Switching from Consulting to a Product Led Business | Laura Roeder, MeetEdgar | BoS USA 2016

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Laura Roeder, CEO, MeetEdgar

Almost everyone running a consulting, training or agency business, however successful, will admit at some point that they wish they could run a product business. Why don’t they?

Turns out it is quite hard – many of the skills required are complementary but stopping taking on paid clients to allow a team to build a product with no immediate prospect of return requires a brave and bold move. Laura decided to make the move a couple of years ago, while pregnant. Organically funded, the new business reached $100k MRR within a year and continues to grow – at $200k+ MRR when this talk was given. She shares some of her experiences changing her business and some of the things that have propelled the growth of SaaS business, MeetEdgar.

Slides, Video & Transcript below

Slides from Laura’s talk here

Video

 

 

The 11th Business of Software Conference USA, September 18-20th 2017. Boston, MA.

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Transcript

Laura Roeder: Thank you! All right, so this talk is about how I transitioned. Can I get my slides down here as well – from a totally different business model in the past 3 years, from a training business to a software business. And I put these pictures up as kind of the before and after – so the picture on the left is me in 2009, speaking at an event in NYC. Hot tip, a bunch of red folding chairs empty behind the speakers not the most professional look for photos! I chose this photo because it really represented to me how my business felt at the time which is I felt alone in my business and solely responsible for driving everything. This was early, I didn’t have any employees. I had a few contractors that I worked with sometime so I wasn’t totally alone but I was alone in making all the decisions for my business. Whenever we wanted to make more money, I would have to come with some idea on how that would happen. If I would step away from the business the whole thing would fall apart. And on the right here is the after. And this is our team a month ago and we’re a totally distributed team. We had a meet up in Denver and what I love about this photo is that I am one of many which is how my business feels now. It doesn’t feel like it’s me having to do everything having to drive everything. I am one person on this team of 18 people and we’re all working together towards this common goal which feels amazing.

So from 2009 to 2015 I ran a social media marketing training company. So what that means is that I created information products, video courses that taught entrepreneurs how to market with social media. So it wasn’t a one on one consulting model and going into people’s offices and training them, it was an online business doing training. And it was pretty successful, it was a 7 figure business by the end but there were a few things that I didn’t love about the business model. The first thing is that I was very central to the business. I was the talent, the trainer, the websites – I’m Laura learn from me! That was the whole model! So there were inherent scaling limits to that model. I mean you can have a person with a larger business around them like Oprah, Martha Stewart, but it’s not as easy as scaling a software business. And I was stuck doing some work that I didn’t love because I had built this business around me as the thought leader. When other people did the training people weren’t as interested, that was the draw of the business. And I wasn’t interested in learning the latest Facebook algorithm updates. Now I can read MeetEdgar, I can read them there, I don’t have to research them myself. So I didn’t really love that work.

I had always wanted to do a SAAS company in particular, I actually remember looking at the website for this conference, I was like I wish I had a software business, that seems so cool. But I can’t spend 1000s of dollars cause I don’t even have a software business yet so I guess I won’t go. I was intrigued by the business model. You guys know how it is, just passive revenue that comes in forever, you don’t have to do anything, it’s amazing [laughter], that’s what I wanted. But there were a few problems to my plan. Number 1, I didn’t and don’t know how to code. I didn’t know anything about how to design a software product, I had zero experience working in or around software in any capacity! Like I had never cleaned the floors of a software business. I didn’t know anything of software aside from using it.

So I didn’t really know how this was gonna pan out, I knew there were different ways in like finding a technical team, find a technical co-founder and that stuff sounds really hard. Instead what happened is I met this guy in the picture. The guy in the front – there’s another guy in the back, I don’t know his name but he did a good job rowing that boat for us. The guy in the front is my husband Chris. Let me tell you what’s really sexy about Chris, he’s a ruby on rails developer which – if you’re a marketer like me, that’s very appealing! So that wasn’t really the reason why I fell in love with Chris, but anyway I met him, we got married and obviously him being a ruby on rails developer and me being on the marketing business side we were like this is cool. We spent a lot of time talking about startups, maybe at some point we can do something together. It took a while before that happened. At the time I was very full time running my training business, it was going well, he was doing various freelancer projects. He founded a social media software a while ago that didn’t go anywhere but he had a lot of relevant experience. So it took us 2 years before we were like we’re gonna do this! I really want to do software, you’re obviously the person to make it happen with. Let’s come up with an idea and create a product together!

