Today we sit down with Laura Roeder to discuss her incredible entrepreneurial journey.
Well known as a social media expert, Laura was able to turn her knowledge and course into a 6-figure-per-month SaaS company. I wanted to discuss with her how she was able to do that so we talked about her content marketing process, how she builds/scales teams, and has utilized process in her company to remove herself from the day-to-day operations.
If you’re building an online business and could use some inspiration AND strategic ideas for growth, you’re going to want to check this episode out.
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“Without customers the company doesn’t exist.” – Laura – Tweet This!
“If they’re paying to learn it they might be interested in a tool that does it for them.” – Laura – Tweet This!
“Sometimes you can’t track ROI, but in your gut you know it’s a good move for your business.” – Justin – Tweet This!
What do you think of Laura’s entrepreneurial journey? Are you using Edgar in your business? Let us know in the comments!
Justin: Welcome to the Empire Podcast, episode 152. Laura Roeder has been extremely successful at both content marketing and social media and she recently decided to double down on her SaaS Company, Edgar. In this episode I got a chance to pick her brain about growth tactics, scaling teams, and delivering a kick ass product. You can find the show notes and all links discussed in this episode at empireflippers.com/Laura. Alright, lets do this.
Announcer: Sick of listening to entrepreneurial advice from guys with day jobs? Want to hear about the real successes and failures that come with building an online empire? You are not alone. From San Diego to Tokyo, New York to Bangkok, join thousands of entrepreneurs and investors who are prioritizing wealth and personal freedom over the oppression of an office cubicle. Check out the Empire Podcast. And now your hosts, Justin and Joe.
Justin: Recurring income might just be the holy grail for online entrepreneurs and our guest, Laura Roeder’s got that role on like a boss but she’ll be the first to tell you that her business is far from passive, and this is actually something we hear a lot, right Joe? The myth of passive income and any entrepreneur who are worth their salt who are doing work on industry projects and have good businesses going, kind of like laugh when you ask them about your passive income or how much of its passive, it’s just not the case.
Joe: Yeah, I think there’s two things separate here, right? Passive income and recurring income. They’re two things that everybody shoots for online and there’s a lot of negatives that go with even achieving these kind of goals. I think if you become passive and recurring you’re gonna get kind of lazy in your business. There’s a lot of costs that go into acquiring those customers that people don’t realize and cost, not only money but in time and in building this business around only having passive, recurring sort of revenue when there might be a better way to make a lot more money.
Justin: Yeah, I like your first point about passive and recurring not being the same thing. I’m not sure I agree that the best argument against passive and recurring is just that you’ll get lazy counting the money. I think that recurring is fantastic but that’s no guarantee and that’s no guarantee to continue either. If you do get lazy in your business that recurring can stop. You have lots of other concerns with a recurring revenue business and we actually get into this a bit on the call. One of the things that I think is really great about Laura is that she built an amazing audience over many years. She’s been doing social media, she’s been doing a lot of content marketing, she’s been connecting with her audience and eventually she found the perfect product market fit.
It reminds me a bit of Dan Norris over at WP Curve who kind of kept his audience rolling and launched a couple things and they just weren’t really hits and then founded WP Curve and it was a big win. I think Laura’s got a somewhat similar story so I kind of approached her that way and got to talk to her a little bit about how much help that content marketing was when she launched her SaaS company, how she got started, how she’s scaling her team, I think there’s some really interesting bits of information there. It’s helpful for me too as a content marketer and one of the things Joe, you and I talk about a lot, is what do we do with Empire Flippers where it’s Justin and Joe show, right? We’ve got the podcast, we’ve got a blog, we got all this stuff. How do we back ourselves out and she had some really interesting things to say about that.
Joe: Yeah I’m really interested in that part of the talk for sure, implies very well. I think we’ve done a fairly good job of trying to remove ourselves from at least the face of some of the marketing. Yeah, it’s a long road especially if you establish yourself as the face of the brand to backtrack from that a little bit.
Justin: She’s done a really good job of building her team so she’s got separate departments and going from a one man band to two man band to building a team is a challenge, it’s an interesting challenge but a challenge nonetheless. So, it was great to be able to talk to Laura about it. She was very gracious with her time and very helpful in coming on the show. We’re gonna get into the episode man, but before we do that lets talk about our featured listing of the week. What you got, buddy?
Joe: We’re talking about listing 40428. It’s a package of Amazon sites and Justin you know how much I love packages. So, this is a site that’s just listed above $25,000. It’s 4 sites in different niches including car accessories, electronics, pets, home and garden, so it really covers the gambit in terms of different niches. Has pretty steady income, obviously any Amazon sites had a very good Christmas season, but it’s had a good ramp up since then and it seems to be holding steady since the holiday seasons as well. The average monthly net income is just over $1,000, $1,043. We’re looking at about 4 hours of work a week just adding content.
Justin: I think this is a really good starter package. I mean out of this you get 4 different sites, the price point is less than $30,000 so it’s reasonable. There was a PBN used on these sites but the PBN was removed months ago so there’s no PBN uses on these and they’re earning. So if you buy this as a newbie, you can kind of feel your way through it, you can do a little DIY with the sites and test through it before you move on to bigger and better things. Someone looking to build a portfolio that wants to get started and kind of test through it and make some changes to the sites, I think this is a great package to do that with.
