In this episode of SaaS Boss show I interview Lloyd Yip. Lloyd is a sales and marketing advisor to SaaS companies. In this episode we discuss actionable steps to getting your first sales. Many founders are reluctant doing cold outreach, and so you wait until you build your product to start getting feedback from potential customers.
In this episode we discuss:
Attaining product market fit for SaaS companies and getting early traction
Ways to get first few salates using LinkedIn outreach
Scaling to your first 100 sales and free channels you can use
Building cost effective client acquisition engine
Connect with Lloyd here:
lwyconsulting.com
https://m.me/lwyconsulting?ref=r10kwebinar
Lloyd Yip Interview Transcript
Natalie: [00:00:00] today, it is my pleasure to speak to Lloyd EIP about how to get product market fit using LinkedIn, email, Facebook for early stage product validation.
Lloyd is a sales and marketing advisor to SaaS companies from all over the world. His specializes in helping early stage bootstrap companies, with product market fit and build systematic and predictable growth engines, which allow them to scale cost-effectively and quickly. Welcome to the show, Lloyd.
Lloyd: [00:00:32] good to be here. It’s going to be fun.
Natalie: [00:00:35] tell us, how did you get started coaching SaaS founders?
Lloyd: [00:00:38] So I’ve been part of the SaaS world for around six or seven years now. began as a business development rep. and this was for a Mar tech company, and then ended up doing some enterprise sales for them as well.
So closing some pretty large deals . And then from there I moved into more of a leadership role at a very early stage company, and we were pretty much the definition of like a bootstrapped company, Silicon Valley style. We’re literally just a couple of guys working out of our living room together, but we scaled that from pretty much nothing to two and a half million in 18 months.
So we pretty much gone through the process ourselves of figuring out product market fit. Getting our initial customers needing to scale and build a team from there and we were also helping a lot of companies that we were personally serving because we were in sales technology.
So by helping them with their sales and scaling process, we also were able to experiment and try to run things on behalf of other people and that data set helped me educate what worked and what didn’t in the world of growth in the world of client acquisition.
So I did that for a couple of years. We scaled the team for ourselves and also for our clients. And then I ended up branching off to build my own consultancy because one of the things that I really wanted to do in my own consultancy was touch a broader spectrum of the sales funnel. One of the challenging things that I found a lot about the company that I was with was that we were very focused on top of the funnel.
We were very focused on lead generation, but in reality, when you’re looking at most early stage companies. Lead generation is just one part of the problem set. A lot of people who don’t even have a validated offer yet, they shouldn’t even be thinking about, Oh, how do I get more leads in the door? They really should just be thinking, how do I get more feedback so I can really validate my product?
And then once you’re beyond the generation, you can’t not have a process to close deals because even if you’re generating a ton of leads every single day. If you don’t have a methodology of bringing them through the evaluation phase into actually purchasing, those leads are just going gonna turn to nothing.
There’s a lot more that has to happen to scale a company from figuring out what the right offering is and validating the business itself, but then also adding sales plot process and playbooks to enable companies to actually close and grow the revenue.
So with my consultancy now, we cover all of those different aspects. From when you’re first getting off the ground, how do you make sure that your offering and your products are a good fit for the market and that people wants it, that there’s demand. And then of course, how do you build some pretty sustainable lead generation engines so that you’re always having new people enter the funnel?
But then lastly, as you have these leads come in, how do you make sure that you’re bringing them ultimately into the finish line and closing them as paying customers?
Natalie: [00:03:37] I love how you touched on the conversion part of it because regardless of if you have a bunch of leads top of funnel, but then nothing comes out of it, then it doesn’t really matter.
So I actually did a talk a couple of months ago. I had a presentation in front of a few hundred people talking about the conversion and how if you have a 500. Stop funnel, and then every step of the funnel, you improve your conversion chest by 5% you end up increasing your conversion by 40%
Lloyd: [00:04:10] yeah.
Natalie: [00:04:10] And if you increase on every step of the funnel, improve your conversion by 12% you end up doubling number of sales without adding anything else.
Top of funnel without adding any annual leads, without spending any more money on generating those leads, just like that. Out of nowhere, you basically have twice as much revenue. That’s pretty amazing. So probably I’m going to do a separate talk about that as well, just to drill down a little
Lloyd: [00:04:39] bit more.
