Hired Guns

May 14th, 2009 Chris

As I said last week, I’m getting back into software. And to answer the question I got from several of you, I’m not yet disclosing what it is going to do. We’re still a few months away from launch and I don’t want to tip any potential competitors…

One of the biggest fears I had in getting into all of this was the tremendous investment I feared would be required to actually develop the code. I came from the world of big enterprise software where development is slow and expensive.

Not that the developers weren’t fantastic – they were talented and opinionated, very opinionated It’s just that the paradigm was different. Big software releases happened every year or two, had tons of new features, had to run on multiple platforms and had to be bulletproof.

So when I first developed the concept on the app we’re developing, I assumed that it was going to cost a lot to build – originally I assumed at least $50k – $100k. What I soon discovered gave me the encouragement and cash to go ahead with the project…

Two key aspects of our project substantially reduced the development cost:

1. Software as a Service. We wanted to build this app as a service versus the old fashioned download-install-run model. That meant no multiple platform requirements, no installer, etc… All the stuff that adds tremendous cost without value for the customer.

2. Built in Product Manager. We were not looking for a full-service development house that had project managers and extra layers of overhead. I wanted the type of relationship I was used to: me as the product manager and our hired development guns as the development team. That eliminates a lot of overhead cost.

So I did up my specification (more on that in a later post) and went out to collect a couple of bids… And was blown away by how little this was going to cost!

I should note, that I didn’t go off-shore as I wanted to see the white’s of the team’s eyes. I wanted to sit down over a beer and make sure we all understood the requirements. I want to sit down over a coffee and make sure that the schedule is one I can count on. I was worried that remote development would add a bunch of barriers to communication that would counter-act any cost benefits.

In the end, I found a great team right here in Ottawa who gave me an aggressive but credible bid. And we’re off to the races.

Of course, this is software development so schedule and requirements churn is to be anticipated. But because I’ve got the right team and the right price – I know we’ll get there in the end.

In fact, this model is quite liberating. With the barrier to develop so low, the consequences of failure (from a sunk cost perspective) is also quite low. Which means that if one project doesn’t succeed for one reason or another, you can always try again with your next great idea…

Although that won’t be the case for us – this one’s a winner!

C.

Posted in Financial, Technology | No Comments »

Revenge of the Nerd

May 6th, 2009 Chris

Over a pint (quelle shock) with a buddy yesterday, I was bugged about my lam-mo blog posting frequency of late. And the jab was well deserved. I have been very lame…

I could justify it by saying that we’ve been very busy: our Powerhouse Event was last week (with double the attendees of last year!) and Colleen’s new book is hitting the book stores (go to honestysells.com, now!).

Those items (listed above purely for promotional purposes) have taken a lot of our time but the real exciting news is that we’ve decided that I get to be a nerd again… That’s right, we’re getting into the software business.

I have to be honest: I love the software product business. But based on my experience at my former employer, I thought that it was mutually exclusive with the lifestyle that Colleen and I have grown to love. Too much money was required to launch a product, too much effort was required to market and sell, etc…

But then I started to run into folks that were launching software solutions as micro-businesses and I was inspired. Development could be done inexpensively. Sales and marketing could be done cheaply yet effectively. The big difference is the goal: no desire to go public and make tons and tons of cash. Instead the goal is to launch a product that does relatively well, provides a revenue stream and allows for the continued   lifestyle.

So, Colleen and I agreed on an area where a software solution could add tremendous value to our clients and we kicked off the project! But to do so, we agreed on a few core tenants:

1. Self Funded.

I don’t think I’ve ever heard a single person say, I love my VCs… We don’t want to deal with the stress of all that so the first criteria is that we be able to develop, launch and grow the product only with funds that we generate in the business. So no investors – we own it all.

Now it does help that our business is currently throwing off a bit of profit so we don’t have to borrow any from the bank on the ol’ Line of Credit at this point. But if some point we have to, that’s OK. As long as we don’t get ourselves into the position that any debt on the product could take down the company.

Does that mean the product won’t grow as quickly and we’ll not generate as much revenue. Absolutely! But that is the trade-off to keep it ours…

2. Lifestyle Preservation

I am addicted to our lifestyle. The not shaving or wearing pants on most days. The three months in Miami. The lack of PowerPoint in my life. And this project cannot change that.

