The paths, channels, hacks and experiments this small Australian tech business is exploring.
A little about the founder
I’ve been working in the marketing and tech space since 2005 and always considered myself more of a ‘technical marketer’ before the term ‘growth hacker’ took off. I’ve built, run and grown several large e-commerce companies in Australia, but my interest has always been in Software as a Service (SAAS).
Cogsworth is special to me. I love the problem that we are solving, I love the team we have in place and I love how we tackle the problem.
A little about Cogsworth (our SAAS business)
Cogsworth is the appointment scheduling tool that allows people to book meetings with businesses (now that is as tight of a one liner to describe what we do in the briefest possible terms). We’re not a Silicon Valley start-up with tons of money to burn; we’re bootstrapped all the way.
There is no question in my mind that Cogsworth is a better product to use than any of our competitors. However, that only adds to the urgency of finding scalable tactics, channels and strategies to achieve profitability.
What YOU will get out of this blog series
I want to try and give you a first-person-shooter perspective on what we are trying, how it is going. You’ll also get to see how we approach data driven marketing and make decisions, and bear witness to the emotional journey of it all.
Why $100k in MRR (monthly recurring revenue)?
Partly because it represents a benchmark for ‘making it’ in the online software industry, also partly because Alex did such a great job documenting his journey, and lastly because it’s both an ambitious yet realistic goal.
What $100k MRR looks like for us
We’re a freemium product at this stage (this may change), but right now it means that our task is to get as many people into the top of the funnel (signups) and get as good as possible at converting those people into customers.
At a high level, if we assume three different segments of paying customers; the minimum paying (assume they will pay around $40/year or roughly $4/month), the occasional upgraders (assume to be paying $80/year or roughly $7/month) and hyper engaged customers (who would be willing to pay $160/year or roughly $15/month) we can map these assumptions. A note on these figures:
- All of these prices are way more aggressive than our competitors and should therefore be a no-brainier
- Paying more is a function of adding more functionality. This relies on us:
- Being able to produce good additional functionality
- Being able to convince our customers to pay for this
- Assuming that the largest segment of our users will be free and occupy 50%. The second largest group will be basic users which will occupy half as much of the pie at 25%. Then the occassionals at roughly half as much at 15% (for easy maths), hyper engaged at roughly 10% (also for easy maths). The only segment we are not allowing for is the outlier segment that will spend dis-proportionally more because of a particular fit. We don’t want to model our business on outliers. We have our starting assumptions.
Here are my back of the envelope workings:
What 50 new users a day looks like
At our conversion rate of 3.5% (it will be better – lots of ideas on how to experiment with this) – we need almost 1,500 daily new visitors. Given my experience, I put some CPC estimates to the traffic and worked out the daily costs. Rather steep hey? This would be surmountable if this was a well oiled machine, but bear in mind that achieving consistent conversions from these and other marketing channels is going to be a challenge.
You will also notice that I have omitted channels such as ‘influencers’ and cold outreach, as well as making the affiliate channel extremely small. The truth of the matter is that I may be underestimating these channels – and I will run tests on these and others but my experience tells me that the major channels are depicted above.
You’ll also note the ‘viral’ channel which is conservatively estimated to be 10% – already we know it is pushing these boundaries. By ‘viral’ I mean people stumbling across the product from our customers directly or indirectly using it – like when they see ‘powered by Cogsworth’ in the embedded buttons or emails in the free account. More on this channel later. Lots of ideas here too!
Lastly, I did not mention the product itself acting as a source of marketing. This is distinct from the viral point I made, as I consider this channel to be more driven by integrations with partners and platforms and word of month – spreading the use of Cogsworth. Again, I’m not accounting for this as it is both difficult to measure and will occur naturally.
We need to invest in organic
Given the above table which predicts that we will get almost as much visitation from our organic traffic as our search CPC – we need to spend a disproportionate amount of time on this channel. Further, given that CPC is likely to cost almost $2k a day, there is even more impetus to get organic going.
NOTE: my goal is to prove economics of scale – that is, that we can acquire customers consistently from various channel all day, week, month and year long. Then we can raise money to feed this funnel.
My current organic traffic ideas are:
- Write blogs that offer value and insight (hopefully like this) > build links > build rankings > convert visits to signups > customers + promoters
- Open up guest blogging opportunities for our customers + user generated content
- Create comparison guides to our competitors
- Localise our landing pages and content to enable local rankings
- Encourage our users to embed Cogsworth on their sites – thereby allowing them to get bookings and also provide a backlink
Must haves before starting marketing:
To me these tools are the most important part of my trade. I wholeheartedly stand by each and everyone of them. They are simply the best in class.
- Google Analytics – top priority – must ensure traffic is accurate, have different views for different kinds of activity, set-up custom events and segments.
- Hotjar – must have – as much as you think you know your tool, you don’t until you have watched hundreds of people use it. Great for clarifying assumptions.
- Zapier / integromat – crucial – love both these tools for automation. The last thing I want to be doing is distracting developers to do silly integrations for me.
- Unbounce – crucial – by far and away the most expensive but also the most useful of landing page builder tools. The drag and drop interface is far more flexible than any of the competitors, they just do landing pages and split testing well. I can get a designer to design a landing page, then go and built it in Unbounce without worrying about code, speed etc. Huge time saver.
- Intercom – must have – especially when you have a custom coded app and you want to pass through custom variables and have API integrations, you cannot beat the intercom API and SDK. No wonder they are a billion dollar company – god they do support well. You save so much time with their knowledge base, live chat and email autoresponder integrations. Again, by far the most expensive – but by far the most valuable from a time saving perspective.
- Google Tag Manager – very important – again because I don’t want to be wasting any dev time on pixel and simple marketing script integrations.
- 1 password – important – I will be making a whole lot of accounts, I don’t want to jeopordise security with weak passwords. As far as I know 1 password is the only major password storage company never to be hacked. Also great for storing 2FA codes.
- WordPress – important – again echoes the dire need to not disturb devs while allowing me to play around with different formats, generate content and not risk the main app security.
The above are absolute essentials for an app. If you do not have an app, I would substitute intercom with mailchimp – but the above is the bare minimum I would be comfortable with.
Our journey so far
We launched in late Dec of 2017 after almost a year of iterations. Our first 200 users came from my personal contact list in Gmail, Linkedin and Facebook, with subsequent hundreds coming in from our BetaList listing and ProductHunt feature. I then submitted us to as many SAAS directories as I could find within 2 hours of work, experimented with a bit of PR – to boost initial SEO and get some word of mouth, but then came the lifetime deal community. Boy I will dedicate a post to my experience here, but all in all a really positive experience that gave us thousands of users and customers who helped us build a road-map, gave us feedback and tested the app at length. Now though, it is time for us to prove that we can acquire our own (non lifetime customers) at scale… and I have a plan to do it…
In the next post:
- Our landing page testing
- Marketplace integrations
- Content marketing
- Influencer outreach
- CPC channels
- Facebook marketing
You can signup to our free trial and get to know our product.
Please feel free to comment and let me know your feedback, questions, thoughts and ideas in the comments section below, and if you think this article worthy, please share it. You can also hit me up using the intercom button in the bottom right hand corner of your screen.
I’d like to discuss our technical stack, why and how we made our design decisions, share metrics and data from our marketing experiments and give you access to some of our internal videos, plans and content.
See you next week!