It’s massive opportunity costs because when you’re closing in, say like 15% compared to 30%. Like seemingly on the surface you might make half the money, but in reality, it’s actually a lot larger of a multiplier because anyone who’s closing at like a low percentage, not only are they needing to find more leads, which costs more money, but they’re also spending and wasting more time on sales calls that go nowhere.
And then you’re also more stressed. And then if you have a sales team, you have to like let more people go because you’re constantly not happy about their performance, which causes additional expenditures. So there are so many other side impacts of not being able to close at the bottom of the funnel that ultimately bleed into your ultimate bottom line.
So it makes a huge difference. I’m lead generation just part of the story.
Natalie: [00:05:27] So are you more of a sales guy or a marketing guy?
Lloyd: [00:05:30] I began in sales. I began needing to, even before my SaaS career, actually, I was doing door to door. This was how I paid off college tuition when I was 1819 years old, and it was like the perfect entry point into this world because I think sales is great because it’s communication one-on-one.
If you can talk to someone one-to-one and tell your story and communicate how you can help and add value to them and get them to agree that you know what working with you would be a good thing. That’s what sales is in a nutshell. If you do that really, really well, then it enables you to become a much better marketer because marketing is pretty much one to many sales.
And if you don’t understand one-to-one communication and one-to-one psychology of decision making and buying, then you can’t really do it one to many. So I think every marketer should first like sell and talk to as many of their chosen buyers as possible because you can’t possibly convince them at scale to make a decision if you can’t even convince one of them to make a decision.
I still very much lean on my sales skills today, but obviously as my business has scaled and I’m working with lot more clients and I’m doing a lot more touch points, the marketing and especially the understanding of technology. Is, is augmenting everything that I do, but it all comes down to psychology.
Anything it comes down to do you know how to talk to someone and communicate to them?
Natalie: [00:06:53] so let’s talk about product market fit. Attaining product market fit may actually be an ongoing journey, right? For many companies, if not majority of the companies, uh, Maney. and in fact, I’ve read the districts that companies that do pivot actually end up having much higher MRR just because once you get into it you probably find things that you wouldn’t be able to predict when you’re just getting started. So that’s why, I dunno, that’s my assumption. The actually, the pivot maybe much more beneficial than staying in the, there’s a great book by Seth Gordon as well. It’s called . that’s all about it.
What do you see with the companies that you work? Is it more like they’ve done that once and then it’s done or it’s continuously evolving.
Lloyd: [00:07:41] It’s always evolving for sure. Because even if the first iteration of your company and your offering. Is serving its purpose and it’s working really, really well.
As you expand your company and as you’re trying to do more things or maybe increase your suite of tools that you’re offering, inevitably you start touching more lives. So as your offering changes, as your audience changes, so does your entire definition of like product market fit. it’s constantly iterating.
Um. Like six months from now, I will not only know more about my audiences and their psychology, but it’s very likely that I’ll have even like more different people in the world that I can help and impact. Amazon began as like a bookstore.
They sold books online. And now when you look at them, they’re the world’s biggest cloud provider. They build spaceships. They’re of course, the biggest eCommerce company in the world as well. They didn’t start that way. So as they progress and as they actually improved their overall offering, so does their entire definition of what they do.
So yeah, I think companies have to always be aware that things change and things are fluid.
Natalie: [00:08:55] So how do we get a product market fit? Let’s talk about that.
Lloyd: [00:08:59] Yeah, so I think the biggest mistake that people often make is that they fall in love with just building a tool or a solution. And I meet a lot of SaaS founders they began their journey because they thought of this thing that they really thought like had a vision of being helpful and impactful to the world. And they get married to that idea of the actual offering in the product itself. And unfortunately, a lot of us mere mortals, we don’t have the foresight to understand exactly what the market needs unless we first talked to them.
I mean, unless you’re Steve jobs or Elon Musk, and somehow you’re just. One of those fortune tellers of the future, but in reality, when we concoct an idea just in her own head and we push it into market, it’s super risky and more often than not because it’s just something that we use our own intuition to build.
