Hello to you, I hope you are well.
Here we are... the first edition of "Better than Ramen".
This newsletter is long, I recommend reading it on Substack and if your email software truncates it... click on the button to see it in full.
For you it's just another newsletter (for now), but for me it's a great moment.
I'd rather warn you: The more you apply what you find in "Better than Ramen", the more likely you are to be able to afford... much better than ramen.
(Even if ramen is really good)
I'm just asking you for an extra spicy dose of kindness, because I've never taken a single English class. It's also a personal challenge for me to offer maximum value in a language that is not my own.
I use translators (and I assume, because it does not change anything for you or the value of my contents) and I learn in parallel ;)
A quick introduction and we'll start the 3 topics of the day, are you ready?
My name is Pascal ("Bunbeau" on the unfathomable worlds of the Internet).
In the past I had the chance to create many companies.
Some of them were quite classic, but they had crazy growths (from 200k to 4M in 9 months and from 2 employees to almost 100 in the same period).
Others more special, like a startup with over 150k users in less than 3 years.
In short I am :
- Passionate about entrepreneurship
- A happy dad
- An autodidact who teaches in great schools
- The person after you who most wants to see you live comfortably from your businesses
- Autistic Asperger and introverted, even if they often go together
Today's marketing topics...
*drum roll*
1 - Decomplex your SaaS launch, because it doesn't matter (you'll see)
2 - My simple method to set your price efficiently
3 - What you need to put in place for each paid subscriber that leaves your product/service/SaaS.
Decomplex your SaaS launch, because it doesn't matter (you'll see)
A launch is scary:
- You won't sleep well
- Your brain will imagine 1000 scenarios (even if it is the 1001 that will happen)
- You will generate unnecessary stress
After all, this is normal, isn't it?
It's your startup / SaaS or your product that is playing its life there...
It's weeks, maybe months of work to bring your idea to life.
There's your blood and tears in this gem of an idea.
You MUST make your launch work to avoid ending up in the trash.
WRONG… !
I'm really glad I brought this up, because the launch myth kills many projects every year.
Beautiful projects.
It also ruins the careers of competent and promising indie hackers.
Simply by marketing stupidity.
I am going to lift the veil on a myth with you.
But first of all, who am I to allow myself to advance such a divisive opinion (a launch is not important)?
1. Someone who has been coaching dozens and dozens of entrepreneurs for years.
2. Someone who has ruined several businesses (and yes) because that's the life of an entrepreneur.
3. Someone who wants you to succeed almost as much as you do. Because in my eyes, entrepreneurs are the cement of our society...
Repeat 3 times after me: Launches are overrated.
Did you say that? I'm sure not.
Go ahead and play the game.
The survival of a product is a simple formula that can be summed up in two lines:
- Are there more new active registrants than there are users leaving?
- Do I earn enough money to live and keep the project going?
Without these two points, the product is in "survival" mode and will eventually die if you do nothing.
These are the topics of acquisition, activation, revenue retention and eventually referral (AARRR scheme).
What does this have to do with a launch?
A launch = An Ads campaign, without the cost.
These are the same rules:
- You don't know who you'll be competing with when you launch.
- You will have a relative gain in visibility.
- There will be a strong immediate impact and the effect will quickly fade.
So why does everyone want to do nice launches on BetaList, ProductHunt etc?
For 4 reasons that should not define the future of your product:
- Social confirmation
- Potential generation of a first revenue or early users
- The search for... the snowball effect
- Vanity
The snowball effect, the virality, it does not come naturally.
It is extremely rare for a product to go viral "by itself".
You are probably more likely to have a poker game on Saturday with a minotaur and a unicorn than to create a product that will go viral on its own.
You have to stop dreaming of overnight success.
Unless you know that in reality this night lasts 3 to 8 years.
So beware, spoiler alert: you can have a great business even if your launch is as bad as the first Uber app.
