MicroConf 2011 – Patrick McKenzie

Patrick McKenzie starts with a “I didn’t believe I could do this” preamble explaining how he ended up learning Japanese and choosing a career with a Japanese firm that nearly killed him through exhaustion until one day he stumbled across his future business idea by accident while trying to help a colleague create some bingo cards. Patrick blogs about his business at kalzumeus.com

No budget

Patrick had no budget ($60) and as a result had to be creative about how he did his marketing. He researched the bingo card market and found niches to target and went after those for his bingo cards. Slowly grew the business while working on it in his spare time.

Google Conversion Optimizer

Patrick found that Google Conversion Optimizer was useful for using with Google’s content network. Only display’s content adverts at places that convert.

The Google Halloween

Discovered that Halloween is useful for bingo cards – another spike of traffic for Patrick. He wrote a blog article about it, ended up getting called by Google because his blog article was out-ranking Google’s own blog articles!

Exact Match Domain

Exact Match Domain (EMD) is when your domain name is a perfect match for the search phrase. When this happens Google give you a boost to search ranking. An example would be a search for “New York Plumber” finding the domain newyorkplumber.com. EMD works for .com, .net and .org.

Breaking Free

Eventually Patrick realised the revenue from Bingo Card Creator was starting to outstrip his paid salary job. Finally one night while he was asleep he sold quite a bit of software then calculated the hourly rate for the job that was killing him and decided it was time to quit his job and start working for himself.

Pricing

Patrick had some interesting observations about software pricing.

• Programmers consistently underprice their software. You should double your price.
• By charging more you automatically select out pathological customers.
• Revenue is dominated by people spending other people’s money – monthly budget.
• Recurring revenue is best.

Web apps

Reasons you should consider building a web app rather than a desktop app.

• Sales double
• No piracy
• Faster iteration
• Easier support
• Better tracking of actual use
• Better conversion rates

Make things easier for your customer, focus on the user experience.

SEO

For Patrick’s business 50% sales come from SEO, 75% profits come from SEO.

Create a reason why non-purchasers should cite your website. If someone doesn’t purchase still give them a reason to rave about you.

For all the non-core projects you do (A/B testing rather than bingo cards, etc) write about it and make it available for everyone. Give other people a reason to cite the work you’ve done. This is what Patrick calls the “Iceberg Effect”, the tip of the iceberg is the visible part of your company, the rest of your company is below the waterline and effectively invisible to everyone (and Google!). An example of this is the A/B testing system Patrick wrote for Ruby On Rails. He wrote about this and contributed the software to the community. The result was a lot more links pointing at his website, improving his Google rankings.

Create a system which makes content at scale. This isn’t possible for all businesses, but if it is possible for your business you should focus on this area for easy wins.

Optimise

A/B testing, cheap + easy to do.
Optimize the first run experience
Work on sales funnel optimization
Collect stats on eval users and re-uses.

Customer support

Do not outsource customer support. Customer support is an important source of feedback plus a great way to make a customer happy or ruin the customer relationship. This needs to be under your control.

Awkward customers

Its a fact in life that some customers are much nicer to deal with than other customers. Its also a fact that some days you are just not in the mood for dealing with awkward customers. I know I struggle with this. Patrick has an interesting, if unusual solution for this problem. When he has an awkward customer, Patrick does not write the email. Patrick’s friendly customer support puppet writes the email instead. Patrick has never known his puppet to write a snarky email to a customer.

I don’t know what Patrick’s puppet looks like, but you can see Gwendoline on the right of this text. She’s a rather sweet witch I picked up from a Cambridge market years ago. I’m sure she’d never write a nasty email to a customer – although she might be tempted to cast a spell or two!

Summary

Outsource:	Web design, web content, self contained programming projects.
Automate:	Routine customer support tasks. If more than 3 times, automate it.
Eliminate:	Don’t do stuff that isn’t useful, ask customers before doing (lean!).

Patrick has also written up his talk.

Tomorrow I’ll post Justin Vincent’s talk.