This week on the Boagworld show we are joined by Jesse the founder of you need a budget. We discuss the benefits and challenges that come with a passionate community of users.
Paul: So hello all and welcome to Boagworld.com, the podcast for all those involved in designing, developing and running websites on a daily basis. Joining me is Marcus. Hello Marcus.
Marcus: Just me.
Paul: Just you. Don’t worry, we have a guest for this week’s show but things didn’t go as smoothly as they should have in my world.
Marcus: No, you got stuck in a service station didn’t you?
Paul: No I didn’t quite manage to make it back in time to do the whole show and so we ended up doing the interview with me sitting in a service station on the M25. It was just comical having this really in-depth conversation from a service station. But they you go.
Marcus: These things happen.
Paul: We could have done the whole show but I just wasn’t confident enough with the 4G to be able to do it. Was the quality all right in the end Marcus?
Marcus: It’s all right. People can judge for themselves. Compare this bit to the next bit.
Paul: It will do the job. But it’s a really good interview. As you would have heard at the outset of the show we got a guy called Jesse who is the founder of You Need A Budget and we talked all about what that is and why he’s on the show later. It is probably one of the best interviews, one of the most honest interviews that we’ve had this season.
Marcus: Yes I agree. Really enjoyed it.
Paul: So we got that to look forward to. I’ve been thinking Marcus, because we’re coming to the end of this season did you know that?
Marcus: I just turn up every week without knowing anything.
Paul: Sad Italian accent You know nothing.
Marcus: Equally as sad an Italian accent Nothing at all. First question is how many more?
Paul: We have got four more. So not actually at the end of the season yet.
Marcus: So you lied.
Paul: Well have been thinking about next season, you see.
Marcus: Well what’s what?
Paul: I have a couple of ideas. One of which is very boring and sensible and probably quite good. The other one is absolutely ridiculous and potentially either really good or really bad.
Marcus: I’ll be the judge, shall I?
Paul: Oh all right. So the boring sensible one is that we do a season about marketing and promoting your web design business. To be honest is even a bit broader than that to some degree, some kind of community content marketing stuff. It’s really about building your web design business and the marketing side of that. What’s your value, position, blogging, writing, email marketing, videos, all those kinds of things.
Marcus: I’ve got a feeling in the back of my mind that we’ve done that quite recently? Not that that’s ever stopped us in the past.
Paul: Well we did a season on generally running your web design business but not specifically in the content, marketing and promotion side of things. Not a whole season of breaking it down and delving deeper. So there’s that.
The other idea, because I have been debating little bit about how much advertising I should allow on boagworld the podcast and on the blog because I’m doing the occasional sponsored post and we have advertising slots on the show. So I came up with this really ridiculous idea for next season where we don’t have any paid advertising but the entire show, every episode, is advertising.
Marcus: You’ve lost me.
Paul: So you could call the season something like ‘Shameless Self Promotion’. If anybody has got anything they want to promote, whether it’s their own agency or product that they’ve got themselves, they could write into me and give me the pitch and if I think they are good enough, we feature them on the show. It’s almost like pop idol or X factor for digital stuff where you and me will be the judges.
Marcus: Err okay.
Paul: What do you think?
Marcus: I think that sounds more interesting than the first one definitely.
Paul: See, this is my problem but potentially it could be really shit.
Marcus: This is typical me sitting on the fence but I think you should put that idea out as a possibility – please send me your ideas – and then we judge whether we go forward with it based on what you receive.
Marcus: And we’re bringing some value. And make people happy.
Paul: It’s all about your happiness, dear listener.
Marcus: My dog isn’t very happy.
Paul: I don’t care about your dog. What’s wrong with your dog?
Marcus: He had a nasty wart on his eyelid which was damaging his eye so he had to be put under to get that removed, and it’s also because he’s an old dog he’s got lots of other lumps and bumps, so we had them all taken off and he’s just feeling very uncomfortable and sore. He’s always been a bit of a naughty dog so any excuse to try and get his stitches out or just be generally annoying, he’s doing it. Some having to look after him, bless. So yes I’m feeling a little bit sad for him.
Paul: Oh, I weep for you.
Marcus: No you don’t, you don’t care.
Paul: Have I told you are going to write a new book?
Marcus: Yes because I didn’t say ‘that sounds boring Paul’, but I was hoping it was going to be a sci-fi novel.
What’s your new book about Paul?
Paul: I don’t care.
Marcus: No. Your book, my dog.
Paul: I don’t care about anything really at the moment. But yes, that’s what I mainly good to be doing next month. I want something cool and new and exciting to do. That’s what I need.
Marcus: That’s why figured you don’t care about anything, you need something new. Well you have been running your own business for over a year now, that must be really boring.
Paul: Yes you know how short of an attention span I have got. I think I’m going to retrain as a circus clown.
Marcus: There is no response to that.
Paul: I just want to terrify small children.
