Blueleaf is building the world’s first truly personal financial planning platform.  It’s a complex product with a lot of features to meet all the different problems that our customer discovery has shown that people want.  Here are ten concrete things we’re doing to get 10,000 sign ups before we even launch our product.

1. Making Potential Users Ask Publicly To Get In

There are two ways to get into Blueleaf: get an invite from us, or get an invite from a current user.  We let in a limited number of users every week, and we choose who we let in based on how much they want in.  Only people who request an invite and follow us on Twitter, Like us on Facebook, or otherwise make it clear that they want in, get in.  This means they have to sign up with us and tell everyone else about us before they can get in.

2. The World’s Strictest Invite System

The other way to get in is to get referred in by a current user.  We’ve developed our own twist on refer-a-friend: rather than limit the number of invites someone has, there are an unlimited number of invites – but we’ve limited the time frames to invite a friend.  We turn on the ability to invite a friend for just an hour or two so that people who want in have to beg everyone they know who’s on to let them in before the window closes.  When we announce that invites are on, potential users need to plead for invites publicly on Twitter and Facebook, privately over IM and e-mail, or however else they can reach current users.  Again, this kicks off a viral loop before the app has even launched.

3. Splitting Up Blog And Library Content

We write – a lot.  We publish something new almost every day.  However, most of our new content isn’t on our blog – it’s in Blueleaf's library of articles about financial planning.  It makes no sense to hide an article about bond funds and bond ETFs on a blog, where it’ll be impossible to find in a month.  We’ve segregated our greenfield content so that someone looking for that topic five years after we publish it can find it easily.  Plus, we can easily update and change this content as laws, tax policy, and the investment environment changes without confusing new or returning visitors. 

4. Having A Strong Point Of View

When we write content, we rarely do six of one, half a dozen of the other.  When we write about Roth versus Traditional IRAs, we don’t do pros and cons.  We say that if you have to ask the question, you should open a Roth IRA.  The vast majority of Americans qualify for a Roth.  They should open a Roth.  For the people who should open a Traditional IRA, we go through the reasons when it would make sense – but we don’t do false equivalence.  On our opinionated articles, Blueleaf’s position is front and center, up front, before the rest of the content to deliver as much value as we can in as few seconds as possible. (BTW, we do absolutely no SEO analysis or keyword stuffing.  That stuff is lame.  We write answers to the questions people ask us, simple as that.)

5. We Don’t Blog About Our Product

The Blueleaf blog has three components: Blueleaf Stories, Blueleaf Thoughts, and (to come) Blueleaf Tech.  Our Stories are the Blueleaf staff writing about their own personal financial experiences so that we can make it clear that we’re making a product that we’re very emotionally invested in.  Over time, we’ll ask our users to contribute their own.  Blueleaf Thoughts are about things we find interesting that we think will also be interesting to our audience.  We want to provide value for everyone who is saving for their financial futures, regardless if they’re interested in our product right now or not.  If we have interesting stuff, we’ll get links and traffic.  That’s it.

6. Link Roundups For Users And Relationships

The other thing we do on our blog is post twenty links every Friday afternoon, comprised of the four handpicked links we tweet out each weekday.  Not everyone follows @blueleafcom on Twitter, so it’s a nice convenient place to have some leisurely reading over the weekend.  However, the real clever thing about link roundups is that they provide Trackbacks to the financial bloggers we want to establish relationships with.  Bloggers click through on their Trackbacks, see the Blueleaf site, and get interested in the product.  This makes it much easier to develop relationships and approach them for coverage as we get closer to launch.