Finding the idea

So first big thing you have to do is find this idea. And we did this in a little bit of a different way. Not the typical lean startup way. We didn’t build a bunch of ideas to see which one would take off, which is what a lot of people do within their company, they have an incubator and they build a lot and let’s just build a lot of things and see which one gains traction. Our way was to invalidate as much as possible before a single line of code got written. There are many reasons for this, I’m sitting here talking to you cause I think this is a good idea. I think this methodology is something you should consider. There were a lot of practical reasons why we did it, one we’re both doing other projects. We weren’t going to raise money and we had never raised money before so we didn’t know how to raise money. We didn’t have time to build a bunch of stuff that won’t become a business. But even then we did start code on two projects before abandoning them early partially because Chris likes to think through ideas by writing code. So why I’m telling you that is because this is hard. I recognise that this is hard, to be so confident of an idea before you start writing code.

And I have two criteria for how I know an idea is good enough to start writing code. The first one is are prospects actively looking to buy a better solution to this problem. You notice I put the word buy in caps because when we talk about the solutions, there are a lot of problems that are very real problems that no one is interested in paying money for a solution. You guys probably think of these all the time – I think about this all the time. The other day; I have a route to my son’s preschool and I’m trying to optimise the best route and think I wish I had an app that showed me exactly which street I took and how long it took. I would never pay for this. I’m in to the idea, it sounds fun but I’d never actually pay for it. So my criteria is not is this just a problem or active problem but is this a problem that people are googling I want to buy a solution to this.

I should know that this is obviously not the only business model and the way. This isn’t how Facebook was developed, looking for things people would buy. There’s another way to go and that’s to raise money, you can get many users and not get anything and get sold. That’s cool and a different route than I took that I’m talking about today.

Second criteria or the second first criteria according to this slide, is our solution better than what’s out there? So this one again, sounds super obvious but something that I see happening a lot in the startup world is people get so hung up on the problem that they glaze over do we have a better solution? An example of this, one of the ideas that we considered is a better Wiki. Because our company is unsatisfied with the Wiki’s out there, we just use google docs, we don’t like any of them, we’re like ok all the wiki’s suck, we’re gonna build a better one. I don’t know how to build a better wiki, it’s really hard – that’s why I don’t like any of them. But we often come to see this problem, the wikis are no good, I will build a better one. But you just can’t throw together a better wiki, it’s a hard problem to solve. You have to have a really strong point of view of why what you’ve built is actually better than the alternatives.

So we went through a lot of ideas, invalidating a lot of them, the one that turned out to be the idea, hence MeetEdgar – is one that was incredibly obvious and fell into our lap. You can say if it was a snake, it would have bit you. I remember when this came about we were living in London at the time and I remember we were standing in our kitchen and I was complaining to Chris about all this manual work that our company had to do around social media because we had created this process where we were optimising, sending out your old content over and over again.

So to get a bit into details of what MeetEdgar does, most people write a blog post and they send it on social media once or maybe a few times a week when it’s live and then never again. So a lot of business end up in this situation where you spent years creating this huge backlog of great content, it’s not getting seen because the tools used don’t offer an easy way to make sure that your content is going out over and over again, getting clicks, driving traffic, all the good stuff. So the way that we’re solving this is, I had a spreadsheet with different categories, tips and tricks, other people’s blogposts, inspirational quotes – all the type of status updates that you send to social that are evergreen that you want to repeat. Not like I’m at business of software right now, you don’t want to send that out 6 months later that doesn’t make any sense. I’m talking about, here is a link to a really great post that you will still find valuable years to come.

So we had the spreadsheet, cycling through it so you had to copy and paste the update into your social media tool, and do it over and over again. Images were a nightmare if you had a long form update to go on to Facebook – that was a nightmare. And we were doing this and teaching people to do it in a course called Social Brilliant and if you Google Social Brilliant you can still take the course, it’s free now and it’s a valuable course about social media. So people were paying just to learn this methodology and were using it and having really great results but there was a lot of manual levers involved with all the organising and copy and pasting.

So I was complaining to Chris about this and not being a programmer I was like it’s so weird that the tools can’t do this, I guess it’s not possible for a social media tool to store a library of social media updates. I literally thought that it wasn’t possible or the tools would’ve done it, it seemed like such an obvious idea to me. He was saying of course the tools can do that and I’m like how do you know? Are you sure? He’s like yeah, I can think off the top of my head how I can build that. I can remember him saying I can build that in a week. Guys, a little foreshadowing, it did not take a week, it took a little longer than a week! But this is where the idea for MeetEdgar came from. We were teaching this methodology and the methodology became the software.

