This is a summary of Gail Goodman’s Business of Software 2012 presentation.
The inexperienced assume there is a silver bullet to success.
Have you ever heard someone say that his marketing plan consists of going viral right after launching? It shows a lack of experience. 1 out of 100 will find the magical, silver bullet like viral spread. The rest of us are going to have to work.
Gail claims that she’s pitched more VCs than anyone in the room. There is no silver bullet, but instead it is a long, slow ramp of death. It takes a long time to get to scale. It takes a long time to get to minimum critical mass. Growth is fueled by doing a million things right. Don’t count on a silver bullet to get you to the hockey stick of revenue growth.
There are no silver bullets. So how did Gail get to where she is now?
Constant Contact’s sales were $1.5M/month in 2006. They are now at $20M/month, and they expect $250M in revenue this year – $39 at a time. However, it took Constant Contact $21M and 13,000 customers to get to profitability. How did Gail and her team get over the long, slow ramp of death?
Content is the biggest challenge for small businesses.
You need both online and offline methods to reach your potential customers. Constant Contact used radio and TV commercials. Slowly test these methods – test, scale, tune. They learned that small businesses didn’t understand email marketing, so they created webinars and seminars to educate them.
Word of mouth continues to be their most important channel. If customers like the product, they tell people.
We are in a mixing bowl of technology and people. We live in a world where our attention span is miniscule.
Not only do you have to get them to buy, but you have to get them to stay. Be quick to wow them. Be quick to get your customers measurable results. Make them successful early. The default text in your product should inspire action, not just label stuff.
Innovate everywhere. Innovation needs to occur everywhere in your business, not just in the product or technical side of your business. Innovation should be guided by customer feedback.
You don’t own the gas peddle on word of mouth marketing. The best gas pedal on word of mouth referrals is a great customer experience. The more you direct your customers to the early path of success, the better you’ll be.
Measure your business from customer view (inward), not from metrics (outward).
Gail says the best blog post she’s ever read on SaaS metrics is SaaS Metrics – A Guide to Measuring and Improving What Matters.
LTV = (ARPU * retention) * gross margin / (-) cost of acquisition
Gail recommends MixPanel or Kissmetrics for measuring business metrics.
BUSINESS OF SOFTWARE – FOR PEOPLE BUILDING GREAT SOFTWARE BUSINESSES.
This year will be the 7th Business of Software Conference – 15-17th September 2014, Boston.
A three day conference for founders who want to build sustainable, profitable software businesses. BoS has always been a special conference for our delegates and we want to keep it special. Attendance is restricted to just 400 attendees in 2014. Registration open now.
This year we are also running Business of Software Conference Europe, 25-26th June. For more details, visit the dedicated BoS Europe site. Two days in the birthplace of computers – Cambridge, England.
Join our mailing list to be the first to know when this year’s talks go live and to hear the latest news from the conference.