For the past few years, I've owned product businesses. Businesses where people willingly gave me money. It's been as simple as setting up a tent and waiting for the first customer to pull out their wallet. One taste and they're hooked. Then they tell friends and family and soon enough they're all hooked. I now get orders from across the nation every week.
My new start-up is different.
The tables have turned. I now sell, Gredio, a software-as-a-service application for food manufacturers; An application built for a specific target market. A market that doesn't quite know they need what I'm building. No to mention, it requires an entirely different sales process. As I try and navigate the SaaS waters, I wanted to go over a couple of lessons learned.
In the nine days I've been prospecting for users, here's what I've learned:
1. Outbound Marketing is Alive and Well
Ironically, I do inbound marketing for a living, so this statement may come as a surprise to some of you. As a bootstrapping start-up, I don't have a million-dollar PPC budget. I can't afford re-targeting. I can blog until the cows come home, but it's not going to make potential users aware of my application. That's where good ol' fashioned hit-the-pavement outbound marketing comes in. I've been emailing every food producer I can find in Vermont. Most of them need my product - some of them don't. But I'm hungry for feedback. Finding users of my product without blowing through cash requires unique partnerships with bloggers, food writers, small business consultants, and notable industry professionals. That relationship building means serious outbound muscle.
2. Retention > Acquisition
While Gredio only has a handful of users (including my own company), I've realized I need to hang on to them for dear-life. With a product business, they just run out and probably order more. In SaaS, you've got to prove yourself every day during your 30-day trial. Or convince users to upgrade from free to paid. It's hard, and it's a battle. I've learned you've got to be smart about your in-app on-boarding, your transactional emails, and your customer follow-up. One wrong move, and you're back to square one acquiring more customers for you the one you let escape.
3. User Feedback is Gold
I gave away my first account for free. For life. Emma will never have to pay me a dime. But she will have to give me feedback on everything (don't worry - she's agreed!). Emma has sent me feedback I would have never have received if I stuck my head in a hole and user-tested the product myself. It's been immensely valuable. The lesson? Your first five users should be held on a pedestal. They provide crucial feedback to improve your MVP, give you glowing testimonials, and are genuinely happy to help you out. Return the favor.
4. Work Toward a Minimum Valuable Product
"We don't have anything a user would legitimately pay $29 a month for." That was the last conversation I had with my co-founder. I continued on: "We need to get to a place where the product is not only viable, but incredibly valuable." It's true. I felt I wasn't justifying my price. We basically have an uber-fancy calculator that does complex multiplication and division. Yes, the value a food producer gets out of it is worth paying for, but I want more value. Our small amount of users want more value. We're working on new features to reach a point of "Awesome-status." Hopefully we'll be there by the end of April.
This isn't easy. But, I like the challenge. It's the best sales experience I could ask for, even though at times, it may seem impossible.
What do you think? Have you tried to launch a software product? What have your experiences been?
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