7. Using Facebook And Twitter Very Differently

Instead of using our blog to announce new features, we use Facebook Notes.  Also, Facebook is the only place to get a feed of every new piece of content we post when we post it (there’s no RSS feed for our Article content).  Facebook is Blueleaf's broadcast medium for people who want to keep up-to-the-minute with what Blueleaf is up to.  We use Twitter to share interesting links and we’ll use it as a cornerstone of our customer service as we add additional users.  We’re so big on sharing links on Twitter that we have two accounts for it – @blueleafcom and @BlueleafLinks.  The only thing we do on both?  We’re diligent about responding to anyone who comments on Facebook or @replies to us on Twitter.  

8. A/B Testing The Hell Out Of Everything

We A/B test a lot – we’ve tested calls to action, button colors, button size, headlines, images, and a litany of other things using Visual Website Optimizer and Performable.  But we make sure we don’t end up in local maxima.  We’ve A/B tested radical redesigns of our homepage, and the current page is the one that beat the pants off our old one.  We do this A/B testing so that we can maximize our conversion, regardless if the traffic to our site is a trickle or a flood.  We’re ready to catch all the fish in the sea that just happen to be swimming by.

9. Being Smart About Paid User Acquisition

We’ve tested all sorts of various paid acquisition channels – everything from Google and Yahoo to reddit, Facebook, and directory sites.   We’ve been able to drive down our Customer Acquisition Cost (CAC) to a very reasonable amount – not the blended CAC between paid and free, but our CAC on paid alone is very, very attractive.  Even though I’m the guy who called AdWords “a gateway drug to unprofitable user acquisition”, being smart with small paid tests that get your CAC down to a reasonable number makes potential investors all hot and bothered.  Proof that you can get affordable paid acquisition makes fundraising much, much easier.

10. Knowing Just Who The Hell Is Signing Up

We run every single e-mail we get through Flowtown so we know a bit about who’s coming in through the open door.  Doing this, we can stagger who we let in when and we can have better content for our e-mail newsletters to those on the waiting list.  We reach out to people we’ve identified as potential influencers and we make sure that we don’t let people who are potential investors until the time is right.  (Join the club, folks – not even our current investors have access to Blueleaf.)  Letting in the right people at the right time means that we prime the pump to yield water only when we’re thirsty for new sign ups.

One of the great things about services like AdWords, Wufoo, Mailchimp, Flowtown, Performable, and so on is that they allow the marketing side of a startup to work independently of the engineering side of the startup.  Whip out your credit card and you can have a source of traffic, lead generation forms, e-mail marketing campaigns, social media insights, A/B testing of your landing page, and all that great stuff.

I've worked a fair number of large events - Howard Dean's last rally in New Hampshire after Iowa before the primary, where I brought 1,400 people to Plymouth State University in the midst of a snowstorm and 20 below temperatures, the inaugural Personal Democracy Forum, and Major League Soccer's All-Star Game - and TechCrunch Disrupt has been the most well put-together large event I've ever had the pleasure to work on.  

You're struggling with user acquisition.  No one's coming back.  Your product is robust and full-featured and you're adding new features every week.  You're only building the features that your users want, so you're not wasting any time on "wouldn't it be cool if" problems.  But no matter how hard you work, your graphs just aren't up and to the right. 

What to do?

One of the most valuable resources that startups (consumer web, again) have are the e-mail addresses of their registered but lapsed users.  It can be very valuable to reach out to them and figure out what part of your message or product didn't resonate.  Remember, if your "very disappointed" score is between 25% and 40%, it's often the message - and not the product - that isn't resonating.

Of course, if only 2 or 5% of your registered users remain engaged, it's probably both the product and the message. 

Here's a simple way to find out what's going on.  First, find a well-defined cohort of users.  This cohort could be from your last marketing push, or even "all users who signed up in winter" - you want they survey respondents to be as similar to each other as possible.  Grab the e-mail addresses for all of the ones who registered who fall out of your engaged metric (last 7 days, last 30 days, etc).  Send those lapsed users from that cohort the following e-mail:

That's it.

The survey should have these four questions:

• Why did you sign up for $product?
• What did you think you were getting with $product?
• How did $product disappoint you?
• What can we do to make $product better for you?

