Colleen considers the benefits and risks of changing vendors. Michele talks about a struggle they've had in the early days of their transition to being a remote company.
So for those who are just joining us, I am in the process of building my first software business.
It is a small software widget that I am trying to sell. And so right now it's invitation only in the Heroku marketplace. So I was sharing this idea I have, and it's a product, with a friend of mine. And he brought up an interesting point. And I don't think of what I'm building as a commodity, right? We all want to feel special. But at the end of the day, I am repackaging cloud storage and selling cloud storage. So we were discussing, moving to a low a more low cost storage provider. And the storage providers claimed to have S3 compatible API's, of course, like it didn't, it wasn't really compatible. So I'm trying to determine if it's worth my time to sort it out. I mean, these guys are so much cheaper than AWS. And there's two big players in this space right now, in the file management space, they can't move to a low a lower cost storage provider, right? They're like entrenched, but if I do it now, then I can just be cheaper than everyone else.
Michele Hansen 1:13
That can be an advantage.
Especially in a commodity space.
Colleen Schnettler 1:17
Right? So I again, like I don't like to think I'm a commodity, but really, it's like cloud storage with a bow on it. Right? Like, I'm like --
It's okay to be a commodity. We're a commodity.
Colleen Schnettler 1:23
it doesn't feel special. I guess you are.
Michele Hansen 1:28
There's some businesses that are commodities. And I think it's just knowing what you are, and then knowing how to compete in that space, right. And in a commodity business, if you have an operational cost advantage over the competitors, even if those competitors are huge companies, then that can be an advantage that you can build on.
Colleen Schnettler 1:52
Yeah, and I think like these, these low-cost storage providers, they just released these S3 compatible API's, like last year. So I feel like this is kind of a untapped opportunity is that no one is really, as far as I can tell, no one's wrapping them up and reselling them yet. And they're much cheaper. So AWS, you're looking at point, you're looking at two cents a gig on AWS on this other provider, you're looking at .005 cents a gig,
A lot cheaper. Of course, you know, when you don't have a lot of storage, like I don't right now. It's like, Oh, it's like $5 versus $3. But if I want to really be a storage provider, like this could be a cool opportunity. And I was thinking about the solutions that are already out there are very, very image heavy. And I had been thinking that way, because I approach this problem as an image problem is well, but there seems to be a hole in the market for other file types.
Michele Hansen 2:47
Like PDFs, CSVs, and stuff?
Colleen Schnettler 2:50
Yeah, there's doesn't seem to be anyone kind of like helping or optimizing for -- Yeah, I mean, someone, the person I was on a call with wants to host static webpages on it, custom 404 pages. So there seems like there might be an interesting hole in this space to handle non image files. And to handle image files at a cheaper price point. I've been kind of thinking is like, I'm like the Southwest of image management, the airline, like bare bones, I don't resize your images for you. I don't give you user crapping on the front end, but I deliver a simple service with no frills. And it's easy to implement.
Michele Hansen 3:27
I think that's a good place to start. And you're kind of reminding me of where we started with Geocodio -- even when you said Southwest, you know, my first thought was not airlines. But you know, deserts and our branding from the beginning was Geocodio, rhymes with rodeo and we had all of this Southwest style branding.
If you can find a way to be cheaper than everybody else, and be easier than everybody else like that worked really, really well for us and then differentiating into other adjacent categories that are neglected by major providers. And the way someone described this to me once, you know, I was like, "Well, what if you know, one of the big companies add that adds this and then we're out of business?" If you're doing a business, that's $500,000 a year, a million dollars a year, that's not a big enough opportunity for the big companies to go after it. And if there are people in that space who have something they need, and they're not satisfied by the option, the current options, and you can build a business that makes a couple hundred thousand dollars a year. That is a great income for a one person company and not really big enough to be a threat to any larger company so that they might go into your space, it can be a good spot to be in.
