How does a bootstrapped software company effectively market especially when its founders despise (and, in fact, suck at) sales and marketing? The answer for PDQ.com finally came, in part, from Charles Bukowski: Don’t Try. The founders just started doing what they loved: Talking tech. They offered solutions and suggestions for Sys Admins via content in blogs, KB’s, videos and webcasts. The content was created for people, not algorithms. In this talk, Shawn and Shane share some ideas that worked and some that didn’t…
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Shawn: Hi everyone. It’s nice to be here. Thank you Mark for allowing us to come and share some of the things that we’ve learned. Last names notwithstanding we actually are identical twin brothers.
We’re turning it up to eleven. This is actually our 11th BoS that we’ve been to. We’ve done 10 in the United States. We’ve done one in Europe and looking forward to many more. One of the challenges with being at BoS is that you learn a ton. When we came to our first BoS we had just wrapped up our first year of sales at a whopping ten thousand dollars in sales. Which is amazing because our first BoS we came here and heard Peldi talk about how his first year he did over a million dollars in sales.
Shane: Not to mention Joel Spolsky mentioning over a million in his first year like damn we suck. And we thought wow.
Shawn: And we thought ‘Wow, we are losers.’ We thought: ‘How are they doing it?’. And we thought: ‘Well next year for sure.’ And then we started going down… We’ll talk about that. One of the challenges is that we’ve learned a ton at Business of Software and as we were preparing this presentation we realized we were starting to try and do the same darn mess that Dharmesh Shah did on his first Business of Software talk where he said he just tried cramming everything that he knew in there. And we realized that if we’re not careful we’re going to fall into the same traps. We’re really going to try and stay focused on alternative marketing or marketing for people who really suck at marketing
Shane: It’s not lost on us the fact that we are doing a talk on marketing and not only do we dislike marketing, we really suck at marketing. So, we’re going to talk about how you can suck at marketing and still kind of accidentally market.
Shawn: We know that traditional marketing works because it’s a billion-dollar industry and it’s not going to just pay for itself. So, it does work, just not for us. So, here’s our growth. We’re now at about a 20 million dollar a year company. But if you see this flat line right here there were actually sales ten thousand dollars a year, forty-five thousand dollars a year. We’ll go into that a little bit. This is the equivalent in the health industry as flatlined or ‘Hey you’re dead.’ OK. So, while this is kind of cool over here. We want to focus on what we learned over here at our near-death experience. So, let’s zoom down into that flatline and we see that 2007, 2008 – in 2008 we actually did forty-five thousand dollars in sales which is kind of cool because we did 10,000 in 2007 so I said ‘Hey we’ve quintupled our sales.’ That was the only consolation prize we could give ourselves. We thought ‘Hey we’re on the right trajectory’ and then 2009 came and we thought ‘Oh crap this is going somewhere very bad.’ And we referred to this in our history as the slow bleed of death.
Shane: It is worth stating that we are bootstrapped there is no funding. So, Sean and I consulted, so we were nice high paid consultants in the systems management so we were subsidizing our other partner who is our fellow misanthrope and we are paying his salary as well as just throwing the extra stuff into the company. But this represents the sales or lack thereof.
Shawn: So, let’s talk about this section before we get to the really fun section. Here’s what we tried during this time all, again, self-funded. We did try and raise money. So, the first thing we did is we tried print ads and we’re gonna actually show you our adorable print ad. Now in Hollywood if you ask a director or a producer or a screenwriter ‘Hey will you let me see your very first project.’ Not only would they not let you see it but they won’t even admit that it was theirs. We’re going to admit that it was ours. We’re gonna own up to it and let you see it and then get a chuckle. We did try AdWords, we did some remedial videos using Camtasia. We were trial only and this is a really big point: You either tried our software or you would buy our software. We also tried doing all things to all people. Now, we are a systems management solution. We sell software business to business to the I.T. administrators for a company. These are the nerds of the company; gravy stained, ink stained, sweat marks. These are the guys that they locked down in the basement to keep the computers running. Very smart people have no social skills but we try doing all things to all people. We tried throwing so much into version one of our software that any marketing that we tried to do – we thought ‘Well, we’ve got 20 words that we can add in, let’s try and put in everything that we can do.’ And we were just all over the place. We also really suck at our content writing, it was just horrible.
We’re gonna talk a little bit about that but we want to hear a little Mitch Hedberg quote here.
Shane: As the late great Mitch Hedberg said: ‘You can’t please all the people all the time. And last night all those people were at my show.’
Shawn: So, let’s show you a little bit about our first marketing and we want to give an illustration. And what better way to illustrate than with Joe Pesci in My Cousin Vinny? This was our marketing approach. Shane’s gonna get to the backstory.
