What, exactly, does it mean to be an entrepreneur? And is this whole passion thing all it’s cracked up to be? Is it possible to shift from a mindset of scarcity to one of abundance? We tackle all of these questions and a few more on today’s episode of the show.
Today’s episode is fueled by real questions from real entrepreneurs struggling with what it means to build an independent business in today’s world.
We recently rebuilt the Fizzle community forums from the ground up. Topic tagging, popular topics, @ mentions, and a community calendar were all key additions in the new version (you can see for yourself with a free 5-week trial).
But the feature we’re most excited about is the new Question & Answer forum, where entrepreneurs can ask their pressing questions and then vote on the best answers, just like on Quora.
Since launching the Q&A forum, it’s been the hottest aspect of the community. More importantly, we get direct insight into the most important challenges independent business builders are dealing with.
We pulled five questions from the forums and answered them in depth on today’s show:
How do you shift your mindset away from the scarcity mindset?
Where does “passion” come from and why does it matter?
What do I do if I have NO lasting interests?
What does it mean to be an entrepreneur?
What advice do you have to stop obsessing over negative feedback?
If you’re up for an hour of existential fun and entrepreneurial contemplation, this is the perfect episode for you. Tune in…
1. How do you shift your mindset away from the scarcity mindset?
There’s a bit about snow globes in the 2nd half of episode 129. A Fizzler sells custom snow globes for like $999.
I nearly crashed my lawn tractor when I heard that.
“People pay a grand for a snow globe!?! What the fizzle! Who is that crazy? Who is crazy enough to charge that much?” (I didn’t say fizzle at the time.)
It took about 10 minutes for me to remember that not everyone lives in “my world”. Expensive means different things to different people. Things that are impossibly expensive for 1 person are pocket change for someone else.
Anyone have any tips for shifting your mindset away from the scarcity mindset? – Fizzler Josh R.
2. Where does “passion” come from and why does it matter?
I don’t get working for the passion of it, truly I don’t. Or the audience versus target market. I mean it all makes sense on the surface but it doesn’t match the patterns I have seen in business. I see business as having a social purpose of providing profits and salaries through the creation of value, and if what they sell isn’t valuable then woe betide them.
The new idea of being passionate about what you do and serving people is just not sinking in: I have always found companies (not people) that need services I do and done them well, so I could pay the bills and take care of the home fires. I live for weekends and spend them with my family. If I really cared about my work it would interfere with that.
Am I just way out in left field? Is the new model really all that works? Is there any hope for me? – Fizzle Steve F.
Passion is the word we sometimes use when it’s hard to choose a path forward. Tweet This
3. What do I do if I have NO lasting interests?
This is the end of week 2 of my “Try 5.” I’ve been in “Choosing a Topic” the whole time, but there seems to be a fatal flaw in the course:
It assumes there are at least a few things capable of holding my interest.
Sure, I can get wildly interested in topics. It happens a lot. But I can count on one hand with leftover fingers the number of times an idea has held my interest longer than three weeks, and not a single one of those has happened since I was 12 (and I have no lingering interest in the Ninja Turtles, the Power Rangers, or the minute details of the Colorado Avalanche roster). I get totally into something, learn as much as I care to learn by devouring an outrageous amount of information, and then, curiosity satisfied, have no more interest in it whatsoever.
So what on earth do I do if I can’t generate a list of ideas from which to choose a topic? What if I really have no lasting interests? – Fizzler Lindsay W.
4. What does it mean to be an entrepreneur?
What does it mean to be an Entrepreneur?
There is a lot of talk about “how” to be an entrepreneur but not a lot on what exactly it means to be an entrepreneur. I would love to hear your thoughts and insights. – Fizzle Jonny K.
Being an entrepreneur means being willing to take responsibility for the results of the work you do each day. Tweet This
5. What advice do you have to stop obsessing over negative feedback?
Over the past year, I’ve received hundreds of positive emails and comments from my audience, thanking me for my content and newsletters. It’s really boosted my confidence and made my tiny online project a real source of satisfaction for me.
But a few days ago, one person unsubscribed from my list with the following complaint: “UNSUBSCRIBED: I sent an email with concrete questions a long time ago which was never answered. What’s the point of having a site about this topic without actually informing?”
Now I’m feeling all deflated and can’t stop thinking about this person for some reason. Logically, I know it’s impossible to please everyone all the time, but so far this is my first negative experience with a member of my audience, so the feelings are new to me. I don’t know whether to blame myself for letting her down, dismiss her criticism, or a bit of both.
I don’t want to let one drop poison the well, and it’s ridiculous I know given how trivial this is, but it feels like one negative experience outshadows 50 positive ones.
Why is that? Is this a common thing that most entrepreneurs encounter and learn to deal with? How can I focus on the overwhelmingly positive feedback? – Fizzler David L.
Don’t take feedback personally. It’s about the work. And the work can always be better. That’s how you grow a business. Tweet This
I first met Joanna Wiebe from Copy Hackers in 2013. She gave an incredible presentation on “Copywriting that Converts: How to sell without selling your soul“, but the main lesson that I learnt was the difference between people who can write and real copywriters.
I’m lucky enough to consider Joanna a friend – hopefully she won’t be too disturbed by that. I’m also a great fan of her copywriting blog, and have read most if not all of her excellent Conversion-Boosting Copywriting Ebooks. So I asked her if she wouldn’t mind an interview-style series of questions, thinking she’d either pretend not to get the email or give me a few paragraphs of content.
Instead she gave me this. It’s quite incredible, and if you have a website, care about selling what you do and communicate with words, you really need to read this. Don’t skim it – there are some absolute gem’s here; read below to understand the suspect punctuation.
Who are you, what do you do and what’s your superpower?
I’m Joanna Wiebe. I teach copywriting at Copy Hackers – that is, I help businesses grow online using just their words. My superpower, outside of teleporting (look behind you!! i was just there, but now i’m back here), is writing lengthy responses to all questions but the first and tenth.
Why the name Copy Hacker? I looked up “hack” and found this – 6 and 7 definitely don’t apply to you:
So glad that 3 and 8 apply, though.
Copy Hackers was originally called “Copy For Hackers”, but my partner Lance suggested we drop the “for” and just go with Copy Hackers. At the time, “Design for Hackers” had just come out, and we didn’t want to sound like we were associated with that group – not ‘cuz we don’t dig Dave Kadavy (we do!) but ‘cuz, well, we weren’t associated with him. The “For Hackers” thing felt sortuv franchise-y. So we dropped it.
What I continue to like about the name Copy Hackers is that it sounds like we bypass the theory and get to the goods – that’s how it rings for me, at least. And I dig that. Although we do theorize a good deal, we’re also invested in action and experimentation.
If someone is insanely tight for time (I’m sure you can’t imagine that), what advice would you give them about their copywriting/hacking/skills?
