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This week, Rick helps Tyler think through a new growth plan for Less Annoying CRM
Two founders talk about how to build software businesses that are meant to last. Each episode includes a deep dive into a different topic related to starting, growing, and sustaining a healthy business.
00:01.50
tylerking
Not much you're ah, did you intentionally dress like a venture capitalist today. Oh you're giving off really heavy like vcs hanging out in the lodge vibe. He's got He's got like a collar shirt with this like pullover on top like you got the look going man. Yeah.
00:01.12
Rick
What's up this week Tyler
00:06.59
Rick
Now It's just cold outside. Man. Thank you I Think that's a compliment.
00:20.90
tylerking
I Don't know if it is or not we'll see Ah, anyway, yeah no I am doing Well how are you done.
00:25.67
Rick
I'm good. Ah it's It's kind of this weird weather I've kind of picking up off the ah clothing. Um, it's super cold in the morning and then it starts warming up about right now. So the the thermostat doesn't know what to do and it's just.
00:30.00
tylerking
So.
00:38.17
tylerking
Yeah, I'm so ready for spring. It's we just had our first 2 like warm days ah feeling good anyway, in terms of actual interesting topics. Um, so sorry I didn't mean to like say what you were saying was okay anyway you know I'm not.
00:41.39
Rick
Weird fluctuations of temperatures in the house.
00:53.95
Rick
I.
00:56.91
tylerking
Talking shit about you? Okay, ah ah so did you ever when you worked at people keep did you ever deal with Bug bounties like people. Yeah, so it's basically the idea there to use the language that's out there. There are like hackers and some of them are.
01:03.78
Rick
What is a bug bounty.
01:15.70
tylerking
Black hat hackers which is like the bad kind that are like I'm going to hack your site and cause damage and then there's white hat hackers which find vulnerabilities but don't exploit them and they report them to you and the idea is you're under, no obligation to pay them but you you should and then if you do they'll keep. Looking for vulnerabilities and telling you about them.
01:34.95
Rick
Got it. So there's like 2 like people out there searching for hacks ways to hack you some you know some people like don't hack you and tell you about your vulnerability other people hack you and hold your ransom. Oh cool. Yeah.
01:48.60
tylerking
Yeah, exactly? Um, so I guess you never dealt with this at people keep then oh the okay you you dealt with like the bad guy. Oh Wow. Okay.
01:53.12
Rick
We did actually once with a ransom black hat. So yeah, yeah, yeah, so ah, do you remember that server that that we bought and we used to have this shared drive on. Yeah so that got.
02:04.37
tylerking
Oh yeah, like an old like my the Microsoft whatever like the old school pre-cloud thing. Yeah.
02:10.00
Rick
Yeah, so we weren't even using it anymore. But like it had all like the old stuff on it. Um, and so I think ah and we had switched to um, ah Google drive at that point it was like and but somehow like that was still running and like our c two at the time one day came and said like hey like.
02:22.11
tylerking
So.
02:29.28
Rick
We're being held Ransom because no one's going to let us this person's not gonna let us access these files anymore I don't remember exactly what we did but um, it would that was no impact to our business because like exactly um, but anyway, yeah, so I've dealt with that. But no, one's ever called me and said hey like i.
02:36.39
tylerking
Yeah I Hope you're just like okay we lose the files who cares? that's funny.
02:47.63
Rick
I Want to do a a solid you know I found some issues let me help you out.
02:49.28
tylerking
And yeah, so we get ah we get reached out to fairly regularly about this now most of the people doing this are like it's it's crap like this is I think in low cost of living countries where like the amount of money we might pay could make a difference so there's a lot of people in like. You know India and Eastern Europe and place like that that and don't get wrong. Lots of great programmers. There. But like people who are not great programmers in those places just kind of like run these automated scans and tell us stuff. We know they're like hey this is how your password rules work and it's like I know that's that's how we made it like that's not a vulnerability anyway. But every once in a while you can get. Like a really like a really good report from somebody who like dove deep in to your code and or not your code but like testing your your security perimeter and um, sorry did I lose you there. Okay video cut out for a second. So basically. Ah. We just got our first like really good one of these. We've gotten a number of bad ones and we occasionally pay out like fifty bucks or a hundred bucks but we just paid someone $7000 for um, finding like a a legit thing. It's not like bad like no customer data was exposed to anything but it was. Good enough of a report that we thought we should really compensate for it. $7000.
04:03.00
Rick
Um, how much should you pay you paid someone $7000 for coming to you and telling you about a vulnerability.
04:09.71
tylerking
Yeah, well they came to us with one and we paid them 2000 this is very smart of them. They were like what do you pay for this type of vulnerability and we're like it was a legit one and so we're like here's $2000 and then he was like I've got four more it was it wasn't actually 4 more. But um. It was all kind of the same issue but he found it in a few different places.
04:28.89
Rick
Curious um, is there a service or site that is actively like so a marketplace for solicitations for this.
04:36.60
tylerking
Yeah we're not using one like in our case people just come to us I think maybe we're we have enough reputation or whatever. But I think what you can do I don't off the top. My head know the name of them I know I'm pretty sure tuple. Ah Ben Ornstein's company does this. So if you look at like Google tuple bug bounty and you can. Work backwards from what they're what service they use I'm pretty sure they do. But yeah, so it's like they'll handle the payouts and all that stuff for you. But it also kind of creates a marketplace to find companies that are willing to pay.
05:04.23
Rick
Yeah, http://federacy.com is a ah bug bounty marketplace where you can go see what different companies pay for bug bounties. Wow I had no idea this existed but it's so obvious.
05:17.27
tylerking
Yeah, it's really cool because like also right now we're doing our first like good pen test like penetration test where you pay an outside company to try and exploit you. We've done like a we we've done pen tests before but like we're paying I don't know something like $10000 for a firm to come in and really put us to the test. They didn't find any of this stuff and so now I'm like well first of all, what's up with this pen test company but second of all like this is ah maybe a better way to go is just like pay bug bounties. Well and then people are incentivized to keep sending you stuff. So anyway.
05:54.81
Rick
Yep, So so so are you doing anything about this so are do you like? are you actively soliciting this anyway or do you feel like you need to do anything or you just sort of sharing this as a Fy kind of interesting story.
05:56.38
tylerking
Kind of cool. So.
06:06.56
tylerking
Yeah, just sharing it as an f fi I mean maybe I'll I'll share a little bit about how we handle it because the problem is you get a lot of crap again like people reporting stuff. That's not a vulnerability and all that stuff and it's tough because like you don't you don't want to encourage those people but you also don't want to give off the impression that you don't pay for this stuff. So. Most of the time we don't pay anything most of the time we we we always write back and when we say this is not a vulnerability here's our explanation for why sometimes they get you on some ticky techcky stuff which like there's not a problem here at all. But fine fair you found something and we'll pay like fifty or a hundred bucks but when we do that we always say. Just so you know like we're not giving you another fifty bucks for this type of thing like if you want more money you you got to come with something better than that. Um, but in this case I think it's actually a whole firm I don't think it's like 1 we've been talking with 1 guy but I think it's like a firm that's like at this point they they smell blood in the water in a good way. They're like. These people will pay so let's go find everything we can find for them. So I feel really good that our site's getting more secure now.
07:08.89
Rick
That's cool I had no idea there's this like kind of wild west of um, you know Bount yeah bounty hunting ah app you know gurus it's kind of it's really interesting. Yeah.
07:12.19
tylerking
See.
07:18.81
tylerking
Ah, yeah, it's kind of cool. Ah, and again like the professionals that we hired for $10000 didn't find this stuff so it's pretty it's pretty cool
07:23.93
Rick
Code slingers. No of course not like so what this takes me right into one of the topics that I want to talk about which is the power of incentives. Um I wrote an article a couple weeks ago and I could not um, like stop thinking about but about this and. I don't think I've ever gotten incentives right before in a business and I think I'm getting them right at Leg Upel for the first time because I just see Jd doing all the right things and when we have conversations. It's not just about a shortterm incentives. It's about his long-term incentives. Um, but like what you're talking about with the bug bounty program is purely like.