Colleen Schnettler 4:49
Yeah, that would be an amazing spot to be in. So the only thing I have a little bit of a psychological block here because I have worked on the technical side of this for quite a while now. And now I have to potentially learn a new API to integrate with these third party storage providers. And I'm just like, I started doing it yesterday. And I was just like, I don't want to, like I'm tired. So convince me that it's worth it. It's worth it to do now. Right? Like I should do it.
Michele Hansen 5:16
Well, let's talk about the downsides too.
Sounds like your brain is in downsides mode. So one of the risks here is a vendor lock in risk, right?
Like, if you switch vendors.
Because they're six times cheaper, if they raise their prices by six times, that creates a lot of risk for you that one of these vendors, raising their prices, or changing their policies, like you are dependent on another company to make your company happen. Now, there's a lot of people who build their companies off of another company's platform. But you're, you're creating substantial risk there.
Colleen Schnettler 6:03
But I have the same risk if I stay on AWS, and I feel like AWS is way more likely to raise their prices, because everyone is locked. Not everyone. But they have such a lock on people, right? Because they feel more reliable. I was actually looking at the stats. So my first thought was, maybe these other cloud storage providers aren't, don't have the same kind of uptime AWS does, but they do! People act like AWS has 100% uptime. And they don't always so they just have this reputation because they're the biggest player in this space. But either way, I've got a lock in, right, like I can't, I mean, I can't, I'm going to do a probably a mirror service. So I'll use two storage providers to help but ultimately, my primary storage provider is going to be locked in. I think one of the concerns, though, is these companies. I mean, they've been around for a while, like they're not materializing out of thin air. But as I mentioned, they've only had these S3 compatible API's for like a year. So I'm putting a lot of trust in a company that doesn't have the AWS level reputation.
Michele Hansen 7:02
And that's another risk too. Like, we get this question, sometimes from customers too, right, because they're like, why would we go with you over a big company? Like, how do we know you're not just going to shut down tomorrow?
And when I dive deeper into that question, oftentimes something that's driving that fear is, they have integrated a critical vendor, and then that vendor got acquired, and was shut down by their acquirer. And so we used to feel somewhat sheepish, I guess, when we got this question. And in the last couple years or so, we found that it's an advantage to be a small company and say, we're not venture backed, we're not trying to exit like, this is our livelihood. This, this is our company. We're in this for the long haul. And so I would suggest digging into those companies like why have they launched this product? Like, does it, you know, what would you do, basically, if they shut it down, and just think through that through from the beginning. And then also a way to manage that risk is knowing like, this product, it could be a springboard to another product, right? Like, if this product gets going, but maybe gets to a point where it makes, let's say, $10,000, after a year, you can use that money to then invest in something else, if it looks like revenue is declining for this, or there's new competitors in the space that you can't compete with, and you and you can always use it as a springboard to something else and to seize the opportunity now. It doesn't have to be your forever product.
Colleen Schnettler 8:49
Yeah, that's great advice. So I think I will take the time, it might, it's frustrating to be so close to like launching something and be like, "Oh, it's gonna take two more weeks, because I have to sort this out." But I think I will take the time to sort it out now, because it's a lot easier to sort out now than to sort it out, you know, a year, six months down the road when I'm storing a lot of data, because then you have to migrate everything. So I will take the time to sort it out. Because I think cost is such an easy way to compete. And if I can compete on cost so aggressively. Like, as I said, like I'm Southwest airlines have file management, right? Like you don't get any snacks. But it's cheaper.
Michele Hansen 9:27
Actually, I think they gave out whiskey to people in their early days.
Colleen Schnettler 9:29
Nuh-uh! Did they really?
Michele Hansen 9:30
Yeah, no, this is a real story. Like in order to get people flying on Southwest I'd like they would something about how they would give them all miniature bottles of whiskey that's actually used to get the perks in the old days. And now it's the big companies you don't get the perks from.
Colleen Schnettler 9:45
Isn't it funny how things change? Right? Yeah, the ecosystem has changed.