This question always troubles me – or, better, answering it does. It seems so short-sighted to say that you don’t have time to work on the only thing connecting you to your prospect: the words on your page or in your email. What else are you doing that’s more important? Admittedly, there are things that are at least as important, like improving a product or fixing bugs. But people aren’t doing those things instead of writing new landing pages and optimizing their email drip campaigns. They’re doing all sorts of little make-work tasks, fumbling with the numbers and reading about other people’s success and trying to figure out easier, faster ways to convert – spending hours watching but not acting on user videos and sitting in pointless meetings – when, meanwhile, their site is bleeding visitors to the tune of 99 out of 100 failing to see why they should sign up, buy, upgrade or refer. Meanwhile, they’re auto-sending emails that had little thought put into them and were written clumsily in the 20 minutes they allocated for that “little job.” Meanwhile, they’re spreading themselves thin across everything except their copy.
Stop doing so many things!
If you had 100 customers in your store, you wouldn’t sit in the staffroom trying to figure out what to do to sell to them. You’d get your butt out there, talk to them, listen to them – and sell to them. If you had salespeople, you’d expect even more! THAT’S what your copy is there to do. Don’t mistake copy as “just words” simply because it’s free to make. Your copy is your online salesperson – and if you rush it or don’t make time to work on it, you’re effectively putting an untrained newbie into a room filled with prospects and letting him/her stand there, rocking back and forth on the spot, ringing in the one or two customers that need what you’ve got so desperately they don’t even need a salesperson’s help.
Now, if you have an hour a day to spend on your copy and you have a lot of copy to write, then I applaud you for at least carving out time… and I have efficient copy shortcuts for you.
Here are some short shortcuts:
Replace just one word in your headline with an unexpected, unfamiliar synonym. That’s like changing “Accounting software that saves you time” to “Accounting software that saves you many moons.” Instantly, your message becomes more note-worthy – and, thus, more likely to stick. No, I’m not kidding. “Many moons” holds the reader’s attention for a second. “Time” doesn’t even register.
Use kernel sentences. A kernel sentence is basically “X is Y.” It’s extremely clear. That’s why it’s so powerful. Plus, it’s easy for sixth-grade readers to understand, and that reading level is our target.
Engage all 5 senses on each page. Your copy today is unlikely to engage even one sense, outside of vision because it must be read with one’s eyes. We are sensory beings, and our brains like texture, salt, heat, cold, motion, burning wood – the list goes on. Read over your copy, and work yer butt off to engage each sense at some point on your page. You’ll find that your copy suddenly feels alive.
And here are the long shortcuts, which pay off bigger in the end and are more than parlor tricks:
Swipe messages from your customers. (This is the talk to them, listen to them, sell to them idea above.) Send out surveys with open-ended questions that will compel your customers to use real swipe-able words and phrases to tell you what was going on in their lives that brought them to you, what they most wanted to get out of your solution, what they have gotten, and so on. This is the bloody GOLD that great copy is based on. And it takes little more than one hour to craft the survey, 5 minutes to send the survey, 5 minutes to send a “survey closing in 2 hrs” email, and four hours to analyze the survey results in order to find sticky, swipe-worthy messages. Then drop those into your headline, subhead, body copy, click triggers, etc. Done!
Swipe messages from your prospects. Search Amazon.com for books and/or products that are similar to yours, and pore over the reviews of those products in search of swipe-worthy phrases that speak to expectations, pains and outcomes.
If a small business owner needs persuading that writing better copy should be on their radar, what would you tell them?
Oh, Lord, I am too far down the path of the grumpy veteran copywriter to bother trying to convince people! What the hell else is going to convert your visitor but copy?
Not convinced? Okay, how about you take all the copy off your site and see what happens! Or how about you send a blank email! Go ahead. Do that right now. You send a blank sales email, and I’ll go delete all the words from your website, and then we can talk about whether copy matters or not.
…See? I’m grumpy.
The only way you can connect with your visitor online is with words. If you have LiveChat, great, but that’s still words – that’s still a chat agent communicating the messages that your prospect needs in order to choose you. Same with video: it’s based on a script, and that script has to be written to capture and hold attention and ultimately move the viewer to action… and we call that copywriting.
Failing to improve your copy is like failing to train your salesperson. Don’t be surprised when they fall flat for lack of investment from the C-suite.
For small businesses: hire a copywriter, outsource copywriting (know anyone?) or learn the skills yourself?
I strongly believe that very small businesses – those with 2-3 people – can and should write their own copy. For two reasons.
The first: it’s very, very unlikely that you have the money available to hire a kick-ass copywriter. Copywriters that do more than wordsmith are few and far between, but demand is very high. So you end up with a tiny pool of truly skilled copywriters being lured in by businesses like Google, Microsoft and Shopify – businesses that actually write in their query emails, “Money is not an issue.” You’re up against that.
So, the second reason you should write your own copy: you care waaay more about your business’s success than any $25/hr copywriter possibly could. You have nothing but skin in the game. You care deeply about your customers; you know how much you’re spending to drive visitors to your site, and you care about those visitors; and you know that your solution solves real problems (or seriously delights) customers. All you need to do is figure out how to channel all that great stuff onto the page in ways that convince and convert. So buy a book or two (ahem) and learn!
That understood, the moment you get to a position of profitability where you have, say, $5000 a month to put toward marketing, do yourself a ginormous favor and hire a great copywriter (with a stellar portfolio and chops highlighted in the blog posts they write) on retainer for about a year. You may be able to get 8-10 hours a week from a super-solid copywriter for $5000 per month, and those 40 hours per month could, within four months’ time, see them overhaul your drip campaigns, create new variations of your landing pages (tested in Unbounce, for example) rewrite your home page and even get you set up with an email→sales page funnel that measurably increases revenue for you. At the end of the year, you’ll be well set-up to bring in an online marketer for the $60K you were otherwise spending, and bring the copywriter’s retainer down to about 5 hours a week.
I’ve seen countless small businesses throw $5000 a month at the flavor-of-the-month marketing technique only to burn through it, shrug their shoulders, and go looking for the next fad. Don’t do that. Please. Save yourself the heartache, and get a great copywriter on retainer for X period of time.
Should SEO be factored in to copy writing? If so to what extent? [No leading question there…]
haha! Ah, Dave. The answer is… yes???
I always consider search and the possibility that my copy can make it easier for my client to attract free high-quality traffic. So I’d say yes – but I’d do so with a big ol’ asterisk. And in the micetype associated with that asterisk, I’d explain:
Put the visitor first, whether you’re writing “SEO copy” or not
Be extremely careful before you sacrifice a compelling headline for a “keyword optimized” headline
Don’t be tricky with your search-optimized copy because tricks quickly lose power in algorithm updates – but really rich content that’s on-point has stood the test of time
There are many ways to drive traffic to a site, but you need that site to convert visitors, so keep your priorities straight
“I’m not a writer, so should I take the time to learn how or…”?
Good! Better that you’re not a writer. Writers have all sorts of bad writerly habits to break to write copy that converts.
Is there a product you adore and a fabulous market you want to connect that product with? Then you prequalify to write copy – not good copy, mind you, but copy. Then comes the part where you learn how to turn your ho-hum, wobbly-legged, word-shaped air into bold, confident copy. Then comes the part where you practice doing so. And two years from now comes the part where you finally write good copy, which sets you up to write every piece of business communication better from that point on.
Don’t take the time to learn to write copy if:
You’re independently wealthy,
You can afford to hire the best freelance copywriters, and
You have no plans to review the work those freelancers produce for you.