Shane: In gun speak to ‘spray and pray’ is just that you’re hoping you’re going to hit something and this is our laser. Honestly from my cousin Vinny this described how we approached marketing. Go ahead. And there’s this strut. And the owl pissing him off. Owl that woke him up is still the screech of death owl. We didn’t even come near the mark.
Shawn: So, this is when we get to some of the things that we learned in 2008/9/10 and maybe even now, a lot of professionals were saying ‘You need to speak to the benefits not to the features’, and they always gave the same analogy of the iPod Classic. ‘Do you want to sell all of these features or do you want to say put a thousand songs in your pocket’. That works, if you’re Steve Jobs and you’re selling to consumers but when you’re selling to really technical people who have very specific technical problems, they are looking for the pain points, they’re looking for the features. But we didn’t do that. And we discovered: that’s the wrong approach. And this is a big reason we believe that our content just blew chunks.
Shane: One of the reasons is: when we thought ‘OK what are the benefits.’ They always came down to two things: save time and it’s easy. So almost all of our content just came down to ‘save time and it’s easy.’ So, it’s not going to work when you’re talking to sysadmins.
Shawn: Because we did the spray and pray and we thought: ‘Oh wow, that didn’t work. We didn’t hit anything.’ We decided to do what all young companies do. And we thought: ‘Well we really blow chunks at marketing so let’s just hire a professional.’ So, we actually found someone who does copywriting and they swore up and down that we need to speak to benefits and we actually let them – we let a non-technical marketing person write our content on our page for a technical audience and yet this person was not technical. We went into all the features and how cool our software was. He’s like: ‘Well that sounds like you save time, that sounds pretty easy.’ So, all of our features that we had on our Website he reworded and it was some version of ‘This will help you save time and, by the way, it’s easy while you’re saving time.’ And it was page after page after page and if you looked at our Website you would not know what we did. Now Peldi – I love Peldi, he’s one of my favourite speakers at BoS – a few years ago, opened up and allowed his Website to be analysed and when it was being analysed Dave said: ‘Wait a minute. You don’t actually mention that you do wire framing’ and Peldi said: ‘That’s because we were told to speak to benefits and not to features.’ So, a lot of people fell into this. And so, we thought let’s twist this around a little bit. Let’s do the best of both worlds, let’s do features along with benefits. That is really good information, especially for our customers because we actually started to articulate what those features did. First, we went through and just rewrote all the content and we started one page at a time. We also threw in what we thought would benefit them. The problem is, again, we were doing all things to all people and you just can’t do that.
Shane: We didn’t do a deep dive. We fell into the version two problem that you’ve probably heard about and we couldn’t do a deep dive on the features and we couldn’t get focused. So, we had to remediate.
Shawn: We learned that traditional marketing is really tough. If you need immediate sales, we’re talking about the print ads, we’re talking about things that kind of build brand awareness – which of course we had none of. When you would open up these awesome glossy print magazines – in 2007 and 8 there were a ton of them – and there was one in particular that was widely read by Windows administrators and you saw these full-page glossies. They were all the same companies, big huge companies IBM, Dell, Microsoft, and they were all building ad awareness. They weren’t trying to drive a specific sell. The same ad campaigns would go over multiple magazines over multiple years. And if you need media sells, that’s a really tough way to do that when your customers are ad blind.
Shane: Now Grandma as you know is not that blind. You’ve gone to her computer to help out and you see there’s a lot of toolbars you’ve got installed there. Our customers are not only ad blind, they overtly avoid any ads. A) They would have an ad blocker but even if something slipped through, they would say ‘I’m not going to be fooled into clicking this or reading this because it’s like a personal failure.’ They want the content. So, it comes down to having to really know your customers. Any ad that we would do was literally just wasted.
Shawn: Our customers were just ad blind to the point where if they saw the ad even if it spoke to what they wanted they’re like: ‘I’m not gonna click on that, The Man will win if I click on that’. Talk to Dave Collins and Aaron Weiner if you need AdWords that work. These guys are experts and I wholly and hardly recommend them and I thank them also for being consistent sponsors to BoS because this is the coolest conference ever.
The next thing that we’ve learned is if you have limited resources – and our resources were quite limited, again, Shane and I were just dumping the money in and tightening the belt and living off of our consulting income and I think over those four or five years I put in about eight-hundred thousand dollars for the company just to keep it going.
Shane: Shawn sorry to call you out right here on stage. No. Over that time you put in one point two million.
Shawn: OK, well my stock reflects I put in eight-hundred thousand or so. Someone’s got my stock and I’m a little pissed.