So to go back to the criteria, are prospects actively looking to BUY a better solution to the problem? I knew the answer is yes because of the competitive landscape and this is an interesting point because many people said this to me about Edgar. Why would you launch a social media tool? There’s huge very well-established and funded companies, again we’re not raising money and were a bootstrap company and many people thought it’s crazy to go into something so competitive. But when I see a competitive space, it’s proof that people are paying for the solution, right? And I would much rather actually from a marketing perspective, it’s easier to get people to switch than it is to educate them about this new need that they may or may not solve or have saying you’re already paying for this tool, ours does the same thing better. There is some inertia that happens with tools, but at the end if you have a better solution it’s possible to switch. And I was happy to have that competition.

And the second number 1 is our solution better than what’s out there? And that was also a very clear yes, because there are still aren’t tools that repeat your content, keep an organised library. The things we’re proposing to do I knew they were useful and better than the existing solutions. So I didn’t want to build anything until I felt really confident that this was going to sell and people will buy this. Of course I’m not psychic and don’t know for sure, but to me I’m not going to start a business where I’m like people seem sort of interested but everyone we talked to is I’m not sure if I would use it or I’m happy with what I have. A lot of times when you do customer research you get that where it didn’t quite hit but maybe with a bit of tweaking it could work. I’m not interested in that, but yes I feel really good that people are gonna buy this, which is hard to do and takes time.

Building the Product

So the next phase is building the product. So we didn’t purely bootstrap MeetEdgar, we’ve never raised any money but we took the profits from LKR, the training business, and put them into Edgar. I point that out cause it’s a different journey than purely bootstrapping where you’re receiving and spending 1 or 5 dollar. I want to give this context because we’re able to grow faster because we had initial money to put in. and if you’re switching from consulting or training to software, here is the core team that you need to make that happen. So – and it might be a smaller team than you think. First the obvious thing you need is a dev team to build the thing. In our case this was 6 months of hard time work. Obviously I know there’s a lot of developers in this room and there’s no answer in this and depends on how complex it is, you can’t just put in a timeline but you have to figure out what this is. It’s just where it’s saying I have never seen anyone say I have no experience in software, I will get an outsource development team – I’ve never seen that work never. If you’re not technical you need a CTO, whatever it is, this is your core product. If you just go and make a cheap version and you’re not very knowledgeable about if it works or they did a good job, it won’t be very good. The second thing you need is hours from a designer to create a logo and a basic marketing site. I used hours because you could use a freelancer but this is the design component, a page explaining what the thing is. Don’t forget this is actually supposed to point to number 3 – hours from writer for initial marketing for copy emails sequences – this is the one you developers in the room think you’re too good for. I don’t know why you’re not doing it but hiring a few hours a professional copywriter takes you from putting something together and hoping they would buy and some sort of marketing power behind this. You’re actually trying to explain what it does. You can do this yourself if you feel so compelled but basically the point is you want to treat this seriously and as something you need to launch just as much as the product. If you don’t know software – like me – I beg you to listen to the advice of people who do know software. just because you know how you want it to look in the end doesn’t mean you’re good at the details to build it. There’s many metaphors for it – I might be able to draw a shirt and look how I want it, but I have no idea how it’s constructed, the methodology and that stuff. So some ideas about how they should be executed were too complex or didn’t make a lot of sense so Chris was a huge part in not just doing the code for the product but helping me architect how the product would function. Me saying this is the outcome we want for the customers. How can we make that happen?

Launching the Product

Next part, launching the product. Our plan was to have a half training and half software company. We thought these would be great complements, people would come to training, they will buy the software and they will buy the training. That did not end up happening – we’ll talk more about that but what’s important about this point is this gave us a financial baseline. So at the time my training business was doing 1 million in revenue so looking to the software business that was the minimum. If it isn’t reaching a million of revenue in the first year, then it doesn’t make sense to pursue and we’ll just go for the training instead. I would say you want to have some sort of financial benchmark in your head, whatever it is for you to be able to gage success. The most important mind set when launching a new business, being an agency that’s building a product, you are launching a new business. A lot of us here have built businesses and it’s hard, there’s a lot of moving parts. This new thing you’re launching is just as complex as the other business you’ve built and it will take just as much time, effort and money to get going as the other business that you’ve built. And this is how I see a lot of people treating software, you would not open a retail store by throwing some t-shirts on the floor and seeing if anyone happens to walk by your weird store front, pick up a t-shirt and find a way to buy it. You know it’s ridiculous but in the software world I see a lot of people saying build it and they will come. Just launch it and put it out there. Maybe it will get some traction or get discovered. If you wait and see if it gets traction to me you’re saying I’m giving up, I’m not gonna try to promote it or educate people about it and I will wait and see if it gets traction. There are a few stories out there where things magically got discovered but most products that’s not going to happen just because it doesn’t make sense. How is anyone going to know it exists if you just put it on product stand once or app store.