07:50.40
tylerking
No.
08:01.40
Rick
The incentives are like totally aligned when you pay a bug bounty program a bug bounty like like you just did yep Um, anyway, the larger topic here is I think as a manager or so an entrepreneur.
08:03.53
tylerking
Um, yeah, yeah, you want it to be more profitable to report it than it is to exploit it. Yeah.
08:20.84
Rick
Getting Incentives right is like a game changer just and I and I I think part of the reason I'm able to get sometimes right at Leg of Health is that I've simplified the business I think it's super when you have a complexity in your business.. It's super hard to incentivize people because if you have a complexity in your business. Your incentives get complex. And then incentives that are Complex. Don't work because people don't don't understand them.
08:40.55
tylerking
Do you think there's like a possible future where like up health is going great. You've got 20 or 50 people and this gets complicated again or do you think like simplicity is baked in.
08:50.91
Rick
I think I've got to manage it's going to take effort not to let complexity I mean I'm interested in what you say you've been at this a lot longer than me. But I I would guess that we're going to be under attack. Ah you know like from the by the distraction of complexity.
09:07.94
tylerking
Yeah.
09:10.19
Rick
Um, it's shiny. It's it's more fun. It's not boring. It's exciting. Um, and we're going to have to say no to a lot of things to keep it simple.
09:17.60
tylerking
Yeah I've always so I think less I've gotten very lucky Plus probably we've done some things right at less annoying but like I wouldn't say the business is simple necessarily but the incentives are like we we don't pay anyone on Commission. We don't really track. Anyone's metrics raises our automatic so we kind of take the approach of like. Good people if they feel like they're treated fairly like their default state is to do good Work. You have to like make them resent you for them to not want to do good work. Um, it's not quite. That's like it's harder in some situations where it's like no, we really need to push right Now. How do you incentivize that or whatever. But ah. I Imagine you're probably going to end up with if you do hire more people with more of a sales driven kind of commission type thing.
09:59.10
Rick
I don't know um and when I wrote the article what I realized is that incentives aren't just financial people change behavior for all sorts of incentives like 1 of the biggest incentives is mating like ah we like you know.
10:04.47
tylerking
Ah.
10:11.13
tylerking
Is this? f.
10:14.58
Rick
It's powerful right? And so um, you know there's all sorts of like behavioral incentives and I think you're really good at Behavioral incentives. Um, you may not leverage as much financial incentives. Although you do like you bake in raises. You know it's an incentive to perform so you stay with the company so you get your raise? Um, but then there's also like what you said was that people are.
10:26.81
tylerking
Yeah.
10:33.10
Rick
Disincentivized by poor. You know, leadership and management and so anyway, um, like getting that stuff right? and really thinking about all the ways you are incentivizing your people when you hire them like you get that right? and life gets easy as a manager you get it wrong and you're just like. 1 of the worst situations is when you have a financial incentive that says to do 1 thing and then but you want them to do something different and you're getting frustrated with them and so you're confusing the hell out of the person you're like why did you do this and then it's like because I get paid to do this and it's good.
10:55.11
tylerking
Yeah.
11:02.93
tylerking
Yeah, my favorite example of this. Do you remember I don't know maybe six years ago or something the Wells Fargo scandal where they were creating fake accounts for people. Um, and just for people who don't remember this like so a bunch of.
11:11.17
Rick
Yes.
11:17.53
tylerking
Fake accounts got created for wells fargo customers which in some cases resulted in fees and stuff that they didn't want to pay and they did this extensive investigation and it turns out like literally no managers at Wells Fargo knew about this even though it was pretty widespread.
11:27.23
Rick
And.
11:30.95
tylerking
And so the man you know management was like not not our fault like the the low-level employees decided to do this on their own and then you keep looking into it's like well you made it impossible for them to make their full compensation without doing this. They didn't have to check it check with you. Their only option was to fake this and yeah, so that's that's the the downside of incentives. Yeah.
11:46.79
Rick
Power that's that's the power right? Um I had a couple examples of my article. Um one is I'll share 2 1 example was um, Spotify example um songs get shorter on Spotify when Spotify pays by the song that's is interesting sort of side effect.
11:50.91
tylerking
Yeah.
11:59.33
tylerking
Um, yeah, interesting.
12:05.62
Rick
Um, the the other really interesting one is the one that Charlie Munger Charlie Munger is a Warren Buffett's business partner. Really thoughtful guy around like behavioral psychology. Um, he ah shares an example about Fedex so Fedex like when it was first coming out with their service of overnight you know, same. Next day delivery. Um, they relied on a core system of having airplanes sort of converge I think it was in Tennessee probably I think Memphis yeah, and and they they would they would come and they would meet and then the whole like product and value proposition relied on the ability to shift the cargo and the packages.
12:29.72
tylerking
Um, like Memphis I think yeah.
12:44.26
Rick
Between planes and do that accurately and on time and they could never get like get it right until they stop paying people by the hour and instead people pay people by the shift so they could go home when they were done. It's a powerful one and anyway I would.
12:52.27
tylerking
Um, interesting. Yeah, that's cool. Good thing to keep in mind.
13:03.34
Rick
Good thing to keep in mind. Um, but anyway I've got it right at leg up Healtht I think um and I'm going to be very careful with any other venture that I go into to to get to get to to get this right? takes a lot of thought.
13:09.45
tylerking
Yeah, well let me let me just say is a word of warning. Not not that you've done anything wrong, but just like it's a lot easier I think to incentivize early employees because you can give them a larger stake and be like we're in this together that that stops working at some point. Yeah.
13:25.18
Rick
Very fair.
13:29.13
tylerking
Um, cool What I think I've only got one other topic but it's the big one So we'll save that for later So take it away.
13:33.74
Rick
Um, well I'm adding new clients every well and I we are adding new clients every week now I've got my partner Jd and and me um and we've moved our our check-in meeting to Thursdays and in the early morning and um every week like our prospecting so our major push is prospecting and um I actually had a question related this so recap for anyone who didn't hear the last episode is we've been. We really want to figure out like direct prospecting to consumers in Utah if we can figure that out. We can pour money on it. Basically we have a pretty targeted ideal customer profile. And we roughly think that there's 100000 people a couple a couple 0 people in Utah that we could they could become our clients and by reaching out to them via email social media phone and asking people questions we can profile them and determine whether they're a good fit for our product. Um. Basically that I mean if they buy a health insurance at the marketplace. They're a good fit. So um, we found that like our core assumption is that people in certain professions particularly small businesses and entrepreneurial type. Ah you know tonight and contractor people like hairdressers real estates that kind of thing. Those people have a high probability of being ideal customer profiles. Um, so what we've been doing is building kind of prospecting lists um of people in those professions and then enriching those lists with email addresses and contact information and then reaching out to that list. Um. We're having great success I sent you the funnel via slack. Did you see that crazy right? Yeah I'm happy to share it I think it's really cool like so j d um is doing this work and he is. He's built up. We call it our aor funnel which is means agent of record funnel. But it's basically our.
15:07.78
tylerking
Yeah, that's awesome. Yeah is is that information you can share or is that. Ah.
15:27.47
Rick
Converting people who have marketplace policies ah to our agency and ah at the very top of the funnel we have qualified prospects. Um when I sent this to Tyler. We had reached out to about 500? Ah we we had identified 500 ish qualified prospects and 80% of those people. We'd contacted. And we we had a 20% conversion rate into customer. Um, so pretty cool that if we can and these are all cold reach outs like completely cold. So if we can scale that 400 to you know the the 200000 people that we think or even like some hundreds. Ah.
15:55.96
tylerking
Um, that's nuts.
16:03.99
Rick
10000 people this year we should be able to hit our 400 client number.
