The $0 Subscription Startup Stack – Part 2 of 4: Start selling

The $0 Subscription Startup Stack – Part 2 of 4: Start selling

In part 1 of this 4-part series, we covered tools you can get for your startup for no fixed subscription, to help you ideate, validate your idea, build your product, and run it.

The second and third parts will talk about what is arguably the most important thing for any startup: Finding and convincing users to use your product, and letting users find your product, and sometimes help promote it. These activities are also known as sales and marketing.

We’ll start with sales in this second installment, then go on to marketing in part 3. The fourth and final installment will talk about all the other stuff you need for your startup: Legal, accounting, fundraising, customer support, and more.

As before, any tool or service in this article has a zero-subscription tier, either free or freemium. In some cases, I make recommendations for paid tools above a free alternative, when there are high costs to switching later, and certain services that can’t be found free but are available without a fixed monthly fee may also be included.

My recent background is from my B2B SaaS startup CrankWheel, so this and the next installment will be significantly slanted to the type of sales and marketing you do for a startup like that, but many or most of the tools and approaches will be relevant for most types of startups.

hands shaking on a deal

Sales first

I’m covering sales first, because I think it’s typically more important than marketing, especially at an early stage. Most products are sold, not bought.

Granted, you always need to do the bare minimum of marketing, so that people will see that what you’re promoting is a real product with a real business behind it: You need a nice-looking website on your own domain, a contact email, and I’d usually recommend a business phone number and address. You should probably throw in a Facebook page and a Twitter handle as a bare minimum, along with occasional content and some followers to show that you’re for real.

The above level of marketing may be enough for certain types of startups, and it’s definitely enough to start hustling your way to get your first 100 paying customers, if that’s the game you’re in.

If you’re doing B2C, and particularly if you have a completely free product and plan to monetize later, then a lot of the following won’t apply to you. Let me give you some advice though: You want to have a good idea early of how you’re going to monetize, and even if your initial focus is on gaining free users, you want to start understanding and probably talking to your eventual paying customers as soon as possible. For an ad-driven business, these are typically the ad buyers, or the ad networks as a middleman. For a marketplace or an affiliate site, it’s whoever ends up actually paying you a fee out of their revenue.

A lot of startups, particularly those who start off by bootstrapping, are looking for paying customers almost from day one. These startups will benefit most from the following tools, which help with the day-to-day hustle of finding prospects, reaching out to them, and helping to convince them to buy.

Before we start the hustle, we need to know:

businessman drawing circle around diagram of people

Who are your customers?

The first step to finding more customers is understanding who is your best type of customer, or if you’re just starting out, taking a good guess at which type of person is likely to be your best customer.

I say person because even if you’re selling to other companies, your buyer is always an individual or a group of individuals who you sell to and who make the decision to purchase.

You should have at least a rough idea of what kind of person is most likely to be a good customer based on your ideation and validation stage. Who did your idea resonate with the most? Were some of the people you spoke to willing to maybe even put money on the table right then and there, i.e. to pre-purchase your product? These are a good first step.

If you already have some customers, which of them most actively use your product? What do they have in common?

The more specific you can make your ideal customer profile, the better. This will help you when you try to find more customers to contact, and will help you hone your pitch.

How should you sell?

Before we dive into tools for different sales processes, we need to talk about this: There are different approaches to sales that you can and should take depending on what your unit economics are like.

What are unit economics?

To understand unit economics, we need to look mostly at two numbers and the ratio between them. One is the customer lifetime value or CLTV, and the other is the customer acquisition cost, or CAC.

Your average CLTV is the total amount of lifetime revenue on top of your cost of goods for stuff you sell to an average customer, for the average lifetime of a customer. If you’re running a SaaS product, your cost of goods typically includes your hosting costs, payment processing costs and any subscriptions for platforms and services necessary for the operation of your SaaS. If you’re doing e-commerce, it would include your cost to source the goods you sell, your shipping and warehousing costs.

Your average CAC is the cost of acquiring an average customer. For example, if you look at a 3-month period and sum together all salesperson salaries, advertising costs, marketing costs, discounts, revenue shares, etc. for that period, and divide that by the number of new customers you gained in that period, that gives you your average CAC in the period.

Rule of thumb

A good rule of thumb is that you can have a well-growing business if your CAC is less than one third of your CLTV.

As an example, say you sell products in an e-commerce store and your average profit after sourcing, warehousing and shipping costs is $100 per customer, and that customer isn’t likely to come back later to purchase something else. You should try to get customers for a CAC of about $33 or less.

This isn’t a golden rule, of course, and especially in the early days you can be reasonably happy just to break even on CAC vs. CLTV, as those initial customers are likely to help you find more customers which will lower your CAC as time progresses, and their feedback will also help you improve your product.

Unit economics impact how to sell

Now let’s look at how you can sell, depending on your CLTV:

  • If your CLTV is, say, $30K, you can afford to spend around $10K on CAC. At this level and above, you can do Enterprise Sales. Have a dedicated account manager, fly to visit your prospective customer if needed, spend a bunch of time preparing specialized sales materials and proposals for just one customer. Of course, you need to keep in mind that only a percentage of deals will close, so you don’t want to spend the big money until the likelihood of closing is fairly high.
  • At a CLTV of, for example, $3K, your CAC target can be $1K. At this level you can afford to spend a lot of time on the phone and by email with prospective customers, but you wouldn’t typically be able to visit the customer in person. This approach to sales is commonly known as Inside Sales. When you see software companies online offering you a live demo with a sales person, Inside Sales is what they’re doing.
  • At lower CLTVs of say $300 or less, because a minority of prospects end up buying, you can’t really afford to spend much time selling each customer. At this level, you need to rely mostly on inbound leads and self-service purchasesor trial sign-ups, although you can also do some cold email outreach.

Let’s focus on Inside Sales

At the higher levels of CLTV, you can employ all the tactics that you can at lower levels, it’s just that you can also do more and it’ll still be worth it. At the lowest level, you can’t afford a dedicated salesforce and your revenue is mostly driven by marketing, onboarding, and helping customers be successful. At the highest level, in the early days it’s all about the hustle, and later on you can afford to get some high-priced sales consultant to help you devise some clever processes (not me!). Therefore, I’ll mostly focus on the middle-of-the-range Inside Sales type of sales process and tools in the sections below. This type of sales also what I know most about.

a diagram of various tools working together

Prospecting for outbound leads

Whether you are planning to do cold email outreach, or cold calling, or going to trade shows to sell your goods, you need to prospect for outbound leads. When you prospect, you should be looking for more people who fit your ideal customer profile.

LinkedIn

LinkedIn is completely free to use and remains my number one prospecting tool for B2B leads, even though they have made some of their searching/filtering capabilities only available on their premium plans. You can still often hone down straight to your ideal customer profile. For example, say you have determined that your SaaS solution is most likely to be adopted by a VP of Marketing at a 30-60 person company in Industrial Automation. You can filter by industry and geographical location, and filter titles for keywords, e.g. “director marketing”, and then go through the list to check company sizes. In LinkedIn’s premium product, Sales Navigator, you can take this further and search for e.g. people who started a new position in the last year, filter by company size, and much more. It’s pricey but worth trying out their one-month free trial to see if it’s for you.

