Best Startup Quotes From Business of Software 2012
Posted on by Zuly GonzalezCategories Business of Software, Startups2 Comments on Best Startup Quotes From Business of Software 2012
Business of Software 2012
Image credit: Mark Littlewood

Beau and I attended the Business of Software 2012 conference. Business of Software is the best conference I have ever attended. It’s 2.5 days of awesome, intense talks given by the best of the best in the startup scene. This year the speakers included Kathy Sierra, Bob Dorf, Jason Cohen, Noah Kagan, Peldi and Dharmesh Shah.

The attendee list is also impressive. I’ve learned just as much talking to the attendees as I have listening to the speakers. I highly recommend the conference to anyone in the software business.

These are the 37 best quotes from the conference.

Kathy Sierra

  • Build something so desirable that people just have to have it. [tweet this]
  • Gamification is rarely helpful in building a sustainable business. [tweet this]
  • Gamification is a form of bribery, not loyalty. [tweet this]
  • Don’t confuse buying from gamification with loyalty. [tweet this]
  • Your product needs to be sustainably desirable without bribery or coercion. [tweet this]
  • Quality doesn’t drive desirability. [tweet this]
  • Word of mouth drives desirability. [tweet this]
  • Strive for user awesomeness, not app awesomeness. [tweet this]
  • The key attributes of a successful app don’t live in the app, they live in the user. [tweet this]
  • It’s all about making your users badass. [tweet this]

Paul Kenny

  • There’s more to learn from a qualified no than an unqualified yes. [tweet this]
  • If you win the argument, you lose the sale. [tweet this]

Dharmesh Shah

  • Before you gamify your product, decrapify it. [tweet this]
  • Work on a problem you care enough about that you’d be happy even if someone else solved it. [tweet this]
  • Build the kind of company you want to work in. [tweet this]
  • You don’t just want customers. You want crazy, loyal fans. [tweet this]
  • Technical switching costs should be low, and emotional switching costs should be high. [tweet this]

Adii Pienaar

  • Invest in branding, because it’s free. [tweet this]
  • Customer service is cheap marketing. [tweet this]
  • Diving into the deep end is the best way to learn. [tweet this]
  • Instead of being put into a box, create your own box. [tweet this]

Bob Dorf

  • If you sell band-aids, find bleeding people on the street. They won’t care about the branding. [tweet this]
  • There are no facts inside your office building. You have to get out and talk to your customers! [tweet this]
  • Without rampant enthusiasm from your customers, the odds are overwhelming you are going to fail. [tweet this]
  • Business plans belong in the creative writing department, not the business development department. [tweet this]
  • Always be innovating. [tweet this]

Michael Trafton

  • Culture is the personality of your company. Most companies have a split personality. [tweet this]
  • If you don’t design your culture, your employees will do it for you. [tweet this]

Jason Cohen

  • When what you are testing for is rare, the results are overwhelmingly wrong. [tweet this]
  • Crowds are useful in objectivity, and destructive in creativity. [tweet this]
  • Test theories, not headlines. [tweet this]

Peldi Guilizzoni

  • Surround yourself with excellence. Make yourself the dumbest person in the room. [tweet this]
  • Be a good citizen. If you don’t want people to screw with you, don’t screw with them. [tweet this]
  • Laws are like features – easy to add, hard to take away. [tweet this]

Noah Kagan

  • Marketing is only good if your product doesn’t suck. [tweet this]
  • You’ll make the most money when you don’t focus on money. [tweet this]
  • It doesn’t take a lot to be exceptional, because the bar is so low. [tweet this]

Do you have a favorite startup quote? Share it with us in the comments.

Managing Projects with Subversion and Trac: Free eBook
Posted on by Beau AdkinsCategories Business of Software, Events, Resources, Startups1 Comment on Managing Projects with Subversion and Trac: Free eBook
Beau Adkins Business of Software 2011
Image credit: Betsy Weber

Along with Zuly, I attended Business of Software (BoS2011) this year. This was my first time attending, and I have to say it was an intense 3 days; lots of learning and lots of networking. Although I had a good time and met a lot of really nice people, I’m glad to be back home programming. It was a bit draining for an introvert like myself.

Workshop sessions were held during BoS2011 by both speakers and attendees. Zuly held a workshop session with Ricardo Sanchez and Jason Cohen on Practicing Your Startup Pitch, which was well received.

I held a workshop on Managing Software Projects with Subversion and Trac. I designed the workshop so that it would be easy for novices to follow, but it also contains some advanced topics. I created a simple eBook for the workshop that walks you through step by step on setting up Subversion and Trac. You can download the Managing Software Projects with Subversion and Trac eBook for free.

If you download the eBook, I would love to hear what you think of it. Feel free to share your thoughts in the comments below, or contact me via email.

Business of Software 2011: 48 Tweetable Quotes
Posted on by Zuly GonzalezCategories Business of Software, Events, Startups3 Comments on Business of Software 2011: 48 Tweetable Quotes

This year I was fortunate enough to attend Business of Software (BoS2011) thanks to the kind folks at Stack Exchange. From time to time Stack Exchange sponsors community members to attend community related conferences. As an active participant on OnStartups Answers, I was selected to attend Business of Software this year, and I am very grateful for the opportunity.

Business of Software is a great conference, and I recommend anyone that can afford to do so, to attend. The speakers are excellent, and so is the networking. It’s an expensive conference, but well worth the cost. This year’s speaker lineup included Professor Clayton Christensen, Patrick McKenzie, Laura Fitton, Jason Cohen, and Alexis Ohanian.

I plan on summarizing a few of the presentations in future posts, but for now here are 48 tweetable quotes from the BoS2011 speakers.

Clayton Christensen

Clay Christensen Business of Software 2011
Image Credit: Betsy Weber

–    “Worry about the bottom when thinking about who can kill you.”
–    “Pick a fight where the giant is more motivated to flee than fight you.”
–    “The market to make something more affordable and simple is often times a bigger market.”
–    “A business unit is not designed to evolve.”
–    “The customer rarely buys what the company thinks it is selling him.” ~ Peter Drucker
–    “Help people do what they want to do even better.”
–    “Invest when you don’t need the results of the investment. Innovation is a long term investment.”

Jason Cohen

Jason Cohen Business of Software 2011
Image Credit: Betsy Weber

–    “Most people don’t do things that are difficult to do.”
–    “Honesty has to become a critical policy for every company on earth.” ~ Gary Vaynerchuk
–    “Honesty is big right now. See how we can spin that.” ~ Anderson cartoon
–    “My idea was to be as real and honest as possible.” ~ Howard Stern

Dharmesh Shah

Dharmesh Shah Business of Software 2011
Image Credit: © Software Promotions

–    “The purpose of your business is to create delighted customers.”
–    “High churn rates are scarier than clowns.”
–    “Don’t fall in love with your business model too early.”
–    “Pricing is hard. It’s very, very hard.” ~ Simester (MIT Professor)
–    “The price is always greener in your neighbor’s company.”
–    “Pricing is hard. Raising prices is even harder.”
–    “Assume customers are connected and united.”
–    “You want to get really good at choosing your customers.”
–    “You want the right features in both your product and your customers.”
–    “Strategic is code for we don’t have any data.”
–    “Not every insight needs to be counter-intuitive.”
–    “As code hackers we need to appreciate the value of business hackers.”
–    “Smart people will often get their asses kicked by other smart people that worked harder.”
–    “Generalists are great in the beginning. Specialists are great as you grow.”