16:06.39
tylerking
Well hang on do that math for me again because what I'm seeing from your graphic is you you had 449 top of funnel qualified prospects which turned into 2 clients is that right? Okay so I'm doing 200000
16:17.19
Rick
Yes, yep.
16:24.14
tylerking
Divided by 449 means there's four hundred and forty five times that that many users so you've got something like and then I got to multiply that by 2 because you got 2 clients out of it something like 890 clients if you prospect the whole state basically out of this awesome. So.
16:41.33
Rick
Yep.
16:43.38
tylerking
How expensive do you think it is to do that.
16:43.68
Rick
So we're tracking ah costs on this too I didn't put that in the thing that I sent but we basically got it down to to get to so the the bottom 2 stages of the funnel or 1 is like close 1 like this person became a client and then the one above that is this is ah a qualified. Opportunity meaning they're an ideal customer profile. They buy health insurance to the marketplace and they live in Utah we have. Um we we have it rough roughly estimated at about $10 per um, contact that is a opportunity. Um, and if we can close ah sorry $20 per per opportunity. So if we can close. Um.
17:03.55
tylerking
Um, with.
17:16.57
tylerking
A crime.
17:19.92
Rick
20% of those hold that 20% close rate then it's about $100 per customer acquired which is really good.
17:24.86
tylerking
Yeah, that's like a 2 or three month payback period damn I mean what is is this real that kind of seems too good to be true.
17:33.54
Rick
Way too early to say um but I like our thought is that um is that if this holds like across thousands of of qualified prospects over the next few weeks then it's only going to get better as we hone messaging.
17:51.45
tylerking
Yeah, unless did is the 500 or so very very top people were they selected randomly or was it like you had some rate like is this maybe better than a random sampling of people. Okay.
17:52.72
Rick
Um, Hone systems nurture contacts.
18:03.53
Rick
Possible These people might be more I mean that's a good question I should probably dive into a J D How the list is getting built and if it's like how that list building is biased. Um, yeah, that's a good question I don't know.
18:17.51
tylerking
Yeah, but cool I mean that's super exciting like ah I say this every time you bring this up like I'm so jealous. It's not work I would like to do I don't want to do what you're what JD's doing but it's so systematic and controllable in a way that nothing I've ever figured out.
18:34.28
Rick
Yes, I totally agree. So yeah, anyway I wanted to share that 1 question I wanted to have ask you is you know at the top of the funnel where we're reaching out to these people now that we kind of know that they're going to convert if we can get on the phone with them. We need to get more people to take a call of us right? so.
18:35.47
tylerking
Has been. Yeah.
18:47.71
tylerking
Ah.
18:52.94
Rick
Do you have any ideas on how we might be able to incentivize people like replying to us like that that isn't slimy or because we mean if someone is willing to go on a phone call with us and tell us like all about their health insurance and then create an account. We're probably willing to pay something like.
18:55.43
tylerking
Yeah.
19:09.90
tylerking
And yeah, the tough thing so like the natural thing to think is like offer them a $25 gift card but my understanding is that never works like you can't pay someone to be a cut like at that point you're like a weird ponzi scheme almost um so how do you spend $25 other than just giving it directly to the person.
19:10.57
Rick
Twenty five bucks for that. Link.
19:23.19
Rick
Yep.
19:28.37
tylerking
To get them to talk to you I mean it in per is in person an option because you can be like you can get a free muffin that's different from I'm going to give you $25 like could you set up shop somewhere and be like.
19:36.68
Rick
Like what do you mean by in person like do you mean.
19:43.21
tylerking
You're walking down the street and you can I don't know this is a bad idea right? It can't just be anyone.
19:44.80
Rick
So but that's the the problem with that is like our list is targeted. It's not just random. It's not random people walking by now if it was at a conference for example at a trade show that we paid for a booth like that might be interesting like a small business conference. But um, not for that. Not that's not kind of that didn't work so it's.
19:55.81
tylerking
Yeah, yeah.
20:03.63
Rick
But yeah, like what I'm trying to get to is like if I talked to you about Robert um caldini I don't know how exactly how you say his last name but like he's come up with like these principles of persuasion Charlie Munger actually references his work a lot called the ah like some some like principles of persuasion or something like that. But um.
20:07.27
tylerking
I Don't think so no.
20:17.91
tylerking
Okay, okay.
20:20.74
Rick
1 of the principles. There are 7 of them is reciprocation and like when someone does something nice to us. We feel obligation to give back and one of the key things he says is like to trigger this like first of all, you shouldn't do this and be evil like you shouldn't like go around being nice to people so that they owe you stuff it should you know.
20:26.31
tylerking
Um.
20:38.33
Rick
Um, yeah, but like generally you can like use reciprocation to grow your business and so the key here when you use reciprocation is to go first when we go and right right now when we're reaching out to people we say hey will you do something for me. Will you get on a call with us. Will you answer this question.
20:49.16
tylerking
Oh. Yeah, yeah.
20:56.42
Rick
If we led with hey here's a free gift card. We're gonna give it to you No matter? what? um would you like now now that we've given you a gift card Would you be willing to get on a car call us.
21:03.82
tylerking
Yeah, yeah, because it's like I'm not I'm not shady although I might if if I'm the consumer there I may be like damn you must be shady if you've got this kind of money to burn just to talk to me you know? um.
21:12.86
Rick
Um, yeah, so that's ah, that's kind of like ah, an aggressive one but like I I know that we need to go first with some sort of gift like it's like hey like no ah but like here is money or here is something nice for you. Now that we've given you something nice here's something we're asking for no obligation.
21:31.43
tylerking
Yeah, the thing I'm imagining which I think it'd be hard to pull this off but like can you do a non-monetary thing that's like hey we'll call your insurance company the next time you need to submit a claim or you know something that everybody hates. But yeah, but that that wouldn't work I realize like yeah I don't know.
21:50.58
Rick
Yeah, and it's also contingent like it has to be immediate like Sb We have to go first and it has to be immediate.
21:54.55
tylerking
yeah yeah I mean maybe try the gift card thing after all I don't know I've I've heard people talk about that and be like that doesn't work but the flip side is I've heard in enterprise sales I think it's pretty common to be like listen. We reserved a private room at the nicest steakhouse in town like. You know three hundred bucks a person to eat here. Come here and we're going to give you a presentation like you you get this coming in. We're going to give you a sales pitch. You don't have to buy anything you get your steak either way, but you know you're getting the sales pitch apparently that works in enterprise sales.
22:28.96
Rick
That's actually a really good example, inviting people to free meals and giving them free like free experiences and then they like feel the obligation to help you afterwards. That's actually really a great good example the other one I'm thinking of it that kind of violates. This little bit is.
22:33.19
tylerking
Ah.
22:44.82
Rick
Um, one time I think mx sent me a boat um a remote control boat. Um, and it was like this really nice thing I was like oh this is cool and it was out of the nowhere. It came right to my desk at people keep and then they were like opened. It was like if you want the remote, you've got to do a 45 minute demo with us.
22:47.52
tylerking
22:58.10
tylerking
Oh my God Yeah Wow But that's I mean it's clever I Guess yeah.
23:01.26
Rick
And I'm just like I threw that thing in the trash. If. They give me the remote and then said you know something else I would have felt obligation though to get on the call. Probably I wonder if it was less effective than if they just give me the remote in the first place.
23:15.10
tylerking
Yeah I do sometimes get ah cold outreach from people I never respond to any of it but like some is more more appealing than others like 1 is like people will send you a book with like a handwritten note in it. That's like hey like this relates to less knowing serum I like this book if you ever want to talk about. Whatever their you know insurance or whatever let me know I've never actually it's never worked on me but I've I've been pitched that way anyway, sorry I don't have any good ideas I mean I actually some.
23:40.79
Rick
Yeah, so what kind of books do they send you.
23:51.49
tylerking
This only happened like once or twice but I got like a well the book I forgot what is called it. It did look interesting I didn't end up reading it because I don't read much but someone sent me a stuffed animal. They were like this is our mascot like sassy like it was s a a s like so or something like that that one was fun because it was they sent it like. The day the pandemic hit and so I went into the office like five months later and got this stuffed animal that had been sitting on my desk for five months and I was like oh my god this is sad anyway, yeah, what else What else.
