisory Panel
      • week 8-9: Implement changes
  • Utilize a multi-price mindset
    • you want to have growth both from new and existing users
    • use a value metric (e.g. Wistia differentiates along “# of videos”)
      • do NOT use # of users
    • value metrics should:
      • Align to your customer’s needs
      • Grow with your customer
      • Be easy to understand

 

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Drawing the Lines Between Success and Failure – Mike Taber – MicroConf Europe 2016

The MicroConf Europe 2016 Talk Recaps can be found on the central hub page.

Website: SingleFounder.com
Twitter: @singlefounder
Slides:

 

  • built AuditShark
    • Software to ensure security & compliance of servers/computers
    • I had been consulting in that arena
    • I knew the target audience, the problem, the space
    • I still failed!
  • Why do these things happen?
    • Our personal sample sizes are too small
    • Lack of publicly available data points
      • is it normal to spend $20,000 on building a SaaS?
      • is it normal to spend 10 months buildings a SaaS?
    • Survivor bias is rampant
      • Buffer, Groove, Baremetrics — We all know the unicorns
    • Self-delusion is far too easy – we are too optimistic with our schedules & budgets
      • I even bought delusionsofgrandeurbook.com thinking “Maybe I’m heading the wrong way and this will make a great story…”
    • Small banks were a mistake: They didn’t actually care about security
      • Bad initial market? Pivot!
      • Problem: The product was built for a different market
    • False Hopes
      • I was waiting for the$500,000 deal with one enterprise customer to go through. It never did
  • I failed miserably AND publicly
    • “It could be that the purpose of your life is to serve as a warning to others”
  • How do we find relevant data points?
    • It’s not about “I’m doing 5x revenue that you do.”
    • It’s about “Am I on the right track with this?”
    • MicroConf is a place for sharing our stories and data points!

Analysis of 60 Product Launches

  • Basic Disclaimers:
    • Everything is self-reported
    • Most questions were optional, so not everyone answered everything
    • Not all results came through the online form
    • There is some interpretation involved
    • There’s some inherent bias in the data due to the audience
    • This is FAR from a complete analysis. A larger study would be needed to establish statistical accuracy
  • Break down by Product Type
    • 60% SaaS
    • 14% Books/Courses/Training
    • 10% Desktop apps
    • 15% everything else (Marketplace, WP plugins, Productized Service, etc)
  • 70% had paying customers
  • Current Product Status
    • 28% launched & growing
    • 25% launched, but didn’t go anywhere and I’m not actively working on it
    • 19% making a non-trivial amount
    • 12% Not launched or recently launched
    • Rest: Sold or shutdown
    • ==> 58% didn’t go anywhere and were either shut down or abandoned
    • ==> 30% became a success
  • Resources spent getting to launch
    • Avg calendar time in months: 9 (min 0.5, max 27)
    • Avg product development time: 5 (min 0.25, max 26)
    • Avg customer development in hours: 20 (min 0, max 200)
    • Avg marketing time before launch in weeks: 1 (min 0, max 10)
    • Avg cash spent in Euros: 5,785 € (min 0, max 133,500€)
    • Conclusions:
      • People spent ~40x time on development compared to customer development! Lack of focus on (prelaunch) marketing
      • Succesful businesses spent less time on customer development than failed products (and that is probably a statistical flake and you should ignore it)

Safeguarding against business risks

  • Avoid operating outside of “normal parameters”
    • e.g. your SaaS makes less than $300 MRR six months after launch
  • Self-funded has a better success rate than VC funded
  • SaaS and non-SaaS product guidelines are different
  • SaaS products can generally be launched with:
    • 8-12 hours of customer development
    • < $2,000
    • 6-9 months of effort
    • Revenue ramp is really slow
  • Non-SaaS products can generally be launched with:
  • Tested two different product ideas: ETL Studio vs Bluetick.io
    • Mike was in love with the idea of ETL Studio
    • ETL:
      • Almost impossible to get conversations for ETL
      • not a single discussion got to the point of talking price
    • Bluetick:
      • 16 conversations out of 35 outreach efforts
      • 13x yes, 3x no
      • well-defined, obvious problem
      • 17 Prepayments at $50/month (over $2,000 total)
    • Better response rate AND conversion rate for Bluetick –> build Bluetick
  • Common advice: “Talk to more customers”
    • can mislead you into a false sense of comfort
    • Following things are extremely different:
      • Identifying the need ==> Problem identification
      • Identifying the target market ==> Who has this problem
      • Identifying features needed to provide value ==> MVP
  • There are many steps, but not just one path
    • Objectivity is critical to developing a product
    • Initial traction can overcome a lot of other hurdles
    • If you’ve launched but revenue isn’t increasing, be cautious of it turning into a zombie product
      • kill it or sell it, but move on
      • Hope is not a strategy
    • Pivoting after launch is a warning sign, but one of many
  • Technical difficulty is not a product value
    • Nobody cares how hard your product was to build. They care about how much easier you made their lives

