Jason Cohen – Designing the perfect bootstrapped startup MicroConf 2013

The MicroConf Hub Page with links to all the notes for all the talks can be found here

Speaker: Jason Cohen (@asmartbear)

Title of the talk: Designing the perfect bootstrapped business

Goal: $10,000 / month per founder – reliable, recurring revenue business

Watch the video (sorry, but I’m not allowed to embed it here)

Revenue model

  • One-Offs never get easier – You need to make new revenue every month
  • Recurring Revenue is the only way
  • 1,000 Fans
    • has never been true.
    • Really hard to get 1,000 Fans / Customers
  • Instead: 150 Fans Customers
    • 50: Scratching and clawing – Get interviews, offer to pay for their time
    • 25: Guest-posts / Social Media
    • 75: Basic Marketing
    • $66 / month average –> $10,000 / month
    • Tier pricing: $49 / $99 / $249 –> $66 average
  • “Boutique” approach
    • expensive
    • special
    • works in every profession
  • Cash is King, Annual pre-pay is God
    • Gets you cash upfront, which you can spend on growing the business
    • Example: $300 Adwords gives you $50 / month revenue $60,000 Adwords would give you 10,000 / month revenue
    • Realistic: (WPEngine)
      • 25% of signups pre-pay
      • 75% give you 1x month, 25% give you 10x month –> 0.75 x 1 + 0.25 x 10 = 3.25 x
      • Cash in > Cost out —–> infinite budget
    • Annual Hacks (ARPU = Annual Revenue Per User)
      • ARPU most important metric to small SaaS businesses
      • Coupon for “3 months free” (just 1 month more than your normal 2 months free)
      • Raise monthly price + increase annual discount
      • Change “per year” to “per month”
      • just raise prices – double price until CR changes
    • 60-day money-back guarantee (not a free trial)
    • No picking up pennies (no revenue share, CHARGE YOUR CUSTOMERS)

Part Deux: Market Model

  • B2C is not worth it, customers complain about costs all the time
  • EVERY speaker at MicroConf is in B2B (that should tell you something)
  • Bad Market: Point-in-Time / Temporary Pain (Weddings, Events, Code Profilers)
  • Good Market: Naturally Recurring
    • On-going actual costs
    • financial cycles (HR, taxes, invoices)
    • pain natural changes over time ( SEO changes, Adwords, Competetive reports, A/B testing)
    • Support (e.g. premium support $100 / month)
  • Bad Market: Viralalityness
  • Good Market: Not Real-Time
    • value not provided instantaneously (e.g. hosting is instant, sending out invoices is NOT) – takes away pressure
    • Decision support (analytics, metrics, reports, monitoring)
    • Finance
    • Project Management
    • Content
  • Bad Market: Marketplace
    • you suddenly have two businesses -> acquire sellers & acquire buyers (chicken and egg problem)
  • Good Market: Something that can be “finished”
    • Examples: WinZIP, Freshbooks, Basecamp, Hosting, CRM, bug-tracking, PDF editor, image editor
  • Good Market: After-Markets (there is already a well-known market, you just provide add-ons)
    • Examples: Smart Bear, Balsamiq, WooThemes, AlienSkin, QODBC, WPEngine
  • Aim for BIG markets
    • Niches abound
    • Room for “me-too”
    • Validated space

 Part Three: Acquire Customers

  • Adverts > Social Media
    • Social Media is hard
    • SM is NOT repeatable, Adverts are
    • Jason got 2 customers out of 30,000 of his blog readers
  • Backing into CPC
  • To what end?
    • Sell before it’s too big
    • Sell to partners
    • Sell to your biggest customer
    • Raise prices (to reduce the number of new customers)
    • Raise money (go into funded-startup mode)
  • As opposed to what?
    • What is the hardest thing? To know thyself – some ancient greek guy
    • What is the easiest thing? To give advice – same ancient greek guy

Jason’s formula to success

Predictable acquisition of recurring revenue with annual prepay in a good market

Share Button
About Christoph

Christoph lives in Munich, Germany and is bootstrapping his own SaaS application as a part-time entrepreneur.

He likes to write on this blog about anything of relevance to single-founder bootstrapped software startups.

Comments

  1. Thanks for writing this up! Great notes.

    • itengelhardt says

      Thanks Justin. But TBH: Jason did the really hard work. I’m just a slightly better typist

  2. I didnt get – "Aim for big markets"

    Why not niches?

    • itengelhardt says

      The idea is that in big markets you will find many niches to focus on – with the eventual ability to transfer your product into other niches within the same big market

  3. Hey Christoph,
    thanks for writing this down in a comprehensive way!

    • Christoph says

      Hi Bernd,

      you’re very welcome. Drop me an email if you have further questions or if you make crazy dollars from the knowledge you got here 🙂

Trackbacks

  1. […] it comes in many shapes and forms. Advocates of this more mindful form of celebration include Jason Cohen imploring founders to get 150 customers instead of 1000 fans and Rob Walling helping startups to […]

  2. […] it comes in many shapes and forms. Advocates of this more mindful form of celebration include Jason Cohen imploring founders to get 150 customers instead of 1000 fans and Rob Walling helping startups to […]

  3. […] Summary of Jason Cohen Microconf 2013 talk […]

  4. […] Overall, the talk really blew me away.  There are more notes taken contemporaneously available on Christopher Englehardt’s blog. […]

  5. […] Christophs Notizen zum MicroConf-Vortrag von Jason Cohen […]

  6. […] Attended MicroConf Las Vegas 2013 and heard Jason Cohen’s talk about the ideal bootstrapped business […]

  7. […] Don’t End The Week With Nothing. It referenced Developer Evangelism: The Whole Story and Jason Cohen – Designing the perfect bootstrapped startup MicroConf 2013 (audio and transcript here). Jason Cohen’s formula […]

Speak Your Mind

*

This site uses Akismet to reduce spam. Learn how your comment data is processed.