Marcus: There was a response to that. Just walk down the High Street, Paul.
Marcus: There must be something that you can do. Write a book, that’s a good thing is that takes a great deal of effort and thought and will keep you amused for a couple of months?
Paul: Probably. That will keep me entertained for a while. Or a really good new project. My malaise is setting in.
Marcus: That’s not good. All the time?
Paul: No, just right now really.
Marcus: Oh, talking to me?
Paul: I was fine this morning. It’s you, you have this influence on me.
Marcus: I always think I’m quite jolly. Maybe not.
Paul: Do you know, I much prefer it was just the two of us at the beginning of the show because we are just talking crap now. We would be talking about something sensible of we had a guest on right at the beginning.
Marcus: Exactly and you end up talking to them and starting the interview beforehand.
Paul: Perhaps from now on we ought to limit to them to just the Q and A time? Because we know how much people so enjoy our pointless waffle at the beginning of the show. Try transcribing it!
Marcus: Yes they want to hear about how they want to feel about my dog and the fact that you are bored. That’s exactly what people want to hear.
Paul: Do know the other thing they really enjoy hearing about? Is our sponsors.
Paul: Yes they do. So we are going to talk about Acquia who are our sponsor this week. We had them on earlier on in the season. Just remind people that Acquia take the hassle out of running your own servers. You move the whole thing to the cloud and they deal with it all. Its platform as a service and I am in the to this at the moment. You have the bits of the platform that you need all managed for you. I’m speaking about that at the conference coming up – platform as a service – and I know nothing about it which is fairly common for me to be talking about things that I only vaguely am aware of.
Marcus: And that’s tomorrow’s it Paul?
Paul: No. It’s a few weeks’ time. So I will pretend and speak to someone at Acquia before then.
Marcus: Get them to go with you.
Paul: Oh no. I don’t share a stage Marcus! I went to one of their events recently and it was really good because there were all these very clever people from lots of different areas. Was made up with lots of their clients basically lost different sectors. They were all really clever people that were doing very cool things in their own organisation and I wish I could talk to you about them but it was all confidential with a Non-Disclosure Agreement. What’s said in the room stays in the room – one of those kinds of events. But it was really, really interesting and there were some great presentations and a really good roundtable discussion. It was all about digital transformation. And we got into the top barriers that organisations were facing in the digital transformation and I just wanted to share a few of them with you because I think it’s quite encouraging when you hear that other people are struggling with the same things you are. These are like huge, proper, grown-up organisations.
They are struggling with the fact that digital transformation changes people’s roles and no one likes change, so that instantly causes problems. The sheer rate of change, they were struggling with that. There was a lot of talk about how it’s really hard in large organisations to create a cohesive approach to things. There’s so many business silos that get in the way and management don’t really understand digital. There is a lack of governance around things like content. So it was a really good discussion and I know Acquia do these events from time to time and also they blog a lot and share a lot, so you can find out more about them and what they are up to at Boagworld.com/acquia.
Interestingly, around all these kind of issues, Jared Spool ran a conference a little while ago called UX Advantage. And they had a load of very clever people as well at that and they were talking about the exactly the same issues as well, which is really interesting. Now, they’ve released all of that online see you can check that out as well because you can listen to all their presentations that were given and discussions. That’s at UX Advantage.
So yes, really interesting stuff. Everybody faces the same problems. Anyway all of that is preamble for the main discussion for today, which is our interview with Jesse from You Need A Budget.
Discussion with Jesse from YNAB
Paul: So I’m really excited to have Jesse from You Need A Budget joining the show. I have to say Jesse, you’re a little bit of a hero of mine. I am sorry to go all gushy.
Jesse: Oh dear, okay. That got awkward quickly.
Paul: I know, it didn’t take long did it? Isn’t it funny though, further years you use an app and you use this thing that it becomes so embedded in your life that you don’t even really think about it and is just something that you’re always doing. Then I was preparing the season about passion, and people being passionate and enthusiastic about digital and web related stuff and then right in the middle of all that, you launched a new product and got a really passionate response from your users. I thought yes! There is a reason to reach out and talk to Jesse about what he does.
So just kick us off, do you want to tell us a little bit about what your product is, what it is that you guys do.
Jesse: The way we make money selling software, but the way we sell the software is really by teaching like crazy. I often tell people that we are an educational company that happens to sell software. We teach a pretty unique method of managing your money. Very principle-based and then the software is very opinionated as it relates to that method. So we take a little bit of a stance there but when people come along and they are stressed with their finances, we really try and just get rid of that stress by saying here is a way which is proven and works, and the software helps you implement that method. It really is nothing more complex than that.
Paul: But that’s what makes it so good in my opinion. It’s the fact that it’s a very simple methodology that you have that has incredible results. I have to say I have got a second agenda for having you on the show, that Marcus, to say you need a budget is an understatement.