Groups

Another way to prospect on LinkedIn is to find groups for subjects that are related to your product, join those groups and start participating in a meaningful way. You’ll be able to find relevant prospects in the member list, and they’re more likely to know of you when you reach out to them if they’ve seen you post something useful or write an insightful comment in the group. You can do the same thing with Facebook groups and Slack communities, just always be respectful that the groups or communities are not there for you to sell to them, they’re there for you to participate in them.

Finding emails

Once you’ve found some prospects on LinkedIn, Facebook or in a Slack community, you can sometimes start chatting with them right there, and sometimes this is a good approach. Another approach is to use a tool to find their email address and add them to a prospect list. My go-to tool for this is Hunter, and another good one is Anymail Finder. Both of these have a limited number of requests per month for free.

Both Hunter and Anymail Finder will also let you search for all the known emails at a particular company. Useful if you don’t immediately find the prospect you wanted, but want to check if there are other folks at the same company who might be relevant.

Databases

CrunchBase is a database of tons of companies, often listing their founders and key employees, as well as giving insight into founding rounds. You could use it e.g. to find companies who have just received a funding round that makes them an ideal prospect for your product. CrunchBase’s premium offering makes this kind of monitoring very easy. AngelList is another good database for prospecting. AngelList is similar in many wasy to LinkedIn, but focused on startups and angel investors, so if startups are your target audience this is one way to find founders (BetaList is another but usually very early stage). Elucify is a crowdsourced leads database where you can filter by industry, company size, role within the company, and more. It seems to have pretty good quality data, and it’s free, but there’s a catch: To get access you need to give them access to your email, where they scan for contacts, information from email signatures, and more.

Prospecting by technology

If you’re selling to companies that use a specific technology, you can try Siftery or Builtwith (both free) to find such companies. Hunter TechLookup is another one that will let you find websites using one or more specific technologies, and also filter by language and popularity.

screenshot of Gmail login page

Email for Sales

There are few things more important for sales than a reliable email system that helps you remember to follow up with your prospects.

As a basic system, I recommend Gmail. It is extremely reliable and there are a lot of email productivity and cold emailing tools that are based on Gmail. That said, if you’re running your own domain you would need G Suite, which isn’t freemium. So I’ll mention that you could get by with Zoho Mail, a solid product, but you’ll be missing out on many of the email productivity and cold emailing tools below. For those reasons and the high switching costs, G Suite is one subscription where I would recommend thinking about spending money right off the bat.

Email Productivity

There are a few components to typical email productivity tools:

  • Reminders to follow up, often dependent on whether a reply is received or not
  • The ability to send later
  • Email templates
  • Email tracking, knowing when and whether an email you sent has been opened

A really good and completely free tool for all of these is Wizy.io, a Chrome extension that integrates with your Gmail or G Suite email. I used it for a long time, until my team and I started using Streak CRM, which has similar functionality built in. I suggest you try both Wizy.io and the free version of Streak CRM to see which one you prefer. The pro of Wizy.io is that it has unlimited email tracking whereas Streak offers up to 200 emails per month in the free version. Streak’s email reminders are a little nicer than Wizy.io’s reminders, and I find that it plays a bit better with some other extensions I use. Your mileage may vary.

If you’re not using Gmail, I would suggest using FollowUpThen. It only gives you reminders to follow up, by forwarding emails to a relevant address such as 3days@followupthen.com to get a reminder to follow up in 3 days, but honestly that’s one of the absolute most important abilities to have.

It is, however, hard to find a free or freemium tool for cold email campaigns. Although you could use, for example, the built-in email automation features in AgileCRM which we mentioned above, I wouldn’t recommend it. What you want is a tool that sends the cold emails as if you had sent them yourself, from your own inbox.

Enriched Lead tools for Email

There are two tools that you should try to get more details on anybody you receive an email from, or send an email to. They also let you easily add them on LinkedIn and such. These tools are Rapportive and Clearbit Connect. The former is for Gmail/G Suite only, the latter also works in Outlook. Both are good and have slightly different data sources behind them; I use both.

Cold email, it’s a gray zone

Before I talk about tools for cold email, please keep in mind that cold email campaigns can be quite effective, but they are illegal in some countries (Canada, for one), and if you don’t do proper research and customize your campaign appropriately for your target audience, they can be very spammy. My rule of thumb would be, if it will take your prospect more time to read and discard your email than you’re taking to research that prospect and prepare the message for them, then you shouldn’t email them at all. You should be researching the prospect well enough to have a fairly strong conviction that you could bring value to their business, and you should at least write a personalized email opener for them, or better yet maybe start by reaching out on social media (e.g. commenting on a LinkedIn post of theirs in a meaningful way).

Also, please keep in mind if you write follow-up emails to prospects that don’t respond, which is something that many people recommend as there is typically a very low response rate on just one email and a significantly higher one if you follow up multiple times: Never just follow up with a “did you get a chance to read my email” or “just following up”. Always, always, add more value to the prospect in each one of your emails. For example there might be a piece of research you could send them a link to that could be helpful for them independent of whether they choose to go with your product. You can get more ideas for how to add value from this free tool, and from this playbook.

That said, let’s dive into the tools.

Cold email tools

With a good email productivity tool, you can run your own cold email campaign at no additional cost. For example, Streak CRM even in its free version will let you upload a list of contacts as a CSV file, with fields such as name, company name, email opening line, etc., and create a mail merge from one of your saved email templates to all of those contacts.

The place where it’s better to have a dedicated cold email campaign tool is when it comes to following up in your campaign. This is hard to do manually, as you need to set reminders to follow up each individual prospect, and it’s also hard to manually keep track of folks who request to unsubscribe from future emails, whereas tools will help you with that.

One such tool that does have a free tier is If No Reply. The free tier is limited to only 20 contacts per month, and will add some branding to the bottom of your emails, but hey, at least it qualifies as a full member of the $0 Subscription Startup Stack. The tool overall looks pretty neat, it lets you edit your email templates right within Gmail.

A simple and robust tool that I’ve used is Mailshake, but it does not have a free tier or even a trial (they do offer a money-back guarantee though). Just like If No Reply, it connects with your Gmail or G Suite account.

Tracking Prospects – CRMs

If you’ve ever read about modern sales, you will probably have heard of tools called CRMs, or Customer Relationship Management tools. Salesforce is the most famous of these, and some folks say that if you’re an aspiring SaaS company, that’s what you should use, not necessarily because it’s the best but you’ll get insight into the product built by the biggest SaaS company in the world, and can learn from that.

That said, Salesforce is expensive and time consuming to deploy and it’s certainly not for everyone. Also, Salesforce always comes with a subscription, so it doesn’t fit in our no subscription stack.

Recommendations

I’ve used AgileCRM which is very full featured and flexible and has a free plan for up to 10 people. Just beware that for some of their built-in functionality, you may be 10x better served with a more focused solution; for example, I found it 10x easier to work with MailChimp for drip campaigns than using AgileCRM’s built-in functionality for that.