So, the next reason is really big, I think you should all take note of this because it applies to you. If this is your organization, you’re going to have a real hard time with traditional marketing. Your name is Shane or Shawn.
So here it comes. This is where we’re going to play the ball. Throw the ball or the dodge ball, whatever it is. And we’re going to cover ourselves and let you see our very first marketing attempt.
OK now we could not afford the full page glossy because that cost money. Ours was in the back of the magazine on a third of a page with two other ads stacked on top of it. It still cost twelve-thousand five-hundred dollars. Yeah. For a three-month run by the way.
Now again we were told ‘You speak to benefits not features.’. We actually put a screenshot of our software and we’ve been told that our software saves your time. You could download our software, install it and be using it in the same time it takes you to eat a sandwich. So, let’s put a sandwich up there that will really drive home the point. That’ll drive those sales like you wouldn’t believe. So, Shane and I decided hey this print ad is worth a lot of resources. So, we went out and we spent two dollars and fifty cents on the good loaf of bread not the 79-cent crap that we were living off of. You could actually see the whole grains in this bread and we glooped on the jelly and we took it into the garage with those horrible halogen lights and it turned out yellow and we didn’t really know anything about Photoshop and it just looked like the most unappealing sandwich that you could ever want to eat.
Shane: It served two purposes. This actually was a meal for us. This provided sustenance and for all we know PB&J stock went through the roof. Nothing touched our software but…
Shawn: And we did go through almost the whole loaf. Those are my bites, just so you know. I did a lot of travel. And I happened to be in Italy with my clients and they subscribed to this magazine. And so, I’m doing all my work and I look over on the desk and there is the Windows 80 Pro Magazine still in the wrapper. I’m like: ‘This is so cool, this is marketing research.’ I’m going to go to see him open it up, go to the very back of the magazine and go: ‘I need to look at this sandwich.’ And I was there for two weeks. And the magazine was never opened and I was just heartbroken. And then I realized as we looked at the measurements over three months that same ad generated, I think about 20 ish clicks. 10 of which were mom.
Shane: She was so proud of us.
Shawn: I think she probably had that sucker framed. Bless her heart.
But one good thing did come out of the sandwich, besides a meal. And that was, you know how magazines say that there is this huge wall and there’s a separation between print ad and editorial. It’s not as pure as they would like you to believe. All of a sudden magically out of nowhere they said ‘Hey you know we’d like to do an article’, because it came time for renewal and we’re like ‘Well we’re poor’. And they said ‘Well we’re going to do an article about you.’ And so, they actually interviewed one of our customers, they had an awesome picture. They did a cool article. We got hundreds of clicks on that article and it was so telling to us, we thought ‘Wow it really is better to be the content that consumers are reading as opposed to information or noise that’s around the content that they’re reading.’ And we decided at that point that we were not going to do any more print ads but as you saw with the slow bleed of death we had to make a decision.
Shane: You’ve all seen Apollo 13. So, you’ve heard this quote.
“Well I suggest you gentlemen invent a way to put a square peg in a round hole rapidly”.
We were definitely the square peg and the hole is successful marketing and we realize that this isn’t working. Whatever we’re doing isn’t working but we’ve still got to get our message out. So how do we do that?
Shawn: Now that we’re successful there’s not a week that goes by that we don’t have someone contacting us saying ‘Hey we’d like to come in and invest some money with your company. It happens all the time from very reputable sources. We couldn’t get these guys to return our phone calls before. But one of the good things about funding – which is why I kind of think that if we had been funded we would have either been out of business or they would have given us sooner because we were still able to eat and make our bills and make our mortgage payments and stuff. We let this languish for three years but if someone else hadn’t been holding us to the fire we probably would have realized within three months or maybe two quarters ‘Hey this really blows.’ And so, we were slow. That’s one reason why that flat line is so long because we weren’t dying.
Shane: I got to say Adam – who is our other partner – when we were discussing our success and he said one of the keys to our success is we never said no. Even when we should have. Because we were consulting and we could still eat, we thought it would solve itself.
Shawn: Yeah. And so, we decided that there was a couple of things that weren’t marketing related that are very important that we change in and we’re gonna talk about alternative marketing – which is why we’re here.
Shane: The first thing we did is we thought that our software – we don’t get anyone slamming our software we had a couple hundred customers who really liked it. There were a couple hundred customers who were paying 250 bucks a year. We thought no one’s telling us this sucks but we know that it sucks. So, let’s go ahead and take out the most important two features of this software and create two new products that focus on those two features. And this helped our marketing message like you would not believe. All of a sudden, every piece of content that we were writing we’re no longer trying to fill up bullet points of hitting every feature. We had one feature in each product that was the most important thing is we made our product better. The next thing and this is how I wanted to tell all the different decisions we made. Most of these things that we had done came from ideas we got while at Business a Software. That’s why we keep coming back because this is so so so good. This next piece that we did, we consider it critical to our success.