So if you treat it as a side-project it will remain a side project. Make it a core part of your business plan. Don’t just hope it goes well. Everything that you’re thinking about your other business, you need to apply to your software business. With your consultants you don’t want to be I will see if any customers show up and maybe we’ll have a business and maybe we won’t. You have a plan for how you’re gonna keep growing, you need that same plan for a software business.

So here is how things went for us – we did very well so within the first 6 months we had 50k a month of MRR, this shows our customer count for each month and we didn’t have any kind of free plans, these are all paying customers so you can see in the beginning in was doubling every month in June we sent emails to some people, went from 10 to 48 customers, 234, 428. So by January, we were up to a little over 1000 paying customers. So this was successful, this was doing well, this got traction but in 2014, the year we launched, 90% of our revenue still came from LKR. Still came from the training business. So it wasn’t as clear cut as you might think, we were doing well but we still got the vast majority of our revenue from training. And that’s when I decided to go all in on software. I decided to completely shut down LKR, my plan was once we reach break even from Edgar meaning once the revenue from it alone covered the burn rate for the entire company monthly, that’s when we would shut down LKR. And we were still making $1 million a year in revenue, very high profit margin, from this business. So this was a big decision and not just like a its not doing very well. It was a really big decision.

This is why I did it, because I wanted to. Looking back at the reasons why I decided to make that maybe crazy hall, the biggest reason like I said I wanted to be here talking to you guys. I wanted to have a software business and after I’d done it for 6 months, I loved it just as much as I thought I would. It was a business model that gave me a lot more freedom away from the business than I had before. I just really enjoyed it. Number 2, the potential upside was much larger with Edgar than LKR. Like I said LKR was all around me, MeetEdgar is a very scalable business and a business I can sell if I can choose. My previous business didn’t have that option. And number 3 because building two businesses takes twice the time, effort and cash I think we know this logically but often we have a lot of projects going on and we’re not really realistic about all the energy we’ll have to put into those projects.

Running two businesses is twice as hard as running one business. And it’s worth mentioning at this time this was not the only big pivot going on in my life. So when MeetEdgar launched and I made this decision 6 months after launch, I did not look like I look like today, standing in front of you. I looked a little different. Like that. It makes my back hurt to look at the picture. So I was pregnant when I launched – I was real pregnant – we got our first customers June 2014 and my son was born January 2015 so obviously this also played into my decision in a lot of ways and one of them was I was really set on having a business or I could have freedom from the business where I could take time off and didn’t feel lonely standing on the stage with the folding chairs behind me. I wanted a business where I was one of a team where the rest of the team was very capable of continuing and growing the business while it was gone.

So I was very sad because I was pregnant when we launched, I knew I would be taking maternity leave, I was set on removing myself as that constraint or bottleneck. So this is still the process I take in my business, looking at that, we saw the graphic earlier, the theory of constraints, removing the weakest link – I’m a big believer in that and am always looking at myself as the weakest link to be honest. What do I need to improve, that I don’t actually need to improve, why am I slowing down? So knowing that I would go on maternity leave, I just removed myself from everything and structured the business so that it could keep growing without me cause I was going to be on maternity leave within our first year of the business. And this is a huge testament to our team and MeetEdgar, so during the 3 months that I was on leave which was about 6 months after launch so still early in the business, we went from 74k to 110k MRR. I was completely gone, out for 3 months and we had an incredible result, you’re paying attention this means we crossed that first annual RR, that first million in the ARR. And we crossed 100k in MRR, 2 huge milestones in my opinion. 6 months after launch while I was away so that was awesome.

