Ruben bootstrapped Bidsketch while working full time and was quickly able to grow it into a profitable business. Bidsketch has helped over 1,000 paying customers win millions of dollars in new business and save thousands of hours in the process.
→ What is Bidsketch
→ What the Bidsketch to kind test the market out in 2009
→ How large has the sketch grown to whatever he can reveal
→ What is the plans range in price
→ His lunch process of about five beta testers
→ How important he thinks about his success
→ His integrated with FreshBooks in High Rise
→ And a whole lot more
Bronson: Welcome to another episode of Growth Hacker TV. I’m Brian Taylor. And today I have Ruben Gomez with us. Ruben, thank you so much for coming on the program.
Ruben: Hi. Thanks. Thanks for inviting me.
Bronson: Absolutely. Now, Ruben, you are the founder of Bid Sketch. And the bid sketch story is really exciting. There’s a lot of twists and turns in terms of growth that I think our audience is just going to love. But let’s start at kind of the beginning. What has been sketch?
Ruben: So Big Sketch is a web app that’s used by freelancers, consultants and agencies to create really professional looking client proposals.
Ruben: So I don’t I don’t like to talk about users because that doesn’t really mean anything to me. You’ll hear people talk about like I have like, you know, 500,000 or a million users, but like, you know, they’re talking about all the people that just register for an account. How many of those are actually active? More importantly, how many are paying? Right. Mm hmm. So generally, what I look at nowadays, I don’t even know what that number is, by the way. But they paid accounts. I think it’s, you know, somewhere around maybe like 1200 or something to that. Wow, that’s great. But generally what I’m looking at nowadays is growth. Like, that’s what I look at. So now it’s growing at about like 1000 to $2000 a month.
Bronson: Oh, that’s great. And your your plans range in price. Is it from, like, $9 to 49 or something like that? Is that the range right now?
Ruben: No, it’s from 19 to $99.
Bronson: Oh, gotcha. So double both the numbers I just said.
Ruben: Yeah, exactly. And for for a long time it was at $9 up to I know this is really low to $19 a month. So with a $19 a month, I changed my pricing so that the $19 a month plan became $99 a month. So nothing changed other than price. And then the $9 a month, you know, became 19.
Bronson: Gotcha. And towards the end, I got a lot of questions about pricing, because you’ve learned a lot about pricing kind of through bid sketch. And that’s one of the things on the show that I ask entrepreneurs about pricing. And there’s a lot of question marks. There’s more questions than answers in terms of how to do it. So that’s why I’m really glad that we have you on. But we’ll get to that in a moment. So let’s talk about the launch of Bid Sketch, because the way you launched it was very methodical. You know, we get some people on the show that is very methodical. Some people it’s kind of, you know, just just put it out there, see what happens. But you’re seem like there was a lot of thought put behind it. So what year did you launch bid sketch in.
Ruben: Its like late 2009.
Bronson: All right. So we’re in late 2009. And the first aspect of kind of growing anything is testing the market, you know, validating the market scene if there is a possible market there. So what did you do with Bid Sketch to kind of test the market out in 2009?
Ruben: So I did three three things I would say. First thing was I jumped on the keyword research tool by the Google keyword tool that they have that tells you how many people are searching for certain key words and phrases. So I searched for proposal software, which is what my product is, and I didn’t find there was nobody searching for that. Right, which is a bad sign. But I kept looking for related keywords, so I saw that people were searching for proposal templates, which was close enough. Basically what I want didn’t want to do was create a new behavior, right? So people were writing proposals and they were looking for templates to help them do that. So I felt like I can get that traffic cheap enough or easy enough that because it was just a low competition, keyword or set of keywords. So that was a good sign that I found some volume there. The other thing that I looked at was the competition. So I found that there were products out there that were selling to the design niche, which was what I was trying to focus on, and they were making money. The only problem was that they were downloadable products that were plug ins were just stuff that designers didn’t really like to buy. Right? So there was nothing. There was a web app. So that was another good sign. And last thing that I did, once I had those two to good signs, I put up a landing page. So that basically led me to that led me to the next step, which was landing page and see if I can get this traffic to blogging for you and focusing on specific keywords when, when I blogged and you know, if I can get their email address then and you know, how are how are they going to pay for my product, right?
Bronson: Yeah. So you started collecting email addresses on this landing page. And the landing page was informed by the Google keyword search. So is that kind of the link there?
Ruben: All right. So so basically, not only did I was searching for like proposal templates, but I also wanted to see what they were searching for, like terms. I found things like, how do you charge for web design and how do you write a web design proposal? Right. So I wrote some really meaty posts and started to get traffic very quickly for them, for those keywords in there and on the landing page had a description of my product, right? So like right there, it tells you whether or not somebody is interested enough to at least give you an email address. Right. Which which they were. The really nice thing about that was that I started to have conversation with the people that were signing up through the landing page. And that was really another great signal was that people were very certain, people were very excited about the product. I get people replying back saying, Oh, when is this coming out? And you know, they just wanted it. So, so that was.
