Competing with Huge Companies as a Bootstrapper

Michele talks about how the entry of a huge company into the geocoding space impacts their business strategy.

Michele Hansen  0:02  
So you remember a couple weeks ago how we were talking about competitors nipping at our heels?

Colleen Schnettler  0:07  

Michele Hansen  0:09  
So, recently, we had a new competitor, enter the space. 

Colleen Schnettler
Ooh, interesting. 

Michele Hansen

Colleen Schnettler  0:18  
Oh, no. That's fair. 

Michele Hansen  0:22  
I mean, it's inevitable. Um, and we already compete with the likes of Google and Microsoft, and you know, all of these huge companies. So it's not, it's definitely not unexpected. Like, it's definitely been one of those. It's only a matter of time, things. But yeah, I, that that that happened, they launched their own location services. And, interestingly, they're just reselling to other providers, they're reselling s, ri, and here. And it's very focused on fleet management and asset tracking, which kind of makes sense based on what they're doing. Like, they're tracking packages and trucks and like, that's crucial to their operations. So it's almost kind of funny, because, you know, looking at that, and whenever people are asking about, you know, how do I bootstrap my own business? Like, where do I start? How do I get an idea? One of the most common pieces of advice and advice that I give is just start with something that you need yourself and go from there, which is what you have done. And it's also what Amazon has done here, too. So, so it's, like, I look at it, I'm like, Oh, this is clearly something they built for themselves, and now they're gonna have people paying for it definitely does, does a, you know, not a totally welcome surprise for us, right, because, um, fleet management and asset tracking is an important vertical for us, because it's expressly forbidden by some of the other major geocoder. So we do have an important amount of customers in those spaces, and overall, Amazon's pricing is much higher than us. But for asset tracking, it's, it's very favorable for that use case, because instead of paying per basically per ping from a GPS, imagine, like a truck might say, send back a GPS paying every 100 feet, for example, instead of paying every time for the new coordinates of that you only pay per asset. So you know, so I imagine we will lose some customers from this. But at the same time, what I think one of the great things about being in b2b SaaS, but especially the kind of space we're in, is that we're so diversified across industries, that we have tons of other verticals, in addition to fleet management and asset tracking. And it makes me really glad that I do that semi annual customer portfolio analysis, because I know exactly how much of our revenue is from that sector. And looking at this now and knowing Okay, there's this huge, well funded, competitor coming into the space. I can see pretty clearly like, how much revenue that directly puts at risk. But yes, certainly an interesting week.

Colleen Schnettler  3:33  
Yeah. So when you do your semi-annual customer portfolio, do you break up your customers by industry? Is that the purpose of that?

Michele Hansen  3:43  
Yeah. So basically, I look at our customers, as a portfolio, as an investor might look at, say, a mutual fund portfolio, for example. And I split it on a couple of different metrics. So I basically take the top 90% of revenue, and I look at the customers from it within that space. And I look at them by industry. So so there's like fleet management, but also say real estate or insurance, health care, things like that. By industry, I try to get a rough sense for company size. So that I can just kind of, you know, have a little bit more understanding there. And then just really trying to understand, okay, based on these different industries, like how much of our revenue is dependent on any one given industry, and should we think about diversifying whether we want a you know, a higher percentage of revenue in a particular category, we want new customers there, or do we want to purposefully pull back from a certain industry or simply just not emphasize it as much if we feel like there's too high of a concentration there, and also making sure that we don't have any high customer concentration and any one Given customer, so something an important metric for me is, you know, what are our largest customer, what percentage of overall revenue are there, they and basically making sure that that number is below 1%. And again, this also comes out of sort of investor style thinking where, you know, for example, if they're analyzing a company, and they see that a company has, say, 40% of its revenue coming from one particular customer, that's a huge red flag. Right? versus if it's highly diversified, then then let that's less of a risk. And yeah, that's, that's something I do about twice a year. And, and that's kind of one of those things are sort of had to create for ourselves, you know, I'm obviously not creating the concepts, but I think applying them in this way, is because, you know, as we've talked about a lot of the content out there on running a SAS is very much focused on growth and, you know, more well funded approaches to business that don't necessarily emphasize stability or profitability, or things like that. And so, rather than managing for growth, we manage for stability. And I find that this customer portfolio analysis is a really helpful tool for me. And, and matea stew in sort of like us communicating, okay, what are our priorities? And how do we create a more stable business and just kind of giving us a high level of that?

Colleen Schnettler  6:37  
So you do that as a manual process?

Michele Hansen  6:40  

Colleen Schnettler  6:41  
So do you literally hand Google? 