Joe: Yeah you know the listening page says it’s a wonderful opportunity for a portfolio pall too so I think that a newbie portfolio pall that needs diversification, especially in the Amazon can add 4 relatively small sites to his repertoire are move into the Amazon area. For those of you that have Amazon sites already and are at something, the higher tiers, 8 1/4 or 8 1/2, these are great sites to add in to either get you to the highest tier or to boost up themselves.
Justin: Alright man enough about that. Lets take it into the heart of this week’s episode.
Announcer: Now for the heart of this week’s episode.
Justin: I’m really excited to have Laura Roeder on the program. I saw her the first time in D.C. Bangkok, which is an event we go to every year in October. Saw her speak about her company, MeetEdgar, or Edgar as she likes to refer to it, and it was fantastic. She’s an amazing entrepreneur, I’m really excited to have her on the show. Thanks for coming on, Laura. Appreciate it.
Laura: Thanks, Justin I’m happy to be here.
Justin: Lets talk a little bit about where your company is that now. You’ve build a SaaS platform that’s basically for social media, for people that want to tweet and retweet, and message on Facebook. Where’s your company at now in terms of employees, in terms of total revenue, in terms of growth.
Laura: Yeah, so we have 15, maybe 16, we’re hiring a lot right now, around 15 or 16 employees. We’re just over 2 million, about 2.2 million annual recurring revenue.
Justin: Wow, that’s a lot of employees. Are those all in the U.S? Are they remote? Do you have virtual assistance? How does the team work?
Laura: We’re all remote. Everyone works from home, but everyone is in North America, so U.S. or Canada. We’re almost all full time, we do have a few part time customer service.
Justin: Cool and that 2 million that you’re talking about, that’s your monthly run rate, right? That’s where you’re at today?
Laura: That’s our annual run rate, yeah yeah.
Justin: Great. You know, last I saw you were at I think 120 or 130 blog posts, 120, 130 a month so you grown even since then. That’s fantastic. What’s your customer base look like? Who’s your kind of average customer or avatar?
Laura: Entrepreneurs who are really into content marketing. So, what’s different about Edgar from other social media tools is that we recycle your content automatically. So with other tools you have to keep refilling your queue. With Edgar, you actually load up a library of all you old blog post, for example, or all your old podcasts and then Edgar just keeps sending them out over and over again. For anyone who spent a lot of time, many, many hours writing these blog posts only to never send them out again on social media it’s a pretty obvious home run when you start sending out your older content you drive way more traffic to your site. So, that’s what our customer base looks like.
Justin: Yeah some posts are timely, like it’s very specific for a month or quarter or whatever and that wouldn’t work as well but for your evergreen content, having it go out again and again make sense. Right now I try to post some old content, I miss a ton of it I’m sure, right? I have all these old posts out there that I’ve left in the dust. Now, organic traffic is getting it but I’m sure some of our new social media listeners or followers would love to see some of that old content so I can see a need for that. Tell me though, I mean you’ve done really well with your company, you and your husband both are crushing it, but that’s not how you started out. So how did your entrepreneurial journey start?
Laura: I first started working for myself when I was 22. I was a freelance web and print designer making mostly websites for local business where I lived in Chicago. I did that for about 2 years and then I moved to doing social media consulting. Basically it was something I was helping my clients with for free and then people kept telling me, “you know you could get paid for this” and I thought that sounds a lot easier than making a website, just talking about social media, sign me up. So social media consulting very quickly turned into social media training, info products and I did that for about 5 years and then in 2014 I launched Edgar, which is my first software business. Obviously, also in the social media space.
Justin: You built up quite an audience in the meant time. So as you were doing these other businesses, you built up a following as a social media expert, you’re gonna have some social media so how much did that help you launch a SaaS business and do you think that those steps, those earlier steps, earlier companies were required to get to where you are today.
Laura: Absolutely. Having an audience already was, of course, a massive help in launching Edgar. When we launched Edgar we had an email list of about 80,000 people, about 30 to 40,000 followers on the various social networks, so obviously with tens of thousands of people to pitch to you’re gonna have much easier time then starting with zero people to pitch to. I’ve learned, I’ve been working for myself for about ten years now so obviously I’ve learned a lot in that process. I think that’s important to point out because I think people can get sort of discouraged looking at these quick success stories. With Edgar, we hit 100K in monthly recurring revenue in 11 months. We’ve had incredibly fast growth but it’s like a ten year overnight success story, you know?
Justin: Yeah, it’s kind of easy for people to listen in to this and go, “Oh well she had this audience already, of course give me her audience and I would crush it with this audience as well,” but I don’t think that’s necessarily the case. I mean you can have an audience and they can hate your product. A friend of mine, Dan Norris from WP Curve, he had done several iterations of different businesses and his audience just wasn’t responding to them. Then all of the sudden when WP Curve came out he had built up this baked in audience and when he launched that it was successful because, well number one he’d build the audience but number two he had a product they wanted.
Your story seems similar, it’s like you’ve done some other businesses and had some success there too, they weren’t a bunch of failures, but when you started this one it was like, oh it was a great fit for people you have baked into your audience. For someone starting out do you recommend that they build an audience first or product first? Can they focus on product first? Does it have to be one then the other?
