How did Hubstaff, a remote team management software business, managed to grow from 0 to over 4,500 customers? Dave Nevogt, Founder and CEO of Hubstaff, shares how he got Hubstaff started, including missteps along the way, and transparency in how the business is running today. Join us for a great conversation about acquiring and understanding your customers in order to grow sales and succeed in your business.
Listen to this Episode:
Topics Discussed in this Episode:
- Launching Hubstaff and getting the first customers
- Dave’s transparency in business and customer trust
- Why bad products and bad marketing die on their own
- How to get a good understanding of your customers
- Avoiding expensive marketing mistakes
- Strategy advice and resources for digital marketers
- How Hubstaff Got its First 25 Customers by Dave Nevogt – Hubstaff blog
- How freemium nearly caused our business to implode by Josh Pigford – Baremetrics blog
- What I’d Change, Keep the Same, & Don’t Yet Know by Rand Fishkin – Moz Blog
- Traction by Gino Wickman
- Growth Hacking by Raymond Fong and Chad Riddersen
- The 80/20 Principle by Richard Koch
- WP Curve Blog
- Nathan Barry Blog
- Dave’s Blog at Hubstaff
- Dave’s Twitter – @hubstaff
- Michael Phelps and the Longest Putt in TV History
Louis: Bonjour, bonjour. Welcome to everyonehatesmarketers.com. I’m your host, Louis Grenier. everyonehatesmarketers.com is a podcast for digital marketers who are sick of shady, aggressive marketing. I interview no nonsense marketers who are not afraid to cut through the bullshits and say things as they are. During this show, we learn how to get more visitors, more leads, more customers, more long-term profits by using good marketing, by treating people the way we like to be treated.
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Welcome to episode number 10, already, of everyonehatesmarketers.com. In this episode, I interviewed Dave Nevogt. He’s the founder and the CEO of Hubstaff which is a software to help remote teams to manage their teams. This was one of the first episodes I recorded. At the time, I was focusing on transparent entrepreneurs, entrepreneurs and founders who are actually sharing their journey openly. I actually believe that company founders are the best marketers out there because they had to take their business from absolutely nothing to something using marketing.
During the first half of this interview with Dave, we talked about his journey from running a golf training business then to starting Hubstaff and how he got his very first customers and then grew the business. During the second part of this episode, Dave actually shares with us why he believes that bad products and bad marketing will just die on their own, which is a very optimistic view. He’s also going to share how he managed to get a really good understanding of his customers and how you can do the same. Finally, he is also sharing a mistake that cost him $7,000 working with a marketing agency.
There’s plenty of other tips he would share with us. Have a listen and let me know what you think.
Dave: Hey, how you doing?
Louis: Pretty good. Thanks for coming in to the podcast, thanks for taking the time to do it.
Dave: I appreciate you having me.
Louis: First question is what’s better, is it to hit the hole in one in golf or is to run a business with 25 employees?
Dave: Probably hit a hole in golf, I don’t have one, I don’t have one.
Louis: You got me. I really thought you would say the second one.
Dave: I feel like one is a lot easier, which is to have a company of 25 employees.
Louis: Do we know, actually, the starting term of what’s the percentage of hole in ones in golf like in any tournaments?
Dave: No, no idea..
Louis: Who is this celebrity who hit the longest stats recorded in TV history?
Dave: No idea.
Louis: I’ll find it and I’ll put it in the notes. The reason why I’m actually asking this question is because Dave has had business related to golf before, right?
Dave: Yeah, right.
Louis: You founded it in 2004?
Dave: Yeah, 2004, that’s right.
Louis: Then you started Hubstaff in 2012.
Dave: Yeah. I ran the golf business for nine years or something like that. In the meantime, I bought another software platform with a group of investors, ran that for about five years on the side, started Hubstaff. The golf business, I think, went around probably $1.7 million at its top and then the other software system, it’s actually a software service, I think I will bet 2.4 something like that, we’re working there with Hubstaff now. I’ll say that all of them had been pretty small businesses.
Louis: When you talk about $1.7 million, was it in revenue per year?
Louis: Why did you build this first business, the golf business?
Dave: I just didn’t like working for another company. I was young and I just didn’t feel challenged in my job, in my role, I didn’t want to look around me and saw the middle of managers that kind of thing and decided that this is not what I want to do. Just started this business on the side, it started to make money and then I basically made enough where I could leave my job. From there, it grew a lot faster because I was able to put full time into it.
Louis: From the time you started to work on this side project to the time where you’re able to live off of it full time, what was the span of time?
Dave: Probably four months.
