Episode 17
· 40:45
This week Nathan Barry is back to talk about how he wrote his book and why he prices based on value. Our premium sponsor is Sprintly. Sprintly is an agile project tool with one goal: to help you ship more stuff. You can try them out for free at www.sprint.ly. You can also thank them for being a sponsor of product people on Twitter, sprintly.
Speaker 1:Make sure you listen right until the end of the show today. We have something new after the interview. Now let's get to the show.
Speaker 2:Well, let's talk about the process of writing the book and specifically like tools and some other things. So first, what software did you use to actually write the book?
Speaker 3:So I used a program called Scrivener. I think it's available for both Mac and PC. Costs like $40 or something. And what I like about Scrivener is it makes it really easy to throw down a whole bunch of ideas and then go back and fill in the blanks. And when I had a bunch of rough content, I could then kind of drag it around and rearrange it pretty easily.
Speaker 3:So I could quickly go, okay, what if I were to lay out the book like this? And not visually, but the order of the content and how to structure the chapters and that kind of thing. So I like that. It also has a built in function of you can set it in your goals. So you can say, okay, I want a 30,000 word book.
Speaker 3:I have fifty days to write it so I need to write x number of words per day and it'll track that for you.
Speaker 2:Oh, cool.
Speaker 4:That's brilliant.
Speaker 3:Yeah. So there's some nice little features there. It's by no means a requirement to write a book. I think a lot of people get caught up in the tools, you know. Like, okay, I'm going to start running every day or start running regularly.
Speaker 3:So I need to go out and get my Vibram Five Finger shoes and I need to get, you know, and they get all caught up in buying all this gear rather than just proving to themselves that they're actually going to do it. And then get the gear that helps. So I would say start writing first in Notepad or text editor or whatever. And then once you've proven yourself that you're actually serious about it, then start finding the software that's going make it a lot easier or buying whatever tools. And that applies to everything, not just writing books.
Speaker 2:Yeah.
Speaker 3:So other tools. Once I had the base content done, I then pulled it into iBooks Author, which is a free Mac only program. But it's wonderful. I love laying out ebooks in there. It's a really easy but powerful design program.
Speaker 3:I actually spent a lot of time trying to think of what program to use and how to lay out the book. And I tried everything from HTML and CSS that was generated into a PDF, to looked at pages, Adobe InDesign, all that kind of stuff. And I kept ignoring iBooks Author, because when they came out they had some weird licensing things.
Speaker 2:That's right.
Speaker 3:Whereas like anything created with our program can only be sold on the iBooks store, you don't own it, blah blah blah. Yeah. And so that's why I ignored the program and they had quietly released an update that fixed all their licensing issues and I just hadn't heard about it. So when I went back and investigated it seriously, I found that only if you created an iBooks file were you limited to selling that on the App Store. So what I did was just exported it as a PDF, which was really easy, and sold that through my own site using Gumroad.
Speaker 3:And so there weren't any licensing issues, and that made it really, really easy.
Speaker 4:Yeah. So are you also selling through iBooks, like the iBooks store, or just through your site?
Speaker 3:Just through my site. I have a couple other deals. You know I've sold through AppSumo and deal a lot of
Speaker 4:it.
Speaker 3:Right. Okay. Couple reasons that I don't sell on the iBooks store or the Kindle store is with the pricing, I like to price based on value. So that's why my books start at $39 On the iBooks and Kindle store you are either forbidden or strongly discouraged from prices along those lines. So for example with Kindle, I'm gonna get these exact numbers wrong, but if you stay under $10 for your price, you keep 70%, Amazon takes 30%.
Speaker 3:If you go above that magic threshold, and I think it's $10 it switches. Where you get 30% and Amazon gets No way. So you can choose a higher price if you want. It just, know, doesn't make sense to do that. So they are using that to keep their prices down as they like it.
Speaker 3:IBooks has a limit for their textbook style books of $15 The other thing is, and we can get into this more later, email works insanely well for marketing and promoting products. And when I spent all this time selling apps on the app store, I knew nothing about my customers. I would just get this notification of, hey, you sold X number of copies in these countries yesterday. Congratulations. And I have no idea who it was that purchased, where they came from, anything like that.
