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Imagine this: you sell your web consultancy, and give yourself 1 year to build a product. You decide to do everything by the book: you’re going to validate the idea, and use the lean startup methodology to build it.
Show Notes
Imagine this: you sell your web consultancy, and give yourself 1 year to build a product. You decide to do everything by the book: you’re going to validate the idea, and use the lean startup methodology to build it.
Find out what happens next: this is part 1 with Dan Norris of Inform.ly and WP Curve.
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Notable quotes
“You’re a full pro with those intros, were you a TV announcer before you started doing podcasts?”
“I try to record my podcasts in the morning, especially when I have a cold, so I sound like Russel Crowe.”
“I listened to the Dan Martell episode, do you want me to tell all my stories about being arrested?”
“Oh, you don’t know what a bogan is?”
“I started learning web development the day I started by web development business.”
“The customer said ‘we want a CMS’. I said ‘Sure, I can do that’, so I went home and googled CMS.”
Show notes
Creators and Guests
What is Product People?
A podcast focused on great products and the people who make them
Imagine this. You sell your web consultancy and give yourself one year to build a product. You decide to do everything by the book. You're going to validate this idea and use the lean startup methodology to build it. Well, this is exactly what Dan Norris of Informly and WP Curve did this past year.
Speaker 1:This is part one of my chat with him. Keep listening to find out what happens next. This show would not be possible without some really generous sponsors. Every time you visit a sponsor or thank them on Twitter, you really help the show out. So if you've got some time, go and check out these guys on the web, sign up for an account, and give them some thanks on Twitter.
Speaker 1:The hardest part about online advertising is figuring out what works. No ads reveals your competitors campaigns showing you exactly what's working for them. You get to see their successful ad copy and ad placements, keywords and more. Go to productpeople.tvads and sign up for a no ads account. If you're trying to set up an online store, you need to use Shopify.
Speaker 1:I've tried setting up dozens of online stores for clients, and there's always so many headaches. Payment gateways, multiple currencies, taxes, shipping rates. It's just a mess. Shopify solves all these problems for you. It's well worth it to sign up for an account.
Speaker 1:Go to productpeople.tv/shopify, sh0pify, and get a fourteen day free trial. And sprint.ly's been there from the beginning. Perfect for teams of three or more people. Sprint.ly is the easiest way for managers and developers to track the software development process. You and your team can try sprint.ly for free by going to www.sprint.ly.
Speaker 1:When you're ready to sign up for an account, I'll get you 10% off. Just use the code PRODUCTPOPLETV2013. Hi, I'm Justin, and this is Product People, the podcast focused on great products and the people who make them. And today I'm joined by Dan Norris, the founder of Informly and WP Curve. Dan, welcome to the show.
Speaker 2:Thanks for having me, Justin. You're like a full pro with those intros. Were you like a TV presenter before you're a podcaster?
Speaker 1:No, but I always like talk radio. So maybe that's where it came from.
Speaker 2:You've done like 50 podcast episodes, and I don't sound anything like that.
Speaker 1:Well, know what you have going for you is for anyone in America, your accent is going to sound exotic.
Speaker 2:Yeah, I try to record them in the morning, especially when I've got a cold so I sound more like Russell Crowe.
Speaker 1:That's a good technique. That's exactly what you want to do. What's the name of your podcast?
Speaker 2:Web Domination.
Speaker 1:Web Domination. We'll put that in the show notes. So Dan, why don't we start off by maybe just telling us a little bit about yourself? Where do you live and how did you get into building stuff on the web?
Speaker 2:Alrighty, so I listened to the Dan Martell one. You want me to tell you lots of stories about how I've been arrested and shit like that? I think let's skip over that. Sure, sure. Yeah, I'm in the Gold Coast in Australia.
Speaker 2:I grew up in Brisbane in a place called Logan which is like, it sounds like bogan and there's a reason for that because it's like full of bogans. It's like world renowned for being full of bogans and for creating Savage Garden which is kind of weird.