Louis: Only four months, alright. It was pretty quick. Did you found this business just from the money you got from customers or did you add money to it?
Dave: It was ebook, DVD, training type business. My biggest cost was advertising. That was paid for by the profits of the business. There wasn’t a lot of expenses.
Louis: You said then that you started another sort of a software as a service business in between as well?
Dave: Yeah. We bought a company, I put the golf business for sale. In that process, I met a group of investors looking to buy businesses, they were looking at my golf business, decided against it but found another one and basically asked me to come on board and run it because they knew that I was leaving the golf business. I think I owned 18% or something like that of it. We’re in that for like four or five years, in the meantime I started Hubstaff.
Louis: I have read a lot of your blog posts before and actually, I really admire the transparency. I think that’s another subject we can start talking about later. You mentioned this one blog post in particular that I really like, those are the ones that interest me the most is how you got started. You explained how you got your first 25 customers. We will obviously put this blog post in the show notes. For the listeners who are now listening, can you tell me more how you actually got those 25 first customers?
Dave: A lot of it was just we had a product that was out there, there’s different time spans. The first 25 free people using the software do you want to know about or the first 25 actual paying customers?
Louis: Let’s talk about the 25 free ones.
Dave: That’s the first step we took, the first step we took, at least, was to basically go out and get the product built, we paid to have the product built, put it out there. We basically got some landing pages built with keywords that we thought might be targeted to what we’re looking for, those keywords are really, really niched, very small, which is what we wanted because we knew that we couldn’t compete in time tracking because it’s just a small site, new product, that kind of thing, it’s just not going to happen.
We tried to go for time tracking with screenshots, time tracking with proof of work, that kind of stuff. These are small keywords that aren’t getting much pickup. But still, if you’re driving even 20 or 30 people to the site on a daily basis, that’s 10% conversion rate in free trials so you’re talking 2 to 3 from that then we had ads running. We did mainly Google AdWords, this was before Facebook ads has taken off back in 2011, 2012.
We did Google AdWords, got a lot from that into a free product. Found that the conversion rate into the free product from AdWords is pretty good which I guess you would expect. AdWords is something that doesn’t really work for us now or we’re finding hard to work for us now. But it was mainly combination of just small SEO, niche SEO and then advertising on Google.
Louis: You got those 25 first free customers, you didn’t know them, they didn’t know you, they just trusted you with the details.
Dave: They’re totally cold, 100% cold.
Louis: How did you get the first 25 paying customers?
Dave: That was basically a launch to our list. We had built up a list through the free product which I think is important. That’s a good thing that we learned, is basically to put out that free product equals people raising their hands because they’re interested in the product. From there, you can sell to them.
Louis: How many people did you have in this list? Do you remember?
Dave: I’m going to guess somewhere around probably 7,000. It has grown up pretty fast for a free product, it has grown pretty fast.
Louis: From those 7,000, how many paying customers did you get out of it?
Dave: Probably somewhere around 400.
Louis: 6%, 7% from list to paid which is quite healthy.
Dave: We felt pretty bad about it at that time but I guess if you’re talking about free customer which is another blog post I wrote about how that didn’t transpire at what we thought it would. There’s a different type of user looking for a free product in general. Somebody that come into the product for free, 100% free with no obligation of paying, I guess it was alright.
Louis: I’ve heard this type before and I’m not sure, I need to find out exactly where but I’ve read many times that when you have a mailing list of people who are interested in what you do, not necessarily who have bought anything from you before but are on the list, usually a 1% conversion rate from email to paid is actually quite healthy.
Dave: Yeah, I believe that.
Louis: I think you have performed a seven fold.
Dave: Yeah, they’re already in the product, using it. We basically said, “Okay, your access can be cut off by this time.” A lot of them were not using anymore as well, some of them were. We also launched, actually, it would’ve been a lot higher but we launched with first three person free plan, the majority of them were in that zone. That was another issue that we messed up, we probably wouldn’t do that again.
Louis: I see, I know what you mean. You would have charged from the first person.
Dave: We wouldn’t let that three person free, we would charge for three people or less.
Louis: Why so?
Dave: We had that plan, we had the three person free plan for viral spread but we didn’t find that it ever really gotten any viral spread. We were thinking that, “Hey, I’ve got a team of three, it’s free.” We can get more mentions, more word of mouth, more referrals, that kind of thing to a free product which may, four years ago now, maybe it would’ve had an effect by now. But at that time, we weren’t seeing pickup, we’re getting just a ton of referrals in. A lot of people were trying to get around it too, they would start 2 or 3 different accounts and have 10 people in but try to have three accounts so it would be free. It was just one of those things where it was like we’ll just change this up.