24:20.34
Rick
Um, sassy sassy I didn't know that you had a sassy um I have related to this this is like am I a last topic related to this is um so so that's like getting people on the foam then there are these people who are going out of their way. Help us and it might be like they respond and they say you know I don't buy marketplace policies but I have 5 employees who do here's their like may I I'll introduce you to them and they'll introduce us or um, some they'll just say like they'll jump on the call with us and fill out the survey or do whatever we're doing and I'm just wondering like how do we thank people who help us in general.
24:46.43
tylerking
And.
24:58.96
Rick
In a way that is remarkable and I'm thinking of Zappos when I say this so I'm just wondering if you had any ideas for us j d and I are very unoriginal when it comes to this but like we want to be remarkable. The best example of this is ah do you know the cd baby guy. What's his name Derk Derek Sivers are yeah.
25:01.48
tylerking
Yeah, yeah.
25:11.84
tylerking
Ah, yeah, Derek Sivers sivers ever. You say it? yeah.
25:16.73
Rick
So like he tells a story one of his books about how you know the Cdbaby was basically um, a record creator for indie indie people who didn't have you know labels and so you could go to the site and request like your songs to be like converted onto a Cd and 1 guy like. You know when an artist went on there and said like you know I want this my cds on here here's my media and they had this like box that I'm getting this wrong but like they got the box and that said like what else could we do to make this more pleasant for you and he said like get me some octopus or something like that and they sent him a lot like ah octopus to eat and and. On the top of his ah um Cds when they came and he he raved about it. It changed like and it's a great example of just like remarkable customer service.
25:55.22
tylerking
Wow Yeah, hotels do this somewhat regularly right? where you can kind of make it's my anniversary do something special and they'll they'll leave something in your room for you.
26:07.95
Rick
Yes, yes, the chocolate strawberry with some champagne. Um.
26:12.60
tylerking
So you're talking about people who are customers that like do you a favor like referring somebody or something like that that.
26:16.48
Rick
Anyone who helps us achieve our mission. It could be you on this podcast. It could be anyone. We a deem is like hey man that that person we want to do something nice for how do we do that in a remarkable way that is like not. That kind of fits with like the leg up health sort of mission. It's not just like we don't we can't like do return like amazing return policies like Zappos did. For example.
26:34.90
tylerking
Yeah.
26:40.81
tylerking
Right? Let me give 2 2 things 1 one that's like less remarkable but easier to do and that I've heard works I listen a couple podcasts from people who do this where basically ah a swag gift box but like a really really good. 1 Not like here's a mouse pad but like here's a $100 hoodie and like a really nice water bottle and just like $500 worth of stuff branded and there are these companies apparently that will like package it up. Super nice like tissue paper the color of your brand and like when you get it, you're like wow like I must really be special to them because you can just it oozes quality. You know.
27:17.62
Rick
M.
27:19.95
tylerking
It's kind of boring. But apparently that works in some cases the other one. This wouldn't work for like me but I could imagine when people sign up, Add a little quirkiness to the sign up process and be like tell us a fun fact about you or something like that and then later you can use that. To give them some kind of really personal gift. Yeah.
27:38.17
Rick
That is what Cdbaby did they set themselves up I couldn't figure it out. They set themselves up for this. They asked a quirky question that that triggered people into like being vulnerable back with them and then they used that vulnerability to. To wow later I love that framework and I am going to steal that.
27:56.10
tylerking
Cool, yeah and like 75% of the time. It won't work. They'll they'll be like I love you know, private jets and he'll feel like okay well I'm not getting you a private jet. But yeah, or maybe you get them a little tiny one I don't know. Yeah, if you want the remote.
28:02.74
Rick
Ah, yeah I was just thinking like you could you could do something with that. Yeah got but that's talk about Bait and switch right? like that was.
28:14.27
tylerking
Um, yeah.
28:17.20
Rick
That was one of those things where I was just like I don't I don't want an American Express Anymore I want to rip up my card now speaking of credit cards x one card so you know how Divvy and like um, ah Brex like you can.
28:18.89
tylerking
Yeah, that suck cool what else? Yeah X one I haven't heard of this what? Ah what is it? okay.
28:32.68
Rick
You have like 1 physical card but you can create unlimited virtual cards for business and like put things on it. X one is a personal card that lets you do the same thing so I can create unlimited virtual cards on my um on my with an app on my phone and like use that one for Netflix so I get mad at Netflix I can just turn off that virtual card without having to call them.
28:35.10
tylerking
And.
28:42.27
tylerking
Oh.
28:52.30
tylerking
That's cool.
28:52.60
Rick
Um, anyway I've been on the waitlist for about a year um and this came today x one I wanted to tell you about that.
28:56.60
tylerking
Exciting Cool Capital one does that which is what I use but it's like such a pain in the ass to actually create the additional card number I Never do it So I assume X one's doing it. Well yeah.
29:09.24
Rick
It's actually really a really nice um experience I was so annoyed by how long I think I can't even remember it's been so long since I set up on the waitlist I can't remember when I did it So anyway, what what else do you have.
29:16.32
tylerking
Cool I mean my I've got one. Do you want to move on to rant now you talk about Sunday as a success and then we'll move on to rants and chat outs.
29:26.30
Rick
Okay, no work Sunday has been a mission of mine for 2 weeks I've had two Sundays without work and it's been pretty awesome I I think I'll do it again this week so um
29:37.81
tylerking
Is it not like spilling over into other days where you're like now I have like more stressful other six days but it's worth it. Cool. Do you think it's sustainable like have you have you had to set boundaries where like someone's reaching out to you and you have to be like no.
29:43.37
Rick
Um I have I absolutely have more stressful Monday through Friday a it's totally worth it.
29:54.79
Rick
Oh yeah, I'm like the no guy now work like I'm like here's a process that you can use and we'll respond in 48 hours like here's here's a form that you could submit to request that yeah I'm that guy yeah yeah I just wanted to share that.
29:56.52
tylerking
Not talking to you today.
30:02.31
tylerking
Nice I like it cool I don't really have much else to say but I'm glad it's working for you? Yeah, ah well we're gonna We're gonna spend.
30:13.50
Rick
Tell me about you man.
30:17.76
tylerking
You know, 20 minutes talking about me in a second because I got a big topic but you' do ranson shout outs First um, did you read this post from Jason Cohen on and he didn't call it this like that. Well he kind of called it this the elephant curve thing. Um I'll put put a link in the show notes. Ah.
30:21.69
Rick
Yeah, good for it.
30:28.77
Rick
Um.
30:34.63
tylerking
Jason Cohen yeah he's the founder of wp engine and one of the like I don't necessarily like his businesses but his the content he creates about like entrepreneurship and stuff like that just incredible, but this is one of my favorite blog posts ever where he he dives into basically what growth looks like. For saas companies in a way that I've I've never seen anyone describe it as clearly as this in particular far too often you hear people talk about exponential growth or even if they don't use the word exponential. They're like I'm growing this percent month over month or year over year and growth doesn't work like that. Like and he goes through a million examples of like Facebook didn't grow like that uber didn't grow like that like no company has ever grown that way for more than a few months at a time or something ah instead it's quadratic is this like a difference. You're familiar with like exponential for quadratic. Yeah.
31:23.86
Rick
No I you have to take me back to was this eighth grade math.
31:30.86
tylerking
I always knew this like people smarter than me that I work with were like it's not actually exponential. You know it's quadratic and this post helps understand the difference but basically exponential does a multiple each time. So it's like we double no one doubles month over month but just to make the math easy like we double month over month quadratic is. Accelerating but it by an addition rather than a multiplication. So. It's like ah we add a hundred more users than we did the month before every month or whatever. So it's still kind of hockey sticks up but it's like it's a different hockey stick. Um. So that's one really important thing I got got from this article I mean does that resonate with you so far that that that's much more realistic of a growth like model. Okay, and then it goes into this other thing that has been puzzling me about lessening serum for years. We have more or less grown linearly for.
