An excerpt from my cold calling book…
All most people will see is the ‘To:’ and ‘Subject:’ lines. Make them good.
Your subject should be terse and free of useless words. Be specific and summarize the email. If the email includes a deadline or a date, then put it in the subject. You can use subjects to interest the reader but not to create the promise of things that are not there. Much of the advice about writing a good headline also applies here.
If you have something to sell, you should use the headline to make a value offer that they find interesting. If you just want to talk to them, you can do the same if you have an offer to make. If there isn’t a value offer or resource you have fewer options. I usually go with honesty in the best light I can.
If I want to talk to dentists about problems in the dental industry I’m going to research enough to write a specific headline that shows I’ve done the homework. I may try a few different specifics in the subjects I send out and figure out which ones strike a chord with people. You won’t get statistically significant data, but you can pick up on how they react. Repeat what works and continue to experiment.
Start a blog: Interview <Business Name> for <Blog Name>
The blog might be a place to feature businesses or a collection of posts about how businesses in the industry handle best practices.
Write a report: 7 Ways to Improve X in <business>
Be honest and specific: Chat about handling <problem> in <business>
Name drop: Jackie Brown said to ask you about <topic>
Don’t start the conversation with a bad subject.
Lazy: talk about problems in your business
Bad blind sales: Dentistry Practice Software
Feels false: Double your business today!
Follow up like Gravity
I had a physics professor in college that started every class by pushing everything on the table in front of the chalkboard off the far edge. He usually did it all in a rush. After the clattering science equipment settled, he would say, “Still works. Gravity is relentless.” Email requires that you are relentless. You should do so at 7-10 days without a response and then every thirty days after that. Use followup.cc, boomerang, or similar tools to help keep you on schedule. The prospects might get annoyed in the first couple months, but they get over it. You will get some respect for tenacity and you might catch them when they have a free moment. The cold email game is a battle for hitting the inbox at a time when you can get a response. If an email is more than a couple days old, the chances are that it won’t get attention. You can use major mailing list service providers like Aweber or Mailchimp to see your own email statistics, I have included some common rates for a few industries in a table below.
|Type of Company||Open Rate||Click Rate|
|Business and Finance||15.47%||2.77%|
|Software and Web App||15.57%||2.49%|
Data from MailChimp:
If you enjoyed this excerpt, you should check out the cold calling book.
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?” 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.
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.
It was a great event. If you want to learn more about bootstrapping a business or meet people trying to do so, there is no better place to go. Thanks to Mike and Rob. I’ll try to summarize the key ideas that resonated for me after listening to the speakers and chatting with numerous other entrepreneurs at the conference.
Jason Cohen gave the lead off talk and he spoke about how honesty can make you more money. It was a really good exploration of truth in marketing and support. It seemed to spawn a majority of the initial discussions for the rest of the conference. Did he mean complete honesty? Were there exceptions? Who would actually do it? I think he makes a convincing argument for using honesty as an advantage. Especially where it can grant you credibility. Admit something negative to lend credence to your positives.
Customers, Customers, Customers: Who are they?
Hiten Shah was the first to ask this question. Who are your customers? How much do you know about them? What problems do they have? What keeps them up at night? Who do they buy from? What do they pay? Who are their competitors? Who are their customers? Hiten emphasized again this year that speed of customer learning will determine your success.
Where are they?
This came up in a lot of talks. Hiten was first, but Amy Hoy, Patrick McKenzie, and Dan Martell definitely all discussed it. Find them online and off. Learn from them. Build channels to educate and sell to them. Or…
Find “Other People’s Networks” to leverage. YouTube, iTunes, Twitter, Quora, Forums, etc. Discover where your customers hangout and be there.
Actions as Data
Your customer’s actions speak more loudly than their words. Spend time observing their actions with your product, but also with each other. You should absolutely use customer development interviews, but understand that no matter the methodology: people will lie or unknowingly misrepresent answers to these questions as often as not. This is borne out by research. Collect all the hard data you can.
There were moments in quite a few talks where the speakers talked about a failure or riding a roller coaster of emotions on the entrepreneurial trip. It isn’t always fun or fulfilling. You’re never sure about the next move. Each time things don’t work you are reminded of the opportunity to give up. Failure and experience are the best teachers. You can learn to accept failing as part of the process. In this business, your success depends upon frequent failure.
Revenue or Cost
Improve revenue or cut costs for your customer. Build your messaging around the benefits of your product that do this.
Process and Systems
I enjoyed this theme the most. It is best summarized by a quote that Patrick McKenzie shared:
A job is a system that turns time into money. A business is a system that turns systems into money.