Laura: I would say product first. I mean, there’s no set rules in entrepreneurship which is what I love about it. You can do it however you want, but I do see a lot of people making mistake of building their audience as sort of an excuse and a way to avoid doing the scary work of launching and selling and getting on the phone with people and see if anyone will really buy what you have to offer.
So, I would not advise … build up a blog following first, build up a social following first and start selling the product because then you’re bringing in revenue. The problem with building a blog audience is it doesn’t make you any money. So, if you’re trying to do this as a business, you need to start bringing in dollars as soon as possible.
Justin: Yeah, I like Andrew Warner’s argument for why he needed to start making money with Mixergy. He said, “Look I need to make money with Mixergy because I want to deliver better value. I want to make the show better.” He had a plan to make his podcast better and you’re able to do that so much easier when you have cash, when you have a team, right? You have all these people helping you.
Laura: Yeah, absolutely. We talk about that in my company all the time. Without customers the company doesn’t exist. Making money is not some sort of extra that we do. Money is the life blood of the company. No one has a job if we don’t have customers paying us to support the software and support the team.
Justin: We’re big fans of bootstrap companies. None of us, in our space in general, are raising cash in Silicon Valley. Why have you stayed bootstrapped? I mean your business seems like the type of business, the high growth, high end reward payoff, why’d you make the decision not to make cash?
Laura: It’s something that I thought a lot about and since then we’ve had a few offers for fundraising and I’ve aways decided to turn them down and for me the main reason is really the freedom. A huge motivator for me and working for myself is to be able to have exactly the life that I want.
If I decide that I want to quit working for a year and maybe my company will grow a little slower in that year, that’s fine with me. That’s totally fine with me. It’s usually not fine with your board, you know to be like, eh we’re just going to sort of take our foot off the accelerator for a while. Also, things like, you know there’s a lot of implications to raising money. You no longer have total financial control over your business. So when you are the only owner of the business, if you wanna buy a house and take out a few hundred thousand from the profits of the business, go for it. You don’t have to ask anyone, it’s your business, it’s your money. You can’t do that if you have investors cause it’s their money too. I just don’t like anybody telling me what to do.
Justin: Yeah, three months in Bali wouldn’t cut it all that well when you’ve got to raise a bunch of money. One of the things though, with your business in particular is high growth but high competition space too. You have competitors, you have people that are furiously working away to crush you, I mean that’s what they want to do. And that’s one of the reasons you raise money, right? To try to outspend them and outgrow them, so do you feel that pressure as you’re growing this business or, how do you deal with that?
Laura: You know what’s sort of interesting about that is there’s some advantage there to not raising money which is you don’t have to be the biggest. One of our competitors that’s raised a lot of money is Hootsuite. I’m not sure exactly how much they’ve raised at this point but at least 50 million if not much, much more than that.
The problem is when you raise that much money you need to, of course, return the money to your investors so you have to be number one in the space. Whereas, when you’re bootstrapped and you wanna be, let’s say now we’re about 2 million a year and we plan to grow it a lot. But let’s say we planned to stay at 2 million a year, that would be fine, you know what I mean? We could be like, “you know what, we don’t need to be … we’re happy with our 2 million, we’ll take a small percentage of market place,” so it doesn’t have to be winner take all, especially when you’re not aiming for this 500 million dollar exit.
Justin: I mean every year you set revenue goals and where you want to be, but from your perspective even if someone else beats you in the long game and they end up exiting for this crazy amount it’s not a big deal to you because you’ve got a 2 million dollar a year company, you’re a company, next year might be 3, 4, 5 million and you could keep cruising along and be happy with that. Would you feel some sort of loss, though? Or is that not your end game? Are you not just trying to compete with them at the endpoint? It doesn’t matter if this remains a lifestyle business so to speak?
Laura: No I mean it’s interesting how lifestyle business has become and insult in silicon valley, like “it’s just a lifestyle company.” Doesn’t lifestyle mean that you enjoy your life? Is that what that’s implying? Because that sounds pretty good to me. As long as we’re making our customers happy, we’re making our team happy, I’m happy with my work and financially everything’s good with me. I don’t need the super, big, impressive exit.
Justin: Yeah, that’s one of the things, in building our company we’ve run across these questions, or problems or challenges. We go, look should we do this? If we really wanted to get big, would setting up an office in the U.S., for example be better for us.
We always come back to the fact that this is our company, we don’t have any investors, we have no one on our board, we can do whatever we want and if we want to hangout in South East Asia, if we want to travel and want to take three months and do whatever, we can absolutely do that and we’re fine with it. So, I’m on the same page as you when it comes to this lifestyle business. I don’t like that term either, I’m not a fan of the lifestyle business as a derogatory word. I don’t get that. From where I stand, most of the people, most of the entrepreneurs that I talk to and know are bootstrapped, are in the air quotes lifestyle business, and they’re happy with that, you know what I mean?
Laura: Yeah, yeah, totally.
Justin: Talk to me about, what was the problem you were trying to solve with MeetEdgar, was it that you looked at the other tools in the market and were like, I just hate having to put all these Tweets up, like load up my Tweets and my Facebook messages for the work or for the month, I wish something would just sort of do this on a recurring basis? What was your, what were you trying to fix?
Laura: Yeah, so in my company obviously we’re doing a lot of social media marketing to promote ourselves and we had this really convoluted process that we were actually teaching others as well, where we had a big spreadsheet and in the spreadsheet you had different categories of all your social updates, like your emotional updates, and your blog posts and other people’s blog posts, all the different types of updates that you send on social. We had them all loaded into a spreadsheet and then we would just go through the columns over and over again, loading up each update one by one into the social tool, like Hootsuite or Buffer or whatever.