Speaker 3:And I hated that black box. And so I wanted to be able to get referral stats and just have the names and email addresses of them.
Speaker 4:Was gonna say it's impossible to reengage those people, right? You can't follow-up with like a related product.
Speaker 3:And so you just you can't have that. So I've learned that being able to market communicate over email with your customers is so important that I'm not willing to sell on Kindle or iBook Store because of it.
Speaker 2:Now, the you know that when I looked at the homepage for your newest book which is what is that? It's the Design Web Applications book. Yeah. First of all, Kyle and I talked about this the day it came out because we were really impressed with just the whole thing, the way it was laid out, content. And then you get led down to the bottom where you have not just one like a book for sale but you have three packages.
Speaker 2:And you know my first question was, man he, he has interviews with Ryan Singer and Sasha and Trent Walton and all these people. How did he get these interviews? And so I
Speaker 1:just wanted to talk to
Speaker 2:you about that. How did you get these folks to be a part of this project?
Speaker 3:So I just asked, really. You know, there's not some super exciting story with it. It's I sent people an email saying, hey, this is what I'm doing. I really enjoyed your work. In some cases, like with Ryan Singer, I linked to some specific articles that he'd written.
Speaker 3:And I said, these were really meaningful to me, and I've applied them on a lot of projects. Thank you. So it wasn't like I just blasted 500 prominent web designers and said, will you do an interview? It was fairly personal. And the general response from a lot of people was, sure.
Speaker 3:I'm honored. Generally, no matter what level somebody is at in their internet fame, first of all, it is still just internet fame. Nobody is going to recognize them walking down the street for the most part. So you have to keep that in mind. And then also, they were probably in your position if not two years ago, five years ago.
Speaker 3:You know these people who are internet famous haven't been for very long. So at the most you are looking at like 10. Yeah. And that's still not very long. So everybody can imagine being in your position.
Speaker 3:Generally they are pretty helpful. Yeah. And so just ask and that works pretty well. You know, I do have one story related to that where I contacted both Ryan Singer and Jason Fried at 37signals because both of them, their work has had a huge influence on my design over the years. And so I got a response back from Ryan and didn't hear back from Jason.
Speaker 3:And we did the interview with Ryan and it went really well and I posted it online and sent Ryan an email and said hey here's the link to it. And he tweeted it out which was pretty cool. And then I saw that Jason retweeted it. And so at that moment I was thinking, okay, Jason is probably insanely busy. Missed my email before or it just got lost in the file.
Speaker 3:But I know that in the last five minutes he was on my site, you know, and because he retweeted that link. And so we made the connection. So I emailed him right then and said, hey, just following up. Would you like to do the interview here's a couple times and he emailed back within a couple minutes and said, yeah I'd be happy to. Sorry for missing your email earlier.
Speaker 3:Just like that. And so there is an element to some people are hard to get ahold of and if there's timing is important. So if you can get that sort of thing on your side, it helps.
Speaker 4:Right. It's funny you ask that today, Justin, because I've had a few people, and someone today ask how we get people on the shows. Again, most of our people are just internet famous, but I just basically tell them exactly what you said. We just reach out to them, pretty much everybody is happy to talk to us because, well, I mean, you obviously like talking about this kind of stuff anyway. Right?
Speaker 4:So why not Right. Why not do a podcast about it? So
Speaker 2:Yeah. I think there is something strategic about it though because there's going to be people sitting at home right now saying, Well, I tweeted Ryan two weeks ago and he didn't respond. Or you know, I've tried emailing this person and they didn't respond. So I I think there is something strategic about it. Sure.
Speaker 2:Obviously you have to ask but you know sometimes if you can write something personal obviously that helps. If you have a project in mind you know another thing we've done with the show is once you have one you can use that one for you know future contacts. You can say you know hey I just interviewed your buddy here. Would you like to do an interview as well? Gives you some credibility.
Speaker 3:Yeah, it definitely does. So you can start small and work your way up. There's a lot of people who are doing interesting things that still have time for interviews and you know somebody in my position where somebody asked me to do an interview and I'm I said yes definitely, I'm honored. Thanks for thinking that my story is interesting enough that you'd like to talk about it. I bet you'd be amazed at how many people feel the same way.
