The Bootstrapped Founder Newsletter Episode 12 – January 31st 2020

Dear founder,

Just two days ago, I released the most extensive piece of writing I have ever produced in my life. I published a 25.000-word guide called “Zero to Sold on the Bootstrapped Founder blog. It is a compendium that will help both aspiring and experienced bootstrappers on their entrepreneurial journey. Every article I wrote so far is linked in the compendium, and every piece I will write in the future will become part of it.

Check out Zero to Sold if you’re interested, and read this Indie Hacker milestone if you’re interested in the business side of things.

The first article to be added to Zero to Sold this week is the one that a majority of the Bootstrapped Founder Newsletter subscribers voted for Finding the Most Painful Problem in a Market.

Last week I wrote about niches, and I have written about finding a critical problem before. Today, let’s talk about the intersection of those two.

In any niche, there are a plethora of problems. But only a few of them will allow you to start a business. Even fewer will sustain that business over a long time. So how can you find those rare problems?

Like most things in business, it involves talking to your customers. You will need to find and dissect all of the problems they have in their professional lives, and then find the ones that exhibit the properties of a critical problem.

A good starting point is to look for problems that are painful and belong to one of these three categories:

  • Problems that waste time: Productivity issues, tedious work
  • Problems that consume resources: Efficiency issues, overspending
  • Problems that lose opportunities for self-development: Anything that prevents or hinders Reputation, Accomplishment, Empowerment, or Advancement

Find out how intense the pain is for your prospect. Is it just an annoyance? Those rarely get people to buy anything. Pressing problems are better, as they require urgency, and people need to solve them quickly. Tedious but important problems are even better. They will make customers come back every time they occur.

The best problems are pains that are felt very strongly, caused by work that is both urgent and important. That’s unavoidable work, and that helping people deal with that will create very healthy and long-term relationships between you and your customers.

Understand that not all problems are known to your customers. There are problems they themselves might not be aware of. At FeedbackPanda, many of our prospects thought there was no way you could automate feedback writing, so they never bothered to look for a solution. Expect that there are unknown unknowns in your industry.

How can you find those? Look for people avoiding work. Where can people weasel out of something? Where do they keep pushing it further and further into the future until it’s much too late, and they have to deal with it? There are opportunities for founders whenever a prospect says, “I’d rather not.”

Please check out the full article called Finding the Most Painful Problem in a Market to find a list of questions to ask your prospects so you can find the problems you should be working on.

Bootstrapping in Practice

When we had our first hundred paying customers at FeedbackPanda, we chose to say thank you. Danielle and I went to the post office, got a hundred postcards, a hundred stamps, and we spent a wonderful afternoon composing hand-written messages to the first hundred teachers that loved our product enough to pay for it. The response was fantastic: a few days later, teachers who had gotten a postcard created posts on Instagram and Facebook, creating a wave of “free” marketing and a lot of goodwill.

Showing appreciation for your customers can take many shapes.

Let me share with you the things we did at FeedbackPanda that helped us build a tribe of supportive and very outspokenly positive customers around the business.

Respond quickly. Whenever a customer reached out to us, we would listen intently. I made a point of responding to Intercom conversations within seconds of anyone reaching out. Most of the time, they had a problem that we could solve for them immediately.

Listen and act. In the cases where they reported a bug or a technical issue, I make a special point to fix the bug, deploy it as soon as possible, and keep them in the loop. That resulted in a very reliable moment of surprise almost every time: most people don’t expect to be taken seriously, let alone immediately impacting the shape of a product.

Show that you value feedback. When customers would suggest features, I would tag their conversations and revisit all tagged conversations once a week. I’d let the customers know how far their suggestions made it, if we were working on it, or if we’d drop the idea. No matter the outcome, customers were delighted to be involved. Of course, they’d be extra happy when their suggestion made it into the product. We would then often give them a shoutout in the community if they wanted.

Go out of your way to help the ones that need it most. We had some customers who really struggled with technology. They were teachers, not IT professionals, and their job was often made hard by browsers and hardware not working correctly. I would spend hours explaining things to the lest tech-savvy customers, and they would be the most grateful people you have ever met. Usually, people stop helping a few minutes in, so it becomes a sign of great appreciation if you stick with them. A few of those teachers became our biggest fans and helped out other non-tech-savvy teachers get on board, as they knew exactly how to help them.

