Software Social

MICHELE HANSEN Hey, and welcome back to software social. I'm MicheleCOLLEEN SCHNETTLERand I'm Colleen. MICHELE HANSENAnd we're inviting you to join our conversation about what's going on in our businesses.COLLEEN SCHNETTLERMichele, do you want to get started today?MICHELE HANSENYeah, so something I'm thinking a lot about is the golden goose of software: enterprise software.COLLEEN SCHNETTLEROh, man. Okay.MICHELE HANSENYeah. So I mean, you had mentioned a couple weeks ago how you have this dream that if you had a SaaS business, everything would be roses, and amazing. And there wouldn't be any problems. Right?COLLEEN SCHNETTLERCorrect.MICHELE HANSENAnd so the next level of that dream that a lot of people have is if they could just sell enterprise software, where, you know, the companies would never cancel. And they have these giant expensive contracts and like, everything is amazing, right? COLLEEN SCHNETTLERYep. MICHELE HANSENYeah. So I'm thinking about this a lot, because I feel like there's a lot of different ways to do enterprise and there's a lot of granularity in it that gets lost. And at a high level though, what I want to talk about first is how, one of the reasons why SaaS and especially small customer funded SaaS works and a company like ours, which only has my husband and I running it, but we have tens of thousands of customers is because our work has a one:many relationship. And so if you can picture that, every time we do work, we add a new feature, we add a landing page, you know, anytime we're doing work on our service, most of the time that work has a one:many relationship, we add a feature and it helps tens of thousands of people simultaneously, right? Or we add a new landing page and that helps us attract thousands of customers simultaneously. COLLEENSure. MICHELEThe thing about enterprise work on the other hand, it has a one to one relationship. There's a lot of custom work that has to be done. And so in that way, it's almost a little bit more like freelance work.COLLEENOkay.MICHELEAnd so that's important because when when looking at enterprise software and serving enterprise markets, there's all these different things that companies have as requirements. And very often those things can be things that maybe only that one particular customer has, or if you're doing something like on premise, that's a one:one relationship. And as a really small company, we need to maximize for work that has a one:many relationship. If I'm sure any sense at all, stop me.COLLEENYeah, no, you're making great sense. I just, I am curious why you're even thinking about enterprise software. And I say that because I used to work for a Fortune 500 company, and, man, we bought really expensive software, but you probably had to sit in 20 meetings before we agreed to buy it. So I know that there's, I guess, like, why are you even thinking of it? Is it is it just to have a different revenue stream?MICHELE  We reached out to buy big enterprises.COLLEENOh, I didn't know that.MICHELEThis is my next sort of thing, that there's different ways to serve big enterprises. And so the traditional way, as you mentioned, is 20 meetings, you know, three golf outings, you know, five fancy dinners, right, like all that kind of sales cycle, right? So there's that level of it. We're not doing that level. But we do have people in large organizations who reach out to us but this has some different flavors. So one of my favorite ways of serving enterprises is basically when someone within a team has something that they need to get done as part of their everyday work. And for whatever reason, they need to do it faster or they need to do it better. They don't like the tools they have and so they go off and find something themselves. And then they make the case to their boss or to their leadership, that you should use the product. And this either gets put on that team's credit card, called a P Card in most places, which might have a say a $500 monthly limit per service, which is why people like Patrick McKenzie, recommend that price point so often, $499 or $999, because those are sign off levels for price points, actually. So enterprises have a word for this, they call it "shadow IT" which is this kind of like derisive name, because they're implying that it hasn't gone through the big procurement process and the security reviews and everything, but it's a great way to sort of shortcut into a big organization that has reliable ongoing needs, that's going to keep reliably paying you. And then the other way that we often get it is people reach out to us and they do need to use it across the entire organization. And we have to go through security reviews and contract negotiations and whatnot. And this is all my mind because I realized the other day that I probably spend about a third of my time on this kind of work, whether that's having phone calls or negotiating contracts, or any of those other details that go into it. But that I don't think we've ever had a single customer with a custom