MicroConf 2013

Jason Cohen led off the conference with a talk about building a “money machine” that brings in $10,000/mo. Jason crushed it. Rob closed the first day and spoke about taking HitTail from $1500/mo to well beyond the “money machine” mark in 20 months. Rob burned it down. Multiple tweets showed people changing pricing strategies, making sweeping copy changes, and saying the conference had already paid for itself within minutes or hours. Welcome to my retro-diary for MicroConf 2013. As usual, I’m going to cover material that most closely resonated with me and where I am.

Immediate Actionable Takeaway

  1. Use CPC = MRR/25 to work backwards from the CPC I can achieve in available channels and arrive at a pricing scheme for Keepify.
  2. Use money back guarantees and incentivized annual pre-pay from day one.
  3. Meet weekly with the family to plan work and leisure time. We have informal understandings, but planning would be an improvement.
  4. Plan out a marketing component that doesn’t scale and execute.

The Money Machine

Jason’s talk was a great look at the math and constraints behind building a business. He explained how you could piece together a cash machine from first principles similar to his recent post on CPC for bootstrapped business. He left it as, “Predictable acquisition of recurring revenue with annual pre-pay in a good market creates a cash machine.”

Giving incentives to customers to purchase annual pre-pay plans allows WPEngine to advertise with a much higher CAC and CPC. You can spend $300 dollars to acquire a customer that is prepaying for 10 months @ $49  per month right now.

Free trials can be eliminated in favor of a 60 money back guarantee. Use multiple plans and raise prices.

You need 150 customers to pay $66 / month on average. You can get 50 by scratching and clawing (see things that don’t scale) and 25 more with guest posts and social media. The final 75 can come from basic marketing all over a period of months.


Rob’s talk emphasized that it took him a period of 5 months building and 6 months learning before he began to scale the business. All that time learning was improving conversion rates, retention, copy, adding features, and increasing customer understanding. He is planning for similar learning period in the future and it is instructive to hear. I’ve experienced similar (but smaller scale) things recently with PPC ads. You have to be willing to spend a little money and stick it out through many revisions to be successful.


Nathan Berry, Brennan Dunn, and Hiten Shah all reinforced the necessity of using educational marketing as part of the customer acquisition process. Somewhere, Chet Holmes is proud.


Joanna Weibe of Copyhackers gave a great talk about copywriting. She said to minimize the visibility of free offering, use email, long-form sales pages, and start testing.

One point she made seemed particularly relevant to the audience. “Stop treating marketing as an experiment” which I understood to mean that you need to view things in the long term. Don’t give up when an initial ‘experiment’ in marketing doesn’t work.

Plugging Holes

Rob touched on his Operation Retention where he improved conversion and retention throughout the funnel for HitTail. He only resumed his marketing activities when those numbers became healthy again. He gave healthy numbers as 8% or less churn and 40-60% Trial to paid conversion.

Things that don’t scale

Rob, Josh Ledgard, Erica Douglass, Hiten Shah, Jason Cohen, and Patrick all stressed the importance of talking to customers. Especially early or after cancellation.

Erica included some case studies of offering one-on-one consulting for early customers and emailing 1000 people in a few months as examples of doing things that don’t scale to learn and market. Those 1000 emails were from Leo  Widrich of Buffer and converted into hundreds of guest blog posts and Buffer buttons on blogs.

Creating Channels

Hiten talked about creating your own channels to reach customers because established channels get crowded quickly. He gave examples of Nathan Berry, Brennan Dunn, Ruben Gamez, and KISSInsights which used a ‘Powered By’ link on the surveys to connect with customers.


I was part of an interesting hallway conversation about how to go from a job and working on your side pursuit into working normally. Many of the attendees spent some many years working 60 hour weeks that they didn’t know how to stop and enjoy freedom they had earned. It’s a an interesting subject that needs more direct treatment.

Sherry Walling gave a good talk that detailed how she and Rob made it through rough times and built relational systems and communication that evens out the ups and downs of entrepreneurship in a relationship. Another subject that became a topic of conversation in the hallways. Kids are common among attendees and everyone is looking to build a better future for their family.

Golden Handcuffs

Reflection on some of the conversation at MicroConf and a talk with my friend Evan forced me to consider the how a growing income and a growing family have changed the equation for what my minimum “money machine” looks like. Sherry’s talk included a quote about how cleaning services were cheaper than therapy and therapy was cheaper than divorce. I agree. I spoke with others about paying others for cleaning services or lawn care, but where do those things trade-off with growing expenses and lifestyle that tighten those golden handcuffs? It’s something for me to ponder.

Thanks to Rob and Mike for another great conference. I barely scratched the surface of the value available from attending MicroConf. There is simply too much for a blog post. You’ll have to join us for the 2.5 days next time.

You can wait for MicroConf 2014 or check out MicroConf Europe in October.

Magical Dwarves and Marketing a Product

I had a friend long ago that joked about how the laws of physics were the happy accidental result of the actions of many, many,  tiny, magical dwarves you can’t see. The theory has some merit. Quantum phenomenon are a sign of their sense of humor. It’s a cosmic wink and a nod. This was essentially my understanding of how sales were related to marketing as of 2008.

In a recent podcast, Rob Walling mentions that he doesn’t believe people with successful businesses actually thrive on “word of mouth” and that some other activity is actually responsible for their success. This is a connection that wasn’t cemented for me until I actually created a product I could sell online and went forward with the mindset that each sale would be a direct result of some marketing action by me. People won’t appear because your product or book is a better mousetrap. Your customers will only help promote it if there is some compelling reason to do so.