Michele Hansen  6:44  
It's because I'm a I'm a glutton for punishment, apparently,

Colleen Schnettler  6:46  
I know. 

Michele Hansen  6:50  
You probably like the like the week, you know, the the week I spend on this every six months, I actually like genuinely is like

Colleen Schnettler  6:56  
your favorite. Yes.

Michele Hansen  6:58  
Making all my little pivot tables and everything and like, Oh, my gosh, I am. Yeah, it's actually really fun. Yeah, I basically just google them. And then, but a lot of them I've also had conversations with. So that's where I can fill out the rest of the picture to sort of so it's this combination of quantitative and qualitative information that we use for prioritizing. And, and this is really like kind of the first big moment I can think of where something happened. And my first thought was numbers from that analysis. And then it like made me feel better when when this happened.

Colleen Schnettler  7:39  
So when we talked about competitive analysis last week, the reason and this wasn't we were talking about Amazon, we were talking about some of your other competitors who had launched new features. And we talked about you guys competing on some very specific in some very specific areas. So with this Amazon launch, are you saying that now at least for the fleet management sector, you do not compete on price.

Michele Hansen  8:09  
So it's, it'll be it'll depend on the on the customer. So their price for pay as you go geocoding is much higher, they are $4 per 1000, versus we are 50 cents per 1000. If you want to store the data there, 50 cents per 1000, if you don't want to store the data, to anything, I read it more of a as a shot across the bow at Google than you know us. I mean, we're so small like that, you know, Amazon doesn't care about us, like, just kind of one of the nice things about being a bootstrap business. So of course, I mean, people from Amazon, like us, us like they're a customer of ours too. So it's like one of those really weird scenarios where we also have people from Google who, you know, pay us too, but it's just a different department. So it's kind of, it's kind of a funny thing, I mean, it totally makes sense that they would be going into this and there's a lot of stuff that their service is doing that we don't do and that we don't plan to do. So for example, it's very built around asset tracking. So it also includes drive time, and like all these like geo fencing, like all these other things like so, you know, knowing when a truck has entered the area of a delivery center, for example, you might use geo fencing for that. We don't really do that we don't do driving directions or drive time or or radiuses like things like that. So yes, it's a new competitor in this space. But you know, I also tend to think but this kind of data, like there's so much need for it, that there is plenty of space for lots of companies. And I think it really says something about the space that this announcement came out and, you know, you know, the first people I talked to about it, you know, obviously Mateus and then my like, core group of other bootstrapped founders that I talked to, and then the guy who runs another bootstrapped geocoding company being like, Wow, what an interesting day how like, and we're like kind of analyzing it and like, what does this mean for us? And it's, you know, because we all do something different. And like, there have been many times when I've sent people over to his company, because we weren't the right fit for them. I, maybe that's a sort of uncommon approach to competition, but I feel like there's plenty of space for everybody like we, we purposefully like, we don't want to be a monopoly. I don't think that's, it's just not what I want to be. And I don't think it's good for capitalism. Anyway. Um, so So I think there's space for more competition, but it is, I mean, yeah, it's, it's, it's scary when one of the big guys comes into the ring? Absolutely.

Colleen Schnettler  10:39  
Sure, I could totally see that.

Michele Hansen  10:44  
One thing I was talking about, when we were talking about the competitors was how, you know, we don't really change much when our competitors do things, and how we tend to just focus more on the customers we do have, and you know, towards that overall goal of stability? How can we make them happier and and keep them with us? And so it reminds me of a book, I'm actually going to start reading called the jobs to be done playbook. And so I think we've talked a little bit about jobs be done right?

Colleen Schnettler  11:23  

Michele Hansen  11:25  
Okay, so jobs to be done is a framework for doing customer research, and understanding what it is that people really want to do overall. So and I actually have an example of this from from my life this week. So earlier this week, I was getting our holiday New Year cards out the door, which I guess for us are less of a holiday card and more of a like New Years where By the way, we're moving to a different continent card. Which side note, actually, I realized as I was doing those cards that I think I announced it on the podcast that we had moved, like before I had told some of our podcast listeners, yes, you are, you are in my inner circle. So um, so anyway, so we had to, you know, we have to send out cards to tell people we moved, so and then I found a service online that you can create your cards, and they will send them all out for you, which is really necessary because mailing them from Denmark to the US would be ungodly, expensive. And so I'm just going to pay a little bit extra to have a company mail them out for me. But I have to have a spreadsheet of addresses that I upload to the service for them to send them out. And they have a specific format for the addresses. And my spreadsheet where I keep all my addresses normally has them all in one column, like so the whole address is in a single cell. And they needed it split out into Street, city, state and zip. And I first thought I was like, Oh, no, it's gonna take me so long to like, manually do all that in the spreadsheet. And then I was like, wait a minute, I have a tool that parses addresses, and literally does this for people like I should use my own product, which, so it's like, I honestly find it really fun to get the dog like dog food, our product is just kind of, you know, the term people use for that. I don't know why it's called dog fooding eating your own dog food.