So that's where I am with that.
And I want to talk about something else too, as we've been talking a lot about marketing and positioning. I feel like I think my first like marketing thing was Hey, this simple file upload where we do all these things for you. And I listed out all the things I did. And so I've been reading this book Building a StoryBrand, which you recommended to me.
So the whole flow, his character has a problem and meets a guide who gives them a plan and calls them to action that ends in success. And so I've been thinking a lot about that, in terms of like, what exactly does my product do to solve your problems. And I read that copy, initial copy I had. And so I've been thinking a lot about that. And really, my product, if I had to distill it down, it gives you your time back. Like that is what it does, it's time. That is the service I'm providing to you. So he has seven chapters. And each week, I'd like to go through a chapter two and tell you kind of like what I got out of out of that chapter. So the first chapters is a character. And the principle number one is the customer is the hero, not your brand. And so I've been thinking about that, as I said, and I'm selling all these things like I can give you my five point, 10 point bullet list on why my thing is great, but ultimately, what I'm giving you is your time. So that was kind of my revelation, as I went through the first chapter.
Michele Hansen 12:32
I love that. And I think it would be great to go through it every week, fine. If listeners want to follow along. The book is Building a Story Brand: Clarify Your Message So Customers Will Listen by Donald Miller. We'll put a link to it in the show notes.
Colleen Schnettler 12:48
Yes. And so one of the there are a few things that jumped out at me in this chapter one and one was companies tend to sell solutions to external problems. But customers buy solutions to internal problems. And it just kind of like reading this chapter kind of reframed the way I think about people and reacting with people and what drives people to purchase. So when I first thought, like, What am my customers want? My initial before reading this chapter, I thought, well, they want an easy way to add files to their website. And they want to not worry about AWS, and they want to not have to configure their own cloud storage, and they don't want to have to figure out how to connect to the cloud storage. But really, like I said, What they want is they want less hassle and more time. So that is kind of my my workshopping for chapter one. And I will report back next week with what I find out in chapter two. And hopefully, by the end of going through this book, I will have reframed my very cluttered, challenging to understand message. And something that people can actually understand.
Michele Hansen 13:49
You going through that just now makes me wonder if there's a way to visualize all of the steps that someone would be going through almost like a checklist of like, you have to do this, then you have to that then you do this, then you do that. And visualizing that and putting down that checklist and instead saying you could do this to manage your images. Or you could just do this and then it's just your snippet, right.
Yeah, that's get really clear.
And it's because you had all of that sense in your copy. But what you really want to get at is, stop wasting time on this thing you don't even want to do in the first place. That takes up a ton of time. People are spending a lot of time on this. And so remind them how much time they're spending on it and then show them that there is an alternative. Be the guide so they can be the hero.
Colleen Schnettler 14:39
That's awesome. Yes. So yes. So this week I'm going to focus on as I said, I gotta do some technical stuff in terms of storage, but I'm also going to keep reading this book and kind of focus on how to reframe My message to show people like what I'm really providing and kind of like tighten down my elevator pitch.
Yeah, so let's talk about your week, what have you been up to with your business and your life?
Michele Hansen 15:05
So last week, I sort of mentioned in passing that we have recently moved to Denmark, and a couple of people picked up on that. And were wondering if I could talk a little bit more about what that transition has been like.
Colleen Schnettler 15:21
Michele Hansen 15:22
So, it's been sort of an interesting thing, because we were initially only here temporarily. Or at least that was the idea. But now we're transitioning into staying here full time. And, and so there's been a lot of different things that have come up and trying to transition from being a, I guess, a remote in the US company, like, you know, working from home, rather than being remote from abroad. And, and really, one of the the the biggest struggles we've had there, which relates to work, something I've worked on this week, has been the timezone shift.
Colleen Schnettler 15:59
Are most of your customers in the US?