Marcus: I just saw YNAB on Paul’s notes and thought oh I don’t know what that is and then before the show went and had a look and I thought ahh, I see what they do.
Jesse: This is actually an intervention, Marcus. So sit down, we are going to be here a while.
Marcus: Well I’m the sort of person that checks his bank account once every six weeks.
Jesse: Holy cow.
Marcus: And I just got the attitude of earn as much as you can and just have a vague notion of covering most of your bills and nearly 50 years old now so it’s been all right so far.
Paul: We need to put this in context a little bit Jesse, there’s something you need to know about Marcus which is when he was a teenager or in his 20s he got signed to a record label and was a popstar for about a decade.
Jesse: Oh man, now I am the fat now. I need to find the music.
Paul: Did you ever come across a band called Breathe? Hands to Heaven was probably their most famous song. You might be a bit young, looking at your picture.
Jesse: I am writing it down anyways.
Paul: As a result, he is absolutely useless with money. That’s what I blame it on.
Marcus: There is a grain of truth in that Paul, we learnt a lot of money in our early 20s and bills were covered. I’ve never been superrich, not by any stretch but having a lot more than most people would at that age made me think that didn’t need to worry about the kind of stuff.
Jesse: Easy come, easy go.
Marcus: And it’s stuck. I’m exaggerating for comedic purposes suppose but I do have a handle on what I spend, but not down to the last, I’m good spend this on this, and that on that. It’s more of a fuzzy thing to me.
Paul: Which is in stark contrast to Jesse’s methodology. Give us the four points Jesse.
Jesse: I’m trying like mad to creatively thinkable way to tie this into being a popstar. I am struggling. I wouldn’t have each of the rules just renamed in my head really quickly but I can’t do it.
Marcus: I was a popstar a very, very long time ago. We talking 30 years or so. So it’s not that relevant now.
Jesse: Where there are four simple rules and we launch into it early on the website. If you land on our homepage you don’t really know that we sell software until you get a little way down.
The first rule is we say give every dollar a job. And even in simpler terms, make sure your money is doing stuff that you actually want to do. If you care about something, your money should care about it to. A lot of stress, a lot of friction in relationships or people running solo there is so much friction around money doing stuff that’s really counter to what we actually care about. It’s this autopilot friction that happens. Is not that we go out and say I don’t care about this therefore I will do it, we just don’t think about it and the money goes into whatever it does and then we regret it. We have these ‘Aha!’ moments where we get our tax return in the mail and know that we made X much this year – how is that possible, where did it go?
That first rule is to have your money do what you truly care about. Even though we say budget all over the website we really try and get people to realise that were not saying don’t spend, we are saying spend but only on stuff that you care about. I’m not allowed to say to Paul what he should care about and he’s not allowed to say it back to me, and then we get along. But that’s the idea, we each have our own quirks and things that make us unique and things that get us fired up and that’s where the money should go. That first rule drives everything out.
The second rule is to embrace your true expenses. But it’s really just you prioritising your money as part of rule one. Look ahead to a vacation, property tax, sad stuff, happy stuff. Maybe holiday spending or you’ve got Christmas coming up, whatever it is – and I say coming up because we are a few months away yet but in my mind Christmas is always coming up so every month I am setting a little side for the holidays. So try to get people to not only prioritise their money, but also to prioritise it in light of the fact that some of the money will be doing a job later. Most of the time they will look in their checking account and it looks a bit of flush and then they go, oh I can go and by that thing. Whereas in reality some of that money should be spoken for the things that are just coming down later, that they really want to buy but forget about. To the second rule is about looking ahead and checking those longer term priorities.
The third rule is that we tell people, you’ve just made a plan, you looked ahead, now you can change the plan whenever you want. And that is a rule. That you can change those first two things. People get so set, it’s like they say, oh today is Tuesday, I could set my budget on a Tuesday or the first of the month or whatever. And then the next day they find out that the in-laws are coming into town and they are going to eat them out of house and home. It’s like they say they can’t change their grocery budget because I didn’t guess correctly. So really trying to get people to say you’re like a professional coach is making adjustments as the game goes on. You’re like a grand master of chess, you bring out your pawn, and then you’re going to see how your opponent responds and that will determine your next move. The time people think that budgeting is about having a crystal ball, so that third rule is to be flexible. We call it rolling with the punches. Be flexible when things come up and change.
The fourth rule is what we call ageing your money. But we really want you to be living on money that you’ve learnt at least 30 days ago. That gets you away from the financial edge, it removes a lot of spiderwebs and clouds in the thinking where you are on the edge, you make rash decisions. You take a client you don’t really want to take, things like that. So we want people to back away from the financial edge. If they are on a variable income and they are suddenly earning money they actually have on hand instead of guessing what they can earn.
Do you guys have a lot of creatives in your audience?
Paul: Yes, lots of people which would understand that one about living on the edge.