I’ve heard very good things about Hubspot CRM, which has a free version, and also a “scholarship” program for startups which is basically a 90% discount. In conjunction with Hubspot Sales (which also has a free version) it looks very powerful, letting you create sequences that can include emails and phone calls, and letting you call straight from your browser (although you’ll need the paid version for that – I’m assuming you might want to call for more than 15 minutes a month, which is what’s included in the free plan, just a taste).

diagram showing inbound inside sales

The Inbound Side of Inside Sales

The holy grail of Inside Sales for software is usually the live software demo over the Internet, with a salesperson. For many other industries, it’s often getting the prospect to agree to a phone call, or request to be called back, and the phone call may include a visual presentation in many cases.

This typically ends up as an “inbound” customer, i.e. one that requests a demo or phone call. There’s a lot that happens before that’s called marketing, but we’ll cover that a bit later. Marketing typically has a goal to get a prospect to further and further stages in a marketing pipeline, and a request for a phone call or a software demo is often the first stage of a sales pipeline, where marketing hands off to the sales team.

Typical process

Here’s how it typically goes, and I’ll use Inside Sales of software as an example since it includes most of the bells and whistles, some of which are not done in other industries:

  1. Marketing success! Prospect decides to request a demo.
  2. Capture the lead: They fill in some details in a form and submit their demo request.
  3. Follow up / Pick a time: They typically are either told “we’ll email you with some suggested times” or they get to choose a time right away using a calendar booking tool.
  4. Screen share: When the demo happens, the salesperson will call the prospect or join a phone conference or web conference along with the prospect, and use screen sharing to guide the prospect through the software being demonstrated.

The industry standard is for a demo to happen a day to several days later, but this is non-ideal; research shows that your chances of moving the prospect to the next stage of your sales funnel are 5x greater if you call within 5 minutes compared to within 10 minutes, and when you compare responding to them within 5 instead of 30 minutesit shows an even more staggering 21x greater chance. You should aim to get back to your leads within seconds from them requesting any kind of contact.

Between steps 3 and 4, prospects may be asked to make sure they are ready to use web conferencing software, which may involve a download or making sure they’re at their PC rather than just on their smartphone.

Let’s explore $0 subscription tools for each of the steps from 2 to 4, and then we’ll end with a tool that does all steps in one, helps you find an agent to call right away, and avoids the need for your prospect to download any tools or prepare in any way (disclaimer: my startup makes this tool).

Capture the lead

The typical way to do this is to use a web form that populates some sort of database, or subscribes your lead to a newsletter, adds them to a CRM, or whatever it is you want to do with that lead.

If you have a static site and want to wire things up yourself without having to run a database, one neat way to do this is to use a couple of tools together to achieve this; this is the way we do it on StartupResources.io:

  1. Formaholic is a free tool which you can send plain old HTML form submissions to. It will store the submissions (maybe that’s enough for you and you’re done?). It can also be configured to forward each submission as an email. We forward the submissions to the next tool.
  2. Parse Emails by Zapier is a built-in part of Zapier, a fantastic tool for integrating various systems together (it has a free tier). Set up the parser to parse your emails and now you can pick fields out of the emails that arrive and use Zapier to take the fields from emails received and move them into other systems, such as your CRM.

If WordPress does it for you, lots of plug-ins will do this for you. For an Inside Sales type of lead capture, WordPress Leads seems to fit the bill (it’s free).

Lead capture forms are also part of HubSpot Marketing Free, which I haven’t tried yet but which looks quite powerful. I believe they also have a WordPress plug-in.

Follow up

Making sure somebody follows up ASAP with a lead can be as simple as making a Zapier rule that emails the lead information to a group alias where the first person to see it will handle the lead. For teams larger than one, this can be problematic as you may have race conditions where more than one person handles the lead.

Many CRMs have the concept of a queue, or the ability to assign new leads rounds-robin to different agents, so you could use Zapier to add the lead to your CRM, maybe with a tag indicating it should be followed up on.

Pick a time

If you’re not going to try to call the prospect back right away, it can be nice to let them immediately choose a time for a demo rather than having to wait for a few emails to bounce back and forth before they know when they’ll be speaking with you.

The tool I recommend in this category is Calendly. They have a free plan that works great for a single event type, but you may wish to upgrade to have multiple event types or to have a team servicing a single event type (so folks can pick a time slot as long as at least one salesperson isn’t booked at that time).

Screen share

The most well known contender that fits in the $0 Subscription Startup Stack is join.me, which has been around for a while and can be a solid choice. Their free plan allows up to 3 participants and their screen sharing is based on Flash and on app downloads for mobile devices.

Other solid web conferencing choices that fit the stack and that I have tried are UberConference and Zoom, both of which have free plans. Go with UberConference for a conference that many participants will be able to join using their browser, and Zoom if the folks you’re talking to are OK with downloading and installing software.

I would be remiss if I didn’t mention my own startup here, as our product is specifically designed for Inside Sales to reduce the friction involved in the software demo process, but that’s what we’ll cover in the next section.

All steps in one!

My startup, CrankWheel, provides a specialized screen-sharing solution for Inside Sales that takes care of all of the steps mentioned above, reduces friction at every step, and enables you to call your prospects within seconds rather than minutes. A free edition for single salespeople is available.

Friction is reduced because CrankWheel’s screen sharing works on practically every single browser out there, including on mobile devices, without there ever being a download, and because instead of asking a ton of questions all at once when capturing lead information, it asks just one to start with (their phone number) before asking the rest one at a time, while it searches for an agent to call the prospect.

All available agents get an instant notification that a prospect wants a demo, and need to be first to respond to get to pick up that demo request, which leads to very quick response times. CrankWheel adjusts its behavior and messaging based on agent availability.

Lead information is stored in the system itself, sent by email to agents, and can also be sent to other systems via Zapier and native integrations.

OK enough with my tiny sales pitch, hope you’ll excuse that and go try CrankWheel out for yourself or request a demo.

diagram of people at a conference

Get out there in the world!

While Inside Sales is great and I told you I wouldn’t talk too much about enterprise sales which is more about meeting customers in person, my final word of advice is to get out there in the world, go and meet (some) of your customers face to face, ask them what they think, and try to get their honest opinion. Not so much as an ongoing sales tactic, but as a way to learn faster.

One thing I think a lot of startups don’t do enough of is to go to industry-focused conferences where they can show off their product at a sales booth and get face-to-face feedback from their prospective customers. This can be expensive, but there’s no subscription fee (!) so I’ll let it slide as part of the $0 Subscription Startup Stack. Find conferences that are likely to attract your ideal type of customers, and try to go to them. Don’t go unless you can get a booth, or have some other solid plan for how to actually engage with hundreds of prospective customers. Sometimes you can get sponsorships or special pricing to go to startup conferences, but these aren’t very focused. As soon as you can afford it, go to a conference focused on the niche where there will be a high concentration of your ideal customers.

Summary

We’ve talked about why sales can be more important than marketing at an early stage, the importance of finding your ideal customers, and what kind of approach you should use to sell. We’ve then covered a lot of Inside Sales tools such as prospecting, email tools, CRMs and tools for the inbound funnel in Inside Sales.

The next installment, our third, will cover marketing – how to help your prospective customers find your product or service, and how to convince them to engage with you and eventually buy.

Our fourth and final installment will cover other stuff you need to build and run a startup – customer support, billing, legal, funding and more.

I hope you’ve enjoyed this installment. I’d love to hear your feedback, just email me.