Speaker 2:Yeah. Although we did have to go through admin assistant and then there's all the scheduling, phone calls. We had to go to a special like mailbox and like put something in and it was a bit of work.
Speaker 3:It was, but, you know, hopefully, it was worth it, maybe.
Speaker 2:And So Yeah. Okay. Keep going.
Speaker 4:No, go ahead.
Speaker 2:I was just going to just to round off that video interview, I think the other question people had was like were you up front with them that you're building this as a product that you're going to sell and how did you record the videos?
Speaker 3:Yeah, so I'll take the I recorded the videos using Skype call recorder. I think it cost like $30 or something. Just a little plug in for Skype. The other question I get a lot and it's how did the financial relationship work in this sense? And it was very simple.
Speaker 3:It was I said I'm building a product. Can I interview you for it? That was it. There was no talk of I will give you five percent of all sales. And I would tell people just don't ever bring it up.
Speaker 3:Like for example if you say that you want to interview Jason Fried for your new training product or whatever, and you will give him say 50% of the sales, and you can reasonably expect you'll sell $10,000 worth, why are you even wasting his time bringing up $5? Yeah. Right? Like it's just a lot of these people are playing in a league so far above what I was doing, what I am doing, that you know, they're just happy to help you out for free and move on with your day. They're not going to create some revenue sharing agreement so they can get what to them is a very small amount of money.
Speaker 3:So I would say just never bring it up. Ask them to do it as a favor and yeah.
Speaker 2:And has that interview, have you developed a relationship with any of these people post doing the product and doing the interview?
Speaker 3:Yeah, with a couple of people.
Speaker 2:You mentioned Sasha.
Speaker 3:Yeah, we've gotten to know each other before then. Brennan and Don as well. Actually, few of the headlines on the sales page for designing web applications were written by Brennan. It was great. I would say my favorite thing about building these products and blogging is the people that I get to connect with now and that I can call friends you know and say you know I have a question about something I just email it over to Brennan and you know we work back and forth on it a little bit and these are all people that I've gotten to know and friends of mine now and that's probably my favorite thing more than than writing the books or the amount of money that they're making or something like that it's being able to rub shoulders with some really really smart people.
Speaker 2:Dr. Yeah. And Derek Sivers just talked about this in a post about how he used to say you'd have to move to a big city to meet interesting people.
Speaker 3:Dr. Yeah.
Speaker 2:And he says, you know, for him that switched. He feels like all of the action is online and the folks that he's meeting online are you know that that's kind of where the action is.
Speaker 3:Yeah and you know I've had some fantastic help on stuff from Amy Hoy and Patrick McKenzie and anyway. Start working on things and these people that used to be that you used to consider way too famous to talk to you now after a while you just realize they're fairly normal people They just happen to be working on projects that are a little bit more popular than yours.
Speaker 2:Yeah. Exactly.
Speaker 4:So one thing, like we've kind of like we're still looking at your designing web applications page here and one thing that's kind of come up in this conversation a bit is pricing. And this designing web applications is available at a few different price points.
Speaker 3:And
Speaker 4:in the past, you've talked a lot about pricing and there's one specific post I'm thinking of where you talk about price anchoring and and price bracketing. So and how it earned you like an extra $15,000 or something. So I'm wondering if you could just kind of give us an overview of what price anchoring and bracketing is and why it's important.
Speaker 3:Yeah. So the standard thing when selling a book is to sell one book. You know, just the book for say $15. And so the first decision I made was to price based on value rather than what other people were doing. So that put me at $39 is what I wanted to price the book.
Speaker 3:And that's a lot of people are happy to pay that amount. But there's a lot of people who would pay more for additional content. And so by offering a second tier, what I can do is everybody who is happy paying $39 can do that. Everybody who is paying that, who wants more content, can buy the higher package at say $80 And those are the people who are serious about designing software. Know if they implement these things it's going to make meaningful changes in their revenue or they're using the company credit card or you know, there's all kinds of reasons why someone wouldn't mind paying more so long as they were getting at least twice as much value.
Speaker 3:So at that level, you know, I'm going to start bundling video tutorials, interviews, and maybe some other resources like Photoshop files and other stuff that will be helpful. So with those two prices, I haven't excluded anybody by adding the second price. I've just taken, say, 20% of my customers and given them a product that they'll pay twice as much for. So I think that having multiple prices is very, very important. And make sure you're delivering more value with the higher prices of all of that if you want repeat customers.