Traffic is a result of my SEO, content, guest posts, blog comments, and podcast appearances. Aggregate traffic is what enters the “funnel”. If you have high quality traffic, the people already know a bit about you or your product and are primed to buy or sign up. My first month of traffic into the funnel for my book converted to sale at 26.7%. About another 22% signed up for the email list by requesting a free sample. As I understand it, that is pretty spectacular and bound to decline.

I can see the decline coming. My analytics reports that I have a lot of organic traffic spinning up from a content campaign on my book site, but it isn’t converting very well. My copy isn’t that great and some of the keywords are going to pull traffic from outside my niche audience.

The conversion numbers aren’t the point. The point is seeing the world in a new way. I knew how it worked before, but I didn’t grok it. I started seeing all content as someone working a sales angle a while back. It doesn’t bother me (but a younger me is angry about it). People create great content because it gets attention and attention drives sales. Without the sales, there is no reason to create the great content. Churchill’s quote about democracy comes to mind.

Many forms of Government have been tried, and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time.
Sir Winston Churchill, Hansard, November 11, 1947.

Physics and calculus changed the way I viewed physical phenomenon around me. Selling a product online has changed the way I view marketing, commerce, and sales.

How to Pick a Business Idea

Ideas are not worth much. Software is not worth much. Blogs are not worth much. Don’t get emotional about the idea vetting process. You shouldn’t include any ideas that sound miserable on your list, but you shouldn’t jump at an idea because it feels exciting and fun. That feeling usually wears off.

The following is my idea funnel. If an idea passes each of these tests, you have a worthy pursuit. You can then sort those ideas by your priorities and answers to questions like, “Which has the most profit potential viagra generika kaufen schweiz?” or “Which can I get started the quickest?”

You like the technology

Ignore this step if you plan to outsource the technology.

Mind you, this doesn’t mean it is a technical challenge. This is just a check that you are happy working with the best technology stack available to solve the problems you have to. Bingo Card Creator is not an incredible achievement of software, but A/Bingo is a pretty nice, reusable piece of software built on a stack that most people can get excited about (Rails). BCC spawned A/Bingo and other interesting pieces of automation and optimization. Don’t forget about those pieces.

You like the business challenge

The business challenge of BCC is much larger than creating a web-based random number generator. If you don’t want to optimize selling to teachers, don’t create a product for them. If you don’t like SEM, don’t pick an idea that leaves you without any other avenues to customers. Likewise, don’t put yourself in a market where high-touch sales and in-person time is required if you don’t want that to be a part of your life.

You like the people in the market

If you hate war, weapons, and consider it all a waste I would strongly suggest that you should avoid creating products for the defense industry. Find an industry that interests you. Don’t create software for hunters if you are morally opposed to killing animals. Don’t create software for hunters if you think they’re all slack-jawed yokels. It’s not going to work.

You have access to people in the market

SEM, SEO, phone calls, emails, conventions, meetups, local media, Facebook, Twitter, friends, podcasts, YouTube, iTunes, Joint Ventures, direct mail, LinkedIn, forums, community sites, newsgroups

Find a repeatable way to connect to the market and get customers. Pick a market and channel that you enjoy. I haven’t logged into Facebook in three years or more. I won’t be starting a Facebook app business. Keep in mind that this step will require some research. Those channels will reach people, but it might not be best if you start out with the plan to be #1 on Google for ‘project management software’ quickly and with a limited budget. This is a place where competition should figure into your reckoning.

You can solve a problem in the market

Talk to the people in your market and discover their largest problems (See: Lean Startup, Steve Blank, Eric Ries). Determine if you can solve those problems.

Can you do it profitably? Is the technology workable? What would it cost? What is the marketing cost? What is the best channel? What is your expected conversion rate? How long until you can make a sale? Etc.

Most of those questions are not answerable. Not without a lot more information than you have or can collect reasonably, but you can still give them some thought and make estimates. Risk can (probably) be thoughtfully minimized.

The people in the market that you have access to have money

Teachers don’t have money (for the purposes of this discussion). Make sure your market has money. Look a government statistics. Look at magazines. Look at SEM on keywords in your niche. Are people making money from this market? What is the pricing like? Does that support your lifestyle? What does the support burden look like? (Hint: higher prices often come attached to better customers for startups)

Those people will buy from you

Hunters do have money, but they usually want gadgets they can use this year. Very few of them want software that helps them potentially improve the quality of the deer herd using time and resource intensive methods that their neighbors can spoil. Hunters wouldn’t buy Whitetail Scout even if all of the above was true for me.

Hunt Clubs will pay for exactly that to attract more and better hunters and to improve things for their kids, etc. Most hunters are conservationists at heart.

Make sure you are targeting the right buyer with your offering, then test them out for a purchase. Whether you make a webpage that asks them to click a ‘Buy Now’ button or you ask for money in person during interviews, just make sure you ask. If you’re not excited with some pre-sales in hand, you should pick another idea…now.

What now?

You need to talk to customers and test your hypotheses about the market and the idea. If you started this process with an actual idea for a product and didn’t talk to customers for step 5 then you need to go back and do remedial work to validate that the idea is a real problem for the customers.

If you enjoyed this post, you should get your free tips on cold calling your customers.