Andrew: Before we get started, have you ever wanted to visit the land down under? Australia is a hotbed of innovation and has a thriving entrepreneurial community, and the heart of that community is Fish Burners. Fish Burners is a co-working space in Sydney, Australia which is home to the single largest community of entrepreneurs and business people in Australia. If you’re thinking of coming to Australia for a visit, or if you’d like to try working from Sydney, start your trip at fishburners.org. They have a range of membership options for all kinds of businesses and individuals and they host regular events where you can cannot with some of Australia’s most influential business people.
Next, do you need a single phone number that comes with multiple extensions so anyone in your company can be reached no matter where they are, even if they happen to be in Australia? Go to grasshopper.com. It’s the complete virtual phone system that entrepreneurs, like me, love.
Next, do you need a lawyer? It’s not the local guy who doesn’t really get start-ups, not the really expensive guys who want a piece of your business, but one who really understands the start-up community and is there to help you. If you do, go to Scott Edward Walker of Walk Corporate Law. Alright, let’s get started.
Hey there freedom fighters! My name is Andrew Warner. I am the founder of mixergy.com, home of (is this the right way to do it?) the ambitious upstart. I don’t know why I’m punching. Do you know why I’m punching at the screen, Sam? Because boy, it is tough to freaking build a business! It looks like so much fun when you’re reading everyone else’s blog. It feels like, of course it’s so easy to do it. Some guy came up with the five steps to success. It’s so easy! But for me it just feels like it’s a constant fight. Sometimes a fight against myself, sometimes a fight against the elements. Alright, enough about me.
The reason people came here is not to see me punch the camera, but to hear an interview, and this is a really good one. Back in August 2012, about a year ago today, I interviewed this guy who said, Andrew, I failed before. Things weren’t going for me, and then I found a way that worked. It wasn’t an overnight success but it worked. And I interviewed him about it. The entrepreneur is Sam Ovens. His company is called Snap Inspect and what he did was he had this really… He had a process where he found his potential customer’s pain, he figured out how to solve it, and then he just bootstrapped a solution for them.
And the reason I wanted to invite you back on, Sam, is I want to see where you are now, a year after you found this process. It wasn’t easy back then. It still wasn’t easy after the interview, but I want to hear how you grew the company. So Sam, welcome back!
Sam: Thanks, glad to be here.
Andrew: When we talked, do you remember what kind of revenue you were doing?
Sam: I’m guessing $2500. That’s the number that comes to head, per month, $2500 a month.
Andrew: And to many people, you were a hero back then because you bootstrapped it, because you made sales before you even launched it, because you are a guy with a software company who didn’t know how to write code. You just figured out a few way of getting by. But at the time, were you flush? Were you set?
Sam: So, I was covering, essentially covering costs and a little bit more. So covering costs netted about $500 surplus to, you know, try and grow the company with.
Andrew: So $500 to grow the company after you paid expenses?
Andrew: After living expenses?
Sam: Oh. No, I didn’t have any living expenses at the time.
Andrew: Okay. Why didn’t you have any living expenses at the time? Where were you living?
Sam: I was living at home in my parents’ garage and that’s actually where I did my last interview from.
Andrew: Where the cars used to be parked, you were sitting there with your bed and a desk and that’s where you did your work and that’s where you slept?
Andrew: Okay. You were on the right path but you still had some challenges, and I have a list here of some of them. One of the things that you told me is, Andrew, it’s harder to go from $2500 a month where you were at the time to where you are today, which we’ll find out where the revenues are. It’s harder to go from there to here than it was to get your first $2500. Did I understand that right?
Andrew: Why? What are the challenges? It seems like getting your first $2500, building your software, that’s the toughest part. Everything else seems like cake.
Sam: I guess it’s, you know like, it’s figuring out to scale, right? But it’s figuring out, you know, the, you know, because we used to put a lot of effort into getting one customer. Like a lot of time, a lot of phone calls, a lot of nannying, babysitting them, getting them on board. And it’s figuring out, or if we can’t afford to do this for every customer. And we don’t have the time and it’s just not profitable. It’s figuring out how do we systemize that? You know? How do we onboard more customers without having to do so much work? And where do we find more customers? You know? Like what channels. It’s also a big thing is product markets that which is you know, adding features, simplifying, trying to get it, you know, you know close to what the market wants, product market fit.
Andrew: So even though the product was still today essentially it looks like what your prototype looked like, there were still some tweaks in there that needed to be done in order to get a product market fit?
Sam: Oh yeah, of course.
Sam: Like that massive thing has been in development. You know, version one was good. Version one was enough to get my first 15 paying customers and $2500 in revenue. Version one was awesome, but you know to scale up and you know to go off to bigger customers, ones that have 100 users, etc., to go into different markets you need to develop. So I’ve had a full-time developer working full-time ever since we last spoke almost.
Sam: I think ten months I’ve had a full-time developer now. Yeah.
Andrew: Wow. Alright, so let’s see. Who is the product for? Who is Snap Inspect made for?
Sam: So Snap Inspect is a property inspection app for property management companies.
Sam: They essentially use it to inspect rental properties, so it’s the iPhone app. They check off items, take photos, and it automatically creates a report.