Louis: I think it’s biometrics and just people who mentioned that they try to tell their 100% paid product into a premium and things went very wrong. A lot of people signup and what happened was then that a lot of people were just taking advantage of those service using basically their data and server. A lot of demand fall I think because they are not ready to buy anyway. I’m not explaining it very well, I guess I’ll also leave the article there but it’s an interesting thought because I’ve heard that before many times.
Dave: One of the things too with my product that, I didn’t realize this at all going into it, I really learned, I’ll take this with me forever, pretty much, is that in all the other companies that I’ve had, it’s been a one to one ratio between somebody coming into the site and then paying you as a customer. With the golf business, you get a guy coming in, he’s got a bad golf swing and he wants to be able to fix, therefore, he goes and buys DVDs and that’s it.
You get viral spread, you get him talking about this net. With Hubstaff, it’s different because basically you get somebody coming in and let’s say you’ve got a team let’s say, of three people, you’ve got three contractors. We’ve actually got a support from more people because we’ve got to support you in one onboarding flow then we got to support your three team members in another flow, completely different type of on boarding and different type of engagement. Our support team had a support for people. With all those free accounts, we weren’t getting a drop of revenue from any of that but we had to bring on a ton of support. There’s a lot of things that go into that that behind the scenes wouldn’t be obvious.
Louis: I think that’s was Josh from Biometrics has been explaining, he explained it much better than me, the support request went up the roof, they had to support that and infrastructure loads as well was quite heavy. I just want to talk a bit more about you, in particular. Am I right to say that you’re more a business person rather than a technical side person, you’re not a developer?
Louis: Before all of these businesses, what did you study, what was your dream job?
Louis: You used to be in your career in finance, what was the role you’re supposed to get?
Dave: I’ve got a job with the corporate finance with a big pharmaceutical company up at Chicago. It was a good job, it was fine out of college but it was really totem pole and it’s just didn’t fit me. I wasn’t being cocky about it or anything but I looked around and it’s like, “Man, I don’t want to spend 20 years of my life. I need to have more control. I don’t care if it was only a landscaping company. I’d rather do that than have to go to work 8:00AM to 5:00PM everyday and not be in control of my destiny.”
Louis: Freedom, control.
Dave: Yeah, I needed that.
Louis: How long did you stay in this first job? What was the length of time before you started your first business?
Dave: 18 months. I started it probably 12 months in.
Louis: Do you remember how old you were at this stage?
Dave: 23, maybe even 22.
Louis: I’m always interested to hear that from entrepreneurs in particular. What did your parents do in terms of jobs?
Dave: My dad is an electrical engineer and my mom is a dental hygienist.
Louis: Do you have any entrepreneurs in your family?
Louis: It’s an interesting question to ask. Every time I ask, it’s either I have none like I do, I don’t have any, or I basically only have entrepreneurs in my family. But there doesn’t seem to be a middle ground, it’s either you’re the first or the last.
Dave: I think it would be really hard to grow up with your parent as an entrepreneur and not try to do something similar in regards to that. It may be hard to go get a regular job with your parents doing something only in their own company, it just seems strange. It seems like a different way of doing it, I guess.
Louis: I guess the pressure of walking for somebody else while everybody else is walking on their own could be quite high. On the other hand, though, in your situation and in mine, the pressure to break away from this corporate type of thinking where you work for somebody else, you have a decent job, 9:00AM to 5:00PM, you don’t take much risk, I think there’s pressure there as well. On this side it’s like, “Oooh, hold on a second, do you really want to do that?” Did you have that in your family where they’re telling you, “Hold on.”
Dave: Yeah, everybody says that. The people at the other job, “Hey, what about your health insurance? You’re crazy, this is a great job, this and that.” The way I look at it before is just that this is not the only job I can ever get, I’ve got skills to get to the job. Right after I quit that job, I had true friends, I had three people saying, “Hey man, do you want a job?” Not with these good big companies, it’s not like you’re stopping what you’re doing but it’s really good to take the risk, I think. I think you learn way more by doing your own deal.
If I would like to get a job today, I could get a job very easily with I think probably hundreds of companies just because I’ve been doing it for so long. You can so much speak the language of the founders, you can sit down at the front of the founder of the company and just say, “I have been there, I have done it. I understand management, I understand finance, I understand marketing, I understand product, I understand all these different things and I have experience of those things.” If I was not working for myself, I wouldn’t have that experience.
Louis: That makes sense. You guys are pretty transparent, you share how you got your first customers, you share about the VCs who talk to you trying to approach you to invest. You talked about why you’ve built this business, you mentioned it, the freedom, the control on your blog. You also talked about how you found your cofounder. Basically, a lot of things, pretty much everything is shared online with you guys. But, can you share something with us now, to the listeners, that you’ve never told anyone about this business?