Jeff Lawson

Jeff Lawson Business of Software 2011
Image Credit: Betsy Weber

–    “People are your customers.”
–    “Consumers are not rational. Businesses are rational.”
–    “Be proud and put a price on your SaaS.”
–    “Too many pricing options will result in lack of sales.”

Laura Fitton

Laura Fitton Business of Software 2011
Image Credit: © Software Promotions

–    Social media in two words: “Be useful.”
–    Social media in four words: “Listen. Learn. Care. Serve.”
–    “Make the customer the hero of your story.”
–    “Either do something worth writing, or write something worth doing.”
–    “Measure what matters.”
–    “You don’t just want a following. You want screaming, raging fans.”
–    “Use social media to solve a problem you are already spending time on.”
–    “You don’t get a prize for getting the most followers. You get a prize for growing your business.”

Josh Linkner

Josh Linkner Business of Software 2011
Image Credit: © Software Promotions

–    “Your job is to disrupt, or be disrupted.”
–    “Mistakes are the portals of discovery.”
–    “Being safe is the riskiest move of all.”
–    “From failures we learn. From successes we don’t.”

David Cancel

David Cancel Business of Software 2011
Image Credit: © Dirk Paessler

–    “Talking, reading and dreaming are worthless.”
–    “Data alone is useless.”
–    “Use data to validate your assumptions.”
–    “Optimize your business for learning, not data.”
–    “Always be testing.”
–    “We have a strategic plan. It’s doing things.”
–    “In God we trust. For the rest bring data.”

Also take a look at the top 11 tweetable quotes from last year’s Business of Software conference. And here’s a summary of BoS2010.

Did you attend BoS2011, or watch the live stream? If so, what were your favorite quotes? If not, do you have any other startup related quotes you’d like to share with us?

Business of Software Conference 2010
Posted on by Zuly GonzalezCategories Business of Software, Events, Startups2 Comments on Business of Software Conference 2010
Business of Software 2010
Image credit: Betsy Weber

Wow, where to begin…

I attended the Business of Software conference (BoS2010) in Boston this year for the first time. The Business of Software conference is a yearly event sponsored by Neil Davidson of Red Gate Software and Joel Spolsky of Fog Creek Software, where entrepreneurs in the software industry get together to discuss the business side of running a software company.

Attending BoS2010 was truly an amazing experience. It was an intense three days of learning from, and networking with, passionate, motivated, driven, and intelligent individuals. It was very inspiring, and I highly recommend you attend next year, if you can afford it (it can easily add up to $5000 if you include airfare, hotel, conference fee, and other miscellaneous expenses).

The speakers included Seth Godin, Dharmesh Shah, Peldi Guilizzoni, Jason Cohen, Eric Ries, and Rob Walling. These are people I admire and look up to, and lil’ ole me actually got to meet and talk to many of these guys! How awesome is that! Probably the most surprising part was how humble, and easy to talk to these rock stars in the startup world are. Everyone I talked to was super nice, and extremely willing to talk to nobodies like myself.

I met lots of people at the conference, all at different stages in their business. Not only did I meet struggling startup founders just like me, I also met startup greats like Jason Cohen and Dharmesh Shah, and everyone in between. I especially enjoyed meeting Ricardo Sanchez and Steve Wilkinson, both of which I had previously interacted with online on OnStartups Answers.

BoS2010: Ricardo Sanchez and Steve Wilkinson

It’s impossible for me to write down every lesson I learned, and every emotion I felt, but I’ll do my best to summarize the presentations.

BoS2010 Presentation Summaries

All of the BoS2010 presentations were really good. My goal is to eventually post a summary of most of them. Unfortunately, that’s going to take me some time, because they all contained lots of good information. Below is a brief description of each presentation, with links to the ones I’ve summarized so far. I’ll post more summaries in the months to come.

Seth Godin: Being a great programmer is no longer sufficient to succeed in the software industry. Creating a piece of software that works is no longer an indicator of success. Times have changed. And in a world where we are bombarded with brands and products, we must create a unique customer experience to succeed. Success in the software industry is now dependent on your ability to create a tribe – a movement, a place of belonging, a community – and lead it.

Dharmesh Shah
: To have a successful software business, you need happy customers. It’s simply not enough to just acquire lots of customers – you need to retain them. And to retain your customers, you need to make them happy. You must measure your customers’ happiness level. Come up with your own metrics if you have to, but look at those numbers closely. Determine what makes happy customers, and what doesn’t, and adjust your business model accordingly.

Rob Walling: Most of us think that the number one goal of our website is to sell our products. And in a way it is. However, to best achieve that you must motivate a visitor to return to your website. Rob discusses how we can use permission based email marketing to increase website sales and profits.

Peldi Guilizzoni: As you run your business, you will worry about almost everything, however, not everything is worth worrying about. You should only worry about the important things – the rest will eventually work itself out. Peldi shares some of the issues that concern him, and discusses which ones are worth worrying about, and which ones are not. Peldi also shares some tips to overcome, and deal with, those fears.

Jason Cohen: From Geek to Entrepreneur. As a geek who has started three successful companies, Jason had to move from coder to everything else  – salesman, marketer, accountant, and changer of the pellets in the urinals. In the process, he found that some widely accepted advice lead to failure while trusting his inexperienced gut lead to success. He discusses six ways to figure out whether specific advice is right for your situation, and then work those lessons against the 37signals philosophy.

Youngme Moon: If there is one strain of conventional wisdom pervading every company in every industry, it is the importance of competing hard to differentiate yourself from the competition. And yet going head-to-head with the competition—with respect to features, product augmentations, and so on—has the perverse effect of making you just like everyone else. Youngme’s message is simply: Get off the competitive treadmill that’s taking you nowhere. Aspire to offer the world something that is meaningfully different. Different in a manner that is both fundamental and comprehensive.

Paul Kenny: Paul explores how to best get the customer talking about their needs, their concerns, and their aspirations. He discusses how to use our questioning and listening skills to engage the customer in a meaningful dialogue, which will help not only to identify an appropriate solution, but also to enhance the customer experience.

Eric Ries: The Lean Startup is a scientific approach to innovation. Most software projects fail. Most startups fail. Most new products are never used. But it doesn’t have to be that way. The Lean Startup is a disciplined approach to imagining, designing, and building new products. By testing assumptions earlier, faster, and with more rigor, you can improve your success rate.

Scott Farquhar: From Bootstrap to $60 million. Atlassian has been a successful software bootstrap, right up until they took $60 million in funding in July 2010. Scott discusses some of what he’s learned about running a successful bootstrapped software company, including how to pick a business model, how to get free marketing, how they hired 32 people in 6 months, and how they built a workplace that has won numerous HR awards.