negotiated contract cancel on us. COLLEENAh, yeah. MICHELEBut you don't necessarily have to have a big sales force to get that kind of thing that kind of plan levels through, but it does, it does take a lot of specific work. And the thing is, is when I'm doing that, when I'm having a call with one huge customer, or I'm negotiating contract with them, that's work that's going for just that one customer. It's a one to one relationship. And so, this is where this really comes into play for a small SaaS company like us, is when we're talking about things like on premise where it's a one to one relationship. But so any work that we might do on that, or like help, we might need to give them with their installation of it, that's all one to one and needs to be priced accordingly. But the thing is, is customers who request that often have these, you know, compliance requirements, you know, whatever industries they're in, that they can't get around it. And so they have to pay a lot more for something. So I'm thinking about all this, but there's a there's a great site that I found recently called enterpriseready.io. And it goes through a lot of the features that enterprises might require. And it was interesting looking through this, you have things like Single Sign On, audit logs, integrations, things like that, because absolutely, these are things that big companies require. But we don't have all of them. And we're selling to big companies all the time. And so my point here is that you can be selling to enterprise without necessarily doing that whole enterprise song and dance on the sales side. And you can say like, you know, we'd love to work with you, here's what we have. We don't have single sign on, or we don't have, you know, SOC2 audits, or we don't have audits of our financial statements every year. And if the buyer in the organization loves your product enough, maybe they've gotten to try it for free or on a lower plan with their boss's P Card, they can advocate to their legal department and actually get through those things. And you don't even need whatever those requirements are. Doesn't happen all the time, but I think it's really helpful to look at a list like this, and then also remember that it's not necessarily all requirements that you might need before you try to launch into that space, which I think is a headspace that people get in in a lot of different ways of, "My product doesn't have every single feature that someone could possibly ask for. So I'm not going to launch it yet." COLLEENSo So do you guys ever reach out to enterprise? ...

Follow us on Twitter at https://twitter.com/SoftwareSocPodTranscriptMICHELE HANSENHey, Michele here. Just a quick note before this week's episode, in the second half [NOTE: starting @ 12 minutes] I talk about a controversial topic and use some strong language. So just a heads up in case there are little ears around. MICHELE HANSENWelcome to the software social podcast where we invite you to join our weekly discussion about what's going on in our businesses.MICHELE HANSEN  I'm Michele Hansen. COLLEEN SCHNETTLERAnd I'm Colleen Schnettler.MICHELE HANSEN  So Colleen, tell me, what's going on with your business this week?COLLEEN SCHNETTLERSo Michele, last week, I told you that I am building an image management service. And you asked me if anyone wanted that service. Do you remember what I said?MICHELE HANSENYou said maybe but at the very least you want it [yourself]...COLLEEN SCHNETTLERRight. And also, I haven't really asked anyone if they want it. So I kind of think, what I want to start doing this week is in conjunction with building the service -- which is pretty much almost done -- I want to start finding out if anyone wants it. So, right, it seems like such an obvious step [Michele: Magic words!] that I should be taking. So my commitment is to spend one hour a day trying to figure this out. First problem. Who are my customers?MICHELEAnd where are they?COLLEENAnd where are they? How do I find them? So since I'm building this as a JavaScript plugin, my customers or other developers, probably developers like me who do consulting so they want to optimize for time. I don't know how to find these people and ask them.MICHELE Have you looked in places yet? Like what have you explored? COLLEENSo here's what I've explored I put something on indie hackers literally no one okay. That's a good start. That's what I thought but literally no one responded.MICHELENo, I you know, I so I love any hackers but also I find that it can be very much like unless you get to one of the bigger threads there, it can be kind of a drive by with like people just putting their projects and there's just like so much and a lot of it's really good. Yeah, that it can be a bit tough to filter.COLLEENYeah, I've really I've, I've posted on Indie Hackers a few times, and I've never gotten any kind of engagement. And maybe it's if you I've noticed that the posts that are like, here's how my business was so successful, like those get a lot of engagement. MICHELEI wrote