It’s not going to really be that desirable in the marketplace. Instead of what people need to really focus on is falling in love with solving a problem. So I’ll give you a non SaaS example just so that everyone can like really easily understand. But if the problem that you’re really trying to solve for, let’s say is weight loss, and then you also understand the audience you’re trying to solve it for is like mothers between the age of 35 to 55.
So now you understand who you’re solving it for and you understand the problem. There’s actually many, many different ways that you can go about solving this problem. You could have a brick and mortar yoga studio. You can have a diet and nutrition program. You can have an online info products.
So what matters not is, is less so the actual vehicle that you’re utilizing to solve the problem. What matters more is like, do you really understand who you’re solving it for and the specific problem that needs to be solved. When you begin there and then you try to come up with a vehicle and a product which maps to the audience and the problems that they’re going through, you’re much more likely to build something that actually is needed by the market rather than just trying to come up with the offering and then stick it to some sort of audience or stick it to some sort of product or problem after the fact, um, that a lot of the time doesn’t go well.
The way that you would really go about doing this is, yeah, like you begin by picking your audience, you begin by picking the problem and you do so by talking to a lot of people in that space. You interview them, you get feedback, or maybe you are one of those people, because a lot of people, they begin their companies to solve their own problem.
So that makes it easier if you were your own audience and you’re solving your own problem, but if you’re not, if you just want to build another SaaS company. Then, yeah, you definitely have to understand deeply the audience that you’re serving and the problems that they’re going through. You almost want to understand it better than they understand that themselves.
Natalie: [00:11:43] I’ve a read a book and there was a great example about a company who are trying to make the world better. and they came up with the idea that, the world needs incubators for premature babies in their third world countries, um, that do not have access to highly expensive incubators.
And so what they did is. They travel to the countries that actually need that there. Our initial assumption was that they would need to just make it cheaper because incubators probably costs like, I don’t know, $10,000 age. So their idea was, okay, we’ll probably need to make it cheaper .
So without them actually going there, they would probably build something that would cost $5,000 maybe. But when they actually went there they understood that the problem is not that they needed 50% less expensive incubators. They actually need a completely different kind of incubator because in those villages they didn’t have electricity, so it had to be working without electricity.
And only when they went there were they able to understand the actual problem and build a solution that would really, really fit that need. So I really liked talking about when you mentioned that, understand that problem and then think about the vehicle.
And by the way, the anum of that store is that they build an incubator that cost just a few dollars each and it would work without the electricity on that app. The same in millions and millions of babies actually in the third world countries just because they when there and understood the actual need and build something that exactly was needed instead of us making some
Lloyd: [00:13:23] assumptions.
I actually, I’ve never heard of that story, but that makes a lot of sense. We gotta be flexible as entrepreneurs and not assume, Oh, what we have is like the perfect thing. We got to really think about what do our customers most need? And they might not be able to tell you exactly what they most need because frankly, if they knew it, maybe they would just make it for themselves.
But they can tell you to an extent like what are the things that are most annoying and frustrating to them? What is the biggest problem that they’re facing? And maybe what have they tried in the past that hasn’t worked? Like those are the answers that will get you closer and closer to understanding, okay, here’s what I should build.
In response to all of that .
Natalie: [00:14:00] I usually say that to get the first time customers, a founder should not rely on like a SEO or even paper claim that they need to start doing cold outreach. Is it something that you would recommend? And then what are your strategies.
Lloyd: [00:14:14] Yeah. I completely align with that vision because the way that I perceive content and SEO and paid acquisition, all of that stuff implies that you already have a set offering that you know is needed by the market. Cause all of those things are inherently like way more expensive to set up, take generally like a bit longer for you to even have the content in the first place.
and for the content and the paid ads, the copy itself to even convert, you really need to be making sure that the copy in that content is solving real problems. That it’s creating some sort of like profound realization in your potential client’s head that like, wow, I’m doing something wrong. Here’s a better way to do it.
You can’t actually do any of that stuff though, unless you first really understand your product market fit, unless you really understand what your offering is and what the problems that you’re solving in the beginning when you’re just trying to validate your offering, you don’t have any of those raw materials.