Shane: This is where, if you recall, we were trial only so – hey try our software and then if you like it by our software. We read that the founders read a book called Free the Future of a Radical Price by Chris Anderson and it was a game changer for us. We all read it and convened in my basement and Shawn asked the question – do we want people to try our software or use our software.
So, we made a really big huge decision to go freemium and we had a free version but, see we are our own customers. We are system administrators and there were some contingencies that all of us were ironclad on. If we’re gonna go freemium the free version has to be useful, it cannot expire, we will not put ads in there, there are no strings attached and we will not put shitware we will not bundle the Ask toolbar or all the different antivirus stuff. Customers hate that in fact they use our software to remove that very shitware so we’re not gonna do it. No strings attached. And that was probably the biggest game changer right there is that we, all of a sudden start having thousands and thousands of users, many of them would reach out to us and say – wow you’re giving too much away but this is real system management software that works and it’s free. Now we do have the premium model.
Shawn: The most important question that you can ask yourself if you go to the freemium model is – what are you going to give away for free. Because it’s really difficult to take something away and make it paid if it was free before. Your customers they keep score and they know if you try and do a little switcheroo on them. So, we have a little saying that if you’re not losing sleep from giving too much away then we’re not doing it right. And there was one feature in particular that was really tough for us to say let’s go free it turns out it was very advantageous for us to do that. Basically, if you were really smart and you were willing to devote a lot of time to this one feature you could actually replicate some of the paid portions of our software. But again, it takes a lot of time and you had to be super-duper smart and that just gave us a lot of credit. So, at this point we’re coming out of the poverty scale and we’re actually realizing the trajectory is pretty good. We’re actually making some money and we started focusing on our blogging and our videos. We’ve always been blogging. That’s very important. Almost from day one and that was an idea we got from Business to Software. And so, we were creating content Web sites blogging and we were always increasing the quality of our videos. We went freemium we had two focus products and we decide that we’re going to be ourselves and we’re not going to try and be marketers.
Shane: And that being ourselves is because we’re not marketers and we realize we’re trying so hard to blog and follow all the rules that we read about you know making sure that the title is just right. And making sure the images just right. And then you think of Morpheus – What if I told you: We create content for humans not algorithms. We realized – hey only thing that we’re good at is talking tech. So, our blogs, we just started to talk tech. We just started to be ourselves. Mark, I doubt anybody who’s gone to previous BoS conferences will be able to talk to you about the shirt that was before, this Motorhead Lemmy is fantastic. They’re going to remember this one. This is you being yourself. This is something they’re going to remember. And after I saw that I thought shit, I’m a huge Motorhead fan and I want instead of Tom Waits who is my favourite instead of going out West. I thought I’m going have smiling like a killer. Come on down here from Motorhead but it is too late. People are gonna remember this. You’re being yourself and our customers realize we’re just talking tech. Even if we weren’t hawking our wares we would blog about hey here’s a technical problem that sysadmins find, here’s a solution even if it didn’t involve our software. And pretty soon we realized that people were trusting us because it wasn’t always about our products. But even more importantly we were just talking tech.
Shawn: So, as we’re creating our own content which was what we call ‘The alternative marketing’ we use what we call The Long Tail method. Now Shane mentioned a book called Free the Future of a Radical Price by Chris Anderson, his predecessor book to that was a book called The Long Tail. This book is a game changer if you are trying to get organic Google results or you’re at the top of the page, you really should look at the long tail because it is a method for being very focused in your content that you’re creating and speaking to very specific problems, because our software does what we call software deployment and inventory collection. Those are what Dharmesh Shah refers to as ninja keywords and you don’t want to fight a ninja unless you’re a ninja. That’s one of the things we learned at BoS and so we started doing very specific content. I’ll give an example of longtail. So, our users use our software to install the updated java version to all of their computers and they might have 500 computers that the sysadmin is in charge of managing and they could use our software to install it silently to all the computers and no one would even know that it happened they were still using this on their computer at the same time. And so, in October of 2010 I put this to the test. I just did a blog and a video on how to update Java to all your computers and it coincided with a quarterly Java release. And then I did the most important thing, forgot about it. It’s kind of when you buy stock in a company you don’t wanna sit there and hit the refresh on a ticker all the time, I just forgot about it.
The next January the next quarterly release of Java came out and I thought – Oh that’s right I wonder how that blog is doing. It was number one above Java dot com and so the long tail actually works because people who are searching for the same very specific definition or feature that you’re looking for are almost bound to find you because you’re not speaking in general.
