The MicroConf Europe 2014 Hub Page has notes on all the talks and additional information.
Website: GetDrip.com / HitTail.com / SoftwareByRob.com
Twitter: @robwalling
Slides: here
What Is In It For You?
- Benefits of the “Slow Launch”
- How onboarding will make or break your business
- The optimal path to recurring sales
- Knowing when to move on
Part #1: The Slow Launch
- Build your email marketing list –> notes from last year
- Keys to the Slow Launch
- Pick the right early customers
- the 1st one didn’t work for Rob’s vision of Drip
- Spent a month and built
- Popup widget
- Mailchimp integration
- Email designer
- Broadcast emails
- Customer asked for a MAJOR feature –> “fired” the customer
- choose new customers, repeat
-
Features for customer #1 & #2 have to work for #3, #4 and #5 as well!
- Become a developer for hire (really custom onboarding)
- When you have “Problem-Solution-Fit” for at least 1 customer, ask additional customers to join your beta
- “Don’t worry about billing right now. We’ll do that when Drip provides you value and we are sure this is a long-term fit for you”
- But manage expectation: “You will eventually be billed. ” (implied)
- Go high touch
- Name your price up front
- … but don’t charge until a customer receives ample value
- unlimited trial length
- Pick the right early customers
Part #2: Onboarding
- MPA = Minimum Path to Awesome
- Proposal software: first time someone gets a proposal accepted
- MPA for Drip was 2 steps
- Including the Javascript
- Setting up the campaign
- Big progress bar during onboarding
- Do anything to make them complete the MPA
- Concierge onboarding service (e.g. create drip email campaign for them – at no cost)
- Add drip email campaign during onboarding
- Lessons:
- Determine your app’s MPA – take a guess at first & refine
- Guide new users through the MPA
- Do it again via email
- Offer to do it for them (“concierge”)
- All this increases trial activation from 5% to 60%
- The Slow Launch Part #2
- Wait until onboarding is working
- Divide list into cohorts (10-20% each)
- Send a launch email sequence with a time-limited discount
- Wait [trial_lengths] days
- Repeat
- ==> $7,000 MRR
Part #3: Stair-Stepping
- Step 1: Build one-time sale, single channel app
- e.g. WordPress plugin, mobile app, Magento add-on
- NO SaaS app
- Traffic: SEO, WP.org, Amazon, Youtube, etc.
- Step 2: Repeat step 1 until you own your time
- e.g. 3 more WP plugins
- Brings income diversification & experience
- Step 3: Recurring sale
- e.g. Baremetrics, Drip, Planscope, DistressedPro
Part #4: Lifetime Value (When to move on)
- LTV = total profit you receive from a customer over his lifetime
- LTV for HitTail when Rob bought it: $90
- LTV for HitTail now: $140
- LTV for JustBeachTowels.com: $30 revenue, $7 profit
- Simple way to calculate LTV:
- Average order size – cost of goods sold
- OR
- lowest plan * 10
- Better way:
- One-time: ARPU – COGS
- OR
- Recurring: AMRPU / monthly churn
- Sample Customer Acquisition Costs (CACs):
- Content Marketing: $50 – $200
- Facebook Ads: $50 – $300
- Adwords: $100 – $1,500
- Cold Calls/Emails: $250 – $2,000
- LTV >= 2x CAC
- You should quit if you can’t make those numbers work
- “Free” marketing channels
- Google / SEO
- iOS app store
- Android app store
- WordPress.org plugin repo
- Amazon.com
- Youtube
- iTunes podcast directory
- etc
[…] Rob Walling: “How to Validate Your Idea and Launch to $7k in Recurring Revenue“ […]