one of those (laughing)COLLEENBut there's nothing wrong with that, like, everyone loves those, right? Those are inspirational, like I love those posts, and I love getting advice from successful founders. But it feels like there's just not a lot of engagement with people who are just starting out. So that didn't work. So I tried Indie Hackers, I think I put something on Twitter and I had like three people respond, which is better than no better than no people. Right? What do you think? Like let's say I'm starting from zero and I'm also like, open into seeing what other ideas are out there as well. As we as you know, I've kind of been plugging away at idea generation for quite a while now. I'm definitely making my image management service, because I'm almost done. I'm going to use it for my clients. But I'm also open to hearing about, you know, other problems and other ideas. I like targeting developers, because I like using existing marketplaces, to try and sell what I'm building. MICHELEHave you looked at Reddit? COLLEENSo Reddit confuses me...MICHELEIt is one of my favorite places to recruit is it really can be a little bit. Yeah. Because if you find the right niche within Reddit and Reddit has, I mean, there are so many weird corners of Reddit, right? Which I think is part of what makes it a little bit intimidating from the outside. But there's so many great niches within Reddit that are so great to recruit from. There's also some really big communities. So there's, for example, the webdev community. There, but there's also some really small ones. You know, for example, when we were launching a HIPAA compliant geocoding service couple years ago, we wanted to do some usability testing. And there was a health GIS subreddit with like, 5,000 people in it. And I posted something saying I wanted to do some testing with people. And I'd give them a $25 Amazon gift card if they participated. And I got 70 responses. Wow. Like all from our target market customers. Like it was -- I was floored.COLLEENWow! That's amazing.MICHELEYeah. And so I think if you find the right, you know, the right community within Reddit, and you have, you know, a good, genuine post, explaining who you're looking for. And you have some sort of incentive there. I think even $10 to Amazon, or whatever, is, is probably good, you know, because people's time is valuable, and they're giving you something valuable, so I feel strongly that there should be something there. But you know, you really only need to talk to five people just as a baseline. So you're looking at $50 worth of investment plus your time, which could, you know, save you weeks or months of dev time that, you know, ends up getting wasted, because it wasn't what people wanted.COLLEENSo how would you recommend? This is like, this feels like Cold Calling Strangers like this feels very awkward, which is fine. I like people. But how would you like even recommend going about that?MICHELEYeah, so if I found a community...so let's, for example, say you doing web dev, though, that might be too broad of a community and I'm not super active on it myself. So I can't really speak to community norms. Some for example, don't allow you to, to post various things, so just always check their rules. Okay. Um, but I would say something to the effect of, you know, I'm building an image management service, blah, blah, blah, blah, blah is your -- you know -- and I need feedback. That's your post. And then in your, sorry, that's your title. And then in your posts, say something effective, you know, Hi, I'm building the service, like, here's what it's aiming to do. And I'm looking for some people to give me some feedback on it. If you can give me a half an hour of your time, I'll give you a $10 Amazon gift card, just send me a PM with some details about, you know, what kind of work you do and what interests you in trying the service and, you know, and make it very clear that it's not a sales call or anything like that. It's strictly for the feedback, because people sometimes are, justifiably wary that that it's not what it purports to be, right. Also, I would recommend creating a Reddit username specifically for this, whether that's your real name or your company name or whatever. Just so some weird post you made 10 years ago doesn't mean that surfaced with your name attached to it, you know. Yeah.COLLEENOkay, that's great. Okay, so that will be my, my weekly goal this week will be to actually talk to people who might be potential customers and see what they have to say.MICHELE Do you know what you want to ask them?COLLEENWell, I guess I'd kind of want to drill down on is this really -- to me, it's a pain point. And like I said, every client minus maybe two has had this problem. And there's so many different ways to solve it. And they're all kind of none of them are super easy. So I guess the answer to your question is no, I don't know what I want to ask them.MICHELE It sounds like you want to find pain and frequency. COLLEENYes. Right. I mean, how big of a pr...