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Two Years in the SaaS Trenches – Jordan Gal – MicroConf Europe 2016

The MicroConf Europe 2016 Talk Recaps can be found on the central hub page.

Website: Carthook.com
Twitter: @JordanGal

  • Started out with solarlightstore.com – didn’t know a thing about eCommerce
    • sold after 12 months
  • Lessons learned:
    • eCommerce doesn’t have MRR
    • 4000 customers, but as soon as you stop advertising revenue is gone
  • With the next business, I don’t want to do development. I’m going to focus on marketing
    • Got lucky while looking for a developer for the next project
    • Having expertise in eCommerce was helpful in convincing developer to come onboard

Carthook

  • Carthook is a cart abandonment software
  • Initially brute forced my way into sales
    • scraped a list of potential customers
    • hired VA to find email addresses
    • wrote tons of cold emails
    • Result: 20 first customers
    • Lots of conversations with strangers/potential customers
  • At around $3,000 MRR I was unsure on whether to go all-in or just let it grow by itself
  • Got a acquisition offer shortly after
    • acquisition didn’t go through, but it showed me that this idea is bigger than I estimated
  • over christmas 2014 a bunch of friends offered to fund Carthook with roughly $100,000
  • I had lost my developer because he got offered his dream job
  • Early January a new signup on the mailing list: A developer trying to reverse-engineer Carthook
    • Started a conversation with him
    • met in Los Angeles
    • decided to work together and raised money
  • We scale to 10x and immediately hit a wall in tech
    • key lesson: Be prepared to rewrite your MVP
  • After rewrite, we focused on integration marketing

The rest of the notes have been removed on request by Jordan. 
Jordan, thanks for a great & candid talk!

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Leveling up – Patrick McKenzie – MicroConf Europe 2015 Talk Recap

The MicroConf Europe 2015 Talk Recaps can be found on the central “hub” page.

Website: starfighters.io
Twitter: @patio11
Slides:

 

Talk Recap

  • Everything we do: It’s all about the family
    • optimize for it, NOT for business results
  • Flying Geese
    • From dirt poor country to really rich country
    • developing economy: dirt poor, not able to do anything
    • start industry anyone can do: textiles
    • take educated workforce, infrastructure improvements from textiles industry and build refining steel industry
    • repeat and level up to automobile industry
    • take what you learn from automobile and re-invest into software/robots/aircraft/etc industry
  • Flying Geeks
    • Bingo Card Creator –> Kalzumeus –> Appointment Reminder –> Starfighter

Don’t Make Our Mistakes – Make Much Better Mistakes!

  • Tutorial mission: Your first business
    • Ship it. Ship it. Ship it. Ship it. Ship it. Ship it. Ship it.
    • Optimize for learning over perfection
    • start accumulating unfair advantages for later businesses
    • Cover “minimum viable financial goal”
  • How you know it’s an advantage?
    • People tell you you’re anomalously good
    • Watch other people around you in community. Note where you’re doing good on something useful.
    • Use your growing understanding of your business to project what X would do in another, larger business, or a business with advantages you lack
    • When you find your superpower: Exploit the heck out of it!
  • The case against SaaS for Biz #1
    • huge barriers to shipping and keeping it in the market
    • Hard to sell and market without any pre-existing foothold in industry
    • Long slow SaaS ramp of death
      • took 6 months to get to $400 MRR
  • The Glide Path To SaaS
    • Plant a flag on the market with an e-book, WordPRess plugin, etc
    • Start collecting email addresses
    • Launch a productized consulting business
    • Gradually titrate up the amount of software offered
  • Typical Bootstrapped SaaS Pricing
    • $29 – $49 – Tier 1, some foozles
    • $99 – Tier 2, even more foozles, maybe a feature
    • $249 – Tier 3, much more foozles, all them features
  • Productized Consulting Base Offering
    • $99/mo: SaaS application to do pricing pages
    • $500/mo: Savvy pricing pages as a service
    • $2.5k to $10k++/mo: Chief Revenue Officer
    • This is aspirational pricing!