These are, of course, unstructured questions, so you're going to have to read all the answers.  Don't worry about missing stuff - the patterns will be repeated over and over again so you won't be able to forget about them.

If you want, you can add a checkmark box or a field to capture phone number for follow ups.  Make sure that you don't ask for name or force respondents to leave any personal information if they don't want to.  You want them to give their unvarnished feedback.

Take their feedback - figure out if it's the product or the messaging that's falling short.  If it's the product, add those features (and think about killing the ones they're not using).  If it's messaging, that's even easier to fix.

In just the last week, two different people have come to me to get feedback on their pricing. One was a startup selling a very sophisticated product to corporate enterprises. The other was selling consulting services to individuals, small businesses, and trade associations. In both cases, however, the questions were the same: how should I price this on a per-head basis? When should I charge a flat fee? How do I make sure I'm not leaving money on the table? How do I make sure I'm not losing customers?

First thing I said was: you need to have a public rate table. I believe that people like to comparison shop, but that they only choose amongst those providers who make it easy to compare prices. If you provide a rate up front, you are at a substantial competitive advantage to your competitors who require potential customers to fill in a lead generation form. Second, if you have a premium product and you have a competitive advantage because you make it easier for customers to compare you against the competition, for the love of God, raise your rates. Higher costs are a signaling mechanism that you're selling a premium product. I can't find a link, but there's an apocryphal tale that Cadillac sales actually went down in the 1980s when Cadillac lowered prices. Traditional economics says that lower prices means you move right on the demand curve, leading to higher sales, but it didn't happen because consumers thought the lower prices were a signal of lower quality.

OK, now that we'd established better base rates, the question came down to how do we set the appropriate levels based on demand? Surely you want to have quantity discounts, especially for those parts of the business that are easily scalable. Well, to start, let's take a look at a business I know intimately well.

Here are my rates for business consulting and GMAT tutoring services (two wildly divergent services, one simple rate table):

Hours	Per Hour
1-4	$150.00
5-9	$125.00
10 or more	$100.00

As you can see, there's a substantial price break for pre-paying for more hours. This allows me to better manage my schedule and worry less about new client recruitment, and it encourages my clients to buy more hours as they get more "bang for their buck". It's a traditional win-win situation.

(Note: I've actually since raised my rates since this was originally published in November 2009: they're now $300, $250, and $200 an hour for the various pre-payments.  Read on for why.)

How did I pick my rates? Well, they just "feel" right. It "feels like" a good balance of encouraging larger purchases, but there's no real rhyme or reason. To me, it's like the golden ratio: it just "feels" right. However, it also turns out that there's a constant that shows up again and again in other successful companies' pricing. Let me demonstrate with pretty pictures:

Here's a graph of my consulting/tutoring rates:

As you can see, there are two steps: one at 5 hours and one at 10 hours. Everything else is constant. As you can see, at the 5 hour mark, my new rate is 83% of the rate for 1-4 hours. At the 10 hour mark, the new rate is 80% of the 5-9 hour rate. So the reduction in rates is very similar: about 80% of the prior rate.

Well, remember how I said we see this in lots of other places? It's really quite uncanny. Let's start with everyone's "it just works" darling, Dropbox:

Dropbox has a free account up to 2 GB, then paid accounts that go up to 50 GB and 100 GB based on payment. As you can see, the price per GB spikes once you need just a little more than 50 GB, but then it comes down to the levels from 30-50 GB. It turns out that you pay exactly the same amount per GB at 80 GB as you do at 30 GB ($3.00/GB per year) and exactly the same amount at 100 GB as you do at 50 GB ($2.40/GB per year).