Mike Taber spoke about it at length as well. Peldi and Bill Bither both mentioned using the best development talent they had to work on business systems and not the product. Sarah Hatter talked about systems for interacting with customers to deliver great support. Automate things. Improve the experience. Use checklists. Use metrics. Build visual dashboards. Prioritize problems. Document your process. The quality of your systems will distinguish your from your competition.
Patrick McKenzie and Sarah Hatter addressed this directly in their talks. Patrick mentioned a Japanese word that means ‘an awareness of the impermanence of things’ in reference to work and money. He wanted everyone to make sure they spent time on the things in life that bring them meaning and the things that last. There was a running joke for the speakers to include a picture of their kids that connected up strongly here. These people have real lives. Sarah said (paraphrasing) that you shouldn’t take business advice given by people that don’t have a life. I think that is wise.
The talks were all excellent this year. The speakers were extremely accessible and engaging. The attendee quality was very high. The venue improved. I’d say I’ll see you at MicroConf 2013, but I’m concerned it will sell out too fast to guarantee.
Recently, Jason Cohen featured two blog posts about pricing. Sacha Greif talked about how his research and thinking yielded a low price with high volume approach. Jarrod Drysdale rebutted with a tale of a high price and low volume strategy where he made more money. Amy Hoy got involved in the discussion both on HN and Jason’s blog. She and Jarrod championed the high price model. It’s a good model. And she is correct in her assertion that higher prices make it more likely that you can continue to provide an exceptional service level to each customer. Sacha maintained that you could make money and address a wider audience with a lower price.
I recently read Bargaining for Advantage and it’s got me thinking about how to view these decisions in life and in business. There is a section in the book that outlines several types of situations where people engage in bargaining. One of the key factors in how he suggests you should bargain is based on whether or not you expect to have a continued relationship with the other party or if it is simply a transaction. Groceries are usually a transaction. Even most cars and houses, but most business interactions are best viewed as a relationship.
Relationships mean that you might not bargain as hard and you’d let the people on the other side of the table know it. Relationships mean creating more value than you capture. Relationships mean understanding the other side of the table and what goals they have not only for this deal, but also in life. Relationships are what build careers, reputations, and (I think often) wealth.
It’s easy to see most decisions, moments, and interactions in life as transactions. Walking by someone who drops things in the park. Seeing a neighbor struggling to load a truck. Passing by a forum post or email with a question you can answer. These aren’t transactions in a business sense, but even in helping out you can treat it like the beginning of a relationship or a momentary hassle. Relationships don’t scale. They can’t. And that is why they’re special.
In the end, I think there’s more than one way to skin a cat. Amy’s method allows you freedom to pour a lot of attention into a faithful few. I’m sure that can forge powerful relationships. Sacha’s method of selling for less is relational in a different way. I think people understand the value in his offering and it builds the bridge to start a relationship down the road across a wider audience (similar to Customer Perceived Value). You can’t always start with marriage and million dollar deals. Sometimes it helps to start slow. The level of “know, like, and trust” required to make a $3.99 sale is different than a $3,999.00 sale.
Ultimately, the approach to pricing depends on where you are and where you want to be. The money won’t make you happy. Relationships can help with the money and the happiness. Pick the one that works for you.
I’m going to tell the story of a new product idea from conception to death. I know that my first year or two of trying to vet ideas was a scary process to navigate. I felt like I was in a race car with an opaque windscreen and a vague impression that I needed to turn, but I never knew which direction or when. The uncertainty still plagues me, but I have developed some processes to deal with it. I’ve also learned that it’s more like a bumper car than a race car in most scenarios. It might be embarrassing or below expectations to crash, but there is little chance it will be fatal. It is also quite common to crash and you never get going quite as fast as you’d like.
In September 2011 I created a small piece of code for a friend that allowed them to use Wufoo as a platform for graded quizzes. Before creating the project I investigated which form platforms had an API that I could leverage and as part of that I asked a few questions of someone at Wufoo support. I followed up with the completed project to the Wufoo contact in case it would interest them. That small thing allowed me to turn my README for the project into a blog post on the Wufoo blog.
The blog post generated some inbound interest, but I didn’t start taking the idea very seriously until some of the interest turned into consulting opportunities. I figured a few consulting clients, a blog post, and some additional interest from the friend that started everything warranted more investigation. So, naturally, I made a few customer development phone calls to get more insight into people that wanted to solve this problem. I was able to isolate two interested segments: online education and marketing.
I was able to get a collection of people in marketing to be moderately interested, but it seemed like education was the real player. I spoke with about 25 people over and above the 10 or so that had already come my way. I got really excited at this point and started to move things forward on multiple fronts. The consulting deals were done in such a way that I could keep the code open sourced and use it for any purpose down the line. I knew that I had wasted time on the technical side before when I should’ve started with marketing so I jumped in on the marketing side.