Bronson: To clarify the landing page in the blog or the same thing, right? So you have a blog with these media posts and then it tells you on the blog what this product is that’s coming out and you can put in your email here. Is that correct?
Ruben: No. So the blog was to get traffic and it had it had almost like ads to that led or links that led people to the landing page.
Bronson: I gotcha.
Ruben: Okay. So I was routing that traffic to the landing page.
Bronson: Okay. That makes a lot of sense. So it was the it was the blog. Did it have the brand name bid sketch on it or whatever name you were using back then? Or was it just like a totally like a random blog about designer stuff that happened? Have ads for this other product?
Ruben: No, no. It was it was like the big sketch blog, but it wasn’t bid sketch back then. I, I mean, I changed the name of the product like three times that, you know, on so bad with me it was like Earth Wings Soft or something like that. I remember where it was.
Bronson: You know, which is much better.
Ruben: Yeah. So good job. Yeah, I like bits.
Bronson: Sketch a lot. I love the logo now too. I think you know the logo, the feel of the word. I think you’ve a really good brand right now, for what it’s worth. So you started collecting email addresses kind of through this blog, and the blog was built on the Google keywords that you knew you could get traffic for. How many emails did you end up getting here or, you know, first, how long did you have that blog collecting emails? And in that period, how many emails did you collect?
Ruben: So I had the blog up for. It’s hard to remember exactly, but it may be like six months or something like that, right? And for if you look at the very early posts on the blog, I didn’t immediately start focusing on those keywords because I didn’t know what what I was doing know it was all brand new to me at that point in time. Right. So first there are some like random posts focusing on like other keywords. I just wanted to see if this thing really worked right and it was working. So then later on I started blogging about the right things, but I had it for about six months. I ended up collecting about somewhere around 300 emails. So not a lot, but it was a lot for me at that point in time. Like nobody knew me, you know what I mean? It was it was it was a big deal to me at the time.
Bronson: Absolutely. And you know, the things people don’t realize it. In 2009, collecting the email addresses wasn’t quite the science that it is in 2013. Now, you know, we have Launch Rock. We have all the things kind of nailed down about how to get a bunch of email addresses. There’s all these known ways to do it, right? Back then, to get 300, I mean, it’s pretty good validation, like, all right, they care. And the fact that they had to go through a blog and then click through again to your landing page, it wasn’t a direct shot. So I think three is not bad for back then.
Ruben: Yeah, it, it definitely gave me more confidence to move forward with the product. Yeah.
Bronson: No, absolutely. So you have these 300 email addresses. You’ve built up some kind of relationship with the people that you said, emailing back and forth a little bit. So then you, you know, you created this product, so you created a sketch when it was built. Did you let all 300 in right away? Do you blast email and say, Hey, it’s open, come use it and tell me what you think?
Ruben: Something like that was the original plan, but I ended up changing it very close to the to the beta. So right when you signed up for the list, I actually sent back a confirmation email that had a link in there and said, if you want to be part of the beta, click on this link and you know you’ll be part of the beta testing group. I had, I don’t know, maybe like 50 people, 60 people click on that link. But by and. I got close to ready to let people in. I decided actually I’d seen Rob Walling do really nice lunch where he just had a very small beta testing group. It was like five or six people and I just liked that process, so I decided that I wanted to do that. So I changed my my lunch process to just let about five beta testers. Me.
Bronson: I gotcha. So you let five of those people in. Was that just so that you could kind of figure out what was broken before you let the other ones in? Was it to learn something else from them? What was the reasoning or what did you get from those five?
Ruben: So the main difference was that I was able to because I had, let’s say, 50 or 60 people that wanted to be the test. So I was able to email them and say, well, I have too many people that that want to check it out. Right. Which was nice to be able to say that they don’t know what numbers I’m talking about. But, you know, so I said I’d need and the first few people that reply to this email I’ll be able to take. But you have to also give them something to agree to. Right? So this is the timeline. These are things that you need to look at. This is what you need to report. So it will just let me really define how the beta the beta period went, how much work they put in, and that the feedback was really great because if you just let everybody in, then, you know, some people will look at her, look around, meet me, test something. But only a few of those people were actually going to bother to write me and give you good feedback.
Bronson: Yeah. So you kind of use the psychology of scarcity to make them feel like they were a part of a special group. So then you could demand more of that special group, which is really rigorous testing of your code.
Ruben: Right? Right. Exactly.
Bronson: Yeah, that’s great. And so you had those people and they uncover anything like astonishing or it was just, you know, they told you a few bugs and it wasn’t really a big deal. Or did they really shape kind of the direction for the next people you let in?
Ruben: So they was mostly just a few bugs. It wasn’t anything crazy. Like I had to rewrite anything major or anything like that. It was helpful because it definitely put me I was heading in the right direction and I had a product that solved their solve their problem. And then there were a few features that I left off that wasn’t sure whether or not they were necessary. You know, I had like tabs that said so ghetto. It said like coming soon and stuff like that, you know, and they were okay with it. They didn’t miss it. So, you know, that was okay, cool. I can launch with this sort of really slim set of features.