Speaker 1:What's a bogan?
Speaker 2:Oh you don't know what a bogan is? Like a redneck? Do you have rednecks there?
Speaker 1:Yeah we have roadnecks. I've never heard that term bogan.
Speaker 2:Well, maybe it's actually it's like named after Logan. Maybe it's like it actually only exists here. I don't know.
Speaker 1:I just looked it up and it said the term bogan is an Australian and New Zealand slang for an individual who's recognised to be from an unsophisticated background.
Speaker 2:That's it. That's fine. Well, they could have just said an individual who's recognised to be from Logan.
Speaker 1:So you're from a redneck town.
Speaker 2:Yeah, yeah. And then after I migrated from Logan, we moved to the inner city but then I ended up moving back to another redneck town so I couldn't get away from them. At the moment I'm on the Gold Coast because I like the beach. My background is I've actually started doing human resources believe it or not.
Speaker 1:It's just
Speaker 2:really weird because I'm not a people person but the only reason I did it was because I failed marketing and they have a rule in university here where if you fail your major, like if you fail a subject that's your major, you can't keep doing that major.
Speaker 1:Really?
Speaker 2:Which is harsh. Yeah. You can keep doing it but you have to repeat the subject. Whereas if you change majors, you can keep that failure as like a completed pass, like a conceded pass.
Speaker 1:So why do you think you failed marketing? Was it that you didn't like it or what was behind that?
Speaker 2:I think I was just totally clueless going into university. I was just lost and just I failed everything. I think I went from like in the first year of university I pretty much failed everything except for my human resources subject just because it was so easy and I just had to get a book and read about it. And then by the end I was like somehow worked it all out and I was getting really good marks. But yeah, the first semester I just screwed everything up.
Speaker 2:So screwing marketing meant that I had to either repeat the subject or change majors and obviously I'm not going to repeat the subject screw that so I changed majors. So I did human resources for a little while and then eventually just kind of forced my way into more technical stuff because I was just bored with HR stuff. I worked for a big company over here and basically got into e learning pretty early on. So this was probably like how many years ago is this? Probably like seven or eight years ago, nine years ago.
Speaker 2:And we were sort of pioneering some e learning type stuff, so that was pretty exciting to me, much more exciting than talking to people.
Speaker 1:And was this e learning on the web?
Speaker 2:Yeah, I mean it was all internal, like the company had like 15,000 people, so they had an internal system so none of it was public facing stuff. It was all like internet. In Australia, this really wasn't happening that much at the time. It was pretty new And so we were building some pretty cool stuff. Things like it was a train company so we're building how to identify bombs on trains and stuff like that and making it really interactive.
Speaker 2:Was all flash based and you navigate around and find the bombs on the trains and that kind of stuff. Oh wow, okay. Yeah, it was cool. It was cool so it was fun. But yeah, I just kind of get bored after a while doing things so eventually I just left and and started my own business probably six or seven years ago doing web design.
Speaker 1:Had you always been doing web design? Like, is that something that you were always interested in or is that something you just started doing seven or eight years ago?
Speaker 2:Yeah, I actually started doing it the day after I started the business.
Speaker 1:So you just decided the web looked interesting, decided to go start a company and then you just had to start teaching yourself?
Speaker 2:Yep, that's it. I those, you know those Sam's Teach Yourself books? Yeah. So I bought like the Sam's Teach Yourself JavaScript in twenty four hours and I thought they meant actual twenty four hours. So I sat there for twenty four hours learning JavaScript.
Speaker 1:What was it about the web that attracted you?
Speaker 2:I don't know really. I think it was just so cool. I think like when I was working in the government, like there was like normal people and then there was programmers and they're like, the programmers were like these elite people that like one of them was so totally useless. Like he didn't do anything and he never got fired because he just had these skills that other people didn't have. Like it didn't matter if he worked one hour a month, no one else could do that work.