If any of the above is untrue for you, take the time. Learn how. You’re running a business, after all. You don’t get to opt out of the key parts of growing that business just because learning to do it right is inconvenient. I certainly hope you weren’t sold the idea that running a business is easy and takes no training…
Do you have any hacks for split testing? What tool do you recommend?
Tests need hypotheses. So start with a question. You can usually dig up great questions just by looking at your Google Analytics.
For example, you may find that X landing page is getting good traffic, but visitors are bouncing / exiting quickly and conversion rates are lower than on other pages or low compared to the amount of traffic you’re getting to that page.
This is the part where you can get really intense and rigorous – or where you can use shortcuts (so you actually run a test this year, not just in your dreams). A shortcut is to head over to http://fivesecondtest.com/ and upload a screenshot of your page. Then pore over what users say, and use that to feed an hypothesis about what may be going wrong on your page.
To do the testing side of this easily, you’ll ideally already be using Unbounce for your landing pages, which would mean all you have to do to test your hypothesis is click a button to duplicate your page, then edit your page in keeping with your hypothesis, then publish and launch the test.
If you’re not set up with Unbounce, you can install VWO or Optimizely – they’re both easy – on your site and set the test up in those platforms. It’s generally as easy as clicking an element to exclude or change it within those testing platforms.
FYI: For the most confident results, you should set minimums for traffic and conversions before you launch the test. Simply relying on a testing tool to tell you which variation has won has led to countless problems with invalid data. Use calculators like Evan Miller’s to calculate sample size, etc before launching a test.
Five Second Test
Unbounce, VWO or Optimizely
Evan Miller’s calculators
Would you try to persuade someone to split test? If so, how?
The biggest objections to split-testing that I hear most often are:
I don’t have enough traffic
I don’t know what to test
The fourth objection usually comes when the rubber hits the road and a new variation is sitting in front of them, waiting for their okay to launch the test. In the cases of risk, it’s easy to reduce risk: simply expose the new variation to a smaller percentage of traffic.
Which brings us to the first objection: low traffic. If you don’t have solid traffic and conversion rates that indicate that you have an active customer base online, you shouldn’t split test. It’s okay not to split test if your traffic won’t bear it. Instead, use Five Second Test, UserTesting.com, Hotjar, Crazy Egg – any or all of the above – to learn about your visitors and what they’re stumbling with on your site. Then craft a new page variation. And launch it. Watch your analytics, of course. (Note that I’m not talking about “before and after” testing. I’m talking about optimization without split-testing.)
Secondly, it’s hard to test. Sure it is – especially if you don’t know what you’re doing. It’s hard to scuba dive or drive a car or even read a book if you don’t know how. So you learn. And then you practice. And eventually it gets easier. I think it’s great when a business owner believes testing will be hard; the lie is that testing is easy – and that’s the same lie that makes people think marketing is easy, Adwords is easy, hiring talented people is easy, writing great copy is easy, designing a page is easy. It’s not easy. But it’s extremely rewarding, and you’ll learn things you never knew you could learn – things that marketers throughout the last hundred years would die to have been able to learn.
If you don’t know what to test, test big, bold changes. Those lead to the best insights / learnings. And that’s the real reason to test: not to play a game of experimentation but to learn so you can market better and grow more effectively.
Finally, if you don’t know why you should split-test, learn more about it. Ask more questions. And should you find that you want to measure your marketing to see what really works – instead of taking stabs at it and crossing your fingers – hire experts to handle it for you and relay insights and business results to you.
What’s your biggest grammatical peeve?
haha! I have to laugh because in copywriting we so rarely get to talk about grammar. I am a grammar junkie, secretly – although, admittedly, I make grammar mistakes without realizing. (There are a lot of rules!) One of my favorite writing books is “Grammar As Style”, a brilliant but out-of-print book that every writer should read yearly.
My biggest pet peeve is probably improper use of apostrophes. I’m quite certain the apostrophe is morphing into a punctuation mark it was never meant to be. In particular, I dislike improper possessives for plurals and words ending in ‘s’.
I see this sort of thing a lot: Jesus’.
It should be this: Jesus’s.
Words in the singular ending in ‘s’ – including names – are to be treated like any word and given the appropriate “‘s” when possessive. A way to remember it: Bridget Jones’s Diary. Only words that are plural possessives get ye olde apostrophe sans ‘s’, such as in a phrase like this: the girls’ books.
I also dislike misused semicolons, but they’re a tricky little mark, so I can’t complain too much there. If you’ve ever driven a traffic circle in Canada or the US (not in the UK, where they’re everywhere), you might see the similarities between semicolons and traffic circles: they’re extremely dangerous when used by people who don’t know what they’re doing.
Why do you write your emails with a lowercase subject?
So they’ll stand out! One of the biggest challenges when writing a subject line is to get it noticed in a cluttered inbox. So I use lowercase. Oh, and I just kinda like it.
What are the best and worst aspects of doing what you do?
The best parts:
I get to practice the discipline of writing on a daily basis
I get to help businesses reach their market and grow, which means people are getting solutions to their problems and those businesses are able to hire people (yay for employment!)
I meet insanely cool people – like you! – thanks to events my business allows me to participate in
I think enough about copywriting problems that I sometimes come up with actual solutions
The worst parts:
I have such a hard time saying no to new projects that I rarely write anything for pleasure
While I’m helping other businesses, I’m failing to focus on my own, which means my visitors aren’t getting the solutions they need and I don’t have time to recruit or train the help I could use
What technology do you use and love, and use and hate? Software, hardware, body implants?
Use and love: Calendly, Gmail, WordPress, Buffer, AdBlock, PayPal, Stripe, Slack, Boomerang, RightSignature, Airstory , Yoast, Bounce Exchange.
Use and hate: Infusionsoft, MailChimp and QuickBooks. Okay, I don’t hate them. I have to give Infusionsoft a chance ‘cos I’m just starting out with it. I’m trying to switch from MailChimp to Infusionsoft because, for the money I pay MC and the time I’ve been with them, they sure as hell aren’t trying to do anything to keep me, including totally failing at support and making me pay a premium above the $300+ I already pay just to get access to better split-testing (which is something they should have offered two years ago as part of the core product!). And QuickBooks – it’s just stunningly buggy for a signature product from a massive tech company.
Where would you like your business to be in 5 & 10 years? Realistically.
In 5 years, I need Copy Hackers to be a brand that’s well-respected everywhere business is done in English. (Unless I learn to write in other languages!) When people talk about Copy Hackers and forward our blog posts to others, it’s because they want to bring trusted, proven copy and growth recommendations to the conversation.
In 10 years, obviously my volcano lair will be complete, so.
Now, here’s a piece of the puzzle you may not have thought about: what is the most appropriate way to archive test results?
Surely, any mature organization can use insight from past test results as an indicator of where to go in the future. Trouble is, there is no single correct way to do this, and barely anyone is talking about how to do it well.
Why Archive Old Test Results?
If optimization is, as Matt Gershoff put it, about “gathering information to inform decisions,” then part of that process is documenting what you’ve learned. In fact, this isn’t just applicable for test results. It’s important for qualitative research, such as customer surveys, and it’s equally important for anything that brings insight to your decision making.
Really, there are two main tangible benefits to archiving old test results. The first has to do with regular reporting and is more applicable to communication. As Manuel da Costa put it, “You have an audit trail of everything you have done for that client – so you can show them the value of your optimization efforts.”