Bronson: Gotcha. So it wasn’t just for them to tell you what was wrong, it was also what they weren’t saying that you were listening for and they were complaining about certain things. So you were okay to kind of move forward? Yeah. Yeah. So that’s that’s a great kind of thing you did to kind of ensure that there’s growth potential after that first five group. So after the first five, you have, you know, 295 ish email addresses left. So then did you blast out to those to those people and let them come in?
Ruben: Yeah. So at that point in time I did if I were to do it over again, I’d probably go for another wave of like five or something like that just to get a fresh new set of eyes on it. But so I did promote it to them, but I made an exclusive offer to them so it wasn’t public. I emailed them and let them know that, okay, this is your this is a pre-launch phase, you’re getting a deal. But the price will go up after this pre-launch phase.
Bronson: I gotcha. And so, again, using the psychology of a timeline, now that you need to kind of, you know, upgrade, now you’re in the beta, don’t lose that privilege and have to pay full price later. And so did a lot of people end up converting and paying.
Ruben: So a fair amount I actually had and this threw me off a little bit later, but I had like 20, 22, 23, something like that. People sign up for the paid account. Mm hmm. So paying customers in the twenties and I had I had two plans, free plan, and I had a paid plan. And I had I don’t remember how many, but I had less people signing up for the free plan.
Bronson: Yeah. And I think what you’re saying are so key because, you know, I do the same thing with products that I launch to Growth Hacker TV, for instance, you know, we had a beta list and I let people in one at a time and so that I can test different, you know, psychologies, I can test this offer and then I see how it performs. And then I let another one day with a different offer. And I do that until I’m through the entire list. And by the end of the list, my conversion rates are through the roof because I figured out exactly what they want in that email and exactly what offer is going to convert. And so I think that’s there’s a great plan. I use it personally. That’s how I live. People enter the product. And I think you’re right. You know, you let 300 in. I think letting in smaller groups and learning from them is even better, you know? You know, we do that.
Ruben: Right? Yeah, definitely.
Bronson: Now, that’s great. And so you let in those 300 people you saw really high conversion rates. I mean, to have 20 something paying members, I mean, out of 300 emails, that’s that’s awesome. And I know you said it threw off a little bit later and I think we’ll get to that when we talk about pricing later, because I think you learned a lot about pricing that and you can talk about how that threw you off. But since that initial of 300 people came in and you had those initial paying users, you’ve done a number of things from 2009 until now to try to grow your product. And so I want to go through this list of things that I’ve seen you talk about online before that you’ve tried and you just kind of walk us through maybe why you tried it and how it worked. One of the first things you did, which is kind of crazy when you think about it, is you acquired a competitor so that you could get better design and better SEO. So tell us about that a little bit.
Ruben: Yeah. So this was during the beta testing period. You know, that was totally unexpected. But I was monitoring the flipper, the site called the Flipper. It was called something else at the time. I don’t know if you’re familiar with it, but basically where people post their websites and products and all that stuff and try to sell them. So I was monitoring that site probably too, and I still look at it every once in a while for this reason. But to see if, I think buy a site that has the right type of traffic, right. You just because there are a lot of sites you can get on there for, really. So I came across a another web proposal app, which is not because there weren’t any do zero, right. They had just launched it was a month it was a month old and they were for sale already. So the price that they wanted was too much. I couldn’t afford it. But I decided to just email them and just start a conversation. I we, we got to talking and we had a good conversation going and basically the option and they didn’t, they didn’t get offers at the price that they wanted. The guy actually came back to me and said, Hey, you know, maybe we can work something out. So after a lot of negotiation, we’re able to like come down to a price that I was able to afford, which wasn’t wasn’t very much right. Because I don’t like, you know, I didn’t have any money or much money. So, you know, but the site was beautiful, just an amazing design. The guy who designed it is a great designer and they had links from, you know, really great sites like 37 signals and all this stuff. So is worth way more than you know. Then I paid for it. The value was there, but they were also good, I think with selling it to me because they liked the direction that I was going and you know.
Bronson: So no, that’s great. So you end up acquiring a competitor while you’re in beta and you acquire them so that you can get better design. So you end up using their design and then you get all their SEO stuff as well.
Ruben: Yeah. So I launched with actually launched with their, their website. I was in there like during the beta period. I did not have a website. So I was literally like looking at WordPress templates and my design at that point I was terrible just like so bad and my app design was still not that great. But one thing I could immediately use was the design of their website, which is really nice. Yeah. So I just did I just, you know, change the look when selected on end user.
Bronson: That’s such a great story. I mean, I know it’s hard to quantify something like that, but how important do you think that was to your success? Do you think it was just kind of an accidental thing that didn’t matter? Do you think that’s really pivotal from.