Speaker 2:And so I was just like, man, I gotta learn some of this shit. And yeah, and just getting like those books and getting like the PHP, MySQL one and doing like the hello world thing in the database. I'm like, man, this is just so exciting. So I think I don't know what it is about it. Mean, I don't code anymore, but it was just something exciting about doing something that was like, sort of like magical.
Speaker 2:It was like, I don't even know how these people do this stuff, but it is just a case of picking up a book and learning how to do it.
Speaker 1:Yeah. And so you wanted to figure this out, but you know, you were learning this quite late in life, right? This is you know, you've already gone to school and you've already started your professional life and then you decide to teach yourself. Were you primarily teaching yourself JavaScript? Is that what you were doing?
Speaker 2:I taught myself whatever I needed to learn at the time. That seems to be the only way I learn is when I need to learn something. Like my first project was, or my first non plain HTML project, a project where the client actually wanted something other than what I was telling them they wanted. I was clueless. I'm just like, here's a website.
Speaker 2:But they're like, no, we want a CMS. And I'm like, sure, no worries. So I go home, Google CMS. I didn't even know what it was. And he's like, Yeah, we want it to be built in.
Speaker 2:And so I like doing all my research. I'm like, Oh cool, awesome. I'm gonna do Joomla. Because I think Joomla was just coming out. And so I've gone back to him, Yeah, let's do this.
Speaker 2:I've got this Joomla system that I can show you. He's like, No, I want it to be an ASP. I'm like, Oh shit. So go out, get the book on ASP. Yeah, I can build that for you.
Speaker 2:No worries. So yeah, that's kind of how I learned early on.
Speaker 1:No way. Like you taught yourself ASP?
Speaker 2:Yeah. I mean, enough to be like able to build the crappiest, most simple CMS possible.
Speaker 1:And so you're doing client work, basically building websites for people. At what point did you start getting interested in building products or even realize that you could build products on the web?
Speaker 2:Well, before I started my business, we actually built at the railway, we built a project management system and it was web based, but I didn't build it myself. I just I was kind of like lumped with the project and they gave me a developer who was getting paid like a crazy amount of money per hour and he was pretty much just working for me and he was just like, do this and he's doing that. It was like right when dot net started coming out. And so we built this performance management system which was well before the major vendors were doing it and it was a huge project. They spent so much money on this thing I can't even begin to imagine how much money it cost.
Speaker 2:But I was working on it for pretty much a year with a full time developer and so that was like the most exciting thing about that job. Was just like building this thing that didn't exist. So I was just addicted to building things.
Speaker 1:Yeah. And you were kind of like the product manager for that product. You had a developer and you're basically working him through the process? Is that like working with him through the process?
Speaker 2:Yeah, yeah. But I had absolutely no IT background or there was no such thing as product managers then, at least not in this company. So it was basically just like, yeah, Dan kinda likes computers, like get him to do the project system. And I think they were thinking like that would build a tool where you could press upload and upload a PDF of your performance report. But we built like this entire system where people could create goals and review their performance and sit down with their manager and agree, like negotiate back and forward on their performance rating and run reports for senior management and like the whole management hierarchy and we just went to town on this thing.
Speaker 1:Wow. And did that product actually ship?
Speaker 2:It did, but it was eventually replaced. When it was replaced, I think it's been replaced quite a few times since, but Saba who were doing the learning management system brought out a performance management product. Saba was the railway's performance management product. So as soon as that came out, they pretty much wiped ours out. And then I think they've upgraded to SAP since then and SAP pretty much wiped the Saba one out.
Speaker 2:It was live for a couple of years, yeah.
Speaker 1:Yeah, but you had the experience of working on something in a large company and actually shipping it which is quite unusual.
Speaker 2:Yeah and I mean we made so many mistakes on that thing. Was like if you made those kind of mistakes in your own business like I'm sure if if you got the job of building something like what we built for this type of company now, like it would it would probably be a multimillion dollar job. Mhmm. It's a big big project to get all the managers, you know, but back then it was just like us tinkering stuff. We weren't even in IT.