So, we will need to do things virtually – working with contract developers. Getting sales and marketing help without hiring. Etc…

3. Complementary to the Business

At the end of the day, we need the product to be complementary to the business. That’s how we get a multiplier effect. We’ve got over 10K people in our database which is an amazing starting point to up-sell and cross-sell. And it means we can leverage Colleen’s high visibility in the market to promote this as part of our overall portfolio of services.

So in April, we pulled the trigger and began development. And we’re moving fast, aiming for commercial release in the fall.

I know there are a thousand things I’ve not thought about and will learn by trial and error… And I’ll make sure I share them all on the blog. Hopefully, together we’ll confirm that you don’t have to be a big, VC-backed company to successfully launch a technology product…

Next week: lessons learned in getting stuff developed…

Thanks, C.

Posted in General | 3 Comments »

The Bank (Screw) Job

April 8th, 2009 Chris

It has been a crazy last couple of weeks here in South Beach. We’re coming to the end of our 3 months here and have loved it so much that we’ve been trying to buy a little place so that we can have our own pad and won’t have to pay rent. I say trying to buy because despite the one zillion places available including a host of foreclosure properties, we have failed to close.

Why you ask? Surely, there are many motivated sellers given the glut of properties and the hard-asset-starved financial institutions sitting on these worthless mortgages. Surely, in such a buyers market, those with the most to gain from the sale (ie. the banks) would be bending over backwards to move these properties.

Well, sadly, the only ones bending over are the buyers…

In the last two weeks, we have tried to buy three foreclosure properties and each time have been met with  unresponsiveness and a general screw-you attitude.

You’d think that with a mountain of these condos, the banks would go the extra mile to provide the buyer with information to ensure there were no objections in moving the sale forward. Instead the bankers are radio silent. Ask a question and you get crickets chirping… Request to see a piece of information and you hear the echo of your own voice.

There is no question that in this process, you are marching to the bankers’ drum-beat. I remember in the military there was an expression, hurry up and wait. Well this is alive and well in the real-estate market here. Submit a bid and you hear nothing for days and days (and days). Then, all of a sudden, you have hours to provide some info or respond to a request for a new bid. Ask any questions about the process, again with the crickets.
Finally, you really are left with the impression that you are being screwed. Submit your bid and several days later, you’re told that you have only a few hours to submit your best and final bid with no indication of what the bidding was currently at. Then a few days later, another request to submit your final best and final bid. And then you never hear anything again…

One of the big horror stories was a place we were bidding on that had been stripped down to the studs. Not a big deal – for the right price you can remodel just the way you like. The contract said you were buying it “as-is” and the seller had no knowledge of anything bad (mold, asbestos, etc…). Well, I did a little digging with the condo board and it turns out that when the previous owner was booted out by the bank, he turned on the hot water tap and left. Fast forward several days later – the mold was  bad, the drywall was black from floor to ceiling. So the entire Sargeant Shultz (I know nothing!) routine was BS. Oh yeah, and there’s a huge bill for the clean-up that the buyer will have to foot.

So we leave in a few days without a property and a thorough bad taste in our mouth from the whole experience. And with the knowledge that next year there will still be lots of properties ’cause the way the banks operate, they won’t be selling many.

What the heck does this have to do with a microbusiness? Not much – but it did remind me that I need to hug our banker when I get back to Ottawa. We have the world’s best business banking rep (Barb) at the Royal Bank. She’s responsive and always is acting in our best interest. If you don’t have a great banker, then switch. There are great ones out there…

C.

Posted in General | No Comments »

More Pretty…

March 18th, 2009 Chris

Last week I went to a conference for users of the CRM package we use here at Engage. It’s called Infusion and in the last couple of years it gathered a base of over 2500 small businesses.

I say CRM but it’s really much more and provided an integrated platform for our marketing, sales, ecommerce, etc… And the conference was fantastic with lots of great info on Internet marketing (using their tool of course…).

I was pretty excited by the almost 100% improvement in our Newsletter landing page conversion rates as I mentioned last week. Then, at this conference, I got even more ideas of how to improve it.

So off to work I went and made the following changes:

Specifically, as you see above, we did two things:

1. We moved the sign-up box to the top on the right so that it was above the fold. That is, it could be seen without scrolling down. We also put a red box around it to make sure it stands out.

