Thoughts on Amazon EC2 for Hosting
We recently launched our free Web CallerID app using Amazon.com Web Services Elastic Compute Cloud (EC2). EC2 is a fully virtualized self-service hosting environment as compared to traditional dedicated hosting or managed hosting from companies like Rackspace, ServerBeach, or SoftLayer. We took advantage of Elastic Block Store (EBS) for persistent database storage and Elastic IP for persistent IPs. Here are some thoughts based on what we learned:
- Setting up EC2 hosting takes more time than traditional hosting as you have to budget for creating/repackaging the Amazon Machine Images (AMI) and creating scripts to reconfigure items in the event of an instance change (e.g. remounting EBS volumes and reassigning Elastic IPs)
- More or less being forced to make an AMI is a great exercise in packaging up your server for deployment, which actually saves time in the long run as you won’t have to rebuild a machine when a hard drive fails, like with traditional hosting, or when you are adding more of the same type server, like with traditional hosting
- Amazon EC2 is actually cheaper than traditional hosting if you purchase Reserved Instances, but more expensive if you pay the On Demand rate
- We haven’t had any maintence issues with the EBS volumes, as compared to our RAID hard drives on one of our other multi-server apps that requires a hard drive to be replaced once per month, incurring additional systems administration work on our part
I highly recommend Amazon EC2 for hosting.
Pros and Cons of Free Product Trials
We’ve been offering free trials of our software for years and have come to understand some of the pros and cons of doing so.
Pros to Offering Free Trials
- Helps assess how serious of a prospect you have
- Provides an opportunity for the prospect to interact with other members of your team (services, support, etc) and show them how great of a company you have
- Sets prospect expectations of what the product does and aligns interests with the company, proving that it is a good fit
- Provides a sense of urgency as the free trial will expire at a certain date
Cons to Offering Free Trials
- Usually more labor intensive, especially for more complex products as services and support teams need to be involved
- Can lengthen the sales cycle as the prospect might have to get other people from his/her organization involved, and actually do real installation work
- Some prospects will keep asking for free trial extensions, which can create an adverse situation with the sales person that wants to solidify the deal or walk away
A couple other items of note:
- The free trial is really a proof of concept project, and should be referred to as such
- Before doing the trial, clear success guidelines must be set up and agreed to by the prospect (e.g. in the proof of concept, we will show x,y, and z working resulting in some benefit, and culminating in the prospect signing a contract)
In almost all cases, I recommend offering free trials (proofs of concept).
More Benefits of Daily Check-ins
As you might know, I’m a big fan of daily check-ins. After spending some more time doing them (we’ve been doing them for 16 months with the leadership team), I’ve realized there are several additional benefits I didn’t consider before. Here are some more benefits that come to mind:
- Having everyone stand up and talk in front of their colleagues gets the energy level up
- Since it is at the start of the day, everyone says hello or good morning, helping promote the team camaraderie
- As you’ve already talked with your team that morning, if an issue comes up later in the day related to one of your priorities, it doesn’t take as much time to get them up to speed on something you need help with
I highly recommend doing daily check-ins across your company.
Two Tiered Sales Process
We recently hired several new sales people to start building a two tiered sales process. With this approach, tier 1 reps are responsible for setting appointments for the tier 2 reps who help the buyer through the sales process and close the deal. Phil Hill, previously of Vocalocity, is a big advocate of this approach, and convinced me we need to start down this path several months ago.
I’ve been blown away by the results.
There’s so much latent demand that is left dormant when cold-to-close reps chase the most promising opportunities. Inevitably, when things get busy, prospecting to load the top of the funnel gets neglected. I’m a big believer in playing to someone’s strengths and not trying to shore up their weaknesses. A two tiered sales process allows for specialization and focus on what reps do well, resulting in better results.
Note: My experience with this is for selling software that is $10,000 – $70,000 over the phone and web with all inside reps.
Quarterly Product Themes
One of things we do is have quarterly themes for our products. Themes are a good way to keep everyone focused on the big picture direction for a period of time. Our products’ themes for this quarter include:
- Ease of use
- Connecting the dots
- Go live
I’d recommend having one theme per product per quarter. Set the theme and then do your best to rally your team around it.
Sales Training Workshop Topics
We’re adding weekly sales training workshops to our training program. They work the same as our manager training where we each come up with a few topics we’d like to discuss, write them all down, and then pick two each week to do experience sharing around. Here are the topics we came up with:
- Getting around gatekeepers
- Voicemail best practices
- Communication timelines
- Pre-call strategies
- Overcoming killer objections
- Questions for pain points
- Time of day call strategies
- Call to appointments goal ratios
- Prospect qualifying
- Augmenting prospect info (e.g. LinkedIn)
- Establishing rapport over the phone
- Customer engagement during GoToMeeting
- Cold calling strategies
- Emailing strategies
- Creating a sense of urgency
- Strategies for determining the best prospects to target
- Negotiation strategies
- After losing a deal strategies
- Too small of a budget
- Sales role with marketing
- Tier one sales rep. feedback loop
- Demo preparation
Manager Training Discussion Topics
We just started a new weekly training and workshops program for the managers in the my company. As part of it, we had everyone come up with a few topics they’d be interested in discussing in future meetings. Here are the topics we’ll be discussing using the Gestalt Psychology experience sharing methodology:
- Constructive criticism
- Effective coaching to maximize strengths
- Rivalries and motivation
- Policy and procedure changes
- Big rocks and prioritization
- Dealing with underperforming team members
- Effective delegation
- New team member training
- Determining employee effectiveness and effort
- Frequency of communication
- Best practices for departmental meetings
- Dealing with inconsistent department workloads
- Visibility into development cycles
- Friend vs manager balance
- Balance between micro-management and being hands-off
- Dealing with missed timelines
- Working with problem employees
- Decision making without concensus
- Delegating undesireable work
- Strategies for minimizing overlapping work
- Managing employees with inter-departmental responsibilities
- Improving attitudes towards problem customers
- Manaing people with skillsets you don’t have (e.g. programmers)
Sales Commissions for Subscription Services
I was talking to a very successful entrepreneur a few days ago about sales rep compensation plans. In his model, they sell an annual subscription for several thousand dollars to their service. What I really liked about it was that quota was done on a monthly basis whereby no commission was paid at all until 60% of quota was reached for that month.
After 60% was reached, commission was paid on all previous deals and more sweetners were added when additional percentages of quota were reached. The result was that sales reps worked hard and that there was a spike in deals at the end of each month, when the reps could make the most money.
Don’t Add Too Many Features Before Customer Input
This has come up two times in the past couple weeks making it worthy of a blog post: don’t add too many features to your produt before soliciting customer input. In fact, in some cases, you should sell your prospects on the idea of a new feature and/or product just to get their feedback to see if it is the right direction to go.
As a rule of thumb, you should be able to build and launch your web application in three months tops. If it takes longer than that, you’re making it too complicated. We made that mistake with one of our products and are now spending hundreds of hours refactoring the back-end and actually removing some features from the product. Don’t let it happen to you.
Crowdsourcing Creative
For one of my latest projects, I decided to try and see how cheaply I could get a really nice logo and web design done for Shotput Ventures. Here’s what I did:
- LogoBee.com for the logo – $279
- crowdSPRING.com for the crowdsourced web design – $750
- PSD2HTML.com for the HTML+CSS – $329
Of course, it is powered by the eCrowds Community Management system and Pardot Marketing Automation system, but that’s a different topic.
I think the site and logo turned out pretty nice for under $1,500.