The $0 Subscription Startup Stack — Part 1 of 3

The $0 Subscription Startup Stack — Part 1 of 3: Build something and run it

I’ve been building a SaaS startup for a couple of years now, and one of the things I noticed after a few months of operation is that all those small subscriptions I had for various things needed for the operation of the startup really start to add up. We have enough revenue now that those subscriptions don’t matter so much, but there was a time when they were a burden, particularly since we were bootstrapping.

I got to thinking whether it would be possible to build a startup stack with $0 in monthly subscriptions, and after putting together a list of the various tools we’ve been using, and looking for replacements for some of them where you can avoid the monthly subscription, I figured that this would be quite doable.

In this series of three articles, I’ll cover the different areas most startups need some help with, and list tools and approaches all of which have no fixed cost per month. Most of these are completely free, at least up to some decent level of usage, although some of the alternatives I list are zero subscription in the sense that you pay no fixed monthly fee although you do pay a small fee per usage.

Some of the services you use early on have high switching costs. I’ll try to point out tools that are like this, and give my advice on cases where I feel it may be good to invest some money early on to get you on the appropriate tool from day one, rather than having to spend a lot of time switching later.

I’ve spent almost 11 years doing startups (and almost 10 years leading technical projects at Google), but my recent startup experience is primarily from building a SaaS startup, so I’ll be able to provide the most relevant advice on categories of tools used by such startups. Many of the same tools apply to any type of startup, and I’ll also try to cover a few specialized tools other types of startups need, e.g. e-commerce startups, but I’m not an authority on those.

This first article of three will focus on tools you need to build a product and run it. The second installment will focus on how to get your product in front of your users, and how to make sales. The third and final installment will talk about all the other things you need to run a successful business: Accounting, customer support, billing, legal, financing and more.

Let’s dive in, shall we?

Ideation and Validation

Startups typically start with an idea. In this section, we’ll explore some tools and approaches that can help develop your idea, validate it by getting it in front of potential users, and more.

I recommend pitching your idea to potential customers very early, and very often, to avoid building the wrong product or service. Even if you think you’re all for this idea and will do super early pitches to real decision makers at potential customers, take my advice: Whatever the earliest you would feel comfortable with pitching a customer would be, do it twice as early, and do it twice as often as you planned to before reading this paragraph. Here are some tools to help you.

Mockups

Showing your potential customers a mockup of your product can be a great way to get early feedback. Having a rough design for your user interfaces ready will make it that much easier to explain your vision and get actionable feedback.

The cliché here is that your first mockup should be hand drawn on the back of a paper napkin is actually pretty close to how rough your early mockups should be before you start talking to customers.

Once you get a bit further, sketch-like mockup tools are all the rage. I use Balsamiq, which is a great tool, but it doesn’t have a free version except for a free trial. NinjaMock, which has been featured right here on StartupResources.io for a while, uses a similar style of sketch-like mockups and they have a free plan; the only catch is that your projects on this plan are public.

A similar tool with a different type of free plan is Moqups. Their free plan lets you have just one project, with up to 300 objects.

Another type of mockup is what’s called a design prototype, and looks a lot closer to a finished product although with no functionality behind anything. A very popular tool for this is InVision, and they have a free plan that lets you work with a single design prototype.

I like Reddit, and I recently stumbled upon an interesting thread there on the subject of prototypes and mockups, that mentions a few other tools.

Remember, don’t just build your mockups and prototypes. Get feedback from your team or friends and colleagues in the same industry, iterate on your mockup, then go out there and get it in front of potential customers for more valuable feedback.

User Testing

Your first quite-a-few go-arounds of getting user feedback should be done completely manually and by interacting with real people directly.

The way we did this manually at my startup, CrankWheel, was first to pitch to potential customers, and then as our product started being closer to usable, to do hallway testing. Hallway testing is when you grab people from the hallway and ask them to try to achieve some goals with your product or service while you step out of the room, but maybe record their interactions to see what they get stuck on and why. How to do this could be the subject of a whole separate piece; if you’d be interested in a piece on that, email me to let me know.

Once you’re slightly further advanced, you’ll probably want to use some tools.

A very neat tool is Peek, which lets you get a 5-minute video of a person using your website or app (along with their comments while using it), for free. If I recall correctly there are some limits on how often you can do this, but it’s a very useful service nonetheless, that UserTesting (a very useful but pretty expensive service) uses as a teaser of their full set of paid services. If you can afford them, great, they seem to be a leader in this space, but most startups starting out can get by with hallway testing instead, as briefly described above.

Another great resource is UsabilityHub. They have a $0/month plan and as long as you invite your own testers, using their platform to run tests on that plan is completely free. Using testers from their network is a pretty reasonable $2.50 per test.

I’ll also sneak in Stuart Brent’s UserInput.io. There is no free plan, but no subscription either — it’s pay per use. This could be an alternative to UserTesting but at a much lower price point.

Business Model Canvas

This is less of a way to validate your idea, and more a way to ensure that you’re thinking about the various different angles that might need validation. The Business Model Canvas is a very simple framework for putting a startup idea down on paper and understanding how it’s different, how it will make money, how you will get it in front of customers, and more.

You don’t really need a tool for this, there are lots of free templates you can download and fill in, but if you want a free and simple tool, you could try Canvanizer.

Validation from Investors

One good way to get often quite insightful feedback on your idea is to create a pitch deck and/or demo for it, and show it to some angel investors or VCs, and maybe apply for some accelerators. Even if you don’t get funded or accepted to an accelerator, you should most often get valuable feedback.

I would only recommend doing this if you are actually open to taking in outside funding, or joining an accelerator. You don’t want to burn any bridges you might want to cross in the future by making people feel like you wasted their time.

Product Development

This section focuses on tools you need to develop digital products. I realize not all startups are built around a digital product, but most have at least a website, which sort of qualifies.

It used to be you would need to pay lots of money for software libraries that you were going to use to build your product on. Those days are gone, with open source providing a free implementation for an incredibly wide range of things. Hooray! So what is left? Well, it turns out, quite a lot.

You may need to find and hire folks to work on developing your product. Maybe you’ve got this covered yourself, or through your co-founder(s) or close contacts that you can recruit, but maybe not.

You need a safe place to keep everything you’re developing, track versions, keep track of bugs, and so on.

You also need to manage your development project, get your product tested, and more.

Let’s start with a couple of tools to help you recruit talent, if you need it.

Talent

If you have local talent available and vetted by yourself or somebody you trust, that is often the very best way to start. Perhaps they are willing to work for some sweat equity, or even join up to become a co-founder.

If you’re not in a position to find the very best local talent, you may want to look online.

If you don’t have much time to spend and are willing to pay for the value you get, I would recommend Toptal. They have programmers, designers, and even finance professionals who can help you, and they hire only the top 3% of everybody who interviews with them, and they expect and enforce a high level of quality. There’s a no risk trial period so if you’re not happy with the person they find for you, you don’t have to pay.

If you have more time and are able to take a chance on trying a few people before you find the right fit, then check out Upwork. I’ve been able to find some good talent there at a good rate, but be advised that you may need to work with a few people before finding a strong talent and a good match in terms of ease of working with that person.

Obviously, neither Upwork nor Toptal are free, but both of them qualify for this article as there is no fixed subscription fee — rather, they are collecting a part of what you pay to the talent you hire through the platform.