Dave: I have to think about that, we do share pretty much everything. All the big decisions, all the big things are pretty public. I guess just one thing is that it’s, I’m not sure that this got across in some of the stuff that I’ve said. It’s really, really hard to do this, right now we’re four years in and we just went through a little downturn. We pay a company called Lupra $800 a month in analytics, we go through segment, we’ve got all of our analytics setup, we’ve got our own, basically, warehouse setup.
We track every event that could possibly happen in the application as well as people coming into the site, we have very good vision in terms of what’s happening. We went to this downturn, I spent 5 days trying to figure out what was happening and I still don’t know, it just came back one day. It was down for a month, we grew in October and it just happen. We grew in October half of what we’re doing net a month or recurring, we grew by $4,000. When we were having months of 75 to 80 before that in growth.
It was like big customers were coming in the door, I have no idea what’s going on. Every place in the onboarding funnel looked the same, we were getting more companies signing up for the free trials, their sizes were fine. It wasn’t like we’re getting all smaller companies in the door, all of a sudden all of our rankings were the same or improving, they were just not choosing a plan, they were getting through the funnel fine, they just were not choosing a plan. We had lesson upgrade, so I don’t know, something happened.
I was thinking that something was broken in the code, I was thinking that we were sending emails somehow, I was thinking that, maybe, things were getting marked as spam, all of our emails are being marked as spam, I was thinking that maybe someone did a strike, international credit cards not being taken, I don’t know. It was odd, very odd.
Louis: It came back. You had this period of time where the growth was reduced by 50%. Just to clarify on the number you shared, is it new business growth?
Dave: It’s everything, new business growth plus churn plus upgrades plus downgrades, net.
Louis: Do you think it’s possible that it’s just bad luck in a sense that maybe many people decided to downgrade, many people decided to cancel at the same time?
Dave: I understand, new growth was down, new people choosing plans was down but then also, upgrades was way down. It was like everyone was on vacation or something like that, it was odd.
Louis: A glitch in the metrics.
Dave: Yeah, it was odd. But then it came back, it was there and everything was fine. It’s been like that for 18 months and then everything just dropped down. My point is that it’s not easy, it’s very hard, we’re two smart people running the company. We got 25 people working for us that are all smart as well, still cannot find a good reason for why this is happening.
Louis: Thanks for sharing this. I guess that’s the underlying thing behind all of that is that it’s tough, it is really difficult.
Dave: I talked to 20 customers, I was at the point where I was calling people going on Skype, that’s the thing, it’s hard.
Louis: I appreciate your transparency. I guess that’s the next question, why are you being so transparent?
Dave: I think if you think about it, isn’t that what the best companies do? Think about the companies that you follow online, aren’t they all being transparent in a way? I just read a post by Rand Fishkin, it’s one of the best posts I ever read and he was just very much like, “Hey, what do I not know yet? What did I learn that I want to change? What would I keep the same?” It was a very long, in depth post about business. You know about high level stuff, you know about funding and that stuff, relationships, that kind of thing.
In my mind, it’s almost like trust is the number one thing. Actually, I’ll take that back, I think product is the number one thing and I think trust is secondary. But in marketing, it’s almost number one. Product comes first but that’s, okay you got a good product, it all remains the same. A person is going to buy from the person they trust. What I’m trying to do by being transparent is just getting the customer to understand who I am and that they can trust me, they’re buying my product.
This is a product that’s kinda no BS. They’re using it to track the time with their people, they’re using it to invoice their clients, they’re using it to pay their employees, we can’t have any down time. They need to know that they’re going to get good support from our team, they’re going to need a fast answer, they need to know that there’s a person behind the scenes, that’s my angle. I know they’re out there testing several different platforms at the same time, I know they’re testing different platforms.
I think they’re going to go with the product that fits them the best, number one, it’s about product first. But the second thing is they’re going to give my product that little bit of an extra chance because they trust us.
Louis: That’s a very interesting topic. I believe personally that trust is the currency of relationships. It’s like the glue that connects us with each other. I think businesses have lost their way in the last few decades because they are very corporate, very non emotional, very much like we are here from our Ivory tower, I’m talking to our customers but not even touching with them with the stick. Trust have dropped down because of that traps in companies and institutions. With the rise of internet, trust is going back, companies have to share stuff.