Shane: Some of your customers actually know what they’re looking for.
Shawn: Seth Godin at one of the Business of Software said that you have software which means you have a solution that fixes a problem which your customers don’t know that they have. That doesn’t apply to us because our customers know very well that they have a very specific pain point and it’s driving them to Google and they’re saying oh my gosh there’s a huge vulnerability in Adobe Flash. I’ve got to get this patched up my CEO is coming down hard on me. That’s a huge vulnerability.
Shane: They don’t Google. How do I save time? They Google. How do I deploy Java to 1000 computers silently? That’s a literal search.
Shawn: And that right there would be a long tail term, that big long string and so that is probably the only CEO that we deal with which brings us to the next point if you can create your own content.
Keep an eye on SDL but don’t worship it. There’re certain best practices I guess but we don’t run everything through the high priestess of SEO when we want to do something. We just speak to sysadmins because we are sysadmins so we know how they speak and we speak to that. And we just try to do long tail and we hit very specific areas.
And so, this brings us to the next part which I think is why Mark wanted us to come and speak is because we do something that’s a little bit different with our videos and with our webcasts. So here is this awesome trajectory. One thing I do want to talk about. I would come to BoS and by raise of hands how many you have a SAAS model or all your applications on the web.
[audience members raise their hands]
We so envied you because it was bad. I mean we do our software because we have required route access God writes the site the administrators have to have that deep deep access.
You can’t let that live in the cloud. So, at some point we have to be on prem software sort of the old boring traditional software which is a big reason why I thought we couldn’t raise money. But we decided you well we can’t go all cloud but we can do some cloud features. We have the on prem software but it will use some cloud features, those features became our most popular features and it allowed us to do what we want to do from day one. We thought you know what. We’re not a cloud product. We have cloud features but we’re just going to make believe and we’re going to change our pricing model and we’re going to call it subscription because we just did the buy at once and then you look at 20 percent upgrade fee year after year which is very traditional we just say we’re going to change it and this can be the same price every single year.
And we learned that BoS the best way to do that. We learned that you just change a price and our future customers existing customers were grandfathered they were frozen in time and we got zero complaints. The new customers did not realize that they were spending a lot more. The old customers were fat dumb and happy because they weren’t. Now all of a sudden, our revenue is climbing and you see up here we added we added some webcasts.
Now I want to show you. A little bit about how our videos work. This is a screenshot of one of our webcasts. Our produced videos that we can do multiple takes on and then do all the cool call out features… If you don’t do this you should look into it. We discovered that you can have the screen capture in a voiceover but people would drop off our videos pretty quickly. So, we thought let’s get a green screen in here and superimpose the guys who were talking at the introduction and at the closing of the video and we saw our viewing rates went a lot higher than we thought. You know what. Let’s just keep him on there for the whole time as this little experiment. And it went even higher. So, when you watch a video of ours the guys giving the video are actually superimposed over our product and we became known for doing that. One of the challenges is we want to do webcasts, it really excited us on webcast because we thought this is a way to really engage with the customers because on a post produced video the one thing that customers can do is leave you some mindless drivel comments of ‘hey that’s a really cool beard’ or ‘good job’. Once in a while you might get some technical questions in which case you always say, oh yeah that’s a good idea. So, there wasn’t a lot of back and forth and we thought with a webcast there can be tons of back and forth because not only are they asking you questions live they’re actually driving the content and when they know they can actually direct the content and shape it the way they want to go. All of a sudden, we started getting a lot of participation. The challenge was there was no webcast software that allowed you to put your talent over your product because all the go to webinar type software they always want you to have a PowerPoint presentation and a voiceover. And if you had to have a Web cam we’ll put that in a separate box around the content and you’ve got you guys over here with the black screen behind them and you’ve got the content here and it just didn’t work for us. So, we thought as luck would have it we’re a development shop.
We actually had developers we’ve dedicated one of our developers solely to making a new product and this is that product. At first, we were webcasting through YouTube which we still do use and YouTube has a really cool feature that is a chat window. That’s great until you get two or three hundred users on there and then that chat window is doing this and it’s going up and up and up and really good questions get lost in this banter back and forth between customers who are helping each other with problems or commenting about their favourite movie.