Project Management

Developing your product is a project that can sometimes get really complicated, with lots of moving parts and many people involved.

My favorite tool for the cat-herding involved in project management is Asana. It’s like a perfect to-do list that you can categorize, tag, prioritize, and the best part is that it does collaboration really well. Asana has a very generous free plan for up to 15 users in a team.

Taking a slightly different approach to project management, a lot of people really love Trello. Instead of being based on the concept of a to-do list, the base concept feels more like boards on your wall with sticky notes where you can move sticky notes between boards. If you’re doing something like Kanban (we actually do this in my team but we use a real wall and sticky notes…), then it’s a pretty perfect match. Like Asana, they have a very generous free plan with an unlimited number of users and boards, but lacking some features you may end up deciding to pay for.

Code Hosting

You need your code in a safe place, off-premises, and you need to be able to go back to any older version of your code. Choosing a cloud service built around a revision control system is the best way to achieve this, and these days the only revision control system I’d recommend you use is Git.

Bitbucket by Atlassian fits the bill. It’s built around Git and it is free for teams of up to 5 developers. I haven’t used it personally but Atlassian is a solid company that’s not going anywhere, and I’ve heard people speak well of Bitbucket. That said…

Your source code repository is one case of a system that has very high switching costs, so I would choose carefully here. My company uses GitHuband we’re very happy with it; if you’re doing open source it’s kind of the industry standard (and it’s free if you only work with open source projects, no proprietary code). If you’re incorporating open source projects hosted on GitHub into your product, it makes it pretty easy to work with those.

Any feedback on Bitbucket vs. GitHub from folks who have used both? I’d love to get your comments.

Issue Tracking

I mentioned issue tracking in relation to GitHub above, so let’s tackle that next.

You need a place to write down problems that are found in your product, to assign them to people, track whether they’re new, fixed, have been verified as fixed, reopened, etc.

One way to do this for free is to track your issues in your project management tool, e.g. Asana or Trello, both of which I mentioned above. They’re not specialized for this, but can do the job.

Both Bitbucket and GitHub have simple issue trackers integrated. This is probably the way to go to begin with, for most startups.

Switching cost caveat: If you have a fairly large and complex product, you may be better served by going with a more feature-rich issue tracker right off the bat. There are full-featured open source issue trackers available such as MantisBTRedmine and the venerable Bugzilla, and if you host them yourself, there is no subscription fee, although I’d recommend using a hosted version for peace of mind and simplicity. There are also products such as FogBugz which some people swear by.

Quality Assurance / Testing

The basics of quality assurance aren’t that complicated, even though the work is challenging, especially to find the most elusive bugs. For much of what you need to start, you don’t need any tools aside from your issue tracker and a documentation tool such as Google Docs:

  1. For as much of your functionality as economically feasible, create automated tests to cover this functionality. This helps a great deal to avoid bugs creeping in later, and is a key component of Continuous Integration, which I highly recommend. I say “as much as economically feasible” because for a startup in the early stages, you may be better off spending more time on manual testing and less time on automation, until your product is a bit more mature. Early stage products tend to change a great deal, which gives you less time over which to amortize the setup costs of the automated tests, whereas manual testing has close to zero setup cost, with the downside that the per-test cost is high.
  2. Have a written description for how to test your product, i.e. steps to take to run through all the basic test cases that will cover most of what your product does. Google Docs or any other documentation system is good enough for this.
  3. Create a test matrix of the different platforms your testing should be performed on. Depending on your product this may be a set of browsers and different versions of their browsers, or it could be a set of operating systems and different versions of those. In your test matrix you can specify which
  4. When your product is tested, it should be done based on the written test description, as well as exploratory testing outside of what’s in the written description to try to find new defects in corner cases. For any new or changed features, you should also ask for hints from your developers on what they think might break or need a particular emphasis in testing.
  5. Any time you find an issue, register it in your issue tracking system and decide how to prioritize it, when to tackle it, etc. Your issue tracking system can help with this, for example you can break your releases down to milestones (for example once every 2–3 weeks) and determine which bugs to fix immediately and which bugs it may be OK to defer a little bit. This depends on their severity and how many users they may impact.
  6. Any time you find an issue that you would not have detected using your written test description, take a step to make sure this or similar issues do not come back in the future. Add an automated test that would have caught the problem, or add a test case to your manual test description that would have made the problem obvious in routine testing.

Your initial testing can be done by you and your core team, but I would recommend having a separate person doing quality assurance pretty soon after the ball gets rolling. For one, it’s a somewhat specialized role and folks with experience in it will find more bugs than those without, and for another, you and your development team will become blind to defects in the product, and will do less creative exploratory testing. As for development, I would recommend Toptal if you want to be sure you get a great team member without having to try several times, and if you’re more budget conscious and have more time, you should be able to find somebody on Upwork, but you do need to be willing to take that time and may end up spending a fair bit of money to try a few freelancers before you settle on somebody for the long term.

One key tool that I always recommend for quality assurance of web-based applications is BrowserStack. It lets you run literally hundreds of different browsers on both desktop and mobile platforms right in the comfort of your browser. They used to have some of their features free, but no more (unless you have an open source project) — so I looked around for some alternatives for the $0 Subscription Startup Stack.

One alternative is Browsershots, which is completely free and supports a range of browsers. It doesn’t provide live testing though, only screenshots of your site across multiple different browsers and versions (this is the same service BrowserStack used to have for free).

Another that is now part of my toolchest is the Blisk browser, available for Windows and macOS, which does emulation of multiple devices so that you can view your site for quality assurance, and in fact for development as well. Their free version includes some of the devices they support, and you can upgrade to get more.

Operations

Now that you’ve built a product, what about running it? Most digital products need to be hosted somewhere online. Many require functionality such as email, SMS, telephony, and more, that you’re better off buying from a Platform as a Service rather than building and running those functions yourself. Finally, you will need to understand how your users use your products in order to be able to improve it, and for that you need product analytics. Let’s explore each of these areas in turn.

Hosting

There are several levels of hosting you could go for. The simplest and least expensive level is when you have a simple static page. The next level after that is when you need your own dynamic back-end but can make do with something like WordPress, in which case you need a shared web host. Finally, if you are running a complicated digital product, you will likely want your own custom backend that you might host in multiple geographic locations. In all cases, you may want to use a CDN in front of your site to speed it up and decrease load on your servers.

Static site hosting

My recommendation: If you can build your site as a static site, you should do so. Especially if you’ve got some coding skills. You can do this even with fairly complicated sites that accept user submissions, might have a blog, and more.

For static hosting, I would recommend Netlify, which is simple to use and has a generous free plan. This is what I use for StartupResources.io, which is a static site even though we have various forms you can submit (more on how to do that in the next installment in this series). You can either simply drop a folder on your Netlify deployment in order to upload that folder as a new version of your site, or you can integrate Netlify with GitHub to continuously publish any branch of any repository as soon as you push to that branch.

Another good alternative is GitHub Pages which is built into GitHub, so if you’re already using that it may be a very convenient alternative. I use this for the CrankWheel marketing site and it works really well.

There are many free and easy static site builders that you can use to make a static site feel more like WordPress. For example, when I write a blog article for CrankWheel, I’m basically just writing a Markdown file; no HTML or CSS. The static site builder that I’ve used and can recommend is Jekyll, which takes a set of source and configuration files and builds the static files that get served up for your site.