My customer experience in the business the way we buy, we are in the stage where we take a lot of decisions into buying softwares, it’s trying and taking the decision really the same day. But, maybe on the very far end of the scale, because we are involved with transparency as well, I have no problem signing up with a business that have a product that is not as good as a competitor but that is being more transparent because I feel I can trust them more and I can trust them to build the product better in the long run.
Dave: What I try to do is like I said, I just try to get them to know that there are people behind. I guess what I’m trying to avoid is the whole Microsoft thing where it’s like, “Am I going to buy a product and have it just be made by this, am I ever going to know who the engineers or the people that are running this company? Are they in some office, in cubes?” I want it to be on a more personal level. I think that it helps your churn rate a little bit. I think the people are more likely to not churn out your product if they know you and trust you.
What I’m doing is like a mini sales thing, I don’t usually get on the phone and talk or try to talk to somebody into getting my product but it’s like at least they know me and they know my email address and they can reach out if they need it.
Louis: I want to move on the next part of the podcast. As I mentioned before to you, this podcast is really for digital marketers being sick of the marketing bullshit out there. They really want to grow as marketers, they want to have their company grow, they want to be better at what they do without interrupting or misleading customers or treating them like nonhumans. When was the last time you saw a marketing campaign or a website that made you cry?
Dave: I’m not sure, I never had.
Louis: I had one recently, I didn’t cry of sadness, I’m not talking about this type. I’m talking about crying out of, “Oh my God, this is so bad.” Never?
Louis: The one that made me cringe the most is always using bad photos. Do you know this girl that you can see on every customers service chats, she’s a brunette with a headset. I just can’t unsee it anymore but every time I see your website using it, I can’t deal with it, I just can’t. Anything that pisses you off like this?
Dave: I think there’s one thing that upsets me, I don’t like the word chat. I don’t like being offered a 15 minute chat. I don’t like hearing somebody, “Hey, do you have 15 minutes to chat?” It will only take 20 minutes to chat, I don’t like that because I don’t have 20 minutes for anybody unless there’s a benefit for my company in it. I have 20 minutes for charity. I have 20 minutes for my son. I don’t have 20 minutes to sit there and listen to a sales pitch, there’s too much going on.
Lately, it’s been like somebody will literally email me four or five or six times, just an automated sequence like, “Hey, just popping this back up in their inbox. Do you have 20 minutes to chat this week?” About what? Why would I have 20 minutes to chat? They don’t even give me a reason other than to introduce me to their company. That’s the one thing that gets me, I guess.
Louis: That boils your blood a little bit.
Louis: For our listeners out there who are trying to sell to Hubstaff, make sure not to mention chat or anything like this because it’s not going to work or whatsoever.
I think we have a responsibility as marketers and entrepreneurs in general to make the internet a better place, to avoid using interrupting ads or that kind of stuff that make the experience very bad for people. You personally, how do you think marketers could do and should do to make the internet a better place?
Dave: I think it’s self-governing. I feel like it’s self-governing, that stuff is not going to work, it’s just not going to work. Everyone talks about how good content, you’ve got to come up with good content. Let’s say two or three years ago, there’s a big switch about only quality content is going to be the way to go. Now, we’re two years on the road, what do you know? If you’re not producing good content, you’re not going to have rankings, you’re not going to have traffic, you’re not going to get sales. Even if you get somebody to the site, they’re not going to be engaged.
If you put a big pop up on the window, people are just going to be pissed off and ready to go. I think things are self-governing to a point where you’ve got to be good. I think being a good marketer goes down the same path of what you’re saying in that. I think marketing is changing to be much more based on what’s good for the user than what it was before. It used to be where you could really talk in terms of what’s good for me, not like what’s good for me, it always had to be focused around the customer but more along the lines of you could get them to do what you wanted them to do in marketing, that was the name of the game.
You’ve got to listen to this one time offer, you’ve got to play this video or whatever. If you try to have a one time offer after somebody buys or whatever, you get probably 10% of the people just hitting x and then emailing you immediately and saying, “Give me a refund. If you don’t give me a refund, I’m going to charge you back. I couldn’t even download the product.” I’m just saying, I think stuff like that is self-governing.
Louis: That’s a good point. I actually didn’t even think of it this way too much, it’s a very good point.
Dave: It’ll weed itself out because the whole thing with marketing now is being good to the end user because if you’re not good, it’s not going to work.
Louis: But the best marketers ever, anyway, were all about customers from the first place. Even if you think back about marketing was created to link back the company like building products on the side and the customer that’s on the other side. When you think of business, the very core of a business is basically you should think about the middle age or this kind of centuries ago. You produce something, you sell it directly to the people. If they don’t like it, they don’t buy it, you’re out of business.