Colleen Schnettler  13:31  
And that's weird, by the way, but

Michele Hansen  13:34  
that's what yeah, that's, that's what we call it bootstrapping and dogfooding. And we've all these, this whole weird language of our own. So, um, my, my seven year old is actually sitting here with me while we record this, and she just started laughing into a pillow when I said dogfooding. So, um, so, so I uploaded it. And while it was processing and the 30 seconds it took to process. I was like, You know what, we should have a landing page about this, I don't even know what I need. So like, I just I quickly wrote up a very, very sparse landing page. And I was like, feeling all good about myself. And I'm like, Oh, this is I'm getting Christmas cards out. And also, like, I'm being so productive and adding landing page. And this is awesome. And then I downloaded it, and it was actually kind of a nightmare. And it wasn't a good use for what I was trying to do. Because it because we split out the street number and the unit's type from the address, and I needed those in the same column as them. So for example, if it was, you know, 17 Main Street, 17 Main Street, would all be in separate columns, and I or rather it would be 17 would be in a separate column from Main Street, and I needed those concatenated and also the units were all split out from the unit numbers and I only I could only have one column for address to information. And I did it manually, even though material This letter was like, why didn't you just read a concatenate function. And so it was kind of a funny thing. But like talking about jobs to be done, like the whole idea of jobs done is that it's not just the one thing that someone wants to get done, there's a broader job they're trying to accomplish. So in this case, my goal was not process a spreadsheet, my goal was not get the addresses in the right column format, my goal was get out these cards to a fulfill my social obligation of sending out holiday cards with my family photo on it, and be tell people that we have moved in, give them our address. And so there was kind of this, like physical job of actually getting this physical piece of paper out, there's a social job of informing people that we have moved and, you know, send it, you know, sending a card reciprocally, as they would as well. There's also sort of an emotional job of me having the relief that this is over with, on the long holiday to do list. And so. So that's what like jobs we don't really get that is that it's not just that one thing that people want to do, it's there's some broader goal that they have. You know, most times when people are using Juco, to for example, it's they want to make more sales, they want to track where their trucks are going so that their customers are happy with them so that they order from them again, like, it's not just about tracking the truck, or, you know, putting their customers on a map, like there's something else they're trying to do. And so how do you dive into that? How do you get that kind of information out of a customer? And then how do you use that information, to make decisions to write landing pages to have sales conversations, you know, like, how do you use that to really run a product run a business?

Colleen Schnettler  16:56  
Yeah, I love this. Because last week, we were talking about how I have started doing all these customer interviews, and how I was getting so excited talking to customers, when they gave me suggestions. And they showed me how they want to use my product. And you pointed this out last week, you said something which kind of struck me. And you pointed out that I missed an opportunity to understand the bigger picture of what they were trying to do, and why they wanted to do it. So I was just thinking about the small potatoes, which was you're trying to get a file on your site, you're trying to get a file in the cloud, and you pointed out these discussions are an opportunity to figure out why why do they need to do that? What is their their bigger process? What are they trying to achieve? So when you describe this book, it sounds exactly like what we were talking about last week in terms of customer interviews.

Michele Hansen  17:47  
Yeah, and something I think about that took me some time to learn with customer interviews is that they're not a conversation, and ways that you would act in a conversation where if somebody says something, and then you're just to agree with them or to disagree with them, or, or whatever that is, in an interview, you can't do that. Do it, you instead say? Can you tell me more about that? Why are you looking to do that? What were you doing before that? What would you do if that wasn't available? Like you asked these sorts of questions that you just don't, don't really ask and sort of normal conversational style. You know, there's actually I, I was I was preparing to give a talk at micro con last year, so 2019 on this, and I was talking to a friend beforehand at a cookout about what I was planning to talk about. And he goes, you know, that reminds me of this improv class I took where whenever somebody says or does an improv, no matter how crazy it is, you just have to build on it. Like you can't react to them, you instead build on what they have done. And so if they put on a cowboy hat, and like, tell you, they're an astronaut, like you have to just go with it. And you you can't like question them about that, right? Otherwise, the whole thing falls apart the whole dance. And so it's not a conversation, it's acting. And the way that you would talk to a friend is very different than the way I would talk in in a customer interview setting. Also, at the same time, though, like, you know, these are, this is a set of tools and in if you use these tools outside of that context, it can come off as the wrong way or not be as effective. Like, for example, I wouldn't do this in a sales setting because people have their guard up and are less vulnerable in a sales setting. justifiably Yeah. And so you don't want to dig too much into their emotions and their goals and everything else like it's it's very surface and has its own dance entirely. But yeah, I'm really excited to read this book. And if anyone else wants to read along with me, it's called the jobs to be done playbook by Jim kobach. And like so a friend recommended this to me who was a UX director at a at a big company. The reviews for it alone are from some of the big names in the jobs be done world Des Trainor, the co founder of intercom, Melissa Perry and author of Escaping the Built Trap, Bob Moesta, who is like a just a rockstar in the jobs to be done world. Tony Ulwick. Same He also wrote a jobs to be done playbook himself. So I, I'm so psyched to read this book, you know, seeing all of these people that I that I really respect recommending it, and of course, my friend recommending it as well. So this is something I'm going to start diving into over the holiday break. We you know, we are in a second lockdown now. So it seems like a good time to start a new book. But yeah, it's, it's even for somebody like me who's been doing this for years. I love diving in and learning more, there's always more to be refined. Nice.