I created a landing page. I used my contacts in the market to generate ideas for benefits and features. I iterated on the design and content with some trusted friends and advisors in the startup space. I bought a domain, picked a name, and did some quick and dirty keyword research.
I enlisted some outsourced marketing help on oDesk. I had people tracking down competitors, keywords, blogs, hangouts, and the best content online in this market. That set me back a few dollars, but I was excited about my marketing approach. I had a demo that included a graded quiz and captured email addresses! It was whiz bang cool. I started planning out the future and wrote a 10+ page marketing plan. I had paying clients and interested potential customers.
I decided to drive some traffic to the landing page to build a huge mailing list for my mega launch event. To drive traffic right away I turned to Facebook Ads where I figured I could effectively target young, web-savvy, educators. I also used BuySellAds paid tweets and I linked the landing page from my blog. I was banking on 10% conversion, but if it was a little lower I was willing to retarget and try some new things.
I managed to convert 0% of the traffic. I spoke with a few advisors about the idea and the process I had used in depth. Everyone agreed that there was something to the idea whether it was lead generation or a simplified Learning Management System (LMS), but we also all agreed that it wasn’t quite there. The idea wasn’t fully formed. The traffic wasn’t converting. The test didn’t succeed. I’m not great at copy or paid search ads. I do think these networks have tremendous value, but I did not connect on this idea.
I recently heard Noah Kagan speak and one of the best things in his talk was to set specific, challenging goals for tests and simply walk away when your expectations aren’t met. I walked away.
I was sad to see an idea that I was so emotionally attached to go by the wayside, but you can’t make emotional decisions about which product ideas are worth pursuit. You make data-driven business decisions after you talk to customers, do market research, and test the idea by exposure. This is not something I could have done a few years ago.
I try to pursue things that will leave me better off when it’s all said and done whether it meets my loftiest ambitions or it crashes ignominiously. I think this project meets that criteria well. I got the blog post. I tested another idea in depth and I’m getting faster, more decisive, and (I hope) more effective at it. I learned some new tricks for marketing, I wrote a great marketing plan that I can use as a template, I experimented extensively with outsourcing, I worked from the market side first, and I solidified my process of vetting an idea.
I learned some great skills and a valuable lesson about getting too excited about an idea too early. I thought I already met that lesson, but here it is again. I spent $150 or so, and I saved months or years of chasing an idea that I can’t sell online with my resources and contacts. This is a key distinction. Someone may be able to execute on this idea. Maybe my failure is more due to my lacking copy or SEM skills than the idea itself. Perhaps I missed the number one benefit. In any case, I gave it my best shot and I know that this one isn’t for me.
I’ve been watching my daughter grow up for almost two years now and recently she led me to an epiphany. I should fail more and I should do it at many things. I was watching her run around the park a few days ago and I was struck by the way she moved around. Every rock, bump, and obstacle was a challenge waiting to be attacked in a haphazard order. If she fell down, she got up and tried again. In the face of persistent and certain failure she asks for help, but she will give just about anything a go before asking.
What would the world look like if everyone took on life like this? We’d all be a bit more fit I suppose. But, we would also never stop trying new things. We wouldn’t care if people saw us fall down and in part we would not care because we would be too busy trying again.
The world is pretty big to a two year old child, but she doesn’t see it as daunting or intimidating. She doesn’t studiously avoid the playground equipment she isn’t adept on. Everything is a quiet challenge.
I’m off to pickup the gauntlet. Kindly look the other way when I’m picking myself up. Life is too short to live it all walking carefully.
I have spent a lot of time reading books, articles, and blogs all about business, marketing, and startups. I don’t think it was wasted, but I don’t think it really prepares you to do much either. I think I’m better prepared to see mistakes coming for others, but I find that I tend to justify why my situation is different before learning the hard way that it is most certainly not.
I don’t think this is a bad thing. Experience is a superlative instructor. ( It reminds me of the Stanford Machine Learning course introduction to neural networks. The brain only has one really versatile learning algorithm and experience is the input. ) I expected the recent ‘You’re Overthinking It‘ article to be more along these lines. An exhortation to do more stuff, but it was not to be.
Do more stuff! Lean process emphasizes shortening the iteration cycle in order to speed up product development. Faster development with customers driving the process just might yield a profitable business before you run out of cash or motivation. I’m actively combining this simple and widely applied insight with another related one, “Practice makes perfect.” ( Boy, was Solomon right: There is nothing new under the sun. )
I’m thinking a little less about doing the perfect thing at the perfect time. I’m trying to build a large quantity of short, fast iterations in each area I want to improve. I have started adding small projects that let me get those experiences with less commitment and more focus. This is all one reason why I support Rob’s thinking behind acquisition. I’m planning to do a bit of that on a small scale myself. It’s a (hopefully?) great way to get instant reps.