So we made the hard decision to let LKR become messy and this was not our team transition from one to the other, we didn’t shut down one business and open up the other, it had to be messy so that we could just stop devoting resources to it, because closing something in an elegant way takes time. We were like we’re just gonna go all in on Edgar, it didn’t look very clean, it still doesn’t. So, I looked up some history on this, our first MeetEdgar blogpost December 2014, the last LKR blog March 2015, we switched our newsletter branding from LKR to MeetEdgar in May so it wasn’t this big launch, it wasn’t this clean thing. It was a mess and if you’re switching business models, that’s likely what it’s going to look like unless you have the full team on both to close one in an elegant and lovely way and we didn’t have that.

Set Priorities and Stick to Them

Just really briefly another thing that I’m a big believer in that allowed us to do so well without my presence or leadership, setting priorities to each quarter and sticking to them. There is a lot written to the company about this and 3 big rocks for each department and quarter. So for you to be done for a quarter, each department already decided what they’re doing. They have the top priorities, they do them that quarter. There’s not a lot that can go wrong, especially if you’re a business model like us when you’re bootstrapped, self-served and have small business customers. We don’t have an enterprise customer having an emergency we had to react to. The only thing is reactive in our business is because we’re based on Facebook and Twitter so we have to be reactive to what they’re doing but beyond that, we’re very much in control of our business. Which was by design.

So by the end of 2015, this graph had totally flipped around, we went from making 10% of our revenue from Edgar to making 77% of our revenue from Edgar. This was our first full year of being a business by the end of 2015 we were at 2.2 million MRR.

Here’s how we did it!

This is our growth chart of MRR from very early on, I don’t think this one shows the very first month but pretty close to it and up to just last month up to August. And what’s interesting about this chart to me is how even it is. So we often hear the story of the hockey stick where you’re going a line and we found this growth hack and everything took off from there. That has never happened to us, we’ve never had a hockey stick and have no viral coefficient, another cool buzzword, we don’t have that with our software businesses, we don’t have a way to insert ourselves to their communications so people don’t know we’re using it. I’m much more focused on the funnel – it’s been mentioned in a few talks which I was really excited about, I’m a big fan of not worrying about one off tricks or hacks, even one off promotions and really focusing on the funnel. And this is a big thing I learned in my previous business because in my last business, if we wanted to make more money we had to come up with a new idea. I see a lot of software companies like ok we have to grow next month, who is our new partner, what’s our cool new feature? Will we have a campaign or promotion? If you’re not running for the next thing, your growth is going down. I’m not gonna do that, it’s not sustainable and won’t be able to give me maternity leave. We are gonna focus on the funnel and optimise it and grow that way.

And there’s also a lot of things that we chose not to do. I’m such a big believer in the power of saying no, I think it’s one of the most under rated skills in business. We have been very focused, this is a small list of, especially on the marketing side, some things we don’t do. We don’t do integrations, we did launch an integration this year so we could not do other integrations and just do that one. Out of our 6000 users, last I checked 172 used the integration. We don’t get a lot of traffic from their side or anything. So even that, from a business perspective, I don’t know if it mattered. Our company is – we wanted it and thought it would be cool and that’s why we launched it. We don’t do any kind of partnerships, don’t have an affiliate program, we don’t do bis dev.

Here’s the truth – I’m not sure what it is – every time I go to San Francisco it’s the job of everyone I meet. I think it’s about the integration and partnership stuff – do you know what it is? Sales and target? How do we do it? I think that’s a good move. I don’t know cause we don’t have anyone in our company that does it. We also don’t have free trials, we’ve experimented with them and don’t work for us so like most software you don’t start with a free trial, you pay for the thing and buy it. We also don’t have a freemium product or plan, we don’t have a sales team. At all! There’s no sales people at our company, we don’t do any outbound or inbound sales – we can email our customer service team and they’re happy to talk to you but we don’t do sales.

And none of these things are bad ideas or bad strategies, we’ve heard about some companies that grow huge due to these things. The important part is what’s on your yes and no list, but that you have them. And you’re really strategic about how you’re spending your time. On the flipside, the things we do we try to blow out as much as possible so we found that being a guest on podcasts is a great marketing strategy for us. So I do 20 podcasts a month, I have podcast week, one week a month our goal is to make them for the 5 work days and all year long we’re looking to book quality podcasts with enough listeners. Someone came to me and said I heard about MeetEdgar from a podcast and now I’m a customer. So worked for that one guy at least! Even if it hasn’t worked for anyone else.