32:12.79
Rick
Yeah I think so.
32:24.33
tylerking
In the very very early days. We kind of hockey sticked up when like when you only have a hundred customers. It's easy to go to 200 but ever since we've had a critical mass of people. It's been linear and we've always been like how is this possible either. Ah growth is. Hire or ch we know that churn is as a percentage of customers and so like it's so unlikely that growth and churn perfectly cancel each other out if that makes sense like you'd think either you plateau or you hockey stick. You wouldn't you wouldn't think you go straight this article goes into a.
32:50.50
Rick
Yeah, yep.
33:00.40
tylerking
Very compelling reason for why most companies actually end up with this type of growth model even the really hyper growth like Silicon Valley startups do so I'll admit like I need to reread it because like the math gets complicated but more or like I think the simple version is the way growth works is you're stacking many different channels on top of each other and one is.
33:05.93
Rick
What And what is the reasoning.
33:20.50
tylerking
There's actually more like an s curve where it it kind of hockey sticks up and then plateaus. But as it's plateauing another 1 hockey sticks up and so if you're growing effectively. You should expect it to look linear more or less. So anyway, there. Probably that was a waste of time because everyone should just read it instead of listening to me butcher it but a really good blog post I'm I'll post it in the ah in the show notes. Yes, it's it's the right? And yeah, you kind of you hockey stick up and then if it's the idea is each channel.
33:39.54
Rick
Um, and so the Elephant curve is basically an s curve. It's a series of s curves.
33:56.58
tylerking
Follows the model of an elephant and when you stack them on top of each other. It looks like a straight line. So yeah, um, well it talks about that. Yeah, it's actually it's It's like a long article and.
33:59.70
Rick
I like it What if you do multiple elephants at the same time is that when you get exponential growth. Okay I Yeah, it's sounds like ah.
34:13.25
tylerking
I'm not like bad with math but I'll admit at points I was kind of lost. But.
34:19.63
Rick
Like ah article that would take a weekend to get through.
34:20.31
tylerking
Yeah, but worth it I recommend it anyway. That's my that's my shout out. What do you got? Yes I have every single one of our listeners just tuned out. They're like these guys both use windows. Ah, it's not.
34:25.38
Rick
Um, I'm just wondering have you upgraded to windows Eleven is it worth it.
34:39.67
tylerking
Better. Do you customize your start menu at all or just like stick with what it how it behaves by default.
34:44.79
Rick
Um I customize the task bar like with shortcuts but I don't care about the start menu. You know.
34:49.63
tylerking
Okay, because like I moved I moved to the bar I guess tar I guess task bar is what I mean I move it to the right side of the screen instead of having it on the bottom and I have it like not show I basically move it back to how windows 7 worked. Um, you can't you can't do that anymore.
34:56.37
Rick
Oh no I don't do that.
35:03.52
Rick
Okay, I'm gonna be fine.
35:08.55
tylerking
If you use the default I'd say Windows Eleven is basically the exact same as windows ten Yeah, go for it.
35:10.29
Rick
Okay I can click the upgrade button then thank you and by the way this came up at at windfall this week and because we like basically everyone has peace max because it's San Francisco based company and that's just like what people do.
35:22.92
tylerking
Yeah.
35:25.33
Rick
And I was like if you made me use a Mac I would like I would resign over that and I I mean it like I I cannot work on a mac I I try I've tried it I've had I've tried to work on a mac twice I am I am too efficient on a pc with shortcuts and primarily keyboard shortcuts and.
35:30.20
tylerking
Because you switched for a while a few years ago right
35:38.00
tylerking
Yeah.
35:43.74
Rick
Ah, the operating system shortcuts that I would just I would not be able to do it.
35:45.69
tylerking
I hate mac os I have like a mac mini I use it from every time using them like people talk about them like they're really good at software design and like they're not I don't I don't get it anyway. Windows isn't either I want to be clear. It's not that I like windows. It's that I hate Mac yeah, okay.
36:00.15
Rick
Um, yeah, so um, anyway, that's I think we probably should take your topic now because we got about 25 minutes yeah
36:07.17
tylerking
Yeah, big topic. Cool. So the topic is growth I think a few episodes ago I kind of mentioned basically like we had a pretty bad holiday season which I didn't want to read too much into because holidays are always bad but it was worse than normal but like. Seasonal stuff like that. It's so common for it to just bounce back and be fine I didn't want to overreact to it. But now we've had you know we're halfway into March and this year's looking. It's we're not like shrinking. We're still growing but like not nearly as much as I would like so it's time not to panic but to go from. Wait and see to like let's be proactive and actually do something. Yes, yes and it's been like 7 years since we've created an elephant. So I think probably this is overdue um, well like I mean 1 thing I've been thinking about is like was it.
36:48.46
Rick
Let's understand our elephants um create more elephants.
36:56.71
Rick
Yeah, say so.
37:03.70
tylerking
Whatever we come up with in this conversation and whatever the company does should we have done this anyway like why weren't we doing this but I do think like if growth is happening I'd rather not be working on this. You know I don't like it but got to do it now. Um, so yeah I just figured I'd kind of talk about I'm I'm already.
37:12.13
Rick
Um, you don't like it. Yeah.
37:22.64
tylerking
Decently far into planning this but not done with it. So I thought I'd just catch you up to where I am and just this will be 1 of many brainstorming sessions I do with different people and and I'm sure you can give me a lot of wisdom here. That's okay, cool. So first of all like how seriously do we want to take this.
37:32.54
Rick
Yes, I'll be wonderful.
37:40.52
tylerking
In my opinion you want to overreact to this stuff or I mean you want to appropriately react. But if you're going to air I'd rather react too aggressively I don't want like a year from now to be like well we didn't do enough and now we're really in trouble. You know so I'm basically looking at the company and saying. I don't want to do again. It's not like a disaster scenario I don't want to like ruin all the good stuff we've got and make mistakes that would like like I don't want to like hurt our long-term success but anything with flex anything that we can cut without it hurting too bad I want to pivot those resources to something else. Um, so that's where I'm starting at here is like looking at the whole company and saying what can we do makes sense.
38:21.89
Rick
Like when you say cut. Do you mean like what people are spending time their time on it's time allocation more so than resource allocation like resource allocation could include cash as well. Um, you don't You're not saying like we need to fire people and replace them with other people. You're saying like.
38:27.81
tylerking
Yeah time time? Yeah, ah almost entirely? Yeah. No, no, no good point.
38:41.88
Rick
Um, people are spending their time a certain way today. We need to reallocate how people are spending their time cool. All right cool.
38:44.94
tylerking
Yeah, yeah, exactly so here's so I looked at the whole company There's about 20 people right now. Ah, the teams are they're Crm coaches that's about 8 people I think that's customer service I do think they will have a role to play I don't think it will be. I think they will be the least affected by this probably they'll probably do some customer research and try and get a little more information and stuff like that. But mostly I I don't want to disrupt customer service. There is a product team which is a designer 2 devops people and 5 or 6 software engineers I do think shifting product. Like the product stuff we're going to do around is something we should be doing and so I'm just like overviewing here. But I'll dive into that in a second and then there's the growth team which is 2 people kind of a marketing and a biz dev person that it's very obvious that they should be heavily involved in this and then the final thing. Is my brother Breck and he's the other co-founder. He's one of those devops people. He's really good at like stats and data stuff like he has a ph d and I don't understand it but something like that. Ah, and he's going to be listening to this and hopefully get a chuck out of that. But um, he's really good at that stuff. We don't have like.
39:49.35
Rick
Nice.
39:59.77
tylerking
A Data E Marketing Person so I'll just start there because this seems like the easiest one we're thinking and until we don't need it anymore. He's not a devops person. He's a kind of data scientist more or less basically answering questions because when I brought this up four weeks ago or whenever it was with you. You said? Well what happened why are you? Why did your free free trials decrease and I was like I don't know. Ah so that's the type of question that he'll be responsible for answering. So let me start there anything to add suggest.
