This is a guest post from Diego Oliveira Sanchez.
From zero to dream work/life – the power of knowledge
My name is Diego Oliveira Sanchez. I have a background in software, and I have been consuming content from Microconf since 2016.
Also in 2016, me and my business partner Magda Sternik launched our first successful product: a SaaS app for nutritionists and dietitians called Nutriadmin. This was after 2 years of unsuccessfully trying other business ideas that ultimately failed.
We have also launched a second app, related to the nutrition space in 2021, called Mealplana.
It wouldn’t be a stretch to say that Microconf and the talks from its speakers have been the most influential educational content we have learnt from to start and grow our business.
In this article, I’ll tell the story of our business, focusing on two pivotal moments: the start (no funding, zero income, no product) and plateauing in income six years later. Hopefully this is helpful to anyone planning to start a self-funded software product, or someone that has been stuck for a while and wants to learn what to do next.
How to start a software business
In my experience, you need two key ingredients to create a software business: the ability to create a great product (i.e. coding skills) and the ability to find customers (e.g. marketing and sales skills).
Most people have at most one of the above. It’s rare to find someone that can both build and sell a product.
Moreover, in my experience, most of the people drawn to Microconf tend to have a software background. These tend to be developers or professionals that can code and build great software. That was the case for both me and my business partner.
When you are a software expert, planning to start a business, then the question becomes: “How can I acquire the marketing/sales knowledge I need for my business?”
This is probably the most important consideration for anyone technical that wants to sell a product. Unfortunately, this is typically the kind of question that most new prospective technical entrepreneurs ignore or postpone to their peril.
Our first failed business project was a food delivery app that we built for a year, coding relentlessly without a single customer, no market research, no marketing. Turns out we built something nobody wanted, and had to start again from scratch. This is painful and wasteful, and you’d like to avoid it if possible.
Our approach to commercial app development changed dramatically once we stumbled on Microconf. In fact, a single video changed our trajectory almost overnight!
How to acquire relevant marketing skills when you are a developer
The video that changed our lives was Designing the Ideal Bootstrapped Business – Jason Cohen, Founder, WP Engine – MicroConf 2013, probably one of the most famous Microconf talks since the inception of the conference.
At the time, we were stuck with 1 year of building an app that nobody wanted with no sales and not sure what to do next.
We were reading marketing/sales books voraciously, which was helpful, but inefficient. This is because most marketing/sales books are not specific enough. By specific, I mean they were not specific to our use case (and probably for the use case of anyone interested in Microconf). Most books will talk about strategies for big businesses, corporations, non-software businesses, or other types of projects/companies. A lot of the knowledge is not actionable or not relevant for a small self-funded software company.
When we watched Jason Cohen’s video, our first reaction was “Sure, this sounds nice, but my case is special and this doesn’t apply to me” (laugh). Three days later we were like “Ok, this is definitely exactly what we should be doing”.
Jason Cohen makes a lot of specific points that we found invaluable:
Targeting businesses instead of consumers. Businesses have more money, so B2B is easier than B2C for our purposes
Staying away from marketplace business models which require 2 sides to get started (chicken and egg problem)
Charging a relatively high monthly subscription. SaaS business model
Annual plans
Customer development (I recommend Steve Blank’s “The Startup Owner’s Manual” book). I.e. do research and presell your product before you build it.
Target a niche and be the best at it, instead of focusing on a wide audience
That video probably taught us more useful knowledge than the dozens of books I had read on business until that point. All the advice is hyper-specific.
For more details on how we got started, you can read A 9-Step guide to launching a software startup for developers without investor funding.
Why is Microconf an amazing learning resource for developers?
The key with Microconf is that it aggregates mostly developers, i.e. people with a technical background, and it aims to discuss the marketing, branding, sales, and other business topics that we lack.
Moreover, the topics are hyper-actionable. Literally many of the talks are step-by-step guides on how to solve a particular problem. I.e. how to get started, how to reduce churn, how to increase revenue, how to improve your SEO, etc.
I’ve watched dozens of talks and, combined with my own experience building businesses since 2014 I can sum up the following “mini-guide” on how you can get started.
1. Find a business partner you can trust (optional, but it’s much easier to start with someone as opposed to being on your own)
2. Learn customer development. Rob Walling’s (creator of Microconf) book “Start Small, Stay Small” is an amazing guide!
3. Iterate over ideas and try to validate them/discard them quickly before building anything. This means that, in a month, you should be able to test out 5-6 ideas, without investing much money or time.
a. Define your target customer
b. Reach out to them on Linkedin, via email, etc. If you can’t then your target customer is unreachable, so this is probably not a good idea.
c. Check keywords to see if you’ll realistically be able to rank in Google for your desired term within a year. This will depend on competition, market size etc.
d. Interview your customers and ask them how much they would pay for your desired solution.
e. Set up a “mock landing page”, with a “mock screenshot”, where you ask strangers to buy your product (that doesn’t exist yet). Then spend $100 on Google ads and see if people attempt to buy.
f. Other strategies and more details are in Rob’s book.
