I attended one of lunch talks at Garage48 Hub yesterday, the guest was Alari Aho, co-founder of Toggl. Toggl is a SaaS time tracking app that is doing well. They have more than 300.000 registered users and around 20.000 paying users. It’s a freemium product that is free to up to 5 users per team.

Due to the nature of the lunch (no slides, people ask questions, and sometimes very random questions) talks Alari didn’t go too deep into any topic, but he openly shared what Toggl has done and have his suggestions for other SaaS startups. In this post I’ve tried to structure Alari’s nuggets under different “headers”.

The first lesson is focus

Toggl was started as a side project in a software development house back in 2006. For the first couple of years it didn’t make any money and growth was rather flat. Things kicked into gear when client work stopped due to recession and the team properly focused on building the product.

Another aspect of focus is building an app that does one thing very well, and talks to other apps, not a “swiss-army knife”. To provide more value Toggl has introduced additional products like Planner or made Toggl better by making it simpler (eg. remove features that are being used by 1% of users) and faster to use.

Toggl has some very specific target groups like lawyers or designers, and the company has been toying with the idea of making dedicated apps for each one. But so far users in different verticals have rather homogeneous needs, and there hasn’t been a real need for that.

For wantrepreneurs Alari’s advice was to do one thing at a time rather than build several products and “see what sticks”, because it takes time to do something properly. He advises to plan 2 years for getting something done properly, and not counting on much income during that period.

Talk to users a lot

When probed about the most important things that have led to Toggl’s success, Alari emphasised the importance of talking to customers. They frequently travel to US or UK with the sole aim of visiting customers, seeing first-hand how they use the product and getting feedback. He brought the example that sometimes a feature that works well in the office simply doesn’t work in real life.

Toggl has also introduced some scalable means of talking to users. For example, when they found out that conversion to paid is much higher for users that have invited the whole team, they set up an email that encouraged users to do just that. 14% of people who received the email invited the team vs. 7% for those that didn’t.

Be very pragmatic about marketing

Toggl only hired their first marketing person a couple of months ago. This is not to say Toggl hasn’t done any marketing, they’ve just been very pragmatic about it (like the email example above).

A whopping 75% of traffic to Toggl comes from non-branded search (try googling “time tracking”). And this hasn’t come by itself – they’ve invested into SEO-friendly website and good copy. It also helps when you’ve been around since 2006 and been linked to by LifeHacker and lots of forum posts and discussions.

To get the word out Toggls emailed around 20 relevant bloggers back in 2006, and – lo an behold – one of them wrote about Toggl. This trickled over into posts downstream and the company hasn’t had to work hard for PR later.

Today Toggl does lots of marketing experiments. For example, Dropbox-style “refer people to get free service” didn’t work well – there were some signups but they didn’t convert.

Raise prices when you can, and raise money only when you need to
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Toggl started out by charging $1 per user and now charges $5, without introducing new features. With the latest price hike, existing users kept the old price for 3 months, and could lock in the price for 12 months thereafter by paying in advance. 5% of customers decided to leave but because 10% decided to pay upfront, revenue increased both in short and long term.

Toggl was initially funded by proceeds from software development services, and is profitable today. They haven’t felt the need to raise addiotnal funds and, as of now, are planning to self-finance future growth.

Photo courtesy: Kadri Uljas of Garage48Hub

I can’t say attending Seedcamp with Talentag yesterday was “great fun”. It was intense, and while we had a good time, it left us exhausted and overwhelmed by the end of the day. But it was useful as hell for getting quality feedback and meeting people. Seeing so many smart people who have done it before, and that are doing it in front of your eyes, also gave a nice motivational boost (after a night’s sleep).

Timo Rein has written a great post about the benefits of attending Seedcamp, and tips on preparing, and there’s no point repeating his points. Instead, I’d like to summarise a masterclass by Saul Klein and Chris Riley on telling stories.

The black line on the wall

Saul kicked off the talk by showing one of his holiday snaps. Slightly sharper than the ones my grandmother used to torture me with, but otherwise a rather unremarkable photo of his family in an ancient-looking place with a black line across the wall. Because of this line a few people in the audience recognised the place as Masada, the 2000 year-old fortress in Israel. This line makes Masala different from thousands of other old fortresses, and any holiday pic featuring said line is instantly recognised.

It was this metaphorical black line that the session encouraged us to look for and develop in our startups. Some of Saul’s sound bites that resonated with me were:

You need to tell your story to a class of 7 year-olds. Not to mention that you need to be able to tell the story to your friends and family.
Great storytellers know their audience. That said, Saul insisting that great storytellers “sleep in customer’s beds” got the response that this not scalable, and also depends on the product in question. 🙂
Pick a field big enough for a never ending story.
Saul concluded that a crap product doesn’t fly even with the best of stories, marketers and agencies.