40:30.96
Rick
I love it I mean 1 thing I learned from my recent exercise with Jd is that like a lot of good growths strategies start with good questions. Um, and so I think that is a great place to start? yeah.
40:38.62
tylerking
Yeah, cool. So maybe we can just real quick brainstorm question. So the first one you already said in a different episode and I'll let me say it in more detail than what I just said our our number of users on their free trial is lower than normal where at maybe. 900 at any given time I'd like to be at 1200 just to just to kind of get back to what was normal before um and you kind of said. Well what happened did like ah did a specific channel dry up is it that you're not converting from website to free trial at a high rate like what's going on so that's definitely. Ah, question, we need to get the answer to anything else. Come to mind like to even know what we should be doing.
41:19.50
Rick
Yeah I mean I would depends on I usually like twelve months of history but you probably don't I don't know because I like to see the whole season. Um, but like yeah so I would probably take the last twelve months and I tried to organize it to answer a few questions like for the last twelve months like where did traffic come from.
41:26.58
tylerking
Yeah, and we have a lot of data. We just haven't done anything with it.
41:38.52
Rick
Um, how did that traffic convert why did traffic so try to answer questions around like why did certain traffic spike why did certain free trial spike and tie it back to like either activities that you are controlling or activities that are happening in the market. Um, the changes that Google is making to its search algorithm changes in spend that you've made on your. Marketing agency I think you spend money on ads some amount of ads per month. Yeah yeah, um, so like you know changes to referral like I remember before the pandemic you're making a lot of changes to like referral programs and like where you're marketing that.
41:59.56
tylerking
Yeah, not it's getting worse and worse over the years but yeah
42:15.21
Rick
Try to try to see what the impact is of changes that you've made historically not necessarily to understand the impact of those changes but to understand what impacts what changes what actions change think does that make sense. So I guess the larger question is like what did we actually affect.
42:29.67
tylerking
Yeah, yeah, okay that makes sense my my guess is what we're going to find because again we've been very passive with growth like a 20 person company normally has more than 1 marketing person. Um I bet what we're going to find is a lot of this happened to us and like we were never.
42:32.70
Rick
And what can we affect.
42:38.62
Rick
Um, the.
42:49.85
tylerking
Impacting it much now we might say like this channel dropped off or not but I doubt it'll be like we did this thing and this channel dropped off. You know what? I mean.
42:56.51
Rick
Yeah, maybe yeah I think you'll it'll probably your growth is a probably complicated ah combination of lots of little things that you've done over many years um but like you want to make sure you you know what? those things are so you keep doing them. Um, while you also do more tactical things to accelerate the growth. So like I guess that's what I'm saying is like what things do you want to keep like identify what? what's working and that you want to keep doing identify things that you're maybe doing what didn't tell like you have a lot of those but like that don't matter or that you've done that didn't have any impact and then start experimenting with things like.
43:18.87
tylerking
Yep.
43:35.41
Rick
What what can we try to do that might might drive growth that luja no shoot. It's probably me.
43:38.81
tylerking
Sorry last yeah I lost you for a second there. Um, sorry about that if if you feel like you I can just take what you said if you feel like you said it well but can you okay, can you just restart wherever you want from there.
43:48.32
Rick
I Didn't say it well at all. Um I can't remember what I was talking about.
43:57.14
tylerking
Um, okay, let's say this? Ah all right. It looks like that cut out for a second. So I'll go back and try and clean that up. But ah, we're not sure where it cut out so we don't know what to repeat here but cool. Okay, you gave me, you gave me some ideas on like and preliminary answers to questions but but a lot of this is going to be like. Ask a question answer it and that will lead to the next question. So I realize you can't tell me what the next round of questions is yet.
44:21.33
Rick
The high level here is like I understand what's happened in the past and why it happened and that will give you insights into like what you want to do? what like you want to do going forward and what you want to try going forward then start trying things and asking questions about what happened after that. Um, like do you have ideas like assumptions that.
44:25.64
tylerking
Yeah, okay.
44:35.85
tylerking
Yeah, so but.
44:41.32
Rick
You of things that you want to do.
44:42.25
tylerking
Sort of let me so let me talk about that in a second but just as a backdrop everything else we say for the rest of this conversation. Remember we have this person who's good at data stuff if we maybe we'll stumble upon more questions. Oh it'd be good for him to dive into that dive into that. Let's just keep that in mind. Um, so.
44:58.27
Rick
The.
45:01.99
tylerking
You asked do I have ideas for what I want to do or what? Ah what I think is wrong.
45:03.71
Rick
Um I would just like it's It's sort of like but without that those questions answered everything we talk about becomes extremely hypothetical. Um.
45:10.66
tylerking
Yeah, so what I wanted to talk about more was like the plan like the framework I'm going to use to approach this more so than like what's the specific idea going to be Okay, so here's here's my current plan um feedback appreciated.
45:21.60
Rick
I Think that's great. What for like how are you thinking about approaching this.
45:30.50
tylerking
So again, we've got Alex in Eunice Alex does biz dev unice does marketing. But if we're being honest like neither of them what they do would be good biz dev or good marketing at a different saas company like we kind of do it our own way which works well when things are working so let let me give you an example rather than being so abstract. Eunice is putting a lot of pieces in place for our hopeful product led growth future which is probably several years away it's not that it's not valuable, but it's not none of us were under any illusion that it's doing anything to drive growth right now. Um, that's an example of like.
45:56.68
Rick
Are.
46:09.27
tylerking
She's she's doing very little like we we need to shift that I like the long term approach but we can't be that long term focused right now. Basically at sound right? yeah.
46:16.26
Rick
That's a time reality. That's a time reallocation. We j d and I had a conversation about this today. Um, there are things that we need to do to like figure answer the question of like does this prospecting motion work. But then there's long-term investment into relationships of like. In the bd category business development category of like payroll companies that are based in Utah um, other group insurance agents that are more focused on groups that could be referral sources um property and casualty agents these people we need to start reaching out to and build a relationship with but it's a 10% type of time effort.
46:45.70
tylerking
The.
46:50.38
Rick
Um, versus a 90% effort
46:50.43
tylerking
Yeah, absolutely um, and then you know imagine the same type of thing with Alex he's doing work. It's valuable work. But it's not like the thing that might change this trend um, most directly. So here's what I was thinking with them I have a long meeting scheduled with them on Monday. Ah, have you read the book traction but hang on there's 2 books called traction. Not the one about the entrepreneurial entrepreneurial operating system the one by Gabriel but Gabriel Weinberg that's about like growth traction channels. Yeah, okay, so.
47:20.00
Rick
Yeah, the traction channel but like it's like the wheel of growth and like there's each yeah I seen I've read that one? yep.
47:28.81
tylerking
Here's my hypothesis. Let me know what you think I I think one of the mistakes we've made in the past. Um I follow Sas pretty closely but not well. First of all I don't think eunice or Alex I think you I do closely ununice does medium Alex does not much but I don't think any of us are really like. Experts on what other people are doing that's working for growth and so as a result every time we brainstorm marketing type ideas we're like making them up ourselves you know and it's a great It's a fun exercise. It's like super creative and stuff. But then most things don't work my hypothesis here. Is that one of our cause reasons for failure is that we're trying to be too creative as opposed to focusing on executing on proven models and so what I said to both of them is I bought this book for everybody said, read it by Monday we're going to spend the next six months going through this and I'll give a summary or you can in a second for listeners who aren't familiar with the book. But my my constraint I put on them is nobody gets to come up with any new strategic ideas for the next six months that the tactics specifically how are we going to execute on this might require a little creativity but like no one gets to hypothesize. A growth channel that hasn't worked for another company before what do you think about that? Okay, um, do you like the book do you like the book like do you think it's a valuable framework.