And so, we thought let’s create something that allows us to have users ask their own questions. And so, you have the banter back and forth but then if you want to post a question then we can see that question and if we think it’s worthy, it’s not off topic, it’s not a feature request we’ll approve it and when we do that. All the other users can see it. They can even vote it up and then you can see the content and we’re part of it which is great because when you have your talent superimposed, there’s times where you have a pause in the action you’re not moving the mouse you’re explaining something and your users don’t know where to go. They can look at those two ugly mugs. It really works. What we discovered when we want to build this software is you can’t do it with USB, mike and a webcam. You actually have to up your game and we had to actually go pro, we really did. There was no other way to do that, but it added the quality to our software.
Shane: Yeah it gave us the ability to take that to the level that we needed. Definitely.
Shawn: So, here’s a problem that we learned along the way, when you’re doing alternative marketing. How do you staff your sales and marketing team? We didn’t want someone to come in and say – hey I’m your new sales and marketing guy, just give me a hundred thousand dollars and I’ll start a new ad campaign. I’ll get you a trade show and then we can get some PR, some press releases out there and you’re gonna love it. We didn’t want that but everyone that we interviewed. That was the only approach they knew they were so tied into it.
So, what we thought we were going to do is be ourselves. If you have ever been in Salt Lake City, and at some point, in your lives all of you will find yourself in Salt Lake City. And you listened in the last 30 years to rock station then you know who Kelly hammer is. He’s here today. He was a DJ. Kelly is also a good friend of mine. So, when we were building the studio out we were having some problems. We were newbies, we weren’t 80 guys. We had this hissing problem. And Kelly would come and help us build our studio out. Radio is not a growing industry. I think we can all agree that. There’s a lot of really talented people who, just like in print journalism, are being laid off and it’s not because they’re articles blow or because they’re not a good DJ that’s just because the industry is changing.
Shane: And he’s got this thing and he has an excellent deejay voice but he, like everybody else. He saw it coming and when he was laid off we just jumped on it we realized you know what. There are so many broadcast professionals that are terrified for their jobs and we’re gonna grab this one because this is the alternative marketing that we’re looking for. We’re gonna go to webcasts we’re gonna go to videos and we need that expertise that’s not in the traditional marketing sense. So, we grabbed Kelly and told him to run with it.
Shane: Kelly interestingly enough has just been highlighted in an industry magazine for radio titled Life After radio. Because when we go to NAB which is the National Association of Broadcasters – it’s a big event in Vegas and it uses every square inch of the Las Vegas Convention Center which is not easy to do and it’s where if you want to buy green screens or microphones that’s where you go. And when Kelly walks in there you should just see that people who know him because you know after 30 years everyone knows Kelly and they’re just kind of looking at him longingly like – oh I’m still on radio and he’s eating.
Shane: But then don’t let that get lost on you, the fact that we are a software company that attends National Association of Broadcasters Convention because we needed to take our studio all the way to get our message to the next level.
Shane: Yeah. And so, Kelly is just an example. If you look at our sales and marketing team you will find a graphic designer, you will find a customer service expert – that we had worked with as a vendor of ours and we pulled her on because she was so good at customer service. You’re gonna find two of our support technicians who actually have a personality. In fact, those guys right there, they’re so good personality-wise and they’re some of the faces of the company they’re actually on our sales and marketing team. And so, our sales and marketing team is not made up of sellers and marketers and it helps us get our content out because we’re not trying to shield that with a bunch of crap. What we want to do now is kind of show you a little bit about our videos because again this is why I think Mark wanted us to come in and talk with you. Believe it or not you don’t have to have millions of dollars invested in studio equipment it takes thousands but it’s not millions and a lot of people can do it. You can start small and grow up. This video was actually created just for BoS. So, our videos, again, we’re not always hawking our wares. That’s really important we’re always trying to help sysadmins be better sysadmins and we often take an inner reverent approach. We’re trying to a lot of funny videos because hey we think we’re funny but it responds well because people know they’re not going to be watching a commercial and this is just a very quick montage of some of the videos that we made.
All those came from clips of videos that we had released. And now comes the part, if you’re going to create your own content, you have to be honest and Shane’s going to talk about this.
Shane: Part of what we call embracing the suck, number one when we do our videos, especially our webcasts. I like it when there’s errors. We try not to cut anything out. Many of our videos are done in one take. There are some times where I was going a little too long to start over but for the most part if there’s an error that comes up I want customers to see that because they know that we’re being real but they can see how we troubleshoot. It’s kind of free at no extra charge. But I just hate that feeling that we’re you know pulling some trick. Now we’re real and we suck. And one of the things as we start to get a little more successful, we started to not follow the roadmap guidance that was presented before, but we start throwing a lot of features into our products and our products got very slow. And our customers started to let us know. ‘Yeah. Love the new feature but Dan this is taking forever to open. It’s taking forever to deploy software. It’s taking forever, it’s getting really really bogged down’ and we took a peek at the code and said OK you’re right, this sucks and we’re not going to do it, we’re going to put a freeze on new features until we fix this. We didn’t want to just throw a couple of point releases in there and pretend that nothing had happened. We embrace the fact that we dropped the ball. We made a video and actually got a really good response from our customers and other people to say yeah, we really suck.