To get a snowball effect, you'll probably need to create content over a long period of time, grow a community to which you offer value on a regular basis, and talk extensively with your users to modify your proposition.
In addition, you can also meet an incredible competition... although their products are useless.
Don't you believe me?
Setting the scene:
1. You have been preparing your product for months.
2. You have been preparing your launch on ProductHunt for weeks.
3. You launch.
4. You get beaten and your visibility plummets because someone launches a spinner at the same time.
Real-life case:
This little free product is launched by someone I respect a lot, and who did it for fun.
Beside his main product.
The same day Twitter was full of :
- "How do you want to fight this?"
- "My product solves a real problem for him."
- "My bad luck is unbelievable... look"
Yes… ;)
I'm not throwing stones at Marie NG, whom I adore because this situation happens regularly.
And the problem is not Mary or people's love for "Fidget Page", it's believing that a launch is the key.
A launch is overrated.
It's a "bonus" that shouldn't make you forget the most important thing: without paying users, your company is just doing volunteer work.
I love ProductHunt, I love BetaList and all the platforms that give creators a leg up.
Just take these platforms for what they are, a boost.
So take a breath and focus on actions that actually impact your acquisition.
If you understand all of this, then you'll have launch jitters, but you won't be afraid of them.
My simple method to set your price efficiently
Pricing is a challenge for too many entrepreneurs.
It doesn't matter what country or background you are in.
It doesn't matter what your product or service is.
It doesn't matter if it's SaaS or saber-toothed tiger salad delivery.
Everyone goes through this.
This is especially important because depending on your price, you can't structure your business the same way.
The fear comes from these thoughts (be careful, hurtful truth):
- If I raise my prices my users will hate me
- If my price is too high nobody will want my product
- If I undercut my competitor I will sell more
- If I lower my prices my former customers will feel robbed
- Is my product really worth paying so much?
And dozens of other useless and arbitrary thoughts.
I will prove it to you, by experience.
For several years I sold job ads.
Not just any jobs, but jobs in a sector where companies were unable to do their sourcing.
The prices below are in euros, but it's the same no matter the currency)
I "sold" these job ads from memory (in this order):
- Free of charge
- 7€
- 14€
- 36€
- 190€
- 360€
- 4 358€
This is not very precise in reality, because I give these figures based on my memory.
It was almost the same service in all 7 cases.
Except that in the first 4 cases, you had to sell an incredible number of them to support one person (if you take into account the taxes and the customer acquisition cost).
Here's the very long list of customer reaction to each increase:
- None.
And yes, none.
And even if there had been some reaction, that's not a problem when you start your business.
And especially... as long as you haven't conquered your entire market.
Above all, you need to set a price that can support you, your project and the future development of your project (to meet your ambitions).
Well, in fact it was my investors who were pushing for the price increase. One of the few very positive things about our partnership...
And now, do you want my simple and efficient method to set the price of your product?
Whether the product is a SaaS, a traditional business or even a training, I always proceed the same way.
It's also the method I've recommended to many early stage startup founders (surprise, many are still alive today).
You have to start defining two points.
Be honest about these two points, because if you lie to yourself, then you might as well put a price on random.
1: Will my product bring a measurable ROI to my future customer?
2: Do I solve a painful AND time-consuming problem?
If yes to both questions, then you can charge a lot of money.
If yes to only one question, then you should align yourself with your competitors.
If yes to neither question, then no matter what your price is, you will have to bring a very particular positioning and very good services to "hope" to be able to live from it.
It's a brutal reality, but I know of very few businesses that don't fit this pattern I've constructed.
Regarding the exact amount of your benefits, it depends on your positioning and it is impossible to give a magic number in this edition of "Better than Ramen".
However, remember that if you are looking to make $10,000 per month (before taxes) and you sell a $10 product, you will need to make 1,000 sales, probably to 1,000 different customers.
Whereas with a $2,500 product, you need... 4 customers.