Jesse: If I had a mission, a redo, I would love to solve the variable income problem for business owners. Because that is such a source of stress. People think it’s easy to plan and it is if you are on a fixed salary, but most of the business world is not by any stretch. It’s a little bit of a tangent but that fourth rule is basically to say, you’ve earned the money that you are now planning with. We not planning with pretend monopoly money at that point.
So that’s the four rules in a gist.
Paul: There wasn’t anything to do that topic, but I needed Marcus to hear it.
Marcus: That is cool. I know I should be a bit more organised. Have lots of savings accounts that money automatically goes out to so when the tax bill comes I can choose a savings account deal with it. So it’s not as organised as I should be able is not like I spend it all on whatever comes along.
Jesse: Not to deflate Paul, or throw a spear in his plan…
Paul: Oh I like to feel self-righteous here, don’t ruin it for me.
Jesse: And this is not to just Marcus this is to anyone, if you are not stressed about money and your hitting goals that you need to hit then things are pretty good. I think that’s all right. Now if we were to have a heart to heart, and don’t know you very well Marcus at all, and at the end of that you say I really wish I could do this or I wish a little more for retirement and that wasn’t happening, that’s when we would say, let’s make it happen.
But the people who are nailing it, don’t introduce more. Just keep doing what you are doing. But that’s up to every individual to decide. Most people are stressed and need a solution though. So the market is still big even without Marcus as part of my market, I still feel confident.
Paul: You still think you can struggle through it? I tell you, you absolutely can. One of the things that has amazed me about You Need A Budget is the word-of-mouth spread of it. That was how I was introduced to it, by a friend when we were talking about saving for the future. And so I started using it and I’ve introduced other people to it including me!and it just snowballs. And you have this really strangely passionate audience and will get into more about the challenges of that in a minute. No disrespect, but were talking about a bit of budgeting software. It’s not the most exciting thing in the world. Do you think is this methodology this way of looking at it that’s made your audience so excited or is it something else?
Jesse: I think the method is one that we still haven’t peeled it back all the way. I think the passion comes from the contrast between what the person was feeling, they adopt the method and the software helps them and hopefully it feels like they are winning. The method is implemented and then they see and feel the difference.
To put it in dollar terms, nine months later for the average YNAB’er the average checking account balance goes from $300 to $3300. And that right there is a fundamental shift, not just in someone’s balance but in how they manage their money. Money is everywhere and I think that’s where that passion comes from. Is a victory over a thing that invades every other aspect of your life and so you can’t help but habit and be involved? And that’s what continually pleases me and scares me and surprises me every time.
Marcus: It’s not a budgeting software, is a de-stressing tool.
Jesse: Absolutely. I talk to the company all the time and the team here I say to them, our mission is not to make software, our mission is to reduce people’s financial distress.
Paul: Talking of reducing stress and people’s relationship with money, little while ago – see I have been using YNAB since version 3 I think. Version 4 was a real step forward and a huge wonderful bit of software that moved things forward. Then you’ve come out with YNAB 5 recently, while I was planning the season and it was that event that led me to invite you on the show. Because what happened is, dear listener, is that you moved from a purchasing a piece of software module to software as a service. A very common move these days within the application development community. But that caused a huge reaction amongst a minority of your audience that responded very negatively and very strongly to that. They weren’t getting angry because they hated you, they were getting angry because you came across that you are fundamentally changing something that they deeply loved. If it was something that they didn’t care about like a Twitter app, you wouldn’t have got that level of reaction. But because it was something that was so important, you got this amazing response to it.
Let’s run through that a little bit. Why did you decide to move from a paid piece of software to a model where you are charging people every month and you’ve taught them to be really good with their money and suddenly you are adding this? What made you change that business model?
Jesse: There are a couple of things. I wish I had talked less about absolute cost and more about value, but that’s a side note. I think any time you are B to C, that value proposition isn’t necessarily the instinctive reaction of your customer. B to B is a lot easier to take.
We moved from $60 for a one-time business software and we would launch a new version may be a couple of years later and then we would charge $40 for that. So we were talking $100 over a three-year period if we were on a normal desktop upgrade schedule.
This one, we went to $50 a year or you could go five dollars a month but the vast majority people go with the yearly. So we’ve basically upped the price by 50% if you always upgrade. We have a lot of people that brag about how they’re using the super old version and we still support it and I think that’s okay, this is my market. But that value proposition aside and the fact that we bumped up the price by 50% essentially cause the reaction.
The thing that got me the most were the people were saying it’s because of our cost structure. It wasn’t it, there was a little bit of that but it could have been overcome by a more rigorous upgrade schedule. What got me was the feature hoarding. You were always holding back your best feature for the last moment because you have to make a splash with people. You have to convince them that the incremental value of the upgrades is worth it. They are always saying I have A and now I need A.2 – what is the cost of this .2? And that’s where you need to make that difference so strong. See you end up building a feature that sits on the shelf for a year-and-a-half and meanwhile you’ve learned some stuff and you may be would go back and change that feature a little bit and development is what it is and it costs a lot to change things and so you are having to hold those back but really the customers should have had them a long time ago.