Shawn: So that was how we said sorry. And our customers responded very well. And what’s interesting after all of this and even after what Mark talked about having us come out and speak we realized you know what, we have built a community. And so, the saying is in 10 years we had an overnight community.
We were always told from the very first BoS that we ever came to, to build a community. So, we did all the things that we thought you should do. We had a Lincoln Group. I haven’t been in there in a long time. It’s pretty dusty. You have a Facebook page. Yes. There’re hundreds of millions of people having conversations on Facebook. There’s someone probably talking about what you do but not very many if your business to business. So, we did all these kinds of platforms that you think you should do, we have a Twitter handle and we do use that for you know update releases and stuff. But we realized with our webcast we actually have a community. People actually follow and they come in an hour in advance of the webcast and when you’re doing a webcast, here’s one of the secrets that we learned. You don’t want to just go live and then realize that a microphone is not working or you just say something or a camera’s been moved so we do what we call a preshow for 30 minutes before our webcast goes live. It goes live and it has a countdown to when it really starts and people think our customers think oh these guys are just talking about movie reviews or drinking scotch or whatever it is because they do drink on the on the webcast. We’re actually testing all of the system so that when that magical start comes We’ve already fixed everything go a half hour before.
Shane: We realized that almost every was showing up well before the advertised time because they wanted to talk movies or motorcycles or scotch. It’s just took on a life of its own.
Shawn: So, you know we have people in England and Italy whose day has ended – it’s 10:00. We do this at 10:00 a.m. on Thursdays in Salt Lake City and it’s 5:00 in London and then 6:00 o’clock at night in Italy and we have customers that go home, pour some scotch and sit down and watch it every single week.
We’d do it earlier for them but 10:00 is very early to have these guys drinking scotch.
What’s interesting one of the things that happened like three weeks ago is we had a customer note. This is Marcel. Marcel has been a very active customer of PTQ for many years. He’s very active on our boards. He’s one of the first people to come in on our webcast. And it’s not uncommon for someone to drive through Salt Lake, again like I said and we’ll be there sooner or later. And so, we have customers come up and say hi which is cool. It was not uncommon. Marcel said – Hey I’m coming over. We just thought Oh good he’s doing what every European does at some point in their life; they go to the US because he’s from Slovakia. And so, he showed up at our door we thought we’re going to see him for one day do some photos have some fun take him out to a game. He showed up for two weeks.
Shane: We were his vacation. When you know your customers, once again that’s our customer. This is a guy who wouldn’t click on an ad if you had a fucking gun to his head.
Shawn: And so, we were like oh two weeks don’t you go to Vegas. He’s like no my dad was an alcoholic and gambled so I don’t want to go to Vegas. And we’re like – well you can go to Park city, all the fun stuff to do here. He’s like – no no, I just want to be here. So, we gave him an office and let him test our software. And loved it and we thought we were just wrapping up our presentation and we thought – let’s get a picture of Marcel because he actually flew on his own dime from Slovakia to come and see us in Salt Lake City. Questions.
Mark: All right some questions – Bridget.
Attendee: Hi guys. I really enjoyed that. Thanks very much. Really really simple question. So, I was kind of waiting for you to get to the point, which is – are you saying that all these Web cast stuff got you from nought to 20 million. You say that you’re 20 million turnovers is directly as a result of the fact that you’ve built this successful community and everybody loves your videos. And if not or how are you basically measuring it.
Shawn: No, we don’t. We don’t think there’s a magic bullet there. The closest thing to a magic bullet we believe was going to a freemium model because we have over 200,000 system administrators around the world using the free version and we have 21,000 companies who have licensed our software, we license up per administrator so some of those companies have up to 100 licenses. So, there is no magic bullet we just happen to think that it was very important because it’s one of the only things that we do when we create content. We put it on our Web site and we make a video about it. And if it’s a really important topic that we feel can fill up 30 minutes we do a webcast on it.
That is all that we do.
Shane: But we think it really does help with engagement. We can measure engagement. So, you know, you can talk all you want about the analytics discussion. But you know if you look at our NPR score it is skyrocket. If you look at our actual sales we have an 80 percent retention rate. That means obviously if you’re giving us money this year there’s an 80 percent chance you’re going to give us the same amount next year. And a lot of it we believe is due to the engagement in the communication process that we have with our customers.
Shawn: Oh, and because our software is so easy to use it saves time and fast.