Speaker 3:But you can take that a step further by adding a third tier, which is my favorite way to go. And so on the app design handbook, I think I did $39.79 and $1.69 for the different tiers. And as each one got more expensive, I added more and more content to it. And the idea was that well, there's a saying, and I'm not sure where I heard it, probably some book on pricing that I can't remember, is what's the best place to sell a $2,000 watch? And it's right next to a $12,000 watch.
Speaker 3:You give that context of all of a sudden $2,000 not is you may not be able to afford it but it's a bargain compared to the $12,000 watch. And so that's a case of using price anchoring to change and reframe the whole discussion.
Speaker 4:Right. Because I think in this blog post you talk about how if you have one price point, say it's $39 people are gonna look at that and they're gonna compare that to other things that cost $39 or to other books that are priced differently. But by introducing a second price on your same page, they're not gonna compare it to other external things. They're gonna kinda compare it to your other price point. Right?
Speaker 4:So it's like you're keeping them comparing prices of your products.
Speaker 3:Yep. Exactly. Yeah. You're explaining it better than I am.
Speaker 4:So I probably reread it like 20 times, so that's that's probably why.
Speaker 3:So the if anyone wants to find that post, it's on a site called Think Traffic, which is a great blog. And just do a Google search for pricing, think traffic. I'll put it in the show notes. Okay, perfect. So you wanna get those comparisons happening in a way that benefits you.
Speaker 3:And so, you know, like you said, you don't want them comparing this $40 book to this other $15 book. You want them comparing, okay, well for $40 I get this, and for $80 I get this, and here are the different features in each one. And so then it changes from should I buy this product to which version of this product should I buy? And that's the conversation you want customers to be having in their head. Now what I like to do, and I may not be the best at it, but is taking one of the packages, one of the three, and saying, this is the package you should buy.
Speaker 3:And so with the AppDesign Handbook, I chose the middle package. And the higher package, you know, I honestly thought it was too expensive. I thought that people wouldn't pay that much for training content. I was wrong. And so I put some really great content in there that I'm really proud of, but for the most part the highest package was there to anchor, frame the discussion and to push people towards the middle package.
Speaker 3:And you can see some design elements in there like the buy button of the middle package is orange whereas the other two packages are gray. Because I'm trying to get people to buy that middle package. The next book I went, okay, how could I change this discussion more? Turns out people will pay quite a bit for training. So not only did I increase my prices for the second book, but I totally changed the discussion where instead of saying which one would you like to buy, I said here's the product.
Speaker 3:It has all of these things and it costs $2.49 And then after that it was okay, if that's too much, then there's this option that costs $99 and includes fewer items. If that's still too much, here's just the book, which is a great product in itself, for $39 And you can compare the sales numbers from the two books and it works. So I made incredibly more revenue on the second book off of that top tier package. You know, I still sold more copies of just the book than of the top tier package, but the revenue just doesn't even compare.
Speaker 4:Could pull it up So I you're almost doing the opposite of upselling. Right? So in your first one, you're kind of like, here's the basic, and then you're like, and for an extra whatever, you get these extra things. But you're doing the opposite. You're kind of like, here's everything.
Speaker 4:And if price is your objection, like there's other options. And if that price is an objection, then there's other options. Exactly. So it's kind of like down pricing.
Speaker 3:Yeah. And you know, I just spent this long sales page selling you on the product. And then what I did there was put in and dedicated a decent amount of space to every single item that's in the package to try to make it feel like there's a ton of stuff in there. And there is a ton of stuff in there because I spent a zillion hours creating it. But just to illustrate that point more, I'll read off some sales numbers for you.
Speaker 3:So the Designing Web Applications book, of just the book, I've sold three seventy copies for $12,500 in sales. For the book plus videos, which is the middle package. So the first one was $39 this one's $99 sold 160 copies for $14,000 in profit. The highest package, I sold two zero six copies. So my achievement there is that I got the highest one to sell more than the middle one, which previously they'd all been staggered gradually decreasing.