Obviously this was a really cumbersome process, you can’t really have images in a spreadsheet, and it just seemed really weird to me, you know, why is this so manual? Why do I have to keep loading everything up one by one, over and over again? And more specifically this content problem as well. Like you mentioned for your company, you have old blog posts that never really see the light of day on social, and it’s because there is no way to do that really with other tools besides Edgar. That you just have to do it all manually. You’d have to keep a spreadsheet of all your old posts, make sure you load them up over and over again.
So we were doing it this complicated manual way. People were paying to learn this way and were doing it in their business and having great success with this process, so I figured, well, if they’ll pay just to learn it and they’re actually doing it, people will probably be interested in a tool that does this for them.
Justin: Yeah, it’s interesting, Laura, and just to be clear, you’re not a developer. You were doing this out of spreadsheets, pulling links and trying to do this. And you were teaching that as a process. You had a bunch of students that were digging into these spread … I bet there’s one template spreadsheet that a gazillion people have out there right now, so-
Justin: You basically just turned that into a tool. As a non-developer, was that a little freaky for you? Like, God, I got to develop this software, I don’t even know where to start, how do I find a good developer? Did you start of really small? How did that work? I know that ultimately it was your husband you brought in, but he had to hire people and he had to figure it out. How did that go?
Laura: Yeah, so my husband Chris, he’s now our CTO of the business, and he’s a Ruby on Rails Developer and he built the initial version of Edgar. So I was very lucky in that I didn’t really have to doubt any of that stuff, because it wasn’t like I was trying to figure out how to do it and then he came along. Basically, he came along and told me that it could be done. Because I kind of naively was like … I honestly thought, there’s a reason none of the tools have done this. You know? I thought, this seems like such an obvious idea. Especially at the very minimum, Edgar keeps a library of all your updates categorized. I thought, why don’t they keep a library? That just seems weird, you know? Why do I have a spreadsheet with my updates when I’m using social media tool? Why are the updates not in the tool?
So I kind of thought, well, it must be impossible to keep a library of the updates. So basically I was talking to Chris about the idea and he was like, “No, that’s not impossible at all, I could build It.”
At that point, I mean I had always wanted to do software, I was always very interested by that business model. In my training business, I was very much the face of the business, and I didn’t like how tied that made me to the business. I wanted something I could step back from more, so software is a great way to do that. So I had wanted to do software for a long time, I just never had an idea that was good enough, that I knew was great and people would wanna pay for.
So once this kind of came together, I was pretty excited to go for it and try it out.
Justin: Let’s talk a little bit about how you were the face of the business, and you’ve done that in many of your past businesses. It’s been, for lack of a better phrase, the Laura Roeder Show. Right? Like hey, I’m here, hey let’s do this, look at this new thing, let’s jump on board.
I found that that’s really, really helpful in getting something off the ground. To inject your personality into it. People wanna buy from other people they like and trust, and if you’re out front of it, they wanna get on board. But there are some disadvantages to putting yourself out there too. Can you talk to me a little bit about any road bumps you ran into with having yourself out there so much?
Laura: Yeah, definitely. As I’ve grown my various businesses, what I always look to for growth and hiring is where am I bottle necking the business. In some ways that’s easy like, okay, in the being it’s like oh, I’m doing customer service myself, I’ll outsource that, or I’m doing all the market copyright, I’ll hire someone else to do that.
But then when you’re the face of the business, there’s a lot of things that you just can’t have someone else do. Like the teaching. I would try to have other people come in and teach, but people are really expecting you. That’s what they signed up for.
So I have an 11-month old now, and I’ve always known I wanted to have kids and I thought, once I have a kid, I mean one, at the very least, maternity leave, take off some time. But then beyond that, I want the freedom to do what I want with my schedule. I don’t wanna think oh, I wanna spend more time with my kid now that he’s a toddler and he’s home but I can’t, because I have to show up and teach this class. I don’t wanna be forced to do anything I don’t wanna do in my business.
I find for me in particular, I get really antsy whenever I feel like I have to do something. I have to feel for me like it’s a choice. Like okay, I like doing this, I wanna be here. And I just started to feel like oh, I have to do the teaching, I have to be the face of it. And even things like a lot of the writing. I’d have someone else do the writing but it was still under my name, because right, I was the one … like in my newsletter, there was this little intro for me, and I wasn’t even writing it but it was still ghostwritten from me. I just didn’t like that. Why does the intro have to be from me every week even if I’m not writing it? I just didn’t like that burden.
Justin: God, Laura, you’re speaking me right now. First off, I’m in that situation right now. My name is on everything, I’m on everything. And pulling back sounds really freaky to me. People just aren’t gonna like that, or there’s gonna be a problem. But I realized that I’m not gonna be able to continue to do that and to be at the front of everything and to be the one that writes the emails or at least is publishing them under my name. I’m not gonna be able to do that forever.
Was there any kind of drop off when you did that? When you started to pull back? And what are the exact steps you took? Did you start hiring contractors, bringing people on part-time to hire people? What were the first steps you took to get to where you are today?
