Nerdburn - Web application & graphic user interface design blog by Shawn Adrian

We're only a few days past the Canadian Thanksgiving holiday, and I have plenty to be thankful about. Yesterday I had the opportunity to chat with Hiten Shah, one of the most generous startup founders in Silicon Valley and founder of KISSmetrics and CrazyEgg - two apps I use and love.

Like Hiten, I'm a big believer than whatever you give comes back bigger. Maybe not immediately, maybe not in the same way, but it will come back around. He signs his email newsletters with this quote from Zig Zigler, which I believe to be true:

You will get all you want in life if you help enough other people get what they want.

I've seen this principal at work in my own life through this blog. A couple of years ago I gave away my web design proposal template and to my surprise, thousands of people began downloading it every month! This led me to create QuoteRobot with my good friend Jon Cochran, and now thousands of people have signed up for it, earning us a bit of residual income, which I've written about before here.

Three Tips From Hiten Shah

In the spirit of openness I've decided to share the tips that Hiten shared with me during our phone call yesterday.

Tip #1: Focus On One Thing

I'm always dreaming up new apps to launch, and seeing the potential in plenty of opportunities. It was encouraging to me to hear that if Hiten could do it all again, he would have focused on CrazyEgg until he reached his goals, instead of starting another VC funded app when he did. KISSmetrics is a huge success, and he has no regrets about starting it, but I got the sense he was urging me to choose one app and focus until I reached my goals before starting up another venture.

Tip #2: Treat Your Side Projects The Same As Your Client Work

While complaining that I'm spending so much time doing client work that I hardly have any to work on my beloved apps, Hiten reminded me of some wisdom shared years ago by 37signals when they were in the same position. You should treat your side projects as though they are clients. Setting a budget (time), milestones, and deliverables, and holding yourself to them. That is the best way to get your projects finished while juggling consulting work.

Tip #3: Don't Raise VC Money Unless...

...you want to build a $100 million dollar business. If you're in this to create a nice comfortable residual income for yourself, you're not likely going to want the pressure of earning a 10x return in a few short years for some hungry investors. And why take friends and families money, gambling with all your close relationships on the chance of growing a business? If you're good at what you do and have an idea, build it, nurture it, and take it slowly. It'll pay off in the end. Hiten mentioned that after CrazyEgg, he was ready for massive challenge, and thought hard before taking the venture capital route. But he's happy he did it. So be ready if you choose that route!

In Closing

If this post has helped or encouraged you, please remember that I wrote it to share what was freely shared with me, so do the same and find real lasting success. Also, you could tweet about it too :) Also, feel free to check out my new app, coming soon, called Ticksheets - Easy custom timesheets for small business.

We’ve all heard that great customer support is one key to success in business, but sometimes it’s difficult to measure it’s effect on revenue growth. Well, over the last couple of months I’ve witnessed an interesting by-product to hiring a team member to help with customer support... noticeable revenue growth!

Back Story

On June 1st, 2010, Jon Cochran and I launched QuoteRobot, an app that helps designers and coders create winning proposals quickly. It’s been a lot of work, and we’ve been lucky to see steady growth ever since our launch. I wrote another post about how much fun it is to create residual income with an app - it’s a lot of fun.

One of the things that’s also grown has been the amount of customer support emails we receive. With our day jobs (Jon and I both actively design and code for a living) we’d been falling behind this year on the day to day support and bug fixing end of things. We decided to hire an additional team member in April 2011, and hired an excellent guy named Randy Jennings.

Fewer Cancelations = More Revenue

Like any web 2.0 startup founders, we measure everything religiously. Visitors, signups, retention rates, click through rates, etc. We keep our fingers on the pulse of the business. Watching the numbers is one of the joys of startup life.

Our cancelation rate for new signups has always hovered around 50%. That meant that for every ten people who put in their credit card to use QuoteRobot, five would quit. It became a sort of the rule of thumb we’d use to estimate our future revenue growth.

Since Randy’s been tackling the customer support, we’ve seen a major decrease in cancelations. So major in fact, that our cancelations are down 40%. That’s right, 40% fewer people are canceling now that we have somebody answering emails immediately upon arrival! We had no idea this would make such a difference! I feel naive for not getting on it sooner.

The Graph

Here’s a little graph I made to show the difference it’s made.

We started out the year with an abnormally high cancelation rate. Some bugs emerged during our Christmas hacking sessions that we didn't squash in time, and people are generally more inclined to clean up their credit card bills early in the new year. Then in March, we fixed a bunch of bugs and promoted the changes, so we saw a dip in cancelations, but April brought them back up to the average. Then, we beefed up our customer support, and we've seen what appears to be a sustainable drop in cancelations!

Based on our average cancelation rate of 50% last year, we've seen a 40% drop in cancelations over the last couple of months. Pretty awesome! Talk about some great motivation to continue helping people create winning proposals.

Want More?

If you liked this article and want more, please consider tweeting about it, sharing it, or just following me on Twitter (upper right). Thanks a bunch for reading.

Are you constantly fighting to achieve, but not quite seeing the success you want? Do you look at your failures and cringe, frustrated and eager to improve, but not sure why you fail? I’ve been in this situation, and have been studying the issue over the last couple of years.

Dr. Henry Cloud, a clinical psychologist and leadership consultant, wrote a book titled Integrity which is one of the best books I’ve read on the subject. In the first chapter he outlines three key ingredients for success, which I thought I’d share with you since they resonated with my own experiences.

Competence

Successful people are good at what they do. If you’re a programmer, be great at it. Study, write code, create side projects. Improve. Same for designers. Design passionately and study to improve.

Connections

Be a person who makes alliances with other people. Not just networking, which is sales oriented and one sided, but real human connections. Befriend and give to people. Build trust and those relationships will improve your life.

Character

This is the kicker. You can have both competence and connections, but if you don’t have the character to “not screw it up” you’re bound to fail eventually. We all know somebody like this - a person so talented it just hurts to watch them fail over and over. The missing ingredient is character. The ability to act on your promises, fulfill commitments, draw clear relationship boundaries, and keep your word.

This article is really just a tickle - if you’d like to dive deeper, I recommend picking up the book and reading it yourself.

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