Andrew: And you told us that you went after them because you looked at the help wanted ads and you said, who is buying help wanted ads? Whoever is buying the most is growing the most and those are the kinds of companies that you were going after. And then you started cold calling them one at a time and getting to understand their problems, getting to understand the solution you need to build for them, and then building it and selling it to them, or actually selling to them, and building it, and then getting them on recurring revenue. That’s the first customers.
Andrew: Where’d you get your second set of customers?
Sam: I guess that’s kind of when I worked out how to make advertising work. So my first customers I brought on, you know, very manually through reaching out to them. And you just covered exactly how I did it. So my second batch of customers came from when I worked out how to make, you know, Google Ad Words pay.
Andrew: Google Ad Words was the next place where you got customers?
Sam: It was actually. Yeah. I just figured out a couple of, I figured out a couple of key words people were searching for that were essentially looking for what I had and created some ads and, you know, that started feeding through a little bit more flow of free trials.
Andrew: How much money were you spending in the early days on Ad Words?
Sam: I think like my first budget for Edwards was $500 month.
Andrew: Okay, $500 a month. So really keeping it simple.
Andrew: And then how long did it take you to break even on Google Ad Words?
Sam: Just, I’m figuring out to actually measure that. Like, it took me about three months.
Andrew: Three months to even figure out how to measure?
Sam: Well, to get some data. It was a process, right? Like I didn’t even know you could track that sort of stuff. So three months from when I started to when I learned what my ROI (?) from Edwards actually was.
Sam: Yeah, and whether it was worthwhile continuing to do it.
Andrew: How did you learn to do that?
Sam: Just reading on, you know, blogs and I even learned how to set up Google Ad Words actually from one of your courses.
Andrew: Oh cool.
Sam: It was with the guy, was it transcribing? Or…
Andrew: Proofreading Pal.
Sam: Proofreading Pal, that’s the one. I knew it was something to do with a service to do with text. Oh that’s a low member, but the way he, he had a like step by step way to set up a basic Google Ad Words campaign. And it’s funny, that’s still today, that’s how my AdWords campaigns run.
Sam: So, that’s how I learned, and in there I think he brushed on very lightly how to measure conversions.
Andrew: So, setting up groups, why was that so important to you?
Sam: What? Setting up what? Sorry.
Andrew: Oh, sorry. Setting up Ad Words. Didn’t you say setting up Ad Words groups is one of the key parts? Why is that so important?
Sam: AdWords housing, Ad groups, like, cause, for example, you only ever have two ads going at all times inside and Ad group which houses a keyword, two ads and that’s one Ad group. And for that keyword you’re always completing two ads and, you know, you’re consistently trying to beat your best one. And housing them out to separate things like that, I mean, it’s just more simple.
Andrew: Okay, it’s…
Sam: You know it’s…
Andrew: I’m sorry. Go ahead.
Sam: That, I mean, AdWords is a whole beast of its own. I mean, yeah, that course that I watched that’s how I started AdWords and it’s profitable. We still do it. We haven’t stopped.
Andrew: When you weren’t measuring what kept you going with AdWords? I mean 500 hundred bucks is not that much money but it’s a lot of money to guys who are just scrapping by and living in his parent’s garage. What kept you going?
Sam: Well, it was generating trials. It was generating trials and for me that was kind of like a feel good [??]. Right?
Sam: I mean at least people are trying my software so I was like it’s doing something. What I didn’t know is it generating customers. So, the free trial that Ad Words creates are those people signing up. That’s what I didn’t know and you know I was able to measure that later on.
Andrew: Okay. So, you’re starting to at least get people to try. Were you learning from the way they were trying your software, how to improve it, what features to add?
Sam: Oh yeah.
Andrew: You were?
Sam: So, let me think how I can best describe the biggest breakthroughs I’ve had in terms of product.
Andrew: Because I know when you were selling one-on-one you were really learning a ton and that clearly influenced the product. Now that you’re starting to experiment at this stage in the story with Google AdWords, is it just trying to make money on it or are you also learning to improve the product or learning to at least improve the sales page at that point?
Sam: Honestly, I was looking to improve everything because what I had was a well-educated guess of what the market wanted. And it was a well-educated guess because I talked to the market before I built the product. It still wasn’t exactly what they wanted and so, you know, the major areas I was looking at was one the messaging. So, what are the key benefits, what should the headline be, like you know, what are the key parts of this app that people want – like trying to learn that. Because everyone knows there is about one-hundred features to a piece of software but which ones do you actually talk about? I mean you can’t talk about all hundred.
Andrew: I see, and so because you were buying ads and testing different headlines with Google AdWords you could tell which headlines were grabbing people in and those words are what people are drawn to and the features that they represent are the ones most important.
Sam: Yeah. Exactly. And then, on the product side of things, I mean, we removed features. That was one thing we did. We started calling out features.
Andrew: For example?
Sam: Yeah. I can give you a really good one. We assumed, or I assumed, that probably managers would have individual portfolios. For example, let’s say you have a five person property management company. Each person would have a hundred properties and the other property managers couldn’t see that person’s, you know like Chinese walls in between them, and boy was I wrong with that one.