The second one was the iteration – the platform itself. It will be behind-the-scenes and so no customers will rejoice or anything at the moment, but we built in some backend stuff where we can bleed out a feature to 2% of the users and get a reaction to it. You can’t develop and design in a black box, you’ve got to get this information. So that’s the other thing that has me most excited about the platform switch, moving to the web, moving to Sass is that we let get to learn as we go and we can innovate. These incremental changes will be more on points and I think we have been able to have in the past. There are things that I put into a major upgrade, no testing, just guessing and there are things that I have regretted putting in later. Software design is a one-way street. You put something in and as I have found out, it’s tough to rip it out. It’s brutal. So I love that we can iterate and make little adjustments and get to a better place for the vast majority of our users. So those were the two big reasons.
Paul: To be honest, the audience that are listening to this and myself totally get that. No problem at all, seems completely obvious as is the way that I would certainly think of it as well. But obviously your audience didn’t see it in quite that way did you anticipate that? Did you expect a backlash that you got?
Jesse: There were different components of the backlash. Backlash for the model itself that switch. I had done a Reddit AMA a while back, it had been in our forums – we have a very active form community, very small but very active. They knew that we were switching to a Sass model and people would come out as a I’m not switching; I’ll never switch on principle. So we had that type of backlash. And I told my team that there are people who are just fundamentally do not want to rent software, so they are not going to be for us anymore and we hope they will stay online for as long as they can and that would be great – we hope to win them over. The team was ready for that one and the backlash was there but it was nothing in comparison to the design changes that we made.
Paul: Really? So that was the big one?
Jesse: That was the one that… I just thought, I’d up my price by 50% on everyone and they are livid about surprisingly small to me changes. Where we thought it would be a big outcry it was small and where we didn’t even think about the change, there was blood on the streets. So that was where I wish, if I could go back and talk to myself I would say hey, do a little bit more interviewing, a little bit more of finding out on how people are using it. But we were so focused on a reinvention of the software, knowing what we know now a decade later, what would we do to help this method be implemented?
It’s pretty easy to invent something but it’s terribly hard to reinvent something and that’s what we ran up against.
Paul: It’s always the way, I remember back in the days when Dig.com was a huge thing. Talking to Daniel Burko who was the Creative Director there, it comes down to people don’t like change. He said whenever they launched a new feature he ignores any feedback he gets for the first two weeks until people have time to calm down and take in and adjust to the new design. So have you been seeing that? Have people calmed down a little bit since the initial…?
Jesse: Yes. Absolutely. For a while we could post something on Facebook and say, hey look so and so paid off $35,000 of debt in three months and someone would say give me my X back – the feature. So you couldn’t even have a conversation about anything because it was all going back to the change. It was like our presidential race over here, there is no other news. It’s just this one thing over and over. That’s what I felt like. So it has come down a lot and our loyal customer base has seen that we are moving rapidly. They’ve never seen us develop like this because we’ve been this one thing for three years. Finally, it’s, oh gosh four days later they’ve pushed out something new.
And if I could go back in one other way, I would educate my users to the best of my ability and their desire on what an MVP means and why we launched without so many features that I still think absolutely critical but are not mission-critical. So it was just calls we made to get to ship and people were like, this isn’t even an app as it doesn’t have reports. To be honest, we haven’t said this publicly but our conversion rate from people who haven’t heard of YNAB before is actually better than it was with our old app that was mature and had all these other features. So it’s interesting. You get caught up in thinking that the users want one thing and it was really nice and painful to hit the reset button a little bit and find out what they really, really want.
Paul: So did you show, you did a Reddit AMA, you wrote some stuff through your blog, did you show anything in terms of what the new design was going to be like before you actually rolled it out publicly?
Jesse: We did. What we were trying to do was a soft launch where we want to see how brand-new users would react and so we had this idea of the soft launch. The downside of the soft launch was Apple. We had a brand-new iPhone app that had to play with this brand new YNAB app. And so we couldn’t be discreet with the iPhone app and if you want the user to have a testable experience, we couldn’t give them the app and say, hey would you buy this and not give them the iPhone app. So we had to give them the iPhone app and once we put that out and before we could even blink we had to get ahead of the curve until users that we were doing a soft focusing on new users, don’t worry. But at that point, and this is where communication from me could have been better, they felt like we weren’t listening to their feedback as they started falling into the soft launch. In reality we were really trying to focus on what these brand-new users were telling us. We learnt a lot, we learned stuff that we would have built six months later that would have been wrong so it was good. But man, communication. If you master that you master the world.