2. We put the benefits on a coloured background to make them stand out.

The other thing you’ll notice is that the page isn’t particularly pretty, just more pretty than it used to be. You are witnessing the extreme limits of my graphic design capability. But it’s pretty to the user in that it gets their attention and gets them to focus on the key benefits to them as well as their call to action. Even if it’s not that slick graphics-wise.

OK – so what are the results… Well, according to Google the new page is converting 40% more than the previous revision (which was performing 100% better than the original).

All pretty simple changes to make the page, well, more pretty.

The other lesson here is to continue to come up with variations, test and measure the results. It’s amazing what an hour invested here or there on a little experimentation can do for your results.

C.

Posted in Web Site | No Comments »

Pretty Persuation

March 11th, 2009 Chris

Like many micro-businesses, we use the Internet to add to our prospect base – basically getting people to come to our site through various mechanisms and sign up for our newsletter. Whether it be a referral from a partner, someone reading one of Colleen’s articles or Google Adwords – we take advantage of their visit to try and get them more engaged with the business.

We do this by offering them a free newsletter subscription and a ten day eCourse. That is, ten emails in ten days, each with a great sales tip. All they do is give us their name and email address and we’re off to the races.

The page where we make this sweet offer is often referred to as a squeeze page in that we are trying to squeeze their interactivity down to a specific call to action (and only that call to action). In our case – it’s that Newsletter and eCourse sign-up.

As you may suspect, our goal is to maximize the number of folks that sign-up and so we look at the conversion rate – the percentage of those that visit the page that do indeed sign-up.

And figuring that out is half art and half science. I say half art as, often, the stuff that influences visitors to sign-up is not intuitive. It’s tied to psychology and what motivates us to take action. And it is generally to complicated for me to figure out. That’s where the science comes in.

Just like advertizers that conduct all sorts of market testing, the key to maximizing the conversion rate of a squeeze page is trying different approaches and measuring the results. For example, one thing that we’ve found that improves conversion rates is providing more graphical cues on the page. Here’s an example…

We took that squeeze page for sign-ups and added the following graphics:

To measure the actual impact, a great tool is provided with Google Adwords (although only measuring traffic that comes from Adwords – still very useful). It allows you to measure the effectiveness of different versions of your squeeze pages. It does so by randomly sending Adword clickers to one of your pages and keeping track of the conversion rates of each.

So what did the extra graphics do on the page conversion rate. Lets compare the original page (Original) with the new one (Variation 1):

As you can see, adding the graphics almost doubled the conversion rate from 8% to 16%! That ultimately translates is a halving of customer acquisition costs and doubling of sales! All by adding some graphics…

It’s worth taking a look at where you are asking customers to make decisions on your web site and asking yourself, is it pretty? And then test the heck out of it…

C.

Posted in Marketing, Web, Web Site | 2 Comments »

Dead Right

March 4th, 2009 Chris

In my life in the corporate world, we were very sensitive of the competition. Fighting for scarce customer resources meant that we had be very aggressive at battling those that were trying to eat our lunch.

Often, the fervor spilled over to pretty-over-the-top dissing of the competition. I specifically remember putting up pictures of competitive CEOs and superposed shots of our own management team punching them in their respective heads. It got the sales team rev’ed up and more confident to go do battle.

Despite the energy spent bad-mouthing them, one thing was always true: we never dismissed the competition. Understanding the strengths and weaknesses of the opponent is critical to beating them. And it requires the acknowledgement that the competition is doing somethings better than you.

While admitting that you were being beaten on a particular front was a little tough on the ego, it was critical to understanding what lessons you could borrow from them and what counter moves you could mount. The alternative was to live in a self-absorbed fantasy land – one in which business continues to suffer while you tell yourself that you’re the best… Not good.

That’s why I was shocked late last week by the response to one of our marketing pieces. An email we sent out discussed the need to be an effective presenter/speaker as a sales professional and referenced Obama’s recent visit to Canada. Specifically, it cited his ability to inspire and motivate – a fact that anyone objectively must concede he’s good at, regardless of your politics.