Michele Hansen 16:02
Yes, US and Canada, we do have a small percentage of customers who are outside North America. Usually they are companies or consultants to companies in the US or Canada, they're working with that data. So for example, it might be and you know, development teams in Southeast Asia or Eastern Europe, pretty often we do have customers in other parts of the world, but they're usually they're all working with US data. It's always been that we will get customers and work requests pretty much at any hour of the day, you know, the Middle East workday starts on Sunday. And so pretty much Saturdays are really the only quiet day. But that's actually when you have people working on hobby projects reaching out to us. And pretty much normally from you know, 7am to midnight, we're getting stuff and then overnight. But but the shift that's been more difficult is that, the US doesn't wake up until three o'clock local time here. And that's also when our daughter is getting out of school. And so one of the nice things is we get tons of focused work time, from eight to three, we can get so much done, and really not have any meetings, any requests coming in, and it's great. But then the other thing is all of the requests start around three o'clock, and pretty much don't stop through the through the night. And that's that's family time. That's dinner time. That's bedtime, and like we can't be working during those hours as well. And, um, and it's definitely been a shift to not work from 8am to 11pm and exhaust ourselves.
Colleen Schnettler 17:51
So how do you handle that? Okay, quick first question is what kind of response time do you think is reasonable into your clients and customers request a view?
Michele Hansen 18:03
So this is a difficult one, because I think our own standards for what's reasonable is a lot higher than our than our customers. And, you know, if someone has a critical issue, like, you know, we have alerts that will wake us up in the middle of the night for, you know, a database goes down, or a server fries or whatever, like, those things wake us up in the middle of the night. Thankfully, they don't happen very often. But I think if you look at our Intercom stats, it like our actual, you know, median response time is something like under two minutes, like, it's really, really fast. And so part of it has been being more understanding of ourselves and seeing we actually don't need to be responding to things in two minutes most of the time. And the other thing is also what can we do to reduce the amount of tickets? And I, I have this this sort of guiding belief that every ticket should only happen once. Right?
Like nobody really wants to talk to customer support, because if you talk to customer support, it means there's a problem, right? Like, nobody wants to be standing in the customer service line at Target.
Colleen Schnettler 19:19
right? You just want it to work.
Michele Hansen 19:21
Exactly. You want to not have to end up in their first place. Now there's a small percentage of people who are you know, maybe they're they're lonely or whatnot, and they enjoy talking to customer support people. Were you know, anyone who's ever answered the phone has had frequent fliers and whatnot. Thankfully, I don't know why. But we're not really in that situation. I think maybe because of what our businesses is and being in B2B like people have a problem. They just, they just want to get it done. Like, I've only had one time when I had someone say, Hey, what's up and I was like, how can I help you? And they're like, "I'm just waiting for something to deploy. Like, how are you? I want to see if there was a real person here." And I was like, That's funny. Like, cool. What We're going to talk about something like this the only time that's ever happened.
Um, and so, so every ticket, we try to take it as a signal that like something needs to be fixed. So whether that's, you know, I geocoded, this address, and it came back, and the result was a mile away from what I expected, or, you know, what is the price for this or whatever, like, we try to make sure that each issue only comes up once. And we're not perfect about that. But we take those as hints for things to improve.
And so this came up this week, we're talking a couple weeks ago about how we launched a HIPAA compliant product, remember.
And how Initially, it was kind of a kind of a rocky launch, because some of our expectations for for that product. And our research didn't totally reveal all of the complications with that, primarily how long the sales cycle is. And so because the onboarding process we had built for that was basically all online, you know, assuming there wasn't a lot of stakeholders involved. And that didn't match these companies, you know, because you have to talk to procurement, you have to talk to legal, you've stuck to security, like, all these things, they can't just go through a online signup process, boom, boom, boom, and get started like they can with the standard product. So instead of having people go through the onboarding, and get themselves set up, we just had them contact us. We set it so that it would fire off a message to us a chat message saying, I'd like to get started with Geocodio+HIPAA. And the problem is, this would this would lead to a lot of conversations, but we actually like weren't getting a lot of context from people. Like, we weren't getting details on what they knew about the product and what their reasons for it were. And if they knew about the pricing model, and that we don't have a pay as you go version, all of these things, it's we're having lots of conversations, where it turns out that, you know, if we'd had better information on the website, they probably wouldn't have needed to talk to us.