Mark: Alison how was your first day up BoS.
Attendee: My first day was awesome. I think I’m losing my voice. So, I talked to a lot of great people. Thank you both so much. First, I want to commend you on saying that you don’t have to just sell your product to your customer. And I think being involved in the tech conversation is one great way to build brand loyalty. But my question is actually about some of the changes in marketing. You spoke about webcasts and I know podcasting is also really big right, now we have the switch to conversational marketing and I want to hear what your opinions are on some of these new trends. Are they just fads and how much weight do you think that people in the B2B tax base should be putting onto them?
Shawn: When it comes to podcasting. Because we’re very technical it’s very difficult to go into a technical discussion especially when you’re trying to show someone how to do something. So, I can’t imagine our webcast being converted to a podcast very well. It’s great if you’re trying to convey high level information if you ever listen to an audio book that has a lot of charts. You quickly go and buy the paper bound because you’re like they’re describing a chart and wow you know it’s just doesn’t work very well. So, in that regard we like to have the engagement of them seeing our product and then to see the faces on there to kind of keep their attention.
Shane: If you go to live PDQ Dot Com you’ll see all of our old webcasts and yes, they can be 45 minutes. But guess what. You expand that and we’ve got each question that is posed by a customer during that webcast broken down so you can click right to that point in the video to see an answer to your question. And yeah, we have a webcast slash podcast. I don’t tell my family. I don’t tell people who aren’t customers about it. I’ve had people say hey you know watch my podcast. What’s it about. You know this is nothing that’s going to interest my family. I’m just really doing it for future customers and for tech people. So, the audience is going to be necessarily lower. We’re not thinking this is going to be the next twit but it’s a great way of getting your information out as long as you make it accessible like breaking down the questions, clickable they can they can go straight there 18 minutes into it to find the answer to their question.
Mark: Yeah Ray.
Attendee: The line came to my mind when you’re talking about the initial discussion of talking just benefits and the sandwich ad. Was that all marketers are liars. And that part of the problem with benefits and just discussing benefits as a series of bald statements is the same problem of people clicking on your ads. Right. They don’t believe what’s in the ad. They believe that you’re lying to them and then you show the story of the webcasts and you are being vulnerable. You are being imperfect and you’re talking about what you care about. I was wondering if both of you could expand on your experience with building trust through honesty with your customers and prospects.
Shawn: That’s one of the things I love about Business of Software is because the best talks are when someone becomes very vulnerable and when they open themselves up to say we’re so not perfect. And here’s the proof of it. And I do think that helps our engagement with our customers.
Shane: Yeah, it’s a long game. It really is a long game because you know trust is something that has to be earned. And you know having being self-deprecating certainly helps but if you’re not willing to show the blemishes then people are going to see that everything looks too pretty, everything looks too produced and so it’s the long game of building that trust. So, as you can tell from how long it took. Yeah but it is it is very very important. That’s all I would say. There’s not a shortcut there.
Attendee: So, you mentioned that with Facebook you didn’t really have any success. Are there other third-party platforms that you found work better. I’m thinking YouTube perhaps reddit. What’s your experience there.
Shane: Thank you for bringing up Reddit because that is one of the community aspects that we have and we really take a hands-off approach on Reddit but because we’re so honest and because we’re not always hawking our wares we do very well on the sysadmin sub Reddit and by raise of hand who here has been flamed on Reddit anyone.
How did it feel? It didn’t feel good. Okay. It sucks.
And so, one thing that was interesting about Reddit is we noticed that because we were not the whole corporate we weren’t always hawking our wares. We just let the redditors and sysadmins people on that sub-Reddit talk about us.
And if you try and complain about PDQ software, they come out with the long knives and it’s not us and we’re like – Oh he’s about to get flamed. And so, they are really really huge in a big part of that number, that feature I talked about that was really hard for us to decide to put in the free version, that one feature alone endeared us to so many of the redditors that they thought OK these guys. They realize that we can basically circumvent their software to a large degree and they’re still okay with it. And in fact, if someone is singing praises on Reddit and the thumbnails say hail corporate, long knives come out because they’re like that’s a user. In fact, if we ever do a voice in – which is rare – we always say by the way we are with PDQ. So, Reddit is big.
Shane: But we didn’t try with Reddit. I have a tattoo of Borkowski right here. Don’t try. I’ve had it for years. I love Borkowski. He’s my favourite author. And don’t try really resonated with me. I’m not gonna get on Reddit and risk that hail corporate of trying to push it. It just kind of happened organically. And while we’ll keep an eye on it and maybe answer a question we don’t try.
Shawn: Think we’re out of time Mark. Can I get a hug?
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