Paul: It’s so funny because as somebody who went through this process, I was one of your users in this, I caught myself because obviously I deal with a lot of this kind of thing and is part of my job but I was all the time balancing the things that was irritating me, and analysing my own behaviour in it. Things like it really annoyed me that you put a Classic band on the icon of the iPhone app. Why the hell did that annoy me? I don’t know, I couldn’t tell you.
Jesse: We really screwed up on that launch, the iPhone specifically. We envisioned a brand-new user launching classic and saying I’m on the wrong app. That was completely the opposite. We needed to think about the existing user seeing that app. We had a contingency of users that thought we had just pulled the rug out, disabled their functionality, added all this stress in. It completely ruined their YNAB world and said, and we charged you more sucker!
I panicked when I downloaded what I thought was YNAB 4 onto my new iPad only to be told my email username didn’t exist!
So it was horrible on that side – we should have chosen A and we chose Z. If it was like go left, we took a hard right and it was a complete miscalculation because what we were really trying to do is not confuse the new users. We were just lamenting, moaning all over here. You only saw the public.
Paul: Gosh, what you must of gotten via email?
Jesse: To give you an idea on the volume, we answered more emails in the week following our official launch than we did in all of 2015. It was an absolute nightmare.
Marcus: Ha ha.
Jesse: We launched on my birthday…
Paul: What were you thinking?!
Jesse: I will never do that again. I have this picture of my kids gathered around me… We launched and it goes crazy. I go home and tell my wife that would do dinner and cake and then I’ll head back to the office and I will see you in three days. I get down there and all my kids are around me, we all gathered around for this picture and I look at this picture now which is only two or three months old and I’m looking at it and it brings no happy memories. I will never do that again in all my life. But you really wanted to get ahead of the New Year’s Russian really wanted to get that out there and at some point, as hard as it is, as brutal as it is, shipping is the ultimate feature and we had to get it out.
Paul: The other thing that I did which I thought was fascinating is that in YNAB 5 you introduced a new feature. It’s a feature that I have from one of our sponsors, Freeagent, which is that you can now automatically pull in bank transactions into the app. It just connects up with your bank and pulls them in. And when I saw that I was like, wow have my money, please take it. And then I realised….
Paul: It didn’t work because I was in the UK. Now, this is the really interesting thing from a psychology point of view. I hadn’t had it before, I survived perfectly without it and yet now use planted in my mind and I was so pissed over that. I wasn’t so pissed, I am exaggerating because I know the complexity and everything that’s needed to be involved. So there was also that element of offering something and then not delivering it even though I hadn’t paid for it. It’s so peculiar the way you react to stuff like that.
Jesse: Last night my four-year-old, Rose, she goes berserk when I say bedtime. Okay this is more than normal for going to bed and she’s just moaning. She goes, you said I could have a cookie and I remember this passing comment, maybe later we could have a cookie. But it’s amazing, once you have this expectation whether you are 4, 40 or 70, as a business owner you have to manage that so well. It makes you want to never say anything again. It makes you want call into a cave and say login to communicate and is a horrible reaction.
We made a call. Well our provider removed it and said we’re not doing international right now. I think it had to do with the data laws that were messing with the safe harbour? Something is why the provider said that we are not going to mess with this right now. Then we sitting there were saying we don’t have manual file import for now so we are literally, from Paul’s world we are stepping backwards from where you were at. You would go, this is worse. This is an objectively worse. And it was.
And it is still. Manual imports are coming, and we are close, very close with it and I’m excited. But it was one of those things we think, okay, for most of our users this will be okay. But you never want to hear that. Even for a single user it’s painful.
Paul: It’s also, going back to your cooking analogy, it’s almost like you’ve told your child’s brother that he could have a cookie but she couldn’t. Because you said to all your Americans, you can have the cookie! But you scum in Europe, you don’t get a cookie.
Jesse: It would have been like this. She is on one side of the room and he’s on the other. And I said because you’re on that side of the room you get the cookie and that makes perfect sense.
Paul: I totally get it and I totally understand. My response is I know manual import will come along and I will wait to upgrade when that arrives and so that’s fine. But it’s just really interesting to see your own reaction to a piece of software that you’ve used for so long and care about so much. I’m really interested in whether you think there is going to be a long-term impact here? Do you think that you’ve just seen a knee-jerk reaction? You said it’s calmed down a bit but do you think that you’ve damaged relationships over the long term or do you think that you can win those back?
Jesse: I think there were some that were just genuinely hurt.
Paul: It’s only a bit of software! Sorry.
Jesse: For me to say any other way would be inaccurate. I had people write me these impassioned emails. It only got hard for me from a user standpoint. It’s complex. You’re trying to build for that 80% case and that’s where you do the greatest good in the world. If I want to reduce the most financial stress collectively I need to hit the sweet spot and get most of those people. I could build a little niche software and make a great living for me and a few other people I’m sure that you make these trade-offs. I understand that and I believe it. The only time it got hard is when they got personal. He gets tough because they start saying it’s a money grab and that I lied. I don’t lie. Is just one of my things. If there was one lesson that came out of it was that I thought okay, come what may you have to be genuine and be straight with people.