Laura: I’ve been building up a team slowly over the years. So taking me out of it was actually more of a brand thing than it was a team thing. Because, like I said, even for LKR Social Media which is the training business, I was very good about having other people do like everything possible. Like I said, I would have other people ghostwrite under my name. I would show up and record a class but someone else would put together the slides, someone else would do the editing.
So I definitely started building a team, having other people do just like absolutely everything that I didn’t have to do. But then when we launched Edgar, it was really just much more of a switch in the brand, where the brand is Edgar, you know, the brand is not Laura Roeder. Laura Roeder does not show up anywhere on the website. We don’t position it as like hey, I’m Laura and I made you this software. You know?
Justin: I picture a Laura like pointing to Edgar like nope, I’m all done, I’m not on there, take me off. That’s cool. So you already built the team. I think I could learn something from you there, that’s something I need to work on. Joe, my business partner, he’s much better at that. He’s much better at placing himself. I’m struggling, that’s something I wanna work on in 2016.
Let’s talk a little bit about content marketing versus social media marketing. Your tool specifically Edgar is for social media marketing but you do quite a bit of content. You’re doing podcast interviews. How do you track the value of the different channels and campaigns for your business?
Laura: There was this blog post, we can link to it in the show notes, from First Round Capital about this tool called Expensenify or Expensify. And they wrote a great blog post that made me feel so much better. They were basically like, being able to do that detailed level of tracking is a total fallacy. Which I was just like, Hallelujah.
Because the truth is, the way that people interact with the web, it’s never a single point of contact thing. The way people interact is they read a blog post and then they forget about you, and then they see a link to another blog post, and they’re like oh, those guys. Then they follow you on Twitter. And then they unfollow you. They find you on Facebook and then they hear a podcast. It’s all a mix. And people get really into which channel is working the best, and I think you do have to view content as a bigger mix that all interacts together.
Obviously you can look at if something is a great referral for you. We’ll look at that with podcasts that we consider sponsoring. I’ll be a guest on a podcast and if they send us a ton of traffic that converts well, we’re like okay, maybe this would be a good one to sponsor.
But the thing is, you can’t track the success of sponsoring a podcast. People [inaudible 00:26:07]
Justin: It’s virtually impossible. Even the success of a podcast, and the success of social media channels. Like oh my God, we got a bunch of new sign ups and new customers from Twitter recently, but is that because I’m not posting as much on Facebook, that’s actually the better channel? It’s messy.
Laura: It is messy.
Justin: That does sound a little better. As long as you’re connecting with your customers and with your audience base in the ways they wanna connect. So if you’re in quite a few different channels, that’s gonna work … we’ve always operated under the idea that there are some things you’re just not gonna be able to track. You’re just not gonna be able to. But you know it’s a good move for your business, right? Kind of that gut track. Like I know this is good, I feel it, our customers are responding well to it, I’m gonna keep doing this.
Laura: We haven’t even talking about SEO, which is sort of the messiest of them all. Like at Edgar, search is our largest source of leads and customers, and the reason we rank in search is because we do podcasts and social media and content. It all contributes to search. But it’s impossible to say that this thing is more valuable than that thing, so we just do good old-fashioned content marketing. Nothing too complicated. We publish good blog posts every week, we link to them, we use Edgar to link to them regularly on social media. I appear on podcasts because it’s great promo for our company, I enjoy doing it, it’s a great way for new people to discuss us.
I think as long as, like you said, you see that you’re getting a good response, you can see some of the traffic coming in … in a way I view it as don’t even try to get too innovative. Just do what everyone knows is already working, and it’ll probably work.
Justin: Yeah. With content marketing in particular, I’ll ask you which of the two routes you’ve taken. You have, as I mentioned before, the WP Curve model where they talk kind of generally or widely about entrepreneurship, about running a business, and how to use … a lot of how to stuff, very in depth kind of guides. On the opposite end, you have Clay Collins over at Leadpages, where they do very, very specific … the conversion rates. It’s all about Leadpages.
I see the benefit to both sides. On the one hand, the Leadpage stuff, when you’re talking to your target audience, the exact people you want. Maybe it gets a little repetitive but those are the people you want. And the other end, Dan kind of wants to delight his audience and cover a rounded view and scope of what they’re looking for and what they’re interested in. Which have you used? Do you see value in both? Which one do you prefer?
Laura: We try to do both, actually. So we try to have a good mix on our blog of social media how to, along with more … like we’ve had some posts about goal setting for the new year, which are much more broad entrepreneurship. The social media how to posts, I think, are often a lot more boring for our team, because it’s like stuff that to us feels like it’s been hashed on a million times before, and obviously a lot of people have already written about it. But, especially for search, people search for it. We see that those posts definitely get the most traffic overall, those social media how to.
Justin: It’s almost like you’re saying the same things over and over in just a slightly different way. I can see how your team would get a little bored with those ones. But those are the ones that people really respond to, customers are like, oh, that was really helpful, because it helped them at that time in that minute with that specific problem, right?
Laura: And they provide a great resource too, which is another benefit. One of our most popular posts of 2015, I’m actually waiting for our data [inaudible 00:29:36] I think it was our very most popular. Just how to find the best times to post on social media, in the various networks. Just a break down of how to go into the analytics on Twitter and Facebook, and find that information. A ton of people have already written about it. There’s a lot of other articles about it. But it means that every time our customers ask, which they do all the time, our customer service team is able to send people to an Edgar blog posts. Which just makes us look like a great resource. We’ve written about this, we can help you. They’re staying on our site, which is always good.