MICHELE HANSEN: Welcome to the software social podcast where we invite you to join our weekly conversation about what's going on in our businesses. I'm Michele Hansen.COLLEEN SCHNETTLER: And I'm Colleen Schnettler.MICHELE HANSEN: So tell me, Colleen, what's going on with your consulting/transition-to -product business this week?COLLEEN SCHNETTLER: So, I have been stuck in the idea generation phase of trying to start a small business for quite a while. And I've had a lot of different ideas that I've chased down and they really have not amounted to much. So I've decided instead of continually searching for something, I'm going to build something that I want that I know I will use with my clients and throw it out in the world and hope it sticks. Exactly.MICHELE HANSEN: Dogfooding!COLLEEN SCHNETTLER: This, really, for me like a lot of the literature, I read about startups -- and I read a lot of literature about startups -- says not to code before you have an established market. But the truth is, it's something I want, it's something I know my clients will use (because I am their developer!), and I'm sick of kind of spinning my wheels. I feel like I need to take more action.MICHELE HANSEN: So, Colleen, what is this idea you're working on?COLLEEN SCHNETTLER: So I am working on an image hosting platform, I hate to use the word term platform, it's not really a platform. Basically, what I'm trying what I'm building is something that's going to be a JavaScript widget that you install into your site that's going to provide you with a drop zone UI, and then your users can drop their images into your drop zone UI. It puts them -- it's going to create cloud storage for you, and it's going to save them to the cloud, and the cloud will be under my business. I don't know if I explained that well. Well, it'll be in the cloud. I'll put them in front of a CDN. Because I think the CDN part's really important. And it's just going to return the URL. So that's my plan. And there's a lot of image management software out there. Actually, there's a ton of image management software out there. But there's nothing that's just really easy. Like when you're working on a small SaaS app, in my opinion, you just want to move forward as quickly as possible and you want to make progress and the stuff out there isn't bad... but I just want to make it dead simple, especially for like newer developers or developers who don't want to deal with a lot of image management or they don't want to figure out how to use AWS. When you're a newer developer, you're just learning how to develop, you don't want to then have to go spend hours and hours figuring out AWS, in my opinion. So it's just gonna make the process simple. It's gonna be a five minute install. You just drop the snippet in, you put the button on, and it will provide your users their drop zone and all you have to do is save the URL of the image. So now you automatically have your image hosted on the cloud. So you don't have to worry about that. Like I said, I have not yet, but my goal is to put in front of the CDN so you don't have to worry about that. And then you can use the image, you know, like you would any cloud image.MICHELE HANSEN: So have you talked to other developers who have talked about their frustrations with other image management platforms?COLLEEN SCHNETTLER: No.MICHELE HANSEN: Colleen! COLLEEN SCHNETTLER: So here's the thing I know. So here's okay. I know but like, I have come every client I have, I have this freakin problem and it really irks me that there's not a better solution. MICHELE HANSEN: That's worth something.COLLEEN SCHNETTLER: That's worth something! And so when I do talk, okay, that's not fair when I first started to talk to people, and there is -- I did talk to other people.MICHELE HANSEN: Before the pandemic, we talked to other people, right? In general...COLLEEN SCHNETTLER: Yes, before when I could TALK to people. So I have talked to people about this. And a lot of them use big. So so the people I know like they use big powerful solutions like enterprise-level solutions because they work for enterprise-level clientele, right. So a lot of my friends work for big, you know, fancy companies. And so they have these big enterprise solutions. And so I have looked at those solutions. And they're not bad, but they're a pain to set up. It's way more like there's one that's really popular in the Rails community. And it's fine, but like, it's just way more overhead when you just want your user to be able to add a couple images, right? Like it's a huge overhead to import this third party library and configure it, it's a whole thing. You got to figure out how to use it. It's a whole thing. Like, it's just too hard for what you're trying to do. So I am trying to take this thing that almost every application needs, your user usually has some kind of avatar most applicant. Most applications use some kind of images. So I'm just trying to take this thing that everyone needs and make it really, really easy. Like, just simplify the heck out of it.MICHELE HANSEN: It sounds like this is something that you experience frequently and is pretty