Well, some of the response was the most viceral I’ve seen in my life. Here are two examples:

 I believe you should keep your political opinions to yourself as this so-called president is destroying the America we once new. If successful, he will eliminate any motivation to be self sufficient and take risks to become successful. He’s ordering us to redistribute our wealth to those who are irresponsible. He will destroy our health care system with rationed health care. I am really tired of seeing this usurp in the news and watching the stock market tumble every time he speaks. I would say he is far from being inspirational! He is a sociopath, terrorist, liar, and agitator. Furthermore, I compare the likes of him to the anti-Christ! His loyalty is not to the United States but to his home country. I am not alone; 20 states are currently in the process of using their sovereignty to resist the federal government’s efforts to spend this Country into oblivion.

and…

You, ma’am, must be on some serious hallucinogenic drugs. Obama is burying our grandchildren’s generation in debt, with his “inspiration” and ‘motivation”. You Canadians may embrace socialist tenets, but America, even as bad as our economy is now, is a great capitalist-based country. For instance, why do you think your countrymen come to the US for state of the art health care? Because our capitalist innovations keep or medicine at the worlds forefront. Please don’t use the Obama inspires and motivates analogy with me – he just taxes and spends.

Now, Colleen is always respectful of such responses and politely responds that we, as business professionals, need to take lessons from the strengths of others, even if we don’t like them or their business. And typically those that write these emails don’t respond.

Let me, with a bit more force, reiterate Colleen’s point:

• Oh, extreme right-wing reader, let me point out that there is much to be learned from Obama, even if you don’t like his politics. Especially as he just kicked your party’s ass all over the country. Surely in his record fund raising (from those that make much less than the average republican supporter), record crowds, record public approval ratings, etc… you may find a lesson that your party could use to be more successful in the next election.
• “Anti-Christ”. Are you joking? It is pretty sad when you refuse to believe that the competition has any strengths and, instead, attributes any success to the work of Satan. Good grief.

For clarity, my political beliefs actually do not align with Obama and that’s OK. I can look at what he does well and think – wow, we could learn something.

And – as a complete tangent and in a humble defence of Canada’s health care system (and that used by every country in the industrialized world, apart from the US) - our system is based on the believe that everyone has the right to medical care, not just those that can pay for it. To fear-monger about such a system is just that – fear mongering… Here are a few stats for your consideration:

• Canadians live longer than Americans. That includes the average for white, affluent Americans (to counter an argument made in very bad taste by a particular TV pundit).
• American infant mortality is twice that of Canada.
• Per capita we spend 1/2 as much on health care than in the US  (combined public/private).

OK – sorry, I guess that was a bit of a rant. But to reiterate, politics is not very different than business. And in business, we study our competitors to learn their strengths so we can copy and counter them, and we learn their weaknesses so we can capitalize on them.

As an old boss of mine used to say to me: you can be right or you can be dead right. By being arrogant and not believing your competition has any strengths you can learn from, you’ll be dead right – and you’ll be broke.

C.

Posted in General, Marketing | 1 Comment »

Absence of Malice

February 26th, 2009 Chris

A couple of friends visited me last weekend here in Miami Beach. They left on Monday and I’ve just about recovered from the varied excesses that such a weekend inevitably entails. One particular morning (er… at least when we woke up) we went out for coffee and happened to be discussing the benefits of incorporation versus not (yes – we are huge losers).

The pro’s and con’s of incorporation are pretty well documented (liability, tax treatment) and as soon as your microbusiness becomes more of a going concern (employees, office, etc…) it really is mandatory.

What really surprised me is what my buddy was told by his lawyer – that it would cost thousands to incorporate. I was pretty shocked.

Now, I want to be very clear. I have nothing against lawyers per se. I view them as any other business professional who provide a service for money. Nothing evil, no malice. But they do exist to make money – like the rest of us.

So when my friend got his verbal quote for incorporation, it probably incorporated all sorts of good stuff (shareholders agreement, minute book, name search, etc…). But the real question is do you really need all. Especially, as a micro-business owner, this comes right out of your pocket. That’s right, we’re talking beer money!

I know all the lawyers in the audience will say that there are a million and one risks unless you do everything they recommend. The way I look at it is: 1. If you’re starting a micro-business, you’ve already accepted a bunch of risks much greater than this legal stuff, and 2. My doctor keeps telling me I’m only allowed one beer a day and I don’t listen to that either.