It’s great to have that stuff too, just as a resource for your CS team to send people content that you created under your brand.
Justin: With your company, it seems really nitchy. You cover a really wide range of customers. I could see your audience and the customer for Edgar being fairly wide. But it does one very specific thing. In terms of growth for your company long term, do you plan to expand the tool or do you just wanna be that tool for a very wide range of customers?
Laura: Definitely keep focusing in the single problem of the tool. Right now we have, I think, a little shy of 4000 customers. That’s nothing. You know? There are so many more customers to get, just in Austin alone. I think a lot of people make the mistake of going too broad with their tool, because they get sort of bored, or because their customers are maybe asking for different tools or whatever. But we have so much more growth just within our market of entrepreneurs that focus on content marketing. There’s a lot more than 4000 of them out there. So we really wanna stay focused on that market.
Justin: That’s cool. I think that’s interesting. There is an argument though to, I guess, scratch itches or solve problems in your markets. They have other things that they need and that they’re buying from, but you can get kind of diluted if you start focusing in these other problems and building this other software. You can kind of lose focus on the one that got you that. It’s a gamble when you’re creating all these other tools and all these other pieces of software. It’s a gamble every time you create one.
If you can reach a wider market with the tool you already have, that may be the better approach.
What are the end goals for Edgar? What is your ultimate plan? Do you wanna sell the business? Do you wanna raise cash and get billion dollar company? What are you planning to do?
Laura: For now, it’s very much one foot in front of the other, just growing the business. It was interesting, you and I were both at the Dynamite Circle conference in Bangkok, and Ian talked about selling their e-commerce business, and that was very interesting to me because I really realized that I’m really not ready to sell my business at all. Because I’m like, what would I do all day? You know? I’m having so much fun building the business.
Actually my husband was talking to me like, “Okay, if someone gave us a crazy offer we couldn’t refuse tomorrow, what would you do all day?” And the truth is, we have plenty of money, it’s not like we have these big financial goals we haven’t achieved. We have a great life, we have everything we need. Got a sweet Honda Fit in the driveway, that gets me around.
I don’t need more money, and I love the team that we’ve built, I love expanding my skills as a leader and a CEO. It’s so fun owning a business, and month to month, year to year, you really get to change and up level your skills. So we still have so far to grow. I mean it sounds like a bit of a cop-out, but we’re just not really even thinking about that [inaudible 00:33:07] yet, I guessed. Trying to be more present, I guess.
Justin: Yeah, I think you might get to a point where things start to either level out, or you feel like you’re getting to the point where it’s growing beyond you and you can’t really take it to the next level. I think that might be a good time to start looking at selling. From my perspective, looking at both companies, Edgar versus let’s say LKR Social Media. LKR Social Media would but a much harder sell.
Laura: Yeah, you can’t really sell it.
Justin: Yeah, I mean you could, but it’d be a longer transitional period, there would be some earn out required. Whereas with Edgar [inaudible 00:33:44] it’d be in a much better position to sell. And I think, it’s our business, it’s much better to build a company that you can sell, even if you’re not going to.
So considering profitability … I know everyone wants grow, grow, grow, put money back into growth. But considering profitability all long the way, make sure that you’re a healthy, stable company, especially as a bootstrapper, is really valuable. So even if you don’t sell, acting as if you would sell and looking at those numbers I think is helpful.
Laura: Yeah, absolutely. And something I love about being a bootstrap company is you have to be profitable. You don’t have the luxury of being like, no, we’re losing $100,000 even month, because you’re out of business, you know?
I was talking to the person who does operations for our company and she was working in some financial planning. Our financial planning is really not that sophisticated. We have some money in the bank for if things go south so we can cover ourselves for a certain amount of time. But sometimes we try to do this more complex financial planning, and it’s like, you know what? At the end of the day, as a bootstrap company, if we’re at least breaking even every month, that’s kind of all we need to know. Because we’re monthly reoccurring revenue. Our finances are very simple. We don’t do any custom work, we don’t have any inter price clients. Most of our users are on monthly, not yearly, which just makes it even easier. So it’s like, you know, we can predict exactly how much money we have coming in every month. If we’re at least breaking even, we don’t have to do anything that fancy with our finances.
Justin: I got a question about lifetime value with these recurring customers. It’s difficult to determine lifetime value when you don’t have a long enough period of time to really see, right? I mean yes, you see the customers that are leaving in a month or two months or whatever, but the customers that are gonna stay a year, year and a half, if you’re only a year or year and a half old it’s difficult to estimate that. How do you do that?
Laura: I think that’s an interesting point, because I think if you’re bootstrapped, you really shouldn’t be too concerned about lifetime value. I think people get very distracted, especially in marketing spend. So they’ll be like okay, our lifetime value is $500, so we can spend $400 to acquire a new customer. But it’s like wait a minute, $500 is your lifetime value. Meaning it takes you a lifetime to earn that money. So if it’s gonna take you two or three years to earn that, then you have to be out that $400 or whatever you spent for two years, which most bootstrap companies … I mean none have that kind of cash flow just sitting around.