It doesn’t make sense to even try SEO or content creation or paid acquisition yet. So outbound is better because with outbound there really isn’t some sort of implication that you’ve already figured it all out cause you can actually just go to the market and say like, Hey, I’m working on this brand new thing.
My hypothesis is that it’s going to help you in these specific areas, but I’m still pretty early on. Can I just talk to you and understand better your workflow. I’ll share with you my basic idea and you can tell me if you think that it’s worthwhile or maybe you can give me additional feedback so that I can pivot or move to a better direction.
So that’s generally what I say in the beginning. I’m going to be doing outbound, but I’m not even selling. I’m pretty much just trying to go out there and gather feedback from my chosen audience. And obviously you have a bit of an idea of what the problems are that you’re going to be solving for. But what you need to do is really validate if those problems are legitimate.
Natalie: [00:16:16] how many people do average.
Lloyd: [00:16:18] I would say like 30 is a good number. Probably if you can talk to like 30 people in your chosen niche and like at least half of them are telling you, yeah, that problem exists yet it’s a problem that is. Like relatively in knowing all the time.
So it’s, it’s like pervasive. Yeah. It’s a problem that I’ve tried to fix in the past, but I just don’t really know how to, or I’ve never even tried to fix it cause I’ve never thought that there wasn’t a proper solution. or maybe they say I’ve tried to fix it, but other alternatives just aren’t really working the way that I want them to work.
And they’re also saying that it’s a problem that there’d be willing to spend money if they could solve like all of those answers. That’s what you’re looking for.
Natalie: [00:16:58] Wow. So in order for us to talk to 30 people, we’ll probably need to make like what? Uh, more than a few hundred connections. Right?
Lloyd: [00:17:06] And that’s easy.
People get, so I’m like overwhelmed with, Oh, I got to do this much outreach, but think about it. Let’s say you want to talk to 30 people. So 30 people jump on a phone call with you, and let’s say you get a 5% conversion rate or acceptance rate meeting acceptance rate. So. To get one meeting, you got to talk to 20 people.
That’s just like 20 times 30 what does that 600 so let’s say over the course of a month, a month are working like 22 days roughly. so reach out to 25 to 28 unique people every day for a month.
Every business day of the month and you’ll get your 30 meetings. It’s, it’s really not that challenging.
Natalie: [00:17:51] Cool. And then what are we doing next?
Lloyd: [00:17:53] Yeah. So obviously if your approach is going at a not from a sales perspective if you literally say in your LinkedIn outreach or your email that reached out like, Hey, I’m not here to sell anything. I just want to get feedback. Naturally, your conversion rates are going to be higher because people are like, Oh, who’s this person who’s pretty much saying that they think I’m an expert, that they’d love my advice, that they think that I’ve experienced a lot, and then I can maybe even add value to them.
You’re going to improve your conversion rate just by going at it from that approach, and then, yeah, you’re going to have like an initial 30 minute conversation probably to walk them through your hypothesis of what you think is broken in the world and they’re going to confirm or deny. They’re going to say, yup, that is totally a problem in my day to day.
Or it’s not. If they say that is not a problem. Then you got to figure out why. And depending on their answer, if this is continued popping up from all the conversations that it’s not a problem that it’s been solved, then you have to realize, you know what? Maybe this problem just isn’t even worth building a solution for.
So in fact, you’re doing this even before you build your solution to an extent. Because if you try to build a solution first and then validate, you’ve already spent all that time in creating your offering. And if people are saying, Nope, I don’t even really need this, this isn’t a problem, that’s. Needing to be solved, then you just wasted all that time.
Whereas if you have just like a basic idea of what the problem is and maybe what a solution is, if you then first go and validate it, you get like 20 out of those 30 people to say, yep, that’s a problem. I need that fixed. Then you can go in and be way more confident that you’re not going to be wasting time building a solution that no one ever needs.
Couldn’t
Natalie: [00:19:25] agree more. In fact, my husband, his build a few solutions, but the only one that has been successful is the one where even before building that, he actually got a few clients. So he had a bunch of clients who wanted him to build. He, he was doing integrations for HubSpot who wanted him to build that specific integration, and they paid for that integration.