So, we actually added a ton of complexity to our software trying to get that to work, and when we started giving it to customers they were like, this isn’t how we do it. And I had to reverse all of that. We had to change, you know, the foundations of our software. Talk about a month to change. So, we essentially removed something that we built. That’s the danger of building on assumption. That was one of my few assumptions that I had and it was wrong. You know I should have gone to the market for that one.
Andrew: Okay, and so after three months you say you started to break even. Did you start making a profit on it after that?
Sam: On Snap Inspect?
Andrew: Yeah, off of Google Ads?
Sam: Oh, Google Ad Words. So, Google Ad Words, it took about four months to turn a profit on it. Because I didn’t know until month three what we were actually doing and then I was able to adjust. And about four months into it we were turning a profit on it. Yeah.
Andrew: When you say a profit, do you mean that the lifetime value of the customer is higher than the cost of buying an ad to reach that customer? Or do you mean you were making a profit on him as soon as he bought?
Sam: So, month one profit. So total ads spent for the month was less than revenue collected from those customers, from those clicks for the month. Yeah.
Andrew: I see. By the way, I clicked on the pricing page, the pricing link on your page, to see what you charge so that I could bring it up here in conversation. It’s all, it’s hidden. The pricing page just says we have …
Sam: Yeah, so you can change the URL if you just go, if you remove it and go SnapInspect.compricing. It will just bypass the opt-in page.
Andrew: Why, I guess the reason you do that is, you say anyone who is interested in pricing, is interested in the product. I’m going to have them give me their email address in order to get the pricing.
Andrew: And that’s one of the things you do that’s unconventional but it helps you collect leads.
Sam: Yeah. Thirty a day.
Andrew: Thirty a day.
Sam: Leads yeah. Through that one opt-in.
Andrew: You and I, we recorded, of course for Mixergy, about how you did consulting on the side so you could make enough money to pay your developers and keep yourself going.
And one of the fundamentals, one of your fundamental beliefs is, you need to collect leads. You need to have a sales funnel that includes getting traffic at the top, and then underneath it collecting and saving those leads. You can’t just have, get traffic, sell them, go off on a beach somewhere.
Sam: Yeah. It’s multi-stepped.
Andrew: I’m sorry?
Sam: It’s multi-stepped. I mean, the way we work out everything at SnapInspect is visited website, opted in, free trial, activation which is did use the software, so did one inspection, and then sign up.
So we measure all of our percentages along that line. And we are constantly trying to improve the conversions between each one.
Adding in an opt-in, so you could go visited website, free trial. If you put an opt-in in there, people might visit website, opt-in, leave. Then you’ve got an order respond going to them. Then they come back for the free trial. So you can improve your conversions from visitor to free trial if you add an opt-in in the middle.
Andrew: How do you keep track of people’s progression through your funnel so that you can keep track of the revenue and tie it back to the expenses?
Sam: Yeah, so that’s, it gets pretty complicated depending on how deep you want to go into the data.
I mean, at the beginning I was just able to use spreadsheets and Goggle Analytics and things like that. And having my developer put little tracking things in the app, so whenever someone did a first inspection it would like log that data somewhere so I could get him to pull a report and he could tell me.
So for the first, for at least the first eight months we were doing it manually.
And then I’m, you know, we now had more revenue to play with. I moved to (?) Metrics and that is, you know, when you value data and you sort of switch from being a guess-entrepreneur to a data-driven entrepreneur, you know (?) Metrics is an awesome tool for that.
Andrew: How hard was it for you to learn to use it?
Sam: Well, first, I didn’t value that when I first started out in business. I was like, “Why do I want to know all these metrics?” You know, everything was on gut. And you can start a business on gut. That’s the thing. You can start a business on just talk, conversations and talking with people, and gut-feel, and whatnot.
But when you’re coming into that part of the business where you’re trying to scale it from that two and a half thousand up, you know, that’s when you start to having to pay attention to the metrics.
And it’s like, I think it start of becomes a game when you put the numbers in because you kind of forget about the other things. You’re just always looking at numbers and trying to influence numbers. And when you start doing that, it’s amazing how quick the business grows.
Andrew: Really? I thought you were going to say that you get so connected to the data that you forget about the product and the product isn’t made with the same understanding of the user anymore and you’re saying, “No, it actually connected you back to the user’s needs better.”
Sam: What data did was it showed me where I needed to have the conversations. So, if I spotted a gap, like why are people having a free trial button, not doing a first inspection? That’s what the data would show me. And I instantly can hone in on that one area and I would start calling the people and then having those real conversations. At least I knew what I was asking them about. You know what I mean? Then I could take their feedback, fix it and then go back to the dialogue [SP]. You know what I mean?
Andrew: You’re calling up people. I guess you ask them for their phone numbers as a part of registration. In my business, people tend not to pick up the phone. Property inspectors – are they still phone people?
Sam: Yes. To get a free trial of Snap-Inspect, you have to give us your phone number so we have their phone numbers from the start. We always call them. In the B-to-B world, I think it’s normal to call. In the B-to-C world, it’s not as normal. I think e-mail is probably used more in the [??] world. We are dealing with entrepreneurs because you don’t ask for a phone number anywhere.
Andrew: We started to. Actually, we used to, we stopped and we started again. I would collect people’s phone numbers. I would call them up and they don’t answer their phones. Frankly, I never answer my phone unless I see on caller ID that it’s someone that I know and if I happen to have their name in my address book, which I tend not to do anyway.