The more that we decentralize the production of goods with the selling of the goods, the more distance there was with the company and the customers and therefore you had to creating marketing to beat the gap. I think you said that before, marketing is a good product isn’t it?
Dave: Yep, 100%. That’s where we’re learning and that’s what we dump almost our money into the product versus marketing. Even the marketing that we do is basically to help people use the product better, help them understand the product better, it’s all about the product because people are going to make their own minds up. It’s hard for somebody to talk me into anything, I’m sure it’s hard for somebody to talk you into anything. It’s like I’m not going to change your mind by calling you up and saying, “Hey man, do you have 15 minutes to talk about this?” I can probably coerce with you to use my product especially if you’re not even using the product right now.
We’ve tried cold email, we tried cold calling, we’ve tried these different outreach methods. If somebody is not using a product, it’s either similar or it’s just really hard to do. Even if they are using products similar or they have a need, it’s still like getting in the switches, it’s hard. They’ve got to be in the right mindset to even talk to them and it’s got to be on their time, that’s the main thing, it’s got to be on their time.
It all comes back to okay, we’ve got to be ready on their time. I’ve got heavy support teams across all time zones because I’ve got to be ready on their time. When they’re ready to consume the content, they got to know where to find it, they got to have good documentation, it’s got to be on their time. We’ve got to have heavy videos, we’ve got to have good videos, we’ve got to have webinars, we’ve got to offer them many times. A lot of what we do is all money put into helping the customer, like I said, understand the product or work the product out on their time.
Louis: I guess marketers walking for companies selling shitty products or services are doomed.
Dave: I think their time is over. I think that there was a time when the internet first started back in ‘98, ‘99 through probably 2005 where you could have a crappy product for a while and then if you were doing better marketing you would win the game but that time, I think, is now over and the best product now wins. I think it’s only going to get more and more that way.
Louis: Which means the best product which is basically the best solution to the one of the customer problems. In your instance, it’s a SaaS software, it’s a SaaS business, in other instances, it could be shoes or whatever or it could be a coaching program, whatever. The product doesn’t necessarily mean something tangible like a software or something but it has to solve customer problem the best way possible for them to like it. I guess that’s the form of marketing.
Are you worried about competition at all?
Dave: Yeah, a little bit. What we do is super hard, first of all, it’s a hard business to be in. We call it building our castle because it’s not like a shed you can construct in a day, it’s a castle that takes years and years and years to build. We got to support Mac, Windows, Linux, iOS, Android, Chrome, and the web. We’ve just got a lot of money and a lot of time into it. I know by very, very smart people building from the right way up. I’m not worried about competition in that regard but you’re always worried about somebody big doing something for free.
Your goal should be better than a free product. You’re worried about, I guess, maybe a shift in belief or a product going out of style. I’m not worried about that with my current company because I think it’s on the up to date but that’s happened to me twice now. It’s just a shift in the market.
Louis: Are you prepared to answer that if it happens?
Dave: We’re diversifying, we’ve got different products now being released. We are diversifying. We’re not going on the road of focus and having the risks that come along with that. We are diversifying, you’ll see that come out probably February.
Louis: Interesting. Looking forward to that.
Dave: Project Management software.
Louis: You have some fear of competition in this field.
Dave: It’s just so related, it’s so related. Our logic is that we can do a lot of things. Right now we have 30 integrations with PM softwares which is great, they work fine. But the problem is we can’t just do whatever we want to with their API, there’s very high limits in terms of what we can do. We have full access to do whatever we want to do which is going to help us a lot.
Louis: Are you going to stop providing support for those or are you going to do both?
Dave: We’re going to do both for sure.
Louis: I’m interested about the allegory that you made around the shed and the castle. When you started out, did you build the size of a castle in woods or did you build a very tiny tower made of stones?
Dave: We started out by investing $26,000 a piece and we spent about probably $40,000 of that on our first prototypes and in terms of Mac and Windows clients that could track time on Mac and Windows and then the beginnings of the web. If we wanted to, we could just have stayed there and we already had a product, that was our free product. We had people coming into the door, left and right, we actually launched with that just as soon as it got stable enough where they could stay online, not crash.
We didn’t have a lot of features than we have now. Basically, it was always built on good foundation, I guess you’d say, but it was much smaller. I would say it was a tower of stone but now we’ve built on to it many, many times around. I guess that’s the best way I can describe it.
Louis: Let’s just take the first for a second, let’s say we are a digital marketer, you’re a digital marketer, part of a small business like Hubstaff was when it started, let’s say five, six employees. The product is good, it’s one thing already ticked in the list. Your task to increase awareness for this company and to increase sales. It doesn’t really matter, I think, whether it’s a SaaS business or a commercial or physical store. What would be the number one thing that this person that you would do starting today?