Value Nurture. Show them the value they receive from your product through congratulatory messages and statistics inside your product. Customers love the idea that you (benignly!) track their accomplishments and make an effort to reach out to them when they hit milestones on their journey with your product. We tracked their most important value metrics (like feedback written or Lessons taught) and presented it to them in a pleasant and readable form.

Celebrate your own Milestones. When FeedbackPanda was one year old, we decided to invite a few Instagram influencers in the Online English teaching space that we knew were our customers. With them, we announced a Zoom-based virtual birthday party, and a lot of people showed up to that. It was a big hit, we had a great time, and it allowed us to bond with a lot of old friends and new faces.

Customer Spotlight. Every week, we would select one of our teachers to be the “VIPanda of the week.” We would ask them for a nice photo and the answers to a pre-written interview, and we published one of those to our blog and social feed every week. It gave our customers a public face, and the more entrepreneurial ones even took this as a chance to promote their side-projects. It was a big hit in the community, and we had lots of them queued up at any given time.

Make Billing Flexible. Sometimes, our customers struggled to pay their bills. More often than not, it was the end of the month, and the credit card we had on file had reached its limit. We gave our customers a 14-day grace period with multiple charge attempts in between. We tied this into our Intercom chat, so we could respond to them if they needed help.

See the bigger picture. For the cases where people could not afford it, I would often forgive their invoices and give them a month of free access. With the low marginal costs of a SaaS, this often went a long way: they became evangelists for our brand, speaking about the product and the team in the most glowing words.

Meet your customers. When one of the online schools that our customers worked for hosted a conference, Danielle decided to fly over and host a meetup that same night. She booked a meeting room with a bar in a hotel, flew to the US from Canada, organized a few of our contractors and influencers to come, and invited everyone who’d be there. She even managed to get swag to the event without being in the country: she had ordered webcam covers and lip balm with our logo in it – an excellent treat for online teachers who teach through their webcam and talk a lot. As you can imagine, that was a night to remember! People still talk about it.

These things and many more were the activities we chose to do because we wanted our customers to feel appreciated.

There are many more things you can do, of course. You can find a lot of real-world examples in the replies to my tweet asking how other founders show their appreciation.

Links I Found Interesting

Gumroad CEO and Twitter virtuoso Sahil Lavingia asked about people’s favorite bootstrapped businesses, and his followers delivered. If you ever needed an extensive list of inspirational customer-focused companies and their founders, you will find them in over 300 replies.

Anton Elfimov of Uploadcare shared his story of how he wasted $50.000 on Google ads so the rest of us won’t have to. The systematic approach and the detailed insights are worth a read for everyone who has trouble getting to terms with the arcane school of magic that is Google ads.

I found an interesting story on Noticing You’re Confused by Arram Sabeti. If you’ve ever heard of Harry Potter and the Methods of Rationality (which I highly recommend), you will like this rationalist approach to understanding what we usually call a “gut feeling” and how to detect it.

Jason Fried of Basecamp wrote on how not to be a hothead in an article called “Give it Five Minutes.” He recounts a story of how he learned to take a step back and let things sink in before responding with crushing criticism.

Bootstrapping Success Stories I Noticed

Gabe from Divjoy shared how he doubled his sales with one small change. It’s a pricing change… without changing the pricing. But it had a significant effect! The meat of the story is in the comments, as with many Indie Hackers threads.

Jordan O’Connor’s business Closet Tools broke $17k MRR this week. That’s fantastic news! Back in October, Jordan wrote an excellent guide called Increasing Wealth As A Father, an incredible treatise on how you can to get your life sorted out as a founder and a parent, financially, professionally, and personally.

Next Up: Your Choice

Like last week, I would love to ask you to vote on which article I should write. Last week saw only a few votes, so any vote will count quite a bit. Please vote for one of these three articles:

  • Problem Validation: Making Sure You’re Talking To The Right People
  • Make it Sell Itself: On Referral Systems
  • The Boring Truth of Successful Products That Survive

Here is the link to the poll. Participation is entirely optional, of course. I’ll be very grateful for every single vote.

Thank you for reading this week’s edition of The Bootstrapped Founder. If you like what I wrote about, please forward the newsletter to anyone you think would enjoy it too.

If you want to help me share my thoughts and ideas with the world, please share this episode of the newsletter on Twitter or wherever you like, engage on Hacker News, or reach out on Twitter at @arvidkahl.

See you next week!

Warm Regards from Berlin,