Ruben: I think it was relatively important in helping me get some nice traction, more traction at the very beginning, because it increased my traffic immediately, but traffic sources weren’t that great. So while I launched two or 300 people and had like 2040 total for registered 20 something paid, they had during the first month like almost 2000 registered accounts. Right. But they had like seven paying customers. So there was a rate so great at getting traffic, but you know, some some important differences there. Yeah. So it was important to help me get more traffic and then I don’t know, still my product was it was still exactly my product with the bad design and all that stuff, you know, still converting relatively well. Yeah, right. So without acquiring that competitor, I think I would have done well still, but probably not as well as fast as I did.
Bronson: Yeah. You know, I love the numbers you just threw out there because I think it’s so important for people watching this that haven’t been through the actual process of growing a startup. Because you said they had 1000 registered, seven paying, you had, you know, an email, 340 registered and 20 something paying. And the difference isn’t that your design was better because their design was better. The difference isn’t, you know, that you had SEO because they actually had SEO as well. The difference is psychology, you know, pricing, you know what you’re actually doing with those people. And people underestimate the importance of what you’re doing with your audience in terms of monetizing them. Not just, I have a beautiful product and it’s better than competitors, so obviously I’ll make more money. Not necessarily so there’s so many of the things that go into it. So I love that story for that reason alone. Right. One of the other things you tried was you kind of learned after, you know, launching the product that you wanted to recreate the initial onboarding experience. I heard you say online that you didn’t feel like you were helping them use the product fast enough. Tell me about that a little bit.
Ruben: So early on, I was basically trying to what a lot of people would try to do early on, which is just improve conversions. Right. And looking back, my conversions weren’t that bad. They were pretty good. There were decent. I just there aren’t numbers out there. There aren’t metrics like benchmarks that you can say, okay, I’m okay, I should focus on other things. So anyways, I said, Oh, I saw people canceling and I thought, this is bad. I need to find out why. I looked into it. I had set up KISSmetrics, which told me that the people that were canceling and through the conversations that I was having weren’t creating proposals. So I was not doing I was not doing an effective enough job at activating them. Right. So basically my goal at that point became just creating getting them to create a proposal like guide them through that process. So I sort of like eliminated as much as I could from the interface right when they first signed up and just direct it every like the only real action, I give them a way out. But the primary action was mostly just create a proposal, just get started that way. And that was pretty helpful that that took the like crowd to page conversion rate from like the high forties to like the high 50, you know, from 50 to 60%, something like that.
Bronson: Yeah. So by changing onboarding experience, you get kind of a 10% boost in the funnel, you know, overall. So that’s great.
Ruben: Right? It also will help with churn like things that you do to improve, you know, because if you don’t activate them, they’ll eventually churn rate if they do become paying customers. Yeah.
Bronson: No, that’s right. No one’s going to pay for a SaaS product, you know, for months and months and months. If you don’t activate them eventually, you probably have to activate them really soon, but they’ll eventually cancel no matter what. And, you know, we’ve had people in our show say that before that, you know, one of your goals is to help them use the product in the way that you promised them they would use it as soon as possible. Like, I think that’s what Dan Martell said, you know, help them, you know, see that your promise is true as quick as possible and then you’ll have a better chance of really retaining them. You know, one of the other things that you did and kind of, you know, one of the things you tried to grow is you integrated with larger products. So I heard that you integrated with FreshBooks in High Rise. Tell me about that a little bit. How did that integration what does it look like?
Ruben: So I yep, I integrated with both of those products and I made sure to create really nice integrations. Like a lot of people that create integrations will just import contacts or something like that and call them integration. So I wanted these integrations to fit into their work. Right. So I do this with all the integrations, but so that they can not only import contacts, but they can convert a proposal into an invoice with all the pricing items and basically just make it fit really nicely into the customer’s workflow. And this this was important because there and when I reached out to like FreshBooks and High Rise, you know, the 37 signals and I created a landing page for each one of those integrations with the nice video and stuff and showed them, We just integrated with you, here’s the landing page, here’s where we’re talking about. And it’s a really thorough MIDI integration, right? Mm hmm. They were actually more likely to just, like, blog about it or tweet about it or whatever than than, you know, if I would have just just been another integration. So FreshBooks emailed, ended up emailing their entire list and which was like in the millions at the time. Right. And I was getting I was at a conference and I remember looking at my phone and I was getting sign ups just one after the end. Like, you know, I was at that point asking for a credit card upfront and I was just getting so many sign ups. I thought somebody hacked my server. I was like, you know what’s going on? Something’s wrong. And I found out it was them. They had the email there, there with and then with high rise, they put out a nice tweet. They wrote about it on the on the blog. So that was that was also pretty, pretty good.
Bronson: Yeah. No, that’s great. So if you’re going to do partnerships, we can do integrations, be prepared, do it right the first time and then reach out. Is that kind of the take away there?
Ruben: Right. Right. Yep. And, you know, I’m just have make it easy for them to to promote it, right. Like if you just do a mini version, like, oh, we just import your contact. That’s hard, right? Like, I had a conversation with the head of marketing at Harvest and we were talking about that and she said, Oh, this makes it so much easier. She literally said that, right? It’s easier for me to add them to my list, which they did, because it’s a real you know, there’s there’s a lot of value here.