Sam: In the B2B world, it works. That’s what SnapInspect does. I’ve never tried anything else so I can’t really comment.
Andrew: I think it also has to do with the kind of customer you picked. You wanted to pick someone that was more accessible than the average entrepreneur. They have the money [SP], but they also need it to be reachable. Is that right?
Sam: Exactly. Being able to get in contact with them was an essential criteria in which market I’ve picked. I’ve seen a lot of people try to do software for lawyers and things like that. They’re impossible to get on the phone. They’re impossible to talk to almost. That makes things harder. Property managers are quite likely in that you will always get them. It’s rare that you will even get voice mail.
Andrew: So, here’s what I’m getting: first batch of customers came from the phone, second batch of customers came from Google Ad Words. Before you even get to the next batch of customers, you wanted to perfect your funnel so that when people are coming in the door, they are actually going through a process that would eventually result in revenue for you. So, maybe now is a good time for us to talk about what the stages are for your funnel that you set up for yourself.
Sam: How I look at everything is traffic. That could be the first one, just people visiting on the side. [??], which is us capturing some sort of information from them, email address, name, phone number, whatever. Then, free trials, which is basically a…A free trial is more of a better lead [SP]. It’s a good lead. What you do is when you get the people who don’t want to go for the free trial, you nurture them towards the free trial. Then, when people are on the free trial, you nurture them to sign up.
So, I have two different stages of nurturing. I have two nurturing tunnels, one for the just the objective to get them on the free trial, one for free trial users where the objective is to get them to sign up. Once they’re signed up, then it’s about keeping them for 90 days in software. It’s like the [??] risk time. Most turn [SP] happens within 90 days of signing up. Then we nurture them to make sure they get on-board properly, sit up, rolled out between all the different staff members and we keep them there for an essential 90 days. Then, it’s just satisfying and, you know, making sure we handle support, you know? That’s basically the whole final of my business right now.
Andrew: Okay. I noticed that even though your product is essentially an app, you’re selling your service on the web, not within the app, right?
Sam: Yeah. So, I mean, we have a web app and a mobile app, and we decided to put the billing in the web app. So you sign up for Snap Inspect through the web app, you enter your credit card and you pick plan on the web app. You just use the mobile app to do the inspections. The benefit of that is you don’t need to pay Apple at 30 percent commission.
Andrew: And you get to keep your relationship with your customers. You get their credit card information, you get the rest, so if you want to upsell them on your site you don’t have to get permission from Apple or Google or anyone else.
Sam: Yeah, and it’s, I mean it’s how a lot, I mean everyone in my case it’s how they do it. Like, the businesses.
Sam: Yeah, it’s a good way to do it.
Andrew: At this stage of your company’s development, you are still doing consulting work, right?
Sam: So, it was around about the stage where our company was at $3,000 to $4,000 a month.
Sam: And monthly recurring revenue, like I already said per month. And, you know I was looking at the numbers and we were covering costs. We had a little bit of money that we could, you know, spend on ad words and try in different channels. And I knew that what I had was, you know, was good. I knew that the product was good. I knew that people wanted it and there was a need for it and that, you know, it was going to be a good company. I knew it was good. But what frustrated me was growing. Like, we just weren’t growing fast. Like, we’d add, I think we’d usually add about four to five customers a month.
Sam: And that just wasn’t fast enough for me. Like, you know what I mean?
Sam: I wanted, when you know that you’re holding something that can help like, you know, a ton of people, you just want to get it to all of them like as quickly as possible. And that was what was really frustrating me and I knew channels that worked and I knew that if I got this message in front of people that, you know, there would be a high chance that they’d buy. And so what I needed was essentially money to scale, money to scale up my company from, you know, $3000 to $4000 month, you know into six figures, you know, and then onwards.
Andrew: Did you try to get funding from investors?
Sam: Well, I’m in New Zealand, so that stuff doesn’t really happen here for a start. And so it’s a lot. From what I know about it, it’s a long process. Like it’s going to become like your job for at least a few months. You know, nine to five sort of thing, and I’d rather keep my focus on, you know, the company and I didn’t want to give up equity and I figured I’d gotten this far, right? Surely I can figure out how to get, you know, to the next step. And, yeah.
Andrew: Okay. And so you were doing consulting where you were kind of, let me see how to explain this. Sam and I, to the audience, Sam did a course on Mixergy about how he did consulting, how he got his customers, how he had those customers taken care of that didn’t suck up all his time and divert him from Snap Inspect. He did that course and it’s available at Mixergy Premium, or will be soon after this interview is up. I’m trying to think of, Sam, what’s a good way to explain to people what you did and give them a broad…
Sam: Sure. So…
Sam: So I realized that I needed another source of income to, you know, to fund the growth of Snap Inspect. And so, you know, I had a few skills at that time. I knew how to capture leads. I knew, you know, how to write basic copy. And I knew how to use, you know, I knew how to sell. I knew the basics of sales and marketing. And I figured this stuff could be very valuable to other businesses. So I decided to do consulting, helping other businesses with, you know, the stuff that I already knew myself.