Speaker 3:And off of those two zero six sales I made 45,800. And so I sold almost twice as many of just the book as I did of the complete package. But I made almost four times as much off of the complete package than I did off of just the book. Anyway, sorry, the numbers, it kind of jumbled around, but price high, it was.
Speaker 4:People kind of forget that price is a multiplier, right? Like it sounds like there's an incremental difference in your prices. But actually once you start multiplying it by a certain number of sales, like you're looking at exponentially different
Speaker 3:Yeah, it's pretty huge. And when you have multiple price points, you know, I'm saying here's my whole package, books, videos, resources, interviews for $2.49. But I'm not excluding anybody from buying just the book if they want. Mhmm. And so that's why I love that combination of pricing based on value and multiple price points.
Speaker 2:Yeah. Yeah. This is so interesting to me. I think we could talk forever about this. You know, just one thing about this that I've been thinking about is I keep trying to think about what's the mental model of someone buying something like this.
Speaker 2:And I can tell I bought it so I can tell you my mental model. My mental model was I'm thinking how much would it cost me to take a course on this or how much would it cost me to go to a conference to learn something like this? Plus all of the other materials. And so I think I'm wondering if that's what a lot of people are thinking. They're thinking, well, I don't have to go to that expensive conference.
Speaker 2:I can stop doing that. I can just pay $250 and I'll save myself $2 and I'll still get the same benefit.
Speaker 3:My goal with all of my products is to deliver about 10 times the value of what I charge for it. And so I'm trying to deliver about $2,500 worth of value with my complete package. So it's got, eight different interviews with some really top notch people who say some fantastic stuff. Between all the tutorials and the book itself, that's kind of my goal.
Speaker 1:That's how
Speaker 4:I think about it. Cool. Well, I think we'll start winding down here, but, maybe, like, you're you're 22. You've obviously had some successful products, so the next thing is probably ease into retirement and stop making stuff. Am I right?
Speaker 3:Yeah, yeah, or the opposite.
Speaker 4:Or opposite. Yeah, well, obviously that's not what you're doing. You're obviously going, moving even faster than ever. So maybe tell us about what you're up to next, what you've got coming down the pipeline. We just saw ConvertKit before we started the interview, so maybe you wanna talk about that a bit, or what other projects you got coming?
Speaker 3:Yeah, so I realized something with selling all these books that it was all one time revenue, right? So I sold $60,000 worth of books in December, which is absolutely insane. January 1, I start over, right? Like it's $0 worth of revenue until I sell individual copies that month. And so I really wanted to pursue recurring revenue.
Speaker 3:And software as a service is the best way to do that. So I started to look at what I could build while still teaching people. So the first of the year, I announced what I called the Web App Challenge. And that was where I was going to take go from not having an idea of what I was going to build. And I was going to allocate $5,000 of my own money to build it and I couldn't spend more than twenty hours a week on it.
Speaker 3:And the goal was by July 1, six months later, to have $5,000 a month in recurring revenue. And if anybody is thinking that sounds like a small number compared to the book sales, I'll tell you it's a whole lot harder to get people to sign up to a monthly thing than it is for a one time purchase. Anyway, so that's the project that I announced. And I said, I'm going to blog. I'm going to be transparent about all the numbers all throughout the process.
Speaker 3:And I'm going to blog about every step of the way, teach everything I know from wireframing to naming the product to coming up with the idea of all that. And it's been going well. It took me about a week or so to come up with the idea. And what I'm effectively building is the product I wish I had
Speaker 4:my
Speaker 3:books. Basically the most effective method for marketing my books was email. And so doing it over again I would spend almost all of my time focusing email and and ignore Twitter and Facebook and because they those I'll tell you that 3,000 email subscribers convert far, far better than 3,000 Twitter followers. Mhmm. Or even 10,000 Twitter followers.
Speaker 3:And I bet you can keep going up. I bet, you know, 25, 50,000 Twitter followers aren't nearly as much 3,000 email subscribers. And so there's this method that works really well of when people come to your site, you want to give them something for free. So let's say you click through on Twitter to my book and you have no idea who I am and you're kind of reading through it and learning about it and then I say, okay, buy the book. If that happened in real life where we meet on the street saying, you know, oh, Justin, it's nice to meet you.
Speaker 3:I'm Nathan. Or hey, you work with Zafka, right? Yeah. Well, hey, buy my book for $39 You'll really like it.