Chris Riley started with a clip that he claimed to about the most exciting thing in his (rather exciting by most standards) professional life. If was the first couple of minutes from this video:

Not a word about technology. Rather a story of Apple and the industries the company had revolutionised. At that very moment I acknowledged that I was taking notes on the said “breakthrough internet communications device”. Which kind of proved Jobs’s point.

Jobs’s storytelling greatness is even more evident in this video, contrasted with Gill Emilio’s lifeless style.

More examples of great storys

Mini. The idea of Mini has outlasted the original product. Current incarnation of Mini has nothing to do with the original because it’s made by Germans, works reliably etc. But today’s Mini stands for the same things than a Mini back in 1960’s.

ALO Audio. Selling the quality of sound through traditions of electronics manufacturing.

Again, very little about the car, lots and lots of stories. (Eminem’s story, history of Detroit, hint to Ford installing Microsoft Sync in their cars). By the way, it sold lots of cars.

Path that tells a story of its own with design.

There are more story examples on Saul’s Checkthis page.

Discussions, conclusion

Riley pointed out that 90% of the work of storytelling, whether by Jobs or auto manufacturers from Detroit, is done by the audience, not on the stage. The full story is formed in people’s heads. For example, of the Nike ads in the 1990s, not everyone understood every commercial, but “curiosity was up” and there was strong interest to find out what was up.

When someone in the audience remarked that startups can’t afford to have superstars appear in their TV clips, Riley pointed out that Apple’s “Think different” commercial used copyright-free images and was without any special effects.

When asked whether startups should mention competitors in their story, Riley encouraged to certainly show how one is different from competitors (and showed this video).

In conclusion, always be telling a story and make sure to apply to Seedcamp. Seedcamp Budapest is in October already.

Being good is just a matter of temperament in the end.
– Iris Murdoch

I recently tried out a couple of blogger outreach services. One of them presented me with the following signup page, and signing up to the Pro plan seemed like a better option, because the “free” option wasn’t actually free to use. No-brainer, I thought, if I don’t like the service I can cancel in the first month, $20 is not such a big deal.

When a 240 dollar charge showed up on my bank statement, I was understandably disturbed. I re-checked the page and yes there is the Billed annually there but come on, font 6 shouldn’t officially count. As the service wasn’t quite what I needed anyway I immediately sent a rather cocky email to the service, asking for a cancellation and refund.

The reply didn’t take long to arrive:

I am sorry that you don’t like our price, but we don’t actually refund clients. I will make sure that your subscription is cancelled.

And cancel my service they did ie. I could not even log in to download a receipt, which of course didn’t make me happier. I contacted my bank to cancel the payment, sent out a condemning tweet and sent another email to the company, threatening them with spreading the word about that approach of yours. I heard nothing back and so I sent another bitter email. Still nothing.

After my bank told me that small print on the web is not their concern, I realised I was in the state often referred to as “fucked” in customer service speak. I had parted with my money, got nothing in return and was on my own.

A couple of days later I realised I still needed an receipt. I contacted the company again with a much more reasonable tone, having accepted defeat. The reply was quick; I got my receipt and even promised access to the service. I was pleased that someone was answering my emails again, so I decided to ask for refund one more time, politely explaining that I didn’t need the service and that this money would come from my own and not very deep pocket.

And guess what, I got a reply back that they they can make an exception to their refund policy. I felt glad, and really stupid. Why had I taken the threatening position in the first place when an honest friendly explanation did the trick? We hugged (read:apologized each other via email for mishandling the situation) and went our separate ways.

The service is Blogdash by the way – not what I needed but maybe works for you.

Be kind, for everyone you meet is fighting a hard battle.
– Plato (or someone else. Long story )

To companies, especially startups: don’t be dicks. Not refunding people for a service they don’t need is plain wrong on one hand, and bad for business on the other. We do have this thing called social media after all.

Note to self and everyone that is a customer of something: let’s not be dicks. At the other end of the keyboard there is a human being who is most probably not the cause for the thing that annoys you. Little bit of friendliness can go a long way as I believe I’ve now proved.

Epilogue.

I needed to cancel another service a short while later. Coincidentally, I had troubles accessing my account there, too, and my first email was without a response again. My lesson still fresh, I wrote them a second email which wasn’t bitter:

I became a paying member and now wish to cancel my account and stop all payments to you. Nothing personal, I just don’t need the service.

I can’t login with [my email address] as your system doesn’t recognise the email address for some reason.

My accountant will kill a kitten every time you take a payment from my card and I don’t have a receipt. Please close my account, stop taking money from my account and end this crime against cats. They deserve to live. Please confirm receipt of this email.

Thank you,

Andrus Purde
Kitten lover

I was answered this:

We are animal lovers here and will do whatever it takes to preserve the lives of kittens. J

As requested, your account has been removed from our database. You will not be billed anything additional.

Q.E.D.