48:45.83
Rick
I Mean yeah, it makes senses to me, you're creating focus I think um, yes, ah yes, um, the framework that you're referring to is. Experiment with a bunch of channels and then once one is working go extract the heck out of it and then constantly be experimenting with other ones so you have your next one lined up extract heck out of that and you basically it's basically ah an elephant building strategy for lack of a better word. Yeah.
49:14.87
tylerking
Yeah, and the book gives nineteen I think it is proven Channel Now. It's a little outdated at this point. So Probably if you read it today. There'd be a few new ones and if you would get cut but the point is it's like if you just stick with these nineteen and try them. Again, The tactics might vary but there's some ideas in there.
49:31.15
Rick
The thing that I think is different for you than if you were like he writes more for the entrepreneur like figuring this out for the first time is you have tracks and channels. You just don't know what they are so like I think there's this like there's this first step.
49:36.69
tylerking
Yeah.
49:44.34
tylerking
That's fair.
49:48.53
Rick
Before you start doing new traction channels of like understanding what traction channels you already have traction in and and figuring out how you're going to manage those versus the experimentation of New channels.
49:56.42
tylerking
Okay, that's that's a good point. Um, and it I think the framework in the book kind of allows for that where you're right that it's more for early early stage people. But it's kind of like it has a system for as something begins working it moves into this is that they use the bull'seye.
50:03.29
Rick
E.
50:13.36
Rick
Um.
50:15.31
tylerking
Metaphors things in the middle are the ones you're extracting like you say one's on the second level you're testing 1 ne's on the outer level. You're like these don't work for us. Basically um, you're basically saying some should start out in the middle and we should start by extracting those as opposed to experimenting with new things that we don't have yet.
50:32.72
Rick
Um.
50:33.90
tylerking
Right? Okay, that's a good point I hadn't thought that that makes a lot of sense. Um, having said that I do want to I think we will there will be some options there but I I think 90% of our growth right now is something. We're not going to be able to extract from very effectively because it's. Cus it's just people here about us and like we ask people this question. How'd you hear and there is like I don't know. Yeah.
50:58.28
Rick
I would hesitate to try to go into new channels until you can answer the question. How are you? how how are you growing currently? where yeah, okay, cool and I would I would want like everyone like who's working on this project to like really understand that and to.
51:06.81
tylerking
Oh hundred percent and that that's Bracken's number one priority I totally agree.
51:18.50
Rick
Like believe it um like there's like kind of the version of history. That's like yeah, that's what the data says but I don't believe it I think that's like not you know you got to get people going yet. That's right. Okay, that's true. Um, who's gonna take and then there's probably like who's gonna take ownership of.
51:25.25
tylerking
A.
51:37.80
Rick
Managing that this going forward versus who's going to try new things.
51:40.66
tylerking
So let me I already know some of the answers here which is like a huge percentage of people who sign up for free trials googled less annoying Crm came to our homepage and started a free trial. What's the next step to dig into that to peel back the onion. Do you think.
51:55.94
Rick
I know.
51:59.90
tylerking
Because the the problem is there's all this like we actually do have pretty good. We're not like a brand the way Salesforce is a brand but if you're looking for crm. Um, you see us on every single Marketplace. You've probably heard someone talk about us I don't think people necessarily can attribute. Them knowing about us to a specific source.
52:18.50
Rick
So what I would typically do here is I would put together a buyer journey and I would want to understand holistically like what triggers someone to go into a buyer journey and what you know what? the process is that they're going to go through and. Like if they type in what are they going to type in in into Google what are they going to hit and I would want to sort of grade less annoying crm and their and our presence and whether we're getting found because you're you're not going to go like 1 of the channels is not going to be like cold calling crms like both from a philosophy standpoint and.
52:50.20
tylerking
Yeah.
52:53.81
Rick
Cost of acquisition standpoint. So you're probably going to be more of an inbound marketing like get found based on you know, be available during the the consumer the journey that your customer is already taking versus create new journeys so I would want to really understand that journey and then I would want to assess like whether or not you are. You are available throughout that journey and there's sort of like the phase one of the journey phase two of the journey and then there's like phase 3 which is like buying actually making a purchasing decision. My guess is that for certain like Journeys you're very prevalent and then. For some you're not eating an existent and I and I would want to know which ones or which customer interviews customer interviews. Um, so um, so there's 3 groups of of potential customer interviews. Well I shouldn't call them customers market.
53:31.18
tylerking
Yeah, for sure. So how do you? How do you build a buying journey. You just talk to people who are signing up. Okay, how do you though? What about the people who aren't getting to us.
53:50.85
Rick
Stakeholder potential customer interviews I don't know what you call them to compass at all. But like there's customers. There's potential customers and there's people who don't know you who could be customers customers are people who are paying for you currently potential customers are people who you've had some sort of interaction with like they sign up for a free trial. Or subscribe to your blog but they're not a customer but you know you they know your brand and there's people like you call like you you look ah in your cram your your customer's database and you say we have a bunch of painters and then you go call a painter in Nebraska and you say.
54:09.10
tylerking
Okay.
54:20.31
tylerking
Are.
54:26.17
Rick
Do you know what lessnoying crm is they go no and you go Okay, great I Want to interview you because you are yes yes and so you want to have people in each of the categories. The people who you're going to learn you need to understand how the people are there finding you currently that's going to be the exercise Brat bracken goes.
54:28.57
tylerking
Um, and you like give them a gift card or something and okay, okay.
54:42.28
Rick
But the more enlightening one is going to be identifying people who don't know anything about you and what serm they have and how they found that cram because then you're going to discover how where you're missing out on people.
54:50.61
tylerking
Cool I like that a lot I especially like it because I'm not going to have to do that. Someone else will.
54:54.52
Rick
Yeah, but like it's actually a fun exercise because um, you learn so much by asking people questions and mom tests the mom test interview guide for how to do these interviews is the way to go.
55:06.86
tylerking
Great, Okay, eunice is going to love that too I think she was like an anthropology major or something she loves like studying people. People's behavior and stuff like that. Yeah, okay, great. Um, okay so I get.
55:11.65
Rick
Um, yes, this is a behavioral analysis and there's just 3 groups 3 different groups of people.
55:24.92
tylerking
Step 1 is understand what's going on dive in understand more and all that I want to basically say throw out all the pie in this guy brainstorming. Let's use this traction approach like we we haven't run experiments truly in far too long. That's one of the things. The traction's all about is like you start with I think they say $1000 in one month is the maximum budget for any channel until you prove that it's worthwhile and the reason for that is so you can try so many different things. So I think the specifics depend on what we find out but we'll try to extract more from our current channels and try to throw a bunch of shit against the wall with new channels.
56:02.66
Rick
The one the 1 thing that I'm thinking about that we haven't talked about but you probably already thinking about it is you know one thing you need to stand up is a system to manage this so that um because like 1 1 thing that you like when you're starting a business that you don't to worry about is unintended consequences. Um, when you start experimenting with things.
56:04.41
tylerking
More or less.
56:12.37
tylerking
Are.
56:21.85
Rick
You've gotten to your stage like an experiment like yeah, you're only spending $1000 a month but if it's breaking something that's bringing you in $10000 a month. It's an $11000 experiment
56:31.96
tylerking
Yeah, okay, fair. Yeah, so for an example that might be I know we get some visibility from like g 2 and captara and sites like that if we go and mess with our profile there. It could help but it could hurt.
56:41.57
Rick
Yes, or you know, yeah exactly seo experimentation you you drop down on the rakings without understanding hey like yeah, just second order thinking. Basically you need a system to manage that and do approvals. Um.
56:49.90
tylerking
Yeah, okay.
56:58.23
Rick
And then also like kind of know when something breaks. Ah, ah so there's like this monitoring thing that just sort of alerts you of experimentation's gone bad.
57:07.30
tylerking
Yeah, okay, cool since we've just got a few minutes here can I move on to product I'm not. We're not going to get into like what specific features we're going to build but again I just want to talk about like the philosophy I'm I'm using here, get your thoughts on it. So basically I'm going to look I want to look at everything and say like where again where is their flex. What.