annoying for you, which is a great place to be for a potential product is something that a user experiences frequently. And is something painful, you know, if you had if you had an idea, and it's something that isn't very painful for people and doesn't happen very often, that's usually kind of a red flag. But if you can find something that's pretty frequent and pretty painful, that can be promising.COLLEEN SCHNETTLER: Yeah, so the first iteration of this I built was just for public images. So it was like for your static assets. And I built that because like images are just a pain point for me because they're just annoying, right? Users -- they take these like they have these huge files, your designers give you these huge files. And you have to, you know, compress them and resize them and all this stuff. But the first thing I kind of built, which is this, the building blocks to what I'm working on now, was just public image hosting amongst teams. And that was cool. And I like that. But like, no one was really interested in that because no one cares so much about web performance. Very few people care so much about web performance was my experience that they're actually going to, you know, resize all of their images that are just their static everyday images, or they're just going to throw them behind a CDN anyway, so they don't care. But this problem, I think the thing about this problem is, it's a common problem. And there's many, many, many different ways to solve it. And I have seen as a consultant, I work for a lot of different companies over the past years, and I have seen all these different kinds of ways to solve it. And there's just no, but it just doesn't feel like there's an easy, consistent way like you'll have one app that uses this gem then one app and you and then one app that does it this way. And I feel like we're taking this problem that doesn't have to be so hard and making it harder than it needs to be.MICHELE HANSEN: And you know, as I hear you talk, what I what I think about is you were mentioning earlier how you consume a lot of startup literature and talks and advice on starting a business. And something that always comes across in those kinds of venues is how, you know, you should be passionate about it, you should be passionate about the business and you should be passionate about about what you're solving and whatnot. And, you know, I don't think there are any, you know, eight year old kids out there saying, "Mom and Dad when I grew up, I'm gonna solve image management software." But what does drive someone is experiencing a problem so often, that you are passionate about solving that feeling of pain, and I think...

MICHELE HANSEN: Welcome to the Software Social podcast, where we invite you to join our weekly conversation about what's going on in our businesses. I'm Michele Hansen, COLLEEN SCHNETTLER: and I'm Colleen Schnettler. MICHELE HANSEN: And this week we're giving you an intro to what this podcast is about and who we are and why we're doing this and why we're hoping you'll join us. COLLEEN SCHNETTLER: So Michele can you start by telling us a little about your software business? MICHELE HANSEN: Yes, so I am a co-founder of Geocodio (https://www.geocod.io/) which is a software as a service company. We do geocoding for US and Canada as well as data matching, and my husband and I started it about six and a half years ago now as a side project and we have run it full-time for the past three years. COLLEEN SCHNETTLER: So you're basically living the dream, is what you're telling me?MICHELE HANSEN: Some people would say that, I bristle at that a little bit, there's definitely a lot more dream to be had. But yeah, people do say that to me, especially people who are looking to create their own software businesses. Which is kinda the boat you're in. COLLEEN SCHNETTLER: Much like myself! I am a Ruby on Rails developer, I've kind of had a varied career. Always in tech. I started as an electrical engineer, stayed home with my kids for a few years, and then I started learning Rails and I built up a really successful consultancy. And that has been amazing, and a really wonderful journey for me, but I have always wanted to start a product business. There is just this dream of having a product business that you are in charge of your own life and your own business, you get to make your own decisions. That's something I've always wanted. And man, it's hard! MICHELE HANSEN: It is hard!COLLEEN SCHNETTLER: Right? You know, I read a lot of startup content. I have read a lot of books and I follow a lot of successful startup founders and there's so many stories out there that make it seem like -- I mean you don't hear about it until they're successful, so it makes it seem like it's easy, and I'm at the very beginning of this journey, and you know, I'm just getting started! So part of my impetus for doing this podcast with you is obviously to learn a lot about what you can teach people who are in the early stages of their business, and also to stay inspired and to share with people what it's really like to start a business.MICHELE HANSEN: I don't think you give yourself