For non-developers out there, you can still use static sites. Ask your web developer to set up the initial site using e.g. Jekyll, and then use a tool like CloudCannon so that you have a visual, web-based editor for creating and editing blog posts and such.

Shared Hosting

Many companies offer shared hosting of WordPress and such. I need to do my research on this before creating a full comparison review, but Bluehostcomes highly recommended by many folks I’ve spoken to. While it’s not free, you can sign up for as little as $3.95 per month using this link, and you get more than $150 in advertising value with Google AdWords, Bing and other leading advertisers, which is more than you’ll pay for the first 36 months.

Cloud Hosting

For the most complex needs, you’ll want a cloud hosting provider. There are times when you might want to set up a virtual private server (VPS) rather than do cloud hosting, but in my opinion for almost any reasonably complex product, the ability to grow without switching providers is going to be very important, so I’d recommend going with cloud hosting.

I’ve primarily used Amazon Web Services (AWS), and I’ve had a very good experience with it. I’ve also heard good things about Microsoft Azure (it’s not just Windows — you can run Linux on it too). The most important criteria for a provider to me would be that I have to trust that they will stay in business and won’t cancel any of the platform services that I’m relying on, and both of these companies qualify.

Neither of those are free for serious usage, although both offer a free tier to get you started. However, as a startup you can apply for significant credits with both of them. With Amazon’s startup program, you can get up to $15,000 in credits that are valid for 2 years (even more in some cases), and with Microsoft’s BizSpark program you get up to $150 of cloud services per month for free (along with many other benefits), and up to $12,000 if you qualify for BizSpark Plus.

Content Delivery Networks (CDNs)

A CDN is a great way to reduce the load on your servers, and in some cases can also provide redundancy and protection in case of a distributed denial of service attack (DDoS). If you haven’t already heard of CloudFlare, then you should check them out. Just head over to their site and click Signup, and you’ll be able to add a site for free. Their free plan is quite generous and includes a basic SSL certificate for your site, caching, and various other goodies that can speed up your site. They take over as the nameserver for your DNS. Setup is really easy. I use this for multiple sites.

Platforms as a Service (PaaS)

Transactional Email

Transactional emails are those emails your system may send on account creation, password reset, confirmation of orders, shipping updates — the emails your customers definitely want to receive independent of their preference in terms of marketing email.

Don’t set up your own mail servers to send transactional email (and definitely not marketing email — but that’s for our next installment).

Use a service like Amazon SES (Simple Email Service) for sending email. They have a free tier for up to 62,000 messages per month, and pricing after that is not expensive — $0.10 per 1000 messages. I use this for CrankWheel and it’s rock solid, although it doesn’t have all the bells and whistles of Mandrill (now part of MailChimp), Mailjet (free for up to 6,000 messages a month) or Mailgun (free for up to 10,000 messages a month).

A key issue with transactional email is deliverability, a.k.a. not getting your email marked as spam. Once you’ve got your basic setup for transactional email, use the free tool MailTester to get hints on how to optimize for deliverability.

Non-Internet Communications

Do you remember life before the Internet? There used to be these things called telephones, which people would use to talk to each other, and a bit later there was this thing we now call a feature phone where you could send short text messages (SMS), it was like Facebook Messenger only without the GIFs.

It turns out, for many products, the ability to integrate with the telephone network or to send text messages can be extremely useful and effective. We use this at my startup to enable sending text message links to screen sharing sessions, and it’s great because it works on all phones.

The platform I recommend for both telephony and text messaging is Twilio. It’s been around for a while, and I’ve personally witnessed text message deliverability improve quarter over quarter for the last couple of years.

Logs Analysis

If you’ve ever run a webserver or a custom server, you’ll know how useful it can be to view server log files to diagnose problems.

There is a really useful class of services out there that allows you store logs from all of your different servers and machines in one centralized place, visualize them, query them, and create alarms based on them. I very much recommend setting this up if you have a complex product.

The solution I’ve used is Loggly. It’s a solid product, and it has a free tier that will be suitable for many startups.

There are significant switching costs for a product like this. I sometimes wish I’d gone for a metered product like LogDNA, which is priced per usage, rather than going with a plan-based product like Loggly, where I’ve had many months where we were on a plan that was significantly too large for us. I haven’t tried them, but they promise lower rates than Loggly, and much faster queries, which is an area where Loggly doesn’t exactly shine.

Usage Analytics

If you have a complex product, read this section. If you just have a static site or a WordPress site, wait until the next installment in this series, where I’ll talk about marketing analytics — that’s all you typically need for a website.

Usage analytics are important so that you can see where your users are having trouble, compare retention rates between versions, and more.

Many of you have probably heard of Mixpanel, which was the pioneer in the space of usage analytics, finally making it easy for small startups to track user churn, behavior funnels and more. They have a solid free offering.

The alternative that I recommend is Amplitude. They were first to offer a generous free plan, and although their free plan today allows fewer events than Mixpanel’s free plan, I can vouch that the free version of Amplitude is very powerful and lets you visualize and analyze a ton of stuff regarding how your users are behaving.

Summary

We’ve covered ideation and validation, product development, and operations in this installment of The $0 Subscription Startup Stack.

The next installment will cover sales and marketing — how to get your product in front of your prospective users, and how to make revenues from them.

The third and final installment will cover other stuff you need to build and run a startup — customer support, billing, legal, funding and more.

I hope you’ve enjoyed this installment. I’d love to hear your feedback, just email me.


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Originally published at http://startupresources.io/blog/the-zero-subscription-startup-stack-part-one/ on November 19, 2015.

Speech for Startup Reykjavik 2015 Mentors

From left: Salóme Guðmundsdóttir, CEO of Klak Innovit, myself, and Svava Björk Ólafsdóttir
From left: Salóme Guðmundsdóttir, CEO of Klak Innovit, myself, and Svava Björk Ólafsdóttir

For the last three summers, I’ve participated as a mentor in the Startup Reykjavik accelerator programme. Today, I was honoured to be voted by the 2014 alumni as “mentor of the year” for last summer’s programme.

I was asked to give a short speech for the occasion, for the mentors who are participating in the Startup Iceland accelerator this summer. I gave the speech in Icelandic, and it is available in its original form here. What follows is an English translation:

Hi everyone,

I’d like to say a few words about what it is like to be a mentor, and in particular about being a mentor in the Startup Reykjavik accelerator, which I’ve participated in from the start.

I know many of you are experienced mentors, from Startup Reykjavik or elsewhere. For those of you who are getting started, it might make sense to talk a bit about what it is like in practice to be a mentor for Startup Reykjavik.

Usually, the way it has worked, is that at the beginning of summer, you let the organizers, Klak Innovit, know what dates you are available, and they will book mentor meetings with most or all of the ten teams participating in Startup Reykjavik.

You then meet each team individually, get a short presentation, and try your best to give them some useful feedback based on this first encounter. You follow this up by deciding which teams you think you could and would like to help, and this often ends up not being more than one or two teams per mentor. Of course, it can take several meetings before the mentor-mentee relationship clicks with one or more teams.

After this initial process, your communication is more directly with the teams you are taking under your wing, to organize meetings or use other communication tools. But at the start, it’s great if you can meet as many teams as possible, to be able to make the best selection.