57:17.28
Rick
Course.
57:26.65
tylerking
What features can we push off not that we're never going to do them. But we're not going to do them right now to free up time I've already done that exercise I think that was actually pretty easy. So how do we decide what to work on and here's the framework I was going to use I looked at it. We have really good churn. That's not the problem making our listen I want to make our current customers happy I don't want to act like I'm forgetting them. But like that's not what we need to do here number 2 we have pretty good trial to paid conversion. Um, 25% of our free trial users pay and that's with no credit card upfront which I think is pretty good. Also if someone does. Anything they add a task if they had a contact if they just log in a second time. The likelihood of them paying goes up to 50% so I wanted to focus on 3 things number 1 ah something that matters to somebody before they sign up for a free trial like basically ticking a box.
58:11.15
Rick
Yeah, it makes sense.
58:24.88
tylerking
Sometimes people call up our support and they're like do well before we we actually have it now but they used to be like do you have outlook integration. We're like no, they're like okay bye um, something that actually a meaningful number of people we think care about before they've even seen the software that's number 1 number 2 something that will get someone to log in a second time. So for example, a feature. We're lacking right now. Our search is not great. Nobody knows that until later right? because you have to have data in this yarn before you can tell the search isn't good. We're still going to fix it again. I'm not abandoning our current customers here but like that's not the feature that's going to convert someone and then number 3 is something that creates a new.
58:48.63
Rick
Um.
59:03.13
tylerking
Top of funnel growth channel like something that brings customers in 1 way or another that could be getting listed on a integration marketplace. It could be a viral thing where our customers are reaching out to their customers. But those are the 3 things and then I just wanted to figure out what fits into those 3 What? What do you think about that list.
59:19.50
Rick
Um, yeah I think it's great.
59:23.64
tylerking
Okay I don't know what I expect you to say here I'm just like you don't think I made some huge fuck up there. Yeah I guess it's because in the in the customer journey. That's the third thing that happens if it's viral.
59:26.86
Rick
Um I just I don't know you always say the third one last.
59:36.68
Rick
But like but you've underinvested in the third thing and you've overinvested in the first two. So I just I feel like you always 1 of the core values at windfall is leverage over optimization and I actually really appreciate it. Um, and like I feel like your leverage here is in the third bullet you.
59:41.29
tylerking
Yeah, you're right.
59:55.56
Rick
The the first the first 2 bullets that you went through are optimization opportunities and like listen you don't need to do like this is not an optimization effort that you're going through. This is a leverage effort and it feels like yes you like once you've exhausted the you know.
01:00:04.10
tylerking
Okay.
01:00:12.38
Rick
First the the third one then maybe you should consider some of these other things. Um, but like maybe it's a ninety ten so you want to keep continuously improving some of these other things but like seems like the most of your efforts should be going into like increasing new growth channels and sharing reality versus like trying to increase conversion rates.
01:00:20.44
tylerking
Yeah.
01:00:28.40
tylerking
Let me explain why this is not a a defense I'm I'm not sure how I feel yet if if if I think this is a defense or not but I think the reason I naturally shy away from it is a lot of the ways to well let me give a couple example of specific features.
01:00:33.17
Rick
And.
01:00:44.88
tylerking
Ah, we could build invoicing where our customers can send invoices to their customers that's kind of got the virality thing we could build web forms where you can embed your a form on your website and then when someone fills it out. It goes directly in your serum. Um, those would would you agree those both fit into that third category. Okay. Those also aren't really on track product-wise whereas all of the things for the first 2 are things they were like already things we wanted to build. But maybe maybe that's exactly maybe that's ah the wrong way to think about it. Maybe it's like well fuck what you wanted to build like go go build invoicing.
01:01:18.50
Rick
But like the other attention like has been spent on the first 2 Ah, and so that's where you have your backloggged items and you have good ideas and you have confidence in those ideas but you haven't given the attention to this other thing like and I feel like every time we talk about giving an attention. It comes.
01:01:24.55
tylerking
The.
01:01:29.83
tylerking
M.
01:01:38.31
Rick
After you give attention to you know the other attention. Yeah, so it's like if you're not if you're serious about this like give it some attention like you can always come you already know what to do on the other 2 like you're not going to. There's not learning anything new there. It's just optimizing. Um, there's ah, there's a 0 to one opportunity with this other thing and that like.
01:01:38.35
tylerking
It's next yeah, no, you're you're absolutely right about that.
01:01:57.51
Rick
I Think you're serious about committing to it at the top of the funnel I don't know why you wouldn't also commit to that at the um product level.
01:02:04.76
tylerking
Yeah, that's fair I'll have to put some thought into that and talk I'm going to ask everyone involved to listen to this and get their thoughts on that. But I think that's a good reality Check I appreciate that? Yeah, it is.
01:02:17.44
Rick
It's scary though like and like what you're basically saying is like you have no backlog of obvious simple things to do to increase sharing virality or create new growth Channels Um, from from the product. Um, and therefore you're not prioritizing it. It's like.
01:02:34.18
tylerking
We have some I should like but not.
01:02:34.91
Rick
Like some like that like fc so some on the list here right? Zapier's one is that? Yep yep, yeah and then events invites is another 1 right? Yeah, but like that's yeah.
01:02:40.41
tylerking
Yeah, zapier's checks all 3 boxes. That's the most obvious we have to build that. That's an easy slam dunk yeah event invites the other 1 right? and we're planning on doing both of those. But yeah, the other ones right.
01:02:53.88
Rick
Would love to see a list of like if if nothing else over the next like ninety days if you had a list of like 20 ideas that were like related to your existing product like constrained to like core product delivery and it was like yeah we went and found all these ideas and we decided not to do them because they're too expensive or like.
01:02:59.30
tylerking
M.
01:03:13.40
Rick
Um, but like there's just not not enough ideas here.
01:03:14.90
tylerking
Okay, and that ladies and gentlemen is why you should have a podcast with Rick now that that's obvious when you say it no that you're I I have absolutely no defense against that you're you're a hundred percent right
01:03:19.87
Rick
Um, I being so it was annoying i. I I'm sorry I I was telling Tyler before I got on the podcast. It's been a very long week I've got back to back. So if I'm ah being orner like what's the right word like annoying I'm sorry about that. Yeah I can hear you.
01:03:40.65
tylerking
Oh I think we lost each other can you hear me? Okay I ended with I have no defense against that you're a hundred percent right
01:03:47.30
Rick
Okay, yeah I heard you I'm sure like every everything is being recorded locally right now. So it's going to be. Yeah, we'll here I'll hear I need to figure out my internet issue I don't know what's going on I'm sorry about it. Um, do you want to talk about anything else.
01:03:52.46
tylerking
Yeah, we'll hear it all later. Hope No Worries. No I Listen I'm gonna bring this up probably every ah 2 to 4 weeks until the problem Solved. So I appreciate the thoughts I'm gonna go. Answers those questions do some of this brainstorming and then once I have my thoughts together I'll come back and we'll do it all over again.
01:04:16.55
Rick
Cool I think it's great that you're thinking about this and I think it's going to be really exciting for the people who get I think it'll be energizing for the company to to work on some some innovative stuff.
01:04:29.11
tylerking
Now I agree. It's hard to communicate this without people panicking like my personality is I'm I'm fired up I'm like I can't It's been too long since we've had like discomfort and I like it. But it is hard to communicate it to people without them panicking. But. Why not when we start talking about ideas when we're like what if we built this what if we built that people like yeah yeah, let's throw all that other stuff out the window and let's do that. So Yeah I think it'll be fun but I thank you a lot. This was ah very helpful and I I'll keep you posted.
01:04:52.75
Rick
Energize energy. Yeah I like it cool. All right? Well um, if you'd like to review past topics and show notes visit star to last dot com see you next week
01:05:05.65
tylerking
See you.