The second is about knowledge management, supporting test ideas, and evolutionary learning.
You Need To See It To Believe It
A scenario you might be familiar with:
You’ve got the initial buy-in for a testing program (or you’ve just started working on a client’s site), and you’ve made some substantial lifts. You’re learning more and more about your customer base, and each test is bringing you more insight, which will lead to more revenue.
The problem: how do you communicate these results, clearly, to executives?
We recently published a great post by Annemarie Klaassen and Ton Wesseling that told their detailed journey of visualizing A/B tests results for clearer communication. You can (and should) read the whole post later, but for quick reference, here’s what they started with:
And where they ended up:
The clearer you can communicate ROI, the more organizational buy-in you can receive, leading to a stronger testing culture.
At Porch, she says, every week they have weekly test roundups, and each report is led by insights (which is above even revenue). As Joanna said:
“If we’re going to plan for the future at all, we better have a lot of data that someone’s brought into the room, so that we’re all working from the same place, we all start from the same place.”
So their reporting accumulates, and even tests from a year ago can bring insights to current test ideas.
Knowledge Management and Evolutionary Learning
Now there’s the second side of reporting: using the archives as a database of accumulated knowledge.
As Manuel da Costa from Digital Tonic put it, “Ultimately, documenting also serves as your own testing library that you can dip in and out of when brainstorming in other projects. There is accountability and also helps maintain the trust with the clients you work with.”
Martijn Scheijbeler, Director of Marketing at The Next Web, echoed a similar sentiment, placing emphasis on the fact that all of the knowledge can be put in one place where everyone can benefit from it:
“Having 1 place where all the data can be found by both the CRO team that is working on testing but also that we have data to the rest of the organisation to explain to them what the test entails, how we tracked it and what was the hypothesis on something. So it’s kind of a backup of history on what we’re doing but also could help us defend what we’re working on.
As it’s a planning tool as well we have all our ideas from the whole organisation in 1 place and that makes it easy for us to reschedule ideas if needed.”
How Mature Organizations Archive Test Results
There’s no one way to do it. While one organization may prefer Excel and Trello, another may have a built in process complete with a custom tool to track all tests.
We mentioned Porch, above, who spends Sundays documenting results, insights, and other pertinent information that goes into a database of past test results. Though I’m not sure on the exact tools they use, it seems like a more manual process than some other organizations.
That’s what’s interesting about archiving test results: there’s no correct way to do it. All that matters is what works best for the efficiency of your team.
The Next Web
The Next Web is a powerhouse in tech news, and their growth/optimization team is efficient. Here’s how Martijn Scheijbeler described their reporting and archiving process:
“Obviously every test that we run is documented to make sure in 6 months we still know what test we ran, at what time, and what it was about. As we try to keep up the velocity and run approximately 200+ tests this year, it’s of great need to us.
To keep our testing documentation as structured and available as possible we’ve decided to built an internal tool for this. Both ideas and actual experiments are being added in by the team who is responsible for it. We can easily track the backlog with ideas and move them to a real experiment when the time comes.
We save quite some data on a test: it’s ID, name, Device category, Template, Experiment Status (Running, Finished, Building, etc.), Objective Metric, Owner, Expected Uplift, Start Date, Run Time, Implemented Date, Description, Hypothesis and the Tracking Plan. This data is then automatically extended with data on our current goals in combination with the objective metric – and we also know the end date based on the start date + run time.
In addition to the experiment data we save two extra field per variant – if it was winning and a screenshot of that variant. Based on this we extend our information with the reporting data on our tests.”
GrowthHackers.com recently outlined a growth study on how they began high tempo testing and how it revived their growth. This entailed 3 experiments a week, including new initiatives, product feature releases, and of course A/B tests.
“My inspiration for high tempo testing comes from American football and the ‘high tempo offense.’ Perhaps the best example of this is the Oregon Ducks’ college football team. From the moment they hit the field they are go, go, go… The opposing teams often end up on their heels and Oregon is able to find weaknesses in their defense. It’s exciting and frankly kind of exhausting to watch. High tempo testing is approached with a similar energy and urgency to quickly uncover growth opportunities to exploit.”
So as much as I hate the Ducks for beating Wisconsin in the Rose Bowl a few years ago, you can see how archiving results would be beneficial in their case. Running tests at this volume and velocity, it’s important to fuel your tests with as much insight as possible, so as not to waste any valuable time or traffic.
The above image is from Growth Hackers’ new tool, Canvas, which helps support the whole process (including archiving results). Not only does it archive results, but also ideas, hypotheses, etc. This makes it easier for members of the team to extract insights from past tests, and it also lets new members quickly onboard by analyzing what has and hasn’t been tested in the past. Here’s how Sean put it:
“All of the completed experiments are ultimately stored in a knowledge base so we ensure that we capture this learning and don’t keep repeating the same tests. The knowledge base is also very helpful when adding new members to the team, so they can understand what has been tested, what worked and what didn’t.
The analysis has started to become a bottleneck for us, so we recently added a role that is responsible for analyzing the completed tests and managing the knowledge base. Previously this responsibility was shared by the team.”
Here’s Manuel da Costa explaining how their reporting process has evolved:
Manuel da Costa:
“We basically documented everything – from ideas & observations to test plans and ultimately results and reports.
We used a patchwork of tools like Trello and Google docs and Basecamp to keep information on each project (client).
We would do a weekly standup with the client to show what’s been going on as well as presenting any test results via powerpoint, etc.
Compiling reports was a time consuming process mainly because we had to dig through so many sources.
So talking about the patchwork of tools we used – it was ok but not very efficient. It all came to a head when a client asked us to find all the experiments we had run for a certain criteria (let’s say for example purposes it was social proof).
We had run about 50+ experiments we had run and finding that one piece of info was taking longer than expected. Actually, it took us 2 hours. 2 hours that could have been better spent brainstorming new ideas or setting up new tests.
And of course, you can save these slides as a high-level overview of tests results, and possibly combine this visual with other tools we have listed above (and more that I’ll list below).
Tools To Help You Out
As mentioned above, GrowthHackers built Canvas to help with the growth team’s project management. Here’s how Steven Pesavento, GrowthMaster at GrowthHackers, describes the tool:
“We built Canvas because we needed a tool to manage our growth process when spreadsheets weren’t enough.
Our core growth team uses the product every day to add new ideas to our growth backlog, manage the status of each growth experiment and for documenting our learnings from each test. I see it as our growth control center because each morning, as the GrowthMaster, I login into my dashboard to see the status of our tests and then dive deeper into each one that needs my attention.”
Built by konversionsKRAFT with the purpose of organizing the entire testing process, Iridion is a sophisticated tool for archiving test results. One of their benefits listed on their site is that the tool can, “Record all of your test results in a constantly growing archive. Make sure that new team members immediately know what has been tested previously and how successful these tests were. Use these findings for follow-up tests.”
“Iridion is much more than just an insights database and workflow management. We will add our knowledge from thousands of a/b-tests to help growth hackers and optimizers building stronger experiments with higher uplifts. For example, Iridion will contain a library of 200+ psychological behavior patterns and will include qualitative methods to improve text concepts even before you test them.”