So we have a very clear idea of the things we do and we don’t do and the important part is not to dabble. A lot of people are like I don’t do partnerships but I’m buddies with this company and will be easy to set up and we’ll do the one and see how it goes. It comes back to the initial plan – if there’s stuff in your business when your attitude is we’ll see how it goes. Why don’t you do this stuff that will work? That I feel pretty good about, probably gonna work. At some point maybe you exhaust all those things that are probably gonna work and then you can move to I don’t know, maybe it will work and we’ll see.

Organic is slow, paid is fast

Another point about marketing in particular organic is slow and paid is fast. Paid can be instant so another thing we did when we launched is we spent a lot of money on paid acquisition right from the beginning. I actually looked up our old PNL for this presentation to see how much we’re spending on Facebook ads in the beginning we were spending 40k a month on Facebook ads when we launched. I looked back at that and I was like what was I doing? But it was a good idea because Facebook ads are a way to get customers in instantly. In the beginning they are low hanging fruit.

So what we did with the ads is we advertised to people that used competitor tools – the messaging was here’s a new social media tool and that was pretty much it. Because if you use social media tools, you are interested in the space and you like to check it out when there’s new tools. And you won’t be able to keep scaling that up forever, you can’t just now spend 500k a month saying here’s a new social media tool. The audience runs out. But in the beginning you can do that and this goes back to why you want to have some basic marketing in place. You want to be collecting email addresses and have a way to follow up on people. You can run Facebook ads it doesn’t have to be perfectly optimised but you know at least you’re getting leads and trials even if I’m not getting customers.

So my point of view is we want to start with a lot of paid and a little organic. Cause organic – and by organic I mean blogging, social media, SEO. That stuff takes time to drive a lot of traffic to your site, you have to do it for a while. So at this point, 2.5 years down the road, we get most of our customers from search, we get a vast majority of our customers from organic channels. We still do paid but it’s not as important which is exactly how I think it should be but it’s taken us 2 years to get to that point. And obviously if we do things right our organic traffic will continue to grow over time.

So I’m very proud of these little pie charts, the blue is MeetEdgar, the purple is LKR. We went from in 2014 about 90% of our revenue being from LKR this year, 2016, 0. All Edgar. No more LKR, only software. And to date, in September 2016, we’re at 3.5 million ARR.

Make a plan, not an experiment

So I have plenty of time for questions which is great but my parting thoughts are make a plan, not an experiment. So you don’t want to go into things thinking I don’t know, I’m just gonna launch this and see what happens. I’m gonna see a partner and see what happens. We will release these features – the truth is you don’t know what will happen, you have no way to predict what’s going to work and what’s not going to work. The least you can do is try to predict and make a plan and follow it through and this is the only way to make sure you’re not spending your time on a bunch of hazardous things that don’t coordinate or add up. The plan doesn’t have to be a complicated plan, it can be a list and think through the strategies that you’re executing and through what the outcomes might be. Ok, if I do these partnerships, I’m taking a wild stab but do I expect to get 5 customers or 500? If I expect to get 5, is there easier things I can do with my time to get that 5 customers? The same with 500. And don’t let your past limit your future. 3 years ago, I had never done software in any capacity, I never worked in software. Now I’m the CEO of a software business and it’s fun and I love it and we’re doing pretty well. You have your whole life, it’s ok to change careers and decide that you don’t like what you’re working on and to do something new. Don’t let your past limit your future and don’t get stuck because you decided to do something years ago. Thank you!

The 11th Business of Software Conference USA, September 18-20th 2017. Boston, MA.

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Q&A

Mark Littlewood: Fabulous! Thank you! Hands up! If you have questions.

Audience Question: Hi! I really liked your do not list, I also do that. Can you continue on and tell us more of your to do’s? the things you do that would be successful. What other things are to do that made you successful?

Laura Roeder: So we really don’t do that much, actually I first started by explaining what we do and it sounds really boring cause we blog every week, send out a newsletter every week, we have email marketing sequencing so once you’re on our email list you’re being educated about the product and getting offers. We don’t do it anymore cause it didn’t generate much traffic. We do a lot of social media marketing only on Twitter and Facebook. We’re not on Instagram or Snapchat and like I said I do the podcasts. I speak sometimes like this but yeah, it’s not a big focus. I’m quoted in articles and stuff when stuff comes.

Audience Question: On the 2 things you mentioned of finding something that people are looking to pay money for and making sure that your solution is better. Can you dig into that second one a little bit? Just both what you did for yours – you said it was complicated. If you were doing others ideas, what are some ideas that you would use to see if your product was better?