Often, you can help a team in a quick way, for example by making connections for them within your network, even if you don’t intend to take the team on as a mentor. This is another reason to try to meet all the teams, or as many as possible, at the start, even if you don’t expect to be able to be an effective mentor for particular teams.

In addition to the organized meetings, Startup Reykjavik has several open events such as barbecues where you can meet and chat in an informal setting. These events are tremendously useful as a venue for helping a few teams outside the ones you are mentoring in an informal way, and to get to know the teams well enough to pick one or two to mentor. I strongly recommend that mentors show up for these events. Apart from being very useful, they are a lot of fun.

In fact, I think more opportunities for informal meet-ups between the teams and the mentors would be great.[1] Some of these could be more low-key than the barbecues, for instance just an afternoon to grab coffee at the Startup Iceland offices. The informal events are one of the best ways to create personal relationships that can last much, much longer than the 10 weeks the accelerator is ongoing.

Once you have established a mentor-mentee relationship, I’m pretty sure that it’s largely a question of personal style which modes of communication are suitable. All of the classical modes are available, such as meeting in person, using the phone, email etc. I’m willing to bet $10 that some team this year will use Slack to communicate with their mentor. Any takers on that bet?

For my part, I’ve found it most useful to engage in real-time communications with my mentees, either in person or over the phone or via Skype. While email and instant messaging can be great for follow-up or for classical management, being a mentor is not being a manager. It is much more about reading between the lines, seeing how your mentee is feeling, and hearing from the tone of their voice what it is that really worries them or that they’re unsure about.

This brings us perhaps to what it is fundamentally to be a mentor to a mentee. Is it like the relationship between a teacher and a student? I don’t think so, because a teacher usually has significant control over the path the student must take.

In my opinion, a fundamental tenet is that as a mentor, you must let your mentee take their own decisions, choose their own path, and shoulder all of the responsibility for their choices. When mentoring an entrepreneur, you must let the entrepreneur be the entrepreneur and remain firmly in the driver’s seat; the mentor should never assume that role.

I think a mentor should also expand the mentee’s horizons both outwards and inwards. Outwards, by pointing out other paths that could be taken, and possibly recommending one path above others, even though your mentee should always make the final call. Inwards, by helping the mentee recognize their own weaknesses or unscrutinized basic assumptions that might be hurting their decision making or prioritization.

First and foremost though, a mentor is someone who shares their experience in a meaningful way. Experience that could have come about from making their own mistakes, or possibly from being challenged by a mentor in their past. Any kind of experience counts, as long as it has bearing on what your mentee is doing or going through.

This is why it’s best to find an individual or a team that is working on something that you truly have insight into, something where you have meaningful experience you can bring to bear. Relevant experience and a strong desire to help the person or team in question is what makes us great mentors.

Let me end with a thought for all the mentors here. It’s a well known fact that investors, unfortunately, have a strong bias to invest in teams composed of entrepreneurs that remind them of themselves. This has meant that for example in the US, teams composed of white males from privileged families who studied at Ivy League schools, have had a much easier time getting funded than other teams.

Can we all join together to not let the same thing happen when we choose teams to mentor? Everybody, or at least most people, has unconscious biases that they’re often not even aware of. To reduce the impact of these unconscious biases, we can be mindful of how and why we are making our decisions, and try to consciously nudge them in a direction that hopefully reduces the impact of our biases.

I therefore encourage all mentors to pay special attention to teams composed of individuals who are different from themselves. That way, I think we will all learn more.

Thank you.

[1] The organizers of Startup Reykjavik have since informed me that there will in fact be quite many informal events, almost one per week. Yay!

Why CrankWheel, and why Iceland?

cropped-island_startupiceland111The following blog was first published on the Startup Iceland blog on May 11 2015.


About a year ago, I left a fantastic job at Google to fulfil my long standing desire to start my own company. I took a couple of months off, then started working on the startup idea I had when I left Google, only to discover that I was not passionate enough about building that particular business. I won’t describe it in detail in this blog post; suffice it to say that it was related to software localization, an area I worked on quite a bit at Google.

What followed were a couple of months of gut-wrenching self-doubt. This blog post is about those months, how I found and fell in love with the idea that became CrankWheel, and why my co-founder Þorgils and I chose to start in Iceland.

The metaphorical winter of my discontent was actually late last summer, when the sun in Iceland had started dipping below the horizon for a few hours every night. Þorgils and I had attended elementary school in Akureyri together, back in the days when Iceland had just one television channel which broadcast only 6 days a week, 11 months a year. We had become reacquainted a few months earlier, and were spending quite a lot of time together socially that summer.

On one of these long late summer nights, taking in the view from Þorgils’ house of Reykjavík’s city lights, we got to talking about what was missing in his line of business, which was advising and selling to clients over the phone. He described the typical process of selling financial products such as term life insurance: The sales agent calls the customer, tries to get them interested in buying, and if there is interest, they book a meeting in person the following day. A huge portion of such meetings gets cancelled or rescheduled ad infinitum. In the meeting, you bring presentation materials that will let you close the sale.

Why not finish the sale over the phone, I asked? The product being sold is too complicated to explain just by talking. You need to show charts and figures, to point to things and explain. At first, I thought people could use online conferencing systems to achieve this, but after we talked some more and did some online research, our conclusion was that all of the existing systems are way too complicated to ask your customer to use within a phone call; in most cases you would need to spend several minutes helping them set up such a system, and in all cases there would be a high likelihood that they would have problems joining the meeting because of outdated software, lack of technical skills, or a poor Internet connection.

This is how the idea for CrankWheel was born, as we brainstormed well into the night. I wrote down this one-liner as an early dawn approached: “For telephone sales and call centers, to add a visual element.” The idea really resonated with me, because I had vivid memories from the years I spent living in Canada, of attempting to stay focused while a customer service agent I had called to change my mobile phone subscription spent minutes reciting the details of my current plan, then the details of the plan I was switching to, and then repeated all of the details again after I confirmed that I wanted to switch. How much easier it would have been, I thought, if they could have just shown me?

The other reason I fell in love with CrankWheel is that it lets me leverage technology I care deeply about, namely WebRTC. This technology is built into the Chrome and Firefox browsers, as well as hopefully soon a few more of the major browsers, and can also be used in stand-alone applications. It makes it possible to create web applications that make use of real-time communications, i.e. real-time audio and video streams. Think of it like this: If Skype were starting today, it could be done as a web application, using just JavaScript, no download required. I care about WebRTC not only because it’s super cool technology which has the potential to be as disruptive to what you can create on top of the web as AJAX was back in the day, but also because WebRTC was the last project I worked on at Google, so I feel a bit of ownership in it, and I know a lot of the very cool people working on it.

I believe CrankWheel is 10x better than anything else out there today, because we are laser focused on one particular use-case, and on making it work every time with no hassle: You have a customer on the phone. You need to show them something. CrankWheel makes that happen in 10 seconds or less, regardless of whether the user has a computer, a tablet, or a smartphone, regardless of how outdated their browser is, regardless of whether the customer is a computer wizard or computer illiterate, and regardless of whether they are connecting over fiber optic cable or a 2G mobile connection. They never need to download anything, or do anything more complicated than point and click. The service agent is never in doubt that the customer is seeing exactly what they want them to see. We believe the whole thing has to “just work”, not just 99 times out of a hundred, but better than 999 times out of 1000, and we’re confident that our solution achieves this goal.