Joel Spolsky Business of Software

Joel Spolsky: After ten years of running a slow-growth, bootstrapped software company that was profitable from day 1, Joel found himself running a fast-growth, VC-funded internet company that is actually trying to get unprofitable. Joel reflects on some of the differences and some of what he’s learned from going over to the dark side.

Eric Sink: What Eric learned from selling his company to Microsoft. Over the years, Eric was approached by several parties interested in acquiring his company. He learned a lot from those discussions, even though none of the deals happened. In November 2009, Microsoft acquired the assets of his Teamprise division. In his presentation, Eric shares information that may be of interest to others looking to sell a small software firm to a big company.

Mark Stephens: The software universe has gone mad, and you need to step back and re-evaluate big time. This talk takes a long, cynical look at both the past and the future, gives you some new ideas, and pose lots of those awkward, searching questions you try to avoid.

David Russo: The way a company sets itself up from inception to find, hire, engage, reward, and keep its talent plays a large part in whether a company grows, finds success, rewards investors and incumbents, and even lives or dies.

Dan Bricklin: Dan discusses lessons learned from his experience in developing VisiCalc.

Derek Sivers: Derek shares the story of how his company CD Baby came to be, and why he decided to sell it.

BoS2010 Resources

Interested in learning more about the 2010 Business of Software? Here are some additional resources for your reading/viewing pleasure:

Twitter

Flickr

Official Business of Software Webpages

BoS2010 Blog Posts From Attendees

Registration is now open for the 2011 Business of Software conference, and the first 100 people to register get $900 off the conference fee.

Videos of some of the 2010 presentations have been uploaded on the BoS website. And although watching the videos doesn’t come close to actually being there in person, they are definitely worth watching.

Did you attend the Business of Software conference? If you didn’t, would you like to attend next year? If you did, what were your takeaways? What stood out the most to you? Did you share your thoughts on your own blog? Feel free to share the link with us.


Increasing Website Sales: Rob Walling’s 2010 Business of Software Presentation
Posted on by Zuly GonzalezCategories Business of Software, Events, Startups3 Comments on Increasing Website Sales: Rob Walling’s 2010 Business of Software Presentation

This post is part of a series of posts from the 2010 Business of Software conference (BoS2010). For a summary of the conference, and an index to the other presentations, click here.

Rob’s 2010 Business of Software presentation: “The Primary Goal of Your Website” – What’s the primary goal of your website? Not to sell software. With most visitors returning multiple times before making a purchase, your primary goal should be to draw visitors back to your site.

Rob Walling at the 2010 Business of Software conference (BoS2010)
Image credit: Betsy Weber

Rob Walling’s 2010 Business of Software presentation was another BoS2010 talk I really enjoyed, and got a lot of value out of. Rob discussed how we can use permission based email marketing to increase sales and profits. His presentation was eye opening for me, because I always thought of email marketing as ineffective, and a nuisance to the receiving party.

I spoke to Rob very briefly, and he seemed like a genuinely nice guy. I even got to see his adorable baby boy, and I’ll tell you what, he is definitely one of the cutest babies I’ve ever seen!

Effectively Using Your Website

Most of us think that the number one goal of our website is to sell our products. And in a way it is. However, to best achieve that you must motivate a visitor to return to your website.

Rob has researched this topic, and determined that returning visitors are much more likely to purchase your product than first time visitors (and he shared some statistics to back it up). In essence, the ineffective marketer asks you to buy too soon.

The main reasons why people don’t buy from your website are:

  • There’s not enough information on your website to make the decision.
  • They don’t trust you.
  • They don’t have the money.
  • They don’t have a need for your product.
  • They are never going to buy your product.

Rob examines each of these reasons, and suggests how to overcome all of these issues (except for the last one, because there’s nothing you can do about that).

A note on that first bullet item about insufficient information on your website: When Rob mentioned this, the first thing that came to mind was Bob Walsh’s StartupToDo website. I’ve heard good things about StartupToDo, and have thought about joining on several occasions. However, the fact that there’s no evidence on the website of the quality of the service has kept me from joining – even with the free 30 day trial. I’d just like to see a sample Guide, or two, before giving away my information. So I can totally relate to that first bullet item. Rob’s own Micropreneur Academy, which is similar to StartupToDo, is guilty of this.

Statistics on Returning Website Visitors

Rob shared with us statistics from four websites showing the importance of repeat visitors. These are all his websites, except for CrazyEgg.

  • DotNetInvoice: Using three years worth of data, Rob determined that returning visitors accounted for 450% more sales than first time visitors. The per visit value earned from first time visitors was $0.55, and $2.41 for returning visitors – a 440% increase.
  • JustBeachTowels: Looking at a one year period shows that returning visitors accounted for 770% more sales than first time visitors. The per visit value earned from first time visitors was $0.17, and $1.53 for returning visitors. That’s a 900% increase!
  • Another WordPress Classifieds Plugin: Here Rob saw a 583% increase from returning visitor sales over first time visitor sales. He looked at 8 days worth of data.
  • CrazyEgg: A 60 day period showed returning visitors accounted for 1585% more sales than new visitors.

To clarify the term returning visitor, Rob defines a returning visitor as someone who has returned to the website more than two times. However, someone can visit the website from more than one computer. So with that in mind, the actual percentages of sales to returning visitors are actually higher than the statistics indicate.

So now that you’re convinced on the value of returning visitors, the question is, how do you get visitors to return to your website?

Getting Returning Visitors to Your Website

Email is your answer. Email has the highest click through rates, and is one of the most effective ways to get people to return to your website. Email is a form of personalized broadcasting – the ability to communicate with a large number of people, while making it seem like an individual/personal communication. And as a bonus, email is an excellent way to A/B test pricing and special offers.

Blogging is much harder to pull off than email – it is also a lot more time consuming. Blogging is a good way to get someone to initially visit your website. But, after that initial visit, it’s much harder to motivate someone to return to your website with blogging. Social media can be effective, however, it’s very time intensive as well.

By following the simple 3 step process outlined below, you will increase the number of returning visitors to your website. This process takes advantage of the benefits of email, and should increase your revenue by 10%. Best of all, it will only take about 2 days to implement.

Step 1: Create a killer landing page. Don’t skimp on design. Ensure your landing pages are truly optimized to get your visitors to give you their email address (and permission to contact them). For example, provide a free downloadable user’s manual to your product, or a free demo. Also, don’t make your form too long, or you’ll turn away potential customers. In general, the more value your freebie is perceived to have, the more information your visitor will be willing to give up. Take a look at the below landing pages for inspiration.

Good landing page example - credit card processing

Good landing page example - DotNetInvoice

Good landing page example - Stripe-A-Zone

Step 2: Give something away for free. For example, consider putting together an eBook on a topic of interest to your target market, and give it away in exchange for an email address. It really helps to be unique here. The more unique (and valuable) the free item, the more email addresses you’ll get in return. Smart Bear Software gives away a free book (yup, book, as in an actual physical book) on peer code review. The makers of freckle time tracking give away an eBook on credit card processing.