Paul: You say you wish you could go back and do certain things again in terms of communication beforehand but when the proverbial shit hit the fan how did you feel you dealt with it after that event? I want your opinion before I share mine.
Jesse: There were two instances. There was the soft launch where we were so heads down, we launched a softly and it became known to this very small but vocal group of users. They started debating and debating and I couldn’t even keep up with the debate, it was literally impossible to read it all. And we were still heads down as we had still to month to try and hit her date of December 30th. And so that part, I wish I would have let them know that this is for real what we are doing. Instead I said okay, they are debating that and we are focusing on the new user and we got to hit our date and so we stayed focused there. I would go back and I wouldn’t dialogue because there was too much noise but I would go back and do it every other day or twice a week thing and say he is our status and not respond to anybody individually because the impossibility but letting them keep tabs on things. That was where I would go a double down on communication. But it reached such a fever pitch there, if you say one thing it immediately gets extrapolated to mean this other thing then you have to explain that. No wonder there are PR and communications experts because there were some lessons I’ve learned there where I thought you really have to think about these six weeks from Sunday to be clear and even then 100% clarity is pretty much impossible. But I still think you do the best you can be genuine, be honest and I should have hit it with more communication and not less.
After launch our servers fell over and I had no idea that that many people would slam us. Lesson learnt. We would have been really clear on what the limitations were, led with that, no sales pitch, no new features, just everything it isn’t. At that point we were just talking to the existing users. We were trying to talk to both and you can’t to those two audiences simultaneously. So I would say okay, my audience for the next two weeks is existing users only. New users will figure it out. And that would have changed how we approached stuff.
Paul: It was interesting from my point of view because I found out about it at launch on the 31st December. I actually thought you responded really well following that because I went and had a look at it and I had some questions about it, you were on top of it on the blog and were dealing with common questions, it was all very responsive so I think from an existing customer, not an obsessive customer, but a run-of-the-mill existing customer you were pretty on top of it I think once launch had happened.
Jesse: Will that makes me happy.
Paul: Yes, be encouraged by that because I do mean that. But I could see what you mean – there was some element of you up selling the new features of it and then because there were some features that I couldn’t have maybe I felt out that I was missing out on the new shiny new toy. And Marcus will tell you I don’t like missing out on a shiny new toys.
Marcus: Definitely not.
Paul: So very interesting. We are running out of time really and we need to wrap things up. It sounds to me like the big lesson that you’ve taken away is how important it is to focus on your existing users as well as your new users and also to really think through that communication strategy that goes into any new software launch whether you are rolling out a new website or a new app or whatever. Is there anything else that you’ve really taken away from this process, just to wrap things up?
Jesse: I guess at the end of the day I don’t know how else you learn these things except by experience so as I look back and the dust settled and things are going great, we had our best month ever last month and it’s been awesome so the end result was solid. In the thick of it, it was horrible but I do feel like I know more than I did before and maybe that’s the only way you really learn things at the end of the day so I try not to beat myself up too much about it and try to spread a little knowledge around but boy, sometimes you have to learn it by doing and that’s life. I guess I’m okay with that.
Paul: I think that’s an absolutely brilliant thing to end on.
Marcus: I’ve got one thing…
Paul: Oh go on. See I try and wrap it up nicely and then Marcus has one thing. Go on then Marcus, I am sure it’s a good thing.
Marcus: I was reading through your Facebook feed earlier, this to do with human beings and change and there was a quote on there from Harold Wilson, who for your benefit Jesse was the Prime Minister of the UK back in the late 60s and he came up with this quote – ‘He who rejects change is the architect of decay. The only human institution that rejects progress as the cemetery’.
I thought that was rather good. So there you go as humans we don’t like change but we have too otherwise we will die out.
Paul: It’s this issue of failure is so spot on. So many organisations are so massively risk adverse that you can’t predict every risk otherwise you are paralysed and you never change, you never do anything different. In the world of digital that is the kiss of death so I think good on you and thank you so much for coming on the show and being so honest about it all because I know it’s very personal and I know it’s a difficult thing to talk about so I really appreciate it.
Jesse: This was a therapy session for me so I think I won out on this one. This was good and healthy.
Paul: Good, well thank you very much and we will catch up with you soon.
Paul: So was that a brilliant interview? I really enjoyed that.
Marcus: I wasn’t expecting him to be so upfront, it was great.
Paul: Yes, I’m going to make sweeping generalisations now but I’m a great fan of that, you talk to some of these Silicon Valley cofounders and everything is awesome and incredible and our users are so wonderful and we love them and all of this stuff and it was just so refreshing to have someone admits that they screwed up a bit and say that some of the users were a bit annoying over this.
Marcus: Exactly. But it’s real life and that’s what happens.