“The Peldi Test”: Love What You Do

  • Founder/product/market fit is one of the best advantages you can possibly have
  • do something you love
  • Overlap all products in your portfolio!

Level Up In

  • Scale of problem you’re attacking
  • Engineering acumen brought to bear on target
  • Sales/marketing techniques
  • Sophistication of business operation

Ending A Chapter

  • Deciding when it’s time to move on
    • Business not helping you achieve goals (Live/love/Learn)
    • You’ve stopped accumulating marginal advantages
    • It’s “clearly time to go.”
  • Options for pruning portfolio projects
    • shut it down
    • Put it into maintenance mode
    • Sell it
  • Anatomy of a sellable business
    • Goldilocks zone for revenue/price
    • Low ongoing time involvement from founder
    • Low-risk that present revenue evaporates
    • Growth in market
    • Technical risk mitigated
  • Starfighter
    • Online games (CTFs) engineers play, for fun, by programming
    • We passively identify skilled engineers
    • We contact them and ask about background/goals
    • If appropriate, introduce them to hiring managers
    • If they take a job, we earn a commission
    • Where is this “leveling up?”
      • Trusted relationship with co-founders
      • Scale of technical ambition
        • BCC = “Hello World with random number generator”
        • Starfighter = Stock market with C compiler
      • BCC Investment: $60. Starfighter: …
      • Does Starfighter pass The Peldi Test? HECK, YES!
  • Starfighter Lows
    • Morderous Crunch To Ship
      • Ignored family to make deadline
    • Technical Scope
      • 10x technical complexity in a new business: good. We did 100x…
    • Promised a Ship Date
      • never promise a ship date, because you are going to break it
    • Founder Communication Issues

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How I Tripled My Windows Software Revenue In 3 Days – Anders Thue Pedersen – MicroConf Europe 2015 Talk Recap

The MicroConf Europe 2015 Talk Recaps can be found on the central “hub” page.

Website: timeblock.com
Twitter: @andersthue
Slides:

 

Talk Recap

  • I was really bad running a business for the first 11 years – got better in the last 6 years
    • The most destructive force in the universe – besides the Death Star – is shame
    • MicroConf changed it for me!
      • Expanding the comfort zone
      • Sense of belonging
  • shame resilience
    • Dave Collins talking about TSR Watermark Image before teardown: “Finally a really crappy website”
    • Cleaned up the website
    • Removed the free version
    • Improved the copy
    • Went from $300/week to $900/week
    • Changes done in one evening AT MicroConf
  • Why did I not do that before?
    • Requires knowledge
    • Requires courage and shame resilience
    • Requires you to reach out and say help
  • Last day of MicroConf / Takeaways
    • Split ego and product/business
    • Started failing, stopped being a failure
    • Kept raising my hand asking for help
  • Today:
    • 150 sales/month
    • $4500 revenue/mo
    • 5 minutes support /day
    • 2 hours of coding /month

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Mistakes That Will Kill Your Business Value – Thomas Smale – MicroConf Europe 2015 Talk Recap

The MicroConf Europe 2015 Talk Recaps can be found on the central “hub” page.

Website: feinternational.com
Twitter: @thomassmale
Slides:

 

Talk Recap

  • build your business for an eventual sale – even if you don’t plan to ever do that
  • mistakes that will kill your business value
    • “Just one more feature”
    • Not tracking metrics, income & costs
      • get an accountant/bookkeeper
      • important information for buyer
      • missing data –> lower price
    • Single points of failure – owner, platform, third parties
      • common problem for solo-founders
      • SOPs help/reduce pain
    • Overselling annual plans (>20%)
      • annual plans are actually valued LESS than monthly plans
    • Not knowing when to let go
      • growing OR flat growth is the best point to sell

 

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