Smart Bear Software Free Book Offer

Free eBook example from freckle time tracking

Step 3: Setup the follow-up. Follow up with your prospective customers via email. Rob recommends using MailChimp, which offers free service for lists with up to 1,000 subscribers.

Now, let’s go back to the reasons why people don’t buy from your website, and how you can counter each of these concerns. These strategies will become the foundation of your follow-up emails to prospective customers.

  • Problem: There’s not enough information on your website to make the decision.
    • Solution: Provide information.
  • Problem: They don’t trust you.
    • Solution: Build trust.
  • Problem: They don’t have the money.
    • Solution: Provide discounts and wait.
  • Problem: They don’t have a need for your product right now.
    • Solution: Stay fresh in their minds and wait.
  • Problem: They are never going to buy your product.
    • Solution: There is no solution. Forget this segment, and focus your energy on something else.

Let’s look at an example that shows how this follow-up technique can work for you. Test group A was allowed to download a free trial with no email required. Those in test group B needed to provide a valid email address to download the free trial, and were exposed to the below follow-up sequence.

  • On day 0 they received a welcome email with a $5 discount coupon, a link to the free trial, a link to the Getting Started Guide, and customer testimonials.
  • On day 2 they received an email with a buying guide (that highlighted other products), information on the standard and pro plans, information on their iPhone app, and customer testimonials.
  • On day 6 they received an email with an invitation to subscribe to their newsletter, benefits to some of the available features, and customer testimonials.
  • On day 30 they received an outright invitation to buy, and more customer testimonials.

The number of downloads by test group B was down by 33.6% when compared to test group A. That’s not a big surprise since those in group B had to overcome the fear of providing personal information. However, test group B showed a 3.4% increase in sales, an increase in profits by 15.4%, and an increase in first-time purchases by an average of 13.5%.

Avoiding Spam Filters

An extremely costly mistake you can make is letting your emails get stuck in spam filters. Not only is this going to destroy your email marketing, it can also hurt your brand (and reputation), if customers are not receiving your support emails.

Some common, and not so common, spam filter triggers are:

  • Sending the email message only in HTML format instead of text format.
  • Using all capital letters in the subject line.
  • Having a low text to image ratio.
  • Using poorly coded HTML.
  • Using the following terms in your subject line:
    • Dear
    • Extra inches
    • Stop further distribution (instead of using unsubscribe)
    • You registered with a partner
    • Oprah

Side note: This was something we struggled with in the beginning, and still do to some extent. At first, all of our Light Point Security emails were getting flagged as spam. We’ve since made a few changes that helped our emails get through spam filters. By far what helped us the most was using email verification tools, like those provided by All About Spam and Port25 Solutions. These free services print out a report detailing what they found when you send them a sample email message – I highly recommend it.

Increasing Email Open Rates

Now that you’ve made it past a prospective customer’s spam filter, you have to encourage the person to actually open your email message. An important factor in someone’s decision on whether to open your email or not, is the content of the subject line. Emails with the lowest open rates contain the following terms in their subject lines:

  • Reminder
  • Specials: Because it indicates you are trying to sell them something.
  • X% off: Because it indicates you are trying to sell them something.
  • Help: Because it indicates you want something from them.

Something else that has a big influence on email open rates is the From name. The From name is usually the second thing a user sees, and the more personal it is, the better. Remember, people buy from people not companies.

The best choice is to use the sender’s name in the From field. For example, if you receive an email from me, it will say Zuly Gonzalez. The next best option is to use the sender’s name along with the company name. For example, Zuly Gonzalez | Light Point Security. The third best option is to use the person or department’s role. For example, Light Point Security Support. The worst option is to just use the company name. For example, Light Point Security.

Rob Walling presenting at the 2010 Business of Software conference (BoS2010)
Image credit: Mark Littlewood

More Email Marketing Recommendations

One problem you may encounter is people giving you a fake email address. To discourage this behavior, try implementing a double opt-in process. For example, you may require the user to click on a link sent to the email address they provided, in order to validate the email.

A good technique to try is requiring the user’s email address at install time, instead of before downloading the free trial. Once they have downloaded the trial, they are much more committed, and will be more likely to give you their email address. You can request the email address after your product has been downloaded in order to send the user a key required to install the product. There was one data point from an audience member who used this technique, and he said it increased his email capture by 10%.

If you haven’t contacted someone within the last 6 months, throw away their email address. After 6 months, odds are they have forgotten about you, and will see your email message as spam.

In your initial welcome email, thank them for buying your product, and ask them what they want to do with your product. Learning how your customers use your product, and why they want to use your product, will help you improve it.

When emailing your users, also ask them if they have any feature requests. Again, this is great feedback you can use to improve your product.

One of the nice things about SaaS products is that you can tell if people are actually using your product, or not. You can use this information to email your inactive customers, and hopefully get some feedback as to why they are not using your product. This can also help you A/B test your email marketing campaigns to learn which emails worked, and which ones flopped.

Key Takeaway From Rob’s BoS2010 Presentation

Returning visitors buy more than first time visitors. Therefore, the primary goal of your website is to encourage visitors to come back. Because the most effective way to get returning visitors is via permission based email marketing, the main goal of your website is to obtain a visitor’s email address. After obtaining email addresses, implement an email follow-up strategy.

Rob posted a brief summary of his 2010 Business of Software presentation on his blog, along with a copy of the slides.

Memorable Quote

The most memorable quote from Rob’s BoS2010 presentation was:

  • “The ineffective marketer asks you to buy too soon.”

More on Rob Walling

Rob Walling is a serial entrepreneur and author of Start Small, Stay Small: A Developer’s Guide to Launching a Startup. He blogs at SoftwareByRob.com about building self-funded startups and runs the Micropreneur Academy, an online learning community of like-minded founders designed to get a startup from zero to launch in six months. Walling runs 11 one-man technology businesses and has been building web applications professionally for 11 years.

Follow Rob on Twitter here.

You can find Rob’s blog here.

If you found this information to be useful, take a look at Rob’s new book, Start Small, Stay Small: A Developer’s Guide to Launching a Startup – you can even download the first chapter for free. You can also read the chapter on virtual assistants on Jason Cohen’s Smart Bear blog.

What are your thoughts on Rob’s presentation? If you attended BoS2010, did I miss an important point? What was your favorite part of Rob’s presentation? What was your key takeaway from his talk?

Inspirational Business Quotes From the Business of Software Conference
Posted on by Zuly GonzalezCategories Business of Software, Events, Fun Friday, Startups2 Comments on Inspirational Business Quotes From the Business of Software Conference

In my second Fun Friday post, I’m going to share with you the top 11 business quotes from the 2010 Business of Software conference (BoS2010).

I attended the Business of Software conference this year, and highly recommend it. The conference was jam-packed full of insights for software startups, and was truly an inspirational event.