Speaker 2:Like we were in learning and development and we got this programmer in. We were even pissing off IT because we weren't even supposed to build our own stuff.
Speaker 1:So what was it about that? Was there something about that that gave you a vision for like, could build my own stuff and sell it on the web. Was that where you realized you could do that?
Speaker 2:No, I don't think so. I think it was more just the fact that and I didn't really realize this until later, but I just love creating things. Mhmm. And I think it's as simple as that. It was just the fact that, like, that part of my job enabled me to literally invent something out of thin air.
Speaker 2:Like, I was going home. I actually had had the job of building the elearning training for the software before we built the software like at the same time as building the software. So this was before the screen simulation, Camtasia and all that kind of software. So like I was going home and mocking up screenshots of what the software might look like in Fireworks and then sending them to the developer to do the flash like simulation of how to use the software. So it was just like the most exciting thing, just creating this stuff from scratch.
Speaker 1:Yeah. So you're trucking along with your own web consultancy. And I want to know, how do you get from running this consultancy to your first product informally? How did that happen?
Speaker 2:Yeah, basically from very early on running the consultancy I sort of figured out that I became pretty much useless to clients after I built their website. I mean, when I first started out, I didn't really have any way of doing any recurring services. Eventually, I kind of built in a whole bunch of recurring services. But at the start, I'm like, well, what am I actually going to do for these clients each month to make sure that I'm still relevant to them and I can still make money every month. So I started doing manual reports and just like literally logging into AW stats and copying down their stats and writing in a comment and sending them a Word document.
Speaker 2:Yeah, and eventually that just grew. I mean, I went from that to hiring an assistant to do it for me, which took a long time and had a lot of errors. And then I hired someone on Odesk to build like an automated version of it or a very, very dodgy automated version of it. And I think by the end of running that company, I really, really just wanted to spend more time building stuff and create that kind of company that I could scale a bit more. And I had a number of different ideas I could run with and that seemed to be the best of the bunch.
Speaker 2:I decided to run with that and turn it into a product that other people could use.
Speaker 1:Were there other products that you were using? Did you have a vision for other web based products already?
Speaker 2:I had a lot of different ideas about what I would work on and I sort of thought that I was gonna work on like three or four things and then just pick whichever one worked, which I think would have been a bad idea. I sort of started to do that and I know a lot of the people on your program sort of have done that or they've just kept running their sort of web business and done a product on the side. But I tried that and it just didn't work for me. Like I just couldn't focus on what I wanted to focus on and I just kept getting dragged into the web business. It probably wasn't really profitable enough for me to be spending all of my time building products.
Speaker 1:So
Speaker 2:I sort of battled for a little while to work out how I was going to make it work and I sort of built it and sort of tried to launch it and it just wasn't going to happen if I wasn't going to focus on it completely. I ended up just deciding to sell the web design business and just go for it full time.
Speaker 1:And when was that?
Speaker 2:It was a year ago. So it was July 2012 and I had the intention of building like an analytics dashboard for just general business owners and then eventually I would turn on the agency version which was sort of what I built internally, although we had to pretty much rebuild everything from scratch.
Speaker 1:So one year ago, you decided to sell your web consultancy and go full hog on building products. Yeah, And how long did it take you to build initial version of Informly once you made that decision?
Speaker 2:Well, I sort of had a little bit to start with and it probably took me three months. I did a whole bunch of content. I got a whole bunch of people signed up to my email list and while doing that I had a bit of a beta that I had some people playing around with. It probably took me three or four months to actually get a product that could be used and then let me think, see I launched it in December so it would have taken me I think I started August, August, September, October. Yes, it took me about four months before I had a product that was launched to the public.
Speaker 1:Okay. And so how were you supporting yourself during that four months if you weren't doing the web consulting work anymore?