So Iridion is aimed at improving quality of tests as well as workflow. As Andre told me, “I don’t share the idea of “high speed testing” – High impact and success rate is economically much more important than high frequency.”
As mentioned above, Manuel da Costa built Effective Experiments to help conversion optimization project management. Here’s how Manuel describes the tool:
Manuel da Costa:
“A single platform to manage the entire optimisation workflow that would help CROs to store their ideas, test plans and results all in one place. We even went further by creating a lot of automated features that will save CROs time – such as automated reporting and integrations with AB testing tools etc.”
So, it’s an all-in-one workflow tool that will make reporting and archiving much, much easier.
Trello & Excel
No one said archiving test results had to be fancy. In fact, Excel is probably (though I have no data to back this) the most common way organizations archive test results. Josh Baker wrote an in-depth post on how he documents A/B test results using excel, along with what exactly he documents.
We use Trello for certain projects at ConversionXL. It’s also possible to enact a combination of Trello, Excel, and say, the Data for Decks Powerpoint example above, which will give greater visual clarity to non-optimization team members and executives.
Your Testing Tool
There are a multitude of ways you can integrate your documentation process with your testing sool. Here, Leonid Pekelis from Optimizely, explains:
“Optimizely does have an “archive” button for experiments, but what that does is remove the experiment’s code from a customer’s website. This stops the experiment, which means no new results will come through. Customers can un-archive anytime they want.
We have found differing needs and approaches to sharing and storing test results across organizations. We try to make it easy for customers to start their own approaches without imposing any one solution by providing how-to articles, and templates.
More generally, archiving test results lets an experimenter do three really important things: save knowledge gained from experiment results to motivate future tests and decision making, disseminate results across the organization to increase impact of tests, and finally spread testing culture. A good process for storing and sharing tests is definitely a keystone to a successful A/B strategy.”
There’s a whole discussion on Optiverse about archiving test results. Read it if you’re looking for ideas for your own organization.
VWO also has ways to archive test results. Here’s Paras explaining:
In VWO, we give a couple of options around knowledge management. Couple of things we enable in VWO:
We have notes associated with each campaign, so before setting up the test you can record your hypothesis and after the test is done you can record your interpretation of results
We have Gmail-type labels that you can apply to campaigns. So you can categorize your campaigns such as: CTA-tests, major-impact and whatever else you desire according to your company’s CRO process
We have annotations in the chart, so you can annotate on a graph if you see any spikes in conversions/traffic and mark it for your other colleagues to see
We also have a campaign and account timeline so you can see your entire history of which campaigns were started and who did what
Limitations of Learning From Past Tests
Archiving past results, and particularly managing and analyzing them, is time consuming. With any time investment, you’d hope that the ROI would be positive. One of the main questions you’ll ask yourself when it comes to learning from past tests is, “how relevant are the learnings from last year’s tests?”
Martin Scheijbeler says that, though there are some limitations on past tests, in general the benefits outweigh them. Here’s what he had to say:
“There are some limitations. But, in 6 months, the context of a certain test can be completely different if you were to re-test it anyway – as a dozen elements on the page could have been changed in the meantime. That means a re-test is never really a re-test, in our opinion. But it’s still something you’d like to know to make sure you don’t miss certain tests. We also hope that we can learn from these tests, particularly what areas usually have a higher result in testing than others, in order to know what works better for future tests.”
Manuel da Costa agreed, mentioning that learnings from past tests are valid, yet they have to be taken with a grain of salt due to external validity factors:
Manuel da Costa:
“Are those insights still valid?
Yes and no. Some insights tied to seasonal trends were valid whilst some no longer held their weight because of external changes in the marketplace.”
Seasonality, traffic sources, PR, and other external factors are things you need to worry about no matter what, though. It’s not just in analyzing past results that they matter. If you were to indicate, in detail, these details on your reports, then you can factor them into your analysis.
Steven Pesavento doesn’t see these things as ‘limitations,’ necessarily. Even though a channel or tactic may change, learning from past tests is a necessity for the GrowthHackers team:
“Limitations are really based on how a channel changes or whether certain tactics are still relevant. These changes could happen over the course of weeks, months or even years.
At GrowthHackers, we regularly review our knowledge base searching for opportunities to retest old ideas with new strategies. I don’t see it as a limitation as much as just a part of the testing and learning process. Much like the growth process, where we continue to test new channels as they become available, we have to continue learning from our past tests.”
Archiving test results is important because it allows for clearer reporting and communication, and because it gives you a knowledge database from which you can extract insight.
However, unlike A/B testing statistics, the rules of execution are bendable when it comes to archiving results. There is no one way to do it, and most mature organizations do it just a little differently. As long as you’re tracking the right data, the data that is pertinent to your growth, then the method by which you do so is of secondary importance.
Some have developed sophisticated in-house tools to solve the problem, some use their testing tool, some purchase external tools, and some are still using good ol’ Excel. In the end, it’s up to you and what works best for your team.
Since this article is more of a discussion than a how-to, I want to ask: how does your team document and archive test results? What kind of struggles and bottlenecks do you face in the process?
Launched a new online store but struggling to make any sales? You’re not alone, as many other eCommerce owners have the same problem.
In this infographic, you’ll learn 6 ways you can make your first eCommerce sale. Best thing is you don’t even need traffic to your site, as most of these tactics use direct client outreach. You can start testing them the day you hit the “Launch” button on your new eCommerce business.
If you want to be more strategical, you can create a spreadsheet to track the number of sales you get from each tactic. By learning to measure the results you can do more of what works.
Please feel free to let us know in the comments section at the bottom of the page if you have tried any of these tactics. Also don’t forget to share with us how they worked out for you.
Click on the infographic to view a larger version.
About the Author: Kaloyan is a co-founder of WooGuru, a service that offers unlimited WooCommerce support on a monthly basis. Coming from a web design background, Kaloyan is currently focused on growth, and content marketing.
We’re publishing the full series of both the videos and transcripts from all of the SaaStr Annual 2015 sessions (check out the Zenefits and Slack/Yammer posts if you missed them). Today we’ve got Mamoon Hamid, Co-founder and General Partner at Social+Capital, an early stage Venture Capital firm that funds breakthrough healthcare, education, financial services, mobile, and enterprise software companies. Mamoon has invested in and served on the boards of some of the most disruptive SaaS companies including Box, Yammer and Slack.
In this session, Mamoon walks us through some of the companies he’s invested in and delves into the reasons that Social+Capital chooses to invest or pass on an opportunity. Learn what tips him off that an investment might become a unicorn, which red flags have stopped him from making an offer, and learn how to calculate the Quick Churn Ratio that Social+Capital uses as a quick and easy benchmark to gauge the overall health of a recurring revenue model business.
Check out the full transcript from Mamoon’s session below!
Also, make sure you grab your ticket to the 2016 SaaStr Annual. Join 5K SaaS founders, execs, and investors for 3 full days of epic content and unparalleled networking. You definitely don’t want to miss it.
Mallun Yen: Mamoon, I know you’ve got a ton of incredible recurring revenue investments, so please give us a peek!
Mamoon Hamid: Thank you, Mallun. Just a brief introduction: I helped co-found Social+Capital about three and half years ago. We invest across health care, education and financial services as well as enterprise. I lead our enterprise practice at Social+Capital.