Laura Roeder: So to me, better is – there’s a lot of ways to be better. Ours was better not because our core competitor was excelled – they didn’t have the features we had so it was easy to see if you want these features, you have to use our software. We think people want these features because they are learning how to do the features in excel. Which was of course a bet. We could launched and turns out nobody wants it. Another way you can be better is a really beautiful user interface as we saw with Slack. What’s the difference between Slack and Hipchat? Not a ton, but Slack just absolutely dominated I think there’s lots of reasons why, the main one being it’s a much nicer experience. I would say the way you know is that you feel really confident. If you look at them, Slack looks 100 times better. It’s not like – I guess some people would think it’s better but I don’t know. And obviously there’s many people that use Hipchat, better doesn’t mean better to everyone. So you want to look at your solution and know that you have some features or differences that’s just targeted towards a certain market where the existing solutions don’t work for them cause they are brick and mortar and their stuff – you want to feel strongly that this is obviously better.

Audience Question: Great talk! You seem consistent within the conference, including from a dev yesterday. Are you guys considering breaking your no business partnerships rule now that you’re talking about it? More broadly, what’s next? You got into this point, you told a great story up until now. What’s 2017?

Laura Roeder: 2017 is growth and making the product a better experience. So we have about 6000 customers right now, we are very set on staying in the small business space – I loved the constant contact presentation cause it reminded me that there’s more than 6000 customers out there. And I think this is one of the downsides of staying focused cause people are like what’s next? We’re like more of the same, it would be much more exciting if I said next year we’re launching in Asia and going enterprise, but we’re improving our marketing funnel incrementally, raising our pricing, so get in by September. The changes aren’t that dramatic, the most dramatic changes from our POV sometimes we would completely redefine an interface so that it works better but it still does the same.

Audience Question: So from the aspect of this is all the business side, on the technical side how did you take these rules and applications you have?

Laura Roeder: I think the biggest way for us in the technical side is we’re very limited with what we build and our features. So our product is very similar to what we launched with. Looks better, interface is a little better. The only big – if we have RSS, I don’t think we launched with it. Is there anything big that we – I’m asking Sarah on my team. Yeah, onboarding. So we didn’t have RSS integration when we launched and a nice onboarding experience. We spent a lot of time improving so the biggest way we’ve applied these things to development is we said no in many different ways. Social media is a broad space, people use social media and they are listening and people are on Twitter. There are tools that help me do customer service with media. There’s a lot and we don’t do any of that. We also don’t integrate with Instagram because it doesn’t allow you to automatically post things, you have to go on your phone and press a button, our whole value and it’s set it and forget it. You automatically post. People want Instagram and it’s a tough call to tell people no, that’s not what our tool does.

Mark Littlewood: One of the things that really annoys me – there’s many things that annoy me – is those female CEOs that are like it’s hard to be a mother also. You worked it out but you kind of have a slightly – maybe it’s not unique, but you launched your company very shortly after you were pregnant and that I can kind of – I just remember [laughter]. It’s really hard is what I’m saying on the back. That’s even more connected to that whole other projects. And when they are out, that’s the stuff – what else were you thinking about?

Laura Roeder: Somebody asked me on the podcast why did you launch when you were pregnant? And it never occurred to me not to. It honestly never occurred to me and change my plan and I think it’s because the pregnancy was an accident, I wanted to have kids and I know I liked to run a business so it’s not like I got to this crossroads. What I will do now? Have kids or run businesses? That’s what I do – so it was I think what was really unusual is I talked to a lot of female founders and CEO about the maternity leave because a lot of people told me I took a week off and I was there doing conference calls pumping and the whole thing. I was like I don’t wanna do that, so it was unusual to take so much time, especially for Americans. They think it’s like totally insane but I just wanted to give myself the space. People gave me the advice you can come back sooner but you don’t want to tell your team you will come in 2 weeks and then be gone 3 months. So it’s unusual to build a company that allows you to take that space and work life balance is hugely important in our company. That’s how we sell people on working for us, you work 40 hours a week, we don’t have crunch weeks or months. We work normal work hours, zero work on evenings, weekends so the whole company is crafted around those values.

Mark Littlewood: It’s fantastic! Carl!

Audience Question: Starting a business with your spouse – [laughter].