Speaker 2:Yeah.
Speaker 3:And at that point you'd go, who the hell, what? Know, no way, this is awkward.
Speaker 2:At least get me drunk before. Yeah, exactly.
Speaker 3:And you'd find a way, the least awkward way to exit that conversation. Yeah. Online, that's not awkward because you just hit the back button and So the we do that all the time on landing pages where we say, we go from meeting somebody to thirty seconds later saying buy it. And there's just there's no trust there or anything. And so the system that works really well is you come to my landing page, I say, okay, you're interested in software, Here's a free guide on seven usability mistakes you're making with your software.
Speaker 3:Put in your email address, send it right to you, and you're good to go. So you go, Okay, free stuff. All right. That's good enough. So you can get that and read through it.
Speaker 3:But then there's also an option on there of click here to receive a free thirty day course on designing better web applications. And at that point you're going, okay, more free stuff from somebody who looks credible. That sounds good. And so then as you get on that course, you get emails gradually that are more valuable tutorials, all that kind of thing. And only after I've built up trust and taught you a whole bunch of things and hopefully delivered value that's worth a lot to you, then do I say, if that was helpful, I have this book that goes into even more detail.
Speaker 3:So that process works really well. I didn't come up with it. McKenzie is the one who taught it to me. I don't think he'd take credit for coming up with it either. But it's really, really a pain to implement.
Speaker 3:And so in short, ConvertKit, which is the new app I'm building, makes that process absolutely dead simple. I've hacked it together a bunch of times with WordPress themes and Mailchimp and some custom code. And it's really hard to get right and just really frustrating. And so I wanna make it so that the only thing you have to worry about is plugging in the content and all the technical sides are taken care of for you.
Speaker 2:And so you're building this right now? Yes. What are what are you building it in?
Speaker 3:It's a Rails app. I did all the the design and hired a developer to help me with the, you know, the Ruby part of it. And actually just yesterday I started tweeting out some landing pages and and so the app is functional. And within the next couple weeks, we'll be doing more testing and then getting the first customers in there.
Speaker 2:Oh, that's great. Cool.
Speaker 3:Yeah. It's moving really fast.
Speaker 2:Wow. Well Nathan it's been so great having you on the show. You've given us like I said before we were going to talk to you we didn't know how we're going to fit it all in. So thanks so much for giving us so much of your time and giving us so much good stuff that I think people could actually use. It's really great.
Speaker 3:Yeah. Well, thanks for having me. You guys are putting on a good show, so I'm a regular listener. Right on. Cool.
Speaker 1:Welcome to Shout Outs. We've got five Shout Outs this week. Let's get going. First Shout Out comes from our friend Jesse. He's written a great book called Working with Unix Processes.
Speaker 1:More than 2,000 Ruby programmers have discovered the fundamentals of system programming with his eBook. Go check it out and spawn some daemons. There's an operating system joke there because it's d a e m o n. You can check that out at workingwithunixprocesses.com. That's workingwithunixprocesses.com, all one word.
Speaker 1:The second shout out comes from BeatHound. BeatHound is a service for staying on top of new releases from the artists you love. If you've ever missed an album from your favorite band, you need to try BeatHound. They've just added a cool feature for anyone following South by Southwest. You can visit beathound.com/sxsw to follow new releases from all of the South by Southwest showcasing artists
Speaker 3:this year.
Speaker 1:Our third shout out comes from our listener Esprit. She's built savebusinesstime.com, a marketplace for the world's best web apps for businesses. These are apps that help people get their work done faster. If you have a B2B app that you'd like to promote, you can submit it at www.savebusinesstime.com slash submit your tool. Next up, fellow Canadian Marc Andre Cornier has a great book at copywritingforgeeks.com.
Speaker 1:Learn how a developer quit his job and started a product business that became profitable from day one. Visit copywritingforgeeks.com. And one last shout out for product people. If you want to see the video version of our interview with Nathan Barry, all you have to do is sign up for our mailing list. Just go to productpeople.tvnewsletter.
Speaker 1:That's it for this week. If you want to purchase your own shout out, to productpeople.tv/shoutout. See you next time.
Listen to Product People using one of many popular podcasting apps or directories.