Top 11 Business Quotes From BoS2010

Be so good they can’t ignore you.” ~ Peldi Guilizzoni

Peldi of Balsamiq BoS2010 Quote: Be so good they can’t ignore you
Image credit: Betsy Weber

Fall in love with the problem, not with your solution.” ~ Peldi Guilizzoni

Peldi of Balsamiq BoS2010 Quote: Fall in love with the problem, not with your solution
Image credit: Betsy Weber

Brand is what people say about you after you’ve left the room.” ~ Dharmesh Shah

Dharmesh Shah BoS2010 Quote: Brand is what people say about you after you’ve left the room
Image credit: Betsy Weber

Don’t make customers happy. Make happy customers.” ~ Dharmesh Shah

Dharmesh Shah BoS2010 Quote: Don’t make customers happy. Make happy customers
Image credit: Betsy Weber

Improve the product experience, and everybody wins.” ~ Dharmesh Shah

Dharmesh Shah BoS2010 Quote: Improve the experience, and everybody wins
Image credit: Betsy Weber

Don’t make ___(marketing)___ software. Make ___(marketing)___ superstars.” ~ Dharmesh Shah

Dharmesh Shah BoS2010 Quote: Don’t make __software. Make __ superstars
Image credit: Betsy Weber

Services are low margin. Except when they’re not.” ~ Dharmesh Shah

Dharmesh Shah BoS2010 Quote: Services are low margin. Except when they’re not
Image credit: Betsy Weber

Give more than you take.” ~ Patrick Foley

Patrick Foley BoS2010 Quote: Give more than you take
Image credit: Betsy Weber

The hard part of feature design…what to leave out.” ~ Dan Bricklin

Dan Bricklin BoS2010 Quote: The hard part of feature design…what to leave out
Image credit: Betsy Weber

If you want to be different, you must be willing to embrace your negatives.” ~ Youngme Moon

Youngme Moon BoS2010 Quote: If you want to be different, you must be willing to embrace your negatives
Image credit: Betsy Weber

Competence is no longer a scarce commodity.” ~ Seth Godin

Seth Godin BoS2010 Quote: Competence is no longer a scarce commodity
Image credit: Mark Littlewood

What Is Fun Friday?

I created the Fun Friday category to be a collection of very short, and easy to read, posts. The intention is to provide useful information in a compact form factor. These posts will showcase short videos, graphs, top 10 lists, and anything else that can be digested quickly.

Now it’s your turn. What other meaningful business quotes have inspired you?

“The hard part of feature design…what to leave out.” ~ Dan Bricklin
What Startups Should Worry About: Peldi Guilizzoni’s 2010 Business of Software Conference Presentation
Posted on by Zuly GonzalezCategories Business of Software, Events, Startups2 Comments on What Startups Should Worry About: Peldi Guilizzoni’s 2010 Business of Software Conference Presentation

This post is part of a series of posts from the 2010 Business of Software conference (BoS2010). For a summary of the conference, and an index to the other presentations, click here.

Peldi’s 2010 Business of Software presentation: “Do Worry… Be Happy!” – One thing they don’t tell you about quitting your job to become a startup CEO is how much you’re going to worry about things.

Peldi Guilizzoni & Zuly Gonzalez at BoS2010

Peldi was my favorite BoS2010 presenter. He started off with a really cool Bobby McFerrin video, and kept the energy going all the way to the end. His presentation was candid, and very inspiring. I hope they post Peldi’s presentation online, because there is no way I can do it justice here.

After his presentation, I had the opportunity to talk to Peldi. He’s such a nice guy! He’s very humble, and someone you can easily relate to. He’s the type of guy you want to succeed.

What Startup Owners Worry About

What do startup owners worry about? Everything! What should startup owners worry about? Well, not everything.

It’s actually really hard to choose to ignore certain threats, but it’s crucial for your business’s success. Deciding what’s worth worrying about is not an easy task, and can seem daunting at times – but it’s a necessary skill to learn. And even more important than learning to decide which concerns are worth worrying about, is learning to cope, and live with, the uncomfortable emotions that result from trying to ignore these lesser important issues.

In his 2010 Business of Software presentation, Peldi shares some of the issues that concern him, and discusses which ones are worth worrying about, and which ones are not. Peldi also shares some tips to overcome, and deal with, those fears.

Why You Should Listen to Peldi

Why should you listen to Peldi? Well just take a look at his revenue chart below. $2M in just 27 months! I’d say he knows a thing or two about running a successful software business.

Peldi Guilizzoni's Balsamiq Revenue Chart at BoS2010
Image credit: Mark Littlewood

What Startup Owners Should Not Worry About

Peldi started off by discussing three common fears startup owners worry about, but shouldn’t.

Asking customers to pay for your product. We have been paying for products since the beginning of time – I want something you have, so I’ll trade you for something you want (usually cash). But, for some reason we have this weird aversion towards paying for software. (Side note: I’m not totally sure why that is, but I suspect it has something to do with the internet being “free”, and the wide abundance of free software you can find online these days. My guess is that pre-internet it wasn’t so hard to imagine someone paying cash for a piece of software.)

So, don’t worry about asking customers to pay for your product – it’s a basic concept. And in general, if you have a decent product, people will pay for it. HubSpot co-founder, Dharmesh Shah, and other startup experts, suggest you start charging for your product as soon as possible, because you get way better feedback from paying customers.

Not having enough time. There will never be enough hours in the day to accomplish everything you need to. We all have this problem, and it’s one that will never go away, but worrying about it will only make things worse – and take your time away from working on real issues. Prioritize your tasks, and complete the most important ones first. The rest can wait until tomorrow.

Pirates. Software pirates that is…not the ones off the coast of Somalia. You’ll never have 100% guarantee that no one will steal your software. You can take steps to prevent most people from doing so, but you’ll be hard pressed to stop a really determined individual. Plus this is becoming more of a non-issue these days with the movement towards SaaS. The little bit of money you will lose from software pirates is not worth the time spent trying to stop them. Don’t worry about it, take it as a compliment, and move on.

 

Peldi Guilizzoni Discussing Software Pirates at BoS2010
Image credit: ©John M. P. Knox

Common Startup Fears

When to quit your full-time job. After working on his wireframing tool part-time for several months, Peldi decided to take a leap of faith, and quit his job at Adobe. This was before his company was profitable. Making this decision is not an easy one, and will vary from person to person. There are a lot of things you need to consider, such as:

  • How much savings you have
  • Who else this decision will impact (do you have kids, a wife/husband, or other dependents)
  • Your risk tolerance
  • How far away your startup is to profitability
  • The likelihood of success

Having competition. You should embrace your competition. Competition is a validation of your market, and your idea. If there is no competition maybe that means there is also no market to be had. In fact, you want to create something so good that people will want to copy it. You can also learn from your competition’s mistakes to make your product even better.

Building the wrong product. What if no one wants to buy your product? That’s a reasonable fear to have. It’s important to be flexible, and realize that your final product may not look anything like your initial vision. The key is to fall in love with the problem, not the solution. Listen to your customers, and modify your product if necessary. In the beginning, customer feedback is far more important than money, because it allows you to shape your product into something that the masses will want, and pay for.