enough credit, Colleen, in saying that you're just at the very beginning. You have been working intently on this for over a year now -- I remember it was last summer when you came to me and you were so excited about an idea and this passion you had that was leading you to toward that idea, and you started doing user research on it, and having something that you're passionate about, and doing the work to see if there's legs to it, and then realizing that there aren't -- that is work. That is valuable productive work.COLLEEN SCHNETTLER: I hope so! Because it was quite a lot of work. And so just a brief overview, I had an idea to do something with the childcare industry. And I had a founder, someone I was going to work with, and she and I interviewed quite a few people  who would have been in our target market. So we kind of took the steps you learn about with idea generation and honestly the truth is -- we put in a lot of time and effort and found out it really was not a profitable business idea. So it's hard to get really excited about something and climb that mountain and then realize -- up! no one wants to buy it. MICHELE HANSEN: RightCOLLEEN SCHNETTLER: You know? At least we found that out before we started writing code.MICHELE HANSEN: RightCOLLEEN SCHNETTLER: Didn't you guys have some side projects before Geocodio?MICHELE HANSEN: Oh, many. And we had many projects in between that, too, that we've launched in the interim. And it's -- there's no lying that it's hard to find something that sticks, and as you said, no one cares about something until you're a success -- which is a really really lonely place to be for a very long time. You know, our first month we launched Geocodio, we made $31. We thought we were a ridiculous success because we were shocked that anybody wanted to pay us. We thought our product was pretty terrible. And we were we were truly -- we were so shocked that we hadn't even written the code that would tell Stripe to bill people. That was how surprised we were that anyone wanted to pay us. And we worked on it as a side project for a very long time. And it wasn't until just before I went full time, that people started kind of noticing what we were doing and asking us to talk at conferences or, or being a podcast. There's that was a very long time. Where Yeah, exactly like you were saying, you don't hear a lot of those stories. You only hear the stories when people are successful. And I think what we're hoping to capture here is some of that granularity that goes in week by week when you're launching something. And then also the kinds of things you face on a daily basis when you have launched something and it's gotten to the point where you can work full time on it, what what are the kinds of things that you might be facing at that point, and and how do we tackle them COLLEEN SCHNETTLER: So you guys had the business for a few years before you went full time, right? MICHELE HANSEN: Yeah. Yeah, three, it was like three and a half years until I went full time. And then my husband went part time, six months later. And then full time, six months after that, like, honestly, we were terrified of paying for health insurance on our own. And that was a big thing that kept us from going full time. We probably could have gone full time a lot sooner. But given the experience I had just a couple months ago trying to buy health insurance, I'm glad I put that off. But it's possible -- not to scare anyone. But there's a very real fears that come into it. Even when you do have something that works and you have customers and your revenue is increasing. You're going to have a whole new set of anxieties to face so -- congratulations! Yeah, no. Everything is solvable. COLLEEN SCHNETTLER: I think when you're where I am in this process it seems like so far away right like like it seems like "Man, if I could just make a product that people want to buy my life will be rainbows and sunshine and easy every day!" MICHELE HANSEN:  I can see that and also you know our everyday is we've got something that's that's launched that, you know, has recurring revenue and you know supports us and everything and every day there's still people who are upset with us. Every day we discover things with our product that we're like, "Oh my, that is so obviously bad. Like we need to fix that. Like how is that been like that for so long? This is embarrassing." Like that, that happens to happened... today. It happened yesterday. And the same time you know some of the things you were talking about earlier that the dream so many people have for having a product business. Being able to be your own boss, getting to make decisions, getting to have that level of autonomy and authority and direction over your own work. That doesn't go away. And that definitely keeps me going. And really, what makes it worth it when not everything is rarely otherwise. COLLEEN SCHNETTLER: Yeah, I imagine you're a parent as well as am I? And I imagine it goes both ways, right? Like I imagine the flexibility you have with running your own business is amazing to help you parent. But on the other hand, can you ever take a vacation?