So one thing I finally got around to this week was changing that flow a little bit. And we would like to eventually redo the onboarding. But what we're doing for now instead is instead of having everything, go to an Intercom chat to us, I made a page on the website, that is okay, here's how you get started, and basically says, The path to getting started is as complicated as your company will make it. So when someone sends an email, I think there's less of an immediate reply expectation than there is with online chat.
So we're hoping that when people reach out to us, they're more familiar with not what the product is and what they can get, but also what they need to ask us for. So we'll see I just released it yesterday, and completely changed it. So I mean, all over the website, we had these little Intercom prompts, that instead of going to a signup flow, people would be prompted to open up Intercom. So we just changed it yesterday. But but that's something I have been wanting to deal with for a long time. And I've been kind of putting it off. So I'm like really the right way to do this would be to redo the onboarding, flow and redo all of my, you know, my journey mapping and like, do a bunch of flowcharts. Figure out what the real processes like all is basically, these things that you would do from a UX perspective, if you were in a bigger company, rather than, you know, somebody who's managing 50% of everything that's going on in a business. So sometimes you have to be a little scrappy. So I was like, You know what, having some copy on the website that at least tells people what the path forward is, let's, let's see how that goes.
Colleen Schnettler 23:41
Well, that sounds like a great way to handle it. Right? Less requests more information on your site. So hopefully, that'll filter down to less requests, which is less stress for you guys.
Michele Hansen 23:52
Yeah, and I mean, like, we don't mind replying to stuff at night, like, that's when we started this as a side project. So that's pretty normal to us that, you know, you're sitting in bed at 9:30 and something comes in and you just deal with it like that. That's how we've always been. But really trying to take that perspective of every ticket should only happen once. Like, if it's repeating, then there's a problem. And, and I think giving myself permission to put out a solution to that that is not the perfect solution, which would be completely redoing this whole experience, instead, just having text and see if that is a step in the right direction.
Colleen Schnettler 24:35
Yeah, that makes me think of, I have that same philosophy with software, if we get an error once made, and it didn't have test coverage, write a test. So you know, you run it every time so that same error never reoccurs so that seems like a great way to handle it.
But you know, the thing, the thing I want to bring up here, Michele, is I feel like in my opinion and kind of things we've talked about part of the reason of having your own business Is it gives you autonomy, it gives you flexibility, it's supposed to give you some of your time back. And you just said, "Well, we started this as a side project. So we're used to working at 9:30 at night." It's not a side project anymore. It's a real grown up business. And it might I don't know, have you thought about, like trying to tackle this in in more grown up business ways?
Michele Hansen 25:21
Like hiring someone?
Colleen Schnettler 25:23
Yeah, of course, that's, of course, what I'm trying to say. I just like, I just can't wrap my brain around why you won't hire someone. I know, I keep bringing it up. But...
Michele Hansen 25:31
Our episode with Michelle from Squared Away, like got us thinking about how awesome it would be to have a virtual assistant. And we're like, oh, my God, if we could have somebody who is, you know, on West Coast time, right, and they can manage everything starting at 3pm. Like, that would be amazing. And you know, even if it's like, you know, a military spouse, somebody with kids, like, it only needs to be like six hours or something. And then really, but the thing is, is because whenever issues come in, we fix the underlying problems, all of these simple underlying problems have been solved. So when somebody reaches out for your support or sales related, like it's something complicated. It's something that we have to handle ourselves.