And I decided to start a consulting business and use the money I made in there to fund the growth of Snap Inspect, because I knew in consulting it’s much more of a cash business. You know, a product business takes… A product business, it takes a while before, you know, it’s really flowing a big amount of money especially a subscription base, when people are paying $100, $150 a month. I mean, you know, you need quite a lot of them to make decent money per month.
Andrew: And it’s also high enough that it’s not an impulse buy. People aren’t coming on to Snap Inspect and saying, hey you know what? I got an extra $200 in my pocket every month to just throw out the door. No, they’re more deliberate about it. I get it.
Sam: So, I mean, but with consulting I mean I was able to make, you know, pretty good money per month after a while of course. When I started out I was only making $1500 here, $1500 there, and I would use that $1500 to invest into Snap Inspect, which was awesome. But I, you know, eventually I figured out how to grow it up around $35,000 month. This is the consulting business.
Andrew: The consulting business is now doing $35,000 a month?
Sam: And that’s purely, yeah, that’s purely off retainers that this was no new clients.
Sam: So I don’t do any new work for anyone right now. It’s purely just the clients I’ve had that have me on retainer. And I use that money to fund the growth of Snap Inspect. And you know it was things like, you know, like hiring some consultants that knew, you know, they knew conversion optimization. They knew, you know, ECO. They knew Edwards.
And then they could come in and look at the business and, you know, and fix it up a bit and it was talking with people who knew what they were doing. It was also being able to spend more money on, you know, Edwards, being able to have a full-time developer, you know, to constantly be working on the product. It was, yeah, and then you know one of the biggest things was being able to hire people. So being able to hire my first full-time sales rep who would just do sales.
Andrew: I see.
Sam: Like, as an entrepreneur, I was the sales rep, but I would be doing like, products, customer support, marketing, consulting, like sales. Like I mean, I wasn’t good at anything because I had to do too many things.
Andrew: You told me before we started, you were putting in 14 hour days.
Andrew: With the stress of running a business.
Andrew: So, let me see if I understand this. First, you make phone calls. Next, Google is the next progression for getting customers? Hiring a sales person who goes after new customers for you?
Sam: The next progression was basically working out what worked from all of our testing and, you know, and, you know, pouring more into those channels. So identifying, you know, I found it really good to go back to the dialer and to go back to conversations and go, what caused this person to buy? This person bought, but why? Why did they buy? And then, this person didn’t buy. Why didn’t they buy? And we started to work out, this is why people bought. Well can we make sure that every new free trial has that same experience or that same conversation during their free trial and let’s see if they’ll buy, too. So we’re trying to replicate what it was that made people buy.
Andrew: What are some of the things that you tried? You’re saying you tried different channels and tried different approaches, to talking to people through those channels, and then you picked the best of the best. What are different channels that you tried for finding customers?
Sam: Oh, everything from direct mail to cold calling to cold email to organic search, Facebook ads, LinkedIn ads, Google ads, I mean and then inside Google ads you’ve got search and you’ve got display. You’ve got re- targeting. I mean, we tried a lot of stuff.
Andrew: So you’re just trying everything. Tossing all of these ideas against the wall and seeing which…
Sam: Not all at the same time, but…
Andrew: I’m sorry, all at the same time or not?
Sam: No, not all at the same time.
Andrew: Over what period of time?
Sam: I mean, since we last spoke essentially the last…
Andrew: So the last 12 months you were just trying a bunch of things and focusing on the ones that worked. When you say that you did LinkedIn, Facebook, cold email, snail mail, etc., how much money and time were you devoting to each of them to see if they really did work for you?
Sam: So, you know, we always had some money in the budget where we, you know, like me might say, alright we’ve got $500 here. What should we do with it? Should we put it into Edwards? Or should we try out another channel and see how it goes? I mean, never really more than $500 a month.
Andrew: Okay. So $500 a month to experiment and to see what worked. I don’t know how you can learn LinkedIn ads, Facebook ads, cold emails, etc. for $500 a month in such a short period of time. Were there some that you focused on because you got into or others that you didn’t spend nearly as much time on?
Sam: I mean, I did have to learn how to use each one, and I just Googled it or found, you know, something on it. You can, I mean you can find pretty much anything. And it did take a lot of time, you know, to set up a campaign. It would take me like, you know, two days sometimes to set up a new campaign, and I mean the beauty of my market is you’re never dealing with big numbers especially in the online stuff. So if you did LinkedIn ads, you’re not getting that many clicks at all really. And same with Google ads.
You’re not getting it because it’s not like CRM. You type in CRM, I mean, God knows how many searches that thing gets a month. You know, property inspection software compared to that? I mean it’s a lot lower and the competition is way less fierce. So you don’t have to be that good at Facebook ads to, often there will be no other competitor. Like you know what I mean? So, you don’t have to be that good at it which was good because I wasn’t that good at it.
Andrew: Yeah. Okay, so you’re trying all of them. Of all of these different channels, which one worked best?
Andrew: Do you want to reveal it?
Sam: I mean, I won’t reveal my best ones, but I mean, Ad Words consistently delivers good, not a bunch, but it consistently delivers, you know, trials and sign-ups. It’s very consistent.
Sam: And it slowly trains upwards as the market becomes more sophisticated.