4. Once you try testing 5-6 ideas with customer development, you will notice patterns, such as that some ideas nobody cares about. Others are too undifferentiated, yet others the target customer is unreachable or unwilling to pay enough. You should keep testing and quickly discarding your ideas until you stumble upon something that:
a. You are able to reach potential customers via a sustainable channel like LinkedIn or SEO.
b. People are willing to pay enough (at least $30/month) for your solution.
c. The solution is recurring in nature (e.g. a tool to manage your customer’s work, which is useful over time) as opposed to a one-off problem (e.g. something that you only need once).
d. Other conditions/checkboxes. You can learn more by watching Microconf’s videos on its Youtube channel.
5. Only after you have validated your idea, made a few pre-sales, or received confirmation that a few people are willing to buy your solution, then you can build it. That should be the easy part if you are a developer.
The process above is roughly what we followed to build NutriAdmin. The knowledge from Microconf was invaluable.
How to break from plateaus
After 6 years running NutriAdmin, we run into the challenge that our revenue growth had stopped. This meant we were not growing anymore.
With any subscription-based model, you can reach a point where roughly the same number of users join in as leave each month. When your new subscribers and churn match, then you stagnate.
There are two ways to break this deadlock: increase sign ups (or upsell existing customers), or reduce churn.
Now, the above is obvious, the question is what practical strategies can I follow to increase sign ups and/or reduce churn?
For a year we tried several strategies unsuccessfully, assuming there was not much we could do as the global covid-19 pandemic had reduced business activity worldwide in general, and that somehow everything would magically return to normal soon.
You know you are in trouble when you are just wishing that your business will fix its own problems magically over time.
The solution we found was, again knowledge. In particular, the right kind of knowledge to solve our specific problem.
Microconf for growing businesses
On May 2022 I had the opportunity to finally attend Microconf in person, in London (where I live) for the first time. This is after years of consuming online content from Rob Walling and other speakers.
I think the day of the conference has been probably be the most profitable for my business since its inception. Literally. The advice on increasing my product’s price and offering annual plans on its own has increased my revenue by about 20%.
Implementing the pricing changes took a few days of work, producing almost overnight results, and was possible only after I acquired the knowledge from other entrepreneurs.
Why does this work? Well, it’s simple. I am 30 years old at the time of writing this article, and have been in business for 7 years. At the conference I get the chance to meet people that are 10 years older, with 10 years more experience doing the same thing I am doing, but at the next level. We have so much in common sometimes that it’s scary.
Sure, you can watch an inspirational Steve Jobs talk and get pumped, but you won’t get any actionable practical advice from there. This is someone that is many, many, levels ahead in their business career than almost everyone in the world.
I find it much more useful and practical to get advice from people that are just a few steps ahead of me, and have fresh memories of how they overcame the issues I am now grappling with myself.
At the talk, I got about 4 months-worth of marketing-related tasks to add to my Kanban board. These include:
Setting up automated drip marketing campaigns to:
o Engage cart-dropout customers
o Find out the reason people cancel their subscription and automatically offer a solution to their problem
o Send new customers a tailor-made course on our software based on their indicated preferences when they sign up (we now ask them 3 simple questions that create a “persona” for them in our software)
o Automatic metrics to identify the new users that are at most risk of cancelling their subscription (e.g. they haven’t used their free trial at all) and automated solutions like offering resources, onboarding calls, free trial extensions, etc
o Automated emails to reduce delinquent churn
o And more! The possibilities are endless.
Brennan Dunn, from Rightmessage.com, gave an amazing talk explaining in detail, step-by-step, how to set up the automated email system described above. He explained how this system increased his revenue by a whopping 60%! We are now implementing our own version for NutriAdmin and for Mealplana.
Editor’s Note: Brennan Dunn has presented at MicroConf multiple times. This is another popular talk that he gave about tripling his SaaS growth rate.
I also got other invaluable advice from the speakers, and from other attendees. Such as:
How to efficiently hire someone part-time to delegate admin tasks to
How to survey my top customers and learn from them (so that I know how to get more like them)
How to reduce churn further (and the massive effect this can have!)
How once churn goes down, then Lifetime Value of your users goes up, which means that you can now afford to spend more in customer acquisition and can unlock new marketing channels (E.g. We have tried LinkedIn and Facebook ads and found that, although we can get a few extra customers this way, the cost is just too high. Now, if we manage to reduce our churn enough, and double the LTV of our customers, then that will mean we will be able to spend more in ads and then these previously unprofitable campaigns will become positive ROI.)
Met local entrepreneurs and had a lot of fun! These connections will surely be beneficial over time, both personally and professionally!
Conclusion
I don’t want to sound like a broken record, but I can’t recommend Microconf enough to any aspiring entrepreneur in software.
It’s free to watch Youtube videos and learn, and when you get to the level where you can afford the conference, you can go in person and get the networking benefits too!
Knowledge in books is often lagging behind by at least a few years. Books are really useful, but they can only offer a snapshot at the time they were written.
With an event like Microconf, you are always getting the latest information on online marketing for software developers, amongst other topics.
Hopefully you will find this amazing community as useful and fun as I have. Wish you success in your journey!