So we really don’t worry about LTV, we don’t really use LTV in our planning. We’ve picked three months as the amount of money that we can kind of be out, cash flow-wise, like spending on acquiring new customers. So LTV is useful just to look at sort of like, are people liking the software? Although really just look at churn as far as I’m concerned. Obviously you always wanna lower your churn, but I’m really not too concerned with LTV.
Justin: Yeah. It’s interesting with lifetime value. Joe and I both worked for a company, years and years ago, where it’s a recurring model, it was a local SEO product. They were looking well, our average customer is worth $900, they stay for about a year, they’re spending I think $300 on sales and they were just testing this new channel. So they started spending $300 per sale or maybe $400 per sale in this new channel. They were able to sign up a ton of customers on this dollar special. They sign up for one dollar. And then they’re like oh my God, we’re gonna crush it. So they just let the dogs loose in terms of sales, and blew it up. And then coming to find out about 60% of those customers were canceling after the first month. Blew through about a million bucks on this silly little test that the sales team put together. Yeah.
So depending on lifetime value for one set of customers may not be the same if you’re getting and pulling them from a new channel or with a different pricing scheme or whatever too. That could be a little scary for sure.
Laura: It’s also such a fallacy that if you have monthly reoccurring revenue, it’s like “passive income”. You still have to deliver a great product and service, or if not service, customer service every month. Even if you have a great product, but for example your CS team goes downhill, you’ll lose customers. And we’re talking about web businesses, these aren’t just like … you don’t just program them once and they’re just good forever. In almost every instance, you need to keep updating the software. In our case, maybe we have to keep up with Facebook’s code, something will break if we’re not constantly keeping up.
So that all affects your LTV, it’s this living thing month to month. It’s not just like oh yeah, we’re good, no matter what happens, people stay around for two years. That’s just not true.
Justin: Laura, do you have a sales team or is it more like a service team that handles on boarding?
Laura: Yeah, we do not have a sales team. We are customer based. It’s all small business. If some bigger businesses come along, they just sign themselves up. We don’t have any kind of one on one sales process at all.
Justin: One thing that we were able to [inaudible 00:38:48] on the company, and we’re gonna start doing I think with Empire Flippers and maybe you can take something from it, is we set up what’s called a wind back team. It helps with churn, helps you bring customers back on board. They were able to give away incentives, and give them quite a bit to bring them back on board. To see why they canceled, talking them through it, and then bring them back on board.
I’m not sure your price point, you could afford to pay a sales team to do that? Might be able to, I think you might be able to. What we found was their “sales” were through the roof. Their value per person was way higher than even our sales team. So as you grow, some kind of wind back team or someone that calls through canceled customers, tries to get them on board, offers them incentives, might be valuable for you.
Laura: Thank you, I think that’s a great idea.
Justin: Cool. Well, thanks so much from coming on the show, I really appreciate it. I think your business is really interesting, I think you’re in a real growth model, you’re in a real growth industry so it’s really exciting.
Is there anything I should have asked you that I didn’t?
Laura: You’ve caught me off guard. I feel like I should think of something [crosstalk 00:39:48]
Justin: I got one question for you. So you do this transparent business model, right? We do it, and we talk about monthly reports, we’ve done quarterly reports and how much we’re making, what we’re focused on, what we’re not focused on. We’ve done that because it’s a marketing shtick. One on level. It brings new customers. You’ve been in a very similar situation, you know, at that Dynamite Circle event in Bangkok, you’re very open on this podcast, you’ve been very open about your numbers, about your team, about where you’re going.
Aside from obviously it brings attention to the company, what’s your other reasons for doing that? Why else do you do that?
Laura: I just don’t really see any reason not to. We don’t do it in any kind of formal way, you kind of have to dig. We don’t publish numbers on our blog. But if you listen to any podcasts that we’ve done, or like we’ll share things in our Facebook user group about our direction for the software.
But especially being in a space, like one of our big competitors are Buffer, and they’ve made themselves really famous with a kind of insane level of transparency. They publish the salary of everyone at their company. So I think especially when you’re in that space, you’re kind of like, why not?
I think I have kind of a unique view on competition. We talked about it earlier where I truly don’t see it as winner take all. I think a lot of people overestimate … they think there’s only room for one. And there really isn’t. Even in our space, a lot of people use another tool along with Edgar. A lot of our customers also use Buffer, Hootsuite, because they’re using a smaller part of the software that we don’t have, or … Buffer has a lot more integrations than we, like Buffer has a Pocket integration, which we don’t have. So if you like to read things on Pocket, maybe you post just those things with Buffer, and you post everything else with Edgar. Like, cool. That’s fine.
So I think people worry too much about having these top secret plans that they can’t share with anyone. Something I always say is every opportunity comes from another human. That’s how everything happens in your business. Other people always have to be involved. So the more you share what you are up to, where you’re going, what you want, the more opportunities can be open to you. If no one knows, for example, how much money we make, maybe they assume we’re much smaller. So maybe there’s a great opportunity out there from someone listening to this podcast and they’re like, oh, 2 million a year, that’s about the level that we’re looking to partner with for our product that’s really complementary, whatever. These things can’t happen unless-
Justin: They know.
Laura: You put that information out there.
Justin: Yeah, unless they know, unless you’re out there telling them. And then they say oh … on the flip side of that, the downside is the people that, there’s gonna be some people that say oh my God, you’re only 2 million a year, come back and talk to me when you’re a serious company. And then other people are like 2 million a year? You’ve got to be lying, there’s no way you guys are bringing in 2 million a year. You got both sides. Kind of the crazy spectrum. But the ones that are just right, they’re like oh, cool, okay, these are the types of companies we work with, and I wanna talk to Laura because we can crush it together.