That brings us to the other subject of this blog post: Why we started CrankWheel in Iceland. It’s a fair question and the answer is not obvious. I have a significant network in both Montréal (in Québec, Canada) and in California’s Silicon Valley, both of which are great places to start technology companies, and it would have been financially feasible to move to either place and start there.

First off, there is the obvious inertia of moving away from family and friends. Both Þorgils and I have kids, and the kids’ school and friends and lives are here. But even if this had not been the case, I think it’s very likely we would still have started here.

It’s very easy for us to get started in Iceland. We both have strong networks here, and there are several Icelandic companies that have been extremely willing to act as beta customers and to run structured trials of our solution so that they can give us measurable testimonials, e.g., how much sales improved, how much customer service phone calls were shortened, how customer satisfaction improved, and so forth. Although the Icelandic market is not going to be a significant focus going forward, it’s great to have friendly and willing world-class companies almost literally next door that are happy to let us learn from their use of the first versions of our product, before we enter our growth phase and start focusing almost all our efforts on larger markets.

Starting in one of the world’s technology hot-spots can be very expensive compared to Iceland. Just look at the cost of living in Silicon Valley, or London, or New York, and it’s obvious. In the past 5-6 years, the typical size of a Seed investment round in the US has more than doubled and is now in the 1.5 million USD ballpark, and in Silicon Valley, that kind of money typically only lasts a startup 12-18 months, and that’s assuming a very small team. In Iceland, investors’ money will last considerably longer, and the time needed to reach break-even is shorter, since you will need less revenues to cover the expenses of a given size of team.

Finally, the talent pool in Iceland is really good. It’s small, but in my opinion the average quality of the people you need to build a product, e.g., programmers, designers and such, is very high compared to what I’ve experienced abroad. At some point I hope CrankWheel will have grown enough that it will start to become difficult for us to hire people with the right skill set in Iceland, but until then, this is a great place to grow our team.

There can be disadvantages to starting in Iceland, or any place that is small and far away from your future market area, but the magnitude of these disadvantages will depend quite a bit on the business model you choose. CrankWheel is a Software-as-a-Service (SaaS) solution, meaning it is a hosted solution and the kind of deep integrations and long sales cycles that are typical for enterprise software solutions are unnecessary. For a globally focused enterprise software company, starting in Iceland could be a significant disadvantage since most of your customers are far away, and you have a considerable need to visit them in person. For a SaaS company, there is much less need to meet in person, which reduces this disadvantage considerably. For our company in particular, that likes to use its own product to further reduce the need for meeting in person, this disadvantage becomes even smaller.

I hope I’ve given some insight into why I fell in love with CrankWheel, and why I’m excited to build CrankWheel in Iceland. I’m happy to continue the conversation on Twitter at either @joisig or @CrankWheel, or on CrankWheel’s Facebook page.

Shameless plug: CrankWheel is hiring! Check our Facebook page for links to listings.

I’d like to end by giving a shout-out to Bala. Thank you Bala, for the opportunity to guest blog, and thanks for everything you’ve done for the Icelandic startup community! I look forward to attending the Startup Iceland conference in just a couple of weeks, and I encourage everyone connected to the Icelandic startup scene to attend – it’s the premier event for our community.

 


The above was first published on the Startup Iceland blog on May 11 2015.

Introducing CrankWheel

This part of your bike is called a crankwheel. Without it, your bike would suck.
This part of your bike is called a crankwheel. Without it, your bike would suck.

I’m finally ready to blog about my startup, that I’m now working on full-time after developing it since last fall with my co-founder Þorgils (I’m the technologist, he’s the sales wizard). Our tagline is “CrankWheel: Power your Sales and Service,” we’re on Facebook and Twitter and you can sign up at http://www.crankwheel.com/ to get news (and a special offer) when we launch, which should be this summer.

In a nutshell, CrankWheel allows a customer service agent, a sales person, or anybody else who might have a customer or colleague on the phone, to enhance the phone call with the ability to communicate visually, as if you were sitting side by side in front of a computer screen, in ten seconds flat.

Why didn’t I blog about CrankWheel sooner? The truth is, I’ve been through the typical Valley of Doubt with this project.

It’s a trail that starts in the hills of “This is the Best Idea Ever,” meanders down to an outcrop called “Oh look, there’s competition doing something slightly similar but nowhere near as good” and further down to the still-happy foothills of “This will be hard but worth it.”

After an enjoyable start, the trail keeps descending into the Valley of Doubt, and just as it starts to rain, you hit the dense forest of “Ouch, we just found a lot more competition.” As a thunderstorm of the soul sets in, you end up at the bottom of the valley in the marsh of “I’ve just wasted months of my life with nothing to show for it!”

Luckily, in my case, I made it through to the green pasture of “Every customer we speak to wants our solution” just as the weather started to improve, up the knoll of “I’m sure there’s a better way” and after that, step by step up out of the valley until I’m now standing on a plateau called “Time to commit very publicly.” Hence this blog post.

Now that I’m on the other side of the Valley, I’m strongly convinced that we’ve figured out a much better way to solve the problem at hand than anything that’s out there today.

I made it through to the other side thanks to questions such as these:

  • Why would you ever force your customer to install software or an app on their computing device, just so you can show them something?
  • Why should you ever live in doubt about whether your customer is seeing exactly what you think you’re showing them?
  • Why should it take more than a couple of steps, ten seconds at most, to see something being shown to you? Why should you have to remember and type in ten-digit conference room codes?
  • Why should you be forced to care about what kind of network connection you’re using, or what browser version you have, or whether you’re using a tablet or a smartphone or a desktop computer, when what’s happening is something so simple to do in real life? Just to be shown something?

Those questions gave rise to CrankWheel. In ten seconds or less, your customer will see exactly what you want them to see, no need to worry about what kind of device or which browser they have, no need to install software on their end, and it’s extremely easy to join a presentation. It just works, every time.

I think CrankWheel will make the world a better place through happier customers, a more personal touch, and less need to burn gasoline while driving to places to receive the kind of service that can’t be delivered over the phone alone.

To give a hint about CrankWheel’s “secret sauce,” I’ll mention that the last project I worked on at Google was WebRTC. It’s great technology that makes an excellent foundation for a product such as CrankWheel, but it’s also very new technology, supported by only a handful of browsers, which on the face of things conflicts with some of CrankWheel’s main goals. I’ll leave it at that for now – more later.

Right now, Þorgils and I are finalising the lineup of our first several customers, one in each of a few different industries, all of them willing to run scientific trials with us to see how much CrankWheel increases sales, shortens support calls, increases customer satisfaction, etc.

We are also ready to hire employee number one, based in our Reykjavík office. The ideal candidate is a rockstar programmer interested in web technologies and real-time communications. Don’t hesitate to get in touch with me if you are one or you know one. I promise, this will be fun!

I really look forward to being able to show and tell you more about CrankWheel in the coming months, both here and on the yet-to-launch CrankWheel blog, as well as by email if you sign up at http://www.crankwheel.com/.

In the meantime, I’ll keep pedalling.