Work/Life balance. You can’t spend every waking moment working on your business, and ignore your family in the process. You need a good balance that works for you, and your family. After all, they’re probably the reason why you’re doing this. Peldi’s strategy is to work while his family is sleeping, so they won’t know that he’s ignoring them.

Not being noticed. These days everyone wants to get on TechCrunch, or on the front page of Digg. The trick is to be so remarkable you can’t be ignored. Getting noticed is great – it’s what you want. But be careful what you wish for, it can also be a bad thing if you’re not prepared.

Picking a niche that is too small. A small market can be a good thing for a startup, because it is much easier to lead. Peldi gave the example of Bingo Card Creator – a very small market. Seriously, when was the last time you had to create your own Bingo cards?…When was the last time you played Bingo? Although it’s a tiny niche, Patrick McKenzie (a BoS2010 Lightning Talk speaker) is making it work. And so can you.

Peldi Guilizzoni discusses small niches at BoS2010
Image credit: Betsy Weber

Finding advisors/mentors. Peldi has no formal method for finding advisors. The most important thing is to be yourself. The best advisor is one who you feel comfortable with, and can trust. It does you no good to have the top expert in your field (better known as Frank to those of us who attended BoS2010) as an advisor, if you can’t feel comfortable enough with him to discuss all of your business problems in excruciating detail. So look for someone you click with – someone who would be your friend even without the expertise.

Learning. Peldi suggests you read as much as you can. Especially before you start your venture, because you’ll be too busy to read after you’ve started. Peldi highly recommends you read You Need To Be a Little Crazy: The Truth About Starting and Growing Your Business. The book details all the horrible things that can go wrong while running a business. Peldi says it’ll scare you more than anything. However, if you still decide to pursue your venture after reading it, not only are you truly committed to the idea, but you will also be ready for the troubles that lay ahead.

Dealing with the business side. Most software startup owners are technical people. We are good at what we do technically, but we have no previous business experience. Developing a great product isn’t enough to succeed, you also need business brilliance. Most of us have never worked with accountants or lawyers in the past, dealt with payroll or EULAs, or heard of terms such as accrual versus cash or NAICS codes. Peldi says you need to fake it. Pretend you have expensive lawyers and accountants behind you. Pretend you are the CEO of more than a one-man startup. Always say ‘we’ instead of ‘I’, even if it is just you.

Feeling like a fraud. Peldi has been extremely successful with Balsamiq, yet he doesn’t feel he is at the same level as the other BoS2010 speakers. Feeling like a fraud is not all that uncommon among successful startup owners. In fact, research shows that 40% of successful people consider themselves frauds, and 70% of all people feel like fakes at one time or another. It’s fine to have these thoughts. The trick is to use these thoughts to improve your product. Don’t let them take over you, and destroy your business. Talk to an advisor, or other people you trust, about your fear – they will help you.

Raising capital. This isn’t always necessary, especially for software startups which require very little capital to get started. One option is to retain your full-time job, and work on your venture part-time until it takes off. Another option is to use your savings to fund your startup. Unless you are looking to be the next Facebook, don’t worry about raising capital, make due with what you can easily get.

When should you start hiring. It’s important you don’t hire employees too early. You could end up in a situation where you don’t have enough work for them, but are still paying them just the same. Peldi waited a long time before hiring his first employee. His suggestion is to “wait until you are about to die” before hiring someone.

Forgetting something important. A great way to remember things is to write them down. Peldi chooses to blog. Blogging is a way to record what you’ve done, what you want to do, and ask for feedback from your customers/readers. A side benefit of blogging is its marketing effect. Blogging shows your human side, and hopefully your personality will shine through. People rather buy from people than companies.

Creating a business plan. Writing a business plan is a good way to organize your thoughts, and really think about the viability of your business idea. However, it’s not something you should obsess over. The truth is that nobody reads business plans anyway. It’s a must have if you are looking for investors, but don’t fool yourself into believing that they will actually read the whole thing. And when an investor does look at it, he is just looking for all the reasons why he shouldn’t do business with you. Investors also know that the financial projections in your business plan are completely unrealistic. So write a trimmed down version for yourself, and move on.

Key Takeaway From Peldi’s BoS2010 Presentation

As you run your business, you will worry about almost everything, however, not everything is worth worrying about. Only worry about the important things – the rest will eventually work itself out.

Fun Facts About Peldi

I learned a couple of things about Peldi during his talk:

Memorable Quotes

Some memorable quotes from Peldi’s BoS2010 presentation:

  • “Be so good they can’t ignore you.”
  • “Fall in love with the problem, not the solution.”
  • “Create something so good people will want to copy it.”
  • “If you work while they [your family] sleep, they won’t know you’re ignoring them.”

More on Peldi Guilizzoni

Peldi Guilizzoni of Balsamiq at the 2010 Business of Software conference
Image credit: ©John M. P. Knox

Giacomo ‘Peldi’ Guilizzoni is the founder and CEO of Balsamiq, makers of Balsamiq Mockups, a wireframing tool for programmers, UX experts, and even business types. Balsamiq has been a bit of a poster child for a new wave of tiny but ambitious bootstrapped tech startups, netting over $1.6M in sales in the first 18 months of operation and gathering rave reviews. Peldi is a champion of the “radical transparency” trend that’s sweeping the Internet, through his posts on the Balsamiq blog.

You can find Peldi’s personal blog here, and his Balsamiq product blog here.

Follow Peldi on Twitter here.

What are your thoughts on Peldi’s presentation? If you attended BoS2010, did I miss an important point? What was your favorite part of Peldi’s presentation? What was your key takeaway from his talk?

 

Measuring Customer Happiness: Dharmesh Shah’s 2010 Business of Software Conference Presentation
Posted on by Zuly GonzalezCategories Business of Software, Events, Startups6 Comments on Measuring Customer Happiness: Dharmesh Shah’s 2010 Business of Software Conference Presentation

This post is part of a series of posts from the 2010 Business of Software conference (BoS2010). For a summary of the conference, and an index to the other presentations, click here.

Dharmesh’s 2010 Business of Software presentation: “Building A Great Software Business: Notes From The Field”

Zuly Gonzalez & Dharmesh Shah at BoS2010

I’m a big fan of Dharmesh. I’ve been following him for sometime now, so I was really looking forward to his presentation.

Before heading out to Boston, I watched Dharmesh’s 2009 and 2008 BoS presentations (to see the videos go to the end of this post). It was nice to see some recurring topics in his presentations, because that indicated to me that these were important enough ideas for him to repeat.

Dharmesh’s 2010 talk was packed full of insights – customer acquisition, customer retention, customer data, transparency, and venture capital. Dharmesh provided us with lots of useful equations and data throughout his presentation.

How to Measure Customer Happiness

To have a successful software business, you need happy customers. It’s simply not enough to just acquire lots of customers – you need to retain them. And to retain your customers, you need to make them happy.

Let’s look at customer acquisition first, and then customer retention.

