The Startup Chat with Steli and Hiten on Smash Notes

The Startup Chat with Steli and Hiten podcast.

December 31, 2019

Unfiltered insights and actionable advice straight from the trenches of startup and business life. The show hosts, Steli Efti and Hiten Shah, are both serial entrepreneurs who have founded multi-million dollar SaaS startups. Being busy CEOs of fast-growing companies, they know the value of your time and make sure you get the most out of each 22 minute episode. Tune in for new episodes every Tuesday and Friday.



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Today on The Startup Chat, Steli and Hiten talk about how to develop free tools and use them to market your business.


Marketing your business is essential but can be quite expensive. A great way to generate leads for your business is by developing a free tool that solves a problem for your prospects and leads them to want your main product.


In this episode, Steli and Hiten talk about how to do this strategically.


Time Stamped Show Notes:


00:00 - About today’s topic.


00:49 – How HubSpot started with a tool called grader.com.


01:22 – Steli talks about why his company hasn’t developed a free tool yet.


03:24 – How to choose the right app before investing in this strategy.


05:45 – Why the tool has to fit in the customer’s journey.


06:24 – Another way to choose the right tool to invest in.


07:06 – Hiten talks about a company that uses this strategy very well.


08:50 – How do turn free traffic into customers.


12:05 – Build the free tool first and then build the audience.


13:45 – The right amount of time to spend developing and deploying a free app.


Quotes:


Your tool needs to solve a problem for your prospect.

It needs to be a logical step in the buyer’s journey.

You have to build something that people actually care about.


[0:00:00]


Steli Efti: Hey everybody, this is Steli Efti.


 


[0:00:04]


Hiten Shah: And this is Hiten Shah. And in today's episode we're going to talk about something that a lot of companies are starting to do and some companies have actually done and built massive businesses and gone public off of a strategy like this. And the thing we're going to talk about is how to use free stuff, free tools, free not E-books or anything but actual free software. Things you build with your engineering and product team in order to do marketing. And I'm going to start with the most kind of popularized example of this that people talk about a lot is HubSpot. They started with a took called grader. Grader.com. G-R-A-D-E-R.com. They still have it. And that was one of their biggest sources of leads for the longest time. And that's how they did lead gen. It helps you your website and it told you that you should use HubSpot basically. And there's a lot of free marketing for them that they got out of it. So that's my example to kind of kick off the convo about this sort of really important and ket strategy for doing marketing.


 


[0:01:05]


Steli Efti: Yeah so I've always, I've seen this being done a lot. I know you guys with your companies have done this quite a bit. This is something I've never done. We've never done a close out. We've never released a free tool, a free piece of software, Chrome extension, anything of that nature as a growth and marketing tool. But we've thought about it, we've talked about it, and it's definitely something that's on the for this year. But one thing that has always stopped us was never a lack of ideas. In our case oftentimes it was just a lack of I think commitment to doing that because we're looking at our internal engineering resources and saying, well we don't have enough developers to be deploying resources to a marketing app like that. We want all of our developers to focus on our core product. And well, what about working with a contractor or going to a freelancing website. Well who will project manage that? And then who will maintain the app and the code base? And I think that, that kind of ... Maybe being overly critical or overthinking this has always stopped us from investing in it. So maybe from your experience, how do you make sure that you choose the right app or the right thing before you invest in it that could really ... Because the app needs to have some kind of a virality or ISO, it needs to be attracting growth without you having to spend marketing and sales resources on promoting the free app or the Chrome ext...

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