A Defense of Reading
I know there are a lot of techniques I’ve learned through reading that gave me the chance to go out and get key experience. I think the mental models that analysis and synthesis of different perspectives develops can help me a lot. Even if that help is only deeper understanding after (re-)learning a hard lesson. I also think that connecting to these things motivates me. It makes me put on my startup/business/developer/marketer hat and act accordingly. That is useful to me on a long day, but I’ve got to balance reading with doing. Doing is the only one that really puts me closer to my goals.
Many of my goals to start 2011 were related to my products at that time: Whitetail Census and Whitetail Scout. I spent the first 8 months of the year developing and executing on a variety of marketing strategies for those. I wish I had read Chet Holmes a year earlier. I did not meet my goals for Census. I discovered that some (recent) laws/guidelines in Texas make it really difficult for anyone to use game cameras for census data in the context of the Ag Tax Exemptions. It was tantamount to learning that your market is now 90% smaller.
I did manage to develop multiple mailing lists, experiment with pricing, integrate payment systems, start mailing lists, relaunch Scout, and attend conferences like MicroConf and the Wildlife Expo. I am happy with my blogging efforts, but this year I should have some scheduled content for December.
I should vet ideas as I have them. Pursuing multiple things can be a great boon to finding what will work.
You can’t replace experience with books and philosophies. You have to go out, kill it, and drag it home yourself. I love Eric Ries, Jason Cohen, Bob Walsh, Eric Sink, Rob Walling, Patrick McKenzie, etc. for sharing so much insight on strategy and tactics, but it is not useful unless you are throwing a ton of things at the wall and finding what works through experience. Your market is not theirs. Your skills, network, and experience are different. You should read this stuff. Get inspired. Try using it. Keep what works for you in your context. Some of it won’t.
Do more. A lot more. I had some unexpected success with cold calling tactics to the point where I’m planning to write an ebook. I also received inbound consulting work because of my blogging and open source efforts. The more you do…the more you are doing that works. Sound familiar?
Methodologies and idea vetting will never take the risk or uncertainty out of new projects. At some point, you have to jump in with a solid marketing plan and see what you can do with it.
High-touch sales is a great vehicle to build a business, but it probably shouldn’t be your first business in your spare time.
Consulting is not often touted as a route to building products, but it appears to be incredibly common. It can be a good way to validate ideas and you build some useful skills that you won’t get in a day job.
Great content rules the Internet.
Mastermind groups are a great way for solo entrepreneurs to stay connected, motivated, and bounce ideas around.
I’ve got an idea for a product. I’ve talked to some people. I know some people in the industry. I have been cold calling others. The idea is promising. The price point people have agreed with is about where I would like it to be. I’ve shown some mockups around and iterated on them. Now, I feel the need to start writing code because, well, I like writing code. And I’m comfortable writing code. But I see lean people.
Steve Blank, Eric Ries, Jason Cohen, Ash Maurya, and a thousand other blogs think I should talk to X people in Y stages. I have followed much of the methodology rigidly to this point, but I have come to a realization. I don’t see many examples of products in the lean world that have markets that aren’t primarily online. Many of the products are technical in nature. This doesn’t overlap with my idea.
I know some civil engineers that think the world of project management in their field is ripe for revolution, but do I know enough of them? How many should I talk to? 5? 30? 100? Do I need 10 customers before I begin? What if finding people to interview using cold calls takes more time than building a product? Building relationships in an industry can take more time than building an MVP. What if I have one guy willing to pay me to start? What if all the advice I read seems disconnected from the market I’m targeting?
Am I ignoring sage advice because I want to be comfortable and write code or am I wasting time with techniques for validation that may or may not improve the odds of success? How much validation is enough?
There isn’t one true answer. This is what the journey of the startup is. I’m not sure what I should do next. I don’t have enough information to pick the best path. No amount of Lean Startup validation is going to ensure success. No one doubts the value of getting out of the building and talking to customers, but I’ve come to realize that even that is a tradeoff. It takes time to organize interviews with busy business people. It takes time to cultivate contacts. I believe it is just as possible to waste time validating an idea as it is to waste time building something no one will buy.
Eventually you have to make a call. I’ve decided to set a goal. If I can find 5 more people that are in on this idea in the next 30 days: it’s a go. If I can’t find five people who are excited about the idea then I may have a bad idea, a difficult market, a lack of motivation, or a dozen other problems. I like what Derek Sivers had to say in his book: keep looking until you find a hit.