Speaker 2:With the money that I made from that business. So I basically I made enough money to give me about a year to work on another business. I just decided that I would make it work within a year or else I would crash and burn.
Speaker 1:Gotcha! So you sold the other business, there's enough money there that you said, You know what, I'm just going to focus completely on building products. I've got a year of runway, here we go.
Speaker 2:Yep, yep. Although I've never actually built a product that someone had paid me for before. Was probably a little bit I don't know, it's probably just how I do things but I couldn't really fully commit to it unless I totally burnt the bridges and just went for it full on.
Speaker 1:And what did the people around you, like your family and friends, what were they saying? Did they think you were crazy? What did they think about us?
Speaker 2:Well, don't have friends.
Speaker 1:So that helps. Yeah.
Speaker 2:Well I've got a very, very, very supportive wife and she knew I was crazy before she met me So that works out well.
Speaker 1:Through that conversation with your wife. Probably, it's up to.
Speaker 2:You
Speaker 1:go to her and you say, I'm going to sell my web consulting business and I'm going to try this crazy thing that I've never tried before.
Speaker 2:I'm going to sell our web consulting business.
Speaker 1:Gotcha. Does she work with you?
Speaker 2:No, no, no, no. No, we met at work, but she's got her own job and thankfully she makes money. I think she knew I wasn't happy running that business because it was frustrating me. It's kind of hard to run a business by yourself and I try to back myself with everything but at the same time it's kind of hard to have all the skills you need as an individual founder to make a business work. And that kind of business is particularly tricky because there's so much competition and you really need to be a good sort of face to face salesperson and have a good team who can deliver behind you.
Speaker 2:And I was more like the team that could deliver but not so much the face to face salesperson. And I tried to work around that a lot. I built a website that actually bought originally, but I turned it into a blog that was ranking number one in Australia for website design, number three for web design. I was getting loads of traffic and I was getting probably, you know, almost a lead a day from that. And I did a whole bunch of other stuff that sort of meant that I could try to run this business without spending all my day out selling.
Speaker 2:But in the end, I just wasn't able to grow it. I wasn't really able to get it to be profitable enough to kind of scale it and that was frustrating the shit out of me. So the decision was basically I tried, I gave myself a final kind of six months and thought I'm going to have another crack at this, give myself six months to get this right and after six months, it was really just doing the same as what it was before, so the decision was made.
Speaker 1:Interesting. Okay, so you've already had some experience before you launched your first product, you had some experience with content marketing, obviously. I mean If you're ranking number one for web design in Australia.
Speaker 2:Well, yeah. I mean, before I bought that site, it was basically just a one page sales page and over the course of about two years I turned it into a blog and I wrote probably 100, 150 posts and started building a following on Twitter and creating loads of stuff. I created like six or seven ebooks and all sorts of stuff on that site. And yeah, that was probably over the course of about two years prior to starting Informly.
Speaker 1:Okay. So, and actually at this point we should probably briefly describe what does Informly do? What is it?
Speaker 2:Right, well it's changed a few times since I launched it but what it does right now is exactly what the original idea was which was how I was using it for my agency which is an agency signs up, they connect to Google Analytics, it brings in all their clients and then it creates nice looking reports with their logo and it sends those reports to their clients every month. And so, I mean, it basically keeps you as an agency owner fresh in the minds of your clients. It brands the reports for you. It creates charts that are really simple for clients to understand so it doesn't give you like a 15 page confusing report that a small business owner is not going have any clue what it means. It's like really, really simple charts and clients are using it generally as part of like a retainer package.
Speaker 2:So how I was using it was I had a support program and as part of that they would get a monthly report and so clients can more or less make money building recurring services and using Informally to kind of educate and update their clients each month.
Speaker 1:And what was the initial version that you released after four months of building? What was the initial version of Informly?
Speaker 2:The initial version was not the agency version, it was direct to business. So as a business owner, you could log in and you could connect a whole bunch of different services. I think I connected with about 13 different services. You know, Xero, Mailchimp, Google Analytics, Google rankings, Pingdom, site uptime, all of these kind of services. And you could create a dashboard with simple charts from all of those services.