Customer Acquisition

The total Cost Of Customer Acquisition (COCA) is determined by dividing the number of dollars spent on Smarketing by the total number of customers. Smarketing, as defined by Dharmesh, is the total cost of sales and marketing.

Definition of Smarketing by Dharmesh Shah at BoS2010
Image credit: Mark Littlewood

The Lifetime Value (LTV) of a customer is the value, in terms of dollars, that you get from a customer for the expected length of time he’s your customer. For example, if you have a customer that pays $10/month, and you expect him to be a paying customer for 4 years, then the Lifetime Value of that customer is $480.

LTV = annual revenue from customer * expected length as customer

A customer’s LTV should be greater than your COCA. If it’s not, that means it’s costing you more money to acquire a customer than you’re making from that customer. That’s a bad business model…and sure to fail! If the LTV is much greater than the COCA, then it’s time to start pumping more money into the business to start acquiring more customers.

These may seem like obvious points, the problem is that very few of us actually take the time to do these calculations. Keeping an eye on these numbers will help you make better business decisions.

Customer Retention

It takes a fair amount of capital to obtain a customer. Therefore, once you acquire a customer, it’s important to retain him as a customer for as long as possible. Customer churn, or customer turnover, is the rate at which your leaving customers are replaced by incoming customers.

Customer churn can be measured in several ways. The simplest way is to look at what percentage of customers are actually staying onboard versus leaving. Another way to measure customer churn is to look at what percentage of leaving customers are high paying customers versus customers on your lower priced plans.

When looking at customer churn, the higher the number of customers staying on compared to the number of customers leaving, the better. However, the above methods of looking at customer churn can lead to deceiving numbers. A better way to measure customer churn is to measure the discretionary churn.

Discretionary churn measures how many users actually have the option of canceling your service. For example, a customer tied into a 6 month subscription plan, may not be happy with your service, however, he won’t have the option to cancel for another 6 months. So, discretionary churn is a much better way of measuring customer churn than the above methods.

Customer churn can be a good measure of a customer’s happiness with your product or service. However, it is imperfect, because the absence of churn doesn’t necessarily indicate customer happiness. And this takes us to HubSpot’s Customer Happiness Index (CHI).

Customer Happiness Index (CHI) by Dharmesh Shah at BoS2010
Image credit: Betsy Weber

What Is the Customer Happiness Index

The guys at HubSpot created the Customer Happiness Index (CHI). CHI is a number from 0 to 100 that measures the probability any given customer will cancel, given the option to cancel. CHI is determined by three factors:

  • Frequency of product use: By looking at the frequency of use, you can assume that the more a customer uses your product, the happier they are with it, and the less likely they are to cancel.
  • Breadth of product use: By looking at the breadth of use, you can assume that the customers who use more features, are happier with your product, and again are less likely to cancel.
  • Sticky product features: This one is important, and probably not so obvious. Sticky features are features that provide a lot of value to your customers, especially when compared to your competition. Those customers that use sticky features are likely to be happier, and thus less likely to cancel. HubSpot has found that this factor is more important than frequency of use and breadth of use – irregular users that use sticky features tend to stick around longer than those that use frequently and use lots of features.

By religiously following the CHI scores of customers, HubSpot can identify early on which customers are unhappy. They can then take a proactive step towards fixing the problem by calling up the customer before they cancel. This action has helped HubSpot keep about 33% of their previously unhappy customers.

Dharmesh did warn against taking their success rate too much to heart. Although they may have prevented a customer from canceling this month, if the customer’s happiness level isn’t brought up significantly, odds are that customer may still cancel the following month.

The cool thing about CHI is that it can be used to measure other aspects of your business, not just which customers are likely to cancel. You can also use CHI to:

  • Measure the quality of the leads generated by your marketing efforts
  • Make decisions on which product features to keep, remove, add, enhance, etc
  • Make decisions on how much to compensate your sales folks.

How to Improve the Customer Happiness Index

“Invest in the experience, not the product, and everyone wins.”

Dharmesh used a quote from Kathy Sierra’s 2009 BoS presentation to set the mood:

Don’t make ___(fill in the blank)____ software. Make ___(fill in the blank)____ superstars. For example, don’t make marketing software. Make marketing superstars.

The key is to think about your customers. Think about what they want out of your software, what they want to accomplish. Make them awesome at what they do. Case in point, meet Molly:

HubSpot's Molly the teddy bear presented by Dharmesh Shah at BoS2010
Image credit: Mark Littlewood

The stuffed teddy bear in the picture is Molly. Molly is the customer’s stand in, and is required for quorum at all of HubSpot’s management meetings. Most meetings don’t happen without someone saying, “What would Molly say?”. It’s a good way to remember that your software is really about your customers, and making them great at what they do.

However, Dharmesh did point out that although customers are very good at finding problems, they are not so good at finding solutions for those problems. So remember that it is your job to find solutions to their problems. (Side note: This reminds me of the old project management cartoon about project requirements 🙂 )

Increasing Customer Happiness Through Services

Another way to increase a customer’s CHI score is by providing consulting services. HubSpot decided to not only offer consulting services to their customers, but to also charge for those services. Why charge? If a customer pays several hundred dollars for a few hours of consulting they will:

  • See more value in it, than if it were a free service. Something that costs $500 is definitely better than something that costs $0, right?
  • Get more out of their consulting session. If the customer is paying $500 for consulting you better believe that they are going to get their money’s worth out of the session. The customer will ask questions, and make sure they understand everything, just because they paid for the service.

A customer that knows how to get the most out of your product will be a happy customer (assuming you have a good product), which will increase their use of your product, as well as their LTV. Therefore, you should work towards making that happen – whether you charge for it or not.

HubSpot’s profit margins on consulting are actually very low. However, they continue to offer these services because it increases their customers’ CHI scores, which in the long run means greater overall profits for the business.

How to Gain (and Keep) Customers With Branding

Your brand is an important part of your business – and of acquiring and retaining customers. The most important thing your business can do (aside from creating a brilliant product) is to not screw with your customers. Dharmesh strongly advises against the Salesforce philosophy – don’t trick people into buying your product. To put it in Dharmesh’s words, “Brand is what people say about you after you have left the room.”

HubSpot Tidbits

Dharmesh shared some HubSpot philosophies, including how much company information they share, and why they decided to accept venture capital.

Transparency Trumps Secrecy

Except for salary information, all of HubSpot’s data is available to all employees. All data! This includes financial information. (Side note: This seems to work for HubSpot. I recently saw the below tweets from HubSpot employees.)


Sorry to brag, but I love my job @hubspot!
@dianafreedman
Diana Freedman


I interned @HubSpot and all I got was this lousy need to substantiate everything with data. 😉
@chimmely
Caroline Himmelman

Although HubSpot makes all of their data available to its employees, the data is off limits to the public. The reason is that they don’t see any real benefit to doing so.

The Evilness of Venture Capital

HubSpot is not Dharmesh’s first startup, but it is his first venture backed startup. Most of us think of pure evil when we think of Venture Capitalists, but VCs can play an important role in some businesses. Most software startups don’t need venture capital, and are actually doing themselves a disservice by pursuing it. But there are a few select startups that can benefit from venture capital.