Bronson: Yeah. Is that a part of one of your strategies now? It’s just finding new integrations because that works so well. You know, when FreshBooks sends it out to millions of people, when, you know, 37 signals blogs about and tweets about it. Do you just like consistently do that now looking for new people to integrate with?
Ruben: I let my customers tell me which you know, what integrations they want. Like when I get a lot of people asking for an integration and then obviously the ones that have that have a big customer base and are more likely to promote it to their customer base, I put to the top of my list.
Bronson: There you go. I gotcha. Now, you also created a deal with app Sumo. It’s kind of a one time thing. It’s not something that’s repeatable, you know, week after week. But how did that work out for you? Was that a net win for you?
Ruben: Yeah, that was really great, actually. I’ve done. To deal with with that sumo. Mm hmm. The first one was better than the second one. But what I saw on both your both deals was that there were a lot of people that have such a huge list. There were a lot of people that actually signed up for the product for bid sketch that didn’t buy the deal. So, yeah, there were like people that bought the deal, but there were a lot of people that just went to my site and just signed up for four regular plans. Right. You know? Yeah. Yeah. They just have, you know, their lists. I don’t know what it’s like. 700,000 is just ridiculous nowadays. It’s. It’s, you know.
Bronson: Yeah. And I really high qualified list of people, you know, that might need proposals. So that’s great for you.
Ruben: Right? Right. I think the difference between the first deal that I did and the second deal that I did was that the first deal was I was giving away a lot more. And the second deal that were I was just being more conservative with my deal. And that was that was a mistake because the value is not in the one time sales of the people buying the deal value is in the recurring revenue. Right. So the people that are signing up to the regular plans and you’re going to get that right if you give if you’re going to get that, basically they promote it to the less and they’re more likely to promote it to a less. For a longer period of time if you give away more. Yes, that’s what I learned.
Bronson: No, I’ve learned the exact same thing. You know, earlier when I told you I sent out the beta emails one at a time. What I finally realized was that give them a deal that is as high a percentage as I possibly can, but lasts for shorter amounts of time. And that’s better than deals that allows longer amounts of time with a lower percentage. So now the deal that I send out with my invites or have been is 75% off for the first month. So that way I can get a credit card on file and then they’ll come in, use the product, and if they love it, they’ll stay around. But I got over the initial hurdle, which is getting a credit card on file. So do all I can up front to get over that hurdle and then earn their support on the back end by giving them a great product in interviews like this. So I think it’s a it’s a great idea. What have you found in terms of how much you need to give away? You know, you said there’s a difference in the first deal and the second deal. What were the two deals, do you remember?
Ruben: Yeah. So the first deal was kind of interesting. This something that I got from Heaton Shaw? Mm hmm. And basically, I didn’t have that. I launched with the free plan, but I removed the free plan later on. Right. So I didn’t have a free plan. But an interesting strategy that that he has or that he that he’s used that I sort of copied for this deal was not don’t have a free plan, but that people can publicly sign up for on your site but actually have it so that you can use it to promote or with partners or whatever and give that. So you’re giving away a lifetime account of your product, right? Mm hmm. A lifetime plan for. For your product. So it’s valuable because you can sign up for that plan, even though it’s what you would probably call the free plan if you had a free plan.
Bronson: I gotcha.
Ruben: So it’s the lifetime account for hundred and 75 bucks or something like that. And that was the.
Bronson: First deal that you did?
Ruben: Yeah. Yeah. So the second one was also a very limited plan. It was actually more limited and it wasn’t listed on the site. And it was like a year you could buy a year for it or something like.
Bronson: That for $75 again.
Ruben: Right. Mean, I do remember the pricing they were playing around with pricing at that point in time.
Bronson: So they’re probably testing it too. So there were people making a difference. Who knows? Now that’s good. That’s good. I mean, so that, you know, having the lifetime in there probably is what pushed a lot of people over the edge. When you think about, oh, a lifetime, then it’s, you know, it’s easier buy to make.
Ruben: Right. Right. But that was giving them, you know. So it was a good plan. Mm hmm. And but it was really it wasn’t my freelancer plan. It wasn’t my cheapest plan. It wasn’t any of the plans. It would be what I would call a free plan if I had a free plan.
Bronson: I gotcha. Now, that makes a lot of sense. Another thing that you’ve done is actually cross-promote products with other people that have an email list. This is something I’ve done before, and I think it’s a great idea. Tell us about a little bit how you did that.
Ruben: So basically just reached out to a lot of other founders that had products that were aimed at the same audience as me, where there was just a lot of overlap and asked them if they would be interested in promoting each other’s, you know, our products to to our lists, giving each other a deal to do that. I’ve done this, I don’t know, like maybe over ten times, know a good amount of times. I don’t think I’ve ever had anybody say no. Mm hmm. You know me. Maybe one person, like, not now or something like that, but everybody says yes. So it’s a really easy pitch, right? Like, do you want to promote your product to to to my list? Everyone says yes. And basically I just give them a deal that they send out to their list and they give me a deal. I send out my list the things that I’ve found that work really well for, just like you were talking about. It’s hard. I’ve tried to sell like yearly plans on deals like that, and it’s hard because it’s a big commitment. So if I the things that work really well are like giving them the first two months free or something like that, right? Like something really low friction or giving them like, like you said, 75% off the first month. Right. Like, you know, 50% off the first two months are just it doesn’t it’s not a big bite for them. So it’s easy for them to sign up.