Speaker 1:So you launch after building this initial version four months into your one year runway. What happens? How many people signed up? What happened after you launched?
Speaker 2:Alright, well I'm going to do the short version of this because the long version is going to take too long. The short version is I screwed up with payments in a bad way so I was really keen to make the payment process as simple as possible and setting up want to say US dollars because I knew that my customers weren't just going to be in Australia. And setting that up in Australia is a real pain in the ass and it requires getting US merchant accounts and all this kind of crap. And I couldn't use PayPal because the way my company was structured. So it took me a long time before I put up a payment button up there and I had, I think I probably had about 4,000 signups, free signups before I even put up a payment button.
Speaker 1:Okay.
Speaker 2:And when I put up the payment button, I mean, basically no one signed up. Had probably, mean, eventually I got to like 20 customers, but I think like in the first week I had like one.
Speaker 1:Gotcha. Gotcha.
Speaker 2:So It feels horrible.
Speaker 1:So and Stripe isn't in Australia. Is that right? No. Man. So there's some challenges with doing some doing this in Australia.
Speaker 1:Were you connected with any of the other startups in Australia?
Speaker 2:Not. I mean, I've got some sort of connection to the local startup scene but where I am, there's not like a whole lot going on. We're just sort of trying to kick it all off. Way it's done is it can be done quite easily with PayPal but just the way my company was structured I couldn't use PayPal at the time and I've since restructured the company so I can use PayPal because it makes it so much easier. But yeah, there's gateways like Braintree and eWay which I use Braintree to set all that up but it ends up being very expensive.
Speaker 2:At one point I was paying $250 a month in bank fees and I was only making $600 a month. It was insane. So they only really work. If you've got three bank accounts essentially, a US bank account, Australian bank account with the merchant who has the gateway, then you're paying the gateway fees and then got another bank account for my normal business. It was just a bloody mess.
Speaker 2:I ended up canning it and just putting a PayPal button up there but it took me like a long time to do that.
Speaker 1:How long did it take you from launch to getting that button up?
Speaker 2:It took me about six months. Wow. Sorry, from when I started. It in about, was in sometime in January, I think when I actually allowed people to pay for it.
Speaker 1:So about two months after you launched? Yeah. Gotcha. So, and you said you had 4,000 signups?
Speaker 2:Yeah.
Speaker 1:Like 4,000 signups on launch?
Speaker 2:I had about a thousand that, so when I first started, I think before I went full time, I just kind of put it out there and put an email sign up on there. Think I had about a thousand who actually signed up to try it back then before I closed it to actually work on it full time. And then I had about a thousand sign up to the email opt in that I had on the site. So that was about 2,000. And then when I launched, I had I think a thousand of those.
Speaker 2:It got a bit of coverage. It got like coverage on the Nextweb and a a whole bunch of other sites covered it. I was doing all kinds of shit. I had like 15 different traffic strategies. Was trying, I was guest posting everywhere.
Speaker 2:One day I wrote 13 blog posts on my own blog. I was just creating an insane amount of content and building up a lot of noise. Doing podcasts and interviewing people and all kinds of stuff.
Speaker 1:Yeah. I told you this before, but where I first heard about you was on Jason Kallikanis' show, This Week in Startups. You called in and I was like, Ask Jason or something like that. And I remember that you calling in and asking about the name informally.
Speaker 2:Yeah, I've had a shower since then. I was like, extra homeless on that because I was actually about to fly out overseas like that morning and they sent a thing out the day before saying, oh, we're doing this Ask Jason show and I'm like a massive JCAL fan so I'm like I'm doing that shit, I've got to be on that show.
Speaker 1:Yeah.
Speaker 2:So I up pretty much a reason to be on there. Like I was thinking of changing the name and I'm like, oh, I might as well just ask him about the name because I had called it web control room originally. Yeah. And I'm like, oh, thinking about changing the name. And so I thought, I'll ask him that question, see if he wants to answer that.