Sam: So you know about sophistication levels of markets. For example when the cell phone came out, you know, its market penetration was one percent, you know? Only one in, you know, a hundred people had a cell phone. Now, everyone does. And cell phone penetration is about 1.8 to one right now. There is 1.8 cell phones to every person. It’s 180 percent penetration.
Andrew: That means that many people have multiple phones?
Sam: Yeah. So that means that that’s a very sophisticated market. And so with property inspection apps, about, I would say about three percent of the market has a property inspection app right now.
Andrew: I see.
Sam: It’s a very new technology and it’s unsophisticated. Now what will happen over time is it will become more sophisticated just like the cell phone market. And that’s what we’re seeing in, you know, Ad Words. We’re sort of seeing this sophistication come up. And that’s a big part of my overall strategy is getting everything dialed before, you know, sophistication starts, you know, really… Because eventually, I say in three years’ time, every single property management business will have an inspection app, whether it’s mine or one of my competitor’s. I don’t know. But they will have one. And that’s just how markets work.
Andrew: Okay. And then you said that there was a way that you talked to them that worked. What do you mean by that?
Sam: You mean the messaging?
Sam: Yeah. So it’s like, it’s like what… You know you’ve got, with a business there’s a million different things you could say that you believe are all valuable. But you can’t say all of those things. You’ve got to work out what’s the hardest hitting sentences and statements that I can have with a customer.
Andrew: What’s the hardest one for you? The one that really hits them and makes them feel like I’ve got to keep talking to this guy Sam, I need to try his software.
Sam: What we found out that it’s reports.
Sam: So. Yes.
Andrew: How about something sexier, more fun? Reports? Most people will go running with the word report.
Sam: Without ad we’ve got a couple sides to it. One side is the inspection, so you do the inspection. The other side is you create the report which is like a PDF document that has the photos and the data from the inspection. We realize that most people, the biggest pain point was the creating of the report and most people cared about the reports. So we changed our conversation to be more report oriented than inspection oriented. You know what I mean?
Andrew: Because you knew?
Sam: We knew what was more of value to the customer, we’re constantly doing that, we still change today, we’re still measuring new things.
Andrew: So then why do you need a salesman for? How does he fit in?
Sam: So the main one is that it’s follow-ups.
Andrew: Follow-ups. I see, okay.
Sam: So I mean, you know? You have a whole bunch of trials, I mean three trials, which generate a ton of free trials right now. And you know? We need to follow-up with them like throughout different every trial like how’s it going? You know? Is there anything that we can do to help out, you know what I mean? And…
Andrew: So you’re saying that if I just try your software, I’m going to get a phone call from a salesman?
Sam: Yeah, you’ve got me to talk about now one of the biggest parts of my business. Yeah, you’re right. You’ll get four.
Andrew: Four phone calls? So I try your software and not so long after I try it do I get a phone call?
Sam: Ten min.
Andrew: Ten minutes, within 10 minutes someone calls me up?
Sam: In between 10 minutes and an hour. 10 minutes and an hour.
Andrew: Okay, you just fire off on imagining a message to a salesman saying call. Alright, what’s the next phone call? Of what stage in a process?
Sam: Well, I said day four.
Andrew: Day four. So is triggered by the day, not by the hour.
Sam: Yes, so it’s all in the area. When you create a free trial and snap inspect, it will go into the CRM and it will assign it to the salesman and it will immediately create a task and the A1 task will be introductory is what we call it. And the sales service it will be an introductory core and we have a script a very single core. So day one is the introductory core and we have a script to say exactly how that core should go and that’s how we know at that point in time what’s the best way to engage with the customer because we’ve looked that a previous sign up and we did that by a fluke, but now because it worked we built to then and made sure it happens to everybody.
Andrew: What do you mean? What kind of thing did you say?
Sam: So in our introductory core we introduce the sales rep to the trial user to tell, you know? To say that there is a human here that’s you know? Going to be able to help you, you know? Get on board and weight, we ask them our magic question and what I like to call the stumper question is how are you currently doing your property inspection?
That’s just the most beautiful question in the world because it tells you how they’re currently doing it which a lot of the times it’s pen and paper or if they’re using a computer’s product it’ll tell you right then and there and that they’re using a computer’s product you can go, okay so why you know ? Are you interested in looking at Snap Inspect? And it’ll instantly give you the reasons why and once you’ve got those down, you write them down in a [?]. You know that you talk to them about that and you’ve won the deal. That’s why we have the phone calls and Internet, that’s why we have our stumper question and…
Andrew: What’s the stumper question?
Sam: I told you, how are you currently doing your property inspection?
Andrew: Oh, that stumps them.
Sam: So I mean in another business for example like Dane’s business, paperless pipeline. So the stumper, yeah his stumper question could be how are you currently managing your real estate transactions? You see what I’m saying?
Sam: Whatever your software automates, you ask how are they currently doing that process.
Andrew: And then you’re saying why are you interested in this so that you identify the reasons that you can get them to…
Sam: Why they’re looking to move.
Andrew: I see.
Sam: Whether it’s from pen and paper or from a competitor’s product or from anything. At that point, on day one of their trial, you know how to tailor the conversation to them over the next 14 days to win their business.