Bronson: Yeah, absolutely. No, it’s great. You know, that’s so easy to do. You just reach out to people and people think that these have to be, like, really complicated arrangements with, like, you know, legal, you know, paperwork. It’s literally you email somebody, they say, yeah, you swap promo codes and you look over each other’s, you know, email you’re sending out and say, yeah, it looks good, you know, shoot it out and then you’re done. And different people have different size lists. And that’s one thing people worry about sometimes, but it doesn’t. You know, sometimes you have to begin to lose. Sometimes they have the bigger list. End of the day, it’s one email. So it doesn’t really matter if one person wins a little bit more than the other. You both are going to win a little bit.
Ruben: So yeah, I did that with with Harvest and they had, you know, like you can’t even compare like, like ten, 30, 40, 50 times the list that I have.
Bronson: Yeah, they’re trying to get new users and you have a pocket of users that they probably don’t have access to, so it’s worth it to them. And so you have to see from their point of view, like it’s worth it to them to get to those new users. They’re not comparing licenses, you know?
Ruben: Right. Right. In that situation, it sort of helped that, you know, I knew one of the co-founders and stuff like that. I also had an introduction. But if if it becomes a problem, you can also just say, okay, well, let’s only email a segment of your list, right? So let’s make it equivalent. You don’t have to do the whole thing. But it’s never been a problem, you know, in any of the ones that I’ve done.
Bronson: Yeah. No, it’s such an easy way to to cross-promote things. Now, of everything you’ve just kind of mentioned would have been, like, the best things for you. You know, we mention cross voting emails, mission app, sumo integrations with fresh book, high rise harvest and changing the initial onboarding experience by your competitor with your juice and their design. So a number of tactics and all of them did well to some degree. Right. What is the thing where you’re like, Man, I’m glad I stumbled upon that because that was awesome.
Ruben: I would say that each one of those things was important at various stages and so at different stages. Right. So at the very earliest stages, like the integrations were really, really key. Right. Yeah. And then then after that, a little bit after that, the Cross-Promotional deals like once I started to get a little bit of scale, the cross-promotion worked great, really great. So yeah, it just depends. Like everything had. The impact of all those things that I’ve tried was pretty good, just at different stages.
Bronson: Now, that’s great. Now let’s talk about pricing a little bit because you’ve actually written blog post, I think on Rob’s blog. You mentioned Rob wailing earlier and you’ve actually written a piece for him, is that right?
Ruben: Yeah, yeah, yeah.
Bronson: That’s why I read it. And you’ve talked about, like, what you really learned about pricing and how important, you know, pricing is, really. So you mentioned your free plan. And you know, earlier when you mentioned the email, there was a free plan. And then later with App Sumo, there wasn’t a free plan that you could view, but that’s kind of what you gave them as a lifetime. And now as you look at the site, there’s no mention of a free plan. It goes from 1999, I think, he said. And so what did you learn about your free plan kind of throughout this journey?
Ruben: So I launched with a free plan because a lot of people had them right, and that’s what I just thought. You like a SAS product, like mine. That’s what you did. That’s what you had to do. So initially when I launched with the Free Plan, I was thrown off because I lost my list and I had, you know, I gave them a deal. So that was just so powerful that I had more people signing up for the paid plan than the free plan. But once you open it up to the rest of the world, it doesn’t work out that way. Right. Like everybody signed up to the free plan and that’s what I found. I so I was getting like a 1% conversion rate to two paid. And I thought, wow, this is like I’m doing something just terribly wrong. This is so bad. This is, you know, what’s going on. And at that point, you know, I was maybe testing a bunch of things. I was just changing everything that I could, trying to get them to convert and maybe help a little bit. But, you know, I just couldn’t I couldn’t get anywhere near what I was getting when I during that pre-launch phase. Right. I didn’t know that it doesn’t work that way. And then I found once I started to do a little research, I just found that this is kind of normal, like this is the way that it works, right? So I, I the last thing that I did, I was starting to get desperate and I said, okay, let me just remove that free plan. So I didn’t write any code or anything like that. It was just I literally took it off the website. So it’s still in there in back in, you know, I said, let me do it for a week. I was a little worried about that because I thought, well, the only people that I’m getting the sign up almost are the free users. So if I take that away, nobody’s going to sign up, right? But I took that away. And what do you know? People started signing up for the paper. And so I saw like basically ten times the amount of people signing up for that. So it was like an immediate 1010 X increase, right? And like you mentioned, pricing. Pricing is one of the easiest things you can do. But we’re talking about growth. You want real growth like right there. Change your pricing. Increase it. Seriously, it’s one of the easiest things that you can mess with. I’ve done it twice and have had really great results, you know. So it’s just really one of the easiest and best things that you could do.