Speaker 2:I actually emailed him probably six months prior and given him something. Like he put something out on Twitter saying, oh, I want a list of ways to market my app and I'm like, here's a list of 500 app websites or something that I'd gotten a hold of. So I mentioned that in an email and said, know, I chatted to Jason a few months ago and I'm keen to chat to him again about the name change. Kieran's like, cool. That sounds like a good idea.
Speaker 1:This is probably a good time to bring up this blog post you just wrote. Is startup validation bullshit? Because I think people watching you would say this guy's doing everything right. Like he built up this big pre launch email list. He had a thousand sign ups on launch.
Speaker 1:He's writing all this content. He's got all these different content channels. You know, you're getting on This Week in Startups and people are hearing about Informly. They know what it is. So talk to us about maybe go through your this blog post is startup validation bullshit.
Speaker 1:What did you discover in that year of building and launching informally that then made you write that post?
Speaker 2:Well, was more the bottle of wine I drunk before writing it that made it work.
Speaker 1:That's when you do the best writing.
Speaker 2:Yeah, yeah. Oh man, well I mean honestly a part of it is just everything you read everywhere anyway. It's basically just getting a customer and not focusing on vanity metrics and not focusing too much on the product instead getting out of the building. It's all that lean startup shit and I don't think I did do enough of that. I did focus on building the product and I did focus on marketing in that I was getting a lot of noise on my site, but I didn't focus enough on whether or not I was building something that people wanted to pay for.
Speaker 2:But as I said in that post, it's a hard thing to validate. With new business WP Curve that we've started, after three weeks, it's making more money than Informally was after a year. And it's so easy to validate. Like I came up with the idea and three days later I had a company. With software it's so much harder.
Speaker 2:It sounds easy like when you read it in the books but it's very, very hard to really know whether someone wants to pay for your software product. I've read all of the posts and you can see that in that post that I wrote. And I've discussed this with people on Mastermind calls and stuff and it's just not as simple as people think. You can't put up a shitty piece of software and expect people are going to pay for it.
Speaker 1:Yeah, I love this perspective. I think this is a really healthy kind of counterbalance to a lot of what we've been reading and thinking about in the last couple of years with the Lean Startup movement. So after a year, you only had 15 paying customers for Informally at $9 a month.
Speaker 2:Yeah, well, did launch the agency version probably after six months or so and after a year I probably had about 20 customers each and it became pretty obvious to me that I was putting all my work into the normal version and hardly any work into the agency version and I was making 70%, 80% revenue on the agency side and 20% on the B2B side. I did make a bunch of decisions very quickly that people might say I'd made the decisions too quickly, but I decided to completely scrap the original version of the product and just focus on the agencies.
Speaker 1:And how much do you make off agencies?
Speaker 2:Well, it's still not a lot. I think it's probably still only like $700 a month because I probably got like, let me think. I mean, it's been a couple of months since I just started focusing only on agencies. And I actually literally like called the other version of the product which meant getting rid of two thirds of my customers which was kind of a hard thing to do. You kind of second guess your decision when you're not making a lot of money and you get rid of two thirds of your customers.
Speaker 2:Yeah, the agency stuff is growing but it's not growing as fast as I hoped it would and it's also I sort of came to the conclusion that I could do my content and get people to the site and make some noise but to sell to agencies you need to sell and that sort of leads us on to finding a co founder and stuff in the next business I guess. Yeah, short story I wasn't making enough to cover costs. I think three weeks ago or so I was still spending about $1,500 a month and making about $600 or something. So I was nowhere near covering costs and I was a few weeks away from the end of my runway.
Speaker 1:Yeah, yeah. And we're going get into your new business and kind of what you're doing with WP curve in part two.
Speaker 2:How many parts has this got?