I’m going to talk about one thing and one thing only, which is this right here, since he has taken all the nuggets here… Seriously, I’m going to talk about MRR and churn.
Before I do that, I’d like to spend some time showcasing our portfolio of enterprise investments and how we generally think about the enterprise investment landscape. The way the framework is laid out, it’s the end user higher up the stack, the infrastructure, and the CIO further down the stack.
At the top of the stack, we look at software that every single employee at a company gets to use inside to be more productive. It’s email, it’s calendar, it’s all kinds of other tools, like Box, Yammer, Slack, things that you know well.
We love end-user-centric horizontal plays like that. We’ve heavily invested across those areas. Other areas that we really like are vertically, what are tools that individuals inside of our organization, a marketer, a salesperson, a recruiter, an engineer, a product manager, use on a daily basis to get their work done?
It’s almost like ‘What are the tools that they open up first thing in the morning and spend most of their time on during a given day?’ That’s the other thing we look at, and we love those kinds of businesses. We love tracking DAUs for our SaaS companies that fall into that bucket.
It’s companies like Clearside that salespeople use, or Intercom that a lot of marketers use, or Slack, that a lot of people in HR use. We really like companies that address applications catered toward the individual contributor.
As you go further down the stack, it’s less about the end user, and it’s more about the CIO. With the proliferation of all of these applications at the top end of the stack, there are issues with security and control.
CIOs have lost control over all of the sanctioned as well as the unsanctioned apps. In order to address that, we’ve invested in security and control companies like Netskope and OneLogin. In here, it’s more about reining in some of that control and bringing some of that power back to the CIO.
It’s, in some places, called Shadow IT, but we’ve made a few bets here as well, because I think it’s super important to address the needs of the CIO as BYOA and BYOD happens. Then as there’s an explosion of data in the stack above, you need to make better decisions. There’s analytics and BI in that, and the last layer is the data infrastructure that’s used to build all these software apps that are above. That’s sort of the general framework that we use.
When do we invest in these companies? A simple way of breaking it out is really just there’s no revenue, there’s a little bit of revenue and there’s a lot of revenue. A lot of revenue for early stage investors is relative, but we look at pre-revenue companies. We look at companies with less than two million of revenue run rate and companies with more than a 10 million dollar run rate.
As we think about where we invest, we come with this prepared mind approach which is, “Where is the white space? Where are the great opportunities to build very interesting large, sustainable, stand alone companies that can one day go public?” The way we form our views is by talking to a lot of entrepreneurs, talking to our portfolio companies, and just thinking about where world is going to be headed.
We continually evolve on that on our thesis areas, but really when we’re investing in a pre-revenue company, we’re talking about investing in a stellar team and investing in a target market where we have a lot of conviction. That’s typically a seed stage company where we’re investing a million dollars. It can be a Series A company where we’re investing a bit more because we know the entrepreneur and we have super conviction around their target market.
The next bucket over is where you have all of the characteristics from the left but also you have early product/market fit and the potential of a category-winning company. Here, we actually look for customer validation and we spend a lot of time talking to customers. In a lot of cases actually, customers end up being portfolio companies of ours or people that we know, so we can really credibly assess the veracity of the customer feedback.
To the right, we’re looking for companies where the business is compounding; it’s rapidly growing; it’s a clear category winner, and it has a clear path to being a unicorn or a…
Jason Green: Decacorn.
Mamoon: Yeah, that’s right. Let’s look at how we map our portfolio to this structure. As you see, a lot of it is in the super early stage where we’ve seeded or done Series As. Quite a bit of companies are also in that middle category where there’s a little bit of revenue, but it’s really an indication of like these companies are really going to be the leaders.
To the right are companies that are already the leaders in their category and they have the potential of being a unicorn. This is actually where we first invested in these companies. The first check was written when the revenue scale was like this. As you know, many of these of these companies have moved on to become much bigger.
Now, we’re going to play a fun game of guess the company. This is a company that was started in 2005-6 but it really morphed into being an enterprise software company in 2007. We invested in the beginning of 2008 and it took them 39 months to get to 10 million in ARR. Any guesses? I’ll keep going, so think about it.
Jason Green: Can I guess?
Mamoon: No, because you know the company. Hint: The next company, launched in 2009… or launched their enterprise product in 2009. We invested in 2010. It took them 33 months to get to 10 million in ARR. Finally, third company launched in 2014. We invested in 2014, and took them 11 months to get to 10 million in ARR. Now, I’ll take guesses.
Mamoon: I heard Slack. Other guesses? Hint, all three other company CEOs have been here or will be here today.
Mamoon: Box, I heard Box. All right. I think I heard Box, Slack and…
Mamoon: …Yammer. There we go. These are amazing companies. Amazing, amazing companies. They are Unicorns, they will be Decacorns. The point is that enterprise software companies are growing faster than ever. They’re growing at unprecedented rates. The universe for who you can sell your software to, has increased dramatically over the last five years. Everybody is adopting cloud software. The mom and pop is, the SMB is. the enterprise is. It used to be hundreds and thousands of enterprise software users, it’s millions, 10 millions. Now that the market size is so massive, you’re seeing companies growing this rapidly, which again, you should ask yourself: “Is my company growing this rapidly?” and, “How do I stand out in a crowd like this of overachievers?”
The next few slides, I’m going to talk about how you can stand out, and I’ll talk about some of the last few investments that we’ve made at Social+Capital in the enterprise space.
The first company is Greenhouse. You saw Daniel here, up on stage a couple of hours ago. It’s an HR recruiting software platform. We had spent a lot of time looking at the HR software space for the last several years, never really pulled the trigger. We heard a lot of our friends, a lot of portfolio companies, the entrepreneurs say, “Hey, you know, software in this general category sucks.”
At some point, we actually gave up on the category. Then, Jason, about two years ago, mentioned that we should meet with these guys from New York… Greenhouse. We did, and we actually sent them straight over to a couple of high growth companies that were actually having problems with their recruiting software. They very quickly validated, like, “This is exactly what we want to see. If it was more mature, we would buy it right now.”
We wrote an instant check of a million dollars in the seed round. That was about two years ago.
We saw growth happening a couple of quarters in… companies like Uber, Airbnb, Pinterest, AdoptIt, Greenhouse, and we’re like, “This is going.”
We actually pre-empted a Series A and decided to invest in Greenhouse and lead a round. That was about nine months ago. Since then, the company’s 3 X’d in revenue. It turned out pretty nicely, long ways to go.
The next company here is a company called Intercom. How many of you know Intercom? Raise your hand. Every SaaS entrepreneur should know about Intercom. It’s a great tool for every SaaS entrepreneur to use for their own product.
I remember this one entrepreneur, Jesse Lamb from Dispatch. Jesse, are you here? If you’re not, thanks for referring Intercom. I asked him, “Hey, can you introduce me to Owen at Intercom, the CEO?” He was like, “Yeah, absolutely.” Met Owen from Intercom, fell in love with him, fell in love with the product and the vision.
The notion that “A customer is a customer, is a customer” — that you have one customer record that you used for marketing, for selling to them, supporting them, to a customer success, made a lot of sense to me. This unified longitudinal view of a customer, made a ton of sense to me.