Bronson: Yeah. No, that’s that’s great advice on on the free plans because, you know, think about it from the user’s point of view and this is for the audience. Hear this, listen to this. You know, somebody is coming to your site. They come to a big sketch and they have a need they need to build a write proposals without a lot of headache. And so to them, you know, they’re willing to pay, but they see the free option. They’ll take it because it might meet their needs enough. And they’re not going to give you money for no reason. And so instead of, you know, tinkering around with the psychology of upgrading from free to a paid, you’re already meeting a need they have. Just make them pay for it. And then you can just skip that entire process of pushing them into a free plan and they’re not bummed out about it because it’s still filling the need and it’s worth the money. Right. And so people don’t realize that they think that, you know, it has to be some other way. But, you know, removing a free plan is a great idea. I like that so much. Now, you also learned a lot about how many features you should list below the plans. So like, here’s the 19 a month plan and here’s all the features. Here’s the whatever a month and here’s all the features. What did you learn about the features and benefits that you list there?
Ruben: So well, I tested this early on. I don’t remember at what stage I tested it at, but basically I just tested adding a whole bunch of features, two to the part to each of the plans. Again, just adding just having shown the core features, right? Mm hmm. And having more features. This led to less sign ups. It’s just more confusing, more for them to analyze. So recently, when I changed my pricing, I said that I started out with May why I eventually had my. 919. Now it’s 1929 and 99. I went through this exercise again like re changing around my plan and then pricing and experimenting and listing features and stuff. Mm hmm. That was one of the key things that I learned during the so, like, basically make it as simple as possible to eliminate them having to think about whether this plan is better than that one. Make it just really simple for them to see a plan that they identify with. Right? Like it used to be basic and premium. Now it’s freelancer, studio and agency. Okay, I’m a studio. I’m an agency. So they self-select right immediately. And there’s not much that they need to think about when they’re selecting the plan.
Bronson: Yeah. And you know, it’s good to name things like that because I’ve heard of stories where people select the highest plan because they don’t want to go their boss with a freelancer plan because it makes their whole business seem, you know, small potatoes. So the buy the agency plan, because they’re an agency, not because they actually need the features.
Ruben: Right. Right. I literally I one of the last tests that I did was just the name. So the pricing was the same and just the right, everything was the same. And just because of that, I had more people signing up for the two most expensive plans, like fewer people signing up for the freelancer.
Bronson: Because people don’t want to be a freelancer because that means they haven’t quite made it yet in their own mind.
Ruben: Right. Yep.
Bronson: That’s great. What do you learn about kind of price anchoring? Because I know, you know, you said your highest price is $99. My guess is that’s the you know, there’s fewer people on that than the other two. You know, do you have that high price just to push people toward the middle one? Or do you actually push that? And is that a big plan for you?
Ruben: So the goal it’s 1929, 99. The goal is to get most people to sign up for the $29 a month plan. Mm hmm. So with price anchoring, they look at the $29 plan. And compared to $99, it looks like a really great deal. Right. And that works very well. Most people sign up. Actually, it’s. It’s. As far as revenue, I don’t like to talk about most people because let’s talk about it. Right. So revenue, 50% of the revenue comes from the middle plan. Right. And then 25% comes from the freelancer and 25% comes from the agency plan. So that’s that’s how it works out. And it was designed to work out in that way.
Bronson: Yeah. Now, thank you so much for kind of clarifying your pricing. There’s so many little tidbits of information in there that I think art reviewers will pull away from all the stuff you just said. A few last questions here. One. You mentioned earlier KISSmetrics and how you use them to track things. We actually had Neil on the show. What what else do you use? What other tools do you kind of use to track your conversions in how stuff is or any other off the shelf software that you use? Because people watching this are always try to figure out the best way to to get the data. And the best way is to interpret the data.
Ruben: Yeah. So I use KISSmetrics for a lot of my stuff. I use Digg my data also.
Bronson: For that one. What is that?
Ruben: That one? It’s an interesting analytics app. I like it because it lets you sort of track things that are kind of difficult to track and it actually will import your your email. So Gmail. Right. So there are certain emails that I that I tag with the label automatically. I have a filter so Digg my data can count those and add those two to my charts. Right. And I can compare them and see a correlation with. Okay. Well, support emails are up. Cancelations are also up. Like, you know, these are related somehow. Let me dig a little bit further into it, but it’s really great for just basically being able to analyze a lot of different types of data sources that that are typically hard to put together into 1 to 1 area.
Bronson: Yeah. So you use KISSmetrics. Dig my data. Anything else in your toolkit?