Andrew: Sam, how do you learn to do this? Most internet entrepreneurs say, I’ve got an app Apple is going to sell for me. You figure I’m going to do it here. I’ll do it on my website. It makes more sense. Fine, I get that. Most internet entrepreneurs say, I’m on the internet! My website is my sales vehicle. You say no, I’m going to have a salesman with a sales process and I’m going to actually have those call sheets, I mean those scripts that I would have hated if someone gave me on the job, but I understand the value of them now that I’m an entrepreneur. How do you know how to do all this? Where do you learn it?
Sam: Well it’s not one place. I mean I can tell you that. It’s just…
Andrew: What about the idea of making phone calls? Where did that specifically come from?
Sam: Okay, yeah, I know where that came from. When you ask one specific question I always know the answer. So, it was from opting in for free trials of very good software companies. So for example, Infusion Soft or the Sales Force, you know, take a free trial of that. Enter in your real details. And what I did is I just mapped out what they did.
So day one, what email, what phone call? I recorded the phone call then I broke down their phone call. What were they trying to do? I noticed they had stumper (?) question. I essentially copied. It’s weird, actually that’s the answer to the more broad question is I just copied what successful people do. I didn’t invent any of the stuff myself. I just copied it off companies that are really good at doing what they do, but for my own industry.
Andrew: Last time you were on here, you said you got bombarded with contact from people who saw you on Mixergy. You even got customers out of it?
Sam: Yeah. That was pretty…
Andrew: So now, sorry?
Sam: That was pretty funny. I was not expecting that.
Andrew: So now all these people who are watching you are hearing you say, learn from the best, I can imagine, I feel bad that many of them are going to go through and create accounts on your site, and they’re not inspectors! They’re just software guys. What are you going to do about that? That seems like a really big expense for you.
Sam: Well, it’s the first, so we have rules of engagement. That’s what we call them inside our company. So that means when a lead comes through, we have a system that we have to follow called rules of engagement, and it’s have they been a lead before? That’s step one. Step two is, are they qualified? So we instantly look at their data like name, email, phone. If they’re not a legitimate business, what we will do is we’ll just, like we just, it’s an unqualified lead. It gets taken out of our funnel. There won’t even be a phone call made.
Andrew: I see.
Sam: So we filter out all unqualified leads, because obviously we get them every day. You know, software company from Malaysia. We get those, I don’t know why Malaysia. We seem to get a lot of those. And we don’t do the full sale. We’re not going to ask them a stumper (?) question, you know? If Andrew Warner signed up for Snap Inspect we’re not going to try and sell him that.
Andrew: I see.
Sam: We wouldn’t, we’d just get rid of it, you know? It’s not a qualified lead.
Andrew: I see. So if someone calls you up from a clone, you can take a look at their domain and see, hey Snapper Inspect is an absolute copy of us. We don’t need to call them up and give them more information about us.
Sam: You mean if one of our competitors try to go through our funnel?
Sam: Yeah, we know their IP addresses and we just direct them to a fake end.
Andrew: One of the interesting things that happens with some of my guests is they tell the story of how they built their businesses and people in the audience think, oh that’s so easy! It’s an overnight success. I’m going to copy it exactly. And I’ve actually seen people copy the pages, copy the sites of the people who I’ve interviewed and it fails. And then they end up trying to sell it on Flippa and often that fails too. I’m not going to, I was going to say the name of one or two of them but I figured let’s not give it any more attention. If someone were to copy you, what part is likely to stump them?
Sam: So many parts. I mean, I mean, the first part that’s likely to stump them is the product. I mean, they’ve got to get a product that is, you know, able to, you know, compete with mine. That would have been a lot easier when I was in version one but now, you know, I’ve tested a lot of things. I’ve had, you know, we’ve built a lot of stuff now. I mean, that’s a big undertaking. I mean they could still copy it, and then what would be holding them back? I mean, the processes, the internal processes.
So when someone signs up for a trial, how do you deal with them like, and then, I mean, you know, there’s so many different things. And then getting customers is a big one. I know a lot of other competitors have struggled.
Andrew: I know you didn’t say it now where you got your customers. Maybe in the future we’ll find out what the best source is while it’s still fresh.
Sam: We have two that produce 95 percent of results.
Andrew: And I’m going to ask you in a moment what those revenues are right now. I mean we’re catching up and hopefully we’ll get to do more interviews with you in the future and keep watching your progression. But let me ask you a few mechanical questions. CRM. You said that you have a good one that works for you. What’s the CRM that you use?
Sam: Straight sales force.
Andrew: Straight sales force. Email. You say that you do a lot of nurturing of customers. Often before they buy from you they get a few emails. What email software do you use?
Sam: Mail Chimp.
Andrew: Mail Chimp. Oh wow! I thought it would be something even more sophisticated. For analytics you’re using KISSmetrics?
Sam: Yep, and just basic Google Analytics as well.
Andrew: Any other piece of software that you’d recommend?
Sam: It’s hard to think off the top of my head. I mean, having, I think having one of the best thing about our company is the way we have our CRM set up. You know, just, we have processes for everything. And no lead goes untouched or un-nurtured. And, I mean, CRM is a big one. It would probably be the main thing that I’d recommend. And sales forces for a start-up business? Forget about it. Like, I know I’m still a start-up but I mean, a business that’s trying to get its first $5000 in revenue, forget about sales force. Just use Excel or a free CRM.