I’d invested in CRM companies, and marketing automation companies and customer success software companies, where they were siloed data sets and different applications had the same data all over again. Here, you’ve got a unified view. I love Intercom. We invested in the series A. The company is 20x since we’ve invested about 2 years ago. This is all about word of mouth — people talking about your product, and saying how much they love it.
The next investment company that you guys I think all know is Slack. Here, the lessons learned from Yammer really helped. You saw the stats of conversion rates and the growth of Yammer. This has all that times 3 on both growth and conversion rates, and unheard of engagement and monetization.
It is the fastest SaaS business ever. We measured, right before this company took off, we were able to look at a months’ or two months’ worth of data and really make a judgment call on this early data to invest, because we had never seen metrics like these before.
Since the investment in Q1 of 2014, the company’s 10X’d on all metrics. These are examples of companies that we’ve invested in.
Here’s an example of one that we didn’t invest in.
Here, nice looking chart, but underneath the chart are really some issues. This shows that there’s crazy gross churn… a churn that is super high. This is a company that sells into S&Bs, where we expect churn to be way below three percent and, actually, ideally, close to two percent. It’s way high.
This actually doesn’t tell the complete story. Let me add net churn, which is the churn that includes expansion revenue. Even that’s not so great. We want it to be below zero. Here, it’s still mostly above zero.
How do we react? This is how we react. Run for the hills. But let’s just peel the onion back a little bit more. Look at the MRR and how it’s outpacing cancel MRR — barely though. What’s happening here is they’re selling, but then they’re also losing just as much.
Every single sale that’s being made is being negated by people who are unhappy with their product. This company has a product problem. Customers don’t either know how to use their product or they’re unhappy with their product. Actually, there are some people that actually do like the product and they’re expanding their use of the product.
The expansion is actually the only thing that is keeping this company afloat. Really important takeaways here and something that we really dwell on inside of our firm is this notion of above the line, net new MRR, and below the line net new MRR.
We’ve coined the term called the “quick ratio,” the SaaS Quick Ratio. It’s a derivative from accounting. It’s an accounting term, which measures assets and liabilities. We apply it to SaaS. It’s like, “What’s the MRR that’s added? It’s above the line. You divide the ARR that’s lost, or MRR that’s lost, that’s below line.” You just do a quick ratio.
Here are two examples of companies. The one on the left are two companies that we did not invest in, and to the right are two companies that we invested in. You do the quick math, and this is what it looks like.
Companies on the right, four or above. Companies on the left, less than four. Simple: pass, invest. It’s not always that simple. But we try to use data as much as we can to make good decisions. Here’s a way of making some good decisions. We still don’t know though.
What’s the recap? What’s the good and the bad here? You want to try to get product market fit. Get to one million ARR. If you’re a super early stage startup, you want to see your MRR grow quarter over quarter. If you don’t grow month over month, it’s not the end of the world, but if your MRR is declining quarter over quarter, it means that you’re not presumably getting better at selling. You’re not getting word of mouth. You’re not getting raving customers.A lot of the companies that we have invested in grew to that one million, that two and three million, five million purely on word of mouth and no sales or marketing.
That’s super important — to have efficiency early on. Get the product market fit right. It’s really good hygiene. Then that quick ratio thing, maintain a quick ratio of greater than four, aspirational.
What to watch out for? That low quick ratio, churn being too high, and new sales that are not working. Net new MRR declining is terrible. Again, it’s like you need to go back to the drawing board and see what’s going on with your sales or your product, because something is off there. Because of all this, maybe you’re just not growing fast enough to get to that $1 million of ARR.
Here, very high level takeaways. There’s a lot more to it. But if you can think about some of these things and use it as a framework, I think it would be helpful to all of you.
Let me sum it all up, and look at a company that’s eight years out. The line on the top is a beautiful hockey stick line with a really nice gross churn and really nice negative churn, which I think is achievable for companies.
The bottom line, the blue line is one where it’s high gross churn and not so great negative churn, or net churn. It’s a $500 million difference over a period of eight years. If there’s one takeaway from the Box IPO roadshow I just saw in part is that if Box stops selling today to new customers and focused on growing their existing customer base, they will be a billion dollar business in 2020.
I think Aaron maybe even talked about it earlier today, is how do you sell better to existing customers? The customers may already be happy. How do you keep them happy and grow in the typical Land and Expand model, which is so beautiful in SaaS?
If there’s one thing I want you to take away from this presentation…
Mamoon: Don’t churn and burn. Thank you very much. Please if you have any questions email me or Andy, one of my colleagues who helped me put together this presentation. Are we good?
Jason: Yeah, awesome.
Mallun: Mamoon, thank you very much. Thank you, Jason.
Download MP3 | Leave a Comment After a big business update last week Brian and Jordan are digging into a handful of things that are going on in their businesses. Putting the typical logistical pains of running a business aside, it’s been a very productive week, and the guys are running on all cylinders.
Today they cover 4 topics: Masterminds, Content Production, Getting Things Done, and Work/Life Balance. Let’s dig into each of them.
The importance of masterminds cannot be underscored enough. Both Jordan and Brian have been in several before, and currently are both involved in at least one group.
Aside from the regular hotseat format that is fairly common, both Brian and Jordan’s masterminds have Slack groups that allow the conversation to continue throughout the week. This includes a Goals channel within Slack that helps keep them accountable in between meetings.
Your mastermind should be with people that are in similar businesses, stage of your business, and areas of expertise. Some variety is important to get different perspectives, but too much draws away from the ability to contribute in each meeting.
If you’re looking to join a mastermind group there are a few ways to approach it:
Joining forums and Slack groups focused on your niche and network with other founders in your niche.
Do some manual outreach to people you know and may be a good fit. Take the time to make sure everyone is in the same place in their business.
When it comes to content production you have to keep in mind that the sum total of the content you produce is a really important factor in your overall content imprint. Specifically, The Startup Chat podcast had an episode on finding the content medium that allows you to easily create content, and spin it into different avenues for your audience. Is it video, audio, written, or podcasting? Choose the one that allows you to create content easily, authentically, and in a way that can get spun into different mediums.
Brian is considering putting this into action within Audience Ops, in a behind-the-scenes way. Their internal planning meetings could be recorded, turned into a podcast, written up into a blog post, and laid over slides into a video.
Getting Things Done
Being organized and productive is always a challenge for entrepreneurs. The list of things to do is endless, but Brian is finding ToDoist as a good tool to help keep the distractions out and staying focused on what really matters.
Jordan favors Trello as his way of keeping tasks organized and prioritizing them. Tags and categories keep things straight and help stay focused on what’s really important for his business.
Emails are the bane of anyone’s organizational existence. Keeping organization via email to a minimum is really important to maintaining your mental health. Those unread emails just nag at your mental energy, and minimizing those will help free your brain up to focus on what really matters.
Keeping that balance, both physically and mentally between work and the rest of your life is something to really keep in mind. The tradeoff between success within your family and success for your business is a zero sum game. Improvements in one side of the business will result in a sacrifice of sorts in the other.
To keep this in perspective, just remember that “These Are The Good Ole Days”. Reward yourself for the decisions you’re making, the opportunity you’re creating, and the journey you’re going on. This is the conscious choice you’ve made and try to embrace it. Don’t wait to arrive, because you may never actually be “done”. The journey is the destination.