Dave: I would think about, first of all, I’ll just try to identify, a lot of things have come to us since we identified our customer. I think that you got to have a good idea about your customer. The golf thing was really, really easy. I already know their pain points and I already knew that because I was a golfer. You got to think that anybody going to visit golfdigest.com or golf.com, there’s going to be somebody that could be a potential customer. Right now with Hubstaff, it’s very hard. Generally, I think it is a lot harder with B2B companies because you don’t know exactly who your customer is, you don’t know exactly who’s buying the product.
There’s a business and we know that they generally were a remote business. But how do you target a remote business? It’s very hard to retarget a remote business because not all remote businesses want a software like what I offer. Just like, I guess, not all golfers want golf instructions, but at least you know that they are a golfer. With this remote business, number one, they’re hard to target, you got to go a lot deeper than that.
I guess what I’m saying is if you don’t understand the customer, make sure you understand the customer. Then, it becomes a lot easier to actually target them and try to figure out what should I write about because I’m going to blog, what terms should I go after when I do SEO, how sharp my page is, who am I writing for. All your marketing changes from there on. It’s like a lever that you can pull to say, “Everything that I’m going to do at this point in time can become a lot more valuable because now I know who my real customer is.”
What I did to do that was I took all the free people that I got into the system. Basically, what I did was I looked at their email addresses. I went either to LinkedIn to find them on LinkedIn or I went to the domain of their email address if it was firstname.lastname@example.org, I could tell what company they are from. Then I got a Google document out, I basically recorded the person’s email address and then I basically categorized what kind of business I saw when I went to their domain or when they said that they’re the owner of so and so startup, like what kind of business is that. I had enterprise software, I had startups, I had agencies, I had freelancers. By doing that, I learned so much. That would be the first thing.
After that, you start blogging for all of these different people, you start paid ads for these people. Paid ads might be the first thing I would do because it’s so easy, it’s so easy and fast, that would be the first thing. I think that has the highest ROI. We haven’t had any ROI on paid ads, we don’t do paid ads because they didn’t work for us at this point in time since our products are paid. But I would say that’d be the first I’d do because then I would learn a lot about maybe it would’ve worked.
Louis: I’d like to ask you one more question about the B2B side of things but before that, did you do anything like a marketing campaign or marketing activity or something involving marketing that you’re not proud of whatsoever with Hubstaff?
Louis: Everything that you did, you were proud of it? Didn’t make any mistakes in marketing or maybe in the business before?
Dave: I’ve made tons of mistakes. I have no regrets because basically, I learned so much from my mistakes and that’s the thing, man. Now, after being in business for four years, now I know, I know all these things, I know what didn’t worked, we tried everything. Only by trying things do you understand what works and what doesn’t and what to focus on.
Louis: What do you think was your biggest mistake in terms of marketing?
Dave: My biggest mistake in terms of marketing has been to basically go give an ad agency $75,000 and to trust them because they don’t know and they didn’t do any better job than what I would’ve done. It looked better, it felt better, I had a lot of faith in it, conversion wise nothing.
Louis: Were there online ads, yeah?
Dave: Website, landing pages, online ads, the whole thing, didn’t do anything for sales.
Louis: Now you are really on your own stuff and internally to do that?
Dave: Now I would never just trust somebody with that kind of money and budget again. I’d have to understand a lot more before. It’s really easy for an ad agency to go to an agency. The first thing that happens is they’re like, “Holy shit, are you serious? This is working this well and this looks this bad. We can double sales, we can triple sales.” It’s like how are you not supposed to be like, “Alright, that sounds really good. I could make ROI on that.” But then you get it and it’s like it does look better but actually conversions will work. Then what do you do? Nothing. I think it’s best to do small tests and trying to figure out, make them prove it on some level before.
Louis: Before committing to a bigger project. Coming back to the B2B side, let’s say you are now a digital marketer in B2B which I think you probably much are, that’s one of the hats you’re wearing. What’s the number one channel that you’ve tried that worked for you or number one campaign or activity that you would recommend to others to try?
Dave: Search. That is basically blogging. Search or blogging. They’re kind of the same thing. All those posts that you were talking about earlier, the growth post, we don’t get a lot of paid customer from that but we get a lot of reach, we get a lot of branding from that which contributes to trust. That’s the stuff that I send, trials that are already coming in the door, we send them that. I think what I would start with is just putting out some content related to the thing that you believe your clients are truly searching for.