And it's easier to have the budget to acquire 4 customers than to find 1,000.
It's also more painful to lose one in four, while one in a thousand is surprisingly tolerable.
(By the way, we'll talk about this in another edition, but generally speaking, the more expensive the customers are, the less unpleasant they are)
Also, calculate your price according to the type of customer acquisition you want to make for your business.
What you need to put in place for each paid subscriber that leaves your product/service/SaaS
I had a discussion with @levelsio (the founder of NomadList/RemoteOk etc. Surely one of the most famous Indie Hackers in the world) on Twitter about a product you probably know: Slack.
He pays about 8000$ per month. For his community.
On the other side, Slack, do not listen when he asks to discuss this price.
8000$ per month...
Who wants to lose a customer who spends more and more EVERY month for years, without complaining.
Well companies that don't like their product anymore because they went from a startup to a bland, soulless company.
Excerpt from the conversation:
Be careful!
With this discussion I am not saying that you should absolutely sell off the price of your services or your product.
What I am trying to make you understand is that it is a signal.
A weak or strong signal, depending on the volume of complaints and users who leave...
And I will tell you what you should do with this signal to turn a negative situation into a real "game changer" in your company.
From experience, there are only 4 main reasons to leave a product or service:
1. I don't have enough money to afford it anymore.
2. I have found an alternative that better suits my needs (features/price/etc/)
3. I don't need to use it anymore.
4. I am extremely disappointed with the result compared to the promise.
That's it.
And every departure... and an opportunity to decrease the chances of someone falling into the 1/2/3/4 boxes.
Before you do anything, you must speak directly with the former client.
Email / Phone, whatever.
You will find that a former customer is often more honest than a hot prospect, because there is almost nothing at stake for them.
Psychologically, in the mind of a departing customer, "the damage is done".
Therefore, there is no reason to be cautious in your explanations, except for extreme shyness or inappropriate benevolence.
Try to be as thorough as possible in your questions, leaving room for the former customer to give honest feedback.
The secondary objective here is to determine if they fit into box 1, 2, 3 or 4, but the primary objective is elsewhere...
The primary objective is:
- Find out which button to push to reduce the chances of a future customer falling into that box.
It seems simple.
It sounds silly.
But it represents a fortune per year that you can earn with this approach.
An incredible MRR boost.
I've saved many corporate clients millions with this method.
Before they were focusing on churn rate, but not providing meaningful experiences to reduce churn in a segmented way.
Some examples of inspiration to narrow down each case (yes even the first one):
Case 1. The customer doesn't have enough money left.
Attention, this case is not systematic. Don't make the mistake of giving the discount card to all your customers who leave...
Adobe, telecom companies, and even well-known associations offer when you leave... to reduce your bill if you stay.
In several ways, so that it suits all situations:
- Pause your account for a defined time.
- A discount for life.
- A few months offered to temporarily lighten your finances.
This is a special case, sometimes you can recover customers depending on the quality of your approach. Remember that the primary objective of the 4 cases treatment is not to retain a customer, but to plug the leaks so that others do not leave.
Case 2. The former client found a relevant alternative.
This case is very interesting because it will allow you to know if you meet the needs of your buyer persona in terms of functionality (and/or ease of use).
You must therefore determine from the very first minutes of feedback whether the customer who leaves is really part of your target.
If not, it is logical that he will leave and you must be perfectly ok with that.
This is an ideal case to detect frictions and take or regain a certain advantage over your competitors.
It is possible that the competitor offers something similar, but cheaper etc.
This is a great signal for the "product" part of your business.
If you have a CPO or a product manager, he must have access to this data.
If you are the product manager, take these cases very seriously.
- Many BtoB companies are making calls from their SDRs to these departing customers since 2020
For two simple reasons:
- The SDR is used to hunting for information
- They want to know who they are leaving with
The goal is not to retain them, but to understand the signal, once again.