Colleen Schnettler 26:20
Right. So you're you're saying that your requests coming in are all high quality? You're, you're generally thanks to, you know, your diligent work on your site, or not getting people saying, How much does this cost? Or what are my plan options. So even putting a person in front of you like to filter requests isn't going to buy you a lot, because that person is still going to be sending a lot of the requests to through to you guys, because they're high quality request, I get that. Okay. And I have one more thing that I thought of, have you thought about removing Intercom? I mean, I don't get why everyone loves it.
It's so annoying that as a user. well, even as a user, it annoys me, right? Like, like, yes, like I, if I I don't know, as a user, it annoys me because now your situation is different. So if I'm having a real problem, and nine times out of 10, the bot or person on Intercom cannot solve it. and nine times out of 10. It's a bot anyway. So then when you do get a real person, it's exciting. But usually it's that first layer person, as we just discussed, so they can't help me anyway. I don't know. I just, I'm just not a huge fan. That's all.
Michele Hansen 27:20
Yeah, we get a lot of surprise from people that were a real person and the founders of the company. Yeah. But I like to think that's part of our marketing, you know, our appeal that like, wow, like you get, you know, I've heard people say to us, I can't believe I get a real person who can actually do something about your problem.
That's true. That's true. That's very rare.
But maybe, I mean, we're providing that level of service for everybody. And, you know, I've looked into it, and a lot of companies charge extra for life support or charge extra for support period. But the problem is, it's been so great for our growth, yeah, that we really can't justify not doing it. And especially since how a lot of our sales model works is we starts out with somebody within a team has to get a project done, they do it for free, or very low cost, maybe they need some help getting started. And then later on, they upgrade to a later plan or just integrate us and use us for years on end. And if we deny them support, when they're only using it for a low volume, then we might lose them permanently.
Colleen Schnettler 28:29
Right. I'm not talking about denying support. I'm talking about email. So it's just a suggestion, like maybe you can just downshift to email like just don't hide it be like, here's our support link, we'll get back to you in 15 hours or 24 hours. It might depressurize some of the the night especially with you guys being overseas. Like I know, you said you don't mind working late at night, but that can't be good for you know, your work life balance and mental health.
Michele Hansen 28:55
No, it's definitely not. I sometimes I wish that we could just have Intercom turn off at a certain point in the day. Like it'll say on it, what office hours are, but you can't like make the chat go away. And I think the chat experience implies to people that there will be an immediate response,
When in actuality, it's just emailing it to us.
And we've thought about that. But I'm I'm wary to take away something that that customers like and has been a positive for our growth as a company. But then as I said, I've said before, why do we need to grow more?
Colleen Schnettler 29:29
Right, so Okay, so I think and we are running out of time today, but I think in a future episode because this is also what I'm thinking about. We need to talk about the goals, right? Because like I feel like where you are in your business, that's kind of where I aspire to be. And no offense but like your lifestyle right now is not really where I aspire to be. I don't want to build a business where I have to work at 9:30 at night. So I am just I would love to have a future episode kind of about what your goals are and and your growth goals and you know where you want to go Where you guys see see yourself going and how that fits into your life.
Michele Hansen 30:04
Sure, and let's do it in a couple of weeks because my honest answer is that we don't have any goals. We just want to keep doing what we're doing as long as we can.
Colleen Schnettler 30:18
That's amazing. No goals, just chillin. We're good.
Michele Hansen 30:20
Yeah, this is the startup podcast with no goals. Nobody's trying to get acquired. We're not gonna be on the front page of Wired. Like, we're just gonna do our thing. As long as we can.
Colleen Schnettler 30:34
Michele Hansen 30:36
Well, sounds good. Yeah. Well, we'll talk about that again in the future.
Colleen Schnettler 30:40
Yeah. Well, that's gonna wrap up today's episode of the Software Social Podcast. You can reach us on Twitter at SoftwareSocPod, and we'd love to hear what you think.
What is Software Social?
Two bootstrapped software founders -- one transitioning from freelancing, and one with an established business -- invite you to join their weekly chats about their businesses.