Speaker 1:Well, this is part one right now. But I think this is a really kind of salient point. And we've had this experience, too, with the software company I'm at where I'm a product manager. We made the decision. We had a low cost kind of self serve version of our software that was $19 a month.
Speaker 1:And then we had a higher value version of the software, which is essentially just more support for $100 a month. And you notice really quickly there's very different customers that go into those two spaces. And so like at the $19 a month, we had a lot of really small businesses. And at the $100 a month, we had bigger organizations with bigger budgets. And we noticed that 80% of our time was spent serving these $19 a month customers.
Speaker 1:But 80% of our revenue is coming from these $100 a month customers. And I think people don't always realize that, that you can build a product that's $9 a month, but it might be an enormous amount of work to get them and then an enormous amount of work to serve them.
Speaker 2:To be honest, I think people realize that because that's a common message. But the question is what do you do about it? Do you keep those customers and just accept it or do you scrap them and focus on the higher level customer? It's a tough decision because I kind of started out with a vision of helping out entrepreneurs and helping them better understand analytics and that kind of thing. I sort of had to just accept that, like, that's nice, but I just wasn't going to be able to make money off it.
Speaker 1:Yeah. And that's tough too, when sometimes you have a bigger kind of vision for how you want to improve the world and then realizing that, yeah, you can't make money doing it.
Speaker 2:Yeah, I don't like compromising. As I get older, I kind of start to realize that you do have to compromise a little bit sometimes.
Speaker 1:Yeah, yeah. This is so interesting. I'm just trying to close this part off.
Speaker 2:Just a couple of other points on that. I feel like I did enough with that version of product to be pretty damn sure that it didn't have legs. I mean, I had 4,000 signups and only about 15 customers though the conversion ratio was horrible. I tried going from freemium to free trial. So originally it was freemium, you could have six charts for free and if you wanted more than that you have to pay.
Speaker 2:But no one paid so I thought okay, well I'll try to just do paid only but I'll do like a cheap yearly plan. So I did like $50 a year, didn't matter. I did free trial and like just paid only. Even current free users, I kicked them off which is not a nice thing to do but I'm like I need to figure out how to make money off this effing business. But that didn't work either.
Speaker 2:Just still had a horrible conversion rate and I set up automated sequences and I set up Kissmetrics and I think I did most things right in that aspect of it. It wasn't a perfect product but I think at the end of the day, it's going to be a very, very difficult product to build as a solo founder when there's big companies like Gecko Board who've got these dashboards that are so sophisticated. Like I was trying to make a simpler version for people, but I think it was just too big a task to do that profitably as a solo founder.
Speaker 1:Yeah. What's interesting about this is that I think I could see how you could validate that business. Like you could go to a small business person and say, know, I'm going to bring in all these complicated stats and I'm going to present them to you in a really simple way. And you're going to get kind of just what you need in this one dashboard. I can see it just sounds like a good idea.
Speaker 1:And even Jason Kallikanis- said
Speaker 2:it was a good idea. Sorry? Yeah, as you say, Jason Kallikanis thought it was an awesome idea. I mean, I did that. I spoke to heaps of people.
Speaker 2:I had heaps of people telling me how much of a good idea it was. And I wrote some of this stuff down. I had like quotes from people and unsolicited testimonials. I've never had anything like that with my other business. Like it was people saying this is an awesome solution.
Speaker 2:You're solving a problem that we face every day and stuff like that would come in all the time. To me, the validation from that point of view of actually asking people what they want was there, but it's like the Steve Jobs thing where you're asking people or what they tell you is totally different to what they do and that's why you need to get customers and get them paying. And it was a big shock to go from me just thinking this is going to crush it to no one signing up, virtually no one. Yeah, the asking people thing is a crock. A waste of time.
Speaker 1:Interesting. So in part two, we're going to talk about how you went from this experience to your new business and how you did it differently. My name is Justin Jackson, and I do the show every week, but I don't necessarily know who you are. I want to hear from you. Why you're listening?
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