So basically
Lloyd: [00:19:49] for multiple people,
Natalie: [00:19:51] and then he built it for every single person, and then he package that does this as basically.
Lloyd: [00:19:56] Exactly. So that’s the entire premise of pre-selling, and it’s the lowest risk thing to do because if people say that they don’t think your problem is legitimate, then you just never even build it.
You save a ton of time. And if consistently people are saying, Oh yeah, like this is totally a pain. I don’t really know how to solve it. None of the tools out there currently are solving it to the extent at which I need. If you can figure something out like that would be awesome. And that’s pretty much your initial clients.
Those are your first few clients. So you bring them on as like your alpha customers. They might even fund your project, or you might give them like lifetime access. With them knowing that eventually this thing’s going to turn to a like a subscription and I’m not going to have to pay for it. Or you do things like money back guarantees in the situation that it doesn’t work out or like opt outs.
and as you create your offering, they’re almost part of the process so that they can vet. Yet we really definitely need that feature or we don’t need that feature.
You almost have like a feedback team, which is guiding you so that you’re building what is actually needed by the world. And that’s much better than working in your black box alone via your own intuition.
Natalie: [00:21:12] So let’s say we have 10 clients that will already press all it too.
And then we started building this tool, and then how often do we need to check with those people because it’s probably gonna take us what, a couple of months to build something.
Lloyd: [00:21:25] you’re going to start off just with like the bare bones. Um, you only really need to build the most simple version of your offering to begin with.
And really your customers are going to have like a whole series of problems, but it’s very clear that one or two of them are going to be the most pressing problems. So the version one of your product just needs to address those things. When you first talk to whoever you pre-sold, you just get a sense of what are the biggest priorities for you.
If we were to get something out, version one and over the course of those 10 people or however many the number is, is going to be very clear, okay, what are the most basic necessities? Let’s build that thing out. And once you have it done, you’re going to give it to them. They’re going to tell you if they’re Happy with it or not. If they’re not happy with that, you’re going to have to go back and fix it because frankly, there’s no reason to build additional features unless the, the primary thing that matters is working. If if you, if that thing doesn’t work, then why would you go and build more stuff? Like the first thing isn’t even working yet, but once everyone was like happy with the first thing, that works really, really well and it’s kind of just like smooth sailing then you can start considering, okay, what are the next layers of problems that people are obviously having in this, uh, in this industry or in this audience base that should also be solved? Which relates, of course, to the initial thing that I was building in the first place. And then you layer those things on, and there should always be like open lines of communication.
If you’re building something. If anyone ever turns, there needs to be like a process in place to figure out why things turn and there should be almost like a community in place, whether that be just a Slack community or a Facebook group community, or maybe even just like one-to-one communication. We’re constantly getting feedback as to like, did you use this feature?
Did you use that feature? Did you like this? Did you like that? So that even as they’re still just using the platform, you’re getting. Indications of whether or not things are going well or not. So those are the things that I would definitely build in. But yeah, it’s one step at a time. You never want to be doing too much too soon.
especially like if you’re bootstrapped and you’re working primarily by yourself or with a very small team, the resources aren’t even really there to be trying to do too many things at once. So you might as well just keep it simple.
Natalie: [00:23:55] is there anything that I should have asked you but have not, and something that will be valuable to our listeners.
Lloyd: [00:24:02] Yeah. So I think the biggest question that I often get is, okay, so how do I even get these people into the pipeline? How do I even get people to interview in the first place? So I would say the best way of doing so is going to be via like LinkedIn, Facebook, and email.
I don’t want to be super concrete with the channels because it really just depends. More so on who. Your audiences and where they are. So, I mean, if you’re selling to CTOs, I think LinkedIn makes a lot of sense. If you’re selling to musicians, Instagram probably makes a lot of sense. So really just reflect on who your audience is and then go to where they are.
And then outbound can be pretty much done in any channel. Outbound being just like go and talk to them, send them a message. so once you can identify the right channel to utilize the messaging. Something that I’ve already kind of shared a little bit before is not salesy at all.
You’re just saying, Hey, I’m working on this new project now trying to sell you anything, but I know that you’re super experienced in this space. I just want to get some of your feedback and understand a bit more about your day to day so that I can really understand if I’m going down the right path. if you’re down to get like virtual coffee, I would love to, you know, just get your 2 cents and share some ideas.