Laura Roeder: Yeah, I mean it’s not for everyone. It’s worked out pretty well for Chris and I. So a few things we’ve been very clear on, so he’s a co-founder but we don’t call him that because he was like I want to build the product. So he’s not interested on the business side, he’s a developer. So he built the product and the initial dev team and now his title is CTO so he advises but we have someone else running the dev team and he’s not coding except when he’s like I can’t help myself! I really want to build this! And he and I work well together because we have different skillsets and we’ve always made that very clear which is one of the reasons we’re not gonna be co-founders. It’s gonna be my business and you will be the product or dev guy! But that was cool because he didn’t want the stress of running a business. I don’t know about product or code so it’s very easy for me to let those be his decisions and let me do the marketing and business side. So having that clarity works really well for us.

Audience Question: Congratulations on having the courage to leave on a 1 million a year revenue! Was it that easy or did you try to have it run by someone else or sell the business or part of it –
Laura Roeder: Yeah, I mean I could have sold it – I did consider I could have sold the website because it generated a certain amount of search traffic but the business was so about me, I could have totally changed it and then sold it for some but that would involve obviously a lot of time and effort changing the model. The truth is I was pretty done with it, I was tired of being the face of it and I wanted a business where I wasn’t the face of it. So because of that, and because Edgar did well. That’s the other thing that’s important to point out. We had 50k a month within the first 6 months so it’s not like I was like what am I gonna do for food or my baby [laughter]. You know? Yeah, it was kind of easy.

Audience Question: Thank you! It was a wonderful talk! I just looked at your website and see you have a team that’s all over the place. How did you find all these people who are now part of this product?

Laura Roeder: Yeah so our team is all distributed but we’re all in US and Canada so we do it different. We don’t do the global thing, we work together just online. You know, we recruit and work remotely, authentic jobs, we’re always trying to do better about educating people what’s unique about our company and there is a lot that’s unique. Like I said, it’s actually pretty rare to not receive emails in the evenings and weekends and we really don’t. We’re bootstrapped and a small business. A lot of those things are appealing to me and for people who work for us that we don’t have to answer to investors and clients – we have a great video about our culture, we try to play up to attract people and we don’t hire people just from software. so Sarah Park is here who runs operations and HR for us. Sarah was running a winter sky resort before she came here. Our customer service person who now is in charge of our whole strategy in that area and we call them advocates, the managers of our team, she started working part time like a CS rep and worked her way up so we have a lot of diversity in the backgrounds of people that come to us. We look for really smart people.

Audience Question: Hey there! So I’ve used your tool before, basically all of the map there and I think at the moment you guys have a great and unique proposition in the library thing and everything like that. And the grass that consists up how good your proposition is right now. How do you think about defending yourself about the competition?

Laura Roeder: That’s a great question and we had our first knock off launch recently. I think they just took our screenshots and put them on their homepage. It’s just an exact replica so it was an interesting experience. This is true for any software, right? It’s just code, anyone who knows it can replicate what we’ve done. It’s gonna take a bit of time and it’s complicated but there’s nothing proprietary with what we have built. I think that’s a big place where branding comes in so that’s not something I touched on in this presentation but we have a pretty unique brand. We call Edgar a he instead of it, we have a personification thing we do and this is another area where devs are like yeah, sure. That will make a big difference in your business. Good luck with that! I remember this is something that my husband did when we were launching. I said we’re gonna do this character and he said it’s gonna be clippy. It’s going to sink our business; everyone will hate it. No, it will be awesome! So I think having a unique relatable brand and company is something that keeps customers loyal but we also have to keep up. We can’t have a crappy product with a cool brand, if there’s a better product people will switch to it and I just see in you know it’s interesting. It’s well known that bigger teams are often slower and that seems very true from what I’ve seen. So as a small company – Cohen wrote a good post about this and there was this great opportunity to go along giants because many people don’t do it. Chris Savage wrote a post about them competing with YouTube and he was no one wants to enter our space cause they are terrified of YouTube. But it’s successful and YouTube could copy everything they’ve done but that’s not the business we’re in. and that’s that they’re in and another place where having really strong feature differentiation is important because we see our competitors with their swiss army knife, having all the social features and that seems to be the direction they’re going. We are focusing on repeating your content, getting more traffic for your content, repurposing. So if we stay there, they won’t be able to build everything and that as well as we can. We’re always gonna be better at that if that’s what we do.

 

Mark Littlewood: All right, fabulous! Thank you! [clapping]

The 11th Business of Software Conference USA, September 18-20th 2017. Boston, MA.

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