Laura: Yeah, yeah. Maybe if I hadn’t shared in Bangkok, you wouldn’t have wanted me on your podcast, and now I’m here and this is a great opportunity for me. Everything kind of rolls along like that.
Justin: Yep. We just ran into some issues where we’re talking to our accountant, we’re talking to our attorney and they’re like … we’re talking about what we talk about publicly, we’re talking about reports and everything, we said look, here’s the information we share and we’re gonna start talking about we have this investor program going. They’re like ooh, no, I’m not sure. We’re like, we’re gonna do that, tell us the risks, that’s cool, we wanna hear about it. We’re going to do that though. Help protect us around that. They’re like okay, okay, we can work with that.
Well, Laura, thank you so much for coming on. If someone wants to get in contact with you, where should they go? Where are you on the Twitters, where do you hang out?
Laura: Yeah, so Edgar is meetedgar.com, or also Meet Edgar on Twitter and Facebook, and my Twitter is LKR.
Justin: Awesome, Laura, thanks so much.
Laura: Thank you.
Announcer: You’ve been listening to the Empire Podcast. Now some news and updates.
Justin: All right, Joe, let’s get into some news and updates. First thing is, we’re extending our hiring period to March 1st for the content manager position. We’re looking for someone to come up to Southeast Asia with us, work with us definitely for a few months. We’ve actually got our manager kind of worcation going on in April, so we want this person to be out here for that. And hopefully we can get them out here in March, so they can be out here a little bit beforehand and work with us closely and get to know our business a bit better. This is a really important position for us, and it’s someone that’s gonna work with me really closely, and I’m really excited about.
So if any of our listeners have any ideas or they wanna apply themselves, or they know someone they think could be a good fit, I’m gonna put a link to this in the show notes, please do share this, please share this with somebody you think would be a good fit, and we’ll get that person out here right away.
The other thing, Joe, is you might be looking to hire some sales guys?
Joe: I might, yeah. I definitely, you know, talking about scaling and what Laura has to say with scaling, it’s interesting because we are definitely trying to scale [inaudible 00:44:48] side of our business and it’s a challenge for sure. I definitely think it’s something I wanna overcome in 2016, but hiring more people at this point is the only way we can do it. We’ve got some of the marketing automation in place, we’ve got a lot of that done. I’m ready to find some sales newbies that are looking to learn the business from the ground up.
Justin: Yeah, mean, I think that’ll be interesting, we may take on one or two sales people, and basically work with them and get them up to, you know, on the brokering side of our business, specific with the market place and with our buyers and sellers, I think that would be great. There’s a learning curve, man, are you ready for that? Any time you hire new people and you’re training them, right, there’s a dip before it gets better. So expect a few months of working closely with them and basically losing some productivity so that you can gain in the future.
Joe: I’m definitely not looking forward to the dip but I understand that it is there.
Justin: All right, man, we’ve got quite a few blog posts lately. If you’re a reader and not just a listener, you might wanna check that out. We’ve got an article on how to avoid distraction, and we’ve got another article out there that talks about our best podcast episode for website sellers. So if you kind of want a curated list of episodes you think would but good if you’re looking to potentially sell your site, we’ve got that on the blog so you can check that out, and I’ll link to that in the show notes.
All right, buddy, time for our listener shouts, also known as the indulgent, ego boosting social proof segment. We’ve got a five star iTunes review, buddy.
Joe: Hit me up, man.
Justin: Gun Hudson says 5 stars, Justin and Joe are fellow podcasters I personally highly respect and thoroughly enjoy listening to their show. Keep up the top work. Again that’s Gun Hudson over at freedombusinessguide.com. Thanks, Gun, I really appreciate it.
if anyone else really appreciate the show, wants a shout out on the show, they can head over to iTunes, give us a review and we’ll make sure to mention you on the next podcast. We got a mention on Twitter, Joe, from Mark E Green. Said hey, Justin, nice hustle, guys. That’s regarding our queue for monthly business reports. So appreciate that Mark, yep, we’re hustling it up.
We’ve got a mention from Jackie [Born 00:46:52]. Joe, do you remember this? This lady, she mentioned on her blog how she’s looking to spend I think it was $80,000. She just mentioned on her blog again that she’s looking to buy a website portfolio. She’s been digging through our market place, looking for some sites she can purchase to see if she can build up her own portfolio. She was looking at real estate, she was looking at some other investments, and basically decided in terms of ROI that website investments are a fantastic choice. She’s got some time freed up here in the near future and she is really looking forward to knocking out some science.
Joe: Cool. I’ll definitely reach out to her and find out what her experience is with the market place, and see what’s holding her back from making her first purchase.
Justin: That’s it for episode 152 of the Empire Podcast. Thanks for sticking with us. We’ll be back next week with another show. You can find the show notes for this episode and more at empireflippers.com/Laura. And make sure to follow us on Twitter @EmpireFlippers. See you next week.
Joe: Bye bye, everybody.
Announcer: Hope you enjoyed this episode of the Empire Podcast with Justin and Joe. Hit up empireflippers.com for more. That’s empireflippers.com. Thanks for listening.
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