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Microconf Europe 2013 -- Patrick McKenzie


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Patrick McKenzie on quitting day job/consulting, building things to optimize the things you build, etc.

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Microconf Europe 2013 -- Patrick McKenzie

  2. 2. Want To Follow?  Hashtag #MicroConf or tweet at @patio11  Slides are available at
  3. 3. Bingo Cards… Who Knew, Right?
  4. 4. We Were All Newbies Once 0 10000 20000 30000 40000 50000 60000 70000 80000 2005 2006 Profits (Early Days) BCC Day Job
  5. 5. See My First Microconf Talk 0 20000 40000 60000 80000 2005 2006 2007 2008 2009 Profits (While Employed) BCC Day Job
  6. 6. Once More, With(out) Feeling
  7. 7. Products With A Side Of Consulting 0 20000 40000 60000 80000 Profits (Excluding AR) Consulting BCC Day Job
  8. 8. 2012 Was A Very Good Year
  9. 9. Not Important Relative To Last Slide 0 40000 80000 120000 160000 200000 Profits (Through 2012, Excluding AR) Training Consulting BCC Day Job
  10. 10. And how will I know that people buy it? What Should I Make?
  11. 11. Quick Wins To Pay For Microconf 2014 Look for the star! $X,000 in return for under 2 hours of work.
  12. 12. The Fundamental SaaS Equation  Traffic is hardest to optimize for – see Rob Walling‟s presentation or mine from 2011.  Conversion rate throughout funnel is easier to optimize (A/B testing, funnel analytics, etc), but takes weeks/months to see results.  ARPU you can manipulate with a few minutes of work  Churn: run your own Operation Retention
  13. 13. Charge. More. • Killed the $9 plan • Added in $199 plan due to apparent demand
  14. 14. In Which I Take My Own Darn Advice $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 $9.00 $10.00 12/2010 1/2011 2/2011 3/2011 4/2011 5/2011 6/2011 7/2011 8/2011 9/2011 10/2011 11/2011 12/2011 1/2012 2/2012 3/2012 4/2012 5/2012 6/2012 7/2012 8/2012 9/2012 10/2012 11/2012 12/2012 1/2013 2/2013 3/2013 4/2013 5/2013 6/2013 7/2013 8/2013 9/2013 Scaled Revenue for Appointment Reminder
  15. 15. Lifecycle Emails For SaaS
  16. 16. How Is This Different Than Last Year?  Drip email marketing is often/typically pre- signup, lifecycle emails are post-signup.  Lifecycle emails require more app-specific logic.  Very helpful: good understanding of funnel  Not required:  Lots of volume  Great copywriting
  17. 17. Get People To Upgrade To Annual Billing  Offer discount (“1 month free”) if they switch to annual billing.  Offer it to “loyal customers” over email  One click + confirmation to switch.  Conversion rate from 10% to 25%+  Immediate revenue of $200 per email sent
  18. 18. Raising Your ARPU, Trivially Consider Bob, who has 280 appointments a month and is on Small Business ($79). Is Bob happy? How can we make him happier? We should do Bob a solid and convince him to upgrade to Office ($199), perhaps at a discount.
  19. 19. Did This At A Consulting Client  “Run my a SQL query of everyone who is within 20% of quota on FEATURE_1, FEATURE_2, or FEATURE_3” (~3 minutes)  Add in 3 extra special-offer plans, which were equivalent to existing tiers but at a slight (~20%) discount (2 minutes)  Write a two paragraph email and interpolate their account data (25 minutes)  Made +N% of yearly recurring revenue
  20. 20. Investigating Low Conversion Rate  Takes ~20 minutes to do in Rails or whatever  Put it on a dashboard which you use for Customer Support tasks, review daily-ish  Get qualitative feedback no matter how poor/small data is
  21. 21. What‟s The Difference?
  22. 22. Walking People Through The Trial They start They succeed They get confused
  23. 23. My Trial Email Sequence  Day Zero: Auto-generated welcome  Day Three: Personal welcome from me  Day Twenty:  If trial is successful: sell them hard  If trial is unsuccessful: rescue the trial  Day Twenty Seven: “incoming charge”
  24. 24. Welcome Mail  Establish expectations for trial  Getting started guide  Introduce yourself and ask for them to email you
  25. 25. Personalized Welcome  Styled to look like sent one-on-one  Announce your availability  Ask for email  “Sent from my iPhone” – maybe not  Lots of folks send this automatically within an hour, almost certainly a good idea but I don‟t do it personally
  26. 26. Free Trial Going Well  Simple heuristic  Do ROI calculation  Close sale (or mention it is automatic)  Immediate incentive
  27. 27. Free Trial Not Going Well  Simple heuristic  Figure out why they aren‟t doing well  Offer a trial extension if they talk to you  Great opportunity for customer development
  28. 28. Weekly Checkup (“Get Them Promoted”)  High perceived value  Great engagement  Creates “ongoing earned media” via the option to embed announcements/link s/etc  Makes ROI discussions academic
  29. 29. Digging Into Individual Accounts If he cancels or has a CC billing failure he gets a phone call. Everybody gets a dunning email, sent three
  30. 30. [Action Required] Appointment Reminder Could Not Renew Your Subscription  Get to the point ASAP  Prominent link to capture updated CC data  Extend a 3 day grace period, try daily within grace  Don‟t forget a “You didn‟t update so we took the liberty of pausing your account” email
  31. 31. How To Quit Consulting
  32. 32. But Patrick, Why Would I Quit Consulting?  People say consulting doesn‟t scale. Horsepuckey.  Ways to scale consulting:  Move your rate up, dramatically  Hire people  Improve your utilization at the margin