Paul: Absolutely. Some of your clients and customers and users are going to be dicks and make a big deal out of something that isn’t a big deal and you’re going to misstep over things but life is messy isn’t it?
Marcus: Absolutely. But the bottom line for him is that he was saying that they’ve had the best month ever in the last month so he must be doing something right.
Paul: But it’s a great product that you need to start using Marcus.
Marcus: Right. But he said after we chatted a little bit that I would be all right!
Paul: Yes, which again I thought was really nice as well. That pragmatism of, well you are happy enough, what’s your problem?
So talking of great software – see what I did there?
Marcus: You’re such a pro.
Paul: I know. We’ve come on to our second sponsor which is Freeagent and you know that I am a huge fan of Freeagent. No disrespect Jesse if you’re listening back to this but I’m even bigger fan of Freeagent than I am of YNAB although it’s a close-run thing I have to say. But the reason why I like Freeagent so much is because they allow me to import automatically my bank transactions (unlike some people).
Marcus: He was getting to that I thought he was saying.
Paul: Yeah, yeah, I’ve heard it all before. Excuses, excuses. You know how some of those customers are a dick? That’s me. I am the dickish customer.
So with Freeagent I wrote a chapter for their e-book outlining figures that you should track on your business. I thought I would share those figures with you which would be something more interesting than just saying, hey, Freeagent aren’t they great? Which they are by the way. They are giving away a free e-book basically that teaches you how to do freelance finances. In my chapter there are five figures that you should be tracking as part of your business.
The first is your retained profits. Retained profit is essentially after all of your bills have been paid and your tax and your VAT and everything else and after all of your clients have paid you, this is how much money you have got to play with. I explain it much better in the book. So that’s retained profit and is a really good indicator that tells you whether you can buy a new shiny iPad or not.
Marcus: I’m quite impressed people because normally you don’t get any of this stuff.
Paul: Well I have learned this stuff from running my own business and also because of the way Freeagent is set up, they make it easy to learn it all. No disrespect to Chris’s spreadsheets but… Chris’s spreadsheets.
Marcus: Enough said.
Paul: So the second one is in aged debtors report. This is a report that Freeagent produces and it allows you to quickly see all the people that owe you money so you can hassle them. Although actually, what is quite nice about it is that you can set it up so that Freeagent automatically hassles them which is even better.
The next figure that you need to keep your eye on is your forecast. This is you looking and seeing what money you’ve got and when it comes in which helps you to manage your cash flow which is the next thing we can talk about. I also use Freeagent alongside something else called pipedrive to help with forecasting and knowing whether I am going to have enough money coming in etc. so forecasting and your pipeline is something that you need to keep your eye on.
Then of course there is cash flow which is how much money you’ve actually got in the bank, when stuff is going out and that kind of thing.
And then finally the other thing that I really like in Freeagent is that it projects what my tax bill is likely to be see don’t get any nasty surprises. So it’s a really great product and definitely worth checking out and like I say it makes it really easy to learn and get control over all the stuff. It’s also worth getting a hold of this field guide that they’ve produced, this e-book which has some really good chapters in, including some stuff by Anna Debenham which is lovely. So you can find out more about that at Boagworld.com/fieldguide and that’s where you can get the e-book and stuff. If you want to know just about Freeagent, go to Boagworld.com/freeagent.
So that’s it for this week’s show. Marcus, do you have a joke for us?
Marcus: I do that I had to search the Internet and power my way through loads of rubbish jokes. I quite like this little joke though but please send me some more.
Paul: What amuses me is that I never realised you actually reject jokes. I just presumed you grabbed the first piece of sheet you could lay your hands on. So there is definitely a curation process involved in this then?
Marcus: Yes, that’s maybe putting a little too much importance by using the word curation but yes, basically if it makes me giggle then it gets in – and is not sort of rude.
Wasps. They are just wannabes.
Paul: That’s actually quite good. I’m laughing on the inside obviously. Now I quite like that one.
Marcus: I like that sort of thing. I got another one.
Smith walks into a bar. Bartender says, why so blue?
Paul: Now see that’s terrible. I preferred the wasp joke.
Marcus: Well other people might prefer the other one.
Paul: Will they would be wrong. When it comes to comedy I am obviously the definitive authority.
Paul: So next week’s show is going to be an amazing show. I actually asked people whether they fancied coming on the show and if you do fancy coming on the show by the way, if you have some passion or motivation or success story to share, we do have a couple of slots left so do drop me an email at firstname.lastname@example.org because I don’t want just the same old people on. So I asked whether anybody felt that they had something to contribute to the show and I was contacted by a lady called Ling Lim and she just shared with me the most amazing story of her career and her life and I just have to have her on the show. So she’s coming on next week and she’s going to talk about what happened to her and how she went about doing what she’s done. I can’t say any more than that is going to be really good so come and listen to it, you’re really enjoy it I promise. But until then thanks for listening.