Ruben: Optimizing. Mm hmm. But I tend to use optimize together with KISSmetrics because I’ve just had it happen too many times where just using optimize by itself gives me the. So it’ll give me the correct result for the first layer. So the first step in the funnel, meaning that more and more people take the very next step, but it doesn’t always mean that those people end up being paying customers. Right. Gotcha. So I tend to use that to go with with KISSmetrics. So really optimize. Lee Oh, crazy egg big. My data crazy is great for like heatmaps and stuff like that. There’s also another product called Inspec Left and Right. And that one does Heatmaps as well. But what I really like is that it records the mouse movements of people. So you can actually do sort of like a video playback of their sessions about what’s going on.
Bronson: Yeah. So I want to try that. Well, what’s it called again?
Ruben: Inspect it.
Bronson: Inspect it. All right. Yeah, that’s great. Let me ask you a couple of high level questions here to close out the interview. You know, you have been through the process of growing the startup bootstrap startup. You’ve grown into a sizable number of, you know, paying customers. And you see other startups, you know, coming out every day launching try and stop doing stuff. What do you think that most startups or mini startups get wrong in terms of growth? The same way that you got to last of wrong until you actually figured it out. But what do you see them get wrong? A lot when you look at the landscape now.
Ruben: So the one thing that that happens a lot whenever I’m talking to somebody about their product and they’re having difficulty growing it, it’s it’s always the same. I ask them, who’s your customer? Right. I always start with that. Mm hmm. And they’re just not specific enough. They say, you know, like small businesses or something like that, right? That’s everybody. Like, you know, like how do you reach them? Like what? Small businesses? How do you. So they’ll ask advice on how to how to grow their product. And if if I’m let’s say I’m brought in as a consultant and I’m told, okay, you know, we sell to small businesses. Okay. I need I need you to be more specific than that. So then I ask them to be more specific. Like what? Small businesses are getting the most value out of your product. Which ones will pay the most? Right. Which ones recognize the value? So then they have to start thinking about it. But that’s a mistake. You should have that already identified. Right. Like you should know who exactly is your customer so that you know where they hang out, where you can reach them and how to reach them. Yeah, right. It becomes just so much easier to to get customers if you’re able to very, very clearly identify who they are and focus on a niche. Like I went, I focused on designers initially. Mm hmm. It’s easy. You know, all the designer blogs you like that opens it up versus like saying, oh, freelancers and consultants and agencies like all freelancers and consultants and agencies, that’s better than small businesses. But it’s still you know, it’s still harder, right? Like which which ones? Which.
Bronson: And you can see they did, you know, with Big Sketch, it would be so tempting to be like, well, we’re proposal software. Anybody can use us. Right. Right. For everybody. And yet you focused almost arbitrarily on a group, even though it was a good product for many, many other niches as well.
Ruben: Right. So I get I get like I still get like plumbers and different. Right. That’s still happens because they’re, you know, they’re willing to try something that will just solve their problem. Yeah, but people are just too afraid of like focusing just on one niche, which, which I think is, is a problem.
Bronson: Yeah. Because when you really focus on one niche, you can get really creative about customer acquisition. You can go to that rabbit hole and try a lot of different things within one small category of people. And then you stumble upon kind of a honeypot like, Wow, I’m going to a lot of new customers through this channel because I was willing to focus on this particular niche of people. So I think that’s great advice that you may have already answered this with this last question, but I’ll ask it anyway. As kind of final question. Here is what advice cut off my level. I’ll take it anywhere you want, but what advice do you have for anyone that’s trying to grow their startup in?
Ruben: Yeah, I would say I mean, I kind of already talked about.
Bronson: It, but I think.
Ruben: We really identify your customer. But maybe I’ll mention another thing that I see a lot of people get. Where I see them getting tripped up is that they’ll be focused and this happens all the time. They’ll be focusing on. Ask them what the problem is, why aren’t they growing like they want? And they’ll say, Well, I’m not getting enough people. The sign up were right, and then I start asking about their conversion rate and all that stuff. It turns out that their conversion rates are might be okay are generally okay, right? Like this is if they actually have a product that people want, right? Like that’s a big yes, right? But their conversion rates are okay, but they don’t know that. So they think they need to get more people to sign up. But it’s like, okay, you’ve gone, you’ve taken care of a lot of the low hanging fruit. What you needed more volume? Me more like traffic more. Right? It’s easier then at that point. It’s really hard to ab test them to refine your funnel and all this stuff. If you’re getting like ten visitors a day or something like that, like they’ll just take forever, right? If you have more volume then it’s just really easy to fast to iterate and get feedback and everything just becomes a lot easier.
Bronson: Yeah, that’s great. And for people in that situation, I would recommend reading Lean Analytics. It’s a book that just came out and we’ve had both the coauthors of it on the show and they go through different kinds of businesses and kind of let you know like, look, if this is your rate of return with this kind of business, you’re in a good spot or you’re in a bad spot, so then you can move on, like you said, beyond the low hanging fruit. And now focus on the other thing that isn’t a good number or isn’t a good metric for your particular business. Reuben This has been an awesome interview. There’s been so many tactics, so much actionable advice. Thank you so much for really being transparent and showing us exactly what you’ve done that worked and didn’t work and for taking time out of your busy schedule. Thank you, Ruben.
Ruben: My pleasure. It’s fun.
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