If they are searching for email software, you’d be surprised. Yes it’s a hard market but you got to widdle it down to be like, “Alright, how many related terms are email software? What does the product really do? I’m sure it’s more than just email software. What’s the specialty? Is it marketing animation, do you focus on lower spam complaints, higher deliverability?” There’s all these things.
And then you basically do peer research and you try to figure out what people are searching for and then you just write on that topic and try to become the best at that topic, try to become the best expert in that topic. That’s a really, really small topic. By doing that, basically, you’re using all the other keywords you need to be using and it could be a landing page or it could be a blog, it doesn’t really matter in terms of that. Just putting out content based on a very, very small niche, that’s how we got started and that’s how, basically, we were able to get at the top of the engines for few keywords but customers start coming in. If you’re ranking it number 30, no one is going to come. If you have folks on the keyword, you can get to the top.
Louis: Laser focus instead of trying to talk about everything.
Dave: Pick out that one thing in the product, niche it down, and then do not one, not two, 30 posts on that one thing and then see what happens. Do those 30 posts as soon as possible.
Louis: If it doesn’t work for you, you can email Dave and just tell him.
Dave: The thing is good content is always going to be an asset. That’s the one thing about content, it pays you back over and over and over. If it does not work right away, probably it’s because it hasn’t been around long enough. But you’d also be surprised in terms of what hits, like something is going to hit, maybe one of those posts that’s why I said do the 30 because you’ll never know what post is going to hit.
You can pick out 30 keywords related to this little niche of whatever you picked out, email deliverability put it, there’s something in there’s going to hit. You’re going to be top of the ranks for that one little thing and that’s what’s going to bring you traffic and you’d become the expert in that space. It’s not that hard to do but you gotta niche it down.
Louis: Point taken. I think it’s very good advice, this laser focus. What do you think marketers should learn today that will help them in the next 5 years or 10 years?
Dave: All the people that I’m trying to find are technical in nature. When somebody is not technical, when they can’t design or when they can’t do some type of coding, it’s tough because they’re not able to do a lot of things. I basically need two people, I got to involve development to make changes, which I don’t like that.
Most of my marketing team now is technical in nature, I’ve got about two or three that are not but they can still operate the blog, they could still do things on the blog, they could still do things with marketing automation, that kind of thing, but they can’t do things like submitting poll requests. Most people I’m looking for, they are. Basically, I would say, you’re going to go a lot longer if you’re technical in nature.
Louis: What are the three resources that marketers should read or view or anything? What are the top three you would recommend?
Dave: There’s a book called Traction and it’s interesting. I like their viewpoint in terms of what to do after you find the channel that works, I like the viewpoint on channels, I like the viewpoint on what to do after you find channel that works. The book called Traction. There’s a book called Growth Hacking. There is one called the 80/20 Principle, that’s an old one but one that’s very valuable.
Louis: Who else do you think I should interview next?
Dave: I really like Hayden Shaw, he’s transparent, he’s good, such a nice guy, obviously very smart. We followed WP Curve blog, they’re from Australia. I follow them, I like what they do, I like the post they write a lot. I like the guy, his first name is Nathan.
Louis: Nathan Barry from ConvertKit.
Dave: Yeah. He’s killing it and he’s transparent. He’s doing very, very well and his company has done very well. All these guys to a point are transparent, you have to be.
Louis: Exactly. Coming back to the point of one of the first points that you made, what’s companies [00:56:28] and probably most of them are transparent in their service.
Dave: They have to teach, you have to teach something, to teach you have to teach your experience in selling.
Louis: Dave, thank you so much for your time. Where can listeners connect with you, hear from you?
Dave: My email is dave@hubstaff, they could email me. My blog is basically blog.hubstaff.com/grow, that’s a little bit to remember but basically if you just Google Hubstaff growth blog, you’ll find it. That’s my best stuff, I think, that I put out there. It’s all basically, like you said in the beginning, how everything we’ve done from zero to what we are now in revenue and how we got there, the decisions we made. Twitter is @hubstaff. I get those, that’s it really.
Louis: Thank you. To the listeners out there, I will share the notes and all the stuff we talked about with Dave today in the blog notes and all the resources he mentioned as well. Dave, once again thank you so much for you time.
Dave: Thank you.
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I’m a no-fluff marketer living in Dublin, Ireland (but yeah, I’m French).
I believe you can treat people the way you’d like to be treated and still generate results without using sleazy, aggressive, hack-y marketing. This is why I’ve started Everyone Hates Marketers – a no-fluff, actionable marketing podcast – as a side project in April 2017.
I’m also the Content Lead at Hotjar – a powerful way to analyse people’s behaviour on your website or app and understand how you can improve their experience.