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

The MicroConf Hub Page with links to all the notes for all the talks can be found here.

Speaker: Patrick McKenzie (@patio11)

  • “Bingo Card Creator is doing business on hard mode”

Once More, With(out) Feeling

  • Listen to Peldi: Start a business that fascinates you (or risk burning out on it)
  • FYI for lifestyle design: your own business is where it is at
  • Becoming an entrepreneur and delivering value to the world is an righteous and awesome way to walk down in life

Quick Wins To Pay For MicroConf 2014

  • Fundamental SaaS Equation: [traffic] * [conversion_rate] * [ARPU] / (1 – [churn])
  • Traffic is the hardest to optimize for – see Rob Walling’s Blog
  • Conversion rate throughout funnel is easier, but takes weeks/months to see results
  • ARPU you can manipulate with a few minutes of work
  • Churn: run your own Operation Retention

Star #1: Charge. More.

  • killed $9 plan
  • Added $199 plan due to apparent demand

Star #2: Drip Email Campaign

  • 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

Star #3: Annual Billing

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

Raising Your ARPU, Trivially

  • Consider Bob with 280 appointments in the small business plan ($79)
  • Is Bob happy? How can we make him happier?
  • We should do him a solid and offer to upgrade to “Office” plan ($199) at a discount
  • Did this at a consulting client:
    • Run my SQL query of everyone who is within 20% of quota on FEATURE_1, FEATURE_2 or FEATURE_3
    • Add new special offers for the higher plans with a slight (~20%) discount
    • Write email offering upgrade to special offer
    • Make +N% revenue per year

Investigating Low Conversion Rates

  • Check if users are actually using your service
  • Start walking your customers through the product using lifecycle email​
  • send emails based on how successful they are in using the product

Lifecycle Emails

  • Day Zero: Auto-generated Welcome Email
  • Day Three: “Personal” welcome email from “me”
  • Day Twenty:
    • Trial successful: sell them hard
    • Trial not successful: rescue the trial
  • Day Twenty Seven: “Incoming Charge”

Star #4: Weekly Check-Up (“Get Them Promoted”)

  • High perceived value
  • Great engagement
  • Creates “ongoing earned media” via the option to embed announcements / links / etc.
  • Makes ROI discussions academic

Star #5: Digging into Individual Accounts

  • Bob’s usage goes up & to the right –> his business is doing well
  • If he cancels OR a credit card billing fails, he gets a call (because probably his CC data needs to be updated)
  • everyone gets 3 dunning emails
    • 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

  • People say consulting doesn’t scale.
  • Ways to scale consulting:
    • Move your rate up, dramatically
    • Hire people
    • Improve your utilization at the margin
  • So why did I quit?
    • Constant rat race to get new clients
    • Lots of unpaid time doing prospecting / proposal / administrative work
    • You have a boss and you have to go to work every day
  • ​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

My Non-software Product

  • Most common consulting engagement (2010): “We send no email. Can you, like fix that?”
  • I would implement:
    • Drip marketing (see MicroConf 2012 presentation)
    • Lifecycle emails (like two minutes ago)
  • It generally required:
    • Lots of sales/convincing
    • A bit of coding
    • Copywriting by me
  • Why choose this over consulting (from a customer’s perspective)?
    • Because it is $500 vs. $20,000
    • Because you couldn’t find somebody to do this for you
    • Because you’re not sure you can get to it right now
    • Because it’s a cheap easy way “to test the waters”
  • Why Not Get It Free on the Internet?
    • Because real businesses spend money on problems
    • “Free, if you have two week to research it” is not free to someone who cuts paychecks
    • Because paid initiatives signal quality and help to reduce roadblocks to adoption within an organization
  • The Key To Marketing It
    • Started 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

Nathan Barry Is An Effing Genius

  • Three packages: $249 / $99 / $39
  • Sales focuses on what customer gets not on what the price is
  • Packaging is a huge win (largest package made ~75% of total revenue)

What Did My Actual Product Look Like?

  • Me speaking into webcam and $60 microphone
  • Loosely scripted. If I were to do it again, I would add slides
  • Took ~2 weeks to record plus video editor @ $3,000
  • Hosted video on Wistia and rolled my own delivery platform (you should probably use Gumroad or similar)
  • Partnered with folks with related interests: additional value to customers at vanishingly little work to me (e.g. CopyHackers for copy writing)
  • Revenue:
    • Launch day: $12,862
    • Next week or two: $16,576
    • “Reminder: Sale ends today”: $15, 579
    • TOTAL: $64,608

Keys To Product Success

  • email, email, email. Get people on it, delight them, teach them, sell only occasionally
  • Target a pain point that you know there is demand for
  • Work on your copy.
  • Deliver quality products, because you have only one reputation.

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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. […] He brings up the point that when a charge fails the language in the notification email needs to be gentle. Use terms like “pausing your service” rather than “cancelling your account”. From Christoph Engelhardt’s notes on Patrick’s talk: […]

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