If you are aiming for quick, high growth (like Facebook), or are starting a business that requires a lot of upfront capital (like a hardware business), then it might make sense to obtain venture capital. At HubSpot, they made a decision early on that they:

  1. Wanted to become the dominant player in the industry.
  2. Were looking for rapid growth.

Because you need a lot of money to accomplish both of these goals, they chose to look for venture capital. A key part of HubSpot’s strategy was to acquire these funds before they actually needed the money. The reason being that:

  1. It is easier to obtain venture capital before you need it, than it is if you are already in need of it.
  2. You get better terms early on because since you aren’t desperate for the money you can always back out.

Do note that once you take VC funds, you move from solving your customers’ problems to solving your investors’ problems. And the two rarely align with each other.

Key Takeaways From Dharmesh’s BoS2010 Presentation

These are the main points I got out of Dharmesh’s BoS2010 talk:

  • Log as much data as you have, even if you can’t use it now. You may be able to use it in the future.
  • Measure your customers’ happiness. Come up with your own metrics if you have to, but look at those numbers closely. Determine what makes happy customers, and what doesn’t, and adjust your business model accordingly.
  • Dream big, and execute small. If someone offers to buy your company, seriously consider it, even if it’s not what you dreamed of. Selling gives you cash, which allows you to move on to your next dream 🙂
Memorable Quotes

Some memorable quotes from Dharmesh’s BoS2010 presentation:

  • “Don’t make customers happy. Make happy customers.”
  • “Brand is what people say about you after you’ve left the room.”
  • “Venture capital isneither necessary nor evil.”
  • “Services are low margin…except when they’re not.”
  • “Invest in the experience, not the product, and everyone wins.”
  • “Customers are very good at finding problems, not at finding solutions for those problems.”
  • “Transparency trumps secrecy.”
  • “Dream Big. Execute Small.”
Dream Big, Execute Small presented by Dharmesh at BoS2010
Image credit: Betsy Weber

More on Dharmesh Shah

Dharmesh Shah is the founder and CTO of HubSpot, a venture-backed software company offering a hosted software service for inbound marketing. Prior to HubSpot, Dharmesh was the founder and CEO of Pyramid Digital Solutions. Pyramid was a three time recipient of the Inc. 500 award and was acquired by SunGard Data Systems in 2005. Dharmesh is also the author of OnStartups.com, a top-ranking startup blog with over 20,000 subscribers and 100,000 members in its online community. Dharmesh is the co-author of Inbound Marketing: Get Found Using Google, Social Media and Blogs.

You can find Dharmesh’s startup blog here.

Follow Dharmesh on Twitter here.

Dharmesh’s summary of his 2009 BoS presentation can be found here, on his blog. And his summary of his 2008 Business of Software presentation can also be found on his blog.

What are your thoughts on Dharmesh’s presentation? If you attended BoS2010, did I miss an important point? What was your favorite part of Dharmesh’s presentation? What was your key takeaway from his talk?

Leading a Tribe: Seth Godin’s 2010 Business of Software Conference Presentation
Posted on by Zuly GonzalezCategories Business of Software, Events, StartupsLeave a comment on Leading a Tribe: Seth Godin’s 2010 Business of Software Conference Presentation

This post is part of a series of posts from the 2010 Business of Software conference (BoS2010). For a summary of the conference, and an index to the other presentations, click here.

Seth’s 2010 Business of Software presentation: “Are you afraid to truly make an impact? The opportunity for linchpin organizations and the people who run them.”

Being a great programmer is no longer sufficient to succeed. Creating a piece of software that works is no longer an indicator of success. Times have changed. And in a world where we are bombarded with brands and products, we must create a unique experience to succeed.

Seth Godin at Business of Software (BoS2010)
Image credit: Mark Littlewood

Today, everyone and their mother can whip up a working software program. Competence is no longer a scarce commodity.

Because the cost of producing and marketing a software product is closely approaching $0, it is becoming an increasingly crowded market, full of competition. It is now harder than ever to stand out from the crowd. As a result, success in the software industry is now dependent on your ability to create a tribe – a movement, a place of belonging, a community – and lead it.

Creating a Tribe and Leading It

People want to belong to a tribe – it’s human nature. People are also waiting to be led, and it’s your job to lead them. But how, you ask? You must be creative, but most importantly, you must tap into their emotions. Make them feel something – joy, compassion, anger, outrage, importance, etc. Make them feel like they are part of something bigger, something lasting, something good.

Seth gave several examples during his talk, but there was one example I felt a deeper connection to. Seth explained how one man from the SPCA was able to lead a movement to make the city of San Francisco a no-kill city. He later went on to accomplish the same thing in other U.S. cities, with no money and no recognition. How did he accomplish such a feat? Because this was about more than just one man, and because it touched the hearts of people like you and me. This was about improving the lives of many.

Your mission, should you choose to accept it, is to create a movement, and lead it! But software that’s boring will never turn to a movement. When considering a product’s viability, Seth says there are four things you should ask yourself:

  • Who do I need to reach? And how can I reach them?
  • Will they talk about my product to others?
  • Do I have permission to continue talking to them after I’ve reached them?
  • Will they pay for my product?

 

Seth Godin at the 2010 Business of Software conference (BoS2010)
Image credit: ©John M. P. Knox

The Network Effect

In the old days, using software was a lonely experience. Today, software is used by millions to connect with each other. Question number 2 above, is central to making the network effect work for you. If you create value and provide a unique experience for your users, they will market your product for you.

When considering a software’s network effect, ask yourself:

  • Is my product creating a demonstrable value?
  • Is it easy and obvious for someone to recruit someone else?
  • Is my product open enough to be easy to use, but closed enough to avoid becoming a commodity?

Key Takeaway From Seth Godin’s Presentation

The best way to sum up Seth’s Business of Software presentation is to use his own words: “Software won’t succeed because it was written by a brilliant programmer. It will succeed because of the business brilliance behind it.”

Memorable Quotes

Some memorable quotes from Seth’s BoS2010 presentation:

  • “The reason to fit in is to be ignored.”
  • “Software that’s boring will never turn to a movement.”
  • “People are waiting to be led.”

Seth summarized his BoS2010 presentation on his blog. You can find it here.

More on Seth Godin

Seth Godin is a renowned speaker and bestselling author of 10 books that have been translated into 20 languages, and have transformed the way people think out marketing, change and work. He is responsible for many words in the marketer’s vocabulary including permission marketing, ideaviruses, purple cow, the dip and sneezers. His latest book, Tribes, is about leadership and how anyone can become a leader, creating movements that matter.

You can find Seth’s marketing blog here.

Follow Seth on Twitter here.

View Seth’s 2008 Business of Software presentation: ” Too important to be left to the marketing department”

What are your thoughts on Seth’s presentation? If you attended BoS2010, did I miss an important point? What was your favorite part of Seth’s presentation? What was your key takeaway from his talk?

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