Here's the graph for 37signals' Basecamp:

Basecamp comes in four paid flavors: 3 GB of storage for $24 a month, 10 GB of storage for $49 a month, 20 GB for $99 per, and 50 GB for $149 per. Again, you see the same spikes in yearly price per GB at the break points. Again, as you get into larger amounts, the difference for every marginal GB becomes relatively minor. Again, it's a bit asymptotic at the tail (in this case, in the mid-$30s per GB per year).

Lastly, let's take a look at Freshbooks:

Unlike the others, Freshbooks charges per client, not per GB, which makes sense as it's an accounting system, not a file storage repository. Freshbook charges $19 a month for up to 25 clients, $29 for up to 100, and $39 for up to 500. In this graph, I don't go all the way out to the "Starship" and "Time Machine" packages (seriously, guys, WTF?), but you can see the same spikes in per client costs at the 25, 100, and 500 client breakpoints that we saw for the GB breakpoints for Dropbox and Basecamp.

"But wait!" you say. "These graphs show spikes in the per-unit costs only at the break points - they're almost flat at the other points The graph for your consulting services showed troughs in the break points." This is true, grasshopper. Except! Take a look at the first few data points for all three. Notice something? At the small amounts, there actually is a substantial difference at each incremental GB or client (the lighter line). Let's look at these differences in table form:

Dropbox
GB	Price Per GB	% of Previous
0
1
2
3	$39.96
4	$29.97	75%
5	$23.98	80%
6	$19.98	83%
7	$17.13	86%
8	$14.99	88%
9	$13.32	89%
10	$11.99	90%

Basecamp
GB	Price Per GB	% of Previous
0
1	$288.00
2	$144.00	50%
3	$96.00	67%
4	$147.00	153%
5	$117.60	80%
6	$98.00	83%
7	$84.00	86%
8	$73.50	88%
9	$65.33	89%
10	$58.80	90%

Freshbooks
Clients	Price Per Client	% of Previous
0
1
2
3
4	$57.00
5	$45.60	80%
6	$38.00	83%
7	$32.57	86%
8	$28.50	88%
9	$25.33	89%
10	$22.80	90%

That's right - early on, there's a lot of 80-something percents in the per-unit differences.

So here's my rule: The rule of 80%.

For anyone selling on an incremental basis, set your break points that the per-unit costs of the new tier are 80% of the per-unit cost for the previous tier. If you're a consultant, whatever your break points are, charge 80% on a per-hour basis at your breaks. If you charge $1000 an hour, whatever your break point is - 5 hours, 10 hours, 1000 hours, make sure the per-hour charge after the break point is no more than $800 an hour. If you sell beer at $5 a bottle, make sure the cost of a six pack (the logical break point) is no more than $24, for a per-unit cost of $4.

If you're selling at a fixed price, it's a no more complex. You just must make sure that your break point from your first paid tier to your second paid tier is high enough to clear the 80s on the light line and it gets into the 90 percent range. If you set your second paid tier too early, before the dramatic savings in per-unit use peter out, your customers will be able to "feel" that you're trying to rip them off and they may not sign up with you in the first place. Once you give them enough goodies at the first paid tier, then you can feel free to ratchet things up - just make sure that your third and fourth tier ratchets don't kick in until the per-unit cost is at or below the limits of the previous tier. (Essentially, make sure your dark line is at the low point in the graph before you create a new tier.)

Well, based on this rule, it looks like 37signals is ripping users off on their Plus plan when compared to their Basic plan. Perhaps that's why they highlight the Plus plan - to avoid comparisons to the Basic plan in favor of comparisons to their Premium and Max plans, where the Plus plan does look like a fair deal. Or, perhaps, maybe the per-GB comparison is the wrong one. So let's take a look at the per-project comparison:

Well, shiver me timbers, but that looks just like the other graphs in the series: same severe downslope with humps in the dark line, same gentle curve with spikes in the lighter line, but no spikes until you hit the 90's.

Now, of course, I'd recommend that 37signals bumps up storage on their Basic plan, with the attendant bumps down the line, but hey, that's just me and my Rule of 80%.