Patrick McKenzie: “Building Things To Help Sell The Things You Build” – MicroConf 2013

The MicroConf Europe 2013 Hub Page with all the information can be found here

Speaker: Patrick McKenzie (@patio11)

Notes from Patrick’s talk at MicroConf 2013

We were all Newbies once

  • In the early years (2005 – 2008) just a nice little bit of money on the side
  • Later made enough to quit 9-5 and go entrepreneur
  • Then started – lesson learned: “Only do products that really interest you”

What should I make? (And how will I know that people buy it?)

  • B2B or B2C ? —> B2B! B2B! B2B!
    • Easier to get to monthly recurring revenue (MRR)
    • more technical knowledge
    • more money to get out of it
  • Find people who don’t love you and ask them whether they would pay for the product!
  • Do customer development before you build anything!
  • Ask the right questions (“Do you have a missed appointment problem?”)
  • Getting email address is next best validation to getting credit card details

Quick Wins To Pay For MicroConf 2014

Fundamental SaaS equation: traffic * conversion_rate * ARPU / churn

  • Traffic is hardest to optimize for
  • Conversion rate throughout funnel is easier to optimize, but takes weeks/months to see results
  • ARPU you can manipulate with a few minutes of work
  • Churn: run your own Operation Retention

Charge. More.

  • Low prices bring you bad customers
  • Killed the $9 plan, added $199 plan for

Lifecycle-emails for SaaS

  • Drip email marketing is often/typically pre-signup, lifecycle emails are post-signup
  • Lifecycle emails require more app-specific logic
  • Very helpful: good understanding of funnel
  • Not required:
    • Lots of volume
    • Great copywriting

Get People to Upgrade To Annual Billing

  • Offer discount (1 month free) if they switch
  • Offer it to “loyal customers” over email
  • One click + confirmation to switch
  • Conversion rate from 10% to 25%+
  • Immediate revenue of $200 per email sent

Raise your ARPU by upgrading customer to higher tier

  • If customer is close to edge of the quota (80%), they might grow anxious
  • Suggest them to upgrade to next higher tier (at a discount)

Investigating Low Conversion Rate

  • build a dashboard that shows you which customers are failing in using the software (e.g. not setting up any appointment reminders during trial)
  • Walk people through the Trial
  • set up trial email sequence
    • Day 0: auto-generated welcome
    • Day 3: Personal welcome from me
    • Day 20: if successful sell them hard – if NOT successful extend trial
    • Day 27: “incoming charge”

Weekly Checkup (“Get Them Promoted”)

  • High perceived value (everyone likes to hear how much money they made this week)
  • Great engagement
  • Creates “ongoing earned media” via the option to embed announcemenets/links/etc
  • Makes ROI discussions academic

Digging Into Individual Accounts

  • If he cancels or has a CC billing failure –> he gets a phone call
  • Everybody gets a dunning email, sent three times (i.e. email send when somebody owes you money)
    • Get to the point ASAP
    • Prominent link to capture updated CC data
    • Extend a 3 day grace period, try daily within grace
    • Don’t forget a “You didn’t update so we took the liberty of pausing your account” email

How To Quit Consulting

  • Ways to scale consulting:
    • Move your rate up – dramatically
    • improving your utilization
    • Hire people
  • Why I really quit?
    • Constant rat race to get new clients
    • Lots of unpaid time
    • You have a boss & you have to go to work every day
  • Why not replace with a SaaS ? 
    • Long slow SaaS ramp of death
  • So what do we do then? 
    • Productized consulting
      • your most common / most valuable consulting engagement, delivered without the full dance
      • an e-book / video course / etc
      • a training event / seminar / etc
    • Sell it through email
    • Offer it at a variety of price points
    • Make several gigs worth of money in a repeatable, scalable, tweakable fashion
    • most common consulting: “We don’t do email – can you fix it?”
    • Goals for productized consulting: 
      • Teach them how to implement drip marketing & lifecycle emails
      • Market at scale
      • Teach them to do their own copywriting
    • Why would you buy that over consulting?
      • Because it is $500 versus $20,000
      • Because you couldn’t find somebody to do this for you
      • Because you’re not sure you can get it right now
      • Because it’s a cheap, easy way to “test the waters”
    • Why not get it free on the internet?
      • If you pay employees to read information “for free” on the internet, it is no longer free
      • real businesses spend money on problems
      • it reduces roadblocks to adoption within an organization
    • The Key To Marketing it
      • Start building an email list a few months in advance
      • Focused 75% on teaching people stuff (pricing, selling to enterprises, A/B testing, etc) and 25% on telling them about upcoming product
      • Sent two, count’em, two sales emails
      • Sent folks to a long copy page (example)
    • Charge. More.
    • Multiple ways to buy –> multiple ways for best customers to discover ways to pay you more money
    • Partnered with folks with related interests: additional value to customers at vanishingly little work to me
    • Revenue: $64,608

Keys to Product Success

  • Email, email, email
  • Target a pain which you *KNOW* there is demand for
  • Work on your copy!
  • Deliver quality products, because you only have one reputation

Share Button
About Christoph

Christoph lives in Munich, Germany and is bootstrapping his own SaaS application as a part-time entrepreneur.

He likes to write on this blog about anything of relevance to single-founder bootstrapped software startups.


  1. […] Patrick McKenzie: “Building Things To Help Sell The Things You Build“ […]

  2. […] Poslední přišel na řadu Patrick McKenzie (, @patio11) s Building Things To Help Sell The Things You Build a nezklamal. Patrick stojí za software pro tvorbu bingo karet Bingo Cards Creator. Zde jedna velmi dobrá rada. Pokud se rozhodnete dělat software, tak vždy cílit na B2B, je tam více peněz a jsou zvyklí platit. B2C jde taky, ale je to dřina. Patrick se bavil i o metrikách, jak takovou SaaS aplikaci měřit a co u ní sledovat. Velmi pěkné bylo jeho povídání, jak skončit s konzultacemi a místo toho raději udělat info-produkt. Zápisky z jeho přednášky jsou zde. […]

Speak Your Mind


This site uses Akismet to reduce spam. Learn how your comment data is processed.