So this is going to work really, regardless of the channel. Obviously there’s intricacies with each channel, so you have to just understand, okay, with each of these outbound channels, what can I get away with? Right? With email, we know that we can generally send six to eight touch points without.
Pissing anyone off. Cause that’s just how email is these days. It’s a pretty transactional, salesy channel, but you don’t want to like send someone six messages on LinkedIn. That’s like very overly aggressive. So you have to be aware of the different social rules and norms, if you will, of each of the channels they’re utilizing.
So with linkedIn three to four touch points, and then just leave it as is. Um, Instagram, same thing. Like you don’t really want to message people more than two or three times. If they don’t respond, you just have to call it quits and move on to the next person. Um. Yeah, I would say those are some of the things that you should definitely consider the frequency.
and then I actually said earlier that the way that you want to do this is of course, cover enough ground. So just be very, very consistent. If you want to be getting those 30 meetings in the calendar and you know roughly the conversion rates going to be 5% then like you just reverse engineer the amount of activity that you need to do every single day.
People significantly overestimate how much work they’re actually doing. I’ll talk to people who are in the process of attaining product market fit, and I’ll ask them, so what have you done to get. People to talk to you and there’ll be like, yeah, I sent out like 20 connection requests on LinkedIn this week, and to me it’s like hilarious that they think they should have gotten anywhere.
When I look at those numbers, I know they would’ve gotten nowhere. There’s no way, 20 connection requests, maybe a third of them even accept and then they don’t even follow the walk afterwards. you’re not even giving yourself a shot to get the conversations in the door to begin with.
So there needs to be volume, there needs to be frequency. The copy needs to be there. And then of course, once you’re on the conversation, you got to understand how to run that discovery conversation. how do you best over a 15 to 30 minute call really pick apart? Do they have the problems? Is it a severe problem, is a problem that’s worth spending on?
Are there other alternatives that have failed and solving that problem? So there’s, there’s actually a very structured way in which you get the information, which will help you to either validate or pivot within your idea. And this is all stuff that has to happen before you even build anything. So I work with a lot of engineers.
I work with a lot of people that come from a bit more of a technical background and like the reason why they don’t end up building a great company or a SaaS product is often not because they’re coding is bad at all. everything else beforehand, they just didn’t do it the right way. So, we got to do those initial foundational things first before we even start coding anything.
Natalie: [00:28:08] Where can our listeners find you and what it is did you help founders with.
Lloyd: [00:28:16] So I help my founders, whether they be SaaS companies or service-based companies, B2B, typically I help them pretty much build a process which enables them to get product market fit, help them build engines and repeatable systems, which allow them to make lead-generation easy. And then I also help them implement sales playbooks, which enabled them to convert.
And then. This is the starting place for longterm sustainable scaling. And when we start hitting that 25 35 K per month Mark, there’s even additional things that we can do so that you get to that 500 K that a million dollar air Mark. So those are pretty much the areas in which I help my clients at with, if you want to find me, my website’s LWR consulting.com I also have like a few free giveaways and free trainings.
I can. Give you the URL of, please do. And then in your, you know, listening to this via Stitcher or player FM or whatnot, they can just click into that and they can immediately start checking out additional content. One of the contents, uh, pieces that I actually created was a very in depth breakdown into how I, I pretty much use Facebook, LinkedIn, and email degenerate, like a very high volume of leads every single week.
Which immediately go into my funnel. And this is really good cause it’s organic and it’s kind of perfect for people that are just starting to get off the ground and starting to scale. And they don’t want to spend too much money on paid acquisition. So if you’re kind of in that, you know, below $15,000 per month Mark, maybe you’re even below like $3,000 per month and your pre proper revenue, this would be perfect for you.
So I’ll leave that in the show notes. And um, anyone who wants to check it out, they can. Awesome.
Natalie: [00:30:03] Any last part in words?
Lloyd: [00:30:06] no, I think that’s a really good, I enjoyed my time here today.
Natalie: [00:30:09] Sounds good. Thanks a lot,
Lloyd: [00:30:11] Lloyd. Cheers.
