Rachel Andrew – How Customers Hold the Secret to Your Success – MicroConf Europe 2014

The MicroConf Europe 2014 Hub Page has notes on all the talks and additional information.

Website: Grabaperch.com
Twitter: @rachelandrew
Slides: here
Additional Material: here

 

EdgeOfMySeat.com – Getting Started

  • 4-year old daughter, during DotCom crisis
  • Lots of friends turned up for work in the morning and the company was gone
  • started own company as a Perl troubleshooter (!)
  • later turned business into a consultancy
  • turned bits of the consultancy into products
    • CMS framework licensed along with development services
    • license cost $4,800
    • average cost per site built $10,000

Moving on to Perch

  • downloadable self-hosted CMS software, licensed per site
  • Recurring revenue because designers build multiple sites on perch. Average 2.8 licenses/customer
  • Motivation behind Perch
    • need to have tool that would make small jobs profitable
    • drop-in CMS for tiny sites
    • started as internal tool, quickly turned into standalone product (“Scratch your own itch”)
  • “We had no idea what we were doing”
  • version 1
    • built over 4 weekends
    • sold for $55 on launch
    • “profitable” in 24 hours

Keeping Your Customers Front and Center

The “Missing Features at Launch don’t Matter to Anyone but You

  • Solve a complete problem for your customers
  • Sell your solution to that problem
  • Existing customers enjoy getting new features after they paid – FREE STUFF!

Scratch Your Own Itch but be Aware that You are not Your Ideal Customer

  • Version 1 was the product we wanted & needed
  • Our first customers were our friends & peers (People like us)
  • Second wave of customers had different requirements
  • ==> Version 2 was the product that our real customers needed

Lesson 3: The Happy Majority will be Silent

  • Provide great customer support
  • there are many terrible ways to configure PHP web hosting – we know all of them
  • The more people CAN do with your product, the more they WANT to do (more feature requests)
  • June to October 2014
    • 38% of people who bought also raised a thread in the forums
  • Your best customers may never speak to you
    • Find out who they are & get in touch.
    • Ask for feedback
    • surveys can prompt customers to give feedback
    • Happy, Silent Majority will answer with “Please don’t change anything”
    • Ask for feedback BEFORE you change features
      • Helps you not to break things for existing customers
      • when it feels like “everyone” is asking for features, it’s often just a few noisy people
      • Make sure you don’t break your product for the happy majority because of a few noisy people

Lesson 4: Your Customers can Show You how to Sell Your Product

  • We love:
    • Storing structured data
    • Templates defining a schema
    • Speed & efficiency of the template engine
  • Our customers love:
    • not having to know PHP
    • that the CMS doesn’t mess with their markup
    • that the end client doesn’t need handholding to edit the site
    • that they can use any Bootstrap template or jQuery plugin
  • The fact that great code makes that possible is NOT a selling code, the side-effects are!
  • “The things your customers tell you they love should be your headlines”

Lesson 5: We’re NOT Looking for Features, we’re Solving Problems

  • Customer: “Can you add a setting for this?” (Blog post: Checkboxes that kill your product)
    • Ask back: “What problem are you trying to solve?”
    • As the product owner you need to get from specific to the general use case
    • Collect use cases from support, from feature requests, from the way you see people use your product
  • New features keep your existing customers happy and sticking with you as their needs are met

Lesson 6: Expecting new features to mean more sales is a mistake

Lesson 7: You can Learn a lot from the “misuse” of Your Features

  • Perch has blog module
    • customers didn’t use it as a blog, but as a portfolio, gallery etc
    • “Why are they doing that?”
    • They used it because it allowed them to CATEGORIZE!
  • Pave the cowpaths
    • See what users are already doing
    • Don’t penalize them for making that choice
    • Find ways to help them do the thing they want to do in a better way

Lesson 8: Great Support can be Your best Feature & Your most Effective Marketing

  • Keep your clients (and their clients!) happy
  • Help people to do things they couldn’t do before they started using your product
  • “One customer well taken care of is more valuable than $10,000 worth of advertising”
  • Care about your first run experience (Minimum path to awesome)

Lesson 9: The Influencers are Fickle

  • ideal perch customer
    • freelancer or agency building lots of sites
    • understands that time is money
    • prefers running a solid business over constantly learning new things
    • often does fixed price website builds
  • the “influencers”
    • well-known in the web industry
    • can charge a premium for their work
    • can treat each project as a “special snowflake”
    • have time in higher budgets to try new things
    • have a need to learn new things in order to be able to talk about them in their influencer role
  • ==> We don’t chase the influencers
  • Don’t rely on influencers for marketing; treat attention from them as a bonus

Lesson 10: You are NEVER Done

  • We are so lucky
    • We can live off our product
  • We are so tired
    • We’ll answer support requests from the beach
    • We’ll add new features occasionally
  • We swapped 10 clients per year for 1000s of customers
  • We are supporting our customers every day of every year and have been doing for over 5 years
  • With no exit plan, we are never done. We need to learn how to make this work well.

Questions & Answer

  • Up- & Downsides of building a business with your significant other:
    • You don’t stop thinking/talking about your product
    • If things aren’t going well it is doubly stressful (business + personal – i.e. financial problems)
  • Can you tell us more about your 24 hours to profitability?
    • We built a landing page, told our friends
    • got mentions on Twitter
    • –> 500 people on launch list
    • costs were really low
  • Was it a conscious decision to NOT grow the company more?
    • Never wanted to be a manager of people (again)
    • Purposely didn’t take more work with consultancy
    • With Perch we wanted to learn how things work before we hired
    • We need to grow now, we need PHP experts to bounce ideas with
  • Why have you not done a SaaS model?
    • we want to have a SaaS option in the future (less server configurations)
    • We didn’t want to provide hosting (low-margin) in the beginning
  • How are you going to grow exceptional customer support?
    • Hard, because our support is highly technical
    • Train people by installing perch for new customers
  • How do you resist urge to implement every feature request?
    • Drew will see interesting code challenges, Rachel is more pragmatic
    • Keep complexity down, don’t add features that add complexity
    • Keep Perch simple and do complex things in new product (Perch Runway)
  • How did you grow business after the initial “friends and peers” phase? What’s your best marketing strategy?
    • Word of mouth
    • Content marketing
    • Speaking at conferences
  • What did you do to keep yourself motivated?
    • Go for long runs
    • Listen to podcasts
    • Set achievable goals

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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.

Comments

  1. Thanks for this Christoph. I was battling jet lag and the time on my iPhone reset which meant I missed Rachel’s presentation. Your notes are amazing.

    • Christoph says:

      Hi Kelly.
      Love it that the notes are helping you! Let me know if there is anything I can do for you.

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