Case 3. I don't need to use it anymore…
Why?
Why don't they need it anymore?
The answer is crucial because this is one of the most dangerous situations for your company.
There are also two common answers...
One is reassuring, the other is a real disaster.
1. The former customer is lying...
and that's good. Because he is under no obligation to give you his reasons and your way of asking may be awkward.
2. The former client is telling the truth...
and in this case you may have a structural problem with your monetization.
If you solve a problem in one shot, no worries.
If you are selling a service that is supposed to be renewed, then you have a lot to worry about.
The renewal of a service (whether it is automatic or not) requires a long term or regular need for a solution to a problem.
If you have too many customers who are leaving by mentioning case 3, then you should seriously think about your business model.
Case 4. 4. Bad result compared to the promise.
Sometimes marketing is powerful, but it's not enough to move beyond the act of selling.
Yet if you take the AARRR model (Acquisition, Activation, Retention, Referral and Revenue), the sale is only the first step.
If the departing customer indicates that the promise is far from the result... that's a great signal!
Why is that?
Because it requires the least amount of marketing to fix.
A little psychology, more than technology, is often all that's needed.
For example, in a famous online game (which generates more money than you will make in those next ten cumulative lives) there was a disappointing game mechanic.
The reason I'm using this example is that it's very similar in the end, you'll see.
When a player was swinging an axe at a tree to make logs, or picking up items to craft, there was a problem.
This is how players expressed this problem: "It takes too long, we don't collect enough resources per action. It makes crafting uninteresting."
Most game designers (or contractors) would add resources per action, or overhaul the entire system.
Besides, the players' comment seemed almost out of place, as the action in question was very quick.
Maybe... too fast ;)
Yet... they simply lengthen the duration of the action. Thus giving the impression of a real effort to pick up.
Creating a feeling of high satisfaction.
The human brain is all the more satisfied to obtain something when the difficulty is proportionate.
On my old startup we turned a form that takes 3 minutes to fill into 12 steps that take 7 to 11 minutes to complete.
We increased our signup rate 9x by doing this, while getting crucial data (= where my users stop signing up).
As you can see, a departing user is most of the time an excellent optimization opportunity.
Never again let a user leave without knowing why and without offering him the chance to give you the data... that could change the life of your project.
Bonus : Featured product… BrandBird.app !
In each edition of "Better than Ramen" I will try to present a product I like.
Or a product launched by someone I like.
For this very first edition, I'm going to tell you about an app I fell in love with.
If you've ever tried to make a mockup for your websites, customer demos, or social networks... you'll go crazy when you see this product.
Important point, I don't gain anything by putting forward this product, it's really for my pleasure and ESPECIALLY to offer you more value in this newsletter.
What made the success of Canva, will make the success of BrandBird:
our incompetence to make nice designs.
BrandBird's interface is beautiful, intuitive and the result is just... wow.
It turns the smallest screenshot into a small work of art (mockup / gradient).
It is simply beautiful.
In a few clicks you'll get results something like this:
No need to say more, right?
Yes, one last point, this is one of the few products where I subscribed from the first day without waiting for the end of the trial period.
If you like #buildinpublic, here is the Twitter account of its creator: Jim Raptis
—---
Now I have ONE question for you.
Does this first edition of "Better than Ramen" exceed your original expectations?
If YES (I hope so) I have a request for you, since we are a bit more intimate now:
- Tell people about "Better than Ramen" on your social networks...
It's the nicest way to thank me for giving you all this for free <3
(it's hours of writing and the distillation of years of experience).
If NO, I have a very different request... you need to unsubscribe from my newsletter. Strange request, isn't it?
I hate to waste anyone's time and I only want to have people here who are happy to make progress every day <3
I wish you to take action every day a little more efficiently and send your MRR (or simply your business) to the moon.
Your new best friend,
IF you are not a subscriber
IF you want to share (and you should)