Move to, the only reason we moved to Sales Force is when our lead flow was getting out of control. So when we started to generate hundreds of trials a month and generate, you know, a hundred plus leads a day, I mean that’s when we needed a CRM system because things were just getting out of control.
Andrew: Alright. Let me do a quick plug here because I mentioned a couple of times here that you’ve done courses on Mixergy.
Andrew: Anyone who’s watched this far and is interested in going to the next level with Sam here, there are a couple of courses that he recorded that will answer a lot of the questions that we couldn’t get to in this interview. The first is, how did a guy who doesn’t develop get his software developed? That’s the key. If that’s the thing that all of this comes from, if that’s what he’s selling using sales force and people and Google ads, etc., how did he build a software? How do you, if you’re listening to us, if you’re not a developer, how do you get software built?
Well, Sam, in a course on how non-developers can get software developed broke his process down step by step including the parts that I think other entrepreneurs would hide, would pretend they didn’t do. It’s all broken down and it’s going to be available on Mixergy Premium to all premium members. He also did a course on how he got his consulting revenue, how he built up his consulting business. You know, you’ve seen a lot of people who I’ve interviewed here talk about how consulting is how they got started but it took them years to break away from consulting to focus on their software because every time they wanted to focus on their own stuff a client would complain and draw them back in, or they’d run out of money and they’d need to go out and hunt for clients and that would take up time. And all those processes would keep them from building what they really wanted, which was their software.
So how did Sam do it? He’s got a course where he teaches that. So if you want to take this conversation to the next level, those are the two courses I would recommend. They won’t be published instantly after this interview. We’re going to dole them out a little over time so that you can have some time to absorb them. But you’ll learn how to get a developer if you’re not a developer and how to generate sales so you can fund your business from consulting. It’s all available at mixergypremium.com. I urge you to sign up now so you can take advantage of those courses. And of course if you are, enjoy those courses. Put them on your iPhone, put them on your computer, wherever you feel comfortable, and just go through them.
Sam has broken his process down step by step. One of the things I like about you, Sam, is you, like very few people I have interviewed, know yourself and your process well enough to break it down and explain it. And that’s what made your courses so good. Mixergypremium.com, guys. I guarantee you’ll love it. By the way Sam, there’s a template that we didn’t get to talk about in the premium course.
Basically, your process is this. You find customers and you talk about how to find the right customers. You then write them a letter with this great headline that they will open up the letter. It just grabs them and makes them either call you, or as soon as you call them, excited to talk to you. I didn’t get to ask you how you write that letter. You said, ‘Yeah, I could make that template available to people so that they could copy and paste that into their own sales process.” How do we get that?
Sam: I can just put a download link on my one page website which is samovens.com.
Andrew: A few minutes ago I went to samovens.com. Here’s what I saw, three things: a photo of Sam, I saw a link to Snap Inspect, and I saw a section on getting consulting services from Sam that said no. Go away kid. I don’t want your business right now. I’m focused on Snap Inspect. It’s not on the site now. You’re going to add it afterwards I’m assuming.
Andrew: Alright. What else do we have here? That template will be up on samovens.com. Current revenue. I’m looking at my notes. Where are we right now with Snap Inspect, in August, 2013.
Sam: It’s around $35,000 – 38,000. It’s hard to say because I don’t know whether I should account a customer we just won and backing our old revenue figures but it’s around $35,000 to 37,000 in a month.
Andrew: Alright. So over $1000 a day and it’s recurring revenue because when people sign up, unless they’re unhappy and cancel, they keep getting charged.
Sam: Yeah. Our return rate’s low. Most customers do stick around for quite a long time. Our first customer is still with us. I like to say that. It makes me pretty happy because they’ve been through the whole journey.
Andrew: I keep referring to the fact that we’re recording this in August. Today is actually August 7th. I don’t exactly know when we’ll publish and I’ll explain to you and the audience why at the same time. I was introduced to you, Sam, through The Foundation. Their site is thefoundation.com. It’s a program that teaches entrepreneurs how to build their businesses, how to get their first-, what is it, first five customers?
Andrew: First ten customers and get their software companies built etc. You were one of the first people to go through that program and you did well so The Foundation introduced me to you. They introduced me to a few other people. The only thing that they asked after that is can you please hold off on publishing all these interviews of people from The Foundation until we’re ready to do something with people from the audience who are interested in following up and hearing about The Foundation. I’m just going to wait for Andy Drish, the co-founder of The Foundation to give me a date.
It’s one of the courtesies that I give to guests and to people who introduce me. I can play with the date that we publish. I will not edit. I will not make the guests look good. I’m not here to do a promotion for the company, but I’m happy, of course, to publish when I can. There it is, Andy, we’ll talk to you about when to publish.
To the audience, thank you so much for being a part of this. Check out samovens.com where the template will be up and hopefully you’ll get to find out more about him. Check out snapinspect.com if you want to see the software we’ve been talking about. Please, be considerate. Hopefully, you’ll build a relationship with Sam in the future. You don’t want him to ever go back in his email and be like this guy was a pest trying to figure out every part of my business. Why should I ever get to know him? Be considerate always. Sam, thank you for doing this interview.
Sam: Thank you.