Colleen Schnettler  21:13  
So with the holidays coming up, I wanted to ask you, what do you guys do to take a vacation? Or do you not like what is your honor, we talked a lot about like your customer support cycle. But I was thinking about this this morning. Because what I did just for context, like I am down to one client, which they're wonderful. But I told them, I'm going to take two full weeks off, but now I have this product. So I'm obviously not taking I'm going to check it every day, except maybe Christmas, right? And I was like, oh, Is that normal? Is that what Michelle's doing? So what are you gonna do?

Michele Hansen  21:45  
Yeah, our approach to vacations is just hope nobody reaches out to us. Which is not healthy.

Colleen  21:56  
Yeah, kidding.

Michele Hansen  21:57  
You know, we were having actually a conversation with some friends last week about this. And one of them pointed out that, you know, the things you do for growth are different than the things you can do when you're at a stage when your goal is stability. And that really got me thinking that, you know, there's things that we did to drive growth, especially when we were trying to transition to full time or, you know, maintain confidence in our transition to full time. And that we that we did to drive growth that maybe we don't need to do now that we feel like we're at a point where, you know, things are more stable, and we don't have to be so aggressive on that front. And, yeah, I'm totally not answering your question, which is that we don't know, again, you. Okay, that's what I'm really good at avoiding that question. Yeah, yeah. It's just that we just hope nothing comes up. But I think I mean, it's gonna be more challenging this break with with us in second lockdown. And, yeah. It's a, it's gonna be tricky. Yeah. But yeah, that's kind of what we do in general. And I don't think I would recommend that other people. So don't do what I do.

Colleen Schnettler  23:18  
Well, and I'm, of course, in this position, where I'm trying to get customers and retain customers. So I'm in a totally different position. But I definitely feel like I need to, you know, be on top of things even during a you know, vacation. Because I'm in such as I'm in such a critical stage. So what you're telling me is even where you guys are, where you're very stable, you still you still do check in every day, even when you're on vacation, to make sure everything is running smoothly.

Michele Hansen  23:50  
I would say it's less that we check in every day. And it's more that, you know, if an email comes in, like we still reply to it,

Colleen Schnettler  23:57  
I met you check your email every day. 

Michele Hansen  24:00  
Like I yeah, like, Intercom still pops up. Like I think this is the kind of the difference between having clients and having customers is that you can tell your client, like, I'm not going to be checking my email, or I'm only going to check it, you know, every three days or whatever. And then like they can like grumble me like whatever fine. Or I'll be like, our offices are closed too. So it doesn't not a big deal. You know, we have you know, 10s of 1000s of people who could email us at any time and hopefully, they're taking a break to us usually holidays are pretty quiet for us. But especially especially with Christmas and New Year's because those are more common around the world than say Thanksgiving is which was pretty quiet for us. But we still had stuff coming in from other parts of the world. But yeah, we we don't have a good approach to taking breaks. And I think we are at the point where maybe that's something we can give ourselves. I mean, but It's just one of the trade offs of running your own company is, you know, working half an hour or an hour a day, during the holidays, but getting to take that time period. I don't really know. I don't really know where the line is there, quite frankly.

Colleen Schnettler  25:22  
Well, fingers crossed. You guys don't have a lot of support requests, and you have a wonderful new year. Well, that'll wrap up this week's episode of the software social podcast. I hope everyone has a wonderful holiday and we look forward to connecting with you again soon. And just as a reminder, Michelle is going to be starting the job city jobs to be done playbook. If you want to read along in that book. We'd love to hear from you at @softwaresocpod on Twitter.

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