If you liked today’s episode, please give us a five-star review and we’ll mention your handle on a future episode of the Bootstrapped Web Podcast. Head here to leave a review in iTunes.
Ken Davenport, CEO of Mission Edge, talks with us about how they’re helping non-profits run the business side of their organizations. He talks about how millennials enjoy giving back in a much more hands on way, and how organizations can give back to the community in various ways, like skilled corporate volunteer programs. He also covers the new concept of impact investing and other ways to give back and still receive returns.
Most don’t have your best interests at heart. Not you as a founder, per se.
But … dude … they are money managers. Not BFFs.
They have the investment’s best interest at heart, if they are successful VCs.
And if they are unsuccessful VCs, they have how their investment appears to be doing as their interest (sometimes but not always the same). Because every few Mondays they are on thin ice and have to explain to the other partners why their investments are doing well.
And if everything goes perfectly, to plan, and you don’t need more money from them, and they don’t think anyone else could do better … then it will all seem daisies and roses.
Some VCs are different, though. Some.
You won’t really know from a smile, a grin frack, a spouse dinner, even a peak climb or heli-ski together, or any of that superficial cr*p.
You’ll only know when something a little bad goes down, something tough.
Then you’ll see. Then you’ll see the “greed” a inch too far, or the lack of support, or the conversation behind your back. Something.
So if you have options — do real reference checking. And if you don’t have options — take the money. It’s all green.
I think if he can really recruit 2 amazing management teams, and get the COO thing to work on the operational side … it’s pretty do-able for a CEO incredibly engaged on product strategy.
It’s when you get sucked into owning a functional area that you get killed. You can’t also be the head of sales for 2 companies, or the hands-on CMO, etc. etc.
But, even if you can be CEO and Visionary and Strategic Chief Product Officer of two … one must almost be definition suffer at least on a relative basis. Pixar killed it, but Jobs didn’t seem quite the figurehead there. He spent one day a week at Pixar (with a world-class management team under him). SpaceX seems to be killing it too, but it feels like Tesla takes more of Musk’s “PR” quota time. And being CEO of a public co. is a lot more work than a private one, even one as successful as SpaceX.
You can own more than one strategic project. And if you are brilliant, with a brilliant team, you can do both.
But one of them has to get less of your attention.
Email simply works, but it’s important to understand why in order to wield it well. Let’s take a step back to dig into why email marketing is such an essential tool for growing your business — and what that means for how to approach it:
Email Gets More Conversions
First, a quick exercise to compare the power of email against Twitter.
According to MailChimp, click rates for emails generally fall between 2.69 and 3.06%. Compare that to click rates on Twitter, which average out to 1.64%. That number varies greatly according to the number of followers you have:
If we compare the expected results for 5000 email subscribers and 5000 Twitter followers, we get 140 clicks versus 27.5 clicks.
But clicks, as you know, aren’t the same thing as cold hard conversions. Here’s a breakdown of aggregate conversion rates across different channels for sales through Gumroad, a platform enabling people to sell directly to their audience:
Email wins handily when it comes to conversions. In fact, “Gumroad sellers who use email marketing make 3x as much in a product launch as those who don’t,” according to Ryan Delk who ran business development and growth there.
Applying these conversion rates to our 5000 email subscribers vs. Twitter followers example, we get 13 email sales and 1.5 Twitter sales.
Nathan Barry, from ConvertKit, went through a similar exercise, applying Gumroad’s conversion rates and his actual clickthrough rates (very healthy numbers: 29.5% for email and 3.1% for Twitter). Assuming we’re comparing 1000 email subscribers versus 1000 Twitter followers, here are his results:
Nathan concludes: “an email subscriber is worth roughly 15x as much as a Twitter follower!”
Of course, these examples aren’t true-to-life, with customers making purchases after repeated interactions and through different paths. But taking a minute to look at these simple numbers is pretty illuminating.
And more than numbers of sales, consider their value as well. McKinsey reports that while email conversion rates are estimated to be at least 3x the rates of social media — the value of those conversion purchases are also a higher 17% value.
Why is Email So Powerful?
There are 3 basic reasons why email works so well when it comes to marketing, sales, and growing a business.
1. Email gives control to both sender and recipient.
The benefits of email are numerous and multi-faceted:
email is searchable and supports long-form copy
email is asynchronous while allowing for near-synchronous, timely alerts and notifications
email is personal while designed for sharing
Compare those qualities to those of other channels:
There’s a one-two punch that email provides. First, it manages to mix the act of broadcasting information with the feeling that the message received is individual. Your inbox is an intimate, personal part of your life.
Compare that with social. As Wired’s Klint Finley points out in:
For many users, social media has become impersonal. Facebook algorithmically curates what we see, while Twitter overwhelms us with a firehose of fast-moving content, and LinkedIn is, well, LinkedIn. The most important part of the email newsletter’s appeal is that it still feels intimate—even if you are sending emails to total strangers.
Email is personal and it scales.
If that personal/scalability duality is the jab, the final cross is the control given to both recipient and sender.
For senders, the ability to communicate at scale is a power. When done with a focus on relevance, personalization, and probably a dash of automation — what in less advanced hands would be an impersonal, one-to-many blaring broadcast becomes an impactful one-to-one communication. (Just consider the effectiveness of transactional emails!)
For recipients: while email may be delivered close to real-time, the way it’s consumed is asynchronous. The delivery of the message doesn’t interrupt you. That’s the point of an inbox — to function as a repository, rather than a stream or feed (though it can feel that way), until you’re ready to deal with it.
2. People prefer email.
Given these qualities, it makes sense that people prefer email, specifically for marketing communication. Despite the constant development of new communication tools and apps, people don’t want to hear from companies and organizations through those channels.
MarketingSherpa found that a great majority — 72% of U.S. adults — would rather have companies communicate with them through email.
A smaller-scale UK-focused survey from Adobe also found that 63% of consumers prefer to receive marketing offers via email. You’ll notice that the more interruptive a channel is, the more unpopular it is too:
3. Email is great for building customer relationships.
You can use email to communicate with people at any stage in the customer lifecycle, from acquisition to happy customer and even afterwards. It’s about sustaining good communication over time, developing and deepening trust and loyalty. After all, you’re building relationships with people.
What does this mean for your emails? How you do it matters.
Instead of the old-school method of willy-nilly email blasts — send thoughtful, timely, helpful, and even delightful messages. Prioritize relevance and context — connecting your goals with those of your readers.
Consider email within your brand’s whole content and communication ecosystem. It’s not the only channel at your disposal and works in concert with everything else.
Email, like the rest of the world, will continue to move on and evolve. It’s a winning communication and marketing channel for your business — but more and more, the quality of your emails and messages will matter.
Relevance, context, and that personal feeling of conversation will become even more vital as devices and technology change, human attention gets more precious, and inboxes get smarter and ever more close up and personal.
How has email been working for you and what’s your best tip for others? Share your wisdom and experience in the comments!
1. Originally reported in British pounds: “Email has an average ROI of £38 for each £1 spent. A big increase over the £24.93 reported in 2013.” Currency conversion correct as of 10/7/15