  33. 33. So Why Really?  Constant rat race to get new clients  Lots of unpaid time doing prospecting / proposal / administrative work  You have a boss and you have to go to work every day
  34. 34. Why Not Replace With Software?
  35. 35. Why Not Replace With A SaaS? $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 $9.00 $10.00 Scaled Revenue for Appointment Reminder
  36. 36. So What Do We Do Then?  Productized consulting  Your most common / most valuable consulting engagement, delivered without the full dance  An e-book / video course / etc  A training event / seminar / etc  Sell it through email  Offer it at a variety of price points  Make several gigs worth of money in a repeatable, scalable, tweakable fashion… with lead-in time of 2 weeks to 3 months, not 6 months to 5 years
  37. 37. My Non-software Product  Most common consulting engagement (2010): “We send no email. Can you, like, fix that?”  I would implement:  Drip marketing (see Microconf 2012 presentation)  Lifecycle emails (like two minutes ago)  It generally required:  Lots of sales / convincing  A bit of coding  Copywriting delivered by me, the non-expert
  38. 38. Goals For Productized Consulting  Convince people who already find me credible that they should be doing email, too  Teach them how to implement:  Drip marketing (see Microconf 2012 presentation)  Lifecycle emails (like two minutes ago)  This generally requires:  Lots of sales / convincing delivered at scale  SaaS products I could recommend and glue code I could describe in high-level detail rather than write  Copywriting that I could teach them to do themselves
  39. 39. Why Would You Buy That Over Consulting?  Because it‟s $500 versus $20,000  Because you couldn‟t find somebody to do this for you  Because you‟re not sure you can get to it right now  Because it‟s a cheap, easy way “to test the waters”
  40. 40. Why Not Get It Free On the Internet?  Because real businesses spend money on problems  “Free if you have two week to research it” is not free to someone who cuts paychecks bi-weekly  Because paid initiatives signal quality and help to reduce roadblocks to adoption within an organization
  41. 41. The Key To Marketing It  Started building an email list a few months in advance  Focused 75% on teaching people stuff (pricing, selling to enterprises, A/B testing, etc) and 25% on telling them about upcoming product  Sent two, count „em, two sales emails  Sent folks to a long copy page
  42. 42. My “Squeeze Page” For Emails m Promotion: • Put a HelloBar lookalike on blog, mentioned occasionally in blog posts • Tweeted once or twice • Ended up on HN once because the community knows me Not just for the “Internet famous”: I got 5,000 signups but total “unknowns” routinely hit X00 in a day
  43. 43. Long Copy #1 Establish value proposition very early Main heading and subhead only there to convince you “In or out, do you want to read more? Note “intriguing” copywriting like “unreasonable
  44. 44. Long Copy #2 Use a case study from your consulting career Copywriting wise, just because it‟s long copy doesn‟t mean it has to be a Giant Wall of
  45. 45. Long Copy #3 Personal testimonial from a consulting client with graphical call-out Customer is more like Jason than like you or me
  46. 46. Long Copy #4 Acknowledge prospects’ objections and answer them (Amy Hoy: “Can you smell the guilt here?”)
  47. 47. Long Copy #5 BENEFITS OF TAKING THIS are more important to the customer than what it contains But be explicit on that, too.
  48. 48. Packaging Pricing: Again, charge more, charge more, charge more. Multiple ways to buy means multiple ways for best customers to discover ways to pay you more money.
  49. 49. Nathan Barry Is An Effing Genius “Designing Web Applications” Three packages: $249 / $99 / $39 Sales focuses on what customer gets not on what the price is So how did that work out for Nathan?
  50. 50. Packaging Is A Huge Win 0 10,000 20,000 30,000 Book Alone $49Book & Videos $99Complete Package $249 Nathan's Sales By Package 0 10,000 20,000 30,000 40,000 50,000 Mo' Packages = Mo' Money Complete Package $249 Book & Videos $99 Book Alone $49
  51. 51. What About The Actual Product?  Me speaking into my webcam and a $60 microphone  Loosely scripted. If I do it again, will add slides.  Took ~2 weeks to record plus a video editor (ARGH) that cost about $3,000, but added fairly little value over $300 on oDesk.  Hosted the videos on Wistia and rolled my own delivery platform (you should probably use Gumroad or similar)  Partnered with folks with related interests: additional value to customers at vanishingly little work to me
  52. 52. Funny Story About The Revenue  Launch day (sent an email, it got on HN): $12,862  Next week or two: $16,576  “Reminder: the sale ends today” : $15,579  Total to date: $64,608
  53. 53. Keys To Product Success  Email, email, email. Get people on it, delight them with the things you can teach them, sell only very occasionally.  Target a pain point which you know there is a demand for. Consulting = validated market, right?  Work on your copy. You don‟t have to be a genius. I certainly am not. (Joanna has a book, buy it: 100X ROI for me)  Deliver quality products, because you only have one reputation.
  54. 54. For more details  Get on my email list @  Special bonus for Microconf folks: You can have the lifecycle emails product for free if you didn‟t already buy it, or the next one (probably on A/B testing) if you did. Send me an email. I trust you.
  55. 55. Thanks for Listening  Blog at  Slides will be posted. See @patio11  Send me email. I love chatting about this.