I contrast the role of a lawyer (make money) with that of the government department here in Canada that is responsible for incorporation: Industry Canada. Their goal is to make it as easy as possible to do business ’cause that’s good for the economy. I know that sounds oximoronic, but it’s true. Canada is the #2 country in the world for ease of starting a business (see all the gory stats here).

What did we did:

• Did a name search (you can do that through Industry Canada for $20 or your lawyer) – regardless, it’s cheap.
• Went to Industry Canada where you can incorporate on-line for $200. There are several forms but they are easy to download, complete and submit.
• That’s it…

We didn’t do things like shareholder agreements (there is only Colleen and I) and corporate minutes as they simply weren’t necessary for incorporation and for our simple structure.

Having said all this, two points:

• Do talk to your accountant. There is a myriad of financial stuff that needs to be considered (like picking the right fiscal year, initial funding of the corporation, etc…) which has an immediate and material impact to your money.
• At some point, some of the things you ignore are going to need to get done. For example, after five years, we did up a corporate minute book (a record of board of director meetings, etc…). It provides a record you’ll need if you ever want to sell the business or get additional investors – and it get’s more difficult to find all the paperwork with each year that passes. But you don’t need it to start.

So, I guess the moral is that when it comes to engaging your lawyer, think of him/her like any other professional – they provide a valuable service but you need to decide what is mandatory versus nice to have.

Just like if some high-tech guy came to your office and told you that you need a double-redundant T1 line to ensure business continuity: sure it’s a nice to have and there is a risk without, but it’s money that can be more directly invested to generate revenue. ‘Cause without that, there is no business.

C.

P. S. I am not a lawyer, this is all my opinion, take all advice at own risk, always consult an attorney (huh? didn’t you just say not to?), etc…

Posted in Legal | No Comments »

Press 0 to speak with an operator

February 19th, 2009 Chris

I really like the movie Contact. I’m not sure exactly why: could be the sci-fi aspects of meeting aliens, could be the techno-stuff in building a really big machine, could be Matthew McC???ney (two words: dream-mee, or at least so Colleen tells me).

Anyways, one of the central story lines of the movie is that us little humans spend a lot of money and time to try to make contact with our brothers from a different primordial soup. And believe it or not – I see a lot of parallels with web site development.

My philosophy with our use of the web has changed significantly in the last two years. Originally, my dream was to develop a bunch of web functinoality and content, and let it loose. I’d just put my feet up on the desk and watch the cash roll in.

Today, I have a very different view. Instead of the primary goal being to get people to purchase something off the web site while we rest comfortably in bed, our ultimate goal is to get people to make Contact!

Why? Well, I’ve noticed a few things:

• The more prospects feel like there is a person behind the business, the more likely they are to purchase.
• The more prospects feel like there is a person behind the business, the more they are willing to spend.

I think that shouldn’t be a big surprise. For most adults, this ecommerce stuff is relatively new (last ten years) and we basically trust people, not web pages.

So now, our web site objectives are aligned with that philosophy. The primary goal is to provide information as effectively in order to maximize the number of qualified buyers who take the next step and contact us.

What do I mean by effectively:

• Simple – make it easy to find the information based on who they are and what they need
• Efficient – be able to get to the information they need as quickly as possible
• Interactive – engage the user in order to deliver information visually, aurally and with words (readilly?)

And when I say take the next step and contact us, we want to provide as many mechanisms as possible:

• Call (toll free of course!)
• Email / Contact Us
• Live Chat

On the LiveChat front, I previously mentioned our implementation. I have to say that it has been great. Just in the last week, Casey in our office has closed over $1,200 in sales using Live Chat. That just paid for the service for the next 15 months. And by providing a mechanism to quickly get questions answered, it’s enabled or accelerated countless other sales.

Now – don’t get me wrong! I still love on-line sales that don’t require human intervention. We have several products that continue to sell very well and deliver great value to the customers. Our view of them strategically has evolved to be in line with this new philosophy. Instead of the dream of building our entire business around these autonomic sales, we see them as gateway products that introduce customers to our business. They are the first step in engaging with the business which hopefully leads to larger sales as they get to know us.

So, down here in South Beach, I’m feverishly working on a substantial redesign of our web site in-line with these objectives. Simplified structure, even more interactivity, more role-based content.

Take a look at your web site – how easy it for your prospects to press 